There has been a lot of attempted political point scoring on housing , often on quite narrow issues that try to ignore the complexities of the situation.
The melee has looked messy, especially for National and Labour.
The Government (National) look like they are in reactive, almost panic mode announcing what appears to be policy on the fly, and they have also looked disjointed amongst themselves.
Labour’s double barrelled attack is to claim that we are now in crisis, but announcing policy that won’t even be considered in Government for over a year at least, and that is dependent on them forming the next government and going by current support indicators, will need agreement by both Greens and NZ First.
Peter Dunne has proposed a national conference on housing involving all affected parties – not political parties, local bodies in particular are a vital part of any possible solutions.
Lawrence Yule, President of Local Government New Zealand, via Stuff, says that Thinking more broadly on housing the only way to make a difference and agrees with Dunne:
LGNZ has long advocated for a ‘joined up’ approach to addressing housing provision and affordability. UnitedFuture leader Hon Peter Dunne recently called for a national conference with all affected parties. We agree. Such an approach could be a springboard for developing a shared national strategy to address housing supply.
We advocate that a shared plan should address the many complex factors driving the housing shortage – and that needs to be agreed between central and local government and key players in the construction industry as a matter of urgency.
He says “it is clear we need to think more broadly to make a difference” and suggests six things in particular that need to be focussed on:
- Funding and financing of infrastructure;
- Addressing land-banking;
- Allowing for Urban Development Authorities controlled by local government to speed up development;
- Putting in place tax regimes that de-incentivise speculation in residential property;
- Addressing a skills shortage in the construction industry; and finally
- Addressing an uncompetitive market for building supplies.
One of the most important priorities for local government is to address the question of why residential-zoned, serviced land is not being released to market at the rate sufficient to meet market demand.
There are two main reasons for this:
- first the challenge of financing and so providing the essential trunk infrastructure, such as roads, water and sewerage, to ensure that land is ‘ready to go’;
- and second the practice of so-called ‘land banking’.
Mayors whose districts are experiencing high growth have said publicly they are already doing what the proposed National Policy Statement will require them to do and it is not just a land supply problem.
LGNZ’s funding review highlighted the need for funding options that will incentivise councils and communities to invest in infrastructure to enable more growth.
One way of achieving this would be to allow councils to retain a share of any value uplift arising from a change in economic activity, including a change of zoning from rural to residential – the value uplift potentially being used to fund new infrastructure.
Currently, that gain goes directly to landholders (hence the incentive to landbank).
Land banking occurs where developers hold onto land, releasing it only gradually in response to increases in land prices. The problem is acute in some fast-growing areas and councils currently lack the tools to incentivise land-bankers to release land for housing development.
We need tools that act as incentives to release the land. We should look to the overseas jurisdictions that have the same issues as New Zealand to consider what other powers might be needed.
The most obvious is to change the law to allow a targeted rate to be applied to land in these circumstances, currently not allowed by law. The approach taken by this Government is to require additional supply of serviced land with the intention of creating a competitive land and development market.
Development and zoning of ‘brownfield’ commercial sites, well suited to infill housing, is also often hampered by land being in small titles, with multiple owners. The United Kingdom is addressing this problem through Urban Development Authorities.
Both National and Labour have proposed something similar to the Urban Development Authorities. Now would be a good time to have one.
UDAs have the power to compulsorily purchase land, particularly useful when an area is under many small titles (often found in commercial or inner city areas) in order to offer developers a consolidated area where economies of scale can be achieved.
We will want to work with the Government on what the powers and governance arrangements for UDAs in New Zealand could be.
Future tense is not a good sign, the Government should have already been working with local government on this.
While National insists there is no crisis and Labour insists there is and they keep hitting each other with political handbags the housing market burns.
If there was ever a time that our Members of parliament should be working together – in this case with local governments – it is now.
Rapidly escalating prices are a major problem, and if the bubble bursts and prices collapse it will get worse.
An urgent realistic and cooperative approach is needed.