sign up log in
Want to go ad-free? Find out how, here.

The Productivity Commission's come up with some great ideas to resolve our housing issues - but also implicitly explains why the ideas will likely be rejected

The Productivity Commission's come up with some great ideas to resolve our housing issues - but also implicitly explains why the ideas will likely be rejected

By David Hargreaves

The Productivity Commission's Using land for Housing report pulls off a fairly neat trick.

It manages to offer some very sensible solutions to a vexed issue, while at the same time implicitly giving reasons why few if any of its major recommendations will be picked up.

Bill English's sparse, six-paragraph, media statement acknowledging the release of the report (see below) would, I suggest, be an early indication of where this is all heading.

I confess I have not yet had the chance to wade through all 374 pages of the commission's report (it's on the list for New Year's Resolutions next year), but so far as I can see the word "nimby" is not used.

And yet the not-in-my-backyarder is omnipresent in the document.

This document gives one of the better explanations I have seen as to the way in which existing land holders zealously protect their interests and ensure that land values keep rising.

Consider these four points as articulated in the document:

  • Groups that have high home ownership rates have higher rates of participation in local government elections.
  • Restricted housing supply will tend to inflate the value of existing homes.
  • Existing homeowners have an incentive to be risk-averse in opposing developments that could affect the amenity and value of their home.
  • Existing homeowners have an incentive to oppose development that involves council expenditure on infrastructure that does not benefit them but will be recovered through general rates. 

And there's more, but you get the message.

You almost wonder if there is an element of the authors of the report attempting to shame those who can do something about it into acting. If that is indeed the intent, I would say they've not done a half bad job.

There's apparently 38 recommendations in the report and many of these amount to some commonsense tweaking. The cynic would suggest that it's the commonsense tweaks that will be picked up by the Government and local authorities - to be seen to be doing something - but I would be much more surprised if some or any of the "big" ideas in this report are given even half-serious consideration.

The biggest among the biggies is the creation of an urban development authority. Such authorities are apparently under consideration for Auckland and Christchurch. However, the report appears to favour the idea of one agency for the whole country.

The idea would be that this agency could compulsorily acquire land blocks. The productivity commission argues that large tracts of land are owned in small parcels by large numbers of owners. This makes it difficult to carry out the kind of large-scale housing developments believed to be needed particularly in Auckland.

So, the urban development authority would have the power to compulsorily acquire large numbers of adjacent properties to consolidate into large-scale developments. Makes a heck of a lot of sense to me and presumably would be fought tooth and nail.

I have already had amusing thoughts and conversations today about the possibility of vast areas of Auckland's Herne Bay (which happens to be where the interest.co.nz offices are) being compulsorily acquired for the provision of high density low cost housing! Was that a large, pink, flying pig that just shot past the window?!

But all joking aside, I do hope this recommendation is not just cast aside, because there would appear to be real merit in it.

A perhaps surprising suggestion in the report is that councils borrow more money. This again is something the nimbys get reasonably worked up about, but the Productivity Commission says there's room on most councils' balance sheet for more debt.

And another one that wouldn't delight the nimbys comes on the controversial topic of provision of infrastructure. The commission suggest that those who benefit from the infrastructure help to pay for it through targeted rates.

Likewise, in a similar vein, is the suggestion of user-pays roads. Given that the Government's already been reasonably dark on Auckland Council's suggestions for doing similar things, these again look like very meritorious ideas not likely to be seriously considered.

And probably the idea that will be dispensed with first of all is the suggestion that the Crown loses its exemption on paying rates on Crown land. Now that's a really great idea that surely won't fly.

Somewhat to my disappointment the commission doesn't suggest land tax as such - but it does suggest paying rates on land rather than capital value. Surely that is an idea that could be picked up? It would encourage the land bankers to develop vacant plots since the current incentive to NOT develop would be removed.

I think this is an excellent report and I really will be reading it all.

I would love to think that large parts of it could be picked up, but, really, as I said at the start, this report itself probably gives the best reasons of all just why little of it is likely to be adopted.

The fact of the matter is that the majority of people have a vested interest in seeing property values continue to skyrocket. When push comes to shove, why would they really want to adopt measures that would harm their capital gain chances?

So far as I'm aware, turkeys don't vote to have Christmas.

This is Bill English's statement on the report:

Govt welcomes draft Productivity Commission report on housing

The Government welcomes the Productivity Commission’s draft report on using land for housing, Finance Minister Bill English says.

“In September last year, the Government asked the Productivity Commission to investigate ways to improve land use regulation and infrastructure provision for housing by local authorities,” Mr English says.

This draft paper follows the 2012 Productivity Commission report which highlighted that the most important thing for housing affordability is to increase the supply of houses.

“That is why the Government is focused on special housing areas, reforms to the Resource Management Act and making better use of our Crown owned land – for example we are redeveloping Crown owned land in Tāmaki to add an extra 5,000 houses,” Mr English says. “The new Productivity Commission report will help inform the next steps in our housing work programme.

“Local authority processes such as planning, zoning and the provision of roads and water infrastructure also clearly have an impact on land availability and housing supply – which is why we asked the Commission to look at this important issue in more detail.”

The Productivity Commission is seeking submissions on the draft report, available at www.productivity.govt.nz, by 4 August 2015.

Mr English has ministerial responsibility for the Productivity Commission.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

19 Comments

Suggesting compulsory acquisition of land that council's have refused to rezone for decades, so that the government can then pass it on in a rezoned state to their mates would breach the bill of rights. Owners are entitled to fair compensation. Unless they are paid full market value of the rezoned land, such acquisitions would be demonstrably unfair.

The government had better wait and see the outcomes of various high court actions against the Crown regarding a similar issue in the Chch blueprint cases.

Even if such policy were introduced it would not greatly change matters, as the land value is a relatively small component of the end value of the house, and it would not solve the actual problem of money of dubious origin flooding into Auckland and excessive immigration which are the true underlying causes of Auckland's dilemma.

Up
0

This report has to be read in the context of its Terms of Reference. When they were originally released it was obvious that the Commission would be severely restricted in the scope of findings and recommendations it could make. So it has proven to be.

It is far from radical. In fact it is pretty much your favourite uncle snoring contentedly in front of the fire.

374 pages! I might have more to say as I plough through them.

Up
0

Given the animosity of the people in Auckland and Christchurch to expanding the housing stock then maybe the Government needs to look at other areas for expansion........maybe the likes of NIck Smith should look at his own backyard....throw in an international airport etc......if people want to hang on to land and housing and be speculative then call their bluff.......

Up
0

Careful re Christchurch commentary:
Two aspects:
Here, the house price rise has plateau'ed and, quelle surprise, that's because the adjacent authorities have proven to be more nimble and reasonable as to processes and regulation, and less rapacious as to contributions and fees/levies. So ECON101's invisible hand has fairly much resolved the lack of supply in the City proper. http://www.stuff.co.nz/business/68644601/the-rise-in-house-prices-loses…

This is largely down to a phenomenon which won't apply to Awkland unless one a them Volcanoes wakes up: the sudden rendering liquid (via insurance and red-zone payouts) of around 10,000 houses that under normal conditions would have been darned hard to sell: think Aranui, Wainoni, Bexley, Dallington for starters. All of a sudden, people had literally several hundred grand in their pocket, so of course they went shopping. And went out of the city to get the best deal for their dough. Normally, housing is illiquid - taking a protracted and expensive (moving for buyer and seller, agents and conveyancing fees) process, and is hence not undertaken lightly. Gaia's little hiccups cut right through this process. That ain't gonna happen to Awkland. (Wellington, well, maybe, sorry, BH)

Bear this in mind when Christchurch is waved about as some sorta Example.

Up
0
Up
0

Interestingly, only in the sense that if the covenants say no relocatable housing, then the relocatable house owner is toast if the owners exercise their legal rights.

The owner of the relocatable is either ignorant, or arrogant.

Up
0

From the article the wording is quoted as:

"any dwelling house other than a new house".

So the issue I assume is new, rather than relocatable.

Odd however that the land owner didn't even apply for a building permit for the foundations .. so implies they aren't terribly up-to-speed with the law. The article states that the owner is a "director of engineering consulting firm Build Green Ltd, which specialises in environmentally-sustainable buildings."

http://buildgreen.co.nz/

I suspect she's looking for a test case wrt a new prefab relocated to the site. It will come down to a civil case hearing if the residents decide to take it that far - as I suspect the council is right that it is not their place to consider or enforce a covenant.

I've always disliked covenants - they do indeed get in the way of innovative design as well as affordability. Perhaps this is the point(s) the owner is planning to make?

Up
0

My understanding is the covenants also say no relocatable.

Up
0

In which case just about all wooden framed NZ houses are "relocatable". Personally an older house with high quality flooring in say matai renovated to modern standards of insulation, services and fittings is preferable to new.

Up
0

No it doesn't because that is not the definition of a relocatable house. And yes you could be right about an older high quality house that is renovated to a high standard.

Up
0

David Hargreaves says "I see the word "NIMBY" is not used"

How would you define NIMBY?

Nimbyism exists at many levels and across many stratas of society
Bernard Hickey usually uses the term in disparagingly with "leafy up-market suburbs"

Here is an example of residents up in arms in a non-leafy non-executive suburb of ChCh
http://www.stuff.co.nz/the-press/news/69482197/residents-use-cars-to-bl…

Try this for nimbyism
https://www.youtube.com/watch?v=qAVZdpQG1n0

Up
0

Here is my definition of Nimbyism. A Nimby is someone who denies his neighbour the same legal rights they have.

Up
0

That doesn't work as in the main the use of the phrase often refers to whole neighbourhoods who opposed any land-use and/or site/building design/development change (i.e., a move to smaller sections sizes in a lifestyle residential area; or a move to higher density in an urban area). NIMBYs normally object to plan changes, or non-complying resource consents - as opposed to already established legal rights (i.e., existing permitted activities under the RMA).

Up
0

That’s the whole point of the definition Kate, a vast majority of the objections do deprive their neighbours of the same rights. If those people understood that these type of objections are not legitimate, then that would get rid of a lot of noise and it would be easier to listen to real concerns.

For example, the owners that are having issues with the relocatable are not Nimbys because they are not denying the relocatable owner anything that they have already denied themselves. Their rights are equal.

A Nimby is not a Nimby just because they object, it’s more why they are objecting.

Also you say a Nimby is ‘Whole neighbourhoods are opposed.’ Not only do you want to override individual property rights, but you want to override whole neighbourhoods, what are next whole cities, countries?

If a whole neighbourhood agrees, what’s there to object to, except from some outside party?

Up
0

I think you misunderstood me. What I'm saying is many NIMBYs want to protect their existing rights under planning laws. Say a developer applies to build a retirement complex which seeks consent for a structure or master plan unique to their residential use. The land is already residential zone, but they want to change density, street and landscape rules etc., particular to their type of development. They (the developer) has no existing right to vary the plan rules, nor do any adjacent/local property owners - and if neighbours object they often get called NIMBYs.

What I'm saying is some NIMBYs don't deny others what they could lawfully do themselves - they deny/object to others doing what they cannot do either.

This is more my experience, as most RCs that get notified are for non-complying activities.

Up
0

I wasn’t meaning you were a Nimby, but the example you give of a retirement village is interesting. Unless an activity is prohibited, in theory, anything is possible. So all a non-complying activity means is that is has to go through more ‘questions’, and if the right answers are given, then it may be granted.

Legally, if you disagree with this proposed activity, then you only have a narrow window to voice your objection.

One of the reasons there are so many objections, is that developers provide so little information, that no one, even those that might support the development, can make a logically informed discussion, so more people object than should.

A retirement village you would think is a pretty benign activity, but what say for example, it was three storeys high and was hard against your north boundary and blocked your sun, then you might have a legitimate concern, and you wouldn’t and shouldn't be called a Nimby.

My original definition, in my opinion, matches your comment about what I'm saying ‘ is some NIMBYs don't deny others what they could lawfully do themselves - they deny/object to others doing what they cannot do either.’

My point being, that as soon as someone (all people) that objects is called a Nimby, it debases the conversation as can be seen by those who have made comments on the Press article on the relocatable houses.

Up
0

Nimby's are those who say they want green power...but no wind farms on their sight line.
Those who want and live on cellphones and mobile devices but don't want towers or roaming charges.
Those who think Auckland house prices are too high and should be cooled off, but are waiting to maximise the capital gain on their auckland property.
The someone should speak up about government created problems as long as it won't come back on them.
That want higher wages, but lower prices.
More government services, and have to pay less in tax margins.

Basically anyone who says "something thing needs to be done" but just not in my back yard. (ie affects me)

so "we" should all tighten our belts and take haircuts.... so the MBIE can spend up big...

Up
0

I don't categorise NIMBYism in terms of opposition to something which is anticipated or not anticipated by District Plans. I categorise it in terms of UNREASONABLENESS versus REASONABLENESS.

Is it reasonable to oppose a 100 unit retirement village next door to you that won't shade you, is nicely landscaped, and only generates minor volumes of traffic with access a reasonable distance from your property ? In my opinion, no way. Yet there are plenty of examples of such developments generating NIMBY opposition.

How about if the Retirement Village built a three storey apartment block that would block 2 hours of sun? Then opposition to that isn't NIMBY, it's a fair and reasonable concern.

Personally I detest true NIMBYism. It's usually small minded, dumb and pathetic and far too much leeway exists for it to influence decision making.

I believe it's the sad by-product of a NZ society that has become thoroughly self interested.

Up
0

the Productivity Commission and Auckland can look to a few rare examples of Councils doing the right thing in terms of planning in NZ, if they care to look beyond their own neck of the woods / egos. Wellington CC does quite a good job, and Queenstown is about to notify a District Plan that looks like it will be bold and innovative in terms of density etc. But just wait for the NIMBYs down there..... Queenstown is also proposing in its annual plan to nuke reserve contribution charging in existing urban areas (there's an automatic saving of 10-15K per new dwelling / section)

Up
0