Housing problems needs grand plan

CATHERINE HARRIS
Last updated 15:14 27/05/2014

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The Government has "unfairly blamed" local councils for much of the housing affordability problem, Local Government New Zealand president Lawrence Yule says.

Yule said today that "a bigger conversation" was needed on housing affordability, jobs and demographic changes in New Zealand so moves to help Auckland and Christchurch did not adversely affect the rest of the country.

The Reserve Bank's clampdown on low-deposit mortgage rules was an example of a policy where one size did not fit all, he said.

"While it might be helpful in cooling the Auckland housing market and, in the Government's view, keeping interest rates lower than they otherwise would be, many of my colleagues in provincial parts of New Zealand have seen a dramatic reduction in first-home ownership," he said.

"We've got to make sure what we do in Auckland and Christchurch isn't counter-productive to the rest of New Zealand."

Yule said that while local government bore some responsibility for housing supply, it had been "unfairly blamed" for a problem that involved "a whole lot of factors".

A common claim was that councils were pushing up the cost of sections by not releasing land to avoid urban sprawl.

However, land supply was not an issue in many parts of the country, he said.

Even in boundary-restricted Auckland, "all we can do is rezone the land, and the developers are the final ones who pull the trigger to release it".

"So I'm told in Auckland, for instance, land the size of Hamilton is actually already rezoned but developers wait until they can get a certain price point to release the land," he said.

"That's why the Government have moved into special housing areas to try to actually force that."

Yule said the housing affordability issue had become a much bigger issue after the recession than was expected.

"The Government's been forced to do something about it and it is, but actually the bigger, long-term, joined-up thinking that should have been done about this probably should have happened about 10 years ago."

He said he would like to see the Government bring councils and the private sector together to discuss a "grand plan" for where New Zealand housing and regional economies should be heading.

"I think the bigger issue I"m raising here ... is effectively the macro-plan for New Zealand that deals with demographic changes," he said.

"That's what we are starting to see, and if you project them out, there are significant issues."

Yule is one of several speakers at a Local Government New Zealand seminar on housing affordability in Wellington tonight, along with Finance Minister Bill English and economist Arthur Grimes.

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