Smith resurrected to drive push for low-cost housing

HAMISH RUTHERFORD
Last updated 07:30 23/01/2013

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Housing affordability is set to become a central focus of government policy, with Nick Smith brought in to drive changes to planning laws and make land available.

The surprise promotion of Dr Smith to housing minister came as Finance Minister Bill English warned councils could be stripped of land allocation powers unless new space was set aside for development.

Announcing his Cabinet reshuffle, Prime Minister John Key said he understood home ownership was important to New Zealanders and vowed action on affordability.

"It's a very complex issue and I need a minister with the sort of energy that Nick has got."

Labour has made housing one of its key policies, promising to build 100,000 homes over a decade.

Mr Key was dismissive of the plan, claiming there was little hope of building houses for $300,000 in Auckland of the type people wanted.

Dr Smith would work with local councils and be involved in Resource Management Act reform, Mr Key said, dropping hints of greater work with social housing providers.

"I'm not . . . promising that the Government's going to go and build a whole lot of houses, but what I can say is we believe that the social sector can play a bigger role."

Dr Smith, who was forced to resign last year in the wake of the Bronwyn Pullar-ACC affair, said last night that housing affordability was closely tied to Resource Management Act reform.

"That data is very clear that the biggest increase in house prices has been in the price of the land," he said, adding that the Kiwi dream of home ownership had become "too big a stretch for too many".

The Government was keen to do more work with social housing providers, but he declined to discuss details.

Mr English earlier warned that the Government could take control of allocating land from councils that did not make it available, especially in Auckland and Christchurch. He predicted progress within months.

"Certainly well before next year we would be expecting to see changes."

Yesterday, the annual Demographia report into home affordability was released, and says the average New Zealand home now cost 5.3 times the median income.

In an introduction to the report, Mr English warned of a new housing bubble, caused by a shortage of land.

"Land has been made artificially scarce by regulation that locks up land for development."

Labour leader David Shearer said he had seen nothing from the Government that would address the housing shortage.

"The bottom line is that the market has failed here," he said. "What the Government's doing at the moment will not result in more houses being built."

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Contact Hamish Rutherford
Business reporter
Email: hamish.rutherford@dompost.co.nz
Twitter: @oneforthedr

- The Dominion Post

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