Demand for planning change

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Calls for changes to planning, land supply and infrastructure funding laws have been flowing as public concern over housing issues grows.

Thursday, January 26th 2017, 12:00PM 1 Comment

by Miriam Bell

News that Auckland is now ranked as the fourth least affordable housing market in the annual Demographia survey, and that home ownership in New Zealand is at its lowest level since 1951, has prompted renewed focus on the issue.

The New Zealand Institute executive director Oliver Hartwich, who wrote the foreword to this year’s Demographia survey, described the situation as “an unaffordability disaster”.

He said New Zealand needs to look to countries like Germany where more houses are built, largely because of the way local government is funded and incentivised.

The view of German local government is that providing more houses attracts more ratepayers which generates more revenue which helps to fund infrastructure.

Hartwich said that, for this reason, they are more eager to zone land for development and speed up planning processes and have, therefore, kept housing supply flexible enough to keep up with demand.

Property Council chief executive Connal Townsend agreed that more land needs to be freed up for development, particularly in Auckland.

This required changes to outdated public policies which have long throttled the supply of developable land.

Until this happened and supply was able to match demand, there would be no improvement in the housing situation, he said.

Meanwhile, ACT Party leader David Seymour blamed “incredibly stupid urban planning and infrastructure funding laws” for the situation.

The housing market problem is not excessive demand due to low interest rates, foreign investors or the lack of a capital gains tax, it is about insufficient supply, he said.

“In New Zealand the number of houses consented has gone down even as prices have risen.”

This was due to over-regulation of land supply, infrastructure funding problems and high building costs and these dysfunctional fundamentals needed to be reformed, Seymour said.

He proposed:

• Taking cities out of the RMA and introducing new urban planning legislation for urban councils with a population greater than 100,000.

• Sharing central government revenue with councils if they allow development and allowing councils to raise development specific bonds supported by targeted rates on the development in question.

• Replacing the council building inspection process with a requirement of mandatory private insurance.

This morning Local Government New Zealand president Lawrence Yule said Seymour’s housing ideas have some merit.

Changes to the way local government is funded are needed to address issues as important as housing infrastructure, he said.

“We are particularly interested in finding alternatives to property rates so councils and communities can have a broader range of funding mechanisms and sources available to use.”

Creating a specific regime for urban areas to deal with housing affordability also warrants consideration, Yule said.

“The resource management system is in need of change and we are advocating for a range of changes, including the introduction of special economic zones to enable tailored policy, regulatory and funding structures suited to local conditions.”

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