- Article by John Held
We need to understand what keeps architects awake at night and why we love this profession! How can we ensure it remains relevant and vibrant? What are the issues facing architecture and the construction industry, and how can we support each other as we face the future?
Is life getting more difficult, and how do we ensure our profession remains relevant and vibrant? So many things are happening in the construction industry that it’s sometimes difficult to understand there are common threads joining many diverse topics – and here’s my attempt at joining the dots!
A rude awakening
Waking up to a radio news headline about certifiers being unable to get Professional Indemnity Insurance is not something that would have seemed possible a year ago. It shows what a mess the construction industry is in. Insurance, after all, is just a reflection of the market reaction to risk, a symptom of all that’s wrong with the system. Perhaps those who advocated in the past for a reduction in ‘red tape’ are having second thoughts? Certainly not if they can privatise profit and shift the losses elsewhere! One good thing to come out of this mess is the number of architects who are thinking deeply about the situation and proposing sensible solutions that could improve the quality of the built environment.
Buildings are long-term investments, but are often constructed on the basis of short-term decision-making and capital cost pressures (even by governments). The assumption is that long-term problems and costs can be moved on elsewhere. Architects have often been the scapegoats blamed for costs, but are rarely appreciated for considering long-term issues, users and the needs of wider society.
The current state of the industry looks very much like the definition of market failure in neoclassical economic theory. First, there is information asymmetry – a market where one side has more information and knowledge than the other. For example, the strata owner knows little about what was built and whether it was properly engineered. The architect tendering for fees doesn’t have enough information about what will happen two years into the project. The subcontractor isn’t given all the contractual detail about risk at tender time.
Second, there is the problem of who is the ‘client’? Principal/agent conflict causing market failure occurs when the objectives of the agent for the principal do not align, meaning the agent is not working in the best interests of the client. Architects often wonder who their real client is – a builder, agent, developer or final user?
If the market has failed, how do you fix it? Does anyone really want to tackle anything other than the symptoms? By definition any rectification of market failure must come through a combined push by industry and government. Architects must step up and make their voices heard – both individually and collectively – and be prepared to lobby politicians to fix a broken system.
Conditional PI for certifiers
States are looking at ways to allow private certifiers to continue to practise even with conditions relating to combustible cladding in their cover. While this may keep the system running for a bit longer, it is very worrying and likely to affect architects. This is not just about new buildings. What happens when alterations or additions are required to an existing building containing combustible cladding? If the certifier is effectively not liable through lack of insurance cover for a future mistake, who will be next in the firing line? The builder may have folded the special purpose vehicle, the developer long gone, but the architect may still be around and worth suing.
Should the government cover the gap? The Federal Government seems to think the problem is a state issue; the states seem to be inventing their own solutions with little coordination, and covering insurance gaps is a stopgap measure.
The deletion of requirements for homeowners’ insurance on buildings of more than three storeys (a decade ago) is just one example of how insurance, as a market device to measure risk, used to control the worst of the industry. The excellent Deakin report into building defects notes that if your reputation was so bad you couldn’t get insurance, you couldn’t build multi-storey apartments. It suggests commercial imperatives to insure and be responsible for ongoing defects would change builders’ attitudes to quality.
What do fees have to do with it?
The perpetual complaint of the architect is that fees are too low, and are being driven down further, and that proper professional service delivery is unsustainable at low fee levels. We also see plenty of webinars and courses on how to increase fees by good marketing, and this is certainly possible. Some sectors, however, are immune to upselling and clever marketing – the government tender market, for example.
The reduction of expertise within government is also an ongoing worry. Brad Orgill noted 10 years ago in the BERIT report that the numbers of architects and other technical experts employed in government at all levels had reduced to such an extent that procurement of capital works was problematic in many jurisdictions. Kim Lovegrove’s recent article notes the courts were already concerned by the reduction of fees for services in the 1990s and that it is unrealistic to expect professional levels of service without reasonable reimbursement for those services. Erosion of fees is a major concern across the profession and is leading to poorer quality outcomes.
The need for research
Lovegrove also highlights the lack of spending on research in the construction industry as one of the causes of the current regulatory failures. The ACA sees research across a range of topics as a high priority, but it is expensive to do properly. Funding and sponsorship of research projects will be an important part of ACA’s future strategy.
Fragmentation of services
Stephen Pearse has recently written about the problems of fragmentation of architectural services. The NSW Government, for example, is looking at requiring registered building practitioners to ‘sign off’ on their designs. This raises many questions. Is there any compulsion for the same person to sign off on the finished product? Can a developer keep engaging different people to do those sign-offs? Who controls quality on-site? What does a non-fragmented scope of service look like, and is this an opportunity for architects to become more involved? If architects are novated to the builder, it follows that they do not have sufficient independence to sign off work. We need to be clear to government what a proper service delivery model looks like and how we can avoid it being subverted by an industry that has made a mess of quality and safety.
The future of practice
In recent years we have farewelled a number of distinguished architects who were true professionals, working for the good of both architecture and society. At the same time, it is heartening to see new professionals arriving with fire in the belly and a collective desire to change the world. To change the system we need clear, practical advice to politicians, which can be implemented across Australia – starting right now.
This article originally appeared on the Association of Consulting Architects website – aca.org.au – before appearing in two parts in Architectural Review #161 and #162.