[+] Builders Rush to File as Regulation Changes Loom

Changes in NSW to requirements for hostel and aged-care development have sparked a rush of applications as designers and builders attempt to beat the deadline. And experts say the new requirements—that those who work on developments in these sub-sectors must be registered—will cause delays and increase costs for builders, and then their clients The amendments have been introduced as part of the state’s push to improve building standards and public confidence in the construction sector. The Building Legislation Amendment (Building Classes) Regulation 2023 broadens the scope of the Design and Building Practitioners Act (DBP Act) to include class 3 and 9c building types. Class 3 buildings encompass boarding houses, guest houses, hostels, or backpackers, while 9c buildings are residential care buildings that may contain residents with various care level needs. The Building Legislation Amendment (Building Classes) Regulation 2023 broadens the scope of the Design and Building Practitioners Act (DBP Act) to include class 3 (such as a boarding houses, guest houses, hostels or backpackers) and 9c (residential care buildings that may contain residents who have various care level needs) building types. --> At the moment, the act applies only to class 2 buildings—essentially apartments. The amendment relates to the construction of new buildings from July 3, 2023, and does not apply to alterations and renovations of existing class 3 or class 9c buildings until July 1, 2024. The extension of the Act means all design and building practitioners who work on hotels and aged-care facilities in NSW will need to be registered. “The expansion into additional classes is a continuation of the NSW government’s commitment to restore public confidence in the building and construction industry,” NSW building commissioner David Chandler says. ▲ Making buildings safer and improving the industry’s reputation in NSW are at the heart of the changes. “These changes are designed to ensure buildings are safe and secure, the industry is more customer-focused and better data is captured throughout the building life cycle. “Lifting residential apartment completions close to 30,000 starts a year is important in helping to meet the housing needs of NSW households. But we must never sacrifice quality.” But it is likely the extension of the act will lead to delays in the construction of some commercial aged-care facilities and hotels in NSW as businesses will need to factor into project budgets the time and cost of registering design and building practitioners, as well as the time and cost of complying with the new regulations. Adding pressure CBRE Australian healthcare and social infrastructure director Jimmy Tat says amendments to the Act will put pressure on projects in the planning phase to get started before the rules kick in next month. “Builders and consultants will be trying to get projects into councils before this cut off,” he says. “But it is positive, because it means better quality buildings will be built.” Tat says builders will have to work out how to pass on increased costs from complying with the amended Act to property buyers. “There is going to be a trickle-down effect, which is what happened when the better design guidelines came out for apartments,” he says. ▲ CBRE Australian healthcare and social infrastructure director Jimmy Tat. “That prompted developers to really work with architects and consultants to deliver these projects.” The extension of the Act is likely to have a mixed impact on the timing of the construction of commercial buildings in NSW. “There will be some delays as businesses comply with the new requirements. But there could also be higher demand for commercial buildings as a result of the improved quality of buildings and safety standards,” PRD Real Estate chief economist Diaswati Mardiasmo says. “There are long-term benefits in terms of quality of buildings and safety, and this is needed, especially for aged care and our responsibility to provide the best buildings for our older generation. “But this is another item that needs to be considered and absorbed by the building industry, on top of all the current challenges.” Building confidence The DBP Act and regulations are part of the NSW government’s moves to respond to recommendations of the 2018 report into improving compliance and enforcement systems in Australian building and construction industry, known as the Shergold Weir report. The recommendations are aimed at overhauling the building and construction industry to restore public confidence in the sector, which was shattered after a series of dangerous and shoddy projects came to light. Over the longer-term, the intention is to expand the scope of the legislative framework to include other building typologies. ▲ PRD Real Estate chief economist Diaswati Mardiasmo. But Mardiasmo is cautious about whether the act should be further extended to other sub-sectors within commercial property. “There is potentially a need for the DBP Act to be amended to cover other commercial buildings, but the timing is not ideal. “Already, many builders and development companies are facing significant challenges, including higher construction costs and material and labour shortages. “Administrative delays and higher costs from dealing with red tape and regulations at a local council level are additional burdens on the sector.” Looking to the future, Tat says there is potential for the rules to be applied to other health sub-sectors, such as rehabilitation centres. “There is already strict governance around rehab facilities. So, this would only mean even tougher rules for a sector that is already highly regulated.” Perhaps unsurprisingly, there are pros and cons to the coming changes, but only time will tell what the real effects for the construction sector and its customers will be. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Builders Rush to File as Regulation Changes Loom

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