New mayors 'must confront housing issues'
October 10, 2016 at 1:55 PM
New Zealand's new mayors are being told to turn promises into action to tackle the housing crisis.
Auckland Property Investors Association president Andrew Bruce said it was time for the new Auckland council to step up as average prices hovered around $1 million.
Auckland is subject to a new Unitary Plan, which is partially in force. But a major part – the zoning changes – is on hold due to a legal appeal by lobby groups Auckland 2040 and Character Coalition.
But Bruce said what would be important was whether councils, particularly in Auckland, took an enabling or preventative stance.
He said small-scale developers needed to be encouraged if Auckland's housing shortfall was to be addressed, but they were the most sensitive to excessive red tape or expensive bureaucratic processes.
READ MORE: Phil Goff's promises to Auckland
There needed to be solid investment in infrastructure, too, he said. Infrastructure problems had held up development in many special housing areas, which are designated for fast-tracked development.
Bruce said there were roadblocks for developers throughout the country. Councils would ask for extra reports, even when their plans met requirements, he said. Each one could cost thousands. He said resource and building consents needed to be timely and cost-effective since because every day of delay would cost someone money.
That cost would end up being factored into the cost to the buyer, he said.
"In the end, it has to come out of someone's back pocket. When you're going through the building process, in Auckland or wherever, it's very, very expensive. You'd be amazed how much money you have to spend before you can even swing a hammer."
It is something Phil Goff had signalled will get his attention – among his campaign promises were limiting immigration, supporting intensification of housing, reviewing the building consent process, developing disincentives to land banking and supporting affordable housing schemes.
But Bruce said a "use it or lose it'" approach would not directly discourage land-banking. "Someone who is intent on land-banking, and does so will not be discouraged by the threat of an invalid consent since it was never their intention to use that consent," he said.
"We want council to take a leadership position and address the issue of unintentional land banking for land that has already obtained a building consent. For a very long time, the anti-development attitude by previous councils had caused an exodus of developers and builders from this city. We want to see the council do more to court these industries back so landowners can start developing and building at a reasonable price."
Gareth Kiernan, an economist at Infometrics, said Goff could be key in tackling Auckland's housing problem.
"There's a lot of pressure on Government to do something about housing affordability, and I think the mayor of Auckland holds significant political power – witness Len Brown's success in getting central government commitment to the City Rail Link."
But economist Shamubeel Eaqub warned results could not be expected immediately. Change would have to wait until the next budget, he said. "From the middle of next year we might see some impact," he said.
Andy Asquith, a senior lecturer in management at Massey University, said Goff would have some barriers. "There's a strong political undercurrent here. Auckland for the last six, and the next three, years at least has had a centre-left mayor and the government is centre-right and doing its damnedest to put the kibosh on what the council and mayor have tried to do."
While Wellington's house prices are nowhere near Auckland's, its rate of increase has taken off over recent months.
That prompted Justin Lester to say he would be a "hands-on" mayor to make sure families were not squeezed out of the market. He laid out some campaign promises: A $5000 rates rebate for first-home builders, a rental warrant of fitness scheme for the city, and the establishment of Build Wellington, an agency that would use land holdings to build affordable housing.
Kiernan said Lester would need central government on side. "Central government probably plays a much bigger role in determining the fortunes of Wellington's housing market given so much of the city's employment is reliant on it," he said.
Queenstown has an issue of how to house its temporary workforce. Its house prices are also increasing at a rapid rate.
On the campaign trail, Jim Boult said the council should not be in the housing business but it could help "facilitate a better outcome" for its residents. He suggested developing dormitory-style housing, similar to that of universities, for the young workers.
Eaqub said it would be important that Queenstown's council took a strong position. "[Housing] is having an impact on the local economy and its ability to get and keep workers."
Bruce said the new mayors could not afford to be complacent. "When you get into a position where there is a 30,000 to 40,000 housing shortfall there have to be some tough decisions made. If it keeps going the way it's going, it just gets worse."
A spokesman for Building and Housing Minister Nick Smith said the Government was committed to working with councils on their housing challenges.
"We have a comprehensive plan to do that and we are making significant progress. We will work alongside the new mayors and councils to build on that momentum," he said.
"We have recently extended the Housing Accords legislation by three years, and before years end we will be having discussions with newly elected mayors and councils in those high growth areas on new or extended accords subject to the views of those new mayors and councillors."