Recalibrating Risk

The Government’s recent announcement to reset the Earthquake-Prone Building (EPB) system marks a meaningful shift in how New Zealand approaches seismic risk. It reframes how we think about existing building stock, occupancy decisions and the long-term planning of our built environment. The proposed changes are a positive step that will make a real difference for the industry, but some challenges remain.

The EPB System and Its Purpose

The EPB system was originally designed to identify and remediate buildings that posed a serious risk to life in the event of a major earthquake. Using the one-third of New Building Standard (%NBS) threshold as a measure was, at the time, a considered and appropriate balance of seismic risk. Over time, however, the quantum of buildings falling below that marker simply meant that there were too many EPB buildings to feasibly be remediated.

The proposed reforms aim to simplify and refocus the system, moving toward a more targeted, risk-based framework that better reflects actual seismic risk.

What’s Changing

Exclusion of Low-Risk Areas

Auckland, Northland, and the Chatham Islands will be excluded from the EPB regime entirely, reflecting their categorisation as low seismic hazard zones. This is a pragmatic recognition of where the real risks lie and will allow effort and investment to be focused where they are needed most.

Specific Building Types

The revised framework narrows its scope to building types that present a genuine threat to life in medium and high seismic zones:

• Concrete buildings with three or more storeys

• Unreinforced masonry (URM) buildings

This targeted approach provides clarity in most cases. The challenge will now be interpretation with number of floors and  hybrid structures (for example, steel-framed buildings with hollow-core concrete slabs) being up for debate. Material alone does not dictate seismic performance, and anomalies or poorly built structures may still fall through the cracks. These nuances will need careful consideration in the implementation of the new framework.

Façades and Regional centres

The focus on restraining facades and preventing collapse into public areas, has remained. There however is some relaxation for small regional centres less than 10,000 people which reflects the reduced risk, and the impact vacancies have had on their main streets. This will be welcome relief and we may see more life come back to these towns.

Extension Mechanism

The reform proposes a four-year extension to EPB remediation deadlines, with potential for a further two years to 15 years at Local Council discretion. This is intended to provide building owners breathing room to secure funding and undertake major works.

Greater flexibility is welcome but clearer guidance is required. Are extensions available broadly, are they being considered based on risk, or only under exceptional circumstances? Without clarity, the mechanism risks becoming inconsistent or misused.

New Concrete Guidance

The announcement also signals changes in how concrete buildings will be assessed under the EPB framework, with a view to limiting the types of failures considered in classification. This could refine the scope of what constitutes a “very worst” building. The direction is positive, but there remains a risk that non-technical audiences see this as a revised assessment criterion, setting further engineering reviews rather than implementing remediation.

Health and Safety Legislation

The reform also recognises that Health and Safety legislation is a key driver for occupancy decisions and that changes are proposed as part of the reforms. This is a pragmatic step, and it will be interesting to see the details of these changes in future announcements.

%NBS Is Here to Stay, Just Not for EPBs

There is uncertainty in the public arena about %NBS relevance and whether it is being removed all together.  The announcement has clearly noted that it will no longer be used for EPB assessments, but it does not clarify how it will be used in the wider seismic context going forward.

We note however that it is embedded in how our engineers’ complete assessments, how building owners and users understand risk, how buildings are marketed and how insurers assess their policies. While there are many short comings of the %NBS system and it needs improvement, the industry continues to rely on it as the main detailed measure and removal all together is unlikely.

Impacts on Building Owners

For many property owners, the reforms offer relief but not reprieve. Much of the current EPB stock is older, has been vacant for years, and requires significant investment to become usable again. Owners will still need to weigh up difficult questions: will tenants return, what rents are achievable, how will insurance and lending markets respond? These are challenging issues, and we expect it will take time for many owners to resolve them.

The transitional period also creates uncertainty. The Bill is expected before year-end, but full implementation may not occur until 2026 or 2027. What happens to projects that are already underway, or where business cases were built on the EPB classifications? We expect Building owners will now need to reconsider their investment decisions and potentially pause projects.

A Welcome Reform with Work Still to Do

The reform represents a strategic recalibration that aligns regulation with real-world risk. But gaps remain, particularly around interpretation of building types, extension mechanisms, and the assessment guidance.

As the details emerge, it will be important for stakeholders to stay engaged, ask questions, and seek clarity. Uncertainty can be just as disruptive as the risk itself, so beginning the conversation early — whether around seismic assessments, asset strategy, or interpreting the changes — will be key to navigating the reform.

We will continue to share insights as the reforms progress and are available to help owners and industry partners navigate what the changes could mean for them.