Property developers and community housing providers want the Government, through its new Kāinga Ora entity, to be legally required to work with them

Property developers and community housing providers want the Government, through its new Kāinga Ora entity, to be legally required to work with them
Urban Development Minister Phil Twyford

Those involved in the residential property sector are urging the Government to ensure the new Crown entity being formed to manage the country’s housing needs doesn’t crowd them out.

A bill is currently going through Parliament to establish Kāinga Ora-Homes and Communities – the entity that will pull together Housing New Zealand, its subsidiary HLC and the KiwiBuild Unit, to lead urban development projects and be a public landlord.

A key message shared by those who submitted on the Bill to the Environment Committee this week, was that they wanted the draft legislation to be tweaked to specifically oblige the entity to complement the work they do, rather than replace it.

Infrastructure New Zealand said there was a “significant risk” Kāinga Ora would see local government, community housing providers and private developers crowded out.

It suggested clauses be added to require Kāinga Ora to “support others to provide housing, including through co-investment” and to work with “existing landowners and development partners”.

Infrastructure New Zealand said the Bill needed to more clearly define Kāinga Ora’s objectives and stipulate that it should only step in where there was clear evidence of “market failure”.

The bill before Parliament is relatively brief as its main objective is to establish the entity. Another crunchier bill to detail the entity’s powers, is expected to be introduced before the end of the year. Kāinga Ora will be up and running in October.

Role for government to de-risk

Another industry group, Property Council New Zealand, likewise said Kāinga Ora needed to complement rather than compete with the property sector.

“By working together, Kāinga Ora can de-risk these large-scale urban developments which are too complex for the property sector to do on their own,” it said in its submission.

“We strongly support Kāinga Ora acting as the master planner, streamlining the resource consent process and investing in infrastructure. This will provide the property sector with opportunities to do what they do best…”

Something the not-for profit organisation, Habitat for Humanity, has a track record in is helping people (more than 500 families to be specific) into home ownership through its rent-to-buy scheme.

Along with The Salvation Army, Housing Foundation and Community Housing Aotearoa, it’s calling for the Government to help fund “KiwiBuy” solutions, such as rent-to-buy and shared equity schemes.

Urban Development Minster Phil Twyford has in the past expressed support for these sorts of initiatives.

Yet Habitat for Humanity said it wanted progressive homeownership and shared equity schemes, “proven by the sector” to become part of the public policy landscape.

Board representation and procurement key to partnerships

It said various types of housing providers should be represented on the Kāinga Ora board and be given positions where they can provide advice.

“Without a significant programme of intentional work to maintain meaningful partnership, the agency will have the propensity to be subsumed by internal operational needs and the demands of a political environment,” Habitat for Humanity said.

Another way it suggested Kāinga Ora could “partner meaningfully” with those outside of government was through the way it handled procurement.

“It makes no sense for these [non-government] groups to bid each other up at auctions for land, outmanoeuvre each other when purchasing supply or hiring labour,” Habitat for Humanity said.

It suggested the agency be made to take a “coherent and considered” approach to procurement.

It always comes back to RMA reform

Both the Property Council and Infrastructure New Zealand didn’t see Kāinga Ora being a silver bullet for the country’s housing woes, albeit a step in the right direction.

“There are many issues holding back the property industry and these are not new,” the Property Council said.

“They stem from a mess of perverse incentives facing growth councils including; debt limits, infrastructure financing problems, and difficulties with the RMA [Resource Management Act] processes and district plan requirements.”

Infrastructure New Zealand went a step further in saying government intervention to address gaps in the country’s urban development system was justified, but this should be a “near-term response to an existing problem, rather than a long-term measure to override largely local activities”.

“It is our strong view that the institutional and statutory arrangements for local decision making in New Zealand are not working and that these arrangements are directly contributing to issues in housing, transport, water and land development among others.”

Its “preference” was for the RMA, Local Government Act and Land Transport Management Act to be reformed.

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12
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It has the appearance of being set up to do nothing, similar to Kiwi Build. It's not clear to me that anything would change other than creating high paying jobs for no reason.

The refocus on providing housing for the poorest is a much more acceptable goal than Kiwi Build focusing on providing homes to people earning the top 5% of income. Low income earners and the homeless need the help.

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Fix immigration rate (ie significantly below new build rate), foreign capital inflow rate (ie, run a mild capital deficit) and reform the RMA. Seems obvious.

Problem seems to be that politicians so want to be seen as heroes riding in to our rescue and we fall for it every time.

I’m not convinced there is a problem to solve.
The numbers in Auckland that are homeless or in temporary accomodation is about 4000 people according to the city council.
Modern student accommodation allows about 15sq metres per person so 60,000 sq meters is the shortfall.
KiwiBuild sounded great but it is just a terrible waste of money and effort.

I'm not convinced there is anybody home...

As New Zealanders we have high expectations of what is required for personal space and a home.
I’ve seen 15 sq meters per person, approved and working rather well, self contained units capable of four people.
It’s pragmatic for reasons I won’t go into here..

I was referring to your first sentence. Their certainly is a huge problem with housing in NZ, in fact there are several problems.

Lack of supply
Poor quality of much of what is there.
Poor public transport and other infrastructure deficits.

Ok,
For lack of supply we could use the outstanding approved kiwibuild applications, about 10,000
For quality we could use rentals that have holes in walls or do not have a warm room, but the government is after them, number unknown.
For infrastructure , we will never be satisfied.
Let’s say the current deficit is 10,000. Where does the 150,000 number come from I wonder?

I don't think new zealanders are quite ready to lower their standards to calling an overpriced overcrowded rental acceptable just because it doesn't have holes in the wall. And for infrastructure we need to actually do it once, and do it right. A pissant light rail service to the airport is a joke

Really, this country is coming to that? Something equivalent to jail cells?

2 bedrooms, shower, kitchen, living, about 60 sq meters total.
Could take two couples.
Built to a good standard

PocketAces,

I own a stand-alone property of 42sq ms. I added a small deck and porch taking the total to some 51sq ms. Currently,there is a single tenant who has been there for over 9 years,but there have been couples previously. It is easily kept and heated.

i have no idea what the minimum reasonable size might be,but I feel sure that many would happily live,either as tenants or owner-occupiers,in properties of 60/70sq ms.

One couple in 60sq mtrs is reasonable, but two couples as suggested above.. nope.

I agree. & Kāinga Ora crown entity appears to be based on the model used by Singapore for the last 50 years. A standard HDB (Housing & Development Board) flat built by the government is between 70-150sqm, a typical unit of 100sqm is typical family home for 5-6 person. Nothing fancy and no frills, but comes with 3 bedrooms, kitchen, yard, 2 bathrooms and a living area. 80% of the population lives in HDB flat. And for a country with 6 million population, the size of lake Taupo, & ZERO homelessness, it is a proven solution that works. Frankly, garages, gardens, & 1/4 acres land, are really non-essentials. Better a 99years leasehold roof over your head than sleeping in garage/van/tent/park bench anytime.

Developers always want the biggest margin. They dont build afordble anything as theres no or reduced profit in it. Getting stressed that it looks like the Govt is going to get going on developing and building state houses without them seems a bit rich. Sadily tax payer needs to do this as history shows that developers just wont do it. Agree immigration needs to be slowed for the next 10 years to allow NZ to get on top of its infrastructure and housing defecit.

Agree that rma and councils are a big issue. Hopefully there is change here. We also need to change councils being the last resort for all building problems. Leaky buildings and people in flood prone or sea rise risk cant all be dumped on Rate payers. I still crackup at the prices people want for beach front houses that have clearly lost most of their dune barrier and are near term from being washed of the sand cliff that now fronts their property to the ocean.

Except the Developers are building houses that are affordable, otherwise nobody would be buying them.

NZ developers have gone crazy with this boom. There is a new subdivision planned for a small town in the Bay of Plenty, Pukehina near Tauranga.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=121...

The tiny coastal community itself has seen prices hyper inflated just recently by local agents. The coastal town has a serious problem with erosion, with council projections showing half the community will be under water in 50 years. I feel Pukehina will see the biggest drops when the bust happens just like it saw the biggest drops in NZ following the last downturn. Over 36% drop shown in this 2012 article.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108...

This time due to the over exaggerated prices, the increasingly serious erosion problem and the drop in foreign buyers I seriously worry about the people in this small community.

I seem to remember there was a motorway constructed to nearby Pukehina so that may save them.
We travelled on it a year ago and we were pretty much the only people on it, perhaps because it is tolled.
Good spending NZTA

Yes, the Eastern Link. The much needed motorway from Tauranga to nowhere? It costs $2.10 for a car each way and takes about 5 minutes off the "free" Te Puke route. Most hardworking locals earning just over minimum wages and who are paying sky high mortgages and rents probably cannot afford this. Which may be why tumbleweeds are commonplace.

The tumbleweeds will never get a ticket, they can do 110km/hr

Hey it goes to Paeangaroa, its a bustling metropolis...not! The land around rangiuru is why that road was built, I wonder who owns it that had such influence over the RONS programme? It will be years before anything is done with that land. Meanwhile north of Tauranga is a killing zone for anyone brave enough to use SH2...

We don't need an urban development authority.

1) Kāinga Ora's role should be to provide housing where the private sector cant as there is no profit - i.e community housing, affordable housing etc (so we don't have people living in garages)

2) Kāinga Ora has no role to play where commercial development is viable

3) Except to the extent that government should provide some affordable /community housing in masterplans - large tracts of affordable / community housing as single areas risks future slums

4) Kāinga Ora has no role to play in urban development - this should be done by removing zoning & density restrictions from the RMA (e.g. to allow high density around train stations) & let the private sector develop it.

Wow... How is the Act Party doing.

It may or may not be ACT policy but that doesn't mean he is wrong. I would never ever vote for ACT (for many reasons but can't state otherwise might get banned) but the key point is that this new ministry should be focusing on what is causing the private sector from not responding to the normal market signals (i.e. price increases). It is clear that the main sticking point is local government rules the prevent housing choice. Here in Auckland near blanket bans on development so-called "character areas" and view-shafts are significant barriers for density. As I have said before, no one has told the bakers to bake more bread!

I don't vote for ACT either, but the nimbies have to go.

Given the character areas are relatively few, I disagree that density protections in those locations is having a significant impact on overall affordability across Auckland. There are plenty of areas to increase density and housing choice has been greatly increased as a result of the unitary plan. There are much larger issues at play e.g. finance, lack of infrastructure, lack of construction sector workers. Planning is an easy target, but the fact is 95% of resource consents are approved.

So despite supply problem...London is falling...

https://www.theguardian.com/money/2019/jul/17/london-house-prices-fall-a...

BUT not to worry...NZ ...nothing can happen.....

Cowabunga , Batman ! . HOLY sha-moley ... the average house price across the UK is less than an average house in New Zealand ...

... and they're a 60 million population , in a land area similar to NZs , next to a market of 400 million people in greater Europe .. .

Wow !

Wow indeed.

Not to worry. NZ is unique and nothing can every happen in NZ... LoL

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... the problem for Labour is that Twyford is now seen as a joke , a clown ... his behaviour over the complete failure that Kiwibuild is leaves him with zero credibility ....

Get back to those who are in serious housing need : the homeless : crank up the supply of state houses . .

... and leave the expensive $ 600 000 end of the housing market well alone ... stop with the middle class welfare nonsense ..

Housing New Zealand managed stock from 2015 to 2019. Why have we gone backwards? Maybe that's why they posted a $76 million surplus last year.

September 2015 - 67,198 total properties - Click

March 2019 - 64,386 Total Properties - Click

. the Gnats were selling overvalued Housing Corp houses . .. and fair enough , why have welfare recipients in $ Million properties ...

But they didn't replace them ... and Labour are too obsessed with propping up their fiasco that is Kiwi Build to realise that housing the genuinely lower income families is the real issue ...

... Kiwi Build is just more of Labours recent history of middle class welfare ...

What, Labour run by Chardonnay socialists who think they know best and feel entitled to tell other people what to do and what to think? Surely, not?

What about the workers who are not on the government teat? Who speaks for them?

The Lorax. No, wait, that's for Shane Jonesy's Trees, bless 'em....

actually -- what they did was create more and more social housing - but jsut not owned and managed by HNZ -- who are a shambles -- hence they have an extra year to comply with new insulation standards --
Community Housing providers gained over 15000 properties in that three years -- some from HNZ stock -- but most from a serious of funding initiatives by National -- All these houses are contracted to MSD -- often for 10-15 years and house the most vunerable

It was and is a much better idea -- to support community housing providers to increase their stock - including new builds -- as they are far more efficient at managing it -- and keep it much better maintained

Or is the extra year to comply with the insulation rules to avoid them having to insulate a bunch of places that are going to be demolished and replaced. Noticed skip bin outside another adjacent pair of state houses on my way into work the other day, so looks like another two along that stretch of Richardson road are about to become bulldozer food.

Not sure your opprobrium towards housing NZ is really justified. When you give an agency the worst customers, and limited resources you are not going to get great outcomes. I must try to find out how much the fun ding for state housing has increased from say six years ago..

Well, in Palmy they bulldozed a significant portion of our social housing stock and never rebuilt it. We now have a waiting list almost as high as Wellington and empty land growing some mighty fine weeds. Great governance there!

If we went really restrictive on immigration, New Zealand's population would begin slightly to drift down.
Huge huge advantages in New Zealander incomes, the environment, carbon, productivity and that there is no planet b.
Adequate infrastrucure and no harrowing costs increasing it. Plenty of houses too. We would be able to focus on building good ones.

We don't seem to be able to limit the immigration numbers.

We seem to have to need to bring in gazillions of people (mostly lower skilled) to grow our economy.

Which raises 2 points, 1) Why is endless growth even considered to be a good idea? and 2) And why is the only way we know how to grow our economy via mass immigration? Where's the productivity growth?

The productivity growth is missing in action. We need Politicians who have practical skills and skin in the game. Not just a good idea or theory

Yawn. Just back from Japan and Singapore where they do urban development properly, with a big role for government. I had a great time, but I have also now resolved myself to our little country never getting its act together. Bunch of amateurs, the govt AND the private sector. Maybe sad, but I'm now kind of in the 'don't give a toss, we are so incompetent' mindset....

NZ certainly needs an Urban Development agency that can compulsory buy land in strategic growth areas, e.g. Town Centre close to public transport planned for growth. If it cant do that then the only outcome is more sprawl.

"Compulsary buy land", do you want to live in communist China / Russia and just rent from the all powerful govt.
Will this be like Jacinda overnight banning oil exploration without even talking to the industry or having a plan for replacing that required resource?
I have decided to build a rail link from my house to the airport......all houses in the route I chose will now move.
Those that are left, well I deem you have benefited and can pay an extra tax on your land.

Quasi-monopoly businesses never last forever. But the land purchased from the profits and sales of those businesses does last forever. But what good is land in New Zealand if you don't have the ever increasing population to create the demand for that land? That is the economic history of New Zealand's 1% since the mid 1980's

Tax free subsidy here? I have worked alongside a few of the social housing providers and have to point out that they are not readily scalable businesses nor are they terribly efficient. A fully resourced SOE can bring far more momentumn and scale than all the social housing providers combined without the religious or anti state agendas that come as part of the offer of an apparently free home. Also of concern is that these organisations may be conveniently subsidized via their tax free status (being churches or charities) when really the should not. Is that not an unfair advantage against a conventionally structured business? If they aren't paying tax they aren't contributing to the national revenues that our society needs to operate with.

Yes totally agree. The 'community housing sector' has long been promoted as a solution, often by themselves, but like you I am far from convinced. I think they can work in much bigger countries like the UK with scale.
The last govt hyped them up but they don't have much to show for it. It's another neo-liberal cop out.

It's a tough gig this housing business. There are thousands working on it with thousands of theoretical solutions & sadly still more problems at the end of the day. Immigration is the biggest con of the new millennium. More workers to pay for more welfare was its original intention but as we've seen, that just clogs up the arteries & the main organs. We do seem to be very good at making life more complicated than it needs to be, don't we? Raise the retirement age by one year in the next 5 years. Then again. Then again if need be. Stop the immoral unvoted for culture changing immigration now! Cut it in half. Do it Jacinda or you're dog tucker next year (and that goes for you too Winnie).

You do realize how dependent the economy has become on immigration and the land value inflation it supports, in fact it virtually IS the economy these days. Not to mention that it also underpins the under productive industries in our economy through low cost labour units too. The failure of the John Key National governments to catch up to Australia's living standards is stark in its reality for all to see. Instead of putting the strategies in place to do so that government simply took the easy way out and let kiwis move to Oz and get that living standard for themselves. Then the Key government simply set about back filling the alarming chasm in our population base with people from desperate origins only too happy to accept what so many kiwis had rejected by leaving altogether.

Talk, talk, talk. Vested interests from all quarters. If we keep on with all the hot air and fafing around we will still be having all these discussions into the indefinite future. We are well past the point when the government needs to get off its over feed bureaucratic chuffs, ignore all the crap and get on and build decent size affordable homes by taking possession of land through the public works act or any absolute power it has the authority to enact. Tender land land development through the well developed Transit processes and call very competitive tenders on an international market to build the houses we so desperately need.
Will they? No! They are more hopeless than the previous government was cynically passive.