The prospect of a powerful new Auckland urban development authority has been welcomed by a real estate industry leader but an analyst and a construction and development boss have raised concerns about the idea.

Connal Townsend, Property Council chief executive, Eric Crampton, NZ Initiative research chief, and business and construction leader David McConnell were reacting to recent comments by Prime Minister John Key about an urban land development agency.

He spoke to the Chinese Chamber of Commerce where he referred to the possibility of a new agency overseeing major Auckland building projects.

"At this stage, that thinking is in its infancy but we're continuing to look at what the options may be," Key said.


Last year, the Productivity Commission said such a new authority could assemble sites, master-plan large residential developments and partner with private sector groups to deliver them.

Townsend said his organisation had suggested that authority around 2013 and he was now delighted to see that picked up by the commission and Key.

"We're advocates of this as a mechanism," Townsend said. "The benefits are that a government agency is able to borrow at a better rate than the private sector and the size of its balance sheet means it can leverage more."

"We've always seen a real benefit in master planning. The new authority can agglomerate or pull together foot prints of land to get developments under way, and get through the tangled web of multiple ownership and put in roads, water, broadband and electricity," Townsend said.

It's good that the Government is looking for solutions to Auckland's housing problems. But an Auckland urban development authority that could threaten compulsory acquisition is a step too far.

Eric Crampton, NZ Initiative research chief

But he questioned what role would be left for Auckland Council agency, Panuku Development Auckland.

"What's this going to do to Panuku? It's the Auckland land authority and only brand new. But overall, I welcome this of course," Townsend said of the new urban land authority.

Crampton had reservations.

"It's good that the Government is looking for solutions to Auckland's housing problems. But an Auckland urban development authority that could threaten compulsory acquisition is a step too far."


"The American experience has been particularly worrying. There, local council officials wanting to encourage new business and new development, have been very quick to use eminent domain to take peoples' houses and give them to private developers," he said.

"New Zealand has not really gone down that road, as takings under the Public Works Act have tended to be for public works like transport corridors or public infrastructure rather than for private profit," he said.

"The better solution is surely to ease zoning and overlays rather than turn to compulsory acquisition. UDAs risk trampling on owners' property rights."

Hear Prime Minister John Key speak to NewsTalk ZB's Mike Hosking about getting more Chinese investment in infrastructure:

McConnell also worried about Panuku's role.

He is managing director of McConnell Group, which owns Hawkins Group, New Zealand's second largest construction and infrastructure business. He is also Auckland Tourism, Events and Economic Development chairman, deputy chair of the Committee for Auckland and chairman of the University of Auckland Business School Advisory Board.

"I certainly see intervention logic of government - local or central - in urban land regeneration and redevelopment, transforming areas of land which require a very joined-up approach to infrastructure and consenting," McConnell said. "In terms of urban development, I believe there's a critical role but my understanding is that is what Panuku is doing. What does this do to Panuku?" McConnell asked.

Key also raised the prospect of Chinese companies funding and building infrastructure to speed up Auckland development and McConnell indicated support for that.

"We're already in a joint venture with China State Construction on St James," he said, referring to Hawkins working with the Chinese to build Auckland's new high-rise Queen St apartment project, rising alongside the historic St James theatre.

Hawkins was also bidding to build the new $200 million Park Hyatt on Auckland's waterfront with China State Construction, McConnell said.

"Chinese construction companies are no different to Japanese construction companies in the 80s and 90s - they all have a role to play."