New Zealand is facing significant challenges in the housing sector, not least the limited number of affordable homes available and the rising cost of purchasing and servicing a mortgage. Earlier this year the government made an announcement that recognised the need for reform especially in the development of small, self contained minor dwellings often called ‘Granny Flats’.
The government’s proposed reforms represent a welcome change for new and existing homeowners across New Zealand, as well as opportunities and risks for manufacturing companies like Tiny Home HQ.
What are the changes, and what do they mean for minor dwellings?
The Government has proposed reforms under two pieces of legislation that affect residential homeownership: the Building Act and the Resource Management Act (RMA). The reforms will simplify the processes to obtain consent and to build minor dwellings, also known as ‘Minor Residential Units’ (MRUs) or granny flats. Here’s an overview of the changes:
The Building Act: Simplifying the Process
The proposed Building Act will contain a new schedule that provides an exemption from the building consent process for standalone dwellings up to 60 square meters. The current building consent process can be expensive and time consuming, creating a burden that can nearly double the cost of a small construction project such as a granny flat. Some of the key points of the proposed changes:
Building Consent not required:
Homeowners can now build a standalone Minor Residential Unit that is up to 60 square metres in size without needing the traditional building consent. This change reduces the time and cost of getting a building ready, and is an immediate significant reduction in the red tape that prevented many people from moving forward with a tiny home.
Building Code must still be followed:
The Minor Residential Unit must still be built to follow the New Zealand Building Code to ensure the tiny home is safe and of high quality. Previously local councils would check the building during its construction and certify it is built following the standards in the Building Code. With the proposed changes a tiny home buyer may find it more difficult distinguish between buildings that follow the Building Code and those that don’t.
Requirement for Licensed Building Practitioners (LBPs):
The building work must be completed or supervised by licensed professionals, such as LBPs. Much like other licenced professionals LBP’s ‘sign off’ on a building, staking their professional reputation on the quality of the building and that it meets the New Zealand Building Code. Tiny home buyers should look for dwellings that have been built or supervised by an LBP.
Notifying the Local Councils:
Once the tiny home is built and installed the homeowner must notify their local council to ensure the council can correctly plan for property valuation and infrastructure upgrades.
Resource Management Act (RMA): Attain Nationwide Consistency
The proposed changes to the RMA aim to create a single consistent framework across New Zealand for constructing tiny homes and granny flats. Currently each council may have different rules for construction, leading to delays, confusion, and possibly increased costs, especially if tiny homes are transported from the builder in one area to be installed in another.
National Environmental Standard (NES):
The introduction of an NES for MRUs (tiny homes and Granny Flats) creates a set of permitted activity standards across the country. In other words the rules for building tiny homes will be standardised.
Permitted Activity Standards:
In most rural and residential zones, MRUs (tiny homes and Granny Flats) will be able to be built without requiring a resource consent, as long as they meet the national standards. This will speed up the process of building and delivering a tiny home and make it easier for home- and landowners to add a Granny Flat to their property.
Single-Storey Dwellings:
The National Environmental Standard (NES) is focused on activities to build single-storey, self-contained residential units which are ideal for small families, elderly parents, or as rental properties.
The aim of the proposed reform is to create a better future for housing
The Granny Flat reform is a key part of the government’s bigger goal to help solve New Zealand’s housing crisis. The reform has many parts and is expected to create long-lasting changes in New Zealand’s housing landscape.
- Improve Housing Affordability
New Zealand’s housing affordability has been an ongoing concern for Kiwis: home ownership rates are dropping and an increasing portion of income is being spent on housing costs. The reforms aim to reduce the burden of building tiny homes and granny flats, making it easier and more affordable for homeowners to add extra dwellings for family members or generate rental income.
- Support Multigenerational Living
A significant social benefit from the reforms is to support multigenerational living. Granny Flats provide a flexible living arrangement for young couples or grandparents to remain close to their family while still maintaining an independent lifestyle.
- Streamline the Building Process
The current building consent process adds time and cost to construction projects. The proposal to exempt small dwellings from the building consent process, while still keeping clear nationwide standards, will make the building process faster and simpler. This benefits homeowners as well as organisations like Tiny Home HQ.
What do these Changes mean for Tiny Home HQ Customers?
The proposed reforms will revolutionise the way Kiwis building MRUs, Granny Flats and tiny homes. At Tiny Home HQ, we’re excited about the possibilities these changes bring and how they align with our vision: every person in New Zealand to live in a warm, dry house. We expect our customers will benefit in the following ways:
- A Building Experience that is faster and easier
With the building consent requirement removed for buildings up to 60 square meters, Tiny Home HQ customers will enjoy a much faster building process. Less time to wait and lower costs with other site related consents that may be required. With many years in business and hundreds of tiny homes delivered the team at Tiny Home HQ is able to help you through the proposed processes and ensure your tiny home meets all the necessary standards.
- Improved Flexibility and Customisation
Homeowners have more flexibility in designing their Granny Flat now they can go up to 60 square metres. Our customers are looking for tiny homes that could be a cosy retreat for aging parents, a separate living space for young adults, a first home for young couples, or a rental unit to generate extra income, and now their choices are wider and more accessible. At Tiny Home HQ, we offer a range of standard designs that we carry in stock, and can build custom tiny homes to meet your specific needs, all while complying with the new regulations.
- Financial Accessibility for a wider range of Kiwis
Tiny Home HQ expect the cost savings from the reduced regulatory requirements will be significant and make owning a home easier for a wider range of New Zealanders. Owning a home is a goal for many but current conditions have priced a lot of families out of the market – the new regulations that will make it simpler and less expensive to build a home. Tiny Home HQ provide high quality dwellings even in our range of affordable tiny homes, and we expect more people will be able to invest in their future.
- When will this happen?
The proposed reforms are still in the consultation phase and we expect and policy decisions will be released later this year. So, expect the proposed Granny Flat regulations to come into effect around the middle of 2025.
Making use of this Opportunity
The reforms proposed in the new Granny Flat regulation are a big shift in New Zealand’s housing policy and have the potential to positively impact the lives of existing and new homeowners around the country. At Tiny Home HQ we’re ready to help you understand these changes and take full advantage of the new opportunities they present. If you are wanting to create space for family, generate rental income, or just add value to your property, now is the perfect time to explore your options.
Contact Tiny Home HQ today to learn more about how we can help you build a code-compliant, high-quality Granny Flat that meets your needs and takes full advantage of these exciting new regulations.