The Bella Vista Homes saga in Tauranga is being monitored closely around the country by local councils and building officials alike.
Bay of Plenty regional councillor Stuart Crosby, the current vice-president of Local Government New Zealand, said the failed development at The Lakes was "very much on the national radar".
"It's not just a subregional issue. I was at a meeting in Wellington last week and a number of mayors and chief executives were discussing [Bella Vista] and the ramifications for their councils as well."
Crosby said staff members in charge of building inspectorate departments were also watching it with interest.
"I guess they'll be observing more what ... learnings can come from this, with regard to improving processes."
However, he said one of the key areas of focus was around what the Building Act says – or what any other act says – in regards to retaining walls before code of compliance can be issued.
"I suggest that would be the primary issue at the moment that other councils are very interested in."
Tauranga City Council chief executive Garry Poole has said in the past that the absence of retaining walls was brought to the attention of builders and Bella Vista "many, many times" but said the council could not demand a "certain sequencing of the building process".
He has also said the Building Act did not require or empower the council to enforce building of the retaining wall before the build.
Four of the 21 evacuated Bella Vista homes had code compliance certificates issued.
However, council staff have said none of those building consents required a retaining wall to be constructed.
Crosby, who previously served as Tauranga's mayor for 12 years, said he had read the independent report by former High Court judge Paul Heath QC that was released publicly on June 6.
Heath's investigation into the council's role in the Bella Vista development found the council acted correctly in some areas but failed in others.
A major issue for the development was the lack of retaining walls, which Heath said should have been considered further by the council.
He said there was confusion around the sequencing of work, and how the council could have approached this issue.
Heath also concluded in his report that the council ought not to have issued code compliance certificates for the four properties.
"I felt his report was an accurate summary of events and what happened and I totally support his recommendation that Tauranga City Council needs to identify very clearly why it happened," Crosby said.
He said the council should do that as a matter of priority.
"They have to clearly identify, was there a systemic failure in their systems, and if there was fault, what are the ramifications to other property owners who built new homes in that era?"
Crosby said he had been involved in the building industry all his working life – he was an electrical contractor, has owned a house-building company, and was also on the Master Builders Association.
"It should not have happened in today's operating environment. It simply should not have happened."
Meanwhile, Nick Hill, chief executive of the Building Officials Institute of New Zealand, said the Bella Vista Homes situation was also being watched closely by those in his sector.
Bella Vista was being used as an example of what could potentially happen if the current shortage of qualified building inspectors was not addressed in New Zealand.
Workload pressure was "front and centre" in the sector and was regularly talked about, Hill said.
"In a scenario where building control authorities have limited capacity, the risks for getting it wrong escalate. And to that extent, our people on the ground are increasingly nervous as to the lack of investment in their area of expertise."
He said with increasing building consent numbers, councils around the country should have had some strategic workforce planning in place.
"And it's quite obvious that they haven't," Hill said.
"Growth needs to be managed. They've got to build technical skills and they've got to build leadership capabilities and they've also got to bring in new, young people to the sector."
The Heath report found the council did not perform its Building Act inspection functions adequately, in respect of both geotechnical and structural considerations.