Low wages stop home ownership: Yule

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Hastings' mayor blames low wages - not council red tape - for preventing Hawke's Bay residents from becoming home owners.

Local authorities have been given a Government ultimatum to help increase the supply of affordable housing.

Finance Minister Bill English said councils need to free up enough land to allow the construction of more affordable homes or the Government will force them to do it through legislation.

The moves were announced in responses to the Productivity Commission's inquiry into home affordability. The package also includes changes to the Resource Management Act to streamline consenting processes.

Hastings Mayor Lawrence Yule said there was enough land available to build on in Hawke's Bay.

"In Auckland and Christchurch there's certainly some issues around getting enough land," he said.

"In Christchurch, because of the earthquake, there's a whole part of the city that you can't build on, and in Auckland the growth is so great that the council has got a real challenge as to how it makes enough land available." However, there were few problems elsewhere in the country, Mr Yule said.

"There's still quite a lot of sections available in Hawke's Bay and most other parts of provincial New Zealand. I don't think land availability is a huge issue in places like Hawke's Bay around affordable housing. It's a component, but the affordable housing issue has really been generated by a period of economic activity where there's been a lot of investment in housing."

The main barrier to home ownership in Hawke's Bay was low wages, Mr Yule said.

The Government wants to impose a six-month time limit on local councils processing building consents. Mr Yule - who is also the president of Local Government New Zealand - said central and local government shared concerns about housing affordability.

He did not expect any significant backlash from councils and mayors against the Government's proposals. But local government was wary, after the leaky-buildings saga, of attempts to speed up the consenting process.

"I think we need to be very careful about streamlining those processes too much."

However, the proposed six-month time limit would have little impact in Hawke's Bay as most consents already went through within that timeframe, he said.

Mr English said soaring house prices had helped fuel household debt and contributed to damaging imbalances in the economy.

"Those factors make it vital that housing becomes more affordable. In addition, projections suggest that many more homes will be required in coming years than are being built."

Local authorities could exert considerable influence on the market with planning and consent decisions, he said.

But Mr English warned there would be no quick fixes.

The package highlighted the need to increase the supply of land, inside cities and on their fringes, which was available for building new homes, Mr English said.

"Many of the changes that will make a difference lie with councils and the Government expects them to share the commitment to improving housing affordability."

The Government proposes introducing a six-month time limit on councils processing consents for medium-size projects.

Environment Minister Amy Adams said the limit would avoid "unnecessary costs and long, drawn-out processes for all parties".

- Hawkes Bay Today

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