Fletcher to build 237 homes on Crown land at Hornby in Christchurch

Fletcher to build 237 homes on Crown land at Hornby in Christchurch

The government has chosen Fletcher Residential to develop 237 new homes on an 11.5ha site at Hornby in Christchurch that was formerly occupied by the NZ Transport Agency.

Housing Minister Nick Smith said 89 of the new homes would be classified as affordable, with purchase prices below $400,000.

"Fifty of these will involve shared equity ownership with the NZ Housing Foundation to assist families into home ownership who would otherwise be unable to achieve this goal," Smith said.

The development is part of the Housing Accord the government recently signed with the Christchurch City Council.

Construction at the site on the corner of Carrs and Awatea Roads is expected to be begin by the end of this year, with the first homes expected to be completed in the first half of next year.

Around 10 homes a month are expected to be built with the entire project expected to be completed by 2017.


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Was this an open compeditive process and if so what were the other options?

From memory FB was awarded the EQR contract non-competitively. I guess we can think of them as the Halliburton of NZ.
Even as the CPI figures show that house-building is one of the few areas in the economy experiencing high price rises this government keeps the crony capitalism bubbling along.

I stand corrected. THe Press coverage indicates there was some sort of formal process (no indication if any other bidder was asked to put up a proposal, though):
Initially the plan was to build 275 "affordable" homes that would sell ot between $350,000 and $500,000 but Fletcher's winning proposal included more public spaces and recreational areas.
Sounds like it started off as an affordable housing project but FB persuaded the government not to be a big bunch of girls blouses.
Business as usual in the housing market.

Buisness as usual for our politicians.
Given the scale of the problem New Zealand faces, you would have expected a closely specified outcome and formal tender documents .  Then you would expect them to solicite as many compedative offers as possible, including from overseas bidders who are clearly far more efficient at mass producing houses of any specification and with access to excellent but lower priced materials.
Imagine the outcry if contracts for roading or any other civil projects were let on this dubious looking basis  When it comes to Fletchers and the Government everybody looks other way.

As revealed yesterday, the current re-elected government is enabling un-controlled migration which has a consequence of pushing down local wages, but when it comes to allowing overseas construction firms into the tendering process it's a closed shop - a protection racket - protected species

Is there any legal avenue to challange these sorts of behaviour between the government and which ever bunch of cronnies the decide to favour?  Surely in any other civilised and developed democracy this would be illegal and there would be legal remidies available to address this sort of abuse of power.

Doesn't look like it
Standard practice
see this comment from GBH back in June 2014
same culprits, same snouts

237 homes verse how many migrants? An exercise in futility - but great for the big boys pockets.

It reads as if the land is government owned.  Are there any details on how much it is being sold for, who is paying for the civil development and if it is the government paying, how much it will cost us?

This affordable home story is all BS. The government can create 'Wigrams' whenever they like. We could have 10,000s affordable homes if the govenment wanted to. The government whenever it wants can buy 'Wigram' sized farms and rezone them residential.
Parker basically said that in the Listener article 'Mind the Gap'. Christchurch Councilor did say that in the Press article -'Planning costs linked to poverty'. "The government should just buy waves of rural land on the outskirts of the city..... and build 5,000 to 10,0000 houses on it. The price of the land would would be at rural prices and that's where you get affordable housing."

Makes a joke of all the BS mouthed at the moment about how difficult the problem is.  But do not forget the Jacked up monopoly building material prices. 
If we lower the price of land all that will happen is that Fletchers et al will simply jack up their prices more so that total house price is still close to what it is now.  We couldn't possibly have house prices comming down.  As you say the whole thing is a BS and artificially controlled.

Chris-M are you aware of the fight to open up competition for food products in Britain in the 1840s? There was legislation called the Corn Laws preventing Britons importing cheap grain. What this did was give local monopolies to the local landlowners -the aristocrats. The newly developing industrialists (productive capital) such as Richard Cobden did not like this because all his productivity was going to crony capitalists -the aristocrats in the form of high wages to pay for their workers food costs. Unions (productive labour), in particular in Shefield were part of a widespread campaign that lead to the repeal of the Corn laws in 1846. 
Wiki Corn Laws for further information.
Do you notice similar battled lines forming today?

Well....yeah they could. Urban Japan was flattened in WWII and they managed to build. Actually, much of the government housing in Japan is far superior to that in NZ and many of the apartments are better constructed and more livable than what you can find in Auckland, which is one of the more anti-urbanization cities in the deveoped world.

Japan is incredibly interesting. The government compulsorily acquired the sites for all subway-oriented development decades ago. They operate as a landlord in conjunction with running the subway system and no subsidies are required from the taxpayer for either.
There are no issues with zero-sum gains to private property owners from subsidies to the public transport system - unlike Auckland.
If the government wants to intensify its developments at those sites, it just gets on and does it, and no added site rent is captured by private owners - unlike Auckland.
No NIMBY rights of objection delay and add costs to the intensifications - unlike Auckland.
The government operates as a socially consciencious landlord, with affordability as a primary objective - unlike the landlords in Auckland who own all the CBD sites where upzoning and heavy public transport investments are being made.
This actually creates a significant competitor in the whole urban economy, in the form of the "public transport oriented" sector of the urban economy being operated on a cost-plus basis, with initial site costs anchored decades in the past - unlike the government sector landlords in Hong Kong who follow the market upwards as "rent extractors", and unlike the private sector landlords in Auckland, who ensure the non-competitiveness of their own location at the expense of ratepayers and taxpayers everywhere else, and at the expense of motorists; all of whom pay their own way relating to the costs of the largely-dispersed "rest of the economy in Auckland".
I am an economic libertarian, but there is no way I am going to regard the Japanese approach as Communism by stealth. I possibly hate crony, rentier capitalism slightly more than I hate Communists. Of course the rest of the urban economy in Japan (outside the government owned and operated public transport oriented parts) is surprisingly lightly regulated, giving them the best of both worlds. 

You have to wonder if we would have the modern capitalist world if in the various key countries had not found ways to prevent land based crony capitalism taking hold. Britain in the 19th century, the US in the 19th, 20th, 21st (some but not all cities) centuries, Germany and Japan (with the exception of the 80s boom) in the 20th and 21st centuries. Each country and city/state in the US and Germany cases have their own approach to this problem but it seems to work.

The story reads as though the gummint are the developer and will pick up massive amounts of planning gain - that's windfall profit to you and me. They have appointed Fletcher as the main contractor who presumably will do the actual subdivision/ciil works and may do some of the building as well.
The land - if it wasn't requisitioned during WWII - was probably acquired for a song yonks ago and is now worth heaps cos its right next to the brand new motorway that the gummint built.
The deck is well and truly stacked.

I doubt that Fletchers will take on the civil works. their pattern is to let somebody else do that then take on the finished sections.  Lunn Avenue/Stonefields - they owned the quarry, sold it then bought back the developed building lots.  There are other examples with Fletchers.  Hobson development, Govt land - who is paying for the civil works there - I don't think that it is the property developers.

Fletcher Building is starting to look like an expensive reincarnation of the Ministry of Works and Development. They are starting to look like the in-house builder.
In this case presumably they'll sub out civil works . But they do seem to have put up a comprehensive development proposal.
Fulton Hogan is a short bicycle ride away. Given that it's taxpayers money involved why not top-shelf all round.

You are all correct.
The government can buy land at rural prices and develop it for affordable housing.
The government can retain land along pivotal rail and road corridors for future transport development and build low income state housing rentals along it.
The government can work with selected builders on mass low  cost housing using economies of scale.
It has done all of these things before with the state housing programmes. Labour and National worked with Fletchers and others to provide housing on a scale they now seem unable to do. Tens of thousands of houses a year from a population a quarter of the size. They worked in partnership.
Yes it was a form of crony capitalism but Savage and co accepted this because Fletchers took a low margin. It was a win win for both. They even had joint ventures in building supplies like standardised joinery factories. The long term security of the contracts allowed Fletchers to invest and innovate in new methods and materials for the NZ market.
And to top it off, they funded a lot of it with low interest Public Credit.
Fact is neither Labour or National now want to do anything affordable along these lines as it would bring down existing property prices. The high prices and the mortgage debt backing them are too big to fail. All the current policies are a token gesture        

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