The Productivity Commission report this week into land use for housing used a surprising word to describe what was needed to solve Auckland's housing crisis: credibility.
The report essentially said governments needed to convince property investors that they would do whatever it took to stop Auckland's mad land-price inflation.
Commission chairman Murray Sherwin introduced the report as a clear set of recommendations for change, but was blunt in saying it would be only as good as the political will behind it.
He pointed to what is driving investor perceptions. A growing number don't believe the Government and Auckland Council are doing enough to solve Auckland's housing supply crisis.
Investors are buying houses that cost them money to hold in the short term because they are confident neither body will free up land and build the infrastructure needed to meet demand.
ANZ's annual property investor survey found Auckland landlords expect prices to rise by an average of 8.2 per cent a year over the next five years, pushing up Auckland's median house price another 48 per cent to $1.14 million by 2020, on top of the 83 per cent rise since 2009.
The Property Institute's new quarterly Housing Market Survey of residential valuers, property managers, real estate agents and mortgage brokers found every one of them expected further price increases over the next six months.
The Real Estate Institute reported lifestyle-block sales were up 40.5 per cent in the three months to September from a year ago, with land bankers driving double-digit price growth on the fringes around Auckland.
The Productivity Commission made a series of recommendations that could make a difference if these politicians grow a pair and take on the vested interests and Nimbys who are thrilled with the ever-rising land prices of the last 20 years, including:
• Encouraging councils to charge targeted rates so those who benefit from new infrastructure for housing and rezoning of land share it with councils;
• Allowing councils to toll roads, impose congestion charges and bring in user pays to reduce infrastructure costs from growth;
• Not imposing strict debt limits on council borrowing to fund long-term infrastructure;
• Encouraging the New Zealand Transport Agency to invest in public transport that would encourage new housing developments;
• Encouraging development of Urban Development Authorities with the power to compulsorily acquire land for new housing developments;
• Creating a Central Government "price trigger" mechanism to ensure swathes of greenfields land would open up if councils allowed urban/rural price differences to grow too large.
Sherwin's description in his foreword of the political drivers for this standoff is the best I've seen and has Auckland written all over it.
"Ratepayers often do not want the higher rates bill and debt levels that accompany more infrastructure expenditure," he said.