The Coalition Government says it plans to push ahead with significant housing policy reforms before the end of June.
Prime Minister Christopher Luxon has been stamping his chief executive style on the Beehive’s operations and has started making quarterly ‘action plans’ for his government to deliver.
While many of the targets are easily achievable, publicizing each step puts pressure on ministers to keep the wheels moving in their portfolios.
Four items on the 36-point plan relate to the property market with changes planned in zoning rules, public housing, rental regulations, and construction materials.
Zoning regulations
At number five, Cabinet will agree to make the Medium Density Residential Standards (MDRS) optional for councils and “take decisions” related to the ‘Going for Housing Growth’ plan.
The Act Party took credit for this policy—and 17 other action plan items—in a newsletter to its supporters which described it as “the three-three-storey-house law”.
“ACT stood against the whole Parliament on this. We said mandatory zoning from Parliament would not build more homes, but it would further bugger up council infrastructure and annoy a lot of people. MDRS is going optional,” it said.
The coalition agreement between the two parties goes one step further and requires any council that wants to continue using the MDRS to ratify it with a vote.
Housing Minister Chris Bishop said, in a Cabinet paper, that he intended to report back on how to make the rules optional during the “first quarter of 2024” alongside other details.
This would be step one in a three year plan to promote housing growth which will force councils to zone “30-years-worth” of land for development.
What that means in practice is still being worked out. Some experts have said many councils have already nominally zoned 30-years of growth but housing costs continue to climb.
Bishop has said the definition was critical and would be announced before the budget in May.
Other initiatives to improve housing growth include the fast-track consenting regime—which could greenlight big developments—and new funding tools for local governments.
Public housing
Next on the action plan list is a formal response to the independent review of Kāinga Ora which is currently being carried out by former Prime Minister Bill English.
It was expected to report back in March, having looked at the financial viability of the Crown agency and its costs relative to the private sector.
Bishop said he was “deeply concerned” about the $520 million operating deficit which was weighing on the Crown’s total operating balance and blocking the path to surplus.
The report is likely to endorse opening up public housing to community and private providers.
Labour’s housing spokesperson Kieran McAnulty said community providers were currently pausing developments as the Government wouldn’t commit to funding rent subsidies.
“The Salvation Army, for example, has had 70 desperately needed homes kiboshed by the Ministry of Housing and Urban Development,” he said.
National didn’t wait for the budget to announce their $2.9 billion tax cut for landlords and didn’t need to wait to confirm funding for community housing providers either, McAnulty said.
Rental rules
Number seven on the coalition’s action plan is another set of Act Party policies related to rental housing.
It has been written as “introduce legislation to improve the rental market” but could also be described as a relaxation of regulations intended to give tenants more rights.
The Act Party newsletter said it would mean restoring no-cause evictions, shorter notice periods when ending fixed-term tenancies, and allowing landlords to charge pet-owners a larger bond.
Renters arguably benefit from these softer rules as they may encourage more property owners to offer their houses as rentals and take more risks on imperfect tenants.
Green Party co-leader Chloe Swarbrick questioned “for who precisely” the legislation would improve the rental market, implying it would not be tenants.
Building materials
Finally, number eight on the list is a promise to release a draft plan for relaxing restrictions on what building materials can be used in New Zealand.
Chris Penk, the Minister for Building and Construction, said in a recent speech that it was too expensive for new products to be introduced in the local market.
“We will cut through barriers stopping high-quality overseas building products from being used in New Zealand while ensuring we do not compromise on quality”.
National campaigned on easing these restrictions after pandemic supply disruptions caused prices for certain products to skyrocket, even though equivalents were available elsewhere.
The party proposed allowing any material or system approved for use in the American, European, British, and Australian markets to be automatically approved in New Zealand.
Act’s newsletter said the Ministry of Regulation, led by David Seymour, would be involved in the reform as the party had long campaigned for this change.
In 2021, the Labour Government asked the Commerce Commission to do a market study of the building sector.
The competition watchdog reported back in December 2022 and recommended overhauling the regulatory system to make it easier to access competitor products.
68 Comments
National MPs and the PM have millions of reasons not to deliver affordable housing.
I do not expect the interest of following generations of Kiwis can compete. The following generations will still be expected to bail houses out in times of flood, earthquake, economic risk etc, as always. Entrenched Entitlement Mentality will carry the day, even as the entitled rant about bludgers.
In case you missed it, they just bypassed all the usual democratic checks and balances, the Unitary Plan would be meaningless.
Whether its their supporters or not even the existing regs have had an unintended consequence, some would say intended by forcing owners of currently life style blocks to sell to developers because of horrendous rate increases. Case in point NP, NPDC. Not just an 18% increase as occurred for me in a residential zone but a conversion from rural to residential which changes the rate of $rate/$land value.
Many AirBnB properties that are also holiday homes (especially those in Qtown) will move back to the medium term furnished rental market for seasonal workers. The absence of medium term rentals (3-9 months) has pushed those seasonal workers into the long term rental market, competing with non-seasonal workers for accommodation which is what has led to the rental crisis in places like Qtown. There are over 35,000 people in the country on working holiday visas, and another 15,000 on seasonal work visas who do not need 12+ month rentals, they want maybe 6 months in multiple locations. They come for the summer or ski seasons and then they leave. Or in the case of places like Blenheim, they come for the Harvest season and then they leave.
There are claims that Akl has many (1000's?) unoccupied houses. Akl has refused to implement an empty house tax as I think Vancouver BC Canada has done.
I conclude that there aren't any surplus underutilised houses as the number are not worth it for Akl to collect such a tax. Or something else?
Time that Winston Peters played another song for the media? https://www.youtube.com/watch?v=D1KDnV9l2z8
There is a lot of merit in allowing overseas systems and products to be able to be used here. So many distributors in New Zealand do low volume and high margin sales just because they have the NZ rights.
Take electric heated floor thermostats for example, probably around 6 brands have certification for NZ and they are all about 4 times the price of what you can buy them for in the UK. It’s just wasted money.
Better access to overseas building products - I see another 'leaking homes' type disaster happening in under 10 years.
The overseas suppliers need to be made to detail their products properly and supply training in their use. Simply allowing them to blame 'cowboy' builders again shouldn't fly.
Had a client with plans to use that as cladding on their house, after looking at a sample I refused to use it and walked away. They came back 6 months later with revised plans to use colorsteel. When I asked why they admitted that they hadn't been able to find anyone who would use it.
I'm concerned with the down turn we're going into builders are going to let their guard down again and it will cost them dearly.
Not with jointly and severally liability, it's everyone's problem. I've seen many builders having to pay thousands just to defend things that weren't their fault, not to mention councils, which is costing ratepayers millions.
BIA was just disestablished and the government gets off Scott free. That's why the council, BRANZ and Builders are so risk adverse.
Couldn't possibly be the home owners fault for demanding something that doesn't work here, but looks pretty
Even Gib is difficult. No one else in the world considers plasterboard as a bracing element, so to use plasterboard from a different country you would either need to specify an alternative bracing, or government would have to allow an overseas product to be used for something it hasn’t been tested for on the basis that it is very similar to the NZ product that has. If they do the latter and that assumption is incorrect, a lot more houses would fall over in an earthquake.
Major savings if you don't need to use braceline, which in the case of lower cost homes you shouldn't need. The plywood is being used in place of flexible vapor barrier and means that you can 1st fix, insulation, and linings before the cladding which means time savings if you have different contractors on the outside to the inside.
Gib has the consistency and tensile strength of chalk, which is it's first cousin: it still boggles me that that BRANZ got talked in to allowing plasterboard as a bracing element.
And hopefully it will become less of an issue when we start to get away from sticks and fluff building and move to factory-built homes and materials from at least the latter part of the 20th Century.
On the other hand it has been tested here, like any other bracing system that has been certified.
Winstones also commissioned a report on how modern buildings performed in the Canterbury earthquakes where gib was used as the bracing system. Possibly biased but don't discount it out of hand.
Ha! Some folks here think the biggest threat to farming is planting pine trees. In reality the biggest threat is Auckland Council being forced to zone 30 years worth of expansion into Pukekohe market gardens, turning Warkworth into a park’n’ride, and allowing beachfront condos at Muriwai.
Meanwhile the great and the good living in Parnell will continue to enjoy their tree lived boulevards and Rangitoto views - no 3 story intensification for them!
"independent review of Kāinga Ora which is currently being carried out by former Prime Minister Bill English. "
An "independent" review conducted by a politician who spent his whole time in power trying to sell off Kāinga Ora. Pretty sure we don't need to wait for the review to know that conclusion will be.
My biggest worry will be sealants and/or adhesives etc . There is already a huge difference in longitivity between the good brands and the cheap stuff. more new brands and it gets even harder to know what is going to last .
I've only recently changed brands after 20 years, i am not interested in any sales talk on how long the product will last , cos that salesmen will be nowhere to be seen after 5 years.And they only warrant the product , not any damage.
The proposals for tenancy changes are significant and much-needed. No-cause evictions sounds dramatic and awful but it will enable landlords to get back control of their housing asset when they have bad tenants who don't pay rent, wreck the property & disturb neighbours. Currently the due process to move these tenants on takes many months, by which time ....well, you can imagine.
Because of these delays in getting rid of a non-paying destructive tenant, It has sometimes now made more sense for landlords to sell up or leave their asset vacant rather than take the risk. It has also made landlords only opt for totally 'safe' applicants, whereas before the current no-eviction legislation a skilled property manager would be prepared to give someone a go.
The proposed pet bond is a big deal as many landlords would be prepared to take on a tenant with a pet but currently it is not worth the risk, given the damage to property a pet can do. Many pet owners manage their animals well but the small percentage of those who don't make it risky. I am sure the good pet-owning tenants would be understanding and ok with a pet bond.
PS I like how Dan achieves balance in his reporting, but that quote from Chloe is pretty glib and devoid of any analysis or reasoning, which can still be achieved in a short sentence.
Since no landlord ever evicts a good tenant for no cause, it wont affect tenants who make an effort to look after the property and be good tenants and neighbours. They have nothing to fear. Its the tenants who seem to think that Labour gave them a licence to do what they like to terrorise neighbours, trash their rental house, and never bother to clean. Its these tenants that will suddenly have to start making more of an effort - and that is most definitely a good thing.
One of my biggest worries with opening the door to overseas building products is that expectations of longevity in places like the USA are far, far shorter than we expect in NZ. In some places in the USA, houses are expected to be torn down after 30 years. (In others though the rules are extremely strict and houses will last for 100s.)
Further, our climate is very different to many places. E.g. most of our population lives in coastal regions which are exposed to high wind, driven rain and salt laden air.
I see another "leaky house" disaster looming. Especially as most Kiwis haven't a clue as to what goes into a building a dwelling. (Had a chuckle in an open home recently where a couple were looking at fixtures and fittings and saying how nice they were. Alas, all were the cheapest on the market. The kitchen would fall apart in 10 years. Quite sad really.)
On the "leaky house" disaster - Wasn't it the Nats that opened that door? By golly it was. History repeating ...
Most of the issues in the leaky homes were that builders weren't trained in the use of new building products rather than the products being faulty.
Coupled to technical compromises like untreated timber being allowed by BRANZ for framing after extensive lobbying and assurances by some quite big local companies, and the lunacy that builders are not required to carry long-term insurance that persists after they fold up their company because their incompetent work is generating huge claims...leaving councils liable and making them hugely bureaucratic to try and mitigate that liability.
I think I'd be much more interested in, say, Canadian CSA ratings on products designed to put up with things like Saskatchewan winters, Vancouver's salt-laden sea fog, or the oven-summers of the prairies, than something evolved in an under-resourced local test facility that is being continuously pressured by local interests.
Fixing fibre cement sheet directly to framing, spraying a mixture of stone and cement at it, then expecting the paint system to keep the water out doesn't scream a faulty system to you?
Yet people find fault with Gib as a bracing system that has actually been tested in the lab and real world?
It would be hard to argue that our indefinitely contestable planning processes are not sclerotic, expensive and uncoordinated - and even people like Geoffrey Palmer, who was an architect of the RMA, have come out to say it is now not fit for purpose.
While I'm not wild about the by-pass of some regulation, it will likely be an interim fix until something cohesive and evidence-driven can be created. Not creating a planning routine makes the process
At least something will actually happen and the trick is learn and apply what is learned from mistakes, rather than denying reality and doing what the theory says, regardless of a lack of results.
There are clearly some good ideas flagged but the detail is still needed. A few years ago I looked at how much of a subsidy KO was getting per rental. I compared that subsidy with the subsidy granted to tenants in private rentals. Bearing in mind most private rentals are “usually” better maintained than government housing it was a shock to find government paid for rentals cost us four times more than private rentals. Government housing accounts for less than 20% of all rentals and in many regions way less. If I and others can provide well maintained homes with happy tenants at less than half the cost of government housing why not give me me more tenants to house.
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