[+] Developers Urged to Lift Quality as Chandler Steps In

The quality of high-rise residential developments needs to improve to engender confidence in buyers, NSW planning authorities say. While it may seem a steep order given the huge challenges facing the construction industry, it is a long-term necessity, says Michael Edgar, general manager of The Hills Shire—one of a number of Sydney councils faced with poor-quality developments in recent years. These builds, of course, have not gone unnoticed. Evacuations of Mascot and Opal Towers in 2019 and 2018 respectively prompted a massive overhaul of the planning sector under NSW Building Commissioner David Chandler. Late last year, Chandler launched Project Intervene, which aims “to find resolutions for owners corporations to have serious defects” in common property, remediated through NSW Fair Trading rather than through expensive litigation. But there appears to be a fair way to go to achieve its aims given the host of building rectification orders and investigations being undertaken during the past 12 months. Five stop work orders were handed out, and nine prohibition orders and 23 building work rectification orders issued during that period, according to the NSW Fair Trading Office’s website. ▲ Damage inside Opal Tower at the time of the incident. Some developments have been hit with multiple orders, such as Toplace's Canterbury site which was issued its third building work rectification order in March. As developers face construction insolvencies, it is highly possible this will only increase. The Wavelength building at 49-57 Gerrale Street, Cronulla, which EQ Construction was building for Iridium Development prior to its administration was hit with a building rectification order in which investigators observed “uncontrolled water penetration within the basement level” and other “serious” waterproofing defects throughout the building. Additionally, questions were raised about whether the Commissioner had adequate powers following an investigation into the Magnolia building in Kellyville, which uncovered “major defects”. “It’s disappointing to me that we’re still issuing prohibition and stop work orders,” NSW Building Commissioner Chandler told The Urban Developer. “I get to these places and I say guys, what rock have you been living under? It’s not as if I'm a shrinking violet. “The commentary around my role was that if it wasn’t for Mascot and Opal towers, you wouldn’t need a Building Commissioner. So we’ve disabused everybody of that.” From the horse’s mouth The Hills Shire is one of a number of Sydney councils to experience astronomical growth during the past decade or more. Last week the council put on exhibition draft Precinct Plans for Norwest, Castle Hill and Rouse Hill, which will deliver capacity for 28,500 new homes across the three suburbs. “In many ways our housing supply relies not only on greenfield lot production, of which there will be plenty for a little while, but also on higher density forms,” general manager Michael Edgar told The Urban Developer. “If we’re going to keep pace and provide enough housing, [it is essential] that we restore confidence in the housing sector, and build apartments that are not to minimum standard, but offer a range of diverse housing and sites. “The council has long argued that if you want to do these well, you have to attract people through the end product being not just the smallest and highest number of apartments you can jam into a building. “In Sydney, we need to find a way in which the consumer can have greater confidence in buying apartments again after problems in buildings like Opal and Mascot.” ▲ The trouble-plagued Opal Tower. These issues stretch further than just developers, and the political contingent of The Hills Shire council is reported to be facing an investigation into “allegations of impropriety against certain persons and property developers” between December 2022 to March 2023. The council says it will take “all necessary steps to assist ICAC”. In the meantime, it is fair to say that the industry needs a clean up, and councils are looking to attract high-quality residential developments such as higher spec and build-to-rent developments—the latter of which has not yet entered The Hills Shire market. “Where we’re starting to see success is builders targeting the family market with larger apartments, multiple living areas, larger spaces. It’s desirable for families, but also empty nesters—they might be sitting in a large fairly home and don't want to downsize to a butter box.” Design Review Panels which become mandatory at a certain scale of development have started to influence the output, Edgar says. “But what I’ve noticed is that the number of DAs coming in from apartments is not as high as you would think. “There’s got to be a real good hard look at the market and the regulators overall to make sure we build the quality in. “The Building Commissioner has a role to go in and make sure standards have been met and there is a lot of work being done but we’re a long way off, and there needs to be greater scrutiny of buildings while they are being built.” ▲ The owners of Mascot Towers apartments called for a buyback earlier this year after being evacuated due to structural issues in 2019. Building Commissioner David Chandler agrees, and says that the Design and Building Practitioners Act, in place from September 2022, aimed to do just that by requiring designs to be submitted before work commences. The NSW Fair Trading office has audited nearly 50 per cent of the buildings that will commence construction in the coming year as a result of this work, Chandler says. “People are realising that the DBP Act audits can be done anywhere, from right at the start of the job in a designer's office, and most recently, where a builder goes insolvent.” To maintain quality, some commentators have suggested that there should be a return to a more council-led approach at certification stages. But pressures to attract and retain professionals in the certification space, or funding for training has proven difficult, and Chandler explained that an audit of council-certified buildings led to similar, if not worse outcomes than those buildings reviewed by private certifiers. A survey of 26 buildings certified by 10 councils found some worrying results. “By a long way, the audit for the local government was far worse than the private certifiers. We found a couple of examples that are really very significant exhibits of where their capabilities fall down,” Chandler says. “We are going to have to work with council to help build that [quality focused] capability because I’d like to see councils still in the certification landscape. “But I’m certainly not going to entertain the idea that they should do the most of [the certification work or] that they’re currently the best performers, because they'=’re not.” Project Intervene Early in his tenure, the Commissioner undertook a strata communities rerport which found that 39 per cent of buildings built in the six years prior to the 2021 survey had one or more serious defects in their common property. “We got a good snapshot of the frequency and the type of defects that we're seeing in buildings,” says Chandler. “The survey also told us that only 15 per cent of people with buildings with serious defects in their common property reported them to Fair Trading.” Only one in four of the projects that went down through the litigation or the dispute process actually got resolved, and this prompted the launch of Project Intervene. It is still in its pilot phase, and there are a number of seminars in collaboration with Urban Taskforce and UDIA NSW in the coming weeks for developers to help them better understand the process. “Most owner’s corporations are shy to publicly report their buildings because they think that that's going to impact the value but they don't realize that the longer you leave them, the more likely they are to ultimately catch up with you.” ▲ There are 35 councils in Greater Sydney, many managing major precincts and masterplans. The aim was to get up to 25 projects in the pilot Project Intervene, but it now has 86 buildings from rated developers registered for the remediation process, says Chandler. “It's been hard yards, we’ve had to learn how to do it and it’s not easy wrestling with developers who start off with denial. “There was a backlog of serious defects and a reluctance by owners to report, but now they’re starting to feel more confident to report them.” Now, 80 per cent of those buildings involved in Project Intervene are owner referred and 20 per cent are developer referred, Chandler says. “We’re certainly winning the hearts and minds of both sides.” Of course, building quality around the five key building elements is only one area over which the NSW Fair Trading Office presides, and the challenge is predicting future issues in the industry. “One of the challenges that we see as a regulator is that you have to look beyond current problems and into future trends,” says Chandler. “Buildings now are being made from inputs from all over the world so the days of a regulator just thinking that everything’s made in New South Wales are essentially over. “As we start to adopt more modern methods of construction, how are we going to regulate that where more and more is being made off site before it's even put on site? “Embodied carbon in construction is the next big frontier. Because if we actually make a conservative, conservative progress in embodied carbon reduction, then to get that you have to have an end to end process of design, procurement, installation, no waste. “Let’s say we put the fix on all the issues that we currently have. Well, what’s next?” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Developers Urged to Lift Quality as Chandler Steps In

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