By Bernard Hickey
Environment Minister Amy Adams has lodged a 10 page submission with the Auckland Council that slams its Auckland Unitary Plan as too complex, costly and inflexible to solve Auckland's housing shortages.
Adams said her officials' analysis of the Auckland Unitary Plan (AUP) had found the plan's development controls and zoning did not provide enough capacity for housing developments to meet projected population growth and would therefore worsen affordability in New Zealand's biggest and most economically important city.
"Development controls and other rules in the Proposed AUP are overly complex and constraining. In particular, the increased requirement for consent applications to be notified from that provided by the earlier draft AUP, means the consenting process will be more costly, inflexible and uncertain than necessary or desirable," Adams said.
Sustainable building and inclusionary zoning controls, along with less flexible development controls, created barriers to "market provision" of large scale and/or medium density housing, she said.
Auckland Council had to make hard decisions to meet the long-term planning needs of the Auckland region and had to balance those needs against those of specific communities and interests, she said.
"The Proposed AUP does not provide the needed long-term residential development capacity to meet projected population growth, and to the extent that it does not, house prices will become even more unaffordable," she said.
'Lower house price multiples needed'
The plan's complicated policies and rules would create high transaction costs, barriers to investment and investment uncertainty, she said.
Adams pointed out house price inflation was a key concern for the Government because of its wider implications for financial stability and the balance between the tradables and non-tradables sectors.
"A gradual and sustained decline in house prices relative to incomes would be desirable for the wellbeing of all New Zealanders, as would more moderate house price cycles," she said.
"Lower house prices would improve affordability for both owner-occupiers and renters, (and) would allow room for saving to flow to other investment."
Adams pointed out that, unlike in the 2002-07 boom, the rise in house prices in the last 18 months was localised to Christchurch and Auckland. Median prices in Auckland had risen at the same rate as it they had done between 2002 and 2007, she said.
Auckland's population had risen 8.5% to 1.416 million from 2006 to 2013 and was projected to grow to 2 million by 2031 as Auckland absorbed 60% of New Zealand's overall population growth.
'Only half what's needed'
"Constraints on housing supply mean that this growth is resulting in rising house prices," she said.
Adams said there was unlikely to be an easing of this pressure on supply and house prices unless the Unitary Plan enabled more housing developments on greenfields land and through greater density in existing neighbourhoods.
She acknowledged the proposed plan was better than the current situation, but said she was concerned it fell short of its own "strategic housing supply objectives."
Adams said the Councils own modelling and that of independent forecasters had shown there was a large gap between the AUP's existing development capacity and the likely needs of a growing population.
She said some estimates had put the gap at half of the required demand.
"In some market attractive areas, where the development sector would be expected to respond to rising land values with more intensive (ie efficient) development, rules are especially constraining, and in some cases represent a down-zoning from existing plans," she said.
Adams called for the plans rules to be adjusted to provide for the housing demand.
"Failure to do so would have far-reaching economic and social consequences for Auckland and New Zealand," she said.
Labour says Government in 'panic mode'
Labour Housing Spokesman Phil Twyford said the submission showed the Government was in panic mode and he called on the Government to use the existing Resource Management Act to issue a National Policy Statement on affordable housing in Auckland.
"The Government doesn’t need to write a submission to the Council or fight a war of words with Auckland Mayor Len Brown. It can simply issue a National Policy Statement (NPS) on affordable housing. That is how the Resource Management Act (RMA) is supposed to work." Twyford said.
“If the Government writes an NPS with directive language, it will compel Auckland Council to deliver a plan and make consenting decisions that meet the objective of supplying affordable housing. The Government doesn’t need to micro-manage the Unitary Plan from Wellington or have poor old Amy Adams sit up late at night writing submissions to Auckland Council’s planning committee," Twyford said.
"It should just use the RMA as it was intended. “The next Labour-led Government will publish a National Policy Statement under the RMA on affordable housing – as well as build 100,000 affordable starter homes, tax speculators, and reform monetary policy to deliver lower interest rates."
13 Comments
Twyford is being opportunistic . We already have the lowest interest rates in living memory , and who says houses in Auckland are unaffordable ?
Clearly not everyone , becasue plenty of people continue to buy houses , and if they were unaffrodable , sales would collapse .
Instead houses are selling like hot cakes and no one has given us any evidence of rampant speculation in the market
3 pieces of evidence, a) Auckland rents are not rising anywhere nearly like the buying prices. Now sure if you can explain this away really well Im all ears. b) the prices in the good areas are making the gains and not so much the poorer areas suggesting like many overseas capitals rampant speculation either from overseas or from those wanting to make a "killing". c) the 3 to 1 ratio of purchase price to income, we are at 6 to 1.
In terms of "selling like hotcakes" Im not so sure on that on, the LVR seems to have knee capped that.
I'll agree that we dont have much evidence either way but to take one side as it suits your outlook is I think unsafe, you are tossing a coin, nothing more.
regards
Here's what the planners have to say;
The New Zealand Planning Institute (NZPI) is backing Environment Minister Amy Adams’ right to have a say on Auckland’s Unitary Plan through a controversial submission made today.
NZPI Chairman Bryce Julyan says the Minister has a legitimate role, through the Ministry for the Environment, to play in the plan-making process, a role the he says has diminished in recent years. From that perspective the NZPI welcomes the Ministry’s participation in the Auckland Unitary Plan process.
“It is entirely appropriate for the Ministry to undertake a role in the plan process as provided for under the RMA. Indeed, many of our members have been critical of the Ministry’s reduced involvement over the last decade or so in the plan-making process.”
The NZPI believes the Ministry for the Environment has an important role to play and has been an active participant in plan-making in the past.
“The Ministry has a role to properly focus on process and integrity of the plan (and policy where appropriate such as alignment with national policy statements),” says Mr Julyan.
However, Mr Julyan is stopping short of backing the detail of the Minister’s criticism of the plan in her submission.
“The decision not to appear in support of the submission is perhaps disappointing as active involvement in the process (that has been set up specifically for the Auckland Unitary Plan) would be more beneficial in relation to such matters as aligning the objectives and policies to ensure the integrity of the plan.
“In relation any submission that criticises content of the Plan, such statements are generally not helpful unless supporting evidence and sound planning arguments are also provided and relief clearly sought.”
For entertainment purposes, can someone get a comment from the Epsom ACT candidate (given his campaigning for no development anywhere in sight of Epsom). I would like to hear the wheels turning as he tries to call on fewer restrictions for the rest of Auckland while tighter restrictions for Epsom.
Sustainable building and inclusionary zoning controls, along with less flexible development controls, created barriers to "market provision" of large scale and/or medium density housing, she said.
This statement of anti sustainability from the Environment Minister? Bernard perhaps you could so the journalist thing and ask Amy what here definition of sustainable is.
PS. I don't believe she is smart enough to put 10 pages together on her own, that would have been done by her lacky's. My response from her regarding my environmentally friendly invention was three lines that demonstated a complete lack of comprehension.
“The next Labour-led Government will publish a National Policy Statement under the RMA on affordable housing – as well as build 100,000 affordable starter homes, tax speculators, and reform monetary policy to deliver lower interest rates."
OK, Phil: your mission, should you decide to accept it, is this:
- Include a draft of said NPS as pre-election Policy
- Define 'affordable'
- Define 'starter', differentiating it from 'coop' and from 'container'
- Define 'speculator'
- Estimate the effect of lower interest rates on Kiwisavers, and on those whose income is dependent on fixed/conservative investments
Phil Twyford should read "Cities as Labor Markets" by Alain Bertaud http://marroninstitute.nyu.edu/sites/default/files/%20Cities%20As%20Labor%20Markets.pdf In particular page 24.
In Korean cities,a 10% increase in the number of jobs accessible per worker corresponds to a 2.4% increase in workers’ productivity.
Additionally, for 25 French cities, a 10% increase in average commuting speed, all other things remaining constant, increases the size of the labor market by 15 to 18%.
In the&US, Melo et al. show that the productivity effect of accessibility, measured by an increase in wages, is correlated to the number of jobs per worker accessible within a 60\minute commuting range. The maximum impact on wages is obtained when the number of jobs accessible within 20 minutes increases; within this travel time, a doubling in the number of jobs results in an increase in real wages of 6.5%. Beyond 20 minutes of travel time, worker productivity still increases, but its rate decays and practically disappears beyond 60minutes.
Both papers demonstrate that workers’ mobility –their ability to reach a large number of potential jobs in as short a travel time as possible, is a key factor in increasing the productivity of large cities and the welfare of their workers. Large agglomerations of workers do not insure a high productivity in the absence of worker mobility. The time spent commuting should, therefore, be a key indicator in assessing the way large cities are managed.
He would then understand the two objectives need to be.
As a city develops, nothing is more important than maintaining mobility and housing affordability.
Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another; and second, the ability to trade dwellings easily with low transactions costs.
Housing mobility allows households to move to the location that best maximize their welfare. Affordability is the ability for any urban household to be able to rent a dwelling for less than a 25% of its monthly income, or to buy one for less than about three time its yearly income. http://www.demographia.com/dhi.pdf Alain Bertaud -Introduction
BB3 you will have to read the whole article but to answer your questions according to Bertaud
A. No -Congestion, higher land costs, pollution etc are head winds but many studies show big cities to have economies of scale/agglomeration effects that outweigh these factors. The strength of those economies of scale is shown by how some cities like Jakarta, Beijing etc that have terrible mobility, pollution etc still attract new business and workers.
B. It is up to the firms to decide, some will go to big cities where they have access to the agglomation effect -access to more skill workers, suppliers, customers etc. While others will relocate for reasons of cheaper land, less congestion and so on. Bertaud actually says the relative order, percentage growth and relative sizes of cities/towns tends to remain the same. In any case developing jobs in other cities is not something the government/planners can do, they cannot take jobs/firms from one city and give them to another.
C. I suppose yes, being closer to your place of work (time wise) is better as it gives you more leisure time. But I think the point Bertaud was making is that the larger a labour market is, as measured by accessing more places of employment in a given time, the more interactions, opportunities, innovation, opportunites there are. So by simply fixing congestion and speeding up transport by whatever transport mode is possible you are in effect increasing the labour market.
Auckland desperately needs a rapid transit network. Who is going to take a job in the Albany business park if they live in Three Kings and have to sit on dominon road and the Northern motorway all day. A little bit of motorway widening is never going to cut it, and we don't have the space for 15 lane highways due to all the water. Rapid transit is far more space efficient and our only solution for truely improving mobility across the city.
Clearly Amy Adams is from planet OMG. Lets have no rules so that Amy's rich mates can do what they like to us poor old hard working suckers. After all we are just slaves so that her and her bosses mates can sift of the cream. For most of us a house is it, it is the biggest by far invesment by far that we will make. ACC recognises this with its consenting process.
Amy instead of dealing in red herrings how about dealing with the real problem, Foreign off shore money at close to 0% and off shore buyers pushing the prices up. QED.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.