Opinion: Incentivising fire sprinkler systems will save lives

Incentivising fire sprinkler systems will save lives

The tragic events of the Loafer Lodge fire on 16th May 2023 linger in the capital city. I must admit as a property manager when I first heard the news and looked at the photos, I knew that this was not a building likely to have sprinklers. I also hoped that the landlord was one that would have done everything by the book and not be one of the few to taint our industry.

I fielded many questions from people about how the building could have complied without being sprinklered. In short, this building was constructed in the 1960s and complied with fire regulations at the time it was built. If this was built today it still wouldn’t necessarily have to be sprinklered either. Should it be? Of course. In NZ as far as I am aware there have been no fire fatalities reported in any building containing compliant sprinklers. Sprinklers would have saved lives on 16th May 2023. This is a fact that numerous agencies will be referring to and asking how do we do better?

Why didn’t the landlord install sprinklers? They didn’t have to.

There are two issues here;

1. the lack of fire safety regulation,
2. the cost of meeting fire regulations.

A crude summary is that any building over 25m tall should be sprinklered. For anything between 10m and 25m with two stairwells, or under 10m with one stairwell, sprinklers are not required. While the legislation looks at use it doesn’t drill down to the occupants. There are guidelines for safety design in community housing, but these are not mandatory. If we want to see more buildings sprinklered this is one aspect that needs to be legislated and in turn that comes at a cost.

As a property manager who has retrofitted sprinkler systems into existing buildings there is a huge cost and significant disruption. The cost of installing sprinkler systems, particularly in smaller buildings is cost prohibitive. You may ask what the value of a life in this equation is. In the end, landlords need to make money otherwise they are a charity. The size and use of a number of buildings limit the investment that is able to be put in. Simply put, not enough rent is received to pay off these capital costs. In Wellington, the cost of owning a commercial building has skyrocketed with rents not following the same trajectory. Seismic, insurance, interest rates, labour costs the list goes on. In a market that is predominantly gross leases, this is all on the landlord to absorb. This is likely to get a lot of flak for the “poor landlord” scenario, but the reality is owning a commercial property in Wellington is starting to just not stack up and adding further legislation will not help.

Would I like to see all commercial buildings sprinklered? Absolutely. Is the cost of doing this practical? No. Insurance discount you say, well fire insurance makes up such a small portion of Wellington premiums that there is not a drastic saving for adding additional fire services. You might find it easier to get some insurers but all in all not much help.

What can we do to help change this? INCENTIVES.

Whether this is from government assistance via funding, rebates to landlords for upgrades, or government providing accommodation supplements on the condition of fire compliance. We need to HELP landlords.

In short, the minimum that should be done is a review of the current fire standards for new buildings with engagement from the end user (us lovely property managers who act on behalf of owners) to work through the practicalities of implementation. In the end, it’s much easier to get it right at the start, isn’t it?