Why we don't have denser housing in NZ

JOHN HARTEVELT
Last updated 07:26 16/07/2012

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Local Government New Zealand has joined the Productivity Commission in calling for a change of mindset to accept more medium-density housing as a key way of improving affordability.

But councils face criticism from the commission and behind-the-scenes pressure from the Government to speed up consents and cut regulatory hurdles for more large-scale housing projects.

"While they say they want to densify, they actually make it really hard to do low-rise, dense housing," a source said.

It is understood Government officials have been meeting construction firms over the past month to establish what is holding back large-scale housing developments. The work of councils is near the top of the list.

"Significantly more information is now supplied to local authorities than was previously required. This adds administrative costs to the land development and residential construction process," Fletcher Building told the Productivity Commission.

"This increased information does not appear to have had a corresponding improvement in the quality of housing stock and its environment."

Only an estimated 7 per cent of new housing construction is in multi-unit dwellings, which is putting pressure on land supply.

Productivity Commission chairman Murray Sherwin said he had been "inundated" with submissions to the commission's inquiry on housing affordability, raising concerns over the cost of delays, regulatory burdens and uncertainties.

Some councils were very risk averse toward developments, often because they were so indebted that they were reluctant to pre-fund infrastructure for an unfilled subdivision, he said.

"In some cases, it is just size, lack of scale and therefore inability to attract the sort of expertise, perhaps, that they need. And the public don't necessarily want to see growth in their communities and certainly don't want to see it next door."

Local Government New Zealand president Lawrence Yule, who will today meet Mr Sherwin at the organisation's annual conference, said he disagreed with some of the commission's views. Councils had to be careful that developments would not create uneconomic infrastructure costs.

There was also a lack of demand for higher-density housing.

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- The Dominion Post

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