National is suggesting the Government incentivises councils to enable growth by paying them $50,000 for every new house they consent above their five-year historic average.
The party says councils would need to use the grants to pay for infrastructure, including pipes, roads and public transport, to support the building of more houses.
It says the Government could pay for the scheme using the $3.8 billion Housing Acceleration Fund, unveiled when it released its housing policy package in late March.
The Government hasn’t yet decided how to distribute the $3.8 billion set aside, but said the contestable fund would be used to pay for infrastructure and provide additional funding to accelerate development of vacant or underutilised Crown-owned land.
Cabinet will consider the detailed criteria of the fund in June.
National’s proposal is included in a Member’s Bill drafted by leader, Judith Collins. The bill will go in the ballot later this week.
It includes a regional breakdown of consent numbers that would be used as a benchmark from which to measure how much councils have increased consenting rates and thus how much they’ll receive in grants.
If Statistics New Zealand consent figures for the year to February were compared to the figures in the bill, maths done by interest.co.nz suggests Auckland Council would receive $197 million, and Wellington City Council would receive $650,000. Meanwhile Tauranga City Council wouldn’t receive anything for coming in below the threshold specified in the bill.
National’s infrastructure spokesperson Andrew Bayly maintained the “vagueness” around the Government's $3.8 billion Housing Acceleration Fund would create a “bureaucratic hurdle” for councils.
“Councils and developers will be forced into a drawn-out negotiation with Wellington bureaucrats to get funding, showing how each new development meets whatever criteria this Government finally announces,” he said.
“Just like the so-called shovel ready projects, where a year later only a quarter have shovels in the ground, this looks set to be another example of Labour’s inability to deliver.”
Supply-side focus
Included in Collins’ Member’s Bill are also proposals for enacting the other already-announced parts of National’s housing plan.
These include putting in place emergency powers similar to those used to speed up house building in Canterbury following the 2010/11 earthquakes, creating a requirement for urban councils to immediately zone more land for housing - enough for at least 30 years of expected growth, and limiting the appeals process under the Resource Management Act to ensure new district plans can be completed and put in place rapidly.
All of National’s solutions are focussed on increasing the supply of housing. None consider dampening demand.
Collins said: “National doesn’t share Labour’s view that you can tax your way out of a housing shortage.”
National’s housing spokesperson Nicola Willis said: “This bill gives councils permission - in fact it requires them - to say ‘yes’ to housing development and to get as much new housing built as they can as soon as is possible.
“This bill will remove the artificial land use constraints and endless red tape that have prevented our cities growing up and out as fast as they need.
“The emergency measures will turn the tables from a situation where housing developers have to bend over backwards to get permission to build new housing to a situation where councils are incentivised to make building houses as quick and easy as possible.”
104 Comments
Council or developer, you need 4 traffic trucks, 8 people standing around doing nothing, to trim a hedge these days. Health and Safety is obviously driven by a very strong lobby group with a very vested interest logic would suggest. How the hell have we come to this point.
I would also suggest some developers would find a way to rort the system if this eventuated.
Health and Safety is obviously driven by a very strong lobby group with a very vested interest
My ex-employer (a Big-4 accounting firm) has had close work links with MBIE's H&S policy team. The firm also conducts H&S audits on third-parties on behalf of government agencies and advises companies on H&S compliance processes.
How can a single interest be allowed to represent both sides in a transaction, while also advising the legislator is completely beyond my understanding.
They put up a SOP on a National bill (NPS) going through the process in Parliament in National's final term - that SOP seeking to abolish the Auckland RUB at the time. Unfortunately, although they (Labour) had prior informed David Seymour's office of the SOP and the need for him to be in attendance to vote on it in order for it to pass - he wasn't in attendance, saying he didn't get the message.
https://www.interest.co.nz/property/81655/labour-calls-govt-abolish-auc…
Serious at the time, but that was prior to the Auckland Plan going through the regulatory process. Once that was done, I think it would have been very difficult for any Parliament to reject and unravel that democratic plan process. Hence, Labour's new/additional NPS on Urban Development 2020, inserting obligations on council's to plan for growth.
I've just read the draft Wellington Regional Growth Framework (the GWRC response to the new NPS) - and they are planning (i.e., required) to accommodate a further 200,000 in population over the next 30 years. No where have they undertaken an infrastructure capacity assessment and maintenance schedule for existing infrastructure against existing population statistics in the various communities.
The framework/plan (and the cost) of all the new infrastructure looks frightening - let alone the existing capacity inadequacies and aging infrastructure issues all of these communities are facing throughout the region.
The nightmare continues.
Thank goodness they haven't
There is a ton of land zoned for development now, and lots more zoned for future release. This combined with up-zoning of existing areas means that land constraint is no longer an issue (except for those who bought outside the RUB and want a payout).
Financing the infra for all of this already zoned land will be crippling, but at least it will be done at scale. The idea of providing infra ad hoc across to every piece of farmland someone wants to develop is ridiculous.
Yip, just like Immigration aren't allowed to put caps or limits on the number of people allowed into the country a year. But they can deliberately under-resource certain areas of processing, or add in extra steps with flimsy justications, to slow down the rate at which they process applications, thus implementing a de-facto cap on applicants in a given year.
Layers of internal entities are created. That is how the Christchurch City Council went about surreptitiously acquiring $45mill of bare land in Central Otago for a new wide bodied jet airport. That purchase was supposedly funded by “borrowing” by some sub company of Christchurch International Airport. So “truthfully” the Christchurch mayor proclaims ratepayers money has not been used. Supposedly though, ratepayers still own the city’s infrastructure and other assets, therefore they own too, the liability of that loan and any loss down the track including ongoing expenditure obviously.
I'd suggest there are two issues here. RMA and building consent. The former is where the lengthy process can take place for a large subdivision. The latter for both resource consent and building consent for a modest, say 150m2 single storey house would be much shorter, in a matter of one to one and half months depending on the Council work load. The 3 storey terrace type houses popping up in Akl would be somewhere in between. Akl and I know NP are going flat stick on residential consents right now. In fact NP are out sourcing some of their consent work due to the load. Unfortunately one can't just shake a tree and half a dozen building consent specialists fall out.
The cost of building consent is another issue. I think Akl do not have a fix set of charges for a building consent and estimate what it'll cost. based on the drawings and complexity. This is an area where they can guild the lily. With Councils under the gun for rates, Resource and building consent can be a nice tidy profit center.
Unintended consequences - correct as politicians here do not think long term and are just looking to get headline, in one way or other without applying mind and it seems are surrounded by YES MAN, who feed them what they want to hear for biased vested interest instead of looking into pros and cons.
Is Judith not facing internal crisis, so could be to deflect as need to show and keep on doing something or other to protect that is working and is full of ideas. Yes full of ideas but do they have any merit.........
Ponzi or no ponzi, let their be a level playing field between FHB and Investor and allow the market to take its own course - send message that when you are buying either stocks or house are doing at own risk ( Here Prime Minister of the country - Jacinda Arden comes out in public and assure that whatever happen will not allow house price to fall therby assuring people to speculate as profit is theirs to keep and risk is covered by government or rbnz).
To create level playing field, RBNZ or government or whoever who wants fairness, should remove Interest Only Loan as speculators has an edge with it.
If Jacinda Arden removed tax on interest for fairness, what is stopping her and RBNZ from stopping IO loan as are bigger culprit and more targeted towards speculators than genuine long term invedtors.
FHB if can afford $600 moratge per week in P & I Loan, can borrow appox $600000 or $650000, where's speculator who can afford $600 mortage per week in IO Loan can borrow appox 1.1 million to 1.2 million ( twice more so can and will most probably out bid FHB in auction room as purchasing power is double ).
This also results in creating bigger FOMO and the ponzi keeps on running. Just like to break the chain of virus, need lockdown, similarly to break the chain of speculation need lockdown of interest only loan.
What happens if council in greed to get more compromise in giving consent.
In our lane ( it is suburb and not city centre) where no two cars can pass each other without slowing down have 17 apartment building comming up in about 1000 sqmt section ( think is 1000 sqmt section, could be less).
In the name of supply both major political parties are turning Auckland into ghetto house. Also this ghettos houses are not cheap and all this is done under the garb of helping FHB.
I shake my head at all the single storey 250 m 2 house developments everytime I drive to Auckland. Its right on a rail and road main artery , it should be multi storey high occupancy development, focused on the towns , and taking a fifth of the farmland the sprawl does.
Ridiculous idea. Auckland Council is in debt over seventeen billion dollars. The solution is to eliminate the incompetence and waste that is so clearly evident.
I have been a developer in Auckland for thirty two years. The councils have bogged us all down with fluff, compliance and massive cost. The people in power MUST have practical business experience. Phil Goff and his band of merry gender neutral, diverse, people have none of this.
Fire them!
Problem is what happened when the government listened to developers and the construction industry when they proclaimed that regulation was unnecessary and they could self-regulate. NZ has paid through the nose to clean up after them.
If the industry can stand behind its products and take some responsibility for what it creates, then removing regulation becomes viable. How do achieve this? Perhaps mandatory industry insurance that covers the cost of fixing their messes? Or make it impossible to dodge responsibility?
The truth is that spawling cities go bankrupt. It's not mismanagement, or expensive staff. That's a tiny fraction of the cost of maintaining and replacing the infrastructure as needed. The only solution is to increase rates. Currently only about 1/3 of Auckland council revenues come from rates. Landholders are being spoiled rotten.
https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-…
Landowners were happy to take the betterment in capital gains but seemed to possess an incredible level of entitlement when it came to not paying reasonable rates. Yet they'd then tell young Kiwis "hey, it's never been cheap to live in a global city!" (unless it's a massive block of land you feel entitled to keep occupying, apparently)
Warren Mosler has this to say about issuing debt.
Proposals for the Treasury
I would cease all issuance of Treasury securities. Instead any deficit spending would accumulate as excess reserve balances at the Fed. No public purpose is served by the issuance of Treasury securities with a non convertible currency and floating exchange rate policy. Issuing Treasury securities only serves to support the term structure of interest rates at higher levels than would be the case. And, as longer term rates are the realm of investment, higher term rates only serve to adversely distort the price structure of all goods and services.
I would not allow the Treasury to purchase financial assets. This should be done only by the Fed as has traditionally been the case. When the Treasury buys financial assets instead of the Fed all that changes is the reaction of the President, the Congress, the economists, and the media, as they misread the Treasury purchases of financial assets as federal ‘deficit spending’ that limits other fiscal options.
https://www.huffpost.com/entry/proposals-for-the-banking_b_432105
Imagine for a moment that governments embrace MMT. Imagine too, as MMT proponents suggest, that control of the printing press is taken away from unelected central bankers and given to “accountable” elected fiscal representatives. Would we be any better off? Far from it. Giving elected representatives the keys to the printing press is the equivalent of giving a gambling addict the keys to the casino. For many politicians, the primary objective is to remain in power. As such, they will too often be incentivised to pursue instant gratification at the expense of longer-term stability.
Inflation and taxes are, in many ways, simply two sides of the same coin. Those governments without access to tax revenues can instead “debase the coinage”. Supporters of MMT claim this will never happen, yet history suggests otherwise: after all, it has been a tried and tested policy of kings and queens over hundreds of years. Too often, those with access to the printing press are prepared to take undue risks in the hope that “this time it’s different”.
- MMT: The case against Modern Monetary Theory
So your solution is to have people living in poverty and people without jobs and houses to live in and run down infrastructure because we all have to believe in the myth that the government has no money. Nothing very bad seems to be happening in Japan does it and we can have no savings without government deficits.
At this point we are really only discussing who the beneficiaries should be.
We already have an unelected set of leaders transferring wealth from younger and asset-less members of society to older asset owners. We've turned our monetary policy into a welfare scheme for the wealthy.
Putting the same in the hands of a broader set of leaders merely changes the mix of welfare being parceled out: instead of just to houses and shares, allocation of wealth to other purposes in society. The longer the wealth transfer from poor to rich goes on, the more society will build its own more dangerous impetus demanding things change.
We are all floundering around in the dark at the present time, it's better that we all understand the truth. Should we all believe that the earth is flat and that the sun goes around the earth just because it suits some in society. The way that we are operating the financial system at the moment with the banks creating all of the money is far more damaging with the high levels of household debt that is being created and who but the government would have the capability to bail us out as with the GFC when it all goes wrong again.
It's just another political party tinkering around on the margins to look like they are doing something serious on housing.
It's like taking aspirin to deal with gangrene. The gangrene in this case is ultra-cheap money inflating a speculative bubble.
Raise rates and risk popping the ponzi? No, we can't do that.
Both Labour as well as national are just playing with time and not serious about speculative bubble. Labour being in government may just hope that their timing of announcement may coincide with normal winter slowness in housing market and avoid them and RBNZ to go after ultra cheap source of funding use by speculators in particular- interest only loan.
So they come up with all sort of idea except talking about interest only loan as they too know, that if implimented in right earnest, will stop the speculative bubble. It is a blatant farce of not stopping it but unfortunately not highlighted so most probably may get away with reasons and excuses to avoid or to delay taking action on IO loan.
Does That make them the greater unluckier fool and you the luckier lesser fool?
Auctions of any type only exist when there is at least one less supply than demand. It's the underbidder or fear of a potential underbidder (in a blind auction) that sets the price.
Have true competition, then Auctions would mostly disappear. Auctions as we know them only started to come in in the mid 90's.
I think proper auctions are far fairer. Look at Auckalnd, everyone can see what is happening in real time (half are passing in). But auctions are not really a thing in Wellington, very rare. Sadly Jacinda only knows that Auckland exists. I expect Auckland will correct while the rest of the country keeps going up
I attended an auction in Auckland about 13 years ago, an auction at the real estate agency offices. During the auction 1) agents came around coaching the bidders ("can you just pay a little bit more, can you just pay a little bit more") 2) There were 'phone bidders' and no-one at the auction would have had any idea who was on the other end of the phone, if there was indeed anyone 3) After a long period of coaching & 'phone bidding' the tension grew to the point where - when the house was finally sold - the auctioneer pounded his gavel down so hard that he knocked over his lectern. My impression was that the auction process was a farcical 3 ring circus designed to fleece buyers, and I don't believe anything would have changed.
Levy Economics Institute of Bard College
Publications
Working Paper No. 244 | July 1998
Can Taxes and Bonds Finance Government Spending?
This paper investigates the commonly held belief that government spending is normally financed through a combination of taxes and bond sales. The argument is a technical one and requires a detailed analysis of reserve accounting at the central bank. After carefully considering the complexities of reserve accounting, it is argued that the proceeds from taxation and bond sales are technically incapable of financing government spending and that modern governments actually finance all of their spending through the direct creation of high-powered money. The analysis carries significant implications for fiscal as well as monetary policy.
http://www.levyinstitute.org/publications/can-taxes-and-bonds-finance-g…
Giving elected representatives the keys to the printing press is the equivalent of giving a gambling addict the keys to the casino. For many politicians, the primary objective is to remain in power. Allowing in-power politicians to print and spend according to their own whims is anti-democratic and would quickly lead us to totalitarianism.
Actually, I left out a few details.. the bigger fool was a by far the investor who offered 120k too much (post announcement) and it turns out they had to downsize their offer by 20k because the bank wouldn't lend them up to that amount. Had the investor paid attention they would have noticed only a few people turned up to the open home. Just plain greed biting themselves in the backside.
Amazing what agents will tell if one only bothers to ask!!
Maybe a little sprawl... ? have a drive north or south of Auckland.. thousands of sections coming online, they are releasing them bit by bit so as not to crash the price.
When building on them gets too expensive or they cant find enough people to take on the debt, that's when they will start losing jobs and that's when it will get interesting.
The council wont spend money on inner city infrastructure because its too expensive, far cheaper to sprawl.
"far cheaper to sprawl" - indeed: the biggest cost of development is transport, and with sprawl the motorways etc are paid for by NZTA but with density the local roads and public transport are 50% paid for by council.
Maybe all transport should be NZTA funded. That would free up a lot of council money for other infrastructure.
You're missing the point. The amount of money the council gets is on top of the money the developers will still have to pay.
Council existing infrastructure needs replacing regardless of whether any development takes place, so they will want those developments to take place in areas that their infrastructure needs replacing, which is not greenfields areas.
They will use this money to first promote brownfields' development.
Mass immigration is linked to bank credit creation. 2002 to 2007 witnessed 100 percent gain in house prices with rates above 8 percent.. Masses of new people are required to increase consumption so debt can be managed. Huge immigration happened from 2003 to 2008. Then again from 2014 to 2020. House price inflation has been at it's highest since 2007. Rates at near zero with similar migration 2016 to 2020 and house price inflation. So what causes it? Credit creation by banks. Interest rates are a con. No link between low rates high growth has been proven. Infact more data shows high rates high growth like 2002 to 2007.
https://www.stuff.co.nz/business/124827724/nzs-houses-make-200b-in-capi…
this is what leverage / stealing from the future looks like
Even if they do understand, I'm not sure they would have the first idea how to disentangle NZ from the invisible hands strangulation of the planets life support systems. I'm pretty sure the first step away from economic "orthodoxy", would see us standing in line behind Venezuela holding our caps.
It's OK, we're inside the tent. Five Eyes, we'd have done Pine Gap too but we planted ours too close together....
I find it amazing that nobody is talking about cities as heat engines and sites of entropy; places requiring inputs of resources and energy, outputting wastes, low-grade heat and the likes of CO2. And I find it amazing that nobody is asking how long this one-way conveyor-belt can last. And then what?
The only question in town, is what form of housing id future-resilient? And the answer is the least energy-demanding (both build, and maintenance). The follow-on question is: which is better, retro-fitting the present stock, or new-building? I suspect it's some of one and some of t'other. Then we ask what maximum sustainable capacities are? If we don't do that. we're fooling ourselves (and there are a lot who seem to need to do that).
Agree that housing ponzi is full on and talk about DTI but silent on interest only ban.
Why many experts and economist do not understand that one of the major contributor in helping speculators to carry out speculative activity, specially in low interest rate is Interest Only Loan.
https://www.newsroom.co.nz/ideasroom/obscene-housing-ponzi-driven-by-gr…
And to add to that;
https://e-tangata.co.nz/comment-and-analysis/the-housing-hand-wringing-…
For the action-orientated, check out;
Freeing up more land to build is great and all but what are they going to do about the shortage of materials? Auckland is building 1000 houses per month, the highest rate ever and the market can't keep up supplying the materials. So changing the zoning of some land isn't going to change the number of houses being built.
I think that the government should be more involved, what is required is more central planning. leaving everything to the private sector to sort out is not a solution. We only need to look to China to see this in operation and what they have achieved, This worked well in NZ until neo-liberalism came along and all of the governments businesses were sold off. Now we have a government without the capabilities to do anything.
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