By David Hargreaves
Nice try. Now try again.
The Government has been too cute by far in using Auckland's housing problem as an excuse to attempt to ram legislation through Parliament that would enable it to centrally control housing development in large parts of the country.
I have previously had this to say about the Housing Accords and Special Housing Areas Bill. Others have had their say too, including the Law Society. The Auckland Council now appears to be circling its wagons, while Housing Minister Nick Smith is demonstrating the kind of dogma this Government is becoming far too readily associated with.
In reality, the bill as it stands is far too much far too soon. When the Government announced it had developed an Auckland Housing Accord with the Auckland Council last month (see housing accord articles here) the indication was that the legislation introduced into Parliament following the Budget would be simply to enact the accord.
But the legislation isn't simple and it doesn't just enact the Auckland accord. In fact there is not much reference to Auckland at all. Nick Smith has gone gallivanting off, like Rambo looking for his jockstrap, and produced some hastily pulled together legislation that could potentially neuter a big part of the what this country's local governments currently do.
In reading feedback from interest.co.nz readers to previous articles on this subject, it is quite clear there is a view abroad that the Auckland Council has made a mess of housing development, so let's bring on the central Government to organise Auckland's housing development because they couldn't do any worse. Just build houses and never mind.
Well, be very careful what you wish for. It is always very dangerous to assume that because one thing doesn't work very well then anything, anything at all, you replace it with, will be better. Oh, no. It does not have to be so. If you think things can't get worse you can always be surprised.
Everybody wants to see Auckland's perceived shortage of 30,000 houses tackled as quickly as possible. But the current legislation before Parliament is very much the sledgehammer to crack the walnut. Do we want the Government having the power to over-ride most local authorities in the country when it comes to housing development? Why stop there? Why have local authorities at all?
In actual fact, I'm no fan of local government. I have long since opined to anybody who will listen that all I want from a local council is that it pumps fresh water into my house and then removes the less than fresh water from it later. That's it as far as I'm concerned. But various previous central government changes have put more onus on local authorities. And the creation of the Auckland Super City (which I didn't agree with) brought enormous power with it.
But if we are now going to have a debate about what powers local authorities should or should not have, let's have that debate properly. Let's not shove some legislation through Parliament under the guise of solving Auckland's housing problem that in fact, de facto, becomes a way of central government re-asserting power at a regional level.
The real issue, right now, that needs tackling is Auckland's housing shortage. There is something akin to panic settling in with home buyers - and prices are going up. This is not an Auckland-specific problem because if Auckland prices go up this drags national prices up and the likes of the Reserve Bank get very interested (they already are) in the potential consequences for national inflation.
The historically low levels of houses listed for sale on the market as we go into winter bode very badly for what might happen once warm spring weather is upon us in October and November. Potentially we could see a massive surge in buyer interest that the market can't keep up with and so soaring prices will result. Before we get to that point there has to be some clear signal sent that Auckland at least has a plan to tackle the housing shortage.
What is needed is a sensible, rational, agreement between the Auckland Council and the Government that will allow building activity to ramp up as quickly as possible in Auckland so that the current shortage can be tackled. The Government and council should get back around the table, re-negotiate the terms of the accord - if that is necessary - and then the Government should go away and draft up an Auckland Housing Accord Bill, which can be introduced into the house simply to tackle Auckland's housing shortage. Yes, that's right. Tackle Auckland's housing shortage. Nothing else. No hidden agendas. No power grab. Tackle the problem.
Later, if the Government really wants to get into the whole issue of what should be centrally-versus-locally-governed then it should, if it wishes, get the legal boffins looking at some substantive legislation further down the track that perhaps redefines the boundaries between central and local governments.
Auckland needs more houses. Now. The Government and the Auckland Council need to get together now on that issue and leave the gang-style 'turf warfare' for later. This issue is too important to be drowned in petty politics.
31 Comments
"Do we want the Government having the power to over-ride most local authorities in the country when it comes to housing development?" - Short answer, yes.
"Why stop there? Why have local authorities at all?" - Very good point. They've become an utterly useless waste of rate payers money.
I dont agree, (utterly anyway) plus they are voted in, so can be voted out. Now sure they need to be pared back, yet of course ppl want the services.
Consider further what you are saying, in effect you are saying get central Govn to do the councils job, so more centralised publically paid staff even further from the coal face.
The next Q is how will funding work? rates are going up at 6% per annum, PAYE taxes have not been, yet hiden taxes are going up. So do we really want central Govn to be setting the rates and syphoing off the money for other things? Or the central Govn deciding that (say) Auckland west is a seat we can win if we spend money there, so we'll starve Auckland south were we cant win? that sound like a great outcome.
regards
Local Authorities need to get back to basics of delivering water, sewerage and roading so I'm all for Rambo finding his jockstrap and harnessing the power.
Housing is a basic human need and bureaucrats shouldn't be allowed to interfere. The bureaucrats should have ensured that the system was free enough so that people can meet their basic needs. Councils have put their needs ahead of the people.
If the council has to deliver water and roads, shouldn't it be allowed to choose where it delivers them to based on the cost of delivering them? Letting anyone build anywhere no matter how much it costs to get services to them is effectively the majority subsidising the minority.
"potentially neuter a big part of the what this country's local governments currently do"
Which is (e&oe):
- restrict land supply against a rising demand thus causing ECON101 price rises
- as the first side effect, handing a luvverly CG to a selected lucky few landowners
- as the second side effect, watching as that vastly increased land price for undeveloped land instantly transmits itself across all comparable developed land plots in the adjacent market, thus multiplying the initial if localised CG thinly across that entire market.
- as the third side effect, handing banks and financiers a vastly increased interest revenue stream, as eager or desperate buyers borrow to buy said plots (existing or new)
- effectively lock out new entrants to the housing market
- effectively transfer development to the many thousands of lifestyle blocks outside the MUL/RUB or other squiggle on a map
- levy fees, contributions and other costs upon any and all attempts to develop the land or densify existing properties
- add mutliple cost layers to any attempt to develop, densify or otherwise improve properties in a way which attracts a resource consent (a sampling: pre-application consult, require engineers/surveyors/feng shui consultaterations, inject time into processes, impose conditions during the process)
- display a breathtaking ignorance of such basic economic fundamentals as supply and demand, or the time value of money
- make decisions, plans, policies and processes which (what else) ignore economic fundamentals
- act rilly, rilly surprised when one of the following occurs:
- massive public opposition to cherished policies and plans
- first home buyers throw in the towel
- developments Unexpectedly are cancelled or deferred (Always the U-word!)
- people don't want to live where and how the Planners want them to live
For the life of me, I just cannot imagine why a Gubmint would want to clamber in and alter Any of the above.....
Like the curate's egg this is excellent in parts.
However - and with me there is always a however - we would be doing Auckland residents a bigger favour to acknowledge that there has been a major market failure - full stop. Of course there is one narrative that says, since free markets always deliver every possible good, then it must have been public sector interference that caused the market failure.
Then there is the other narrative that says there has been a failure let's find out why and fix the problems we find. So far no-one has actually pulled the whole sorry mess to pieces. Even so, we already have plenty of solutions rushing around looking for problems (well, actually just one: " kill the great raven" - apologies to The Residents).
If Auckland council are doing such a bad job of planning Auckland, why is it the fastest growing area of nz? Auckland has improved immensely since the council halted the urban sprawl and made the city a much more desirable place to be. There is still a long way to go, but when I look back at Auckland when I moved here 15 years ago compared to now the changes are huge. Yes house prices have increased a lot too, but that has happened everywhere. Ecomonically urban sprawl doesn't make sense either apart from the cheap houses.
Tony Alexander says 4.6% of sales in Auckland are going to overseas investors who have no intention of living here. Just recycling that 4.6% into the sales market would reduce the rentals available and hopefully satisfy a number of new owners need for their own home.
I would really, really like to see some of these 'knowledgeable(?)' people,like Nick Smith , Len Brown, and the various property gurus address this above first, and then, and only then recalculate the numbers of new builds necessary. Investors can try to get a rental dollar that they want but the renters can only offer what they can afford and that is ultimately the determining value of the property.
you get the sense that the people you are talking about just dont come here and see your wisdom .. might need direct action .. send a link directly to him http://www.nick4nelson.co.nz/ and bombard him with it
At least Len Brown has a twitter account
https://twitter.com/mayorlenbrown
You can Twitter him here
@mayorlenbrown
Nick Smith doesnt have a Twitter account - beneath his dignity - you need to undignify him
So does that mean that you can't afford to buy there. And can't afford to rent there either. Well something will happen in time. Perhaps the properties will be purchased by people who can afford to rent them at below cost. Or maybe the properties will come back onto the market. Mmmh.
You have noticed right. Definately signs of oversupply of rentals in Auckland. Often is at this time of year but this is probably the best tenants market since 2008. If your place isn't well presented with sensible rent you could wait for months if you want to be picky about tenants.
Want some cheap houses Kimy? If any of your properties are subdividable under your local district plan, you can apply for a land use consent to have more than one dwelling on your property. You do not have to subdivide or have any future plans to subdivide (saving rates). You can at any later stage subdivide by right if selling etc. Employ a surveyor to get the consent and you should get a substantial home for under $300k.
central govt powers ARE needed. Even if the Council get their act together (far from certain) and deliver a good Unitary Plan, it won't be operative for at least 3-4 years and Auckland / NZ simply can't afford to underbuild houses for 3-4 years - the country will be ruined.
Local government has a horrible record in Auckland on this issue. By my recollection, the Regional Growth Strategy was finalised about 1999? Then for the next 10 years the local councils farted around and hardly got any upzoniongs done, leaving us in the current mess of limited greenfield land + limited medium density upzonings = limited housing supply = rising house prices.
How about a solution to the problem?
Situations Vacant, wanted 3 property developers experienced in either - Strata, Infill or Greenfields developments to be employed by either Local or Central Government. We need some affordable dwellings built. We have the power to make it happen but don’t know how, as we are currently bogged down with politics and bureaucracy. Don’t worry you won’t have to talk to politicians or bureaucrats we have employed some go betweens as we realise you are currently self-employed for a reason and we don’t want anyone upsetting our sensitive persons or yourself. Ideal candidate would be someone who has a strong mind, isn’t scared of big numbers, has the kiwi can do attitude and of cause experience. We are trying to keep the costs down so it isn’t paying much but let’s do this for the kids. These will be on sold to NZ citizen first home buyers who currently reside in NZ, unlike the rest of the housing stock which can be bought by any human on earth over 18.
Phone one of our go betweens now for an interview, no CV required as we know you haven’t needed one before and won’t apply if asked for one, after all that’s what the go betweens are there for.
How to write the same advert so you get no applicants. http://myjobspace.co.nz/job/322835 Talk about trying to shove well rounded pegs into the square's holes.
Give Nick and Len a violin each and let them have a jam off for the position of "Emperor Nero"
Saying that the central government should be responsible for planning Auckland is ridiculous in the extreme.
The government are voted in by the whole country, meaning a government with a very unpopular plan for Auckland such as unlimited urban sprawl LA style with no public transport and clogged 6 lane motorways could be forced upon Auckland without a single aucklander voting for it let alone the majority. Auckland voted in Len because the majority want a compact city with better transport options.
Why should nick smith who doesn't live in Auckland and probably despises the place be allowed to control what goes on here?
The Auckland council want to free up land for development via the unitary plan but the government don't like it because a few of their rich mates might get some apartments next door. I think national need to be careful because they might lose a lot of their voters at the next election if they keep this up.
This housing issue not only has legs, it has wheels !!!...and it's going to go far into election year ...Both the major parties are feeling the heat .
Wonder why the Labours has a target of 30000 for the first 3 years (10000 per year for umpteen years) and the Nationals has 39000 for three years???
Wonder why Nick smith is on "whatever it takes" mode in tackling Lenin Brown ? Wonder why Lenin Brown is fighting tooth and nail to keep his "Empire" powers??
Lenin Brown is a Labour proxy !!!
Auckland is going to be the biggest battle in the 2014 Election war....You ain't see nothing yet !!!
On a more sane mode : Is there really a shortage of 10000 houses per year in Auckland ?
What happens when interest rate rises (which it will very soon as US T bills and Mortgage rate are going ballastic now)....
What happens when the Recession in Australia reaches our shore in the next 6 to 12 months ??...Still demand for 10000 houses ??
This is not a defence of Auckland Council. In my opinion, they have failed with a capital F...rather a warning that when politicians goes into "politics" mode, they alway never fail to make matter worse
Yet young professional in TV last night didnt want to live on the fringe and spend hours commuting and paying for gas and be away from friends, couldnt afford to buy so had to rent. An impossible want of course. Im sure most ppl have them, hopefully yours will stay that way as well.
regards
From Gormlesslee no less, if I was the ChCh council id hand it over to billy bunter and tell him to sort it.....he couldnt sort his way out of a wet paper bag.
Quite why ppl think a dept used to sorting say 5 apps a day can shift up to 35 is quite surprising...
regards
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