An existential Auckland housing debate during Parliament's Question Time: Do land bankers even exist? Also, building consents vs code compliance certificates (and Nick Smith's defective knob)

By Alex Tarrant

The government on Thursday fought back against accusations from Labour and the Greens that Special Housing Areas (SHAs) legislation had in fact encouraged land banking and not building in certain areas, as some land owners might have been incentivised to wait for the temporary law to expire to get around affordable housing criteria.

We even got a bit existential during Parliament’s Question Time, with National’s Leader of the House Simon Bridges questioning whether land bankers even existed or not. “There is no such thing,” Bridges proclaimed as he opposed Labour’s Phil Twyford tabling a 'grrrr' letter from Nick Smith in 2015 to stickler land owners who had been granted SHA status but not yet built anything.

That old debate over whether we should go with building consent data or code compliance certificates (CCCs) as the definitive reading of building completion also came up. On the code compliance issue, regular readers will be pleased to know that Nick Smith’s defective knob was raised in Parliament again (read on if that doesn’t make any sense).

It was a day of battles over numbers really, with Labour’s finance spokesman Grant Robertson also going head to head with Finance Minister Steven Joyce over who could find scenarios within Stats NZ’s youth NEETs (not in education, employment or training) data that backed their respective arguments of more vs fewer youth being left out of the system.

For those keeping score, there were more NEETs in the June quarter this year than last year (point to Robertson), but fewer in June this year than in each of the previous March, December and September quarters (one-all?). The debate continued on Twitter with Robertson inviting Joyce to debate him at Wellington’s Beervana. 

Land bankers – do they even exist?

Greens co-leader James Shaw began proceedings by putting to the Prime Minister that affordable housing requirements for SHAs may have encouraged land owners to apply for consents, but then wait until the legislation expired before building so they wouldn’t have to meet affordability criteria. Shaw pointed to the 25 SHAs that experienced no building activity since approval, as reported here.

Finance Minister Steven Joyce, responding on behalf of Bill English (he’s never at Question Time on Thursdays), sought to deflect the criticism by telling Shaw the government’s plans were working to make housing more affordable: Prices in Auckland were falling, and more houses were being built than before.

As Shaw raised that over 2,000 homes consented hadn’t been built, Joyce responded with building consent figures showing that over 10,000 homes had been consented in Auckland over the past year and that levels were their highest in five years. He even had a few anecdotes to throw around, including that 1,000 apartments were currently being built in Albany alone.

Twyford then took up the mantle, asking Smith whether MBIE officials still believed Auckland’s housing shortage would last until 2030, given current build rates. Remember, PM English on Wednesday argued that whatever the shortage was, it should be gone within a few years.

Accepting resumption of their regular debate with glee, Smith said Twyford was misrepresenting the MBIE advice. In fact, it was a fruitless exercise trying to predict what might have happened in 13 years’ time because of the variability in both Auckland’s population growth and house building output, he argued.

Into the figures. How could we close the gap if only half of Auckland’s required 14,000 houses a year were built in the previous year, Twyford put to Smith. Again, the response was that Labour’s man was being disingenuous.

Twyford was referring to code compliance certificates, Smith let on to the House. And these don’t count units completed in retirement villages, he said. In fact, 10,400 Auckland consents had been issued in the last year, with Stats NZ research indicating 98% of these would eventually be built, Smith argued.

Why rely on what Stats terms an experimental series and not Auckland Council’s own completion numbers, Twyford fired back. Because you’re not required to actually get a CCC, Smith replied.

In fact, he himself had just finished building a house in Nelson which hadn’t got a CCC. A bit of history: This is because of a defective knob on a gas fireplace. (Hopefully that clears it up for the earlier confused.) Also, it might be that one CCC is issued for a 50-unit apartment block, Smith continued.

A change of tack from Twyford saw him refer to Stats NZ’s trend series in its building consents data, which showed the trend for monthly consents falling over the past six months. This may have been the case, but it didn’t mean Smith had to pay any attention to it; he was still able to point to the actual numbers still rising, no matter what the trend. “The fact is, we’ve got the biggest building boom ever in Auckland.”

Watch Robertson vs Joyce below:

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79 Comments

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To replace a defective knob, get out and vote!

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The National party are a group of arrogant xxxxx...... they can see the state of the housing market, but its all going well in their minds!!!!

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In fairness, their personal portfolios have gone up in value massively.

So .. is this is how Labour extracts its answers from the Gov? repeating the same old questions in a theatrical way only purposed to stir the subject again and again ?
Even a blind man can see that both Grant R, and Twyford are just playing silly and wasting taxpayers money in ridiculous debate ...

Seriously, Are these the New / Old labour team seniors who would be the next Gov. ministers ?

Oh dear !!

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The problem is, David Carter doesn't seem to require National MPs to actually provide answers. It seems like Parliament has really declined over the last decade, especially with John Key in the house dodging questions willy-nilly and getting away with it. It's become a farce.

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Couldn't agree more.
What the hell his purpose is there, I have no idea.

Every week it's just a case of the monkeys running the zoo.

What the hell his purpose is there, I have no idea.

Wine and cheese / beersies at the Backbencher between sessions.

Don't forget the cushy placement at the end of his tenure.

Decline & decay on both sides of the house. Just think if we had had a Holyoake, Kirk, Muldoon, Lange leading the opposition, this National smart "backside" lot would have been out after one term. Maybe the new Labour leader can take it to parliament that they are there for the people of New Zealand, not the global corporates that this government has been well & truly seduced by. That's all you need to say Jacinda "we are going to be for the people, not big business"

Rick you mean NZs Total No Recall PM
TV should show clips of Key as the Nats proposed great hope for NZ from 10 years back
The greatest disappointment they could title it perhaps.
Like the Labour govt before them National has shamelessly abused its power by paying lip service to the dynamic problem that is Auckland housing in the countries major populated city
Why should I have had to move to a city vastly larger than Auckland to obtain housing and great public transport at far more reasonable cost than my home of Auckland ? Reason is incompetent governance and Mr Keys years of incompetence a prime culprit. The guy was so out of touch he wasted time in the end trying to get the flag changed for his legacy ! God defend NZ indeed
Australian cities like Melbourne do a far better job if you can stand Aussie Rules football.

All of those with an empty house in the middle of town would be. If its not so then, and empty house tax would be no issue would it.....

Electrical records can easily identify this.

Stuff and NZ Herald did a report on empty houses a while back, 22k empty according to Stuff and the 2013 census, more than 33,000 according to the Herald "Rise of the Ghost homes", "Empty homes during a housing crisis are a riddle" is the Stuff article.

1% a year vacant house tax in Melbourne I read
Nothing in Auckland
My old neighbours 5 berm 3300Sqft home in prime school zones still to this day remains vacant
It's Chinese owners living a few K down the road

Interesting piece on Commbank in Stuff today (Commbank own ASB) https://www.stuff.co.nz/business/world/95437585/fake-names-drug-lords-su... if they're doing it you can bet your bottom dollar they're not the only ones. $9.5BN deposited through Commbank before they started checking the sources of the money, and apparently continued even after being made aware. Maximum penalty for the offense is $1 trillion, not that that will happen. I wonder how rigorous our own banking system has been over the past 5 years or so?

That is disgraceful. Tampering with the election, maybe she is in collusion with the Russians

Well first she would need to get them out from under the bed, one would imagine. The Reds, that is.

This is a huge moral story and every NZers should reject the Action, the Coverup and the encouragement of doing what she did NO matter how poor or needy they are - It orbits around a very basic principle and building block of our society (Honesty)... How could something like this be justified to our kids if she got elected to Parliament ??

I agree - we need three resignations for reasons of honour: Turei, Barclay, and Bill English.

Without these, we essentially abandon any concern for honesty.

Rick you'd be the smartest person here
Take my advice life's too short
Get on a plane out of there
Plenty of better places to live in this planet
Sorry but Aucklands been screwed by idiots

In actual fact I spread ideas and discussion for the benefit of my younger relations, primarily. For them to have chances and opportunities more akin to what the preceding generations did.

I'm doing okay and I will do okay, and I can by the nature of my work move internationally if required. But it's still worth it to me to tell people about what NZ did in the past to achieve a high rate of home ownership, what we could do in the future to increase equality of opportunity, and highlight areas - from my experience working in alleviating poverty in the Third World - that we need to be concerned about.

The way I see it, ideas and our thoughts about what's true make a massive difference to where we head as society. It matters because NZ's a great society and it should be something we look to further and enhance, not let decline into selfishness and corruption.

Keep up the good fight RickStrauss! Run for politics if you get bored with your day job!!

Ha ha, but from what she's been up to they are more than likely in the bed not under it

True, and likely to be a bit hazardous one might think. I mean where exactly would you position the hammers & sickles! And you would have to think, given the let's say robust & combative nature of the participants involved, it would need to be too, a pretty stout bed at that.

it's one vote lol. while she shouldn't have done it, it is hardly on par with trump's antics

In my opinion the woman is an utter disgrace; for a person in her position to willingly and repeatedly undermine the laws of this country is unacceptable.

We're are getting on average one crime per week out of Turei, how long is her rap-sheet? What will come out next week?

Law firms hold all the information to our questions. There should be some legislation requiring them to provide information for statistical purposes. Law firms know who or what are purchasing/selling land, houses, building new homes. They also know where these entities reside and where the money is coming from. They already have to comply with FATCA so a few other question added to the bottom of their questionnaires should not be too onerous. In fact they do not need to ask the questions, they already have this information

YES THEY DO EXIST , within 500 metres of where I live there are scores of properties that are held by Asian owners , none of which are being developed and in some cases there are houses vacant for over 1 year , and one has been empty for 2 years

55 -57 Schnapper Rock Road
1,3,5,8,9,10 Albertina Place
21 Chester Ave
31 Chester Ave
40 Wicklam Lane
42 Wicklam Lane
19 Wicklam Lane has been cut up into many sections and none have been sold or developed for 2 years

This does not include the vacant houses .

Boatman, to be fair .. these are expensive sections ( 800k - 900K or more a piece) of prime land and even when developed the properties will be worth at least 1,6M - 1,8M in todays market ... so not really everyones cup of tea and surely don't fall into affordable housing .... buyer of these few developments will be limited.

I.e. Chinese. Ooops, they're gone!

Not really, I know two friends who have bought in that area for the purpose of building their new homes few years back but never got around to it - another one started 2 years ago and still dangled in the council RMA approval process.
I believe that chinese have very low interest in small sections - but could be wrong.

The Chinese own just about every big block around the Whenuapai area as well. I know this for a fact.

Wonder if it's private money or Chinese public-private operations, i.e. property of the Chinese state.

I probably should have phrased it people of Chinese ethnicity rather the "the Chinese" as that does sound a bit like the state. I think it is generally individuals / groups of individuals. Ultimately, NZ encourages free movement of capital and has appalling land zoning, so we're almost begging for land banking to occur.

Ought to be careful with the C word. Somebody might accuse you of the R word.

You should go to waiheke, I reckon there are 1000 houses empty by the colluding sneaky northern european pakeha tribes...

I know of three 10 - 15 acre blocks in Kumeu sold to the same Chinese man. He flys in once every three months and drops 10 or so million. The old owners have moved out and the land and buildings are just left vacant... land banking ? nahhh

Yes I agree with you Boatman. It's the same around Farm Cove and Howick. Lots of empty houses and sites, some that have had to be demolished with tarpoli up with signs saying they're planning to build several years ago.

Auckland does rent seeking, not land banking. Rent seeking by owning land whilst council halfwits cut land supply in half.

I read a Croaking Casandra blog yesterday.

I've posted on here how I think the Reserve Bank and their LVRs have been effective and are a good thing (as someone who has been prevented from buying because of them).

https://croakingcassandra.com/2017/08/02/intervening-without-understandi...

But, this has really made me think, though.

unaha-closp, you will probably will like it.

Treating the symptom rather than the cause, I suppose. Plus an idealogical debate on the role of the Rerserve Bank.

I normally agree with Reddell, but I don't like his ideas on housing particularly. He is opposed to intensification, and advocates eliminating the urban-rural boundary to bring down the price of land. Personally I think Auckland has sprawled enough, and there's plenty of land available within its current boundaries.

Well I was renting a room off a guy in Torbay in a 5 bedroom house that he usually had empty, and he had a large empty plot just sitting there doing nothing up in Silverdale, and he was always going on about his capital gains. I know this is just anecdotal, but there's tonnes of underutilisation of land. We really need to apply a tax to land to really encourage productive ownership of it.

Claiming landbankers don't exist is the same as claiming there's no housing crisis. Suits their agenda, but is just not true. All land is under private ownership, and there's plenty not being used productively.

Some land on sloping sections downhill from stormwater with ancient covenants on it can not be cost effectively developed, especially if the section is narrow enough and the hill steep enough that the hill would violate the height to boundary requirements by itself.

I've found plenty of decent houses priced (to build) in the $300,000 - $350,000 range. Once you add all the costs outside the house you get another $150,000 of costs per house easily and that is without pricing the land! I reckon most of our slow build rate is attributable to council rules.

Yeah, in the end we're going to need to start identifying it for what it is: short term financial interests of the older folks born at the right time, over the long-term needs of Kiwis for secure housing.

For most of the 20th century NZ's governments were interested in the role of housing in society. It's only recently that things have turned on their head, at the expense of young and upcoming generations of Kiwis. Time for some big change.

I seriously think many of the incumbents got their business acumen from playing Monopoly, and have also been pushing to get the rules changed to make it more like that.

Either that, or they think Charles Dickens wrote user manuals for societies.

Rick: I get your sentiment but would prefer it phrased differently. Us old folks are not looking short term. I have a moral responsibility to ensuring my wife has an acceptable retirement so 'short-term' is entirely wrong. As a typical goldcard holder who had the benefits of being young when music was good and the phrase 'student loan' was meaningless, I am planning finances for 25 to 30 years ahead - note if my valuable house disappeared and/or superannuation was removed I could still find a job as a security guard or parking warden but after say 80 it is unlikely I will be able to work. Another point: my parents left me money when they died and I really would like to do the same for my 6 kids (it is just that I expect them to be at least middle aged before they inherit).

What you say makes sense but just turn down the generation war because from our side we see most youngsters as selfish (just like we were ourselves when students).

How about a compromise: free tertiary education for the top 10% (as per my youth) and taxpayers to subsidise house building for 1st time buyers (I mean serious money) and related extensive building of social housing. On the other hand please remove all the costs of caring for the elderly. If/when I go totally gaga it is wrong that all our savings and wealth will go to pay for my care leaving my wife and my descendants with nothing for my lifetime of hard work and careful saving.

Thanks Lupan, appreciate the insight. And indeed, I need to work a bit more so as not to offside older folk with genuine interest in the lot of following generations.

I should clarify by 'short term' I meant short term in the sense of 10-20 years - or limited to few close generations - as opposed to an ongoing interest in the betterment of society and following generations. E.g. a massive increase of wealth accruing to some after the government steps away from housing completely, vs. ensuring reasonable access to housing for Kiwis as has been the norm over the majority of the 20th century and up to fairly recently.

Fair point re generation war - and in fact I couch in terms that foster that largely in reaction to much of the dribbling output of the likes of Hosking and the "smashed avocado" warriors, and National looking to change the Pension just safely after the last Boomers turn 65. But realistically, if we're to deescalate and find solutions that work across multiple generations discussion needs to be as inclusive of a grandfather to the progeny of his six children as to a young Kiwi just out of high school and considering the realistic options for building a life in their place of birth.

I like your ideas and agree we need to look at ideas that have worked in our history (regarding affordable housing), rebalance education in some way (less funded university education, and less requirement from companies for a minimum university degree on the CV). Even our universal pension was predicated on housing outcomes being successful, assuming as it does recipients having their own mortgage-free house.

Re healthcare for the elderly, that's free socially-funded like our wider healthcare, is it not? But I'm assuming you mean taxpayer funding of retirement care? If it's "wrong" for old folks to have to pay for having nurses and servants (and we'd need to discuss why that's wrong but free-marketing housing completely isn't), I'd agree it's definitely a conversation that needs to be had hand-in-hand with achieving better housing outcomes for younger Kiwis...otherwise we'll just be tipping the scales further in favour of older Kiwis at the expense of the young.

The trouble is just being old is being offside with following generations.
Way back humans use to be lucky to get to 40. Now they are hanging round consuming resources till into their 70's +.... and we think this is a normal drain on resources. Its not.

Now two days past this years overshoot day ..
https://phys.org/news/2017-08-earth-resource-spent-august.html

When you are still working thinking about wealth is at least partly thinking about saving. When you are too old to work whatever wealth you have has two risks (a) being conned out of it as per some recent finance houses (b) requiring care. I have a friend in her eighties and last week her husband of a similar age, with onset of dementia fell over and didn't have the strength to stand up - after a week in hospital they could do no more than put him in a home (authorities were very reluctant but the wife in her eighties simply cannot manage). That is what I fear and when you are my age you will too. Think about it - what do you do use up all your wealth to pay for care or pre-arrange for your partner to quietly give you an overdose?

Yeah, appreciate that. I have a streak of Chicken Little in my nature, so emphathise despite eighty being a fair way away.

And these things go hand in hand (housing affordability and aged care) because 1) if we provide aged care from taxes to preserve inheritance for children without tackling housing affordabilty, we create multigenerational haves and have-nots, 2) if we don't provide aged care from taxes and we don't tackle housing affordability either, a couple is only a serious illness away from losing both their own wealth and their children's chances of home ownership too.

There does need to be a serious discussion about euthanasia, if I get to the stage where my body and mind is failing, I'd like to think I'd be able to duck out with dignity, and do that legally. It seems insane to keep a body alive if for all intents and purposes that person is gone.

The old age pension in the UK was originally set to an age of 65 because that was average life expectancy. So superannuation (as apposed to Kiwisaver) could be about 80 now. The problem is how to support yourself once you cannot work and that age not only varies from person to person but also from job to job - if you are a drain layer retirement ought to kick in about 50. Our politicians should be pushing superannuation age up - relating it to life expectancy and they should be planning for and paying for job changes as we get older. Instead our politicians are making promises that the next generation (you) will be unable to keep.
I will not apologise for being old but I sure am embarrassed by our politicians. (Is Winston the only leader older than me? That's a worry. And so is Trump. What a bummer maybe old age and brain cell death are related.

The trouble with pensions (& pension promises) is that they are indexed linked ... ie tied to real inflation
So we inflate old debts away quite happily but we cant inflate old pension promises away.
Unless pension funds can get a return which outstrips the growth in promises it all falls over.
And thats where we are at now - low interest rates so that debt and the debt ponzi stays manageable ... but its killing the viability of all pension funds.
Something will give.

Government quickest route is to control demand.
Foreigners can not buy existing stock, must build new, pay extra tax 15-20% to even up the playing field.
Task force to investigate empty houses and land; set up anonymous call line, if its land banking or unproductive use, slap on a land holding tax.
Remove investment property tax claims and eliminate negative gearing abuse.
Introduce capital gains tax.
Then maybe people could afford a home rather than be at the mercy of profiteers and cost of poverty.
Easy and yet they don't - why?

@2 Tooth Bora .......you ask "why?" ....answer "Vested Interests"

Why indeed. Politicians have rentals and are doing the tax minimization dance as well. From Stuffs article in April 2016 "National's 60 MPs have a stake in about three properties each on average, Labour about 2 properties per MP, the Greens 1.7 and NZ First 2.3"

49 Days to go, vote for the few (bank profits and specuvestor leverage), or vote for the many (everyone else). Seems a no brainer but 23 September will show whats in favor, hard to pick. Vested interests are generally clearly one way or the other, but how many are in the middle still undecided...?

Have a look at this guys! Hahahaha
SCHOOL ZONE CAN INCREASE HOUSE PRICE BY 90% - that's where the land-bankers are!!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1189...

@Double-GZ ......are you sure you haven't got shares in the NZ Herald ?

he's got nothing better to do with his time since he's sick of counting his stacks

Is that what you do when your kids aren't brilliant enough to get in from out of zone, and you can't afford to send them to private school?

The old Manukau City Council and Waitakare were well known for their land banking practices. So now the land ownership is with Auckland Council..
What an idiot!

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Does Nick Smith even exist?

If a minister claims to be taking lots of action but produces no meaningful results, is that minister just an illusion, a figment of our collective imagination?

We surely can't expect him to take time off from looking for his knob to actually do the job he's paid for.

Never been a Lab voter but this time.. this plonker needs to be taught a lesson in reality!

but look at the alternative reality Labour offers :( Benefit fraud? no problem, electorate fraud? no problem.

I seem to recall when mixing water colours red and green in school I got a sh***y brown.

Now you tell me it's sh**y brown.. But hang on mixing blue and yellow and what do we get? green...!

So in summary: Blue+Yellow = Green, Green + Red = sh**y Brown, sh**y Brown + Black = even darker sh**y Brown..

And boys and Girl, that is a short summary of NZ political scene

.

Tell you what Rick, if he falls over in the forest when nobody else is around, I won't be too worried about whether he really fell over or not (as long as I don't have to hear him anymore).

... if he fell over in the forest , and one arm was pinned under a branch ... so he could only raise a sound by clapping with one hand ...

I would not care to see the ancient oriental mystical miracle of " one hand clapping " on this occasion .... we've had enough clap trap from him over the years , anyway ...

CDI announced another great result today.
Long may the so called property doldrums continue.
One very happy investor here.

Yep, stonking result, also happy here. A reminder to some that there are investments out there other than buying a rental property.

Vacant Homes Are A Global Epidemic, And Paris Is Fighting It With A 60% Tax
https://betterdwelling.com/vacant-homes-global-epidemic-paris-fighting-6...

Article quote: Runaway real estate speculation has been filling global capitals with vacant homes, creating artificial shortages in the world’s most sought after cities. The “shortage” has made local home owners wealthy overnight, but it comes at the cost of turning lively cities into empty shells. The city of Paris has decided it’s had enough, and implemented a tax in 2015. They didn’t quite get the results they wanted, so they’re now tripling the tax to 60%.

AirBnB changing the landscape for the propertied gentry? "In central Paris, seasonal rentals – much more profitable than long-term rentals – have proliferated at the speed of light, despite their often illegal status. Airbnb is now succumbing to pressure from about 17 different cities, including Paris, and attempting to control rentals in accordance with local regulations.

With 60,000 homes in Paris offered on AirBnb’s website, it’s clear that the short-term vacation rental business is booming in the French capital."
https://parispropertygroup.com/blog/2017/airbnb-paris-love-hate-relation...

Immigration levels and Tourism are keeping both the long term and short term rental market going here. Long may it last.

You are right Mr. Chew. Real investors don't sell, coz we are in the game for the long term.

In answer to the question 'do land bankers even exist?'. I hope this statement was literal because I didn't read the article and that would be a bit embarrassing. But if they do exist in Auckland they need to get out now! As land prices plummet due to a massive increase in supply following the release of the new unitary plan. I don't have assess to free stats on section sales so I can only look at listings. I would love to see an article on this.