By Bernard Hickey
The Government's plans to sell up to 500 ha of Auckland land to housing developers may get bogged down in court action, further frustrating its strategy of addressing Auckland's housing crisis by increasing housing supply.
Ngati Whatua and Waikato-Tainui announced late on Sunday they had employed high powered lawyers to challenge the Government's strategy of redesignating NZTA and Education Ministry land as Crown land under the 1955 Housing Act, which is not covered by Treaty of Waitangi provisions forcing the Crown to give iwi 'right of first refusal' when Crown land is sold.
Housing and Building Minister Nick Smith met with iwi representatives earlier on Sunday in Auckland to discuss the issue of whether the land should be offered first to iwi and said immediately afterwards that court action was not raised.
But those hopes were dashed when Ngati Whatua's Ngarimu Blair and Waikato Tainu's Tukoroirangi Morgan issued a joint statement late last night saying they had engaged Russell McVeagh to represent them in court action.
They said they wanted to make a joint approach to the High Court with the Crown to seek clarification on the Government's plans to redesignate NZTA and Education land as housing land under the Housing Act 1955, under which the Treaty provisions don't apply.
"Our major Treaty settlement Acts provide us with a right of first refusal when the government plans to privatise land, and these rights will endure well into the 22nd century," they said.
Smith told Morning Report the Government had yet to decide whether to join the iwi approach to the High Court.
"I only heard late last night. When we had the hui yesterday with all of the 13 iwi across Tamaki Makaurau there was no talk of legal action at all and so it's taken me a little bit by surprise. We'll need to get some advice before we make that decision," Smith said.
"We need to resolve this issue at pace. This land has sat vacant in some cases for decades. I don't think it's right for New Zealand or for Maori or for Auckland to have public land sitting vacant when we have such a high housing need," he said.
Maori Party upset over tactic
Smith's work-around to avoid the Treaty provisions has already proven contentious with National's support partner, the Maori Party, which criticised the move as breaching the good faith provisions of the Treaty.
"In effect, the process initiated by the Housing Minister circumvents the requirement to trigger the right of first refusal (RFR) over the purchase of former public works land in Auckland," Maori Party co-leader Marama Fox said on June 3.
"It is antithesis to good faith obligations on the part of the Crown to on the one hand offer apologies and compensation to iwi through their Treaty settlements, and then completely ignore them when it is convenient to do so," Fox said, adding the Maori Party had asked the Government to 'please explain' under its Government support agreement.
"If the Crown is able to use other legislation to override the RFR this will potentially have significant implications for all settlements," she said.
'But we've done it before'
Smith has previously defended the work-around as one already used at Hobsonville and in Christchurch.
"If an area is declared under that (1955 Housing Act), then neither the first right of refusal or the normal 'offer back' provisions of the Public Works Act apply, so obviously the Government, just as it did with Hobsonville, is looking to use that Housing Act to enable these areas to be able to have housing on them without those mechanisms such as first right of refusal or the offer back being used," Smith said on June 3.
He said the 1955 Act method was also used by the Government to develop over 200 homes with Fletcher Building on the Awatea block in Christchurch.
"It's that model that the government is intending to use on some surplus land in Auckland," he said.
"We are not ruling out doing partnerships with iwi or with other groups through this process, but with the Housing Act 1955, we do not have a legal obligation under the first right of refusal where the government is intending to use those lands for houses," he said, adding there had already been some "confusion" with iwi in Auckland around the process.
'It's all turning to custard'
Labour Leader Andrew Little said the court action showed National’s Budget centrepiece "has turned to custard."
"It was clear from the start this plan was rushed and ill-conceived. If Nick Smith had done his homework on this and not tried to put together a sneaky deal to cut iwi out, he wouldn’t have gotten into this mess in the first place," Little said.
“First the Government wanted to build houses on cemeteries and substations. Then they promised to make 500 hectares available but 10 days later the Housing Minister could only identify 30 hectares," he said.
“Then it emerged one of the four land parcels being touting isn’t even owned by the Government so Nick Smith has no right to sell it to developers. And finally it was revealed local iwi Ngāti Whātua hadn’t been consulted. The Government needs to stop tinkering with rushed and piecemeal housing policies which will have little impact on skyrocketing Auckland house prices. If John Key really wants to address the housing crisis he needs to ban foreign speculators and undertake a mass government-backed building programme."
'Fairy godfathers for property developers'
Green Co-Leader Metiria Turei described the situation as a shambles and said the Government was cheating iwi and young Aucklanders who were desperate to buy their own homes.
“John Key, Nick Smith and Bill English are the fairy godfathers of property developers everywhere – they’re making all their dreams come true, at the expense of first-time home buyers," Turei said.
“The Government is skirting around its legal obligations in order to fast track the transfer of land to profit-hungry developers, some of whom may potentially be based offshore and all of whom will be keen to cash in on the sky-rocketing Auckland housing market," she said.
“Worst still, these very ‘lucky’ developers will be under no obligation to build the affordable housing Aucklanders desperately want. You can bet your bottom dollar they’re going to be hawking off most of the houses built on this land to the highest bidder, because this Government will let them do it."
(Updated with picture and comments from Andrew Little and Metiria Turei)
33 Comments
SELL?
Government plans to sell up to 500 ha of Auckland land to housing developers
Is that true?
I had the impression Govt was lending the land to developers, not selling it to developers.
The developer only has to hand over govt's "land share" out of the proceeds on the eventual sale of the developed house. Developer never buys the land at all
Can you please clarify?
Nick Smith has previously said the Auckland land will be sold using the existing Christchurch model where the land is lent to developers while they build and then paid for at market values at the time of the sale to the housing owner.
Under that model, the developers don't land bank or make profits from holding land during development, but also don't have to pay up front for land before development.
But the land is eventually sold.
cheers
Bernard
Neat if you are not a taxpayer.
We have no idea how the land will be valued when it comes time to sell to the developer. The market value of a square metre of land in a serviced section is higher than it was as raw land before development. So, take away the cost of siteworks, financial/development contributions, developer margin etc from the market price of a section and what's left (the land component) will still be greater than it was at the start.
If the government doesn't extract that higher amount then, by my rough calculations, the NZ taxpayer will be cheated out of around $1bn. Which, of course, will line the pockets of the developers who are taking next to no risk in this process at all.
Agreed, to ensure justice for all all privately owned land should be confiscated by the government and then on sold to any and all bidders. This will open up the housing stock to new buyers.
The only way to move forward is to have a level playing field for all. To do this everyone must be subject to confiscation without remuneration as was done to the Maori.
Awesome reply.
The diiference between the Maori version of Te Tiriti and the English version of the treaty, is that the crown would have first option to buy (Maori) as opposed to the crown was the only one that could buy (English).
The English version has mistakenly been the version of the treaty which has been adhered to, even thought the tribunal last year affirmed that the maori one was the correct one.
.
We all know what happened when you want to sell something, and you only have one buyer, right?
I think it's more than fair that Iwi have first right to refuse..
Most of the land under 'crown' control was obtained illegally.
Just so everyone is clear.
There is no blanket right for iwi to have first dibs on any Crown land that is disposed of anywhere in the country. In the cases where a Right of First refusal does exist it forms part of a package that settles a dispute between iwi and the Crown. The package usually includes a combo of cash, land, RFR, an apology, possibly co-management rights over important mountains, rivers, lakes and islands.
In the case of Ngai Tahu they only have rights on land the Crown had already acquired by Nov 1997. They have no rights over land acquired after the settlement date.
It's a poor country and we can't afford these ticket clippers. Time they stopped reaching for their lawyers and started building some houses. The mass of maori people would benefit much more if they did. But then this is only about the elite as it always has been.
On TV1 news last night Nick Smith stated that the Government was "doing everything humanly possible to address the housing crisis". Yeah Right everything except; limiting the right of foreigners buying up residential property in NZ (in many cases this could be done through reciprocal agreements), making sure anyone using property to provide a form of business income on profits made on anything other than the family home pay the full share of tax, and so on
When is the market saturated ? These foreign buyers seem to have unlimited funds. Will Auckland house prices ever get cheap enough for first home buyers to get into the market? Are lower wage workers to be excluded from living anywhere but on the outskirts putting more pressure on the transport system?
If John Key really wants to address the housing crisis he needs to ban foreign speculators and undertake a mass government-backed building programme.
Yes, a building programme of the redevelopment of our state housing stock. Rather than sell off all the crap to private interests (which means it stays in the rental market in the appalling state it is in), we should just progressively bulldoze it and re-build these as state-only stock. It's not like we are going to need less state housing in the future based on the fact that we have current waiting lists everywhere. This fixation with trying to enlist private sector involvement at every turn is just a waste of precious time during a period of crisis, which is only going to worsen in the near term.
What we need is a government confident in their own ability to govern and deliver.
Why do you need a govt backed building programme, If there is money in it the private sector would be faster and build the houses people want.
Govt would only build cheap boxes that nobody want to live in.
Make more land available
noble the council fees
Stop the stupid relicensing of builders required by Auck Council (if licenced for NZ don't have to relicense for Auck)
make more competition in the building supplies game as well.
Make more high density housing closer to cbd not everyone wants a 1/18 acre section.;)
Some people think Socialist housing will be made available and prefer to ignore that all the provided housing was very cheaply made and is often the worst to bring up to modern standards and lack all but the barest necessities of the time. After all the collective providing minimal housing, provides only that, minimal housing. As soon as they change their own rules their own housing standards are insuffufficient across the board - but there is no government/collective paperwork that allows them to build better than minimal for people who can't afford minimal, which results in the inevitable socialist catch-22. The only people who see a purpose for socialism systems are those who can't or won't be expected to pay for it. (otherwise they would just do the necessary work themselves....(without need to create paperwork to justify the level of demanded service - if they had the resources then they could just create whatever they _wanted_ ... you only need contracts etc to take from people in a stronger position than you.
If there is money in it...
that's the point though, private builds for profit and therefore sells at the highest price. We are talking about supplying lots of houses that are affordable for most not just a few. Private will never build enough that the price comes down, it wouldn't make sense to.
Not saying social is the answer, but there must be somewhere between the 2.
Govt would only build cheap boxes that nobody want to live in.
We're not talking about houses for a market of willing buyers who 'want to live in the houses'.
We are talking about state-housing for those who find themselves unable to engage in a market transaction in terms of housing for any number of reasons.
The private sector does not build what is required as there is no profit in it. Hence the reason that most land offered under private sector sub-divisions come with caveats .. a means to keep the build standard above that which the low income family can afford.
Good luck in court, Nick, you'll need it.
The reason the legal fig leaf worked in Hobsonville Point is that that land is not in the RFR zone. The limited partnership has no claim over that land.
Just guessing here but the Awatea block in Christchurch may also have been excluded because it was not owned by the Crown on 21 November 1997.
If it turns out the land in this programme is RFR land then the government are already in breach of the Act. What the following section of the act says is that the government have to formally notify the limited partnership at the moment they first think about disposing of the land. Clearly they didn't do that.
122 Notice to Limited Partnership of potential disposal of RFR land
(1)This section applies if an RFR landowner is considering whether to dispose of RFR land that, in order to be disposed of, may ultimately require the landowner to offer to dispose of the land to the Limited Partnership under this subpart.
(2)The landowner must give the Limited Partnership notice that, if the landowner decides to dispose of the land, the landowner may be required to offer to dispose of the land to the Limited Partnership under this subpart.
Nice - seems pretty clear
Right-of-First-Refusal (RFR)
http://www.linz.govt.nz/crown-property/acquisition-and-disposal-land/cr…
It's political
Here is Dr Paul Moon talking to Duncan Garner
http://www.radiolive.co.nz/The-Government-V-Iwi---Whose-land-is-it-anyw…
He agrees
Repeated pronouncements of action is politically and ideologically painless - until it bites them on the bum
Even has a giggle at the magical-mystery-bus-tour BH went on
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