Bernard is an economics columnist for the NZ Herald

Bernard Hickey: Time to bring it on, National

Waisake Naholo's commitment helped the All Blacks to success. The Government needs to show the same commitment in Auckland to sort its housing crisis. Photo / Brett Phibbs
Waisake Naholo's commitment helped the All Blacks to success. The Government needs to show the same commitment in Auckland to sort its housing crisis. Photo / Brett Phibbs

The national quest for more (or any) affordable new homes in Auckland took a few welcome turns this week, but there is still much to be done, and it needs to happen with more urgency and clarity.

The Government needs to emulate Waisake Naholo's direct approach in the first test against the Welsh when a try was desperately needed in the 62nd minute. He called for the ball and bolted low and hard and fast for the try line. There was no faffing around hoping for a breakthrough.

Prime Minister John Key's tentative moves towards an Urban Development Authority (UDA) this week and Nick Smith's announcement of the first housing development agreement with Fletcher Building in Auckland were signs urgency is building about the Government becoming directly involved.

For too long, the Government has taken a hands-off, incremental and deflecting approach to Auckland's housing supply crisis.

It had hoped the private sector would step up to solve the housing supply crisis. When that didn't happen between 2013-15 the governments (in Auckland and in Wellington) spent a lot to time milling around, consulting maps and pointing in various directions.

There was a giant team talk behind the goal line with Bill English and Smith gesticulating and pushing Auckland Councillors in the chest over land supply, consenting delays and asset sales. The end result was not much forward momentum.

English's allocation of $52.2 million to Smith in the 2015 Budget to buy Crown land and commission Fletcher Building to build and sell affordable houses in bulk was a sign the Government realised it couldn't sit back and wait.

That it took another year for the first deal to be signed and that the first home won't be built on that land until August 2017 shows the Government is no Naholo.

Now the issues are clearer and the team seems to shaping up for a more direct approach.

English allocated another $100m in last month's Budget to buy Crown land for more deals like the one with Fletcher to build 196 detached, terraced and duplex homes on 9.2ha of land at Massey East, including 59 for social housing.

The Government appeared to acknowledge indirectly this week that the Auckland Council can't afford to borrow much more to fund the infrastructure for these houses.

The Government's actions have been begrudging, delayed and lacking conviction.

Key started talking publicly about the need for a central-Government-sponsored UDA to enable developers and infrastructure builders, possibly from China, to pay for and build entire new sections of the city.

Another sign the Government is shifting came this week when it dropped its long-standing reluctance to allow congestion charging, another source of contention borne of the council's inability to easily fund new infrastructure.

That was on top of the Government's belated concession to funding a share of the City Rail Link.

But all the Government's actions so far have been begrudging, delayed, stuttering and lacking in conviction.

Now it needs to step up and use its balance sheet, its land and its ability to kick-start a major structural change in how houses are developed, built and sold in Auckland.

The affordable duplexes, apartments and houses built at Hobsonville and Tamaki over the past two years, along with the latest Massey East plans, show the models are there to do it.

The Government has also taken confidence from similar build-and-sell programmes in Christchurch, where 1020 homes were built inside a couple of years.

I understand there is a growing appetite within the Government to bring on these programmes. The council has also created a pipeline of land equivalent to 96,000 sections over the next 14 years for developers to build on, particularly inside the city's boundaries.

Even before the Unitary Plan is decided, there is plenty of space for the desperately needed three-storey apartment and townhouse developments with one and two bedroom houses.

Now it is time to blast through Naholo-style with a much bigger programme of affordable building on Housing NZ and Crown land for first-home buyers.

It would cost several billion dollars to kick-start, but it could prove the model for private developers to end their addiction to big bespoke houses on the fringes and, more importantly, give the land bankers a fright with a rush of supply.

- 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.

Read more by Bernard Hickey

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