Councils may be stripped of responsibility for issuing resource consents if they cannot agree on special areas where house development will be sped up.
As part of a range of measures on house affordability in today's Budget, Housing Minister Nick Smith announced new temporary legislation to streamline house developments in areas where it is least affordable.
The legislation will be rushed through Parliament, with the first reading part of this year's Budget, before being given just six weeks in the select committee process before being progressed. It will last only three years.
"This legislation is an immediate and short-term response to housing pressures in areas facing severe housing affordability problems," Smith said, adding that the first area should be designated in Auckland later this year.
Once passed, the legislation would see a streamlined consenting process in special housing areas agreed between councils and Government.
While it would prefer "to partner with councils", Smith made it clear that where agreement cannot be reached, the Government could take over.
"If an accord cannot be reached in an area of severe housing unaffordability, the Government can intervene by establishing special housing areas and issuing consents for developments."
Since returning to Cabinet in January, Smith has signalled that the delays in the resource consent process were part of a number of problems contributing to diminishing housing affordability in New Zealand.
"Council decisions can affect the entire economy by increasing house prices, driving up rents, and putting increased pressure on family budgets," Smith said.
"Housing supply constraints are causing widespread concern about financial stability, with potentially negative impacts on interest rates and the exchange rate."
Finance Minister Bill English said the decisions of councils, especially Auckland, affected the entire economy.
The new legislation was designed to "free up land and speed up provision of housing in areas where housing is least affordable" English told reporters today.
The Ministry of Business, Innovation and Employment (MOBIE) has been given $7.2 million over four years to fund the initiative.
Smith said the emergency measure would allow time for broader changes to the Resource Management Act to take effect.
Other changes announced today include the introduction of the Social Housing Reform Bill which will extend income-related rents to community house providers such as the Salvation Army.
English said previously there had been a focus on the number of Housing New Zealand houses, which would now change as other providers were given access to funding for social housing.
"What we're doing is moving from counting the number of houses that Housing Corp owns, to specifying the number of subsidised tenancies."
Reviewable tenancies will be introduced for all Housing New Zealand tenants, a measure is expected to see 3000 tenants removed from Housing New Zealand accommodation by mid-2017.
Housing New Zealand investment will be $2.9b over three years, including $1.6b building and repairing houses in Christchurch, adding 2000 bedrooms on existing houses and insulating 46,000 homes.
The Government is also trialling a housing "warrant of fitness" (WOF), although it will initially apply only to Housing New Zealand properties and later social housing providers, with no commitment to applying it to rental accommodation generally.
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