Developer on Tauranga land supply 'crisis': I'll be laying people off

Developers Peter Cooney, Scott Adams and Nathan York addressed Tauranga City Council on Tuesday. Photo / Samantha Motion

A developer says he will be laying off staff in Tauranga by the end of the year as a long-heralded land supply crisis is predicted to hit home.

Peter Cooney of Classic Group, one of New Zealand's largest residential home builders, said other companies in the construction industry - planners, plumbers, architects - would face the same difficult choices without urgent action.

"If there is no new housing supply by the end of this year I will personally be laying off staff," he told Tauranga City Council yesterday in a presentation with fellow developers Scott Adams from Carrus and Bluehaven chief executive Nathan York.

"This is real. We are in dire straits."

Cooney heaped criticism on every level of Government - local, regional, central - for failing to avert the "crisis" and allowing Tauranga to become the "worst" place in New Zealand to develop land for housing.

"We have been warning you for five or six years."

York said there were only 1300 sections left for development in New Zealand's fifth most populous city.

The supply was enough for just over a year, and there was little else in the pipeline for the next three to five years.

Stats NZ estimated the city's population would grow by over 11,000 people from 2018 to 2023.

In the meeting, council staff acknowledged the council's own "theoretical" estimate of six years' worth of developable land was unrealistic, and the developers' estimate was more likely.

They said there was little they could do to increase the supply of developable land in the timeframe.

Adams said it was looking like 2020 would be the first time in 30 years that Carrus, which developed The Lakes, "won't have anything to do in Tauranga".

He said the city had not rezoned any major urban growth areas in 15 years, since Pyes Pa West and Wairakei in the early 2000s.

Infill housing was more expensive and complicated - in part due to unwieldy regional and local Government regulations - for developers and carried a higher market risk.

Both of the council's planned major greenfield development areas, Te Tumu (7000 houses) and Tauriko West (3000 houses) were held up - among other issues, the former was in a Māori Land Court challenge and the latter awaiting progress on plans to realign State Highway 29.

They were unlikely to be subdividable until 2023 at the earliest.

Job losses were just one of the predicted impacts of a dwindling supply of developable land in Tauranga.

Cooney said a lack of housing supply would contribute to the housing shortage and drive up house prices.

"The situation is much worse than you may think."

Several councillors directed the blame for the situation to central Government not doing more to help debt-laden growth councils.

They criticised the Government for failing to make major infrastructure investments - roads - that were now holding up developments.

Councillor Larry Baldock said a lack of uncertainty about the NZ Transport Agency's plans for the city's highways was creating additional risk.

Councillor Terry Molloy said the Government's policies were "strangling" the city's growth.

They resolved to ask for urgent Government action on transport infrastructure, and for the Government to reconsider its decision not to extend Special Housing Area legislation.

Housing Minister Phil Twyford told the Bay of Plenty Times the Government would not revisit the decision.

He said the Government recognised that increasing land supply was crucial to making houses more affordable.

"We are committed to a range of reforms to respond to land supply constraints including reforming planning laws."

He said Tauranga had utilised the Government's $1 billion Housing Innovation Fund that provided 10-year interest-free loans to fund core infrastructure for new housing.

"The proposed Housing and Urban Development Authority will be established in 2020 and will be the Government's lead developer for affordable houses."