Brian Rudman 's Opinion

Brian Rudman is a NZ Herald feature writer and columnist.

Brian Rudman: Bullying won't bring cheap homes

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Housing Minister Nick Smith's appetite for intervening locally appears not to be restricted to Auckland

Queenstown is one of the areas with homes so costly it could be subject to Government intervention. Photo / APN
Queenstown is one of the areas with homes so costly it could be subject to Government intervention. Photo / APN

Auckland may not be the only city to be threatened with "special housing areas" by a Government desperate to show it's doing something about the housing affordability crisis.

Queenstown and the Lakes District, Wellington Central, Christchurch and even Tauranga could all wake up one morning to see Housing Minister Nick Smith riding into town to a make an offer to the local council it can't refuse - either sign up for a housing accord or stand aside while the Crown creates a special housing area.

Slightly modified, but still lacking any breakthrough solution to the housing crisis, the controversial Housing Accords and Special Housing Areas Bill has been reported back to Parliament from the social services select committee.

Missing is any mechanism to ensure a proportion, at least, of any new housing created as a result of this fast-track legislation is "affordable".

The introductory remarks from the government majority on the committee say it all. "Most of us consider that, as the purpose of the bill is to enhance housing affordability by facilitating an increase in land and housing supply, it is desirable for the Government to be able to intervene if necessary to hasten housing development."

This dream, that if new land is opened up, developers will rush to build affordable housing, was rejected by Mayor Len Brown and his deputy, Penny Hulse, in the run-up to the initialling of Auckland's housing accord with Dr Smith in May. But the Aucklanders failed to convince the minister of the necessity to include a low-cost quota in the package.

At the launch of the accord, Mayor Brown was left to plead: "We expect developers to provide decent options for affordable housing and for first-time buyers." Not require, just expect.

The best Auckland Council could do was to have written into the accord that "all qualifying developments are ... required to give consideration to the provision of affordable housing and/or first home-buyer purchase".

Of concern within the council now is that the legislation appears to give no legal status to the housing accord being finalised between Auckland and the Crown. As it stands, there are concerns that even the weak but hard-fought-for agreements on affordable housing mentioned above could be rejected.

One definite improvement is the added requirement that " before designating a special housing area, the minister must be satisfied that adequate infrastructure to service qualifying developments in the proposed area either exists or is likely to exist".

This is a victory for those who highlighted the shortsightedness of fast-tracking group housing on rural land, kilometres away from the necessary pipes and wires of modern urban living.

As for the scope of the legislation, it seems the minister's appetite for intervening is not restricted to Auckland. The trigger point he has given himself and his central government bureaucrats is low, providing the potential for intervention countrywide. To swoop, the minister has to have regard to:

Whether the weekly mortgage payment on a median-priced house as a percentage of the median weekly take-home pay for an individual exceeds 50 per cent, based on a 20 per cent deposit.

Whether the median house price divided by the gross annual median household income - the median multiple - is 5.1 or over.

The existing supply of available residential building land.

According to the Roost Home Loan Affordability Report at interest.co.nz, in theory the whole of New Zealand qualifies as a case for special housing area treatment, on the basis of the first trigger at least.

In June, nationwide, it took 56.7 per cent of the median income to pay the mortgage on a newly bought median-priced house. The worst areas were central Auckland on 88.4 per cent, North Shore on 84.6 per cent, and Queenstown on 81.1 per cent.

As for the second trigger, the median multiple, the old North Shore City topped that list at 8.04. The New Zealand-wide figure was 5, or just shy of Dr Smith's intervention bench-mark. Not that 5 is good. According to the experts at interest.co.nz, the international benchmark is 3, which "is a very good marker for housing affordability".

In the face of such statistics, it's hard to see how freeing up some land and leaving it to the market will realistically address either housing affordability or lack of supply.

- NZ Herald

Brian Rudman

Brian Rudman is a NZ Herald feature writer and columnist.

Brian Rudman's first news story was for Auckland University student paper Outspoke, exposing an SIS spy on campus during the heady days of the Vietnam War. It resulted in a Commission of Inquiry and an award for student journalist of the year. A stint editing the Labour Party's start-up Auckland newspaper NZ Statesman followed. Rudman decided journalism was the career for him, but the NZ Herald and Auckland Star thought otherwise when he came job-hunting. After a year on the "hippy trail" overland to London, he spent four years on Fleet St with various British provincial papers. He then joined the Auckland Star, winning the Dulux Journalist of the Year award for coverage of the 1976 Dawn Raids against Polynesian overstayers. He has also worked on the NZ Listener, Auckland Sun, and since 1996, for the NZ Herald as feature writer and columnist. He has a BA in History and Politics.

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