Housing Minister Phil Twyford promises 12-15 'Hobsonville'-size housing developments

Housing Minister Phil Twyford says there will be 12-15 housing developments the same size as Hobsonville underway simultaneously once KiwiBuild gets running.

Twyford made the comment during the release of a housing stocktake report which canvassed homelessness, housing affordability, the rental market and state housing.

It put the problems in Auckland down to the slow development of infrastructure and land development as well as population growth.

Twyford said suitable Crown land had been identified in Auckland for some large-scale developments for the KiwiBuild programme to build 100,000 affordable homes in a decade. The Government would also buy some private land and buy houses off the plan in private developments as KiwiBuild homes.

"I'm convinced Government can be a real catalyst in this area to really scale up the level of ambition. For example, we are talking about 12 to 15 development project sites in Auckland alone on the scale of a Hobsonville. Twelve to 15 project running simultaneously."

The Hobsonville Point development will have about 4,500 homes when completed.

At the release, one of the authors, economist Shamubeel Eaqab, said KiwiBuild should be aiming for 500,000 houses – not the 100,000 proposed – and the Government should not be scared of borrowing to do it.

He said the KiwiBuild houses should also be on top of those the private sector was already building and questioned whether Labour's fiscal responsibility rules would stymie its chances of delivering on the programme and other housing-related projects such as infrastructure.

Those rules, agreed by Labour before the election, require it to remain in surplus and get debt down to about 20 per cent of GDP.

"The last decade was the best time to borrow money. You are a fiscal idiot if you don't borrow money when interest rates are at the lowest level in a century. I think the challenge is there is a whole lot of politics involved in this and that's not my area, but money is cheap and everybody is looking to lend you money.

There is an endless list of projects that are begging for money. Whether it's housing, whether its infrastructure. We need to spend money building up the capability of New Zealand. Debt is the best possible way to do it. I think the fiscal responsibility rules are a straitjacket that are unnecessary."

He said Housing NZ in particularly should be geared up to increase building and he believed state house numbers should double over the next decade.

In response, Twyford said the policy was to produce an average of 10,000 more affordable homes a year than the private market was delivering as well as increase state housing construction. Many would be part of ''large-scale'' urban development projects which included open market properties as well.

He said the combination of KiwiBuild, more state house construction and an urban development authority to oversee the developments, more than 100,000 homes would end up being built.

Twyford said infrastructure was a block to growth and financing needed to be reformed. That included infrastructure ''partners'' as had happened with the broadband rollout – and the debt would not be on the Government's balance sheet.

"It's about tapping into private finance and making that available for investment in infrastructure.

There is a planet of cash out there that would love to invest in our city's growth. They have no way of doing it at the moment."

The authors were asked not to offer policy recommendations but did so at the launch.

Eaqab called for urgent reforms in tenancy laws and the rental market, saying that would provide immediate relief to more people than housing developments would. About half of the adult population rents.

Twyford said reviewing the Residential Tenancies Act was one of his priorities for the next year, including encouraging long-term tenancies.

Eaqab said the rental laws were written in the 1980s and New Zealand needed a change in mindset about the rental market – including "build to rent'' developments as a separate asset class similar to retirement villages.

Eaqub said Switzerland and Germany were the models for tenancy rules which catered to those who rented for life. Such reforms were "a stretch too far" for current landlords in New Zealand, but there were hybrid models which provided for secure long-term tenure and agreements on rental increases ahead of time, similar to the commercial leasing model.

"We've had enough gains on capital for landlords to be perfectly happy with the value of their houses. I think there is a public good reason we should be changing the rules."

He said capital gains were the primary motivation for buying a rental, rather than rental yields. "If it wasn't for capital gains, why the hell else would you buy a pain in the ass? Which is kind of what rental properties can be by the time to you do the maintenance, look after your tenants, look after the vacancy, the insurance, all those bits and pieces."

He said it should be a business to look after tenants and run rentals, rather than simply renting out while capital gains racked up. One possibility was using foreign investment for ''build to rent'' developments.