By Bernard Hickey
Housing Minister Nick Smith has warned the Auckland Council that the Government retains the power to over-ride the Auckland Council and take over the power to approve new Special Housing Areas (SHAs) directly if the Council overplays its hand in demands for new Government funds for public transport.
The warning came after the Auckland Council suspended requests for three SHAs to build thousands of homes in John Key's electorate near Huapai in North West Auckland. The Council argued it could not afford the transport and other infrastructure to support the greenfields developments.
Deputy Mayor Penny Hulse defended the Council's decision to block the new greenfields SHAs, saying the Council needed further funding for local transport in the area, including plans for a busway on the North West Motorway.
"This isn't a major stoush with Government, but we're saying let's look very carefully at the funding that's needed to build the North West Bus Way and to provide public transport to this area," Hulse told Radio New Zealand.
She said residents in West Auckland had said further consideration was needed to sort out congestion on the North Western Motorway "to make sure the people already living there aren't hugely impacted by thousands more houses."
"This is not saying there will never be any extra development there. It's just not in the short term, so we need to get around the table with the Government and work out how we work through this."
Hulse said the Council was working with the Government on a Transport Accord for Auckland. "That's probably the area where there's the most tension," she said, pointing to the Government's rejection of the Council's ideas for a Motorway toll or a fuel tax and its reluctance to accept the Council's plan for a NZ$100/ratepayer/year transport levy.
"The relationship between the Government and the Council has been quite good on the Housing Accord, and it's quite appropriate for us on Council's behalf to stand our corner and ground for the people of Auckland, which is what we're doing on this."
Smith warns of intervention
Meanwhile in response, Smith told reporters in Parliament the Government had been working with the Council on the infrastructure issues.
"There's always going to be some tension and some argy-bargy around those costs. The Council has the capacity to recover those through the development contributions and, of course, for every 300 new houses built in Auckland the Council gets a revenue stream of NZ$1 million a year in rates," Smith said.
Smith rejected the idea that the Council's suspension of new housing areas for North West Auckland was a road block for the Government's completely supply-driven focus for solving Auckland house price inflation.
Smith said the Government was investing record amounts in infrastructure, including Transport.
"There's always a tension with other parts of New Zealand that also want to ensure that they get their fair slice of that money. And then, of course, there's the capacity issues. We are building sufficient houses in Auckland now, about double the number that was at the bottom of the GFC, that there are real pressures coming on in the skills area. I am expecting to see some of the building capacity shift from Christchurch to meet some of that growth," he said.
'Not held to ransom'
Asked if the Government was being held to ransom by the Auckland Council, Smith said: "I would remind you that the government also has the power to create special housing areas without the approval of the Auckland Council if they choose to overplay their cards and demands for money."
"The legislation makes plain that the government's strong preference is to work in cooperation with the Auckland Council and to work on these issues together. Those arrangements are still robust but ultimately, if the Auckland Council overplays its cards, the legislation does make provision for the government to create SHAs without the approval of the Council," he said.
Smith was then asked how far away from full intervention the Government was: "I remain very confident that the relationship's robust and that we are working these issues through. The questions that have been raised today were raised privately at our accord meeting last month. We've got our officials beavering away on them. I remain confident that we will not have to use the over-ride powers for creating special housing areas, but I simply note that they are there in the event that the Council tries to overplay its hand in trying to gain additional resources for government for meeting some of those infrastructure challenges."
Political reaction
Labour Housing Spokesman Phil Twyford said the Government's failure to fund infrastructure was now dumping massive costs on Auckland ratepayers.
“If the Government does not pay its fair share, that burden either falls on the ratepayer or developments get built without the infrastructure they need," Twyford said.
“Two hundred thousand extra people, 80,000 new dwellings and 60,000 extra jobs are planned for Auckland’s North West, but the Government hasn’t thought about how these people are going to get to work," he said.
“They are splattering Special Housing Areas around the city -- 84 in Auckland so far -- without thinking about what it means for transport infrastructure," he said.
“The Government should be investing in a dedicated busway on SH16 like the successful one on the North Shore which currently carries the equivalent of three lanes of traffic into the city every morning. But having blown the national transport budget on wasteful projects, the Government has no money left to service the regions or Auckland's growth."
(Updated with photo and political reaction)
26 Comments
Just W -T- H does Penny Hulse think she is ?
Does she not realise that we have a major housing crisis , with thousands of new migrants arriving in Auckland ?
A public servant doing her utmost to stymie the orderly development of Auckland , and exacerbate an already serious problem .
She needs to go , before she does any more damage .
@ JIMBOJONES , please go a take a look at Westgate , there is a whole new town like ALBANY being built there .
I understand that about 20,000 people will be employed there over the next 5 years in retail and services
We need to get out of this mind-set where Auckland CBD is the only focal commercial hub. Its not and does not have a monopoly on being the only commercial hub in Auckland
The CBD is a bloody disaster , its congested , the streets are too narrow , parking is too expensive , traffic wardens are too aggressive , and worst of all the traffic lights are unsynchronised further causing congestion .
Its just unpleasant from a business point of view
I refuse to go into the CBD unless I need to be there for an absolute unavoidable necessity , and I don't even go there over weekends .
It's quite remarkable, given the congestion on the north western, and the massive success of the Northern Busway, that the northwestern hasn't been built already, and that the widening of SH16 has not included a busway. The return on investment would be much larger than the Roads of National Significance we're building. Auckland council needs to bring pressure on government to fund our transport infrastructure.
This is so typical, Government blaming the Council and they blame the Government. While all this nonsense continues, no one does anything and prices keep rising. Had a gutfull, cannot believe my taxes pay for these bureaucrats who spend their time shuffling paper and pointing fingers, there is no responsibility and accountability. If only there was a stronger opposition to keep the government honest, the next election will be very interesting, I think people are over over the excuses and are looking for action. Atleast the Aussies got there, all we get here is more denials and the blame game.
What blows my mind and makes me depressed is the number of people who are ok with it (the tax level for wastage) and think we should tax more things.
recently just got told of another Elfin Safety craziness - farmer being prosecuted because while he had helmets for the staff to use on the motorbikes... they were kept on the back wall of the motorbike shed, not stored on the motorbikes themselves. He got issued an infringement notice! I wonder what you're supposed to do with someone elses helmet, sitting on the motorbike you need to use... or is elfin safety think it's better to wear each other helmets...ewww.
Private land.
Private business.
Personal beings.
Personal property.
There are no legal fundamentals which gives the Government the jurisdiction to impose that kind of law...only the stupidity of the flock mind. Just like the GDP ... have you never questioned what makes it go up and down?
The government has to go . It is showing no leadership on the issue.
Yes, we have low interest rates and an undersupply of housing but the government continues to turn a blind eye to managing the inward migration rate. Building new houses will simply take too long.
Also the governments, AuckCCs + AT's budgets are being stretched by trying to keep up with the capital spending on infrastructure required given the inward migration rate - most of which goes to Auckland.
Give the RBNZ the mandate to manage the 12 month rolling migration rate as a macroprudential tool and get the politicians out of it.
A lower & sustainable migration rate will also allow the dollar to drop (less inflation and less gdp growth).
What we want is high gdp/capita not higher gdp.
It is the Council alone who is already spending our money on the tunnel. if it were not for the tunnel there would be oodles of money for bus lanes all over the show...
Wonder why Mr Brown is not fronting this thing. Maybe he's standing aside for Hulse to take over.
Eeeeeek. This is getting absolutely ridiculous now. Labour council vs National govt. Its coming to a head guys....
did you not see the numerous studies that showed taking the buslane approach would require banning cars from most roads into the CBD, as all roadspace would be needed for busses? Don't you think it's better to put in a solution that give people the option of train, buss, or car?
This government has gone beyond ridiculous, they never learn, if they keep flat out refusing to address the demand side, nothing will change prices will keep going stupidly high, and eventually there will be a massive crash.
There should be a limit on how many property investors can be in a government, these guys just seem to want to push prices higher, no matter what the consequences.
It's a laugh watching Brown, Hulse, Smith, Key and English running around in their red noses and oversize shoes hitting each other over the head with rubber balloons.
What's not a laugh is knowing that hundreds of thousands of New Zealanders will have their lives permanently blighted by poor and expensive housing. Kids with Tb and rheumatic fever, kids with interrupted education that amounts to no education - they will be the lasting legacy of these clowns.
Smith has obviously been told by the hair puller to get out and about with the supply message. Faithful plodder is doing his best but he knows he is pushing a pile uphill with a pointy stick. He seems perpetually embarrassed by the whole show. The answer to the most casual observer is crimping demand and its not just housing. Traffic, employment, health, education - its all going to get swamped by Key's Asiafuc@ation of AKL. Has he been bought off - how does it make sense?
It's a price setter environment, it can't be directly crimped (costs get passed start to NZ consumers, usually with extra margin on top!). Worse that just results in NZers paying more for the investments.
They can't increase NZ investmenter AND crimp supply. Protectionism does really work, meaning the only real option is to make sure the big money is paying its way - imagine the oil countries. The stuff costs them nothing to have under the ground - but there is foreign demand for it. so they set the price to the foreign purchasers at "market will bear" top price. This makes all those countries incredibly wealthy. ... Not because the resource money is stolen by government but because the money goes into private citizens hands and they are encouraged to (a) spend and enjoy it, rather than (b) sit on it and try and get phantom returns for it to make ends meet.
By increasing the spending, the get larger wages and demand lifts.... that makes them wealthy.
Yes you get "inflation"! because the economy grows but wages can keep up because sales keeps up, with low losses/leakage to taxation.
but by pushing everything into investments just to get by then who is spending? The money gets lent to businesses but the business have to make money in sales, but everyone is investing (in houses) and hardly anyone is buying. The housing creates a demand, but a nice house gives little real return to the economy over a middling to average house but absorbs a lot more citizens wealth.
What happens if your house market is overblown? Rents get high (in real terms ie vs wages; not in yield terms) and that reduces the disposable income as everyone is paying rent, or paying interest for years on huge mortgages.
One thing they used to say when I was doing Amway. Everyone uses soap. Even in a downturn. And consumables let to repeat sales. that is why the house is a good investment. Everyone and their family need a place to live (preferrably not a costly one). So even in a downturn people are going to be buying or renting. And it's consumable, they have to do it every day. But it's a survival service - it is the lowest investment, which is why it such an issue for me.... If your economies best return is in residental housing, then what does that say for your economy? It's completely tanked!! People need to have wages and currency available to SPEND, SPENDING the money (as opposed to hoarding) creates business demand, which makes returns on housing look bad so the heat will shift to more profitable investments.... but if you clamp "inflation" (aka economic development) to 1-3% then only investments that operate well in the 1-3% are going to sure in the long term. Anything more profitable will create extra wages...lifting inflation... creating investment money which will hunt for good returns. If the only viable long term investment is houses that is where the money will go,. and demand will push up rents...killing the economy. butterfly wing of feedback.
I wouldn't say the government is entirely doing nothing. Your tax dollars are being put to work to improve supply...
http://www.stuff.co.nz/auckland/local-news/east-bays-courier/63507034/h…
You can never be able to please everyone! While there are countless discussions about how expensive Auckland is, lately a number of online petitions have popped up asking people to sign up against major housing development projects around South and North of Auckland.. Typical NIMBY.
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