NZ Government too late the hero on housing supply

By Leith van Onselen

I wrote yesterday how the New Zealand National Government’s simple minded focus on improving housing affordability by fixing supply had failed dismally, with Auckland’s housing shortage getting worse by the month as annual population growth of 44,500 (35,772 from net migration) overwhelms the circa 10,000 dwellings consented.

The situation is probably even worse than suggested above, with CoreLogic in August estimating that “while Auckland consents increased by almost 10,000 in the past year, the housing stock increased by less than 6000 dwellings”. Moreover, “less than half the number of new homes that Auckland needed last year were actually built”, and “the housing gap is bigger than is being talked about”.

Well, 19 days out from the General Election, and after nearly nine years in Government, National has promised to finally fix New Zealand’s (Auckland’s) supply problem by implementing new “fit for purpose” urban planning laws separate from the existing Resources Management Act (RMA). From Interest.co.nz:

A re-elected National-led government will introduce new fit-for-purpose urban planning laws separate from the Resource Management Act to encourage more responsive planning, faster development, and better protection for the environment in our growing cities, Infrastructure spokesperson Steven Joyce and Environment spokesperson Nick Smith say.

“New Zealand is growing strongly and we want to make it easier to build the housing and infrastructure for that growth while still ensuring our urban environments are some of the most liveable in the world,” Mr Joyce says.

“To do that we need to give our cities the ability to adapt and develop faster, while respecting and improving the urban environment – and the current planning system is not allowing that.

“The RMA’s one-size-fits-all approach has restrained the development of our cities, dragged on their economic performance, and restricted the supply of much-needed housing and infrastructure.

“So National will establish a fit-for-purpose planning system that allows our cities to evolve in a way that improves the quality of the local environment, and makes them great places to live and work.”

Dr Smith says the new planning legislation will have clear and separate objectives for regulating urban and natural environments.

“Over the past nine years we’ve simplified the RMA and made it easier to build but the RMA is only one part of the planning system, and we have reached the end of what can be done by making incremental changes to the Act,” Dr Smith says.

“We agree with a number of stakeholders that it is time to develop fit-for-purpose planning legislation dedicated to urban environments that includes the relevant parts of the Local Government Act and the Land Transport Management Act in one piece of legislation.

“So we will set up separate planning and environmental regulations specifically designed to encourage growth while tackling the environmental challenges found in cities, such as air pollution and storm water surges,” Dr Smith says.

The obvious question that arises from this policy announcement is why National waited nearly nine years and announced this policy just 19 days before the election?

The other obvious question is why National has chosen to run a turbo-charged immigration program into a supply restricted market, thereby driving much of the shortages in Auckland?

Bear in mind that recent population projections from Statistics New Zealand estimated that Auckland’s population will rise between 56% (medium growth scenario) and 75% (high growth scenario) between 2013 and 2043:

Driven by the Government’s mass immigration program:

Auckland will continue to be New Zealand’s fastest growing region. Among regions, Auckland is projected to receive over half New Zealand’s net migration, and account for over half the country’s growth in the period to 2043…

ScreenHunter_17595 Feb. 22 08.53

National can bang on about boosting supply all it wants and continue to fail to fix the problem. Because with at least 14,000 new homes needing to be actually built (not consented) in the city each year – more than double the current build rate – Blind Freddy can see that the housing situation in Auckland will continue to worsen as dwelling supply falls well short of rapid immigration-fueled population growth.

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Comments

  1. I look forward to National getting kicked to the curb.

    Should send a suitable message to Australian politicians.

    On the other hand if Nationals get up at the NZ election – god help us.

    • Whilst I do advocate and preach non-violent and non-lethal methods, in the case of these treasonous f*cks I would accept that nothing short of curb stomping would do.

    • If I was a Kiwi, I would probably vote for Jacinda, but she wants to do away with the minimum salary requirement for getting a PR visa – currently at NZ$48k! What the hell Jacinda? Are you just another Gillard who said on TV “I do not want a big AUS” before giving out Aussie passports to those on less than A$16/hour?

  2. If they really want to boost available supply they should reform their rules on foreign investment in residential RE – what’s allowed and what is not. They have a more open, less restrictive policy than Australia…if that’s possible.
    With such an imbalance between supply and demand NZ would also benefit from a serious vacant property tax, ala Paris. Restrictions against the unlimited growth of Airbnb, turning much needed long term rentals into short term stays would also be a good idea.

  3. It could take a few years before new urban planning rules for delivering more affordable housing are in place, Bill English says; Labour says move is an admissiona of failed settings these past 9 years | interest.co.nz

    http://www.interest.co.nz/property/89668/it-could-take-few-years-new-urban-planning-rules-delivering-more-affordable-housing

    It will likely take a few years to consult, work through and legislate for the new urban planning laws National is eyeing to speed up the building of more affordable housing, according to Prime Minister Bill English.

    This is despite a blueprint already existing in the form of the Productivity Commission’s 500-page report on urban planning released earlier this year. While that report will provide the backbone for proposals to separate urban planning from the Resource Management Act (RMA), English said the “few years” timeframe would be required to find consensus on how to overhaul city planning systems.

    You can read more on the Productivity Commission’s report here. See its comments specifically on Auckland here. And watch a video interview with Commission chairman Murray Sherwin on urban planning here. … read more via hyperlink above …

  4. Posted at … http://www.kiwiblog.co.nz/2017/09/general_debate_5_september_2017.html/comment-page-1#comment-2012852 … with extensive further posts …

    Auckland housing was in crisis in 2007/8 according to John Key when housing was about 6.4 times annual household incomes … watch and weep …

    PM John Key on Housing Reform 2007 – YouTube

    https://www.youtube.com/watch?v=cWPgoAI1cLE

    I explained it recently in the NZ Herald … Auckland at 10 Median Multiple sure is a housing lunatic asylum …

    Sleeping pods advertised as $200 Auckland apartments – NZ Herald

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11913700

    … extract …

    … But within half an hour the agent called back to say the ad had been removed and the viewing was cancelled.

    Hugh Pavletich, co-founder of the Demographia International Housing Affordability Surveys, said the appearance of the pods to rent was symptomatic of Auckland’s over-inflated housing market.

    Auckland housing now cost 10 times household income, Pavletich said.

    “This is further evidence of how ridiculous the Auckland housing situation has got. When this government came in in 2008, Auckland housing was 6.4 times household income. When Nick Smith was appointed in early 2013 it was 6.7 times household incomes. Today it is 10 times.

    “We’re going to see these nonsense solutions, when what we need to see desperately is actual affordable housing being built.” … read more via hyperlink above …

    Fairfax reported March …

    The NZ homeowners who hate high house prices are revealed in Labour polling | Stuff.co.nz

    http://i.stuff.co.nz/business/money/90244287/the-nz-homeowners-who-hate-high-house-prices-are-revealed-in-labour-polling

    Extensive further information at Performance Urban Planning (click on my name at top) … particularly the GONE GONE GOING section and the 5 Important Graphs near the top.

    It is essential to get rid of this National – ed Government 23 September.

    Enough is enough.

  5. Great posts as always Hugh. It’s interesting that NZ seems to be finally coming to the party on urban planning laws, more responsive planning to facilitate faster development to speed up the supply of affordable housing.
    Nothing much is happening on this front in Oz.

    • Schillers … Thanks for your comments.

      Historically Labour has always been the Party of reform .

      In contrast the Tories (National) constantly talk the talk … but dont walk the walk in this country.

      We need a branch of Maggie Thatchers firm for the spineless Tories in this country. Apparently she called it ‘Rent A Spine’.

  6. Not another Nick Smith wild goose chase | NZ Labour Party | Scoop News

    http://www.scoop.co.nz/stories/PA1709/S00037/not-another-nick-smith-wild-goose-chase.htm

    Not another Nick Smith wild goose chase

    Only the election on September 23 can save the country and the RMA from Nick Smith, say Labour’s Housing spokesperson Phil Twyford and Environment spokesperson David Parker.

    Phil Twyford says, “National’s announcement of a new urban planning law is an admission that after a decade of blaming the RMA for expensive housing they have failed to fix the problem.

    “Nick Smith’s constant tinkering with the RMA has only made it more complicated and cumbersome. National has been blaming the RMA and Councils for expensive housing but they failed to do the two things that would actually make housing more affordable. … read more via hyperlink above …

  7. Foreigners should be banned from buying land in Auckland. If they do not have a Kiwi passport – no land for them!

  8. … ESSENTIAL READING … In case you have missed these …

    … Houston’s Hurricane Harvey recovery …. Culture is key …

    HURRICANE HARVEY: A VIEW FROM A RUGGED COMMUNITARIAN … LEO LINBECK … NEW GEOGRAPHY

    http://www.newgeography.com/content/005730-hurricane-harvey-a-view-a-rugged-communitarian

    • by Leo Linbeck III

    Narratives are not necessarily built on facts; they’re built on stories, pictures, graphics, and videos. Ideally, we want our narratives to be aligned with the facts; but that doesn’t always happen.

    Here is a synthesis of some of the predictable narratives being spun in the immediate aftermath of Hurricane Harvey from such places as The Washington Post, Slate, The Guardian, Newsweek and NPR: … read more via hyperlink above …

    • Leo Linbeck III is a husband, father of 5, CEO of Aquinas Companies, Executive Chairman of Linbeck Group, a Houston-based institutional construction firm, Founder and Chairman of Fannin Innovation Studio, a biomedical startup studio, and Lecturer at Stanford Graduate School of Business. He was also the Founding Chairman, and is currently the Vice Chairman, of the Center for Opportunity Urbanism, a Houston-based think tank.

    Is Houston Still a Model City? Its Supporters Aren’t Backing Down … the New York Times

    https://www.nytimes.com/2017/09/04/upshot/is-houston-still-a-model-city-its-supporters-arent-backing-down.html