The flurry of news this week about Labour calling for the abolishment of Auckland's rural-urban boundary buried a potentially more important idea that could eventually do more to solve the housing crisis than rubbing out any lines on a map.
Labour's housing spokesman Phil Twyford proposed Auckland be encouraged and allowed to start issuing infrastructure bonds to pay for the roads, pipes, street lights and footpaths to go with these new housing developments a boundary-free Auckland could generate.
If the council issued these bonds and tied them to rates targeted to the residents of these developments it could kill a couple of birds with one stone.
The Auckland Council is up against its limits for borrowing if it wants to keep its AA credit rating, and it faces intense political pressure from ratepayers who worry they'll have to pay the interest on the debt from these new developments.
Quarantining the debt would reduce the financial and political fear.
These infrastructure bonds serviced from targeted rates would also make these new houses more affordable because developers would not have to pay big contributions up front that at present they pass on to buyers.
Those homebuyers have to pay mortgages at the usual rates to pay indirectly for the roads and pipes needed to live there.
By using infrastructure bonds, councils can reduce those up-front costs to homebuyers and use their strong credit ratings to borrow at cheaper rates.
All this sounds foreign and like some sort of a too-good-to-be-true type of financial engineering. Indeed, Nick Smith described these bonds as "creative accounting" and "nothing more than fool's gold".
But former Reserve Bank chairman Arthur Grimes, who did the research showing how Auckland's rural-urban growth boundary distorted land prices, said such bonds paid for from targeted rates were mainstream internationally and worth investigating.
Versions of these bonds are an accepted part of the development landscape in the US, where the house-price-to-income multiple is closer to four times income, not the 10 times seen in Auckland.
The borrowing side of the equation is clearly calling out for a solution to an economic and political problem. But the saving side of the equation is equally desperate for infrastructure bonds.
New Zealand has an ageing population of baby-boomer savers in their late 50s and 60s madly socking away income into bank term deposits and Government bonds.
Greying savers in Europe and Japan are so desperate to get their hands on these sorts of bonds that their bidding has raised prices so high they are getting negative yields - they're happy to pay their Governments to look after their money.
Although New Zealand doesn't have the extreme ageing problems of Europe and Japan, an enormous amount of bank account building is going on.
Household term deposits in banks here have almost doubled to $153 billion since the beginning of 2008 as ageing savers stock up on what they see as the most risk-averse investments, even though most are paying less than 3 per cent.
KiwiSaver and other fund managers regularly tell me there is a huge shortage of investment bonds for infrastructure, council and Government.
That is reflected in the ever-falling interest rates for such bonds. Infrastructure bonds serviced from targeted rates would help quench that demand.
The greatest irony is that the loudest campaigners against council and Government debt are the same baby boomers complaining about low term-deposit rates.
Infrastructure bonds would solve those complaints in one fell swoop - as well as fund the housing infrastructure boom that is just as desperately needed.
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