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Home / New Zealand

Brian Rudman: Hey Bill, we can build cheap homes

Brian Rudman
By Brian Rudman
Columnist·NZ Herald·
9 Oct, 2014 04:00 PM4 mins to read

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Illustration / Peter Bromhead

Illustration / Peter Bromhead

Brian Rudman
Opinion by Brian Rudman
Brian Rudman is a NZ Herald feature writer and columnist.
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Finance minister’s broadside ignores the steps already taken

Finance minister's broadside ignores the steps already taken

With the election safely out of the way, the Government has resumed its Auckland bashing. Council planning rules continue to distort the property market says Finance Minister Bill English. This, even though Mayor Len Brown and his officials have bent over backwards to accommodate Housing Minister Nick Smith's every whim.

Since the Special Housing Areas Act was rushed through a year ago to help "solve" Auckland's housing shortage, the Auckland Council has played the game, designating 80 SHAs.

Together, they could fast-track 41,500 new houses on to the Auckland market. You might have expected the Government to be pleased. Far from it.

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This week Mr English unleashed another broadside at the Auckland Council and its planning processes. He quipped that rising land prices and planning constraints made it "illegal to build a house [for] under half a million dollars in Auckland".

Housing Minister Nick Smith will be surprised.

Less than a year ago, Dr Smith was proudly claiming the Government's house-building arm, Housing New Zealand, would bring in 20 per cent of the 3000 homes in its showcase Hobsonville Pt development in Prime Minister John Key's electorate, for much less money. Ten 10 per cent of the total would cost less than $400,000, another 5 per cent less than $450,000.

The Hobsonville project was initiated well before the SHAs were dreamed up, showing how wide of the mark Mr English's remarks were.

But when you're on an ideological crusade to weaken planning controls and reduce government obligations in social housing, what's a little lie or three?

Before rushing in on a new round of law changes, the Government would do well to check on the success or failure of the 80 SHAs. Early signs are that instead of increasing the number of new houses, they could be adding to the inflationary housing bubble they were supposed to reverse.

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23 Sep 05:00 PM
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Properties within the privileged zones are starting to pop up in the real estate pages for resale as-is, and the label Special Housing Area is starting to gather the added-value cachet with land speculators, that "Grammar zone" has with sellers of inner-city housing.

In July an inner-city 32-resident boarding house in a new SHA was being promoted for redevelopment. The real estate agent, with masterly understatement, said being in a SHA "definitely underpins its value".

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Soon after, planning consultant Jon Maplesden was quoted in the Manukau Courier as saying some landowners had not applied for SHA status on their properties with a view to building houses, but to add value to the land.

What the Government remains blind to - deliberately one suspects - is that a blueprint solution to Auckland's housing shortages is there for all to see, at its own Hobsonville Pt.

This development has all the mixed-ownership, local-national government co-operation, that anyone could desire. What's more, it works without any need to water down the planning rules or the Resource Management Act.

Housing New Zealand is the over-all owner-master planner, with private contractors brought in to develop the land and build and sell the homes. The Auckland Council and its predecessor local bodies were involved at each stage of the development, cutting the red tape and adjusting their rules and development fees to ensure development imposts were kept to a minimum.

That's how it was possible to set the price of 10 per cent of houses at less than $400,000.

But a planned development doesn't have to be publicly controlled. Just before the election, veteran home-building giant Fletcher Building signalled that it too was interested in returning to the fray in a big way.

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It talked of upping its Auckland home building rates to 1500 houses a year within four or five years.

The drawback for a Government seeking a supply of entry-level priced homes is that if you leave it to private developers, you have to persuade them to cut their profits and provide for the low cost end of the market.

But the SHA legislation shows this can be done. All without any changes to the RMA.

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