The government is “willing to shake up anything” to help Auckland meet the demand for serviced land for house building, Prime Minister Bill English says.
That could include the way government, Council and WaterCare interact, English said at his weekly post-Cabinet press conference.
He was responding to suggestions made by the Auckland Mayoral Taskforce on Housing, which Monday reported a number of high-level suggestions for boosting housing supply in the city.
I asked English about the Taskforce’s finding that the key barrier to scaling up supply of stand-alone housing was the availability of serviced land. The Taskforce argued for more collaboration between developers, the council, government and organisations like WaterCare and Auckland Transport.
Does getting WaterCare around the table, and potentially shaking the organisation up a bit, sound plausible to the government?
“Well, yes, it certainly does,” English replied. “I think we’re willing to shake up anything that’s going to help to meet the need.”
Issues such as how land could be serviced with infrastructure like waters and transport was now being dealt with particularly through discussions on the government’s $1bn Housing Infrastructure Fund, English said.
Council and central government had gained a better understanding around the detail of decision making that determined “the day that someone’s going to actually dig a hole and put a pipe in it so that we can go and then build the houses.”
“[The HIF discussion] won’t be negotiating the future of WaterCare, but it will be throwing up all the issues around who pays for what and when, which in a way hasn’t really been tested really hard before.”
Talks were helping the parties to understand why councils were cautious about building infrastructure ahead of demand, and how they charged for it. A good platform was being set for larger scale planning reform, English said.
Meanwhile, the Prime Minister was asked whether central government would back Council in the use of targeted rates to pay for specific infrastructure projects.
This was not a new idea, he said. “They’ve had that capacity in local government; it’s been there for years.” As a local MP in Southland English said there had been arguments about flood protection schemes that involved targeted rates for those who benefited from the schemes paying higher rates, directly connected to the costs of that scheme.
Councils also have the capacity for value uplift rating, English said. While calculating that was “pretty tricky,” in principal Councils could look at using this type of rating scheme.
Asked directly whether he was encouraging councils to use value uplift taxes or rates, English said: “We’re quite happy to see the councils use the powers that they have. And they’re getting much more focussed on using those powers because I think these are quite legitimate ideas.”
English said that “by and large” the Mayoral Taskforce housing report was addressing the right sort of issues. While some would have been controversial in the past, they now needed to be dug into for the process of boosting supply to work.
The report showed Auckland Council was having a “deep think” about how to sort funding issues out, he said.
One idea the government is not keen on is GST sharing, English said. Government hadn’t seen any serious proposal for the model. In any case, the most important factor was what the revenue was used for, he said.
38 Comments
Yeah, I personally would file this talk of Bill's under "Cynical Lies". Just checked my emails from the National party over five years ago...and what do you know, they were promising the same things! But they have done nothing except call everything "a sign of our success", "a good problem to have", and other celebrations of pushing houses out of the reach of young Kiwis.
Everything except open up land adjacent to Auckland City. Which must be banned forever.
Instead Auckland develops endless sprawl miles away in the distance. Then they wonder why it is costing so much. The taxpayer is now going to pay, for Auckland's effed up planning and greedy council.
Ah good point .... Did Labour even tried to shake up these "Cronies" when they were in power ?? we had a similar house crisis during their rein ...
Will Labour dare to shake these trees once they are in power next time ??
Did any Government ( even with Winston) shook up these said cronies in the last 20+ years?
some trees are well rooted in the ground, even big scandals like leaky homes and faulty cladding material did not shake them up ... !! So let's be real
I am not holding my breath either
Rating, as English notes and has been canvassed in these 'ere pages over a decade or so, is quite capable of intense selectivity. A sample: Schedule 3 Rating Act 2002.
Factors that may be used in calculating liability for targeted rates
1 The annual value of the rating unit.
2 The capital value of the rating unit.
3 The land value of the rating unit.
4 The value of improvements to the rating unit.
5 The area of land within the rating unit.
6 The area of land within the rating unit that is sealed, paved, or built on.
7 The number of separately used or inhabited parts of the rating unit.
8 The extent of provision of any service to the rating unit by the local authority, including any limits or conditions that apply to the provision of the service.
9 The number or nature of connections from the land within each rating unit to any local authority reticulation system.
10 The area of land within the rating unit that is protected by any amenity or facility that is provided by the local authority.
11 The area of floor space of buildings within the rating unit.
12 The number of water closets and urinals within the rating unit.
And then for General rates: Schedule 2
Schedule 2
Matters that may be used to define categories of rateable land
1 The use to which the land is put.
2 The activities that are permitted, controlled, or discretionary for the area in which the land is situated, and the rules to which the land is subject under an operative district plan or regional plan under the Resource Management Act 1991.
3 The activities that are proposed to be permitted, controlled, or discretionary activities, and the proposed rules for the area in which the land is situated under a proposed district plan or proposed regional plan under the Resource Management Act 1991, but only if—
(a) no submissions in opposition have been made under clause 6 of Schedule 1 of that Act on those proposed activities or rules, and the time for making submissions has expired; or
(b) all submissions in opposition, and any appeals, have been determined, withdrawn, or dismissed.
4 The area of land within each rating unit.
5 The provision or availability to the land of a service provided by, or on behalf of, the local authority.
6 Where the land is situated.
7 The annual value of the land.
8 The capital value of the land.
9 The land value of the land.
The point is that exercise of these very wide rating powers exists right now, but is probably inhibited by several local factors:
- The intellectual horsepower (or lack of it) within the TLA staff
- The timidity of Councillors
- The existing rates system configuration inertia
- Software and other constraints to actually implement some possibilities
I'd pick #'s 1 and 2 as the real constraints, and That's where any 'shake-up' has to commence.....
@ Chairman Moa , I agree with you but we should go one step further , BAN foreign buyers from the secondhand housing market and restrict them to buying ONLY NEW BUILDS
Now thats real new Foreign Direct Investment............... and we get the GST in our coffers , the addition to GDP , work for Kiwis in the construction sector and so on ...........
Huh ? Watercare ? Do me a favour , those jokers are part of Aucklands affordability problems .
With a simple water meter costing over $15,000 to install on a 30 year old home , when the unit costs under $300 is nothing but laughable
As for the chief executive of Watercare earning more than twice the salary of the PM , the less said the better .
@ Boatman, when I was living in Auckland, Watercare connected our water meter to the neighbour property and vice versa. For years we had been paying for theirs water usage which is much larger home, our was 3br.
One day they had a leak and we ended up paying for it, that was when we discovered the mistake. Watercare slapped us $980 for swapping the meter over, I didn't have a choice as they threatened to restrict our water and no refund for the years we paid for a larger property!
While I can (kinda, sorta) understand the FHB angst directed at the gubmint, I have to ask common taters the bleedingly obvious question:
How come that it is somehow a national (meaning all of NZ, change the Gubmint) issue that Awkland has muddled its way into a Planning Black Hole, when in other localities (like Christchurch) it's possible to buy a plot for a '1' price and a house/plot for a high '3' or low '4' price?
Awaits the arise of Sensible Discussion, but not betting the farm on its ensuance (if that be a Word)...
I don't know the exact answer.
Maybe extremely high immigration rates into Auckland, not enough regulation on foreign investment in non-productive assets, not enough regulation in risky bank lending.
But I guess your argument is it is all the councils fault for some reason?
I would say the council could help by raising rates so they can more easily fund the cities infrastructure expansion, instead of running to the government for hand outs.
From what I can tell, in recent years the population percentage growth in AKL is not much different than CHC. This suggests that the primary difference is either supply related or demand related that isn't related to population growth. The rent to home price has been tracking relatively consistently in CHC, but not in AKL. This suggests that there are more homes being purchased in AKL that are being rented out as compared to CHC. I use this data and come to the conclusion that there are a higher percentage of homes being purchased in AKL for capital gain speculative reasons as compared to CHC. In other words, the demand side of the equation in AKL is being driven by speculation.
Add: the fun part is that the rationale for speculation is driven by supply constraints. As long as the local council is limiting supply, there will be an imbalance in the supply/demand equation. Of course, if the supply starts getting any additions due to speculators selling because of little to no earnings from rent after expenses along with minimal future capital gains, then we should see a nice increase in the supply and the rent to home price will rebalance.
Agree, but the problem with the "fun part"" is that this is not a closed system and so rebalancing is not that simple. Whilst AKL has been having its cut off land supply and speculation-a-thon. AKL has not been building much. But every other city in Australasia has been building stuff at much higher rates. If a rebalancing occurs in general, then why will renters stick around in Auckland when so much more lower cost opportunity might exist in other cities?
Christchurch actually has people living in their houses. Buy seriously.
Less foreign buyers - Auckland consistently ran 40% foreign buyers until the Chinese government finally took action against their citizens.
Mass building of homes due to insurance payouts (not a normal supply effect).
Basically supply and demand managed to equalize. And how Christchurch is probably on an oversupply situation.
If you look what happened to house prices 1 year to 3 years post earthquake, it greatly mimics Auckland. You were seeing consistent double digit house price inflation because
1. There was a shit load of demand, 10,000 families displaced looking for somewhere to live
2. Huge rental demand from out of town workers
3. No (or very little) house building due to insurance hold ups (both paying out and insuring new builds).
4. Very little new property, due to the land owners/council delays, and the simple reality it takes a while to get all the infrastructure in place to to support the new developments.
Thankfully Christchurch is out of the under supply/over demand phase, and prices are trending towards levels that can be afforded by the local population.
The reason - the planning black hole of Auckland is big and bipartisan in its creation.
The National Party (and Rodney Hide) created a steaming turd of reform called the Super City. Then the Super City elected Labour mayors who have driven this whole mess of crap off a cliff at full speed.
Any sensible solution would require acknowledging that both the National weenies and the Labour twits share the blame.
This is politically unfeasible to politicians, who instead will blame one side or the other relentlessly (depending on whichever ideology they cling to). Or will just blame immigrants.
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