Our seismic rules need a shake-up - Leonie Freeman

The Embassy Theatre, Wellington. Photo / Mark Mitchell

THE FACTS

• Building and Construction Minister Chris Penk last year announced a review of the earthquake-prone building system.
• The ratings can be controversial because they are not an exact science.
• Anything less than 34% of the NBS is considered earthquake-prone.

Walk through any New Zealand city or town and you’ll see “earthquake rating” notices on office blocks, schools and shops. These ratings are known as New Building Standards (NBS), and they’re supposed to tell us how safe a building is in a quake. But here’s the catch: the goalposts keep moving. Imagine your own family home – what’s “liveable” one year suddenly becomes “unliveable” the next, even though your house hasn’t changed a single brick.

Take Mātauranga House in Wellington. In 2015, it was rated at 90–100% NBS, considered low risk. A year later, new rules slashed that rating to just 25%. The Ministry of Education moved its staff out. Same building, same concrete floors – just different rules.

This is happening across the country. Tenants now refuse to lease space unless it’s above 67% NBS, even though a building is only considered earthquake-prone if it sits below 34%. Banks won’t lend unless the rating clears the same hurdle.

Some tenants refuse to move into buildings unless a rating of at least 80-100% can be obtained. This is despite MBIE issuing advice to building users, tenants and owners about being safe in buildings with lower seismic ratings. Unfortunately, and ironically, some government departments do not follow this advice. For example, the Government Property Group (GPG) requires up to 80% NBS ratings when negotiating new tenancies.

The result? Empty buildings, stalled investment, and billions of dollars in costs. Offshore investors are turning away, unsure if a building that’s “safe” today will suddenly fail tomorrow. You only have to take a stroll down the main street of Wellington and see the many empty buildings to understand why this is a problem. It’s not just the capital either, we’re seeing this issue in cities and communities alike. Small town New Zealand is also affected by this, from Winton in the South Island to Napier in the North, if you ever drive through and wonder why there’s a lot of empty buildings this may be part of the reason.

Even developers who want to build stronger, safer homes are stuck in a fog of uncertainty. It’s not at all unusual to receive different NBS ratings across various assessments. For example, an initial assessment of Hutt Hospital in 2022 placed the building in the earthquake-prone category with an NBS rating of 15%. A peer-reviewed second assessment then put the building at a NBS rating of 35%. Engineers use different methods and arrive at different results.

Some argue this is simply a cost that owner/developers should shoulder. But that misses the point. Constantly shifting rules don’t just hit building owners, these rules ripple down to the cafe that can’t renew its lease, the local council library shutting down, or the family forced out of an apartment block overnight. Imagine if your own home was suddenly deemed “unsafe”, not because anything had changed, but because the rules did and then you were handed the bill. This isn’t about protecting profit margins; it’s about protecting communities from uncertainty that leaves buildings empty and neighbourhoods hollowed out.

It doesn’t have to be this way. Japan is one of the most earthquake-prone countries in the world but rather than constantly moving the goalposts, Japan sets seismic standards once every 20 years. This gives owners, engineers, and investors the confidence to plan long-term. Here in New Zealand, we’ve changed our rules three times in the past five years, and each time, cost, confusion and delay is added.

New Zealand needs a reset. One set of clear, stable rules. Certainty about what’s safe, and certainty about who makes the call. The focus shouldn’t be on who does your assessment, or whether one engineer’s judgment trumps another’s. Buildings need to be considered either acceptable to occupy or not. We shouldn’t be fixated on arbitrary numbers where the difference between 66% and 67% dictates whether a building is untenantable, despite 1% being within the margin of error.

Leonie Freeman is the chief executive of Property Council New Zealand. Photo / Supplied

That certainty also means recognising that not every city faces the same level of risk. Maybe it’s time to rethink whether one system should apply everywhere. Wellington, Napier and parts of the East Coast sit directly on major fault lines, so requiring higher seismic performance there makes sense. But Auckland, for example, faces a far lower earthquake risk with bigger threats of flooding and volcanic activity. Forcing Auckland property owners to chase the same seismic targets as Wellington wastes time and money that could be better spent strengthening against the risks that are more likely to occur in that region.

MBIE accords an annual “fatality risk” rating for an individual of 1 in 1,000,000 to buildings built under the NZ Building Code in case of an earthquake. Meanwhile, a building that rates below 34% NBS is estimated to have a fatality risk of around 1 in 100,000 which is still far lower than the 1 in 20,000 risk we face simply travelling in cars on New Zealand roads. This puts the one-size-fits-all approach into perspective: even legally “earthquake-prone” buildings carry relatively low actual risk, yet owners in lower-risk regions are still forced to meet the same expensive standards as high-risk areas. With risks so uneven, a blanket system ends up being blunt, costly, and potentially misaligned with the true danger.

The number one priority is safe buildings, but endless rule changes are paralysing our communities. Offices stand empty, schools shuffle into temporary rooms, and small businesses are bled dry by upgrades that may be obsolete tomorrow. The real collapse isn’t in our concrete; it’s in our confidence. Unless we reset the seismic rulebook, we risk shaking the foundations of New Zealand’s entire property sector.

Leonie Freeman is the chief executive of Property Council New Zealand, the membership body representing the country’s large-scale commercial and residential property developers, investors, owners, managers, and affiliated professionals.