Budget 2015: Land on offer but builders scarce

Grant Florence from the Certified Builders Association says the building industry is short of skilled labour. Photo / Christine Cornege

Skills shortage risk to plan for 10,000 homes

Builders are already fretting about responding to Government plans for up to 10,000 affordable new residences on 500ha of the Auckland Crown landbank.

The plans announced in the Budget yesterday include a $52 million capital contingency fund to facilitate housing development on Crown-owned land in Auckland.

Grant Florence, Certified Builders' chief executive, said the sector already suffered a skills shortage but that would be exacerbated if further pressure was put on the already stretched sector.

"The industry is short of skilled labour as it is, so with that land being freed up, as it stands now we don't have the labour to build them. There's about 16,000 licences issued to carpenters but there's a skill shortage already of 4000 to 5000 and the industry has been forecasting that for quite some time. It's boom-bust. In tough, lean times we lose the qualified, skilled labour," he said.

That meant in boom times like this, a labour shortage dogged the sector.

"There may be some builders to come north out of the Christchurch rebuild, but I'm sure that we wouldn't have the capacity to do it, which is a worry because that just impacts on people needing houses in Auckland and the supply angle is one of the drivers for lack of affordability.

"We applaud the move to release that Auckland land and we hope it comes fast. Guys are keen to do the work, but as a nation we don't have the skilled builders to do it. Some labour has come from overseas, into Auckland and Christchurch. But not enough so far."

The Ministry of Business, Innovation and Employment has identified the 430ha of Crown land in Auckland areas zoned for residential housing and thousands of new places could be built quickly there. Between 4500 and 10,000 new residences could be built.

David Kelly, Master Builders' chief executive, welcomed the land release, saying it was a boost for Auckland members who could meet the demand. "There's no question there is a supply issue in Auckland and this is very sensible," Kelly said.

But he called for the Government to release large plots of land, not small.

" ... many hectares. Then, people can think about whether they do off-site manufacture. If they've got certainty, they can invest in the infrastructure, like machines building prefabricated houses or factories where they can build under cover, uninterrupted by weather," he said.

"The sector needs scale and certainty. But if the land is released in dribs and drabs, it makes it harder to get scale."

The labour supply would be able to keep up with the release of such large amounts of land, he predicted, and enough materials were also available.

One community leader is worried that Unitec could soon sport rows of new apartments and townhouses.

Labour's housing spokesman Phil Twyford, speaking before the Budget announcement, said National were so desperate to look like they are doing something about the Auckland housing crisis that they have dusted off his party's 2008 inventory of government land available for housing and re-announced it.

"Despite National ridiculing this at the time, it is a no-brainer to develop vacant government land in Auckland. The Government should have continued Labour's work in this area seven years ago. If it had, we would have had thousands of new homes and the housing crisis might not be as bad," Twyford said.

"This Government has been a bystander, watching the housing crisis spiral out of control. Its poll-driven pre-Budget panic has led to a half-hearted tax measure, that will catch less than 1000 speculators, and the freeing up of vacant government land that is seven years too late."

Housing

• $52 million capital contingency fund to facilitate housing development on Crown-owned land in Auckland.

• $35 million for social housing, plus around $30 million previously earmarked for capital grants through the Social Housing Fund.

• $35.3 million to improve housing outcomes for whanau Maori.

• $12.8 million for the new Te Ture Whenua Maori Network which will help Maori land owners improve the productivity of their land.