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Govt to tackle housing affordability by increasing land supply
January 27th, 2009Housing Minister Phil Heatley said the National Government would reform the Resource Management Act and the Building Act in an effort to make housing in New Zealand more affordable by freeing up land supply.
In response to this week’s 2009 Demographia International Housing Affordability Survey, which concluded New Zealand ranked second to last in affordable housing out of the United Kingdom, United States, Ireland, Canada and Australia (last), Heatley said Government would ensure local councils planned for a forward supply of suitable land zoned for new housing.
“National understands there’ll be property cycles but the recent cycle has been so extreme as to suggest there are fundamental problems with how the market is operating, notably around the supply of land,” Heatley said.
He also said Government would ensure that roading and infrastructure would be provided to aid towns and cities as they grew, and that National would increase trades-training opportunities so there would be more skilled people to build and develop new houses.
Heatley said that many first home buyers were excluded from entering the property market by a number of factors, including restrictive zoning and consent laws, which were major factors in New Zealand’s poor productivity and economic growth levels.
Government will also try to tackle laws relating to the development of housing on Maori and communal owned land, which due to their often ‘rural’ zoning, meant only a few houses could exist on large areas of land.
Heatley’s announcement also follows on from the briefing he was given by the Department of Building and Housing when he first took office late last year. The briefing urged the new government to buy land “strategically” for new housing and move to reduce development costs, especially in Auckland.
Tags: Auckland, Australia, Canada, Demographia, Department of Building and Housing, House prices, Housing, Housing Affordability, Hugh Pavletich, Ireland, National Government, new zealand, Phil Heatley, United Kingdom, United States
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January 27th, 2009 at 2:04 pm
great news if they follow through on this
January 27th, 2009 at 4:04 pm
Great News for the Property Council who (hmm?) encourage National and Labour Inc.
January 27th, 2009 at 4:15 pm
I suppose that the less it is in the national interest the more the policy costs?
January 27th, 2009 at 5:03 pm
Rubbish. The resource management is a genuine problem for the costs to build. The lack of land is tripe. See the size of Auckland versus other cities and check their population. Houses are unaffordable because everyone thinks that it is the only way to make money.
January 27th, 2009 at 5:40 pm
It will take years to put together new legislation to deal with RMA and BA
January 27th, 2009 at 6:03 pm
If the RMA was administed and used for the purpose that the orginal draft and its authors intended then there would not be a problem.
January 27th, 2009 at 6:31 pm
I work in the development industry and the RMA is a major problem. COuncils dick around deciding who is affected or not by a proposal. Things drag on and on, neighbours bribe applicants in order to give approvals, the spectre of Environment COurt appeal (lots of extra time and money) always weighs heavily.
I’ve spoken toi a few Poms recently and they think the UK system is much better and I’d tend to agree. All applications are notified from the outset, neighbours can lodge objections, then a committee makes a decision. Simple. Objectors can’t appeal Council’s decision to the court, although they do have the right to object to the Council. Council can sit again and either accept or reject the objection.
Some would suggest that no right of appeal to a court is a negative, in terms of independant review of decisions. But I say that we have to entrust Councillors to make decisions, sure they won’t always get it right but neither do the courts.
January 27th, 2009 at 6:39 pm
following my last post – based on the above I disagree with those who say the problem is the administration of the RMA rather than the RMA itself. The RMA is in fact the problem, because it wastes everyone’s time and money with the “to notify or not to notify” questions, and allows appeals to delay projects and add lots of time and cost.
January 27th, 2009 at 7:06 pm
Heap of sections and subdivisions around here waiting for titles to be issued…
January 27th, 2009 at 7:09 pm
In our district we currently have 10 times the available land to cover expected population growth for 10 years. Thats not a shortage, thats oversupply. Do we blame the RMA for that as well? A lot of this sounds like excuses to me. Can anyone of you show the science and maths of the so called better alternatives which supply all of the benefits of the current system, including lower cost of a section? Having said that, I think the central govt needs to step up set a firmer direction for housing and the infrastructure that goes with it, agree with that.
January 27th, 2009 at 7:31 pm
Observer – the problem is not the lack of land, the problem is the cost and time it takes to develop land, which is to large extent the problem of the RMA . ie. all the land in the world will make little difference if it takes so long and so much money to develop that land and get houses on to the market. Because of the time, cost and risk faced by the development industry in NZ supply of housing is simply not responsive enough to demand. There is a tonne of credible research on this out of the US – refer for example to Krugman, Glaeser et al. This is not an ideological issue – Krugman is a leftie, yet this very credible Nobel awardee has been quite open in criticising planning’s impact on housing supply
January 27th, 2009 at 10:16 pm
Residential housing as an investment class is the real problem. Reduce the tax incentive to invest in housing and cheaper housing will follow. Phil Heatley’s performance on National Radio was appalling – on the one hand, he wants to have cheaper housing, but on the other hand, he wants to protect the interests of Mums & Dads who have rental properties – truly pathetic stuff.
January 28th, 2009 at 8:08 am
Dosser,
I’d never heard of Phil Heatley until yesterday, and agreeing with you, I now understand why! “Pathetic” is being kind.
January 28th, 2009 at 9:49 am
yeah thats true Dosser, I thought the same, a contradiction from Mr Heatley
January 28th, 2009 at 9:55 am
Plenty of lands out there – it’s the cost from the councils of getting them ready to be developed is a major problem . The charges from local councils are very much in the “daylight robbery” category. As an example, my current house has an unused kitchen in the lower floor. If I was to take the kitchen out and use the space as a rumpus room – the Auckland City council wants to charge $1800 for their fee to record this change in the file…
January 28th, 2009 at 5:02 pm
Bao – that’s a ridiculous price. My understanding is – fees are supposed to be priced on a cost recovery basis – and having determined the cost, the Council then determines how they want to apportion that cost between public (i.e. general ratepayers) versus private (the applicant/user of the service). In my district for example, the apportionment of cost was 50/50.
Why should other ratepayers have to pay any proportion of someone else’s property development/improvement, I hear you ask? Well, according to the local Council here, roughly 50% of the consents staff time cannot be allocated directly to a particular application.
That’s plain and simple inefficiency to me. Ask any legal executive/lawyer – they have to account for their entire day in 10-15 minute slots for billing purposes. Council’s should be equally as rigid and administratively equipped. If (as I was told) they spend inordinate amounts of time answering general queries from members of the public who never eventually go ahead with the development (and therefore end up paying no fee) – and if that is typical amongst all Counciil’s in NZ – then Local Government New Zealand should set up an 0800 call centre which has every District and Regional Plan in electronic form, staff it with 3 – 4 really experienced planners who can do the general public work for all Council’s across the country.
January 28th, 2009 at 6:06 pm
Yeah – lets go churning more of our productive fertile land into housing. Lets get all the local governments to do away with bylaws that stop farmland from being chopped up into lots of unproductive size. This will allow the banks to write into existence many new mortgages. Then expand this new money further by the reserve ratio as as more created credit. Lets not forget all the new opportunities for loans that will be on offering with the intake of new foreign immigrants needed to fill them. Wont it just be great when we end up an unsustainable dependent sinkwell for central bankers created credit to import all our needs, including food, when we reach a point we dont have enough productive land to grow our own. Wont it be great, we can be just like England, Singapore and the likes.
January 28th, 2009 at 9:41 pm
Bao, amount you mentioned includes 5 site inspections by Council officers, and issue of CCC upon completion of work. Fee is based on estimated value of work, and with $1800 fee it would be around70k. You also have to provide proper plans, which is at least another thousand, if engineer is involved another grand probably.
My point is council fees are around 3% of total project cost, even if they are halved still would not make your project much cheaper. Council allows 20 working days to process application which is reasonable time. For developers time is money and they will always moan