Wellington developers hit back at claim 'landbanking' is fueling housing shortage

Collette Devlin/Stuff.co.nz

Wellington Mayor Justin Lester vents his frustration at the monopoly practice of landbanking in the city fringes.

Wellington's mayor says he plans to penalise "landbankers" who are fuelling the city's housing shortage, but one developer has hit back, saying the city council's lengthy consenting process is partly to blame.

Justin Lester had some stern words on Monday for two developers who he said were sitting on close to 490 hectares of undeveloped land on the city's fringe, which had the potential for 2750 new houses.

But it was revealed shortly after that his city council had chosen not to support a proposal to build 147 new homes in the suburb of Grenada Village, because it wants the land for business and industrial use.

Wellington Mayor Justin Lester wants to tackle landbanking to address the city’s housing issues.
ROBERT KITCHIN/ FAIRFAX NZ

Wellington Mayor Justin Lester wants to tackle landbanking to address the city’s housing issues.

Last month, Stuff revealed Wellington had been unable to build houses fast enough to keep pace with its population growth since 2003, leaving it 3590 dwellings short of what it needs today.

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At a State of the City breakfast on Monday, Lester took a swipe at two "major landbankers" whose sections had enough capacity to meet 14 years of demand for greenfield sections.

RNZ

The chief forecaster at Informetrics, Gareth Kiernan, says tighter rules around lending to investors may keep a lid on the housing market for longer this time round.

The council would come up with measures to deal with the problem over the coming months, he said.

These would included targeted rates and levies for anyone holding land over a certain period of time, making it more expensive for the owner to do so.

"I want to signal ... we will look at every available option – including financial incentives or penalties – to ensure our city has the pipeline of new homes it needs."

Wellington city council received an application to add 147 houses to a block of land between Aruba Grove, Grenada Drive ...
LUCY SWINNEN/ FAIRFAX NZ

Wellington city council received an application to add 147 houses to a block of land between Aruba Grove, Grenada Drive and State Highway One in Grenada Village. However it is unclear if it will get the go ahead.

Lester did not name the developers he was singling out, but it is understood they are developers Guy and Rodney Callender, and the Woodridge companies, which includes Woodridge Homes.

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Guy Callender said he had put in at least 520 consents for sections and earthworks during the past year and was currently working on 270 of those, as well as building a reservoir.

It can take up to three years before a house is built, and at least one of those years was taken up with getting consents, he said.

"I'm disappointed. I don't think Justin understands how long the process [from consenting to building] actually takes."

Callender, whose company Hunters Hill was set to undertake the Grenada Village development, said he was told weeks ago that council officers would not be supporting it, after consents were lodged in September.

A council spokesman confirmed this was true. But when approached for comment, Lester said the situation was about to change because he would be supporting the development.

"I need this to happen. We created the special housing area to allow this to happen."

Woodridge Homes owner Wayne Wright did not go into details about what he was doing with his land, but said no one could accuse his company of landbanking.

"We are building houses as fast as we can."

Lester said the council had worked on improving he consenting process.

A rates moratorium, cheaper consents and a one-stop-shop for quicker processing had been successful in seeing more sections consented. But owners were not putting any dwellings on them, he said.

"There are about 250 sections that still don't have houses on them."

RATES TO GO UP 3.3 PER CENT

Meanwhile, Lester said the city council's projected rates increase this year would be an average of 3.3 per cent, down from a forecast of 5.1 per cent.

It was possible that residential rates could drop further before being finalised in the middle of the year, but that would depend on a revaluation of buildings and homes in late May or early June.

Wellington Chamber of Commerce chief executive John Milford said the project increase was a positive outcome considering the cost of the November earthquake threatened to push it higher.

But Taxpayer's Union executive director Jordan Williams said the rate hike was as a "slap in the face" to Wellington ratepayers, given it was two-and-a-half times the rate of inflation.

Trying to sell a 3.3 per cent rate hike by saying "at least it's not 5.1 per cent" was "a sneaky bait and switch" that will fool no one," he said.

 - Stuff

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