Property

Demand for planning change

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

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This required changes to outdated public policies which have long throttled the supply of developable land.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

Comments

On Thursday, January 26th 2017 5:18 pm Peter L said:

I understand that if you own a piece of land in Germany you have the right to build a house on it. No RMA, no council approval, no zoning, no inordinate delays. You own = you build, so there is no shortage. (Of course the house must still be well designed and soundly built).

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.