Housing Minister adamant that the power to over-rule local councils on housing developments will be established in new legislation

Housing Minister Nick Smith is adamant that the Government will press ahead to establish new powers allowing it to over-rule local authorities on new housing developments.

The powers are controversially contained within new legislation that was rushed into Parliament on the day of the Budget last month and is currently before a Parliamentary select committee.

The new legislation has been rushed in, ostensibly to enact the recent housing accord agreed between the Government and the Auckland Council through which it is targeted that an extra 39,000 new houses will be built in Auckland during the next three years. See all our housing accord stories here.

However, the Auckland Council, after seeing the draft legislation, has indicated unhappiness with it and suggested it might not ratify the accord - which has to be done by a full meeting of the council - unless there are changes made to the legislation.

But Housing Minister Smith said on Radio New Zealand that there was no way the Government would be removing the new power it would give itself through the legislation. This power would allow it to over-rule local authorities, set special housing areas and approve new developments itself, if it could not agree accords with those local authorities.

“It is absolutely crucial. The Government cannot take on this massive issue and risk around house prices without those residual powers,” Smith said.

Auckland Deputy Mayor Penny Hulse said last week that the council's current focus is on the new Unitary Plan, on which public feedback closed last Friday, and “Until the Government change the [housing accords] legislation to better reflect the intent of the housing accord the accord remains on the backburner”.

But Smith denied that the accord was being delayed or deferred.

"No, not at all. It’s not on the backburner at all. I dispute that. I’ve had discussions with the Mayor [Len Brown] as recently as last week."

“...There’s no indication at all in my discussions with the Mayor that there is any falling back from the accord. There is work to be done on some of the fine point detail..."

“...But let me leave you in no doubt, the accord’s in business and the work between the council and the government’s proceeding at pace.”

For the accord to be put in place, the council needs to sign off on it and to "notify" its Unitary Plan. The latter action was targeted to occur in September, but more recently Mayor Brown has indicated it might not occur till after the council elections in October.

Smith would not be drawn on when he wanted to see the accord put in place in order to prevent the Government itself taking action to advance the housing developments in Auckland.

“Well, I’m wanting to work at pace. Every one of us knows the impact on the economy of us not making a shift on this housing issue. And look I’ve got some sensitivity to the Auckland Council because what you’ve got is an internal tension there between neighbourhoods not wanting to change – they like the green paddock next door or they like the way their suburb is – and this very important national issue of ensuring that more houses are brought to market.

"So, I’m not going to set down that there’s a deadline of that date or this date, what I have made plain to the Mayor and the Auckland Council is that we need to move at pace.”

But the Government would “absolutely” retain the right to intervene.

“The Government’s been very plain in all our discussions with the Auckland Council our very strong first preference is to work with council but if a council does not want to make progress on this issue it is so nationally important we need to move.

“...I have made plain in my discussions with the Auckland Mayor, as has the Minister of Finance, that our very strong preference is the accord mechanisms but ultimately if we cannot get those to work then the regulatory powers that are proposed in the bill will need to be used to free up land supply and to get housing supply increased.

The targets set by the accord, for 9000 new houses in the first year, rising to 13,000 in the second and 17,000 in the third have been met by a general sense of disbelief in the wider community. Smith said the targets would be reviewed annually.

“At that point there are options on that review as to whether the accord comes to an end or whether there are amendments made to it. In my view it is crucial to the success of the accord that those targets are met.”

The housing accords legislation allows for the Government to negotiate similar accords in other areas that are identified as having urgent housing needs.

Smith confirmed that Tauranga,  Christchurch,  Wellington, Queenstown, Nelson and Marlborough all fitted the criteria while Palmerston North was on the margin. The Government was “not necessarily” looking at accords in those areas, however.