Property covenants 'ghettoise' the rich

Property developers are using title covenants to stop houses for low-income families or disabled people being built in subdivisions, a parliamentary committee heard.

Speaking to a submission on the Affordable Housing Bill, chief human rights commissioner Rosslyn Noonan told Parliament's local government and environment committee yesterday that there were cases of property developers using restrictive covenants to prevent certain types of housing.

"In New Zealand, we should not be encouraging developments which completely prevent mixed housing. We should not be allowing developments which effectively ghettoise the very well-off ...

"What we know is there is a real difficulty in finding places for supported housing for disabled people. It's a constant issue. It's not just covenants; other mechanisms are used to try to prevent and minimise supported housing for disabled people."

Ms Noonan said the Human Rights Act could be "got around", so the bill would clarify the law.

Also, "a number" of cases had been brought to the commission. The one that had got the most publicity involved a property developer in Nelson who had sought to restrict any form of "institutional accommodation" in a development by way of a covenant.

"My recollection is there was a satisfactory outcome in that case once people sat down and worked through the issues," she said.

National MP Nick Smith asked how many cases had been received. Ms Noonan could not provide specific examples but promised to give the committee details.

The Nelson case dated from October 2002 when sections in the 120-unit Greenmeadows Estate subdivision near Stoke had had covenants attached to them excluding people in "institutional care".

Developer Ian Gourdie said last night that such covenants had been common around Nelson at the time, though he was unable to say whether they were still in use.

He said that health authorities had been encouraging people with psychiatric illness to live in the community and covenants had helped maintain property values.

Business NZ economist John Pask told the committee the bill took property rights off land developers without compensation.

"Artificial restrictions" on land availability for subdivision should also be lifted. There was rural land in Wellington's Ohariu Valley that was "useless" for agriculture but could not be subdivided.

- © Fairfax NZ News