By Alex Tarrant
It will be another six to nine months before the real details of the government's efforts to address housing affordability will be known.
And past experience dictates it may then take another three years for any changes to residential planning processes to come on-line, Finance Minister Bill English says.
The government on Monday afternoon released its long-awaited response to the Productivity Commission's report on addressing unaffordable housing in New Zealand.
While Environment Minister Amy Adams re-announced a six-month time limit for medium-sized Resource Management Act (RMA) applications, most of the government's responses to the Commission's recommendations were 'agreements in principal', or recognition that government wanted local authorities to change their approach to development rules and planning processes.
For example, the government said it supported greater supply of different types of housing both outside and inside existing city limits.
But it left any commitments for action to the local authorities already in charge enforcing planning restrictions.
At least, that was until "ongoing resource management reforms may provide an important opportunity to deliver long-term improvements to the planning system and to planning practice."
That ongoing work programme focussed on RMA and Local Government Act (LGA) amendments, including work on the standardisation of building consent processes across the country.
It was also possible the government would investigate the make-up of the building supplies industry. English noted any investigation into that industry would have to look at the near-monopoly held by Fletchers.
Nine months for details, three years for changes
Speaking after Cabinet on Monday afternoon, English said the RMA and LGA work programme should be completed within six to nine months.
“But just to give you a sense of the scale, most major district plans took ten years to become operative, and a lot of the changes take three to five years. The one plan for Auckland, we’ve made a decision that that’ll all be done in three years," English said.
“So it could be...two to three years before the significant changes in the planning processes. We do always have the option of some legislative change from Parliament, but we would want to be careful about cutting across the mandate and the knowledge of local councils.
"We’d prefer to work with them," English said.
He issued a threat to local authorities that they needed a greater focus on the supply of more affordable housing, and said those authorities had hopefully realised the government was serious about the issue.
The policy placing a six-month time limit on medium-sized Resource Management Act applications should affect subdivisions with more than 20-30 houses, English said. The policy was part of the National Party's an Election 2011 re-election platform.
What about releasing land 'immediately'?
The headline recommendation from the Commission when it reported to the government in March was for the immediate release of residential-zoned land on the outskirts of Auckland and Christchurch to address high section prices for new house building.
The Commission also called on central and local government to address roadblocks to more 'brownfields' development - densification within existing city limits.
While the government said it "supported increasing housing supply in both new and existing urban areas, at a range of densities and housing types, for example, stand-alone family homes or medium-density terraced housing," it said:
"Making suitable land accessible to the market and delivering land-use rules and infrastructure investment that increases housing supply and diversity are roles for local government under the jurisdiction of the suite of planning statutes the Resource Management Act 1991, the Local Government Act 2002 and the Local Transport Management Act 2003.
"Such initiatives require a commitment from individual local authorities and, ultimately, a mandate from local communities as well as enabling changes in legislation," the government said in its response to the recommendation.
"Central government needs to ensure that the planning framework supports local authority efforts and that the right tools and guidance are available. The ongoing resource management reforms provide an important opportunity to deliver long-term improvements to the planning system and to planning practice," the government said.
Read the Productivity Commission's report here. The government received the report in March, and released it publicly in April this year.
See the initial release from the government below:
The Government agrees with the Productivity Commission that housing can be made more affordable, and has embarked on a wide-ranging programme to make that happen, Finance Minister Bill English says.
The Government today issued its response to the Productivity Commission’s report on housing affordability.
“High house prices matter because many New Zealanders spend a large portion of their incomes on housing and that has helped fuel household debt and contribute to damaging imbalances in the economy,” Mr English says.
“In particular, high housing debt diverts money from more productive investments, contributes to New Zealand’s significant overall level of indebtedness and exposes taxpayers to growing demands for State assistance with housing costs.
“Those factors make it vital that housing becomes more affordable. In addition, projections suggest that many more homes will be required in coming years than are being built.”
Mr English warns that there will be no quick fixes and instead, work is needed in a number of complex areas and across multiple government, local government and private sector agencies to tackle issues that are deeply embedded.
Having carefully considered the Productivity Commission’s recommendations, the Government is today responding with a comprehensive work programme with four key aims:
· Increasing land supply - this will include more greenfields and brownfields developments and allow further densification of cities, where appropriate.
· Reducing delays and costs of RMA processes associated with housing - this includes introducing a six-month time limit on council processing of medium-sized consents.
· Improving the timely provision of infrastructure to support new housing - this will include considering new ways to co-ordinate and manage infrastructure for subdivisions.
· Improving productivity in the construction sector – this includes an evaluation of the Productivity Partnership’s progress in achieving a 20 per cent increase in productivity by 2020.
“Decisions made by local councils not only affect their local communities, but have wider effects on the economy and the Government’s books.
“Many of the changes that will make a difference lie with councils and the Government expects them to share the commitment to improving housing affordability,” Mr English says.
Some of the programme is already well advanced, with work under way in the Building and Construction, Environment and Local Government portfolios.
Other recommendations from the Productivity Commission require more detailed exploration and the Government has asked for more work to be done on specific policy proposals including:
· Whether Building Consent Authorities can be consolidated in a regional or national hub.
· The possible establishment of a competitor agency for resource consents/plan changes.
In addition, the Ministry for Business, Innovation and Employment will undertake a market-level inquiry into the construction sector to identify barriers to improving housing affordability.
More work will also be commissioned on the specific problems of the Auckland and Christchurch housing markets.
Mr English says the current economic climate, as well as projections of housing need, make it more important than ever for the housing market to function efficiently.
“Our response to the commission’s report also reinforces our existing programme aimed at reducing New Zealand’s vulnerability to foreign lenders, and removing economic imbalances caused by a disproportionate investment in housing.
“If implemented fully, today’s announcements on housing affordability will reduce housing stress and enable the housing market to better meet the needs of middle and low income New Zealanders,” he says.