By David Hargreaves
I suppose everything has precedents when you look back far enough - but I can't readily recall the Reserve Bank previously putting such public pressure on a Government to do something about a specific problem.
The speech by the RBNZ Deputy Governor (and Head of Financial Stability) Grant Spencer, in which he calls specifically for the Government to take direct action against the housing market is, I think, extraordinary.
The sub-text to the speech is: "Look, guys, we can't do this on our own. You have to help out here."
It tells you two things: One, the RBNZ is admitting that the range of weapons it has in its armoury are not enough to tackle what is now a supercharged Auckland market and, two, the RBNZ is becoming completely frustrated by this Government's unwillingness to get its hands dirty on this issue.
On that second point, you can bet that the RBNZ will have been raising its concern about the Auckland housing market privately with the Government for months.
The fact that it is now going public with these concerns and, in a way, trying to shame the Government into action, shows how futile its efforts to get the Government to move have been so far.
The key points I take out of the speech are these:
- On the supply side the RBNZ is pushing for more high-density apartment building in Auckland - and quickly. In other words try to take some pressure off the shortage of supply as soon as possible.
- But then on the demand side - which the Government has not wanted a bar of, in my opinion, the RBNZ is casting doubt on the effectiveness and timeliness of tweaking the inbound migration settings - which interestingly is one measure that has been suggested in some quarters the Government might actually consider - though it hasn't said so as such.
- What the RBNZ has strongly come out in favour of is "fresh consideration of possible policy measures to address the tax-preferred status of housing, especially investor-related housing".
In my view the chances of this Government introducing a capital gains tax or other tax-related disincentive to property investment would be less-than-zero, if there were such a thing. It ain't going to happen.
So, why has the RBNZ suggested it?
Exasperation, I would say.
The RBNZ has now officially declared itself to be at odds with the Government on how the Auckland housing issue can be resolved.
Clearly our central bank is hoping that the court of public opinion might help to put pressure on the Government and get it to do the right thing. Fat chance though.
Realistically, I would suppose that the RBNZ is simply trying to tell the people of NZ that there's a problem of massive magnitude developing and it - can do a little - but not enough. The Government has to step into the pilot's seat.
I guess if the the Auckland housing market bubble does burst catastrophically the RBNZ will at least be able to do a kind of "told you so" thing. It's effectively drawn a line in the sand. "We think more needs to be done. We and the Government are in disagreement".
At the very least, I hope this gets those in Government talking among themselves.
As I said, I doubt very much whether this Government will act, so, all the RBNZ's latest move will have amounted to is putting a distance between it and the Government - which I would have thought could be extremely unhealthy. I struggle to recall a time when the Government and central bank have so clearly not been on the same page.
The only other potential positive out of this is if rival political parties start suggesting credible alternative policies on housing. Then and perhaps only then might John "I see no housing bubble" Key and his troops moved into action.
I'm not holding my breath. But it is getting to the point where I'm seriously starting to hold my breath over the Auckland housing market.
61 Comments
This government has moved on property tax before, switching off building depreciation in 2010. The depreciation change was a suggestion from the Tax Working Group.
Another of the TWG recommendations was a risk free return to tax rental property. If that new tax was offset by personal income tax cuts, then that's just like the 2010 tax swap - where GST was increased and personal income tax was decreased.
The National Government politicians and their backers are up to their eyeballs in rental property.
They are happy if prices keep going up at the present rate.
John Key does not care about the massive social damage this is doing.
A farmer is better off selling his farm and putting the money in houses in Auckland. To be able to do this is madness.
National are leaving the Reserve Bank to make unpopular decisions.
When this housing market corrects, the whole economy will go down with it.
John Key will come on TV and blame someone else for the damage.
About 4 or 5 years ago there was an article here listing all property holdings of all politicans
The list was large - in total - and wide-spread - you were here then
This is just additions in 2014
http://www.stuff.co.nz/national/politics/10016140/MPs-extend-their-prop…
National: pigs at a trough.
National is not doing anything because they have too many backers and MPs with huge property portfolios who are making a lot of money out of houses.
They are not governing in the best interests of NZ but looking after their "friends"
You can call it self interest, I call it corruption!
Thats a very serious suggestion and if that is the case then the sky would be the limit in terms of corruption...
Why noy simply change the law so that foreign investors/non residency buyers, can only build or buy new? Put the pressure back on the Auckland Council to provide the services and rezoning. Work on the RMA but maybe fast track some apartment/high density projects.
Too hard?
Too easy
There's much validity in that statement, but in the words of the wise sage - that's too easy
It works like this
There are two components to buying stand-alone residential property - the land component and the house component - when buying an existing house it is fairly easy to establish the value of the land component, the price being asked for the house is the difference
If you found an (older) house you liked and went through those steps, and then found a vacant section and got some quotes you would find that the cost of building a new house to the new standards of insulation and thermal-envelope and double-glazing and consents you would find that the cost of the new build is higher than the asking price of the existing older house.
It is far, more economical to buy existing than build new while the future inflation in the underlying land will be the same
And that is the advantage the Australian Authorities have benefitted from - they get the new arrivals and non-residents to foot the bill for adding to the housing stock
That's what New Zealand should be doing but cant see it - there's plenty of land - it takes time and effort to do a new-build whereas the off-shore newcomers want and need instant results
How dumb can they be
Land Cost Component
Grant Spencer noted the land component of New Zealand housing costs has grown considerably over the past 20 years, and now accounts for more than 60% of the total cost of a new dwelling in Auckland, and about 50% elsewhere in the country
http://www.interest.co.nz/75013/rbnzs-grant-spencer-says-govt-should-re…
I agree. The RBNZ have their foot on the accelerator with low interest rates while the government are hitting the brakes hard by trying to run a surplus at the wrong time. Silly old National, they did alright for a while but now seem determined to stuff up. Clearly they have worn themselves out and want to retire. The fact that the RBNZ is still running interest rates below the natural rate (ie, blowing the house price/credit bubble ever bigger) is because there is no inflation. There is no inflation (or well paid work in Northland) because the government are trying to balance the budget.
This would all be excusable as "trying to do the right thing" if Michael Cullen hadn't shown us exactly what happens when the government runs a surplus - you get a massive house price bubble as the RBNZ keeps rates too low. A 2% inflation target needs a 2% deficit on average. Is it really that hard for them to understand? I despair.
All together now, repeat after me:
"Give us all a bloody tax cut you stingy bastards."
Despair is right! How craven and dishonest of the RBNZ to bleat like this; they have largely facilitated house price inflation since 2002 by creating the cheap money upon which it feeds, Interest rates needed to be in double digits prior to 2008 and nearer them since - it is the Government of the days job to manage the nation (stopping tourists from buying existing stock, paying tax & etc) and interest rates like that will give them the quick incentive to take remedial action. That's how the RBNZ Act 1989 is meant to work.
And yet, imagine the RBNZ had embarked on the ulitmate lunacy of zero interest rates and money printing like all the others? Relatively speaking, the RBNZ is doing ok and will probably save our arses from the worst when the shite hits the fan overseas.
@Witherspoon: btw, when has it ever been a good time to run a surplus? Never!
Great piece, David. Many thanks for an accurate analysis of extraordinary event that should make all New Zealanders break out in a cold sweat.
It's brave of the RBNZ to take a public advocacy stance but obviously the hints that Wheeler was dropping in January about the systemic stability risks posed by the Auckland property market fell on deaf ears. They were left with no choice but to spell it out in black and white.
The one weakness in the speech is that the Bank are not experts on the processes of development and local government. Their proposed policy solutions are OK but as unlikely to deliver results as the Special Housing Accords. Even if "investors" (most of whom are actually occupiers) are taxed on capital gains they are unlikely to have all their gains taxed away. For the foreseeable future - as long as interests rates stay low - it will still be worth taking a punt on Auckland property.
You are 100% right that the onus is now on the government. And to be fair successive governments over the last 25 years have abrogated their responsibilities. But this is the government that has made promises and now needs to keep them. They have two major levers they can pull that will actually deliver: transport and the RMA.
The functionality of cities including the prices of residences is largely defined by the effectivenes of transport. Much as some politicians might want to rebuild some compact Victorian city, the genie is well out of that bottle. The draft Regional Land Transport Plan published by Auckland Council shows that the government are up for around 50% of the funding costs of Auckland transport. The government, through its transport funding and planning, pretty much determines how well Auckland works. At the risk of over-simplification new house prices will come down at the same time as government support for transport goes up.
That will only workwhen the government also forces Auckland Council to implement the RMA as it was written. The RMA contains no provisions for urban planning at all. There is no reference to zones, protecting sight lines or indeed to 80% of the content of any district plan. As soon as the government passed the RMA with bi-partisan support in 1991 they also washed their hands of the implementation of the legislation. What is passed off by councils as an RMA-based plan is actually the superseded Town and Country Planning Act in disguise. At any time the government could put its effort into auditing how councils have implemented the RMA rather than wasting time tinkering with the legislation.
The government can act now to make housing more affordable, make our economy more stable, and base our economy on real work. But they just sit on their hands.
Basically yes.
In reality I am a Planning-Lite (TM) advocate. But when it comes to residential housing my position is simple: everyone who owns land has a right to build as long as environmental effects are managed. I don't think anyone would complain about creating zones for noxious industries or providing proper transport links but it is not clear to me why councils restrict residential building so strongly.
It is not widely appreciated but councils do not have a statutory monopoly over the three waters. Anyone who can prove that they can handle water,sewer and drainage themselves should be left to get on with it (the nation's farmers already do!). As far as I can tell the main motivation for strictly controlling residential building is to avoid any council risk over infrastructure expenditure. In other words councils use their statutory regulatory powers to create a de facto monopoly for themselves over what are actually commercial services. Conflict of interest anyone?
So councils will save a couple of bucks on rates but force households to pay thousands more each year on mortgages. Bad economics.
As an aside all of the current brouhaha over the RMA would be irrelevant if councils had written effects-based plans. The processes around changing plans are entirely appropriate if the changes are likely to be made infrequently and each change is likely to affect the whole population. This would be the case if you had one set of rules that governed residential housing throughout the city/district.
Once you start using zones the changes are likely to be frequent and only affect a tiny percentage of the population and the rules around process start to look cumbersome and obstructive. But they are only a problem if you have zones.
I stand by the statement I have made many times here: the RMA does not need amendment (gutting) it needs to be implemented as designed.
Becasue the politicians are in on this lark, and many of them in the higher echelons are fairly old buggers, they probably think: "I'll bail out earlier than most others: I'll find a willing buyer before the market is flooded". Or maybe they will be even more rotten and sell and then bring in capital gains for investors or higher reserve requirements for banks to cover property investors. ie Effectively insider trading.
On the supply side the RBNZ is pushing for more high-density apartment building in Auckland - and quickly. In other words try to take some pressure off the shortage of supply as soon as possible.
Where did the RBNZ comment upon the wall of global ZIRP fabricated central bank QE money freely available to under inhibited offshore investors and domestically available to our local banks via currency swapped (hedged) foreign wholesale borrowing, which amongst other funding sources (covered & uridashi bonds), accounts for ~50% of New Zealand bank assets?
Well, nowhere. They are not going to rock the boat. Everyone thinks that money printing is ingenious policy and, to be fair, it is true that without it a lot of superrich would have lost a lot of money when market forces where about to sort out a decade of financial sloth starting in 2007.
I agree that it is fundementally wrong - albeit convenient - to view or portray NZ as isolated from the global financial dislocations created by irresponsible central bank activism. The money has been printed and it reaches NZ by the billions. Additional taxation or even higher interest rates will not change the fact.
So the gravy train for the boomers remains intact and the NZ dream remains screwed up for the young. We can, yawn, all go to bed awaiting more futile finger pointing between govt and RBNZ in the near future :-)
A CGT is but one tool to control prices. A much more effective way would make all or part of interest payments on mortgages no longer tax deductable for investors.
There is not a snowballs chance in hell that National will do anything on the demand side. It is called self interest.
They want to leave it up to the Reserve Bank to make unpopular decisions!
Capital gains tax needs to be applied more rigorously to speculators, landlords etc, especially if interest on loans is tax deducted..
But I don't think it would stop speculation on Auckland house prices even if the CGT was broadened by Parliament
There is a lot of money in term deposits in NZ looking for better returns, but the share market is pretty fully priced and perceived as risky, while the housing shortage and immigration and low interest rates seem to make Auckland houses a one way bet, a lot easier than trying to set up a new business or invent battery controlled rockets..
Yup, yet another lost decade due to journalists, bean counters, politicians etc. who tell us that it is economic progress that the same shed in AKL is now worth double what it was 10 years ago.
It is like watch the Roman empire decay in real-time, battery controlled, or not ...
Like the UK has affordability in its housing... or even manageable cyclical volatility. What ARE you trying to use the UK as an example of?
Evidence that even driving the speculators out of the market with a CGT, does not result in affordable housing?
You need to confront the fact that there is a substantial long-term landlord class in the UK that is CREAMING it; if you prefer that to the mom-and-pop speculator it is merely like preferring one evil to another.
Four families have owned much of the land at the centre of London for centuries. What do they care about a CGT as long as their chargeable rents per square foot are now 900 times higher than they otherwise would have been if not for the Town and Country Planning Act 1947?
There already is legal obligation for profits on sale of property traded as a business venture, to be declared as income. The IRD is working on hunting down people who are failing to do this. People who just "move a lot" might get away with it, but owning more than just your own home puts you in the crosshairs immediately.
Of course you need to have SOLD the property, a lot of the specufestors are not doing this, YET. Mostly they will rush for the exits when it is too late, and there may not BE much in the way of "profit" for the IRD to tax.
This all really comes down to housing supply distortions; there are really no good options. In the past when NZ had elastic supply of housing and it was systemically affordable; and also in the still systemically affordable cities in the USA, NO HARM is done by:
The absence of a CGT - there are stuff-all capital gains anyway.
Tax write-offs for landlords. This just allows rental housing to be kept even more affordable than otherwise.
In Germany there are outright SUBSIDIES for anyone building new rental accomodation. But because of the way their entire market works, this does not feed into fatter profits for landlords like it would do here, at least for a while (until the market crashed).
When housing supply is elastic, low interest rates actually stimulate the economy rather than cause a house price bubble. Subsidies to first home buyers stimulate house building. Immigration and population growth merely provide economies of scale in house building and everything else.
Housing supply rendered inelastic by regulations, is like an ingredient that makes all the other ingredients toxic instead of healthy.
A CGT would need legislation and could not be introduced overnight.
Hence a Bill would have to introduced into Parliament, then debated, argued over, commitees set up and could take months to pass with inevitable amendments.
In the meantime chaos would reign in the market as no one would know whether they were effected or not and the innocent and guilty would all suffer alike.
Next idea please.
You are in La la land, both Labour and the Greens are for it, it wouldnt take much debate and whether its 3, 6 or 9 months, no biggee it would be seen as coming, that would be enough. However National are opposed to it if only because that would hand a victory to the left....JK wont go there.
CGT’s are a red herring. They exist in numerous countries that have significant house price problems.
One of their unintended consequences observed in the UK and Japan, is that the owners of rationed greenfields land won’t sell it at all if too much of their gain is going to be taxed away.
This makes the problem of supply and affordability immediately worse.
The correct approach would be stiff targeted land taxes. It baffles me why, with all the spite from various advocates towards “the fat cats”, they NEVER seem to support anything that would actually WORK, which actually has the appearance that underneath, they don’t want to hurt the fat cats! They seem to want to “take away a big chunk of those evil profits”, but are not interested in removing the means by which those profits are created. And yes, the profits are evil, zero-sum, and a wealth transfer the wrong way in society.
Another rotten aspect of CGT's is fiscal creep. The Productivity Commission was correct that in the long term, the REAL "capital gain" on housing, which does "cycle", cannot be substantial - it is a mathematical impossibility. The PC also pointed out that as interest is taxed, there is already an indirect tax on "housing" for which money has been borrowed.
Phil I agree a Capital gains tax would not be effective in the long run as converting rates to a land value only tax. LVT would encourage intensification -apartment building by reducing its marginal cost and discourage land banking by increasing their holding costs, both things that the Reserve Bank said was needed (along with other factors).
But maybe in the short term as a signal to speculators/investors a CGT would indicate that the government has the political will to restore affordable housing and will be implementing a range of short and long term acting policies it would be helpful. It might change market sentiment. I believe that the Reserve Bank is now courting public opinion with dramatic statements, hence the CGT announcement, as a way to find some political will because it cannot solve the housing problem itself and the softly/softly approach with the current government administration of private conversations and considered public statements is not working. I think the PM -John Key has repeatedly hosed down any traction in his administration to resolve the housing issue and his speech this week saying there was no housing crisis in Auckland was the final straw for the Reserve Bank. The CGT statement yesterday from the Reserve Bank was a shot across John Keys bows in direct response to John's speech earlier in the week that there was no housing crisis in Auckland. On a wider issue I think the Reserve Bank actions shows the benefit of having an independent Reserve Bank. One of my evening Duty Nurse Managers has a son who recently started work for the Reserve Bank. She says one of the appealing factors for working with the Reserve Bank is it encourages independent thought unlike say the Treasury. I think speaking truth to power comes from this independent thought. Previously I have argued NZ needs more of these independent public institutions. I believe the Speaker in Parliament should be appointed by between 75 to 100% of Parliament so the position is a genuine independent referee in the House. Further that the Speaker be given the power of appointment for high profile 'neutral' positions, such as senior judges, ombudsmen, commerce commission etc. This would encourage more independent thinking and speaking truth to power. I believe this would assist in transferring power from the few to the many.Does the lack of independent thinking and the inability to speak truth to power lead to the planning failure of Christchurch's CBD? What other failures are our officials presiding over?
"The guy in Treasury who gave the cargo cult advise that the most important thing for the Christchurch CBD rebuild was that property prices should be protected needs to be sent to do some important work on the Auckland Islands."
Another rotten aspect of CGT is that it perversely encourages government policy that creates capital gains. It made things worse in UK, US, Spain, Ireland, Australia and Japan. For some reason people think it will be a good thing in NZ, instead it will lend further institutional support for capital mis-allocation into land price ratcheting rather than the creation of more productive new assets.
.. if you accept the theory that any instituted tax depresses the activity that it is applied to , then another rotten aspect of CGT is that it discourages private individuals to create and improve assets ...
As Mr Waymad argues at the bottom of this thread , a land tax accurately targets the true culprits in this property bubble , the speculators making tax free gains from land ....
... house prices are not out of whack , but the price of the land beneath them surely is ... ditto for the dairy industry , who seem to exist for massive tax-free gains from the increase in land prices , not from the actual sale of milk ...
Thumbs up, GBH. You won't find anyone in the wider discourse making this distinction.
Stand outside a modest house in an unfashionable neighbourhood in Auckland. Everything you see (the grass, the shrubs, driveway, garage, 3 bed, 2 bath) represents about 1/3 of the market value of that property. What you can't see - a handful of electrons in the LINZ databases describing the exact location and current owner of that bit of dirt - accounts for the other 2/3.
Even Auckland Council are slowly waking up to that fact as they included the price of undeveloped sections in their latest Housing Accord report (they had nothing else to say so its a bit of filler). By their own conservatie calculation the median price of a bare section in Auckland is $475K.
It's all about the land. Any policy that does not directly target that will fail.
Yes indeed , Mr Kumbel , you've nailed it ...
... infact our missing maven of demographia Hugh Pavletich pressed this point repeatedly ...
A few of us here at interest.co.nz got it , but obviously the wise heads in the Reverse Bank still can only see CGT ...
... even our dark overlord Bernard Hickey waxed lyrical about the multiple advantages of a land-tax ...
Power be to the overlord of gloom , wherever he may be : Bless !
.... and the capital gain would no doubt be set from the value of the properrty at the time of legislation passing. And if property has just completed its big run, then ther may be beggar all cap gain left to tax. Also of great risk (which to John Keys credit he may be anticipating) is that if property crashed, the likes of yourself will be claiming a cap gain loss. So for me, the cap gain issue is a dead duck....for a number of reasons but primarily because it is too late - the horse has bolted.
Face up to it. CGT has little if any short term benefit and the IRD already has the tools to capture gains.
So how about a DEEMED RATE OF RETURN where it assumed that all property is returning a minimum of X% and taxed accordingly. Set the X so Auckland becomes uneconomic at current values but low enough that most rentals in other places actually give many owners a tax benefit.
Include bare land and untenanted property in the mix as well.
DROR - Way to go! Set it at 6% with a threat to raise it higher and do not allow for borrowing.That would allow for non leveraged owners to get the best returns.
On the supply side the RBNZ is pushing for more high-density apartment building in Auckland - and quickly. In other words try to take some pressure off the shortage of supply as soon as possible.
Like that will work. Is there any city with fringe containment where apartments, no matter how many of them are built, end up "restoring affordability"? In Vancouver which is a favourite of certain advocates because they have rammed through intensification and abolished NIMBY rights, the median multiple is still 9. Fringe McMansions are around 4 times the price of Houston''s; older cottages near the CBD are around 8 times the price of Houston's; and even the apartments in the CBD are several times the cost of the equivalents in Houston.
Melbourne has an apartment building bubble right now and Melbourne's median multiple remains up at around 8.
Hong Kong with 66,000 people per square mile, has a median multiple of 17. Does it look like building "up" is as good as "out" for creating affordability?
This is one of the most disgraceful fraudulent diversions that is occurring in this issue. It is just another fat gouge by the big-property cronies who can capture even more value for every site that they are holding, as it is upzoned. The value of the site goes up, the value of each housing unit does NOT go down. It is freedom of fringe growth that changes all this, the historical evidence and the international evidence is undeniable.
Phil, in this and your other posts on this thread you summarised exactly why CGT won't work and can't work. This needs to be compulsory reading for everyone, and for the Reserve Bank, Traesury and all politicians as well.
They are really down to throwing pots and pans as the tank that is the out of control housing market rides over them.
It's embarassing to watch.
All cities have a land rent curve from the area with the highest amenity value -usually the centre/CBD because that has the most/easiest access to all amenities. But not in Christchurch as this developer/property is experiencing.
This curve slopes down to the rural fringe where the land is better used for non-urban purposes and is priced accordingly. Eric Crampton in offsetting behaviour discusses this standard urban spatial model here.
The ability to build freely on this rural fringe is not because it is preferable to encourage sprawl versus intensification. It is important because it allows the correct price signals along the entire curve.
When development can occur anywhere along the land rent curve from centre to fringe. Then economic actors can choose the best combination of amenities versus cost for their particular needs. Most importantly they are not exposed to sellers with excessive market power if development is restricted to just one part of the curve.
The aim of regulating urban land markets is that the urban land rent curve should not be moving excessively upwards in response to demand/development. If it does, this in effect is a tax on the productive that is transfered to the self entiltled rentier class.
The council are saying they expect the new unitary plan to come take effect next year. A lot of areas are zoned Terraced housing and apartments allowing 4 levels to be built. Areas Royal Oak could have bungalows and villas on full sites removed and huge big apartments put in place. No doubt this will assist the housing shortage. But at what cost?
A land tax, to start to tax away much of the unearned CG, and to incentivise land-bankers to piss or get off the pot, could be as simple as a National Policy Statement with which TLA's would be forced to comply. After all, they already have every single piece of the required administrative machinery:
- lists of debtors (landowners)
- lists of land values (valuation rolls)
- Transaction-generating software (analogous to the Special Rating Districts needed for e.g. targetted drainage rates - just another 'product')
- Debt-collection machinery
- The ability to enforce debts via caveats or forced sales
I remind y'all, once again, of the extensive powers to rate: Schedule 2, Rating Act, 2002:
Matters that may be used to define categories of rateable land
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1 The use to which the land is put.
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2 The activities that are permitted, controlled, or discretionary for the area in which the land is situated, and the rules to which the land is subject under an operative district plan or regional plan under the Resource Management Act 1991.
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3 The activities that are proposed to be permitted, controlled, or discretionary activities, and the proposed rules for the area in which the land is situated under a proposed district plan or proposed regional plan under the Resource Management Act 1991, but only if—
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(a) no submissions in opposition have been made underclause 6 of Schedule 1 of that Act on those proposed activities or rules, and the time for making submissions has expired; or
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(b) all submissions in opposition, and any appeals, have been determined, withdrawn, or dismissed.
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4 The area of land within each rating unit.
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5 The provision or availability to the land of a service provided by, or on behalf of, the local authority.
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6 Where the land is situated.
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7 The annual value of the land.
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8 The capital value of the land.
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9 The land value of the land.
Here's a possible approach: using the National Policy framework of the Resource Management Act 1991:
First, the RMA section:
45 Purpose of national policy statements (other than New Zealand coastal policy statements)-
(1) The purpose of national policy statements is to state objectives and policies for matters of national significance that are relevant to achieving the purpose of this Act.
(2)In determining whether it is desirable to prepare a national policy statement, the Minister may have regard to—
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(a) the actual or potential effects of the use, development, or protection of natural and physical resources:
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(b )New Zealand's interests and obligations in maintaining or enhancing aspects of the national or global environment:
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(c) anything which affects or potentially affects any structure, feature, place, or area of national significance:
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(d) anything which affects or potentially affects more than 1 region:
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(e) anything concerning the actual or potential effects of the introduction or use of new technology or a process which may affect the environment:
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(f) anything which, because of its scale or the nature or degree of change to a community or to natural and physical resources, may have an impact on, or is of significance to, New Zealand:
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(g) anything which, because of its uniqueness, or the irreversibility or potential magnitude or risk of its actual or potential effects, is of significance to the environment of New Zealand:
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(h) anything which is significant in terms of section 8 (Treaty of Waitangi):
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(i) the need to identify practices (including the measures referred to in section 24(h), relating to economic instruments) to implement the purpose of this Act:
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(j) any other matter related to the purpose of a national policy statement.
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National Policy Statement: we hereby proclaim that the scale, nature and degree of change to a community and to natural and physical resources, caused by the housing shortage in Auckland, and the generally parlous state of housing construction and land development nationwide, is of significance to New Zealand.
Therefore, pursuant to the RMA 1991, and having considered matters under Sec 45(2)(f), all TLA's are required to adhere to the following National Policy Statement:
- a land tax not to exceed 3% of the deemed annual value of the land (pursuant to Schedule 2 (7) of the Rating Act 2002) shall be levied by all TLA's
- the proceeds of this tax are to be used as follows:
1 - immediate substitution for all Development Contributions and like imposts, - such imposts are deemed uncollectable as from the date of implementation of this Statement
2 - infrastructure development to allow new housing, new towns, and intensification of existing appropriate areas, to be expedited.
3 - research into and implementation incentives for modularised, multi-proof-consented, factory-built accomodation initiatives.
I'm sure common taters will add many variations on this theme.....
One thing that Grant Spencer got right is that it will take a significant external event to pop this bubble.
As long as Auckland Council continue working hard to prevent enough dwellings being built to house their own people the prices will stay high. Can't see that changing any time soon especially since they have the tacit support of the government.
Good thread, and thx to those contributing ideas.
However, there's one missing ingredient, and no easy way to fix That, short of a popular uprising and the installation of Lee Kuan Yew Reincarnate. (And, as GoT has all those half inclined to do so, glued to what Leonard Cohen refers to as 'that helpless little screen', the peasants aren't in much of a revolutionary mood.)
I refer, but of course, to Politicians with Cojones.
The real solution to the problem is to build more houses which the RBNZ can't itself do. Of course building more houses isn't a bad thing, it is in fact very good for our economy. And if overseas 'investors' are prepared to pay us a huge sums to buy a very small amount of our land, that is also a very good thing (as long as we are building enough new houses for the locals).
I wonder how many of Labour's 10,000 houses a year would have been built by now? Even if it was only half I think that would have been a significant amount more than National has achieved.
Just tax profits - all profits ...
http://thesocietypages.org/socimages/2010/11/16/guest-post-corporate-tr…
.. and we can all go back to keeping our pittance.
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