Heeding experts’ housing advice is a better option for the Government than beating up Auckland Council.

The week began with Finance Minister Bill English promising he would "keep looking for more tools" to help Auckland Council deal with the region's deepening housing crisis.

Next day, as if on cue, up popped Housing Minister Nick Smith brandishing the first of them. A cudgel.

Reacting to deputy mayor Penny Hulse's plan to veto three proposed special housing areas in rural Huapai unless the Government committed to upgrading the local roading, Dr Smith warned that if Auckland "overplayed its cards" the Government could override the council and approve the fast-tracked housing areas itself.

With 84 special housing areas already mutually agreed to between Auckland and the Government under the special legislation, such childish threats are boorish.


Auckland Council deserved a considered answer to the legitimate question of who was going to pay for joining these proposed new rural housing islands to the roading, sewerage and water networks of the wider urban region.

Ms Hulse said that until the Government "commits to funding the vital infrastructure required" on such greenfield sites, the council would "focus on brownfield sites which already have good levels of infrastructure service".

"But we still need central government help to shore up the funding for roads and water and electricity supply," she said. "Otherwise the cost of growth will be borne by Auckland ratepayers.

"Developer contributions only cover some of the costs of new subdivisions, the rest downstream are covered by ratepayers and those ratepayers do not want larger rate rises."

The Government could do a Christchurch and overrule Auckland Council on the matter. But then what? If the Auckland Council refused to extend the sewer and water mains, and the roading to these orphan developments, is it likely any developer would go near the project?

Best news on the Auckland housing front is that the Government will invest $200 million in building 7500 new homes - the majority to be sold on to private buyers on the controversial Tamaki redevelopment site at Glen Innes, Pt England and Panmure.

"That's a big direct intervention in the market, " says Mr English, "and we want to do more of that when we can."

Unfortunately, the 10-15-year time scale outlined for this project indicates how reluctant the Government is to take Auckland's housing crisis seriously.

Last October the Ministry of Business, Innovation and Employment estimated a current shortfall of 18,000 dwellings and an "ongoing supply shortage".

It is now predicting a shortage of 25,000 in Auckland by the end of the year.

On top of that shortfall is the ongoing demand for 12,000 to 13,000 new houses a year to provide for New Zealanders returning home and internal and external migration. Currently about half that number of houses are being completed. What's being planned for Tamaki makes up one year's shortfall.

If Mr English could build the 7500 houses in one year, that would show the Government was taking the crisis seriously - but 500?

Not that this foot-dragging comes as any surprise. While Dr Smith and his predecessors rush about introducing fast-tracking legislation to bully Auckland Council into action, inaction at the Government's own Hobsonville Pt housing project in Prime Minister John Key's electorate speaks volumes.

For more than 15 years the Government's housing arm, Housing New Zealand, has, at a snail's pace, been redeveloping the old airbase as a 3000-house suburb. The pace has been glacial. This week we learned of $50,000 price hikes for the "affordable" homes being built there, and also that only 130 homes had been built.

If the Government is serious about the housing crisis, the quick answer is to address the supply shortage and build some more, and where better than in its own masterplanned development?

It's what the Productivity Commission recommended two years ago in a Government-commissioned report.

The advice was picked up in the ministry's post-election briefing notes last October to its incoming minister Dr Smith. It said that "using the Government's role as a major construction client" would "provide opportunities for the sector to deliver innovation and scale economies".

It added that "to lift supply to match demand in Auckland" would require the Government "facilitating large scale and innovative developments in partnership with the private sector" by "leveraging Crown land assets and potentially supporting the aggregation of private land".

Unfortunately, ideologically the Government can't bring itself to take the advice of either the Productivity Commission or its housing experts. Instead it prefers to beat up on Auckland Council.

Meanwhile, Auckland house prices keep rocketing skyward.