New Zealand passes earthquake-prone building reform, removing thousands of properties from strengthening rules

HouGarden New Zealand, 19 September — The bill passed with cross-party support, and Building and Construction Minister Simon Watts says it will take effect within a matter of days. The current earthquake-prone building system has not yet been formally abolished, but once the legislation commences, three regions will be affected immediately.

Under the reforms, Auckland, the Chatham Islands and the low-seismic zone covering parts of the upper North Island will exit the earthquake-prone building system entirely. Those areas will no longer be subject to seismic assessment or strengthening obligations. In contrast, parts of coastal Otago and Stewart Island, which were previously classified as a low-seismic zone, will move up to a medium-seismic zone — meaning stronger obligations will apply there, not weaker ones.

About half of all buildings currently designated as earthquake-prone nationally are expected to be removed from the system as a result of the changes, according to the government.

Minister Watts said the reform would save New Zealand's economy an estimated $8.2 billion in total — a figure the government attributes to reduced compliance costs across the whole economy, not confined to any single city or building type. "Expensive and often unrealistic remediation costs that are disproportionate to risk threaten buildings becoming derelict," he said. "Instead, we're enabling that money to be invested elsewhere to grow businesses, jobs and the economy."

Watts added that for buildings remaining in the earthquake-prone system, remediation requirements would be more targeted. "For many communities, particularly smaller towns, meeting the current requirements has been a significant challenge. The reforms take a more proportionate approach to managing seismic risk, while ensuring high-risk buildings continue to be identified and addressed," he said.

Auckland Mayor Wayne Brown welcomed the legislation, saying it corrected rules that had placed an unreasonable financial burden on building owners in a region with comparatively low seismic hazard. "Auckland is one of the least seismically active regions of New Zealand, with a much lower earthquake hazard than places such as Wellington and much of the South Island," Brown said.

"Despite that, Auckland building owners were being hit with ridiculous seismic assessment and strengthening costs for a risk that is far lower here than in other parts of the country," he said. "The system became a big earner for consultants and building managers writing reports, preparing estimates and assessments, proposing strengthening work and producing the dreaded earthquake ratings, all at considerable cost to building owners."

"Thankfully, common sense has prevailed," Brown said. He also used the occasion to call for reform of fire-safety rules, saying: "Now we need to tackle the equally bad fire rules that hinder the conversion of second-tier office buildings into apartments in the city."

For Chinese-owned businesses and investors holding commercial or older buildings in Auckland, the changes are the most directly felt. Seismic assessment and strengthening costs have represented a genuine financial burden under the current rules, and removal from the system means those obligations will no longer apply once the legislation takes effect. The impact on buyers and tenants is more indirect; the reforms address compliance costs rather than alter the underlying seismic risk of any individual building.