Government moves to bring in stronger fire protection for masses of infill housing, in some cases doubling it, have been stymied.
More than a year of work went into toughening up the rules to slow down the spread of fire in townhouses, terrace houses and other intensive housing types.
But key parts of the proposal were withdrawn in early May, just days before the fatal Loafers Lodge fire in Wellington last Tuesday.
That backdown was not because the housing industry does not think tighter fire regulations are needed, but because it does not agree how to go about it, and amid worries the moves will push up building costs, official documents show.
The tragedy in Newtown last week has sparked new scrutiny of fire regulations and a government review of rules around short-term accommodation.
But in the much bigger growth area of infill housing - terrace and townhouses and the like - the regulations have not kept pace with the government's rush to change the law last year to allow intensification to combat the housing crisis.
Official reports state existing rules are inadequate in five ways, including for fires now inclined to be more severe and spread more rapidly between cheek-by-jowl housing.
So the building regulator proposed "changes to address fire risks in residential homes as a response to trends in construction that have increased the density of housing".
Having failed to get key changes through this month, it told RNZ there would be renewed consultation.
New Zealand fire researcher Dr Kevin Frank, who is visiting his native Alberta, has watched something similar playing out across Canada.
"About 20 years ago they started building houses closer together.
"Now when you get a house fire, you lose, like, up to five houses because it spreads so quickly the fire departments can't react quick enough."
Casualties were usually low because everyone had their own evacuation route.
But the damage done was high, Frank, of the building research association BRANZ, said.
Here, the regulator, the Ministry of Business, Innovation and Employment (MBIE), has managed to win industry agreement for better evacuation rules and interconnected smoke alarms, to apply from next year.
Interconnected smoke alarms "from a life-safety standpoint [was] probably the most important thing they were putting in there", Frank said.
But at the same time, on 4 May, it withdrew proposals to raise fire resistance ratings for walls between houses from 30 minutes to an hour, to boost protections from internal and external fire spread, and to include more types of multi-unit properties under the tighter rules.
"There was a general acceptance that a greater fire resistance for the horizontal spread of fire was a good thing, but the way it was to be done didn't have universal agreement," said the ministry's manager of building performance and engineering, Dave Gittings, in an interview.
There was disagreement about where the changes "increased the cost of new buildings without sufficient evidence of the benefits", a ministry report said.
"MBIE will be withdrawing proposed changes to ... increasing the scope of multi-unit dwellings [covered] ... [and] increasing the life rating and property rating from 30 minutes to 60 minutes," an update to industry said.
"So we're going back and working out how we can actually do this," Gittings said.
However, in the meantime more two- and three-storey infill housing will be built under the intensification booster laws and the inadequate fire regulations.
The ministry's reset on one- to three-storey fire rules is also now complicated by it having to start a review about the mid-rise building safety risks raised by the Loafers Lodge fire.
"The [Housing Minister] has made it very clear that nothing is off the table," Gittings said.
Recent research by Frank and Dr Colleen Wade shows New Zealand is mostly behind the US, Australia, Canada and the UK on fire protection for two storeys and above.
As the country catches up on intensification, its fire rules seem to be lagging behind, not helped by this month's setback.
The question people must face is how much risk is acceptable, Frank said.
"Fire issues don't turn up immediately, so the problem is you can build a whole bunch of buildings and then all of a sudden you have a fire and it's, like, 'Oh wait, we made a mistake here'," he said.
New Zealand typically had lower fire resistance ratings, a higher height level at which sprinklers must be installed, and allowed more combustible building materials to be used in unsprinklered buildings than the other jurisdictions Frank and Wade's research took into account.
"We certainly don't require non-combustible materials to the same extent that many other countries do," said Wade, of the Fire Research Group.
"And when we're starting to now look to building more buildings out of wood, our requirements haven't really taken that into account."
Gittings told RNZ: "We're not saying the current standard is suboptimal. We're saying that we can improve it."
But his ministry's own reports list five fire risks "not adequately captured" by the existing regulations, known as C/AS1.
The BRANZ research in 2021 also showed that the higher the apartment blocks get, the worse our rules compared - for instance, Australia and Canada require sprinklers four storeys and above, in New Zealand it is 10 storeys and above.
Frank: "Some countries you wouldn't be allowed to ... well all of them basically ... you wouldn't be allowed to build a five- or six-storey unsprinklered building, particularly combustible construction, whereas you are in New Zealand."
Wade said there were "a lot of gaps and weaknesses" to address around multi-storey residential building developments.
She is working in a government-sponsored industry group on safer use of timber, the recommendations of which she hoped the ministry would pick up on.
Another impact of the setback for MBIE, is that the stronger rules will not go ahead and start to be applied from November this year to a wider range of housing: Townhouses, stacked multi-units and five other types of housing that are becoming more common.
The length of delay depends on Gittings' team opening up consultation with industry, again.
"If the consultation works well, if we can get agreement, we can implement them sooner rather than later," Gittings said.
"We'll continue to ensure that we can provide the best life-safety systems that we can."