English capitalises on Labour call for Auckland to abolish urban boundary; ramps up pressure on Council ahead of Unitary Plan decision; Greens, ACT support Labour too, with caveats; Darby tells Govt to back off; Goff wants Govt funding help

Finance Minister Bill English speaking to reporters in Parliament on August 25, 2015. Photo by Lynn Grieveson for Hive News.

By Bernard Hickey

The Government and the Opposition are collectively applying their Parliamentary blowtorch to the Auckland Council ahead of its August 19 decision on the Unitary Plan, saying it must approve a plan that allows for enough land supply for Auckland's housing needs.

Labour's intervention yesterday with its call for the abolishment of the Rural-Urban Boundary (RUB), the relaxation of density controls and the introduction of infrastructure bonds serviced with targeted rates ramped up the pressure, which acting Prime Minister Bill English climbed on to intensify his warnings to the Council.

The importance of Labour's move was emphasised when English called a short press conference in Parliament to repeat last week's calls on the Council to agree a Unitary Plan with enough housing supply.

"It's a pretty clear signal to Auckland City Council that when the plan turns up in six weeks time they need to demonstrate it enables enough supply and Mr Twyford's statement illustrates to them that there's a strong Parliamentary majority for a plan that's going to allow more houses," English told reporters.

The statutorily appointed Independent Hearings Panel (IHP) finished three years of hearings last week and is due to present its plan to Council on July 22. The Council must approve or reject the plan by August 19. A rejection would send the plan to the Environment Court for years of disputes and effectively freeze Auckland's development with its pre-1993 zoning rules, including its limits on expansion either up or out. A rejection would effectively blow apart the Government's supply-led strategy to deal with Auckland's housing shortage, which has been estimated at 30,000 and growing at 5,000 to 10,000 per year.

Intervention warning

English stopped short of calling for a full abolishment of the RUB, but said the 1993 boundaries clearly did not allow enough room for growth.

Asked if central Government would over-ride the Council if the Unitary Plan was insufficient or was rejected by Council, English said: "We would do that if necessary, but Auckland should take Labour's support for abolishing that boundary as a pretty clear signal where things will go if they don't deliver sufficient houses."

"The Auckland Council is on notice and the fact that Labour and National can agree on what in the past has been a pretty controversial proposition is strong signal to Auckland Council that central Government could step in if it needs to."

English was also receptive to the idea of infrastructure bonds, which contrasted with Housing and Building Minister Nick Smith's rubbishing of the idea in Parliament on November 10 last year, when he described infrastructure bonds paid for through targeted rates as "creative accounting" and "nothing more than fool's gold."

"They're interesting and constructive ideas and they've been kicking around for a while. We've got ongoing engagement with Auckland about how to try and cut through the restraints on infrastructure and those kind of funding proposals are something we would look at, in the context of a plan where they're possible," English said.

English was asked if Council had asked for Government help to use such bonds or restructure its financing to deal with the infrastructure costs of new greenfields developments.

"If they did they'd come and ask. They'd need to sort out their processes before they come near Government. From what we can see, they are having a good hard look about how real their financing constraints are," he said.

English was even blunter when asked why Auckland housing was of national significance.

"Because if it goes wrong it will have an impact on the whole economy. It also drives big cost for Government. We spend NZ$2 billion a year on subsidising accommodation and housing, and that's going up. It's fundamentally unfair that the planning rules lock a lot of people, particularly low and middle income people, out of the Auckland market. And as we've seen, there's signs of distress for families in Auckland because of the difficulty of accessing moderately priced housing," he said.

Asked why the Government was being tough or if it was bullying the Council, he said: "Because so far they've made poor decisions. The fiscal cost to the Government is rising. The risk to the economy is going up and the sense of unfairness is going and the Council understands that. That's why we're quietly confident they will make sensible decisions over the next few months over the plan that's going to be put in front of them."

He said his comments were not a threat. "The Council understands their decisions have a national impact and the Government is interested in that, and sufficiently interested that Labour and National are agreeing on at least one aspect of what should change about the plan," he said.

Greens and ACT supportive

ACT Leader and Epsom MP David Seymour said he was glad Labour had adopted ACT's position from before the 2014 election, when it was the only party calling for the abolishment of the RUB.

"They say, first they fight you, then they laugh at you, and then you win," Seymour said.

He also said he wasn't opposed to Labour's call for a removal of density controls within the city limits, but said the Council needed to convince residents like those in his Epsom electorate that their concerns about congestion, school zones and community character were also being addressed.

"If you talk to people to people in the Epsom electorate, on balance they're in favour of intensification. They just want to know what it looks like and how it's going to effect them. If you can't answer those three fundamental questions it just ain't going to work," he said, referring in particular to the need for a new feeder junior high school for Epsom Girls Grammar and Auckland Grammar.

Seymour also welcomed the calls for infrastructure bond financing, which he described as a Texan-style Municipal Urban District (MUD) with mandatory Council involvement.

"All of this disarms the speculators and the land bankers. The best thing to do to the land bankers and speculators is to drown them in supply of land and that will do this, so I think it's absolutely the right thing to do," he said of the plan to remove the boundary and bring in new financing techniques.

"The National Party should swallow their pride and admit that once in a blue moon Phil Twyford gets something right and he's certainly right about the Rural Urban boundary and isn't it a good story that in only six months he's gone from Winston Peters style race-baiting to an orthodox approach to urban economics."

Green Co-Leader and Housing Spokeswoman Metiria Turei said the Greens were also open to Labour's package of relaxed city limits, relaxed density controls and new infrastructure financing, as long as it included integrated planning with public transport and protection of special land.

"That deals with a lot of our general concerns about just freeing up land on the rural boundary to allow for more sprawl. On the face of it, it looks like something we could consider and support because it has all of the parts of the puzzle integrated. The devil is in the detail always, but we're certainly interested in their proposal," Turei told me, adding she was also open to the infrastructure funding idea.

"If this is a measure to help with the affordability question, then this is a measure that should be given some serious thought. With the housing crisis as it is, every idea needs to be explored. We can't afford to dismiss any idea outright."

Goff and Darby push back

Auckland Mayoral candidate (and favourite) and Labour MP Phil Goff stopped short of endorsing Labour's proposal for the abolishment of the RUB, saying other measures would have to be put in place to control growth or fund the subsequent higher infrastructure costs of housing developments well beyond the fringes.

"If you abolish them you've got to put other measures in place," Goff said, referring to the bulldozing of farm land he had seen near Kumeu which he did not approve of.

"You have to have controls. You have to have a situation that if somebody wants to build way out of the city, the developer and therefore the property purchaser, will pay for the internal infrastructure -- the streets and the water supply -- but the Auckland ratepayers pay the cost of getting infrastructure to that area and the further out you go the more expensive it is," he said.

"And unless you've got a user pays system in place there you can't have open slather."

Goff called on the Government to help with infrastructure funding, rather than simply hectoring the Council to open its boundaries.

"This shouldn't be a slanging match between central and local Government. All the terms being used this morning like throwing down the gauntlet and putting the Auckland Council on notice, threatening to put Commissioners in, that's all nonsense," he said.

"You've got to have a proper working relationship between central and local Government and Treasury told Bill English himself Auckland cannot borrow more. It cannot use rates to pay for infrastructure. Infrastructure is going to cost billions and billions of dollars. It's no good central Government sitting back and saying it's Auckland Council's fault if they're not prepared, either to provide the money, or to give Auckland Council the mechanisms to get the money themselves."

Auckland Councillor Chris Darby, who voted on February 24 against zoning rules allowing more apartments closer to the city, said the Government should let the IHP put forward its Unitary Plan and then let the Council make its decision, without interfering in the process.

"I would just caution the Government and Labour from suggesting that the RUB should be rid of. We're at the end of a statutory process and I don't think it's appropriate to be influencing that outcome at this stage," he said.

"We probably need to hold fire and await those recommendations. There's no suggestion that we're keeping the 1993 boundary and what Labour and the Govenrment appear to not be aware is that the Council adopted the Future Urban Land Supply Strategy last November, which opens up an extra 11,000 ha of land," he said.

"Everybody is putting the blowtorch on Auckland's housing crisis and good on them, but we are in a statutory process. The IHP have a quasi-judicial role headed up by Judge David Kirkpatrick. Let's respect that body and it's work."

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36 Comments

The IDB dosnt seem very independent then if the goverment is telling it what to do ? Auckland is shut for new people, roads are stuffed, schools are poked. Even the rubbish bins outside bus stops are fill. Im sorry but auckland is chocka at the moment. As in the batman movie - some people just wanna watch the world burn.

Perhaps some of the IDB conclusions are pretty obvious without having inside knowledge.

Big rubbish bins, tram or high speed train. Its possible to solve. Need the will. In NZ very low population density compare with other countries and a lot of space.

".. you've got to put other measures in place .."
"You have to have controls."
".. you can't have open slather."

Will somebody please think of the process!!!

That's some quality hand wringing right there. Reminds me of Sir Humphrey Appleby for some reason.

"It's a pretty clear signal to Auckland City Council that when the plan turns up in six weeks time they need to demonstrate it enables enough supply and Mr Twyford's statement illustrates to them that there's a strong Parliamentary majority for a plan that's going to allow more houses,"

Does Bill know that Auckland City Council no longer exists?

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Future planning within Auckland may long have been disfunctional, but it doesn't come close to the government's influence in wrecking the city as a liveable, well-functioning place, via its immigration free-for-all, the social insecurity consequent on accelerating rentals and, at worst, bringing about disgraceful levels of social hardship via homelessness. All these are the direct results of government focus on immigration, real estate sales and rising house prices, as national economic drivers - and the enrichment of existing property owners as a determined political strategy. When you break it, you own it.

Pointing the finger at the Council, whatever its current and historical failings, removes nothing of government responsibility for a fast unfolding urban, economic and social shambles. This is how all get-rich-quick schemes come to an end. With an attempt at shifting blame.

But workingman,

If you own statement is true, "Future planning within Auckland may long have been dysfunctional.."

Then "pointing the finger" is simply attempting to make the local authority accountable and responsible for it's own failings. That, in itself, has nothing to do with the failings of others (governments/markets/investors etc).

RaIph, I do own the first statement. But pointing the finger from Wellington is easy and, of course, politically expedient, also disingenuous, when government action (and inaction) has radically compounded the inherited problem. In no reasonable assessment can this situation be characterised as entirely a fault of Auckland's own governance. The city may not be much of a competent player, but has also been dealt a rigged hand by central government.

It doesn't have to be entirely any one parties fault.

It is entirely reasonable to hold any one party to account for its part.

I don't for one minute buy the excuse, 'I can't be held responsible for my actions because I am a victim."

Agree. Both parties are responsible for the situation, and both need to act responsibly. Apportioning blame is waste of time. The past is not still there. It is the present that needs to be dealt with.

I understand your last point. Some, in life, choose to be victims. They are responsible for their choice. Others, though, have made no such choice, and are thus not responsible for the situation they find themselves in. I see both sorts in life, and many of the second require assistance to get out of whatever trap they are in. But enough philosophy.

I hear you too. The good book says, 'Every heart knows it own pain.' and 'Even in laughter the heart may ache.'

Life has a really nasty way of kicking people in the guts and it doesn't matter how good things look from the outside of someones life, they may be really hurting. Look at all the comedians who hide it so well. Until they commit suicide. So much of life is tragic.

I am absolutely a huge fan of assistance.

It says this in the property press?

Will the NIMBYs be out in force again to shut it all down like last time and keep the farce going.

Phil Goff "favourite"? Where did that come from. Please don't put your opinions into articles.

The council does need to make adequate land available, and have rules in place to enable efficient building on the land, so housing can be affordable.

But it's a bit rich for the central government politicians to heap all the blame for the Auckland housing crisis on the council. It's downright dishonest. What about:

--Foreign buyers
--Massive immigration
--Government subsidies that drive up prices
--Previous government inaction on this, both National and Labour
--Perverse incentives like tax deductability for rental costs and no capital gains taxes for landlords
--Lack of concrete disincentives for landbanking, hoarding of houses like a land tax on rental properties

There's many things central government could be doing to solve this crisis, and they should be focused on that as well as prodding the council. They should accept their part of the blame. So far they have done nothing but STOKE the fire, rather than dampen it.

".. to heap all the blame for the Auckland housing crisis on the council.."

They aren't. They are simply asking them to be responsible and accountable for their part. And so is the opposition.

If central government does not hold local government accountable and responsible for its actions, whose job is it?

I do agree with you Ralph that central government does need to hold the council accountable. It has been very very slow to do it thus far. It is now a shocking crisis. And this problem has been building for 10+ years, getting worse and worse. The current comments of the government, in my view, do have an air of blaming the council - rather than fronting with combined solutions

Ordinarily the council would greet the flood of immigrants with open arms due to the additional rates money that that brings so that it can spend money on their frivolous pet projects.
However, without growth boundaries, the council will be forced to spend money on new infrastructure and will not have quite as much for their pet projects. I see this as one reason why the Auckland council will oppose this.

Do we need all those people coming to Auckland from overseas? A lot of foreigners in every pizza shop, sushi bar and so on. Even on mail delivery or cleaners and taxi drivers. Like NZers can not do this kind of job.

my view Alexil is that if we don't have enough houses for them, or infrastructure like roads, or services like hospitals - then we should not have so many migrants. Immigration needs to be at manageable levels, which I don't think it is now...

Yet Smith et al keep insisting it's due to "returning Kiwis." Yeah, right.

the last stats had the difference between kiwis leaving and returning as net about a 100 for the month.
he uses the gross fiqure to justify doing nothing

It seems an entirely appropriate time to review Sir Humphrey Appleby's five standard excuses, so that in the coming weeks we may enjoy the clever and original usage of them by the various parties.

1. There is a perfectly satisfactory explanation for everything, but security forbids its disclosure.

2. It has only gone wrong because of heavy cuts in staff and budget which have stretched supervisory resources beyond the limits.

3. It was a worthwhile experiment, now abandoned, but not before it had provided much valuable data and considerable employment.

4. It occurred before certain important facts were known, and couldn’t happen again.

5. It was an unfortunate lapse by an individual, which has now been dealt with under internal disciplinary procedures.

I for one am rubbing my hands in anticipation of the entertainment that awaits.

Oh and the three articles of Civil Service faith might be appropriate:

(a) it takes longer to do things quickly

(b) it's more expensive to do them cheaply

(c) it's more democratic to do them in secret.

Here we go again...our politicians all screaming in unison, which should make us tremble. Govts have always created more problems than they have ever solved and this won't be any different. The logical conclusions from this path of action:
- More urban sprawl like LA and no hope to achieve any functioning public transport system in the next 50yrs+ based on low population density;
- The destruction of all the great things about Auckland, ie. rural farmland close on the periphery, vineyards, horticulture, etc. Get ready for a 3hr drive from one end of Auckland to the other...
- Sprawl will exponentially increase infrastructure costs to the Council and central Govt, so be prepared for massive rates and tax increases in the future to fund this idiocy;
- Not one politician or media person is talking about interest rates in all of this (arguably the biggest driver of house prices in Auckland). When (not if) interest rates climb back up to the 8-10% level (nothing extraordinary historically), then the current housing picture will probably look very different and rates/taxes will consequently have to go even higher.

Talk about short-sighted and one-dimensional thinking....

They have pussy footed around far too long with Auckland City Councils property value manipulation. They haven't hesitated stepping in elsewhere in the country when local bodies are out of control. This situation is far more deserving of government direction as it is so far out of control and the consequences many times more grave. A few other local bodies also need to take note.

Time to change NZ's name to Auckland, so the whole country can participate in this housing boom ?
We can be the newest City-State, a la Singapore ?

I don't want a bar of this silly game (despite the fact that as a BOP resident we are getting it). Carve them off from the rest of NZ and let them go to pursue their future chasing ever more brighter rainbows without risking us in their debt laden folly.

Auckland can join Aussie, you mean ?

I don't care. Anywhere but here.

Chris-M: Do you think that nobody outside Auckland has bought an investment property in Auckland?. What provincial NZ needs to understand is Auckland aint going anywhere.

Omni-shambles, that's the word. Any city with a clue builds up - we need hundreds if not thousands of 15-storey apartment buildings including THE ISTHMUS close to transport nodes. Why is it so hard to understand this?

Oh, and a subway. Government, where's the subsidy, yes you John Key and Bill English, where's the subsidy? Let's see an ounce of vision here. You've been borrowing $150 million every week you've been in government, so a few tens of billions invested wisely on Auckland infrastructure is a no-brainer for the hundreds of years worth of returns it will give. See what I mean? Vision....

You'll never see a subway (unless its making sandwiches) any where near ground that's solid volcanic rock.

Love that word denpal --"Omni-shambles". Nice way of saying...cluster f....

I personally would be very reluctant to live in a multi storey building given how prone we are to earthquakes. Offcourse many won't be bothered with this.

I can tell you its very scary being in a tall building in Wn when there's an earthquake. Auckland doesn't often have them (and recently, they have been very small) but as the financial disclaimer goes: "past performance is no indication of future performance".