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Environment and Communications References Committee
22/03/2018
Current and future impacts of climate change on housing, buildings and infrastructure

BROOKFIELD, Ms Kristin, Chief Executive, Industry Policy, Housing Industry Association

ROBERTS, Mr Michael, Executive Director, Planning and Environment, Housing Industry Association

[16:54]

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a brief opening statement, if you'd like to, and then we'll ask you some questions.

Mr Roberts : Good afternoon, and thank you for the opportunity to attend today's hearing. Whilst the terms of reference for the committee focus are broad, HIA has sought to provide the committee with information that relates to the adequacy of current Commonwealth and state policies that are aimed at assessing, planning and implementing adaptation plans and improving the resilience of our buildings and infrastructure across Australia, with a focus on the impact on housing. HIA is of the view that the residential building industry is well equipped to address the likely impacts of climate change, provided that the relevant regulatory frameworks are clear about the expected outcomes that housing must achieve and that the process to identify these outcomes is done in a transparent way.

Housing, and hence the residential building industry, is governed by two regulatory frameworks: the building system and the planning system. To date, when these systems are appropriately developed and implemented, they have, for the most part, guided the industry and the community well in addressing the impacts of natural hazards. In the last decade, the pressure on these systems to deliver outcomes that are not within their scope, and to confuse which system is responsible for which outcome, has become an issue for industry.

The National Construction Code, which establishes the construction standards for buildings in this country, is seen as the benchmark by many overseas countries with respect to the technical construction standards it has established, particularly regarding building in bushfire- and cyclone-prone areas. The code provides an appropriate platform moving forward for continuing to establish nationally consistent requirements for all buildings.

With respect to the planning system, the long-term designation of land for urban purposes occurs in every state and territory through a variety of strategic plans that, in general terms, outline a 20- to 25-year vision. The allocation of zones through state or local planning instruments translates that strategic vision into the fine-grained framework that determines the appropriateness of specific activities on individual parcels of land. This process provides the opportunity to identify constraints and make decisions around the appropriateness of particular land uses.

Critically for landowners and the housing industry, there should be an overarching aim to deliver truth in zoning—that is, if land is identified as suitable for residential or urban development, it should be free from the need to undertake additional costly and exhaustive studies after the fact. Equally, land should not be zoned for residential or urban purposes if an ongoing high level of risk has been identified and the issue remains unresolved.

It is frustrating for the industry and ultimately results in additional costs for consumers when builders are routinely being asked to address competing policy interests by government. Housing development often needs to manage the protection of habitat and vegetation while also addressing bushfire mitigation, or dwellings are required to ensure habitable areas are safe from flooding by building at a particular level, while also being asked to address accessibility requirements which require step-free entry to a home. So often, sitting over the top of all this are a myriad of boutique local council design requirements.

Sea level rise is the issue which currently presents the most uncertainty, and it is in this space that HIA believes that both the federal and state governments will need to show more leadership. There is currently no well-established approach to incorporating climate change issues such as sea level rise into the land use decision-making process. Planning for sea level rise needs a more sophisticated approach than has traditionally been employed to deal with other natural hazards. The long-term solutions for sea level rise cannot simply be dealt with in the same way as flooding. There is a need for a staged strategy that provides flexibility to adapt to updates in the science over time.

It should also be remembered that most current land use strategic plans only have a 25-year horizon. The strategy needs to recognise the average life of buildings and the redevelopment churn that is highly likely to occur in the coastal areas over the next 50 to 70 years. Now is not the last chance governments will get to direct built form outcomes.

Imposing design requirements on new developments now for events that will occur slowly or intermittently over the next 70 to 100 years is impractical and inequitable unless government is willing to force the hundreds of thousands of existing buildings within five kilometres of the coast to also upgrade or be removed. Any strategy will need to include a suite of options for how this issue can be addressed. Logic would dictate that infill development, particularly in areas likely to be defended, should be treated differently to greenfield sites. Equally, areas subject to tidal surge or erosion may be dealt with differently to areas subject to long-term inundation.

It is HIA's view that the federal government has a responsibility to provide clear leadership and direction about the necessary first step in identifying coherent response strategies to expected sea level rise. How will currently developed and potential development areas be defended, if at all? How will this affect planning for those areas that will not be defended? The government should evaluate potential defensive tools that could be employed—and how they might be funded—and resolve who is responsible for managing the legal risks arising from planning decisions where this effects existing individual property owners, who may carry all the costs if property is rendered unbuildable or homes are damaged or lost.

The current practice of leaving this issue to local government to solve will result in local governments in potentially affected areas attempting to address the issue on a site-by-site, development-application-by-development-application basis. This only serves to create significant uncertainty for everyone. It will be costly for those brave enough to have a go and will undoubtedly lead to a range of expensive and perverse outcomes. Again, thank you for the opportunity to attend today, and we would be pleased to answer any questions you might have.

CHAIR: Thank you. We will start with the issue of sea level rise, given that it seems to be one that has a lot of uncertainty. We've just heard from CSIRO about all of the different factors in terms of how you can make good decisions on sea level rise. Given that level of uncertainty, what would the industry's preferred approach be? Leaving it up to individual local governments isn't the way to do it. What do you think governments should be doing to optimise how we plan for sea level rise at the moment?

Mr Roberts : We need to agree on some consistent standards across the country, which currently we don't have.

Senator DUNIAM: Who determines those? Is it the states?

Mr Roberts : It is the states. I'm from Queensland and can speak from experience there. The Queensland state government spent a lot of money undertaking research and mapping. They then simply handed it over to local governments and said: 'Here you go. Deal with this.' So the local governments all ran around wondering how they were supposed to deal with it, as I mentioned in the opening statement, and we ended up with: 'We have an application for a duplex here. It's in an area that's been mapped as likely to be inundated at some stage in the future. We better impose a whole range of additional standards, and yet the site is surrounded by houses and existing buildings.' So you end up with one building site being required to address increased standards when no-one else is.

Equally, there needs to be a conversation at the bigger-picture level to assist local government. Are they going to defend some areas? Undoubtedly, the answer is yes. Who's going to pay for that? I'll use the Brisbane example. Brisbane City Council is responsible for the Port of Brisbane. It's a significant economic driver for the region. Is it fair to lump the responsibility of defending the port wholly and solely on Brisbane City Council? There needs to be a much more sophisticated approach to this issue than we have traditionally used in dealing with other natural hazards.

CHAIR: That is essentially what CSIRO were just telling us as well. We need to have a lot more data, scenarios and integrated planning to assess what the appropriate thing for local government to do is and not just leaving it to local government.

Ms Brookfield : I think the point that we made was that the time frames in these situations are very long term. There is a general churn of buildings, particularly on coastlines, which will occur. Perhaps in part the answer is to accept a shorter time frame and do the research and the estimation on the shorter time frames and require buildings to meet that standard. Then, after 10 or 20 years, reassess those and set new benchmarks rather than setting the 100-year benchmark, which to everybody today seems hugely outlandish and yet we know it's been done for a purpose.

The other element that's important, which we think is a Commonwealth and state issue, is to give local government comfort. We have situations where local councils have to make these hard decisions about saying yes or no to the construction of new buildings. If they say yes, they are accepting a risk and are potentially open to some kind of challenge later on and yet they have suburbs full of buildings that are subject to that risk right now that were, in good faith, approved.

There's an example you can look to in Tasmania where the bushfire requirements were adjusted. Originally they took the same approach as other states and territories to seek mapping of the bushfire-prone areas. After a few years of operation, that state elected to flip it around to say that, if it was an urban area, it was not bushfire prone in the first instance. That gave comfort to everybody who was there and anyone who came along to build a new building. They were going to be treated the same way in terms of the construction of those homes. That's also the government accepting that there is an inherent risk in building in certain places. In a state like Tasmania, there is an inherent risk that bushfires will occur and things need to be done.

CHAIR: Going back to looking at a shorter time frame, what do you think would be the appropriate time frame that should be considered for local government planning decisions?

Mr Roberts : To me, it makes sense to tie it to the lifespan of the buildings we're building. If we're looking at 40 years for domestic construction, are we able to put in place measures that we believe will address the risk in 40 to 50 years time?

Senator DUNIAM: What's the impediment to adopting these longer-term time frames? Is it decision-makers or politicians averse to taking a punt for that longer period of time or what?

Mr Roberts : I believe it's the provision of the information that's out there. It's on public record that, in 100 years, the sea level is going to rise by a certain amount. I've asked the Queensland government, 'Can you tell me what it's going to be in 50 years?' I don't know whether they have that information or they just don't know, but I haven't received an answer.

Ms Brookfield : We have seen examples. Lake Macquarie City Council in New South Wales invested a significant amount of time and money to map their area—obviously this week they've been subject to flooding—and then they went down the path of developing a new construction code for properties which they deemed would be affected. They implemented that for a few months and, in the end, their own constituents came back to them and said: 'No, we think you've overstepped. We think you're trying to make us do too much, too soon.' So they went back some time later and changed that code. I'm not saying whether that's right or wrong, but that's the response that was given by those constituents to that council.

CHAIR: Given the lifespan of the buildings, you think they would be able to much more appropriately justify things if it was, 'This is what the expected risks are that you need to be addressing over the next 50 years,' rather than the next 100 years.

Ms Brookfield : Yes. People tend to want to see that risk when they're investing their money in the construction of a new home. To say to someone, 'You're a kilometre away from the coast and our map says that in 100 years time you are going to be flood prone,' they don't necessarily see that connection. Or, if you're a certain distance away from the forest area that's near your suburb, being asked to build to the highest bushfire rating doesn't necessarily resonate with them.

CHAIR: Can you say how climate related risks are currently taken into account as part of, say, the National Construction Code?

Mr Roberts : The risks are dealt with in a variety of ways. Some of the risks are tied to mapping. For example, elements like bushfires and cyclones are tied to mapping. So, if you are looking to build in an area that has been identified on the map, it triggers additional requirements within the National Construction Code. And I think for the most part that process works very well. Outside of the mapping, it really comes down to risks associated with the type of dwelling.

Ms Brookfield : The code currently addresses cyclone construction, bushfire construction and, to an extent, flood construction. And I think part of the response is that the construction code gives us a single national answer on cyclone construction. It is slightly mixed for bushfire. You have the states and territories responsible for designating bushfire-prone areas through that planning system, and then the construction code says, when you are designated as bushfire prone, here is how you build. So it's still a single recipe for construction. Sea level rise is state by state, choosing different ways to set a benchmark and leaving councils to design the building controls. And flooding is more sophisticated but a similar thing: the states establish flood benchmarks. The local councils do the research and then apply the requirements for the one-in-100- and one-in-20-year flood levels. So it is a mixed bag depending on the constraint you're trying to deal with, but there is better consistency for cyclone and bushfire.

CHAIR: You're talking about the one-in-20- or one-in-100-year flood levels, but those actually doesn't necessarily represent what those risks are looking forwards. It's the historical data looking backwards. Do you think the code gets adequately updated in order to account for what is currently known about, let's say, the next 50 years if that's the time span that you should beef planning for?

Ms Brookfield : That's the mix we mentioned. The code isn't responsible for saying where the risk is. The code is only responsible for offering up a construction solution. So really the question you're asking goes to the council and state governments. Do they change their policy approach to mapping bushfire areas and to mapping flood areas?

CHAIR: I'm interested in that construction solution and whether that construction solution adequately reflects what the risks are going to be over the next 50 years. Even outside bushfire- or cyclone-prone areas, we're looking at the potential increase in intense rainfall events, wind, intensity of wind events and those sorts of things.

Mr Roberts : I think the National Construction Code sets the standard for the construction of the building. If you're talking about bushfire or cyclones, it wouldn't matter if you had a bushfire or a cyclone annually; the building's been designed to cope with that. Flooding is slightly different. The term 'one in 100' really reflects a percentage of that size flood happening. It's not an indicator that it's only going to happen once in the next 100 years. It's saying that we believe there's a 10 per cent chance of a flood of that size happening in any year, that's not to say that we couldn't get a flood of that size every year. But as long as the structure's been built to cope with a one-in-100-year flood, it wouldn't matter if it happens every year.

CHAIR: But it's something where, at the moment, beyond the one-in-100-year—

Mr Roberts : That's right; we don't have a benchmark beyond one in 100 years.

CHAIR: Yes, which actually with the changed climate will become the one-in-100-year flood level. You don't deal with that, then?

Mr Roberts : No. And it really is driven by local government. You're correct; it is based on historical data, which is upgraded as incidents occur. To once again tie it back to the Brisbane example of the floods in 2011: the buildings that were designed to stay dry during the one-in-100-year event based on 1974 calculations all stayed dry. It was only buildings that had been allowed to be built in areas that weren't safe from one-in-100-year floods that got wet.

CHAIR: Moving on. The other issue that I'm interested to know how it's currently catered for is the overall increase in temperatures and buildings coping with heat waves. The evidence is that Australian homes basically aren't well enough designed in terms of their energy efficiency in sustained cool- and heatwave conditions, with the estimate that the 2009 Melbourne heatwave resulted in 374 deaths. Can you talk us through what's being done to ensure that new buildings are appropriately designed for a warming climate?

Mr Roberts : There are currently three reviews being undertaken looking at this specific issue of the future benchmarks that should be set for housing in particular. They're looking across a fairly broad spectrum from just the building envelope, if I can call it that, to the whole of the house and how the whole of the house should be operated. That is a continually evolving issue. We're also due for some amendments to the National Construction Code next year which are going to raise those standards. And the discussions we're having at the moment are really targeting 2022 as a further set of increases to the building standard. That's a continuing discussion about how buildings need to improve.

CHAIR: Is there work being done to look at how they cope with heat waves as opposed to just their overall energy efficiency? The NatHERS standards are for energy efficiencies that are averaged across the year, not how well they cope in a period of five, six or seven days of high temperatures.

Ms Brookfield : It's probably more a matter for the Australian Building Codes Board to respond to in terms of their research program. I have a recollection there has been a piece of research around the heatwave or that component, but I couldn't quote to you exactly what that is.

CHAIR: Do you have a view as to whether assessment and disclosure of energy ratings for existing buildings should be mandated?

Ms Brookfield : We do. We formed a view some time ago that there is certainly a benefit to disclosing to a future home buyer the performance of the building. As you've pointed out, currently, the one scheme that operates in Australia is based on a software tool which simply looks at how often you use the air-conditioner or don't, or use the heater—the NatHERS program. But it still does give you a certain level of information. If you look at the ACT situation, I think it's fair to say that very few people will make a choice to not buy a home—that is, a home in the street they like near the school they like and easy to drive from to work purely based on its energy ratings. I don't think it makes a necessary difference in the purchase choice, but it does give the owner some information which they can then choose to use in renovating that house or making adjustments to that house. So it's something we think is of benefit.

CHAIR: Do you have an estimate of what the various energy ratings of the houses across Australia currently are? Have you done that work?

Ms Brookfield : No, we haven't done that work. We tend to fall back on a reference that you would probably have an average of one to two stars across the nine million houses in Australia today. The current rating scheme commenced in 2003, so we now have over a decade of homes that have a much better performance than that, but—

CHAIR: Yes, but you've got this huge backlog of older houses.

Ms Brookfield : Yes.

CHAIR: We heard at our hearing last week that they've got an average energy rating of 1.8 or something.

Mr Roberts : Could be, yes.

CHAIR: Do you have a view about the bigger picture of land use and planning policies and how they are dealing with climate change—whether there are requirements in greenfields development to make sure that there is more canopy cover, and planning for cooler environments and how important that is, and things like block sizes to enable trees to be there to provide shading?

Mr Roberts : We've seen a significant move towards master-planned communities in the planning space, so there is certainly a greater potential for those issues to be taken into account. I guess what we are seeing, though, is that there are mixed messages being delivered by local governments in this space, in that often the priorities are around protecting natural assets. That tends to drive the built-form outcomes that we are seeing rather than specifically addressing climate change or natural hazards. The outcomes that we are seeing are being driven by protecting those natural assets. There is a challenge as well as the industry is seeking to achieve affordability issues. As blocks of land get smaller, it is more and more difficult to keep or maintain vegetation on sites. That's a balancing proposition. At the end of the day, the industry is trying to deliver blocks of land that people that people can afford to buy.

CHAIR: How much is the Housing Industry Association having input into trying to reach that balance? What is the perspective of the association?

Mr Roberts : The conversations we have—I suppose particularly at local government level—are around that issue of balancing affordability against the desire to, for example, plant trees. I think there needs to be an acceptance that the days of mango trees in backyards are probably long gone. We are building houses on 250-square-metre allotments. There is not a lot of space for a tree on an allotment that size. In fact, large trees aren't the best cohabitant of houses. We need to look more towards the public realm as the space that provides vegetation cover.

CHAIR: Would that mean, in a new housing development, a greater proportion of space which would need to be put into the public realm?

Mr Roberts : Potentially, yes. I think there is a recognition within the development industry as well that, as the lots get smaller and there is a lack of backyard, there needs to be more public space provided anyway, just to provide a space for kids to run around and get out of the house.

CHAIR: Yes. If you haven't got a big backyard for that, then you need to have the public space.

Mr Roberts : That's right, yes.

CHAIR: In terms of the HIA's involvement and view on existing housing stock and improving the energy efficiency of housing stock, is that an area that you do work in?

Mr Roberts : It's not our primary focus, but a good proportion of our membership plays in the renovation space, and the legislation at the moment requires essentially that once a renovation exceeds a certain percentage of the overall house then energy efficiency requirements need to be incorporated. There's some uncertainty about whether that means that the whole house has to be upgraded or whether it's only the addition to the house or the addition to the house and a percentage of the old house. But it is happening. The issue is that there are, as you highlighted, just an awful lot of older homes out there.

CHAIR: Is it a space that the association feels that you as an organisation need to have more of a position on, and things that you are going to try to ensure are achieved?

Ms Brookfield : The answer is yes, we are in that space, and renovation builders make up a significant part of our membership now, and renovation work makes up a significant part—over half of the construction spend in Australia. We have a program called HIA GreenSmart. That program is aimed at educating builders, tradesmen, manufacturers and suppliers of building products about sustainable construction principles, and that course is offered to any of our members and to nonmembers. You don't have to be a member to come to a course. Around that training course, which we started in 2000, we provide a lot of education materials online, which consumers, builders and renovators can all go to. And we have our top 10 tips and our top five things to make your house more sustainable and that sort of thing. Having said that, we are regularly invited to provide commentary to local newspapers and other sorts of media spaces about what people can do to renovate their home and improve their home. We are quite consistently sending that message.

CHAIR: Do you have a view on what more governments could be doing—any incentives, initiatives, programs that government should be doing?

Ms Brookfield : The answer is that they need to be providing incentives. There are some very simple bang for your buck measures that could be done to any home, either as a standalone or as part of a renovation, simplistically talking about your wall and ceiling insulation, your windows—improving the performance of the windows or properly installing the windows—and changing your hot water system to a better-performing hot water system when the time comes to turn that over. These are really simple things. They are the sorts of things that sometimes don't come cheap. Windows would probably be the most costly of those scenarios. Having some sort of rebate scheme like the Victorian Energy Efficiency Target and the South Australian schemes provide a way for homeowners to tap into a little bit of support. And anything like that would be very welcome.

CHAIR: Thank you very much for your evidence today.