The government is comfortable with its interventions to date to help with a housing shortage and rent rises in Christchurch, but is open-minded to future moves.
Housing Minister Phil Heatley said in Parliament today that although the government was "not considering...at this time" regulating the Christchurch rental market, it was boosting the supply of temporary homes available in Christchurch.
“The Minister responsible for earthquake recovery announced last week that we’re providing more temporary accommodation in Christchurch to provide for supply," Heatley said in response to questions from New Zealand First MP Denis O'Rourke.
“Clearly we’ve got new developments coming on stream, and we believe that supply will help meet demand and therefore drive down rental and house prices. That’s what our primary objective is,” Heatley said.
O’Rourke asked whether the government would consider providing some form of bridging finance to help people buy homes in Christchurch, given houses were getting more expensive and harder to buy.
Heatley said there were already a number of forms of finance the government supplied.
“Clearly we’re buying people out of properties in the red-zone where they can take that check and buy elsewhere. I’m assured by the Minister of Earthquake Recovery (Gerry Brownlee) that when he reads the newspaper, there are sections and house packages available," he said.
“We also have the temporary housing villages, Mr Speaker. We have the accommodation supplement, those seeking rental in Housing New Zealand properties have the Income-related rents supplement.
“Yes, we’re open minded to any other interventions, but at this stage Mr Speaker, we believe that our progress so far is sufficient. If we need to ramp up, we will,” Heatley said.
Housing affordability
Heatley had been answering questions on housing affordability in Question Time. In response to an initial question from Labour MP Annette King on what the government was doing to improve housing affordability in New Zealand, Heatley said the most important actions it had taken was to manage the economy well, cut tax rates and provide the scenario for low interest rates.
“We’ve also changed the Building Act and the Resource Management Act to remove unnecessary red tape, and we’ve increased Welcome Home Loan caps since we’ve been in government," Heatley said.
NZ$1 bln lent under Welcome Home Loans
"In fact seven-and-a-half thousand people have bought their first home using the scheme, a total value of borrowing [of] NZ$1 billion. That’s an awful lot of first home buying,” he said.
Under the Welcome Home Loans scheme, first home buyers can borrow up to NZ$350,000 in high-priced areas, with a deposit of 15% of the amount borrowed above NZ$200,000. For example, on a loan of NZ$350,000, an applicant would require a deposit of 15% of NZ$150,000, which is NZ$22,500. See more on the scheme, and the financial institutions participating in the scheme here.
Annette King raised the scenario of an 85 year old housing New Zealand tenant in Christchurch who had been told to vacate her temporary accommodation on Saturday, with no accommodation offered by Housing New Zealand, “and with her family finding it impossible to even contact the department.”
Heatley said he was aware of the case, and that Housing New Zealand was aware of the case.
“There is no doubt that there are significant housing issues in Canterbury. But it would be fair to say, Mr Speaker, that over the last twelve months, the pressure on Housing New Zealand tenants, the way that they’re being managed, shifted to alternative accommodation, has caused very little political or actual noise at all, and Housing New Zealand’s done an excellent job,” he said.
Overcrowding
Labour MP Rino Tirikatene raised issues of overcrowding in Christchurch accommodation:
“For example, eleven people crowded into a two bedroom house. Or people renting a garage to live in for NZ$160 a week. Or the young man sleeping in his car when he’s not delivering pizzas, because he can’t afford a rental or find a place to live,” Tirikatene said.
Heatley said he was aware of some of those situations from media reports.
“I think Opposition members need to realise that, yes, there are housing pressures in Canterbury due to the earthquakes, but they should also remember that when we set up temporary accommodation, whether in the form of caravans or the units that are very successful in Kaiapoi and Linwood now, the opposition parties attacked that and opposed it. So they can’t have it both ways,” he said.
Mana Party leader Hone Harawira asked why the government got rid of the Rural Housing Fund, “leaving more than seven thousand Tai Tokerau households without the badly-needed renovations that had been approved under the fund?”
Heatley said the government had decided to put that amount of money, and more, into the development of new housing, “particular Papakāinga housing on multiple-owned Maori land or other land that Maori and Iwi use.”
“That fund’s been very successful. We figured that new houses, well-insulated and well-designed, is much better than patching up roofs that are leaking, roofs that are rusting, houses that are uninsulated and rotting, which is what happened under the previous Labour government,” Heatley said.
Increasing state homes in Auckland
Housing New Zealand provided almost 70,000 houses across New Zealand which housed 220,000 people, Heatley said.
“That is a huge commitment. The fact that they’re increasing housing supply in places like Auckland is the right direction," he said.
“The idea, like under [the] previous government, where you had one person rattling round in a four bedroom house, entertaining gangs in state houses, all those things are being put behind us. I believe Housing New Zealand’s heading in the right direction.”
84 Comments
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Minister Heatley has got it all wrong, for starters, as the Minister for Housing he should read the papers himself, rather than than leave it up to Minister Brownlee to put words in his mouth.
Secondly, if you really want to make housing more affordable for all New Zealanders, rather than waiting for us to all be poor enough to qualify for Govt. assistance, then get rid of theGovt. and council bureaucracy, don't add to it. Get rid of restrictive zoning, exorbitant council fees, planning gain, deliberate council delays, and no option for developers to finance the development through loan sharks, plus community housing that is funded by extra levies on developers, and ultimately the end user, the home buyer.
Except if this is so why dont the voters vote in ppl to remove these regulations? maybe its because the few libertarians foaming at the mouth are so fringe that it will never happen.
Lack of affordability comes back to being in a ponzi bubble...that will burst.
I see nothing wrong with a new home buyer paying all the cost of their new home. Funny thing about user pays, the right wing retards think its grand until they find they have to pay.....then the whinning starts....
I dont quite understand why devlopers go to loan sharks, maybe because their business case is so pathetic no "real" bank will touch them?
regards
For the zillionth time, Mr Economics Ignoramus, the price of new houses affects the price of ALL houses.
So FIRST home buyers pay through the nose, an equivalent amount at least, to the amount that every NEW home buyer is charged for the "true cost of their new house".
This is why Hugh P is right; the fair way to pay for infrastructure for new developments is either general local govt revenue (it worked fine this way for decades) or development bonds.
Oh, you should go and work for some tinpot dictator who runs a racket with local oligopolies in essential foodstuffs.
You, mr expert, can assure the starving populace that it is "their ability to pay" that is the problem, nothing to do with the racketeers.
Of course when you are one of the racketeers yourself, you will pump out endless propaganda BS by way of a smokescreen; land for growing the food is "running out", yadda, yadda, yadda; also nothing to do with the racketeers, and the racket is morally justified anyway because of the "land runout", you are just starving the locals to death because they will starve to death anyway one day because "land is running out".
What a low person you are. I am getting tired of trying to be civil.
No Hugh P is wrong....It worked fine in the USA because of housing prices going up generating more income, of course there are huge developements with roads and services put in but no houses so no returns, but debt....and the rate payer will be coping those.....no thanks. then of course the house values collapsed and so did the incomes, result pending bankruptcies, collapse of services, no thanks.
Quite simple, want a new house, user pays.
regrds
No Hugh P is right, I have had first hand experience in Municipal Utility Districts (MUDs) developments in the USA and those localities that used this structure or similar had less growth and more importantly far less decline in the financial meltdown ie a stable housing market. And they were at an Affordability of around 3x annual medium income. www.demographia.com says it all. The very type of market you describe happened in those markets with restrictive land zoning and all the council bureocracy, cost and risk that comes with policing it. Their unaffordability was at 6 x or higher of annual medium income, just like NZ is.
"Auckland and Christchurch have particularly serious housing situations - something clearly the Labour Party has no interest in".
.........
Earthquake aside 80% of population increase is from outside NZ. The justification is that when we get to a certain size it will all start to happen. I'm not sure what will happen, but aparently it will. In the mean time the developers make money and we provide the infrastructure.
".....the developers make money and we provide the infrastructure......."
HUH?
Haven't you heard of "development contributions"?
One Wayne Findlay did a submission a few years ago to the ChCh Council, pointing out that it had taken in in "development contributions", approximately double the amount of increased infrastructure spending that it had made across the entire city, let alone what might fairly be associated with the developments that the fees were charged against.
I'll tell you who the "we" are, that are paying for (and "providing") the infrastructure: "we" are the first home buyers who pay the price of the development contributions, built into the higher house prices across the entire real estate market, derived from the higher price of new houses.
Friday, 30 March 2012, 4:04 pm
Press Release: Property Council Of New Zealand
“A balanced and rational approach to the provision of greenfields and brownfields land is needed by Auckland Council to cater for a population increase of one million people over the next three decades, which is a big jump on the current population of 1.5 million.
"He said there was a tendency to believe those coming in under the skilled section were doctors, nurses or engineers who would fuel growth in the economy.
"However, a large number of the skills asked for are infrastructure builders to accommodate the population growth that they are fuelling. Alternatively they are people like travel agents and truck-drivers, occupations that add little to long term growth."
The effect was new suburbs emerging, not new industries, which went a long way in explaining New Zealand's poor economic performance.
He said the housing spirals in the 1990s and after 2001 were both associated with a rise in immigration."
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10450578
New Zealand's change in immigration policy dates back to the early 1990s when the gap in productivity with other nations became pronounced between the years 1970 and 1990. Higher immigration was intended to fix the problem.
In its report, the SWG claims the move backfired.
"The policy choice that increased immigration, given the number of employers increasingly unable to pay First-World wages to the existing population and all the capital requirements that increasing populations involve - looks likely to have worked almost directly against the adjustment New Zealand needed to make and it might have been better off with a lower rate of net immigration.''
"He says developers are being made, by the regulations, to build developments with all the bells and whistles for a market that simply can't afford it."
http://www.stuff.co.nz/business/industries/4497042/Property-developers-standing-their-ground
The organisation responsible for that useless drivel is clearly completely and utterly acting for and on behalf of the bubble cowboys of NZ - we can expect a whole lot more Mark Hotchins over the next few decades if this garbage prevails.
Land is a factor of production and the amount of land in an urban area actually correlates with the urban area's productivity. This is a basic long established point in urban economics.
There is hardly a 1st world economy more lagging its trading partners in productivity, than Britain, (by a margin of 20 to 40 percent) and this is almost entirely because of their "town and country planning" system.
NZ has had nowhere near enough new suburbs emerging. Most of the increase in "housing assets" in NZ has been in inflation in the prices of existing properties. Had the inflation actually been new built houses and infrastructure we'd have a new small city.
The "balanced and rational approach" to the proportion of greenfields/brownfields growth will founder totally on the fact that Akl's brownfields land is already so expensive that it might as well already have new apartment blocks on it - only it doesn't.
RAW land in our inflated markets, is priced at something like $1 million per acre at the fringe, and the "raw land component" at the locations the Akl utopian nitwits want "densification", is something like $4 million per acre. There are cities in the USA where the comparable figures are $10,000 and $70,000. Under which conditions are "brownfields" developments and redevelopment at higher densities going to be able to happen at all?
The Jasmax audit of the Spatial plan was right on the nail. The Productivity Commission looks like getting it right on Housing Affordability too. If NZ won't follow this good sense, it is NZ's own funeral.
A question mark hangs over a third of Pegasus Town after the partial completion of a $500,000 geotechnical study.
http://www.stuff.co.nz/business/rebuilding-christchurch/6641358/Pegasus-land-stability-queried
The PWD were good at getting things done:
“We’ve also changed the Building Act and the Resource Management Act to remove unnecessary red tape, and we’ve increased Welcome Home Loan caps since we’ve been in government," Heatley said.
As a Building Consent officer in Canterbury I can assure you that with the actions of central government the red tape is not only getting thicker, but more layers, in every direction, all in the name of "increased efficiency".
With the recent introduction of the LBP scheme and the mess around "Owner Builders", & soon to come different types of Building Consents it is just going to get even more complex for building officials, builders and building owners. And now that more and more items are being added to "Shedule 1 - Building Works Exempt from Requiring a Building Consent" of the Building Act there is even less accountability for work done, insurance companies have greater loop-holes to wiggle out of, future owners bear the brunt of the problems, and lawyers have more to look at when people take out LIM's.
When you look closely at the comments coming from some of the politicians as to It is interesting too that "we" get blamed for all the hold-ups and problems. Take the following for example:
Sure there are some valid arguments worthy of further investigation in there but then you get some like this...
I love this one….
"A company like Lockwood, which has been building good solid houses for 60 years, will tell you that, depending on which council they’re about to sell a house in to, they might be told ‘you need another brace there’ because that doesn’t comply with the building regulations," Sherwin said.
Gee - do you think? That couldn't possibly have anything to do with site-specific criteria such as different wind zones or earthquake zones, which are based on national standards implemented under the Building Regulations as defined by the NZ Building Code set by Central Government so it's actually the same rules (applied under site-specific criteria) across the whole country eh…. No, It's just all the Council's fault...
You would like to think that if you were to appoint commissioners to research into this kind of thing you would expect they had at least some experience or understanding of the industry… Alas...
The real blame however for "hold-ups" during the building consent process is directly linked to the competancy of the people drawing the plans and writing the specifications. If the designers and architects actually had a good hard look at their documentation before they submitted it for consent, they may pick up on the average 20+ significant errors in their documentation including to foundation design, bracing, weathertightness, drainage, accessibility... and other critical issues that they submit. Any average house (even mass-reproduced plans from group-building firms) will have issues, and people seem to forget that our job is to ensure that the owner gets a house/building that is built to at least the minimum standards under the Building Code - we cannot legally ask for anything more than that. And yet we get the blame if the builders/designers aren't capable of meeting that minimum standard - instead we are called facists and beaurecrats...
Perhaps more of the blame should be aimed instead at the people who just can't get it right first time... and God help us when under the LPB scheme in years to come these cowboys become allowed to self-certify on certain works...
What three things would you have as top priorities to sort this issue out?
One standard for all NZ areas? I mean surely its cheaper in the long run just to have the extra bracing or insulation etc and know you can build anywhere than have back and forward between designers/builders/regulators?
The thing is is that there is one "standard" for all NZ'ers - It's called the New Zealand Building Code. Within the building code's "Compliance Documents" are what are called "Acceptable Solutions" that is essentially a collection of diagrams and data, or references to various NZ, AS/NZS or other international standards which if followed exactly must be approved by Building Consent Authorities (BCA's) as of right, and there are "Verification Methods" which are essentially formulae or testing methods, which again if you show you comply with must be approved.
Where the problems lie (from a consenting perspective) is where designers either take shortcuts or don't understand what they need to comply with. As someone who has worked as a builder, a draughtsman in a group-housing company, as a designer/draughtsman in a highly regarded architectural firm, an architecture lecturer at a design school and now as a Building Controls Officer for a BCA I have seen the industry first-hand from all perspectives and I can assure you that the degree of competancy varies hugely in the industry.
As I said in my previous blurb, the role of the BCA is to ensure that designers and builders comply at least with the minimum standard of the building code. This is purely to ensure that protection of the end-user - the building owners and occupiers. Essentially the role of the BCA is to make sure everyone is doing as they should in the interests of the owners, ensuring that at least the minimum quality is attained to reduce the risk of either building failure either in terms of structure, durabilty, weathertightness or amenity. Essentially our role is similar to that of the Police - to ensure that people compliy with the law. If you break a law (through non-compliance with the Building Code or specified Means of Compliance) then you will have issues. All we say is "don't pass go" until you've fixed up you mistake.
When a person makes an application for a Building Consent they must as a part of the application state which sections of the Building Code are applicable to their proposed work, and what "Means of Compliance" they intent to use. As a part of that they should specify whether they are going to use Acceptable Solutions, Verification Methods, cited Standards or apply for an Alternative Solution or a Waiver from Compliance with each section of the Building Code. This is where the problem starts for many, as they say they will do it one way, but then their documentation contradicts itself somewhere else.
When I was starting out working in a design office (and as a freelance designer) I admit I had my battles with BCA's and used to think "Why the hell are they asking that....?". It wasn't until I learnt more about Building Law that the importance of this became more apparent. If a designer for instance incorrectly calculates their bracing, it's the processor's job to notify the designer of their error and not to issue the consent until the document is revised and shown to comply. The fact is that under the Building Act a building MUST be built to the Approved Plans, so if the plans are wrong but approved, it can be built wrong. A BCA is limited in it's powers to correct things after the issue of consent if the documents are incorrect. That is why we have to ensure the plans are right BEFORE it is issued, and why our inspectors have to be tough sometimes with the builders if they deviate too far from the approved plans.
We always get the "Oh, but he/she's a good designer/builder - they've been doing it for 20+ years and they know what they're doing....blah blah blah" - well excuse me, but if they new what they were doing you would hope they wouldn't make too many mistakes. It's not about how long you've been doing it, it's about doing a good job, now! Industry "experience" means nothing if you are not keeping up with changes in products, design methodology and legislation. The key is maintaining Professional Development in your field of industry - as Darwin would put it, evolve or die...
The truth is that building and designing is such a complicated beast due to the available product options and site-specific criteria that no-one is going to get it right every time (including us), but if there isn't someone to peer-review or monitor design and building work we will end up with one hell of a mess that won't show up for 5-15 years and again future owners are typically the ones who bear the brunt of it, much like the Leaky Buildings problem we have today. With the leaky buildings scenario BCA's were at the time of these leaky buildings being constructed being limited in their ability to review and "supervise" (inspect) building work, and a big mess resulted. End result, tax-payers and ratepayers cough up for failures because there wasn't enough monitoring of the work being undertaken. That was subsequently revised with more thorough assesment of plans and more inspections during the build and now the current Govenrment is putting the DBH under pressure to revert legislation back to the glory-days of leaky-building construction with limited BCA intervention.... Why they can't see this monitoring (consenting and inspections) as a cheap means of insurance I just don't understand... better to put a sign at the top of the cliff than an ambulance at the bottom...?
But back to the question, why not make it "One Rule to Rule them ALL"? The building code sort of used to be a bit like that - prescriptive with "there's only one way or the highway"... however councils could overlay their own by-laws over and above this, meaning every council could have it's own "Building Code". And if you wanted to try a new material or method ? Forget it... not in the book, not being built. Thus legislation changes over time brought in the NZ Building Code to a new document, much like what we have today. It's now performance-based, as it needs to have the degree of flexibility we have now to allow development of new technologies and products - otherwise is it fair to demand Earthquake Bracing of requirements of Fiordland on someone in Northland? Likewise insulation against heat-loss of someone in Central Otago with someone in say Auckland? The Building Code's Compliance Documents set levels of acceptability for these and more to allow for buildings to be appropriately designed for their environment, otherwise the cost of building would be astronomically out of proportion for some areas with what the actual requirements to provide a safe, habitable, amenable building would be. Fact is, you need this level of "flexibility".
Another fact is it's largely the companies who have a national presence like the group home building firms who design buildings for everywhere that have the most difficulties with the BCA's . And this is mostly down to not understanding what is required at that site. From my experience as a draughtsman at one such firm the draughting team was under-resourced, and never provided much info as to site criteria from the various franchises (not to mention Town Planning Reg's - but that's a different piece of legislation altogether). Now of course when the draughtsperson is under pressure of tight deadlines to get the consent in as promised by salespeople to the clients there is never enough time to research things thoroughly before you put the plans together, so it's a recipe for disaster at the Building Consent end - but who's fault is that? Not the BCAs... It all lies in the hands of the design/sales firm. To contrast, when I worked in the high-end architecture firm, EVERY project was peer-reviewed by a senior architect and a junior draughtsperson PRIOR to application for building consent - result - most mistakes were picked up and corrected prior to applications, and the consenting process was always relatively smooth. But the big players like the group home building firms keep on lobbying/squeeling to the ministers in parliament and so they (Ministers) think the BCAs are the bad guys.
So ultimately, as Ive stated before, it's just up to those in the industry to familiarise themselves with what is needed and things would go so much more smoothly, and compliance costs would ultimately come down. A bit more time spent in the office at the start means less time in the BCA's to & fro questioning and hold-ups with the consent.
These hard-working migrants show NZ-ers how to save up for a house ... from nothing ....
You can be a Home-Owner in NZ, you just have to work & save
http://www.stuff.co.nz/business/money/6666929/Penniless-to-home-owners-in-six-years
It is still obscene that a couple who have worked around the clock for 6 years, and probably "lived rough" in ways that the article does not dare to tell us, still needs a mortgage of nearly $300,000 just to get into a modest home.
If these people were in an "affordable" city, their mortgage in identical circumstances would be well under $100,000.
It is Phil,
It's just plain daft that this is touted as a success story. No dis-respect to the couple involved at all. I take my hat off to them but at the same time I pain for them that they have worked so hard already, 6 days a week for 6 years to afford not their own house but just the deposit on their own house. My god what sort of economy have we got in NZ. It's absolutely a sad sad indicment on NZ that this is termed a success. I'm sorry, but NZ this is just crazy.
Thanks, Living in Clover; nice that someone else "gets it" so comprehensively.
And how hard will this couple be YET having to work and for how long, to pay off the nearly $300,000 mortgage?
This is indeed another human tragedy associated with our ghastly racket in urban land.
One of the main reasons for developers high cost of borrowing is the higher risk. A large degree of this risk is associated with the developer having to wade through the paperwork bureaucracy as, even by complying with the paperwork; there is still no certainty of approval. And the time involved adds significant holding costs to the development.
It did not use to be like this, presumable all this extra regulation was to ‘improve’ something. It has not improved land and house prices, it did not improve the weather tightness of homes a la the leaking homes sage, by which, when finished will have cost more than the earthquakes. It has not improved the structural integrity of our homes, as Wayne Brown (Mayor of FDNC and Structural Engineer) noted on a report he did on housing damage after the quakes, that if simple measures had been taken in building quality and inspection, the damage from the earthquakes could have been substantially reduced.
In the best authorities overseas, zoning is far less restrictive, the system allows the developer access to cheaper funds if he meets certain rules, the development infrastructure is not included in the section price but is amortised over the life of the infrastructure which is paid for by those end users only in that development (no developer levies), and that infrastructure is owned by those residences and is not given for free to council to add to their asset base, as it is in NZ. The result is far more affordable sections, and cheaper rates.
A large part of the time in checking plans in council for compliance is like the much quoted ‘re arranging the deck chairs on the Titanic’, a piece of bracing timber here, an extra bit of steel there, to comply with the ‘huge’(not) variation in New Zealand conditions. There is already best practise building codes in other quake prone countries that are colder, hotter, wetter, and windier than NZ and with only slightly more materials are weather tight, twice as well insulated and three times structurally stronger than a new NZ build to code house.
Our section prices are so high, what we are left to build a house with is squashed between the land price and the market value. Between the developer and the council, it is about passing the minimum standard, and yet this causes huge unnecessary costs.
Councils have a very important role, but we need to change the system and strip it of its waste if we want to have more affordable sections.
Dale Smith - you need to do some homework.
(note the second graph down')
but read it all. Note that doubling the resources, did diddly-squat to the result.
'Affordable' assumes 'incomes'. En Masse. Ain't gonna happen. Finite planet, meet species in overshoot. Species (including religious, libertarian, extremely ideological idiots) in overshoot; meet finite planet.
Powerdownkiwi - You make the assumption that the only way to get affordable sections is to increase income, which is one way. Another way is by saving resources, reduce waste, and less cost which is my point. There are numerous opportunities to achieve this under our present system to achieve the affordable housing definition of house and land price being no more than 3 times median annual income. I’ll read your link if you read www.demographia.com
No I dont think he does actually....certianly I do not......Increasing income has to be generated somehow. This takes raw materials and energy to make real goods.....so since energy alone is now constrained we cant all earn more.....some might by taking it off others, sure.....but overall the pie will get smaller......
regards
Where are the peer reviewed academic papers? cant see any....just opinion pieces using data in dubious ways to make the answers fit the wanted results maybe? Smoke and mirrors comes to mind.
Then throw in when I can see the PhilB, HughP etc have absolutely no idea on enginering, science, geology and maths I have zero confidence that anything they present will be factual, correct and truthful.
regards
Dale Smith - I already did.
You aren't 'saving resources' when you build tract housing, you're using up finite ones.
And I don't 'make the assumption' about incomes - Hughey does. I just point out they'll continue to reduce, exponentially. Which makes a nonsense of his magic relativity.
You have a lot of thinking to do.
You are nothing but a generator of smokescreen propaganda BS to cover a b----y racket ripping off our young people. I am getting tired of trying to keep this "debate" civil. It is not a "debate" at all, it is more like protesters "noise" swamping a sensible discussion.
No amount of explanation about the fact that a racket is a separate issue to resources themselves (even if resources themselves are the pretext for the racket) affects the monotonous and irrelevant chant of PDK and to a slightly lesser extent, Steven.
Nothing either of you say makes an iota of difference to the 100% relevance of what Dale Smith is saying. He is not talking about resources, and neither does he need to be talking about resources, to address the racket, period.
I have explained a zillion times that the racket reduces our resilience to the resource shocks PDK claims are coming. The only intellectual explanation for persons supporting the racket as well as believing that resource shocks are coming, is because they are genocidal eco Nazis who want to maximise the starvation and death by adding racketeering as an element in the "coming increased costs of living".
What LOW people. Hickey et al should not tolerate you on his site.
Meet Phil Best, person who thinks the world was created 4000 years ago by some deity or other.
Not content with that fallacious belief, he thinks that - despite all the evidence - resources are infinite. Indeed, he thinks (?) that because the number of people the planet could support, increased at the same time as 'wealth per head' did, he assumes that increasing the population somehow will continue to increase the wealth. Of course, it was never the driver.
What an idiot.
It was increasing anounts of easily-gotten energy, which powered Big Ag, extracted the other resources at a rate which underwrote the wealth.
Peak the calorific supply of fossil fuels, you peak the wealth - and the carrying capacity of the planet. 10 calories of oil to one of food, is the unsustainable fact.
Luckily, it appears that the majority are starting to catch on. Not surprising, really - you either have to have a vested interest (the truth, if you please, PB) or an IQ below that of my Border Collie, to believe the Julian Simon-type twaddle.
Or you could be an economist - that might do it.
pdk - I think the most salient point is the artificial constraint on housing makes society as a whole less prepared to adapt to future energy challenges etc. You don't actually have to be a sheltered caveman or malthusian to appreciate the logic of that point.
Another point is radiata pine timber framed homes can be built reasonably efficiently in NZ, I mean the timber grows like weeds and lasts for years, concrete and glass is hardly in scarce supply - even if concrete had to be mixed by hand to save energy if so desired.
Robby - having been on a Council, I've had to wrestle with who pays for what, when.
Ribbon development, and open-slather, don't work, not even in the days when energy was cheap.
We have enough housing stock in the country, to last a goodly time, given that we must aim for zero population growth.
Pinus radiata? Cardboard. Macrocarpa is 5 times better structurally, not that much slower growing, and doesn't need poisoned to survive. That said, you don't need framing at all in a sandwich-panel house... cars lost their chassis to monocoque long ago. Why not houses?
I'm not against building, per se, indeed I champion appropriate building, and lecture about it. I just think we have to build for the future, and clearly we won't be doing that in PB and Hugheys hands. Bigger land-to-house rations (1-5 acres) and local hubs (town/village) have to be the way to go, and there should be threshold-for-approval solar gain requirements.
HUH??????
Talk about NOT GETTING THE POINT.
I AGREE with you about LOW density being the ANSWER to future resource shocks and everything I am arguing on here, is to the effect that we NEED lower densities and to get this, we NEED to STOP inflating the price of urban land from $10,000 per acre to closer to $1,000,000 per acre with b-----y regulatory racketeering.
I AGREE with you about low density "hub based" urban form - our council planners are total idiots to try and impose "town centre first" monocentricity and high density. Everything I am saying, is in agreement with what you just said.
In fact, the LOW density cities of the USA that Hugh and I approve of, are the CLOSEST thing anywhere in the world already, in any QUANTITY, to precisely what you, PDK, are arguing for. In most parts of the USA, YOU could do whole subdivisions of your energy efficient homes, on 5 acre sections, and sell them for under US $100,000 each, even with the 5 acres of land each. HERE, because the land you would be ALLOWED to do this on is more like $1,000,000 per acre, what's your chances?
What an IDIOT. Stop WASTING OUR TIME ON THIS FINANCE AND ECONOMICS BLOG.
Make up your mind - a few days back you were screaming about lifestyle blocks taking up space.
And you've never accepted resource constraints - you very clearly state that more people gives more resources; or have you finally worked it out?
If you DO accept that we are looking at resource constraints, then thare are two questions: When will the bite, and can the current fiscal system - growth-based - survive past that point.
Which is exactly what I'm about.
Lead-times for construction, vs the World3 scenario, says we might update perhaps 20% of our housing stock, before the ship goes down. That leaves 80% (and in reality, probably more) of the existing stock in place, when TSHTF.
A bigger problem, then, socially, fiscally, and structurally.
Still, I'll remind you that you acknowledge resource constraints. Credit where credit's due; that's a big step forwards from parroting Simon.
I do not acknowledge your hyper-linear thinking about resources.
(I have explained before, the difference between hyper-linear thinking and what really happens with resources, technology, and free markets).
I am merely pointing out your hypocrisy.
Your refusal to condemn regulatory growth boundaries and urban property racketeering, leaves you looking either
1) so utterly ignorant about anything whatsoever to do with economics and "markets" that you shouldn't be wasting our time on this forum
2) deeply vested in land banking interests yourself.
GET THE POINT. "Steven" finally did after about 9 months of repeated explanations.
I have no problem at all with lifestyle blocks as large as anyone want them; what I was saying the other day, is that there is an artificially high number of people in NZ who now have 20 acres plus, because there is no option between that "rural price" for LOTS-of-land option, and a racket price for pocket handkerchief sections behind regulator/racketeers boundaries. The price options are ridiculous - the 20 acres plus, might cost LESS than the one tenth of an acre 5 miles closer to town and within a regulatory boundary.
LOL.....you have never put forward a significant point I except.....you are clueless on the effect energy has on our economy....you are clueless about technology, science and engineering and you are clueless about where our economy is headed. The best you can do is pray for salvation from select non-existant technologies you "like"...if that isnt a defination of delusional I dont know what is.
So I will make myself clear, I do not accept that building boundaries have had a significant impact on or caused the the mess we are in now....its caused by laissez faire politics / voodoo economics and the "rackeeters" are the developers and other clowns who think we can grow for ever...and they can just keep consuming for ever.
Meanwhile you accuse someone of a behavior with no justification....beyond your own fantasy.....
Reality check needed for you....or maybe more medication.
regards
Ah but its pretty clear that the right/libertarian mindset isnt rational or logical....It makes spot decisions based on faulty or no logic.....its cherry picking at its finest....
Those land bankers are I assume are those who own farms/land on the boundaries where they hope to make a killing by being handed a council/state monopoly.......and yes its strange that he hates them, maybe because he know equates you with them so in typical libertarian/extremist style if one is bad they must all be bad.
really he is a fruity loop....
If the land bankers have paid a premium thinkiing they could make a killing then yes its looking bad for them......but you just have to look at the likes of biggydaddy and sk to realise such business accumen is not that uncommon. Never mind they can like the poor pull carrots.....
regards
http://www.youtube.com/watch?v=y3EiRU96Kvw
council planners: "forced these poor fellows to build on the bad land on the east".
On he environment court "I've sat through these things "it's so booring..."
Hmmm:
"Environment Canterbury was unsuccessful in preventing the development of the suburb that is about 20km north of Christchurch.
But it was successful in requiring that the developer, Infinity, use vibrating technology to settle the land as well as extensively building up the soil. Pegasus was unscathed in the earthquake of September 4 and is likely to become a favoured location by the many residents of nearby Kaiapoi where about 300 houses are severely damaged."
http://www.nbr.co.nz/article/bexley-residents-may-sue-christchurch-council-130642
“Obviously the developers couldn’t buy the local politicians and public officials off fast enough in Dallas Fort Worth to overcome the zoning impediment – but they have been trying as this article Fed Up: Texas Monthly November 2007 illustrates. It goes on pretty much everywhere of course – but only illustrates how zoning tends to assist in inflating prices and stalling supply responses.
http://www.scoop.co.nz/stories/BU0711/S00303.htm
[MARK MCGUINNESS - WILLIS BOND & CO] doesn't agree with Mr Robertson that regulation is a huge issue. While parts of the resource consent process are onerous, the most beautiful cities in the world – like Paris and London – are also the most regulated, he says.
While Mr Robertson company Infinity dodged a bullet – it had no exposure to mezzanine finance and the finance companies which collapsed taking so many in the industry down – it hasn't been all plain sailing for the South Island developer.
The banking crisis in 2007 led to his banks calling, asking for money.
"That process went on and on and on – every three months another bank was asking for money back."
Now the problem is the more normal property industry laments – resource management regulation, councils and central government costs crippling the business of developing land, he claims. Prescriptive regulations are wiping more off his bottom line than the financial crisis, he grumbles.
He says developers are being made, by the regulations, to build developments with all the bells and whistles for a market that simply can't afford it.
http://www.stuff.co.nz/business/industries/4497042/Property-developers-standing-their-ground
That might be a small part of the problem, but the major problem is the invisible bells and whistles that make RAW LAND $1,000,000 per acre instead of $10,000, even before a single visible bell or whistle has been installed.
Perhaps the guy saying that stuff has banks of land that cost him a lot more than in a deregulated market?
"a market that simply can't afford it." Indeed......so the asnwer should be as an investor/business person to move on to a sector that offers 'decent" returns. In effect its competition...ie wages only go so far....
Of course it isnt materials costs, labour costs or capital funding costs....oh no...its Govn....yeah right.
regards
[MARK MCGUINNESS - WILLIS BOND & CO] doesn't agree with Mr Robertson that regulation is a huge issue. While parts of the resource consent process are onerous, the most beautiful cities in the world – like Paris and London – are also the most regulated, he says.
And ironically Paris and London are beautiful because of the building that was done there hundreds of years ago, when regulations and town-planning were practically non-existent. They are certainly not beautiful for what has been done there over the last 50 years, in fact far from it. Look at all those god awful planned residential high rises in both cities that now fester with social problems that were built in the 60s and 70s, or the much maligned New Zealand house.
Beautiful de facto gated communities, along with dire social exclusion.
It is HOUSTON that hasn't had a riot for a century.
It is truly remarkable to a Kiwi, to see "low socio economic" suburbs in some US cities, with large houses on HUGE sections that would be $1 million here, selling for $60,000 because they are in what has become a "low socio economic area". Of course the more modern large homes on huge sections in higher socio economic areas are about $250,000, shock horror, oh, the exclusion.......!
Of course the planning system here, and in the UK, and in France, has never tolerated the possibility of spacious and green suburban living "trickling down to the masses" at any time. Hence the fixation with "affordable housing" needing to be something built by the State for the purpose. The more demeaning, the better.
Actually you are quite wrong about any "absence of planning" in the London and Paris of past centuries. The land owning oligopolies ran "planning" with an iron fist. It was not till developers could compete with each other for land almost anywhere accessible by automobile, that the classist racket that Karl Marx and Henry George famously protested, was ended.
Alan W. Evans in "The Handbook of Regional and Urban Economics Volume 3" discusses Planning in London going back centuries.
Unfortunately it is not online without payment of a subscription:
http://econpapers.repec.org/bookchap/eeereghes/3.htm
And Paris is mostly the work of one Baron Georges-Eugene Haussman in the time of Napoleon III.
Maybe partially true for London but central Paris was most definitely planned. See http://en.wikipedia.org/wiki/Haussmann's_renovation_of_Paris
Baron Hausmann supervised the redesign of Paris between 1853 and 1870.
"The project encompassed all aspects of urban planning, both in the centre of Paris and in the surrounding districts: streets and boulevards, regulations imposed on facades of buildings, public parks, sewers and water works, city facilities, and public monuments."
Obviously with a king there was no consultation of the masses but it is incorrect to say the form of Paris just happened.
Well I didn't say it just happened. Nothing ever does. I was merely pointing out the irony that the urban planning of the type we have today was most certainly not responsible for the beauty of Paris or London, in direct contradiction to Mark McGuniess' own comment. Of course those coments are taken out of context so they may not be what he was meaning anyway.
Heatley..."“Clearly we’ve got new developments coming on stream, and we believe that supply will help meet demand and therefore drive down rental and house prices. That’s what our primary objective is,”"...BS
The Primary Objective from the end of 08 has been to do exactly what the bank bosses said shall be done...protect the value of properties...save the bubble prices....or risk bank failures.
Heatley is talking rubbish.
Chch has the govt stuck firmly in a hole of its own making...the banks rule the financial polices and as a consequence their interest is the bubble valuations...they see no value in cheaper housing that deflates the bubble...so Heatley can blah blah blah until he's blue in the chops...there will be no cheap rentals and no cheap land and no cheap newbuilds.
What is happening amounts to an exodus of capital and those able to move out. The smarter and cashed up are leaving for better futures in rural townships..they can get good solid older homes on larger sections and walk to the shops, the dentist, the doctor, the chemist, whatever.
Houston- Privatised Politics:
Since the late 1950s when the '8F' group began to die off and the presence of more multi-national corporations began to diversify the composition of the city's elite, the Houston Chamber of Commerce gradually took over and expanded the role of the 8F group . Unlike the 8F group, which was small, private, and informal, the Chamber has a large budget, professional staff, and 'a structure and membership that prevent undue reliance on the skills of any one individual' ." It draws its leaders from the chief executive officers of the largest and most influential corporations in the city . It draws its membership and participants for its dozens of planning committees from the private, public, and academic sectors . It is a much more public and obvious form of business-oriented planning than that of the 8F group . Its philosophy, however, is the same, to protect a massive investment, stimulate even greater ones, and, in the process, build Houston to their own specifications, with as little interference from the public, and as much help from city hall, as possible' ."They do so through frequent interchanges of Chamber personnel with city hall, social contacts and informal meetings, co-optation of potential opponents, propaganda dissemination, provision of research findings and plans to policy makers, and intensive lobbying . What is most impressive about the Chamber of Commerce is the degree of influence and support it had in the city, at least through the early 1980s . Its agenda was the one that was put into effect . It was supported by professionals throughout the city, whether in the media, the public sector, or the corporations . The Chamber successfully encouraged a conception that its objectives were identical with those of the public interest . On a day to day basis until the election in 1980 of Mayor Whitmire, there was no political body in Houston that came close to matching the power of the Chamber in areas where the Chamber sought to have influence .30 Except for two poorly planned referenda, one on zoning in 1962 and one on mass transit in 1983, both of which were defeated by voters, the primary elements of the policy agenda of the Chamber have been adopted in Houston for over a generation .
The implications for urban policy formation in Houston are clear . As long as planning and policymaking in Houston remained initiated by private sector groups and therefore removed from public debate and discussion and as long as electoral politics in Houston remained a low-conflict, consensus style politics dependent on elite support, then most people in the city, and especially those outside the private halls of power, had little access to planning and policy decisions affecting them and the City- 31
http://www.angelfire.com/tx5/cven04/Fisher-Urban%20Policy%20in%20Houston.pdf
[interesting how Chch residents were asked about their prefered urban plan but not allowed to discuss how many people should be allowed to move form outside and into NZ- a goal favouring business let in by the left who detest "anti immigration feeling"
http://www.greens.org.nz/press-releases/greens-counter-peters-welcoming-immigration-policy ]
Houston critised for lack of parks:
The national standard is that we all should live within a quarter mile of a park, close enough to walk. And while 91 percent of The Woodlands lives that close, just 24 percent of the rest of Montgomery County does, 30 percent in Harris County and 35 percent in Fort Bend County. And the report shows it's not getting much better for parks or just undeveloped tree-covered land.
Looking at tree cover, whch is important to improve air quality and health, the study shows since 2000 the Houston region lost almost 700 square miles of tree cover.
http://abclocal.go.com/ktrk/story?section=news/local&id=7229337
Houston swallows country town
http://www.chron.com/business/real-estate/article/Tiny-town-of-Fulshear-gets-ready-as-Houston-1778509.php
Highest temperature in U.S recorded in Texas, linked to climate change. Rivers will dry.
http://www.mysanantonio.com/living_green_sa/article/Climate-change-made-the-drought-worse-scientists-3381513.php
One of few remaining tall-grass prairies falls to Houstons third outerbelt.
http://www.mysanantonio.com/living_green_sa/article/Climate-change-made-the-drought-worse-scientists-3381513.php
Oh, the hysteria......!
Why on earth do so many (utterly masochistic?) people move to Houston, seeing "private sector" covenant based planning etc is so dreadful, and what is more, the same people reject in the decadal referendums, adopting "publicly" administered zoning?
Read Owen McShane, "The Star City of the Lone Star State":
http://www.rmastudies.org.nz/library/56-columns/185-331houstogap
Well if thats where the jobs are.....and since it seems in the USA such migrations are normal/expected....Lets assume everywhere else is also a mess in terms of non-planning, in effect they cancel each other out is a decision process......lets see I could live in a hell hole and not have a job, or i could live in a hell hole with a job......I would suggest most rational ppl would go for the latter...
regards
This link is a bit old (1980's)
Financing infrastructure Houston style:
Costs of Boomtown Growth
While Houston has experienced dramatic growth since the 1920s and especially since World War II,
there have been serious side effects which, given the continuous growth, laissez-faire ideology, and business domination of public policy, have gone largely ignored and unattended . Urban problems have tended to be seen as private problems .
Many of Houston's problems result from or are complicated by the laissez-faire ideology which, one
report concluded, `has restricted the growth of city government and has kept Houston essentially a low-service city' . 32 Because the Department of Public Works, for example, lacks adequate resources to address serious street and traffic problems, local street installation and repair have been a private matter . In Houston
“the rules governing the installation or reconstruction of local streets are fairly straightforward and essentially put the decision-making burden on nongovernmental actors . Thus, DPW officials assume that persons who want street improvements can get them, and those who do not have improved streets must not want them .33”
http://www.angelfire.com/tx5/cven04/Fisher-Urban%20Policy%20in%20Houston.pdf
Well I would say at least the left have a brain unlike the libertarian half. Health being a huge budget area, followed by education another huge budget area deliver as good or better outcomes with half the costs in Dollar terms or % of GDP...
But then you compare to a communist system when in fact none has ever existed in reality....and say oh look NZ's socialist system will fail or is bad because teh make believe communist one will.
Pretty damning of private capabilities when the bill is twice as large and the outcome no better and actually worse.
Or maybe we can look at the Natioanal grid that the UK and NZ have. The USA has no such system....so OK it maybe a bit cheaper but seems to lack resiliancy and quality of power delivered......so there is a choice....there to be made....NZ has the better backbone to give businesses confidence that power will be there...
regards
"Socialising" the costs of "free" services for all, is simply certain to end in fiscal disaster. This is self evident to any except the socialist mind.
Communism as per the former USSR is simply the furthest progression of this principle, and the best illustration of its consequences. When everything is free, and the costs socialised, you ultimately run out of everything.
The "costs of infrastructure" crisis today is mostly due to this phenomenon. Patrick Troy in "The Perils of Urban Consolidation" (1996) points out that our growing inability to pay for things is nothing to do with "growth" and everything to do with lack of "pricing" and total absence of incentives for efficient behavior (eg re water consumption and recycling).
In terms of efficiency of urban form, regulated high density with unpriced infrastructure use, is the least efficient, and "unconstrained" with priced infrastructure use, is the most efficient. The pricing of infrastructure use itself prevents inefficiency, period - INCLUDING "urban sprawl" if this is inefficient (while allowing "urban sprawl" if and when it IS efficient).
The simple reason the US health system costs twice as much as ours, is that it provides approximately twice as much actual services (operations, scans, procedures, treatment, etc); pays out exponentially more in damages when required; practices "defensive medicine" to try and avoid being sued; provides exponentially more care for the elderly (whose life expectancies are the longest in the world); pays tax; still treats "free riders"; and develops most of the world's new medicines, treatments, and medical technology.
It is ridiculous that the USA does not reform the RIGHT things that would actually lower system COST - there is not a chance that "Obamacare" will do this. Remember I predicted this.
From Wikipedia:
"Life expectancy at birth in the USA is 50th in the world, below most developed nations and some developing nations. It is below the average life expectancy for the European Union.[11][12] The World Health Organization (WHO), in 2000, ranked the U.S. health care system as the highest in cost, first in responsiveness, 37th in overall performance, and 72nd by overall level of health (among 191 member nations included in the study).[13][14] The Commonwealth Fund ranked the United States last in the quality of health care among similar countries,[15] and notes U.S. care costs the most.[16]
The USA is the only wealthy, industrialized nation that does not ensure that all citizens have coverage (i.e., some kind of private or public health insurance).[17] In 2004, the Institute of Medicine report observed "lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States."[17] while a 2009 Harvard study estimated that 44,800 excess deaths occurred annually due to lack of health insurance.[18]"
Ah, the libertarian ideal....
Nothing you say addresses what I pointed out are the underlying reasons in the USA, for the problem:
The simple reason the US health system costs twice as much as ours, is that it provides approximately twice as much actual services (operations, scans, procedures, treatment, etc); pays out exponentially more in damages when required; practices "defensive medicine" to try and avoid being sued; provides exponentially more care for the elderly (whose life expectancies are the longest in the world); pays tax; still treats "free riders"; and develops most of the world's new medicines, treatments, and medical technology.
It is ridiculous that the USA does not reform the RIGHT things that would actually lower system COST - there is not a chance that "Obamacare" will do this. Remember I predicted this.
Nothing I said, "justified" the US system. It was intended as a critique of what is really wrong with it. But nothing about the US system, "justifies" the way we do things in NZ. Private provision of the actual procedures, government "backup" insurance provision, and limitations on insurer and procedure providers liability and duty, is the happy medium. You lefties obviously haven't had any disillusioning experiences with a single payer system, as many people, myself included, have. Or if you have, I suppose you say it's all the fault of greedy people who won't pay enough tax so the dear saintly socialists could afford to treat me........
You talk absolute crap....the delusion is in your libertarian mind...just listen to the US companies like Microsoft who are complaining of the costs of privitised healthcare for their staff.....The fact that the impact on US GDP is twice that of NZ's and the UK's systems...or that private healthcare in the US is growing at 7% per annum, that means in 10 years that impact on GDP will be twice what it is now...so 36% of of GDP spent on health? I dont think so....
Lets see we talked about efficiency, where is the efficiency in doing twice as many scans to protect yourself what a waste of resources. the US system catually has a huge administration oerhead, unless you are or until you are bankrupt you get no free care....
You are in fantasy land again, the total life expectancy is lower in the USA than NZ....that should say reams of which is the better system. What you are attempting to do again is cherry pick selective data to justify a dubious point of view....you really should grow up.
obamacare is a joke....its a useless non-solution to a terminal problem that needs fixing properly.....you are not predicting anything that isnt obvious accept to a retard.
We are running out of everything, and thats in the quasi-capitalist world you "love", simple...
regards
OH, I agree the private health system here at the very least is just OTT.....$350+ an hour .....sorry but I dont see how many can afford that I certainly cant.
So if you ar elucky you get put on a waiting queue, if the GP will put you on it....of course that's a great way to keep the queues down.....dont put ppl on them.
regards
Steven, nothing you say actually addresses any of my points about what is wrong with the US system. I did not say it was efficient and I did not say I approved of it, far from it, I was criticizing it. However, you would have to be ideologically blind to believe our system is superior, you obviously have never been given years of bum steer from it.
I regard State monopoly single payer systems as possibly the most successful "insurance" scam that ever existed, nothing in the private sector comes remotely close. Our system exists on the basis of withholding and denial of treatment for most conditions, most of the time. Figures like hip replacements are like the sop to the public to conceal the massive withholding of care and treatment for most conditions people are unlucky enough to contract.
The system in the USA works the opposite way; provision is private, but laws and regulations penalise the withholding of treatment and care of all and any kind, hence the system is expensive, surprise, surprise. The more expensive the mandates make the system, of course the more people cannot afford to insure under that system, surprise, surprise, again.
The amount of money the US system expends on the elderly, rises exponentially with age group - something like 25% of their entire system expense is going on the "over 70's". But in single payer socialised systems, of course the elderly are expected to be happy with palliative care as they deteriorate to their inevitable death. US life expectancy rates are low in the aggregate due to bad outcomes at low ages in the underclass, but if you're 70 in the USA and insured, your life expectancy is better than 70 year olds anywhere else.
Lets look at outcomes, NZers live longer....or the lists of deaths in USA that are due to no care....18000+? per year...mind you not a big % in term sof toatl population, but still.
Or Southern Cross polling its members on what to do about costs, eg younger subsidize the older.....in which case the younger should get out and go elsewhere.
So ours is superior, yes based on my and my families experiences for the last 30+ years. Urgent and critical care has been free and first rate...Now yes routine stuff is an issue as we are simply rationing, its how we control the costs because the alternative isnt sustainable.
Ah yes US, 70 and insured, but then we should be able to compare like with like, ie affording private health insurance indicates well off in NZ so good food and living conditions for decades plus say Southern Cross....so again cherry picking.....
As an aside my parents looked at the charges for say hips and concluded that they would be paying the equiv per year for a hip......so its cheaper to bank the money and reply on the emergency care that is first class, which NZ's private system doesnt do anyway.
NB I also worked in the UK and NZ public health systems for over 10 years....and now quite a few doctors.....I wouldnt go near a private hospital based on their advice and my families experience...now if I could get accelerated care in a public hospital OK, worth it IMHO.
Underclass, so that pretty much sums up lack of an affordable system that NZ's system is meeting.........it is afterall total outcome that matters not some chery picked numbers.
regards
"..........Now yes routine stuff is an issue as we are simply rationing, its how we control the costs because the alternative isnt sustainable........"
And that is a significant cause of the difference in costs between here and the USA.
And "Obamacare" does precisely NOTHING to address this.
Actually, no...looking at the reports I see the significant cost differences are a) administration costs which in the USA are horrendious and b) actual pharmacutical items....c) un-neceassary proceedures and legal issues. Where here in NZ they are controlled based on ACC, and effectiveness ie no to "me too drugs" and ones with significant side effects and poor outcomes are not funded or are limited....not that there is the difference in rationing...v no rationing....
Then there are the growing number of americans who have been paying for private insurance only to find that they are not covered....as there is some moneor get out found....where our systems doesnt see that....
Obamacare appears to be more like compulsory payments to a govn granted monopoly, that however seems to be a sop to the limitations of the US political system. ....Meanwhile those costs are out of control....when its already absorbing 18% of GDP and doubling every decade it obviously cant go on.
The problem is the NZ building code. There is an assumption that with every ‘up’ grade of the code that it is better than the last, not so. One example is that in the CHCH earthquakes, it was many of the older wooden residential buildings that stood up to the shakes far better than the more modern homes. This was further highlighted by the two heavy snowfalls CHCH had last winter, and over 120 homes had major damage by concrete tiles moving under the snow load and letting snow into the roof cavity which on melting caused major water damage. All these houses where less than 6 years old. Considering our climate is very mild compared to most other countries, and yet we do share very similar characteristics with others eg pacific rim of fire, we should be looking at best practice elsewhere rather than the great experiment we have got going on. The Canadian British Columbian code is seen as one of the best, if not the best, wooden building codes in the world. The Japanese have already recognized it as such and over 500 new family homes have already been sent post their disaster and many more are on the way, while in CHCH, they are still wondering how much extra needs to go into the foundations. Remember, this is a part of the country where they could build unreinforced concrete slabs. Every new home in NZ should be built to a better standard in structural integrity, weather tightness and insulation, and very little extra in materials is needed to achieve this. If we spent slightly more on the capital side of building, we would lower our operational costs, have a healthier family (less trips to the doctor and less spent on Govt. healthcare), less spent on electricity etc.
I asked the DBH what best practise country wooden building codes had they looked at with regard to improving the NZ code post-earthquake. Their response was “why should we do that. We have the same performance standard as they do.” When I asked what they meant by that, they said ‘We all agree that a roof shouldn’t leak for example.” I asked “how come we have leaky homes and they don’t.” DBH said “we just have a different interpretation on how we achieve that performance standard.” Yet not once was he prepared to concede that it meant our performance standard was incorrect.
The system we use in NZ means we pay far too much in development levies, too much in compliance costs, too much in council bureaucracy (this has nothing to do with the Building Compliance Officers), too many restrictive zoning policies, poor infrastructure financing options, all which add too much to the land value, which means we have far less to spend where it should be, on a better standard of housing.
Robbu you are correct in the unenviable task the Building Control Officers have in trying to check compliance, you have to police a system, which in its self is faulty.
Not only is housing far more affordable in countries and states that have the less restrictive zoning etc, but they are better healthier homes.
Dale Smith - you seem to associate 'recent' with a particular construction technique. There are modern buildings of all kinds, which have survived, and would. For instance, at 11kg/sq.m (finished wall/roof) I don't think mine has an inertia/acceration issue.
You can expect to pay more (relative to incomes) for services from now on, whether via levies or not. Oil is entirely to blame for that.
Much of the extra regulation is a result of folk thinking of their houses as 'investments', and wanting the 'value' to be guaranteed. Actually, a house is like any other piece of machinery/structure, and starts to deteriorate from day one. Houses should actually get cheaper per year of age, to reflect this. The fact that they don't, is a ponzi waiting to sh....t itself. The fact that the 'values' actually increase, just compounds that. Many of your 'restrictive policies' are actually developer-driven. They can get more for a snobby area, and they are guaranteed snobbery if they stipulate a big minimum size. Those bigger houses require more inspections, are more complex, and statistically must have more failures over time.
DBH did indeed go into 'arse-cover' mode, having let the horse bolt in their previous (BIA) life. Driven there by an entirely predictable set of circumstances.....collective arrogance at all levels would have fallen at some other hurdle, if not leaky homes.
I can still build a better-insulated, less energy-requiring, no leak, comfortable house, for $500/sq.m). And have it erected in a week. Just a thought....
Good point on the "snobbery"....I visited several houses that were the size I wanted or a bit bigger and they were shoved on a tiny site on a "development" with covenants stipulating complex roofs for instance to "hold their value" that just had to be future issues....then of course there are the internal balconies.....I walked away....
regards
Curious as why there is so much vacant land in places like Gulf Harbour and out west in Swanson sitting unsold even though the original developers have gone bust and the prices are often less than half their original price. Gulf Harbour in particular is only 40min off peak from the city (admittedly a bottleneck at peak) but a very pleasant spot even if some of the original housing is a bit tasteless. Why don't people want 5-600m2 sections for $120-130,000? If thousands of sections were developed on the outskirts of Auckland would people even want them?
Go up north and land prices in the whole of Northland seem to be 50% or less than a few years ago. Subdivisions with all the services ready but no buyers. $50,000 sections in central Keri Keri or $30,000 in Kaitaia.
I agree but my point is that land is available already on the outskirts of Auckland that is "relatively" inexpensive but no one wants it. If you rezoned land all the way between Auckland and Hamilton to the south and Whangarei to the north and released thousands of cheap sections would people want them and at what price. $50,000? $75,000
Are we so urbanised now that no one wants to move too far from the city lights, even if its only 45 minutes?
Well as Hugh (I think?) points out and certainly I do there is no competition in selling plots as its arguable that the council regs restrict the land available.
BUT If you removed the restrictions then it might cause prices to drop, but that is not certain. As if the land owners were "sensible" they hold them up by artificially restricting the amount they sell at once....cartel type behaviour...you just swap who has the keys.
So my thought on that price is its still way to high, its just not obscenely high with 50% off....I mean as farming land what was 500m2 worth? a few K? and now its worth (or was) $260k? plain stupid/grasping IMHO.
regards
And how exactly would this "cartel" form, let alone keep from falling apart? You are talking about literally thousands of landowners; are they all going to go to secret meetings where they plot to keep the price of land high?
Am I really meant to believe that Auckland is a more attractive international destination for immigrants than, say, Dallas or Houston? Our land prices would make it seem so, but this is merely an illusion.
Well there are two possible ways, if you have only a few selling then direct colusion, dunno about you but in my home town (and my wife's) the farmers mostly went to school together and drink at the same pub. The next is a landowner taking "advice" off an estate agent on the "fair value' of the section.....
Would these fall apart? well probably....given time....
I think you need to move past its the land price, its isnt just that. While yes i can see that seems over the top its only part of the cost. Materials and tools are way over the cost of the USA yet are made in the same factory in china. Having a relative build a house 3 years ago and watching them having to pay $35 an hour for some "builders" to do shoddy work with no guarantee they would be on site every day for the 8 hours a day they claimed....was an eye opener....
There are certianly ppl I know at home (UK) who decided not to come here in the last few years due to NZ housing costs....yet South Africans seem to come here readily....(lets face it living in a walled enclave with a gun under the pillow does sound like much fun so why are we surprised).
I wouldnt live in Houston/USA myself...I moved to NZ for quality of life that was lacking in London, so I guess ppl move for different reasons.
regards
Well if you looked at a starter home I would assume that we would be looking at a max of $300k (3 times a double income)......So say $250k to build? means that the all up price of the section incl services should not be more than $50k. Yet I think someone mentioned the councils charges are way above that $50k for the section alone?.....it just doesnt work....even if you use municipal bonds all you are really doing is can kicking those costs elsewhere....yep, something just does not add up.
If you accept that we are in a bubble and property is grossly over-valued by 50% yet we seem to see that new cant be built for the present inflated value let alone 50% less then.....ouch.
Then we see that in effect that house should be $600k, but no NZer can afford that........or the flip side is why are houses in OZ and the USA so much cheaper? is the building industry ripping us off? yes I suspect partially so....when tools are significantly cheaper in the USA you just have to wonder whats going on.
regards
If a government was of a mind to it could buy up large tracts of land currently zoned rural at rural prices, rezone residential, develop services and sell back at cost. The land bankers on the fringes would be decimated and perhaps land values would reset from the outside in rather than from the overly inflated centre out. Would it really matter if a narrow corridor of rural land either side of SH1 became residential/light commercial as long as the appropriate facilities and public transport were put in place. I always used to throw off at Botany but its actually a very self contained town centre with excellent transport and ammenities and the high density townhouse development I've visited(about 150 homes) is well laid out, spacious and quiet. Not everyone's cup of tea but very livable.
wtf - a Govt could, but the screams from those who would profit individually (a few here, methinks!) would be audible. Fed Farmers and the anti-nanny-state types would have a fit.
It wouldn't alter the big picture, though. As a nation, we're already borrowing - you're suggesting we reduce our productive land, even when we're not in the black to start with? Prices will fall; nothing surer. 30-50% is my guess - but it won't help those who have had their incomes casualised, nor will it help those landlords who rely on those casualised incomes to pay rent.
Ribbon development isn't cost (or energy) effective. A square is the cheapest grid-serviced shape, a circle the cheapest theoretically-serviced (but messier to slice up).
Public transport? Ask for whom, how far. Most folk don't realise that most of the activity in a CBD, is parasitic (it's income piggy-backs on something real, elsewhere). The real underwrite is several times oversubscribed, and at some point, the parasitic (this site, for instance, needs folk to be interested in housing/interest rates, which in turn requires the housing to exist) activities will drop away.
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