Bernard is an economics columnist for the NZ Herald

Bernard Hickey: Council caves before home owners

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Auckland Council has let a vocal minority outweigh expert advice on the city's housing needs. Photo / Michael Craig
Auckland Council has let a vocal minority outweigh expert advice on the city's housing needs. Photo / Michael Craig

Auckland Council is reverting to the 2013 version of its Unitary Plan proposal, which will provide for just over 80,000 new homes by 2040.

This is despite expert working advice that it needed to come up with a set of zoning maps to produce 280,000 houses within the enlarged Auckland Council boundaries.

Think about this for a second.

The council decided it preferred zoning rules that would leave Auckland 200,000 houses short of what it needed to accommodate up to a million extra people over the next 30 years or so.

This in a city that already has a shortage of 35,000-50,000 houses. Where housing is more expensive relative to incomes than in San Francisco, which is where the world's richest billionaires are building the wealthiest companies in the history of the world in Facebook, Google and Apple.

It beggars belief that the governing body for New Zealand's most economically and socially important city would fly in the face of pleas from those representing hundreds of thousands of today's and tomorrow's residents, ignore the Reserve Bank and the Productivity Commission and the ministers for housing and finance.

The Productivity Commission spent five years studying how council restrictions on land use over the past 30 years created a housing affordability problem in Auckland that was holding back New Zealand's wealth creation and causing untold social harm.

It found Auckland needed to allow growth for New Zealand to obtain the income and wealth benefits of a big city. It described how existing residents, fearful of what might be built next to them, were strangling the supply of houses in a way that inflated prices and rents.

The Reserve Bank pleaded for Auckland to allow more supply to reduce the risks to the financial stability of the banking system from overvalued housing.

Finance Minister Bill English described Auckland's restrictions on housing supply as the major factor creating child poverty and inequality. His Government argued time and again that Auckland's housing crisis can only be sustainably solved by increasing housing supply.

So how did this happen? Simply put, 700 residents from Kohimarama, Mission Bay and Glendowie held a meeting on February 9 to protest at the maps submitted in December, which they said proposed massive intensification in their suburbs.

They argued they had not been told about these changes, which they said was undemocratic. The meeting and the following publicity spooked councillors into opposing the more intense maps at this week's meeting.

It demonstrated in vivid technicolour the concept of "Democratic Deficit". This is where a few well-organised home-owners with the time and resources to lobby councillors stop development near them because these local politicians know older home owners vote at vastly higher rates than young renters.

I watched this democratic deficit exposed most cruelly when the Council's Youth Advisory Chair, Flora Apulu, spoke to the Council about how she felt the weight of the city's half a million young people on her shoulders as she argued for the affordable housing they desperately needed from this "up-zoned" plan.

She was jeered and heckled by the dozens of elderly and predominantly Pakeha homeowners sitting just metres behind her.

Sudhvir Singh from Generation Zero was jeered even more loudly when he said the generation of home-owners sitting behind him were "pulling up the ladder" of home ownership on the young of today.

"Poor you", was the response. Indeed. Poor us.

Debate on this article is now closed.

- Herald on Sunday

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Bernard is an economics columnist for the NZ Herald

Bernard Hickey is the publisher of Hive News, a Wellington-based political and economic subscription news email service. He also writes for Interest.co.nz and appears regularly on Radio New Zealand, Radio Live, TVNZ and TV3. He has been a financial journalist for 25 years, having worked for Reuters, the Financial Times Group and Fairfax Media.

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