English says council land restrictions worsen poverty; Govt focused on more private sector capital for social housing; Greens call comments "bizarre"

By Bernard Hickey

Finance Minister Bill English has come out swinging at council land restrictions, saying they are the primary cause of housing poverty and preventing improvements in inequality.

Talking about land availability and housing affordability at a news conference to release Budget figures on Tuesday, Bill English accused councils (and Auckland in particular) of worsening poverty and inequality by restricting land supply.

English has made similar comments before about land supply, although the poverty and inequality twist added extra impact.

"The growth in housing costs over time, to the point where you're seeing families spending 50-60% of their income on housing - that's pretty devastating at the low end," English said.

"Councils needs to understand that when they run these policies that restrict the availability of land and the opportunity for lower value housing, they are causing poverty," he said.

"When you look at the historical impact of the growth in housing costs on our households it's clear that the lowest-income households have been the most affected. So our planning processes have probably done more to increase income inequality and poverty in New Zealand than most other policies."

'Bizarre comments'

Green Co-Leader Metiria Turei described English's comments as "bizarre."

“This looks suspiciously like National is using its new found acknowledgement of child poverty as an excuse to rip the guts out of the Resource Management Act,” Turei said.

“National has received report after report about child poverty and not one has blamed planning processes. It’s not ok to use child poverty as an lever for property developers to make more money," she said.

English also commented on the rise in the Government's net worth to NZ$80.8 billion from NZ$70 billion the previous year, in part because of a NZ$2.1 billion upward revaluation for Housing NZ (NZ$1.8 billion of which was in land revaluations).

"The Government has been the principal, but reluctant, beneficiary of a planning process that we believe needs considerable change," he said.

English also said it would be a "significant challenge" for the Government to reach surplus in 2014/15 as the economy continued to slow.

Private capital for social housing?

English said the Government would need to carefully manage its capital, following up on comments reported on Monday night suggesting up to NZ$5 billion worth of state houses could be sold to finance growth in social housing, although he suggested the capital could come from the private sector.

"One of these capital areas is state housing, where we will work closely with community and private providers to provide housing to New Zealanders most in need," he said in this statement .

"This will allow us to draw on outside capital, rather than this being the sole responsibility of taxpayers."

'Show us the houses'

Labour Housing and Environment Spokesman Phil Twyford said National was not planning to build a single new house.

"A vague promise to transfer state housing to the charity sector might add a veneer of warm-fuzzy to National’s brand strategy, but it won’t house the thousands of homeless families who are desperate for a roof over their heads," he said.

“National can’t bring itself to invest properly in state and social housing. Instead it is kicking the can down the road, and hoping the Salvation Army picks it up."

Local Government agrees, but...

Local Government New Zealand (LGNZ) President Lawrence Yule said he shared the Government's desire to encourage economic growth and help affordable housing come to the market. LGNZ would collaborate with the Government on reforming building industry regulation and consenting.

“There is no silver bullet on the issue of housing affordability.  It is a problem seen internationally in growing cities," Yule said.

“This is a complex issue that needs a mix of interventions to correct it.  Some of that toolkit of solutions sits in the hands of local government such as speeding up consenting, which we are working with central government on, but other factors such as the cost of building supplies and materials are out of our hands," he said.

Yule said housing costs in Auckland and Christchurch were high due to demand from population growth, while other parts had available land but declining populations.

“We need to work together to reduce regional inequalities across all of New Zealand.  The level of pressure on Auckland’s housing market would be eased if there were jobs in regions to attract families to relocate to places with more land available at cheaper costs,” he said.

Planners disappointed with English

Meanwhile, NZ Planners Institute CEO Susan Houston said she was surprised and disappointed by English's comments, saying they were not supported on any publicly available government report on inequality in New Zealand.

On the contrary, the evidence available suggests that urban planning processes play a negligible part in housing affordability which is now being inextricably linked with inequality," Houston said.

"The regions of New Zealand face quite different pressures. Land availability and housing affordability are not typically problems that face provincial New Zealand and yet poverty is very evident in our provinces," she said.

"Local planning policy is one contributor to housing affordability but certainly not the main one. The relative inability to build at scale, relative high cost of building materials, land banking, tax structure, interest rates, profiteering and sentiment towards residential property as an asset class in general have a huge role in housing affordability."

(Updated with comments from LGNZ's Lawrence Yule, NZ Planners' Institute Susan Houston)

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81 Comments

Must be about 10 years since the first demographia study came out and showed all regions with house price bubbles had restrictive land zoning policies. 
At least this has now been recognised as fact and the cogs are now slowly turning to fix the issue, particularly in auckland.
The greens need not have an opinion on these sorts of things, they've shown time and time again that simple math and finance logic is beyond them; they stick to the emotion nonsense that gets them a few votes from the uneducated

... it is a wonder , that in one of the least population dense countries in the whole world , sections are so incredibly expensive in NZ ...
 
Only Australia and Canada are bigger basket cases than us , in this regard ....
 
... as our friend Hugh Pavletich pointed out , the total area given to " lifestyle " blocks in NZ is 8000 km sq .... exactly 4 times the total area of all our built up cities and towns ...

I couldn't agree more.  Landowners should have the right to do what they want with the property they've paid for.  Auckland planners are being told directly from Government to ease the restrictions on land, available for development and subdivision in order to stimulate supply and improve housing affordability.

I really hope Bill English gets stuck in and gives the rights back to landowners to do what they want with their own land.  Rich / poor / rest of NZ wins if this piece of the RMA is torn in half.

There is nothing rip up.
 
There is no requirement in the RMA to restrict where development occurs as long as the environment is protected from the worst effects of the development.
 
Urban limits are a fabrication of councils.

Hmm wonder if you will sing the same song as your neighbour builds so as to block you completely from the sun

If they pay me enough in compensation I might not mind

They would not have to pay you anything if there is nothing that legislates for it.

How about we destroy the land banking speculators ability to make super profits just from buy and hold. Either put a time limit on development before it is returned to council at purchase price plus inflation or outright take land into public ownership beforehand at market rates to be rezoned after.
Development to be put out to tender and sales of developed sections put on the market for a transparent value shown to be covering cost of the work only.
Councils charge ongoing rates for provision of adjacent services so there should be no component of this included in the development costs.
Ticket clippers and rentiers are the problem, take their toys away is the solution.

Resource consents to subdivide land have an expiry date built in. But Auckland Council gets $750 for 10s work every time a developer wants to roll over that date.
 
It would be a trivial matter for the government to more or less take away the ability of councils to keep those consents alive.
 
(If they really cared about affordable housing. Which they don't).

Ah.....the Dynamo government: "Hey! Look at that thing over there."
 
It turns out that after years of the Nats denying that we have poverty in this country - even proving that we don't - it turns out we do but it's someone else's fault. Who knew?
 
There is some irony that the same government that cheerfully removed the "four well-beings" from the purpose of local government is now criticising councils for not caring about the outcomes of their policies. Can't have it both ways, Bill.
 
So, what doesn't Bill want the country to notice? Well apart from all the other government policies that actively contribute to poverty he doesn't really want us to talk about all the government policies that contribute to unaffordable housing.
 
The story of unaffordable housing has three parts:
 
1. The price of bare land for development is too high which is mainly due to planning restrictions;
2. A deep fear in both central and local government of getting ahead of the demand curve for infrastructure (aka "We'll build it after they've turned up") which forces the need for (1)
3. Inefficient markets in everything involved in taking a piece of dirt through to livable house on section
 
Bill and his colleagues could do a lot to solve (2) and are solely responsible for (3). But now that we have councils as scapegoats no-one need notice that affordable housing is still all talk from the Nats and no action.
 
Bill gets two things out of this sudden assault on Councils:

  • it frames public attention on councils and away from central government
  • it kicks the can way down the road. As I said elsewhere the earliest we could see a change in council planning policy would be July 2017

Exactly Kumbel.
 
The government could build better roads, busways, cycleways and passenger rail to large areas of newly zoned residential land.
 
They could allow KiwiRail to buy up rural land around rail corridoors and then rezone them as special housing areas. The capital gains Kiwirail would make would cover 1/3 of the costs of a passenger rail service if the US experience translates to NZ.
 
The government could break up the building materials duopoly in some sort of Kiwi version of trustbusting. Or it could play a faciliatative role with tradies so they set a building supplies buyers co-op to access materials at international prices.
 
The government could allow MUDs to compete against Councils. Especially if they ruled that lifestyle blocks cannot be automatically 'zoned' as rural using the RMA. That they can be built on to residential density by MUDs unless someone else can prove (at the complainers cost) the 'effects' will harm them.
 
I agree with the broad thrust of Kumbels argument that National after each election 2008, 2011 and 2014 has come out with a hiss and a roar around how they will fix the housing market only later to blame everyone else but themselves.
 
Who genuinely believes that National wants a truely competitive housing market?
 

Given how much money is collected with GST on a new build, number 2 above looks pretty artificial. They should think about giving some of it back to councils for infrastructure - then see how fast Len Brown would move to free up land. Could be win/win.

My preference would be to stop GST being charged on land -it is not being consumed. Then give GST on all development expenses and building costs to Councils. Convert rates to land value taxes (so land is still taxed and capital gains taxes are unnecessary). I would also give a few cents in the dollar in PAYE and petrol tax to Councils. This should stop Waymads 'do nothing that might cost ratepayers' economic illiteracy from Councillors/bureacrats. It would also allow more competition between municipalities which would be a good thing.

And suddenly.......
Australian house builders are on a roll with volumes going through the roof.
 

Yes, at the moment the standard issue builder ute seems to be top of the range Holden HSV Maloo..

Actually residential housing construction in Australia is not going gangbusters. That is horseshit. The rate of change has improved and the media and internet commentators are not capable of interepreting the data.

Still no mention of immigration volumes.
OK so we cannot alter the returnees and many of them do not have the money to even think about a property
What this mob is afraid to do is to:
A. Turn off the new immigrant tap
B. Implement a tax system that brings the home owners and the investors into balance.
C. Rid us of the overseas speculators by implementing a tax that is more prohibitive than HK, Singapore and Oz (even if they haven't made a prosecution since 2006)
Advice to BE. "Stop the blame game and get on with governing" 
Advice to JK  "Do the hard stuff right now, Those idiot voters will have forgotten by 2017."

The only way to reduce housing demand due to inwards migration would be
 
(i) declare Australia and the UK to be terrorist countries so we could cancel the passports of NZers living there and stop them coming home
(ii) deport everyone who watches "The GC"

You forgot the 4 year NZ-tax holiday that "High Net Worth" migrants enjoy
 
Why not increase it to 10 years
 
Make it forever if they set up shop in Waipukurau

Maybe it could apply only to emigrants not the ones that come here?

What tax holiday would that be then?

Here you go
http://www.ird.govt.nz/yoursituation-nonres/move-nz/temp-tax-empt-foreign-inc.html
 
Any migrant coming into new zealand who holds income earning assets overseas is given a temporary tax exemption on that income for 49 months
 
Any migrant coming into new zealand who holds income earning assets overseas would be silly to liquidate those assets and bring them into NZ until the 49 month exemption period is up

Any migrant coming into new zealand who holds income earning assets overseas would be silly to liquidate those assets and bring them into NZ until the 49 month exemption period is up
 
They would also be foolish not to liquidate them after that point, that's when they have to start paying a capital tax on them.  NZ real estate being a good option for them, no one is going to put a capital tax on that any time soon.

That tax exemption looks like another Labour Party piece of legislation.........talk about stitch up the locals tax residents.....

Not many would know that once they become NZ citizens, they can go to Oz and stay on zero tax until they pop their clogs.
The reason is that because NZ citizens have no point of entry date to Oz the commencement of the Oz four year exemption is undefinable.
Any NZ citizen can do it too and if you are prepared to give up your Super the rewards are endless.
Please correct me if wrong.

FYI updated with these comments:
Local Government New Zealand (LGNZ) President Lawrence Yule said he shared the Government's desire to encourage economic growth and help affordable housing come to the market. LGNZ would collaborate with the Government on reforming building industry regulation and consenting.
“There is no silver bullet on the issue of housing affordability.  It is a problem seen internationally in growing cities," Yule said.
“This is a complex issue that needs a mix of interventions to correct it.  Some of that toolkit of solutions sits in the hands of local government such as speeding up consenting, which we are working with central government on, but other factors such as the cost of building supplies and materials are out of our hands," he said.
Yule said housing costs in Auckland and Christchurch were high due to demand from population growth, while other parts had available land but declining populations.
“We need to work together to reduce regional inequalities across all of New Zealand.  The level of pressure on Auckland’s housing market would be eased if there were jobs in regions to attract families to relocate to places with more land available at cheaper costs,” he said.

Thanks, Bernard.
 
Yule is inventing complications that don't really exist. Certainly the problem is more complex than I usually make out and the solutions will be multi-dimensional but you could get an 80-20 result hammered out in a few weeks if you really wanted.
 
All it would take is:

  • central and local government to negotiate in good faith
  • local government to go into the process knowing that they would have to give up some control over development (and that the sky would not fall down as a result)
  • central and local government to be prepared to involve developers, builders, architects and owners from the start

 
True leadership is about getting results not about being seen to be the leader. I don't care whether the solutions come from Nick Smith or cowboy. All I want is my kids to be able to buy their own houses and live happy, productive lives without being slaves to the roof over their heads.

I want my kids to be able buy their own homes and live happy, productive lives without being a slave to the roof over their heads too. :-)

Every NZ city that is not Auckland is just an Auckland planning nightmare in the waiting if given the chance.
The same dysfunctional legal methodology a la LGA and RMA that Auckland planners use (and have made their own) under pins all councils and therefore towns in NZ. 
But it's not all about the planners, the answer that most Mayors and councillors would give to ratepayers as to why they should support a new business coming to town, is that it will help property prices go up.
In effect what NZ towns are saying to any new business that might want to set up is 'set up your business here and we will help increase your overheads due to pushing up the price of your employees housing which you will have to pay them more to compensate.'

Bastard of a good point and very rarely recognised by the wider community.
 
My personal thumbs up.

and you think central government or free quango can actually improve things?  

In Australia the Councils once had policy that every farmer must have the perimeters of their paddocks worked-up to stop the spread of fire.........then there was a court case of a farmer suing a council (I think it was in NSW from memory). The farmer suing claimed that since the Council had compulsory Policy on fire protection they also had the obligation to enforce it and the farmer deemed they had not done so hence the damages to his property......and the case for damages was granted to the farmer as the courts agreed.
After the precedent that was set in this particular Court case the Councils then changed their policy to a voluntary one i.e. it is suggested that creating perimeters helps to protect your property and crops from fire......the voluntary policy was to remove liability away from the Councils.
 
Could Auckland and Christchurch Councils (probably others too) find themselves in Court for failures, acts or ommissions that they have created?
A test case would be highly interesting and maybe the only way to deal effectivey with housing affordability resuming its historical pattern. It is easy to look at the Government to resolve the problems but maybe the people should be more proactive and take the issues through the courts.
 
 
 

I have read that article before.....it's a goody........Makes one think about bureaucrats and whether they have something missing/malfunctioning in their DNA ;-))

Lol. It is the difference between convergent and divergent thinking, as a designer you do both. When you have a system the people that run that system simply do that. They didn't design the system and are incapable of it, they are linear thinkers than can't see anything but the immediate task before them prescribed by the system. Sitting ducks to the clever person motivated to disrupt it.
 
To a certain degree this can be explained by the Sensing function described by Jung but also Judging, which is the extension of Jung's work by Myers Briggs.
 
Edit: A lot of the discussion around here is pointless because it fails to comprehend this understanding of systems. You don't need better operation of existing systems, you simply need new systems. Conventional thinking won't deliver that.

I tend not to forget the words of Albert Einstein....it applies to a broad spectrum of issues.

“I fear the day technology will surpass our human interaction. The world will have a generation of idiots.”
 

... obviously old Albie never visited the Greens Party annual conference ... they created his outcome in spadefuls , with no technology in sight ...

You never know GBH.....Albie could be watching over.....going I've proved my point!!!
http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=113...

... anyone who still believes in life after death has obviously never visited New Plymouth ...

Some sort of awareness after death? That would imply some sort of awareness in life and I don't see a lot of that going on.

Hahaha,,,classic!!

The Left Honorable Sir Larry Fool, president-for-life of the Small-Nation Association For Urbanista (SNAFU), has taken strong exception to Wild Bill Dipton's recent pronouncements about the role of Councils in causing various social woes.
 
The Fool notes, in protest, that Councils cannot be expected to take into account the economic consequences of activities such as planning, subdividing, consenting, building, or inspection.
 
'Our duty is quite clear', he said, hands visibly trembling and ashen faced.
 
'It's to minimise anything - Anything - that falls into the 'Rates Required' bucket in our LTP's.  Our democratically elected masters - Councillors - have made this consistently clear.  And who are We - mere unelected Minions - to subvert Democracy by thinking about anything else?'
 
'And, so there,  it isn't as though we have any economic expertise anyway.  Why, the sight of anyone with Economic Credentials throughout Local Gubmint, is as rare as Rocking-horse Poo.  (Which, by the way and let me be Perfectly Clear, is banned from deposit on Roads, Verges and Public Parks, anyway in the interests of Public Health and Safety - have you any idea how slippery that stuff is?)'
 
' Until such time as we have a better understanding of such arcane things as why it happens that land one side of a squiggle on a map is ten times the value of that on the Other side - a subject that will take a great deal of expert assessment, public consultation, numerous reports, and finally a considered decision to find the nearest carpet edge and sweep the whole stinking mess under it - '
'Hey, wait - is that mike ON?  Right, boyo, I'm outta here, and one word, ONE WORD in the Media, and , and, - well I'll never give You another interview again.'

Land availability - a very important factor but still only part of the problem.  The others are
1 Immigration and sales to foreign investors.  How can they aknowledge the problem of poverty, people living in garages and cars on one hand while still permitting these activities on the other.   Surely their only priority is looking after New Zealanders welfare, and one has to be deeply suspicious about why they are putting overseas individuals interest before ours. 
2 The monopolistic behaviours of the building material supply chain that the government refuses to address meaningfully.  Our prices are 50 - 200% higher than those in Australia and the USA and our wages are significantly lower.  It appears that the government is corruptly protecting their big buisness mates in similar relationships that they have with the tobacco and alchohol industries as recently revealed through the Whale Oil blog emails.
Bottom line is that we are facing a huge problem of corruption from the top down and a failure of the democratic process.

Add the imbalance between those who would like to own their own but cannot because the investors (of whatever source - local or foreign) have the huge tax rort/advantage that no Government seems able to recognise let alone change.

FYI reaction from planners added:
Meanwhile, NZ Planners Institute CEO Susan Houston said she was surprised and disappointed by English's comments, saying they were not supported on any publicly available government report on inequality in New Zealand.
On the contrary, the evidence available suggests that urban planning processes play a negligible part in housing affordability which is now being inextricably linked with inequality," Houston said.
"The regions of New Zealand face quite different pressures. Land availability and housing affordability are not typically problems that face provincial New Zealand and yet poverty is very evident in our provinces," she said.
"Local planning policy is one contributor to housing affordability but certainly not the main one. The relative inability to build at scale, relative high cost of building materials, land banking, tax structure, interest rates, profiteering and sentiment towards residential property as an asset class in general have a huge role in housing affordability."

And unrestricted property purchasing by foreign buyers, extended family of international students, friends of immigrants, & immigrants etc.  

Sacred cows - never to be discussed - note - Hickey only ever alludes to it indirectly

Bernard
 
Kumbel and Waymad and Dale Smith frequently raise these issues in detail and one never ever sees any response or rebuttal or acknowledgement from those in the game - never
 
Yet, now, when Bill English lets fly, out comes the CEO of one of the groups, simply to brush it away
 
Their silence has been deafening for so long

You would think two former senior council staff and one developer might have a few clues not only about the broad brush but the intimate details as well.
 
Thank you for noticing that we do our best to inject as many facts as we can into the public debate even if they don't get wide acknowledgement. We know and appreciate that we get a good hearing here.

Houston (the person) does not get it. She does not see the link between what planners do, and the ability to bank land and make huge profits and why that makes people sentimental in wanting to invest in property.
Houston needs to got to Houston (the City) and asked their planners how they manage to process developments in a city (and State) that people and businesses are flocking to in record numbers and how the property prices for new housing are still around 3 x medium income multipiles. 
 

There is so much to criticize in those reported comments. But broadly she has got the chain of causality backwards.
 
For example there can be no land-banking, speculation or profiteering unless there is certainty about a rise in  land prices. That certainty arises as soon as regulation is imposed defining where houses can and can't be built. Planning causes shonky developer practices.

English could solve the problem easily with the stroke of a pen - introduce into parliament a regulation compelling councils to approve, or reject, or decline applications within 4 weeks and impose penalties if those deadlines are exceeded, by refunding double or triple any application and or consent fees charged. Penalties to be applied repeatedly for each week the process runs over the 4 weeks - too easy - how hard is that? - Hey Bill - you listening?

And yet across the ditch in Brisbane, a city of comparable size to Auckland.  We can get a permit to build a new dwelling well within 4 weeks and building permit cost of about one-third of what one has to pay to Auckland council.  Wonder why we have a housing shortage.

This discussion is about resource consent to subdivide. Building consents are mostly processed within four weeks here too if there isn't a single mistake in your plans.
 
We charge about double what we need to for building consents to show how serious we are about dealing to leaky buildings.

Hence the old trick of finding of inventing a small mistake and bumping it back to the customer

How many staff do they employ over in Brisbane to meet those timelines?

Private certifiers.. and they all have complusory liability insurance.  
Also when we built our extension we and the builder had to take out compulsory buiding quality insurance to cover unforseen building issues, cost was minimal and managed by the State Goverment.  As in Council staff number, Brisbane has roughhly 2/3 the number of staffs as  Auckland CC, and the portion of people who are on 100K+ and 200K+ are about halves of Auckland.  Just too many fat cats in Auckland CC..

What you state about staff is simply not true.
Auckland June 30 2014: "the equivalent of 8441 fulltime staff "
Brisbane On June 30, 2012, the council had 7900 full time employees.
"This has dropped by about 250 this year – about 150 from people accepting voluntary redundancies and 100 from people leaving who have not been replaced,"
7650/8441 = 9/10ths, not 2/3rds as you claim.
 
Now, what population do those employees cover?
Auckland 1.5Million. (covers the greater auckland region - auckland is the largest local body in australasia).
Brisbane 1.0 Million (covers only the metro area).
 
So auckland council has one employee for every 177 residents, while for brisbane each employee need only serve the need of 130 residents.
Or to put it another way, Brisbanes per capita council staff numbers are 36% higher than aucklands.
 
And brisbane spends more on staff than auckland (NZD741M vs 702) despite having  fewer of them.
Remuneration figures released to the Herald show total wages paid were up $9 million to $702 million for the year ending June 2014. 
 
Brisbane City Council's budget documents show employee costs will drop from $683.14 million in 2012-13 to $664.38 million in 2013-14, an $18.76 million drop.

Read more: http://www.brisbanetimes.com.au/queensland/jobs-to-go-under-brisbane-city-council-budget-20130612-2o4ad.html#ixzz3FdqEjO74
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11324634
 
Aucklands numbers are starting to head up again though after loosing 1000 or so employees, while it looks like brisbanes are on the way down.

What is distasteful about Bill Englishes attacks on planners and Councils is the fact he is unwilling to compromise and he is willing to crash the economy and ruin a generations chances to live an affordable life if he doesn't get his way.
 
He wants Councils to do all the heavy lifting by dumping all zoning restrictions so that ticky tacky stand alone car centric 1950s style sprawl can recommense. But he is unwilling to help by increasing transport funding to open up new areas and to give alternative transport options (cycle ways, busways, passenger rail). Bill English certainly is not willing to address the flood of foreign buyers nor will he address the corrupt way duopolies are allowed to rort the little guy in NZ.
 
The message is getting out though about this government tolerance for these shady practices. I overheard a farmer complaining about the price of building materials and costs in general down at the hairdressers in my rural town.....

In making comments about ticky tacky car centric uban sprawl you appear to be seeking to impose your ideas of how people should live on to others.  Surely the sort of situation that they live in should be their choice.  
The market should be totally free to provide which ever style of development people may want, not subject to whatever is the current fashion in the town planning realm.  If the town planners believe their ideas are so fantastic then there should be some oppertunity for some development of this type.  However their ideas should never be a reason to remove other options.  If their ideas are so good the people will chose what they are offering to the extent that they meet peoples various  needs.  If the only way that they can get  people to adopt high density living is to remove or restrict the other options then their concepts are not acceptable to the public market as a blanket solution for everybody. 
The key point is that the market should be totally open and free of artificial constraints.  This country has one of the lowest population densities in the world, so any apparant land shortage is totally artificial.  If you do not like living in a large city do something to restrict internal and external migration.  If you want high density living then supply affordable and reasonably sized appartments (the size of a stand alone house, not the over priced ticky tacky shoe boxes we see in central Auckland).   Those people who find them a better option than suburban dwellings will buy them.

No that is not what I meant. I would favour less restriction on where people can build and a greater variety of transport mode provision. That will give the people more choices with regard housing and transport choices at lower prices. For instances what is stopping Bill English giving the ok for Kiwirail to buy rural land around its rail corridor to invest in realestate and the government helping with the rezoning and that being just one of many new housing developments solutions.

A difficulty of not being car centric is that you need a large commuter population to make public transport viable.

Bill's Bizaro World orbits Planet Key.

Taken in isolation, of course Bill English is wrong. But taken in context with the other factors that make up unaffordable housing, he is spot on.
 
This is because you cannot agree with one without agreeing to all. 
 
If planners can see that urban growth boundaries cause land banking that causes unnecessarily high land prices then they also will see that most of the work they do helps support this rort.
 
If they can see that developers can put in most of the infrastructure quicker and cheaper without them, then they would see most of their time and thus the time it takes to process a consent is not needed.
 
If they can see the above then they would also see that half of them are not needed and should look for other employment.
 
Maybe that is why they cannot see?

Bill English will be well pleased with this little skirmish. Just as cold war air forces used to deliberately fly into enemy airspace just to test the reaction Bill has put up this ludicrous proposition to see what people say and think about it. We probably won't hear any more about it.
 
I say ludicrous because English, Smith and Bennett have only just handed this whole issue to the Productivity Commission to spend the next year looking at in depth and ludicrous because National have shown no signs of being serious about either child poverty or housing costs over the last 6 years.
 
What the Nats actually want to do is seriously weaken the environmental protections in the RMA. Presumably the political calculus is not that favourable for making such a change hence the misinformation campaign.
 
What is in their favour is that virtually no-one knows anything about the RMA or councils so they can say pretty much anything and get away with it among the wider public.
 
So where we are after the last two days is:
 

  • The false idea that the RMA causes child poverty has been embedded in the public mind
  • The masochistic poodles at LGNZ will continue to roll over and beg to be whipped
  • The NZPI probably have trouble putting together a shopping list let alone arguments in favour of planning processes
  • Any public suspicion can be easily diverted into anti-immigrant and anti-speculator sentiment (you see how easily it happens here; imagine how easy it will be in radio talkback land)

 
The government have put it in writing that you don't need to change the RMA to change land supply controls. But when they do prepare to gut the RMA they will be pretty confident that NZers will back them thinking that they are looking after the kiddies.
 
If this is true then it is cynical politics at its worst.

In The Press today the Christchurch City Council is calling Bill English's bluff.
 
Cr Raf Manji acknowledging  that Councils have been part of the problem in constricting land supply but that Council planning rules were only part of the solution. That the government needed to play a more active role. That the government needed to buy rural land on the outskirts of cities enough for 5,000 to 10,000 homes.
 
"The price of land would be at rural prices that is where you get affordable housing. Land rezoning led to huge winffall gains for the owner, but did not reduce house prices."
 
The ball is back on your side of the court Bill. The Councils have given you a perfectly sensible solution that could be implemented now to solve your problem. What are you going to do?

Sorry, but I don't understand why the Government needs to buy the land in order for affordable housing to be built on it?

There needs to be a large amount of residential land put on the market at rural prices + legitmate development costs (3 waters, paths, residential roads etc) without the huge capital gains to reset the market back to competitive levels . Only government can do this on a big enough scale to have this effect in the short term.
 
The government could do this today while as Kumbel details all the enquiries, reports and any needed legislation on housing affordability will take years and will not resolve affordable housing in this government term.  
 
Long term the government needs to get out of it. Give a 'right to build', ensure Councils have the resources to provide decent infrastructure ahead of demand, ensure there is decent competition in the building supplies market. Stop foreigners buying land and immigration demand from swamping these new supply measures. And so on.

Brendon, here you are talking about a deliberate short-term intervention by the public sector to break the existing negative cycles. Fine as far as it goes especially since a government that was willing to walk the walk could do it tomorrow.
 
It is also worth adding that even in normal times this would be a legitimate process for either councils or government to use to finance extension of core infrastructure. Why shouldn't councils take a few risks, get the planning gain and use the profits to upgrade road and water networks. Private developers would then be left to backfill the open areas around the new infrastructure.
 
This is an era when development should follow infrastructure not the other way round as it is now.

Agreed that is what I meant.

Working example not far from you and I, Kumbel and Brendon.
 
Selwyn County bought land at Roilleston for rural prices, years and years ago.
 
Released now as I-Zone (check the 'no development contributions' page....) it has attracted many businesses (including the new Tauranga/Timaru Inland Port - plus the inevitable inter-port-company duplication of facilities with LPC playing catch-up using OPM.
 
Rolleston, for those outside the area is at the junction of southern and western rail links, and is, in fact busy eating the poor old Christchurch City Council's lunch in this respect.  
 
SCC's consenting rate is many times CCC's (Hugh P noted this yonks ago - Hugh, Hugh, where ya gone?) and most of its territory is on Plains gravels which are much more forgiving in earthquakes than are Christchurch's gloopy riverine silts.
 
But this is all because Selwyn County, now as then (I was the treasurer for one of the new SCC's predecessors - Malvern - many, many moons ago) is run by stolid salt-of-the-earth farming types who tend to take a really long term view of life in general, and Planning/strategising in particular.
 
One can rarely accuse urban Councils of this.....

Yes Waymad I had noted this
'at Izone Selwyn District Council does not charge a contribution on new industrial and commercial buildings.'
Can you tell me if this means no contribution charge on new industrial and commercial buildings in any allowable area in Selwyn or just Izone? 

The development contribution legislation allows for contributions to be levied at the building consent stage and connection to services stage as well as at resource consent time.

I rather suspect just i-Zone, Dale.
 
SCC's DC revenue in 2012/13 was $6.8m:  rates were $28m and DC's plus financial contribs were $12m.  Annual report for 2012/13 here.  See P 49 Comprehensive Income.
 
They're not gonna turn down an income stream that substitutes for 25% of rates, now are they.
 
Canny, in respect of IZone, yes,  Stupid, no.

If it is just for Izone, it must raise the point on what grounds can council wave a requirement on their own development that they forcibly make others pay.
After all, council’s argument is that there is logic and rational on why any particular development gets charged the amount they do for a DC and they will point out to you in legislation and with the formula breakdown on how they arrive at such charges.
You would expect, actually demand, that it should be consistently charged across all developments, not used as some reward or punishment at the discretion of council, especially when it comes to giving themselves the benefit of any waiver.

Waymad I get the impression that young Raf is sick of other people eating his lunch.... The solution is for CCC to start competing back.

Kumbel, you mean take a few risks like Tauranga's waste water system to nowhere, or like Kaipara district's Mangawhai waste water nightmare that put them into statuary management?
Councils are the risk, but the responsubility for their risky behaviour falls on the ratepayer. It might work if the Councillor's and council management were willing to give personal guarantees like developers have to.
And it is because of developers being forced to follow infratructure, mainly waste water, then it is easy for the land to be land banked in advance, and it would not mater if council bought it, they would pocket the artifical uplift value and the end purchaser would still end up paying housing at inflated prices.
Developers should be left to determine where to develop and how and what infrastructure they need to make it work.
Councils in aussie are involved as you say and all they do is pocket the uplift, and cause such a shortage that people sleep over night at subdivisions to be at front of the queue. And they are paying huge prices.
Is there a working example anywhere in the Anglo-sphere where council involvement has resulted in more affordable housing (on a like for like basis) without it being subsidised by the ratepayer?

Dale I think that developers could easily do the 3 waters themselves if they were configured like a MUD. Transport infrastructure -bridges, tunnels,  motorways, busways though are mostly too big and involve more than one development. In Wellington for instance there is special rates for public transport for both the source and destination. In many cases development cannot occur if there is no transport infrastructure -if there is no bridge for instance.
 
Excluding the problem of funding a transport network which I think is why small councils failed in NZ. When NZ had many smaller Councils competing against each other then NZ an anglo country had affordable housing. Some like Hugh Pavletich would like to go back to those days. In Canterbury if Ecan was reconfigured into a well resourced Transport Board then this probably would work.
 
P.S An exception for the MUDs/developers not being able to provide big scale transport infrastructure is rail. Parts of the US like Atlanta that is exactly what transit authorities are doing! Maybe a MUD expert like yourself should be talking to Kiwirail.

Mangawhai was forced on KDC by Northland Regional Council - i.e. it wasn't their idea. I was thinking of something a little more considered :-)

Paragraph2,  It's illegal for councils to do sensible things.

Check out Manawatu council that was forced to sell it's farms because they were a good investment strategy.

Or Tararua council, saved a million dollar nest egg, and government forced them to spend it as sensible savings for "in the black operation" was deemed illegal.

Until we get a financially educated population those with political and social demands will always destroy the economic slow growth.  (add to that the ecological/environmental dreamers.)      They just don't understand  not eating your seed grain.   And so we get the others (Especially risk adverse old capitalists) who want to hoard everything and won't spend in serviceable infrastructure because it costs more to make accessable tunnels than to bury the pipes that will guaranteed needreplacing 50-100 years in the future....when land will be inflated and build on, to make the replacement work very expensive

I'm writing essay on poverty now. So this news is very welcome. You gave me a good idea for the topic of my essay. Thank you.