Leaky and Weathertight homes
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James Zuccollo, Mike Hensen and John Yeabsley “Weathertight Buildings and Performance-based Regulation: What Lessons can be Drawn from a Complicated and Evolving Situation?” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). This paper analyses the problems that resulted in the New Zealand building industry from the regulatory changes in the Building Act 1991. It considers these problems in a wider context to gain an understanding of what regulators can learn about performance-based regulation for the future. Further to this end, the paper proposes a framework to help reduce uncertainty in performance-based regulation and outlines three approaches which may help regulators design more durable regulations. The importance of accountability in performance-based regulation is highlighted and three levels of accountability failure in the leaky homes crisis are identified and explained. The paper concludes with some key lessons to be learnt including the difficulty of regulating complex systems and the need to distinguish between risk and uncertainty, the requirement of knowing more about complex systems before regulating them and the fact that performance-based regulations are easier to understand and enforce when performance measures are observable and relevant to the regulation’s goals.
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See also Brent Layton “Regulating the Building Industry – A Case of Regulatory Failure” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011).