Brian Rudman: Smith gets it wrong with land rant

Housing Minister Nick Smith. Photo / Mark Mitchell

New Housing Minister Nick Smith should really try to keep up with what's going on. Just because he's been on forced gardening leave from the Cabinet for an earlier rush of blood to the head is no excuse for storming up to Auckland to throw his weight around like a crazy man.

Echoing demands from Prime Minister John Key that Auckland Council free up farmland for housing development, Dr Smith is vowing "to break through the stranglehold that the existing Metropolitan Urban Limit has on land supplies". He said this barrier against urban sprawl was "killing the dreams of Aucklanders" by driving up land prices. He was on the hunt for "new tools" with which to knock down the MUL.

What he seemed blissfully unaware of is that Auckland Council has come up with just the tools he desires in its new unitary plan. This document will replace the limit with a Rural Urban Boundary (Rub), an official city development wall bulging further out into the urban hinterland, providing space for 30-40 per cent of Auckland's planned residential expansion over the next 30 years.

Late last year, Auckland Council pleaded with Environment Minister Amy Adams to streamline the adoption of this new plan so it could come into legal effect as soon as Auckland Council adopted the document later this year. Ms Adams refused - rightly in my view - because it wouldn't give Aucklanders "adequate recourse" to appeal against the details. Ms Adams' decision means that the new plan doesn't come into play until late 2016.

With one minister having blocked Auckland's Council desire to fast-track the new Rub, it's a bit rich for another to be stomping around blaming Auckland Council for the delays.

He could have saved himself embarrassment if he'd bothered to go and have a catch-up with Mayor Len Brown. But for all the minister's talk of co-operating with city hall, the mayor's office says Mr Brown and Dr Smith have met only once since his appointment six weeks ago, and that was a token social call soon after his rehabilitation.

On the radio yesterday, Dr Smith said he needed "to find some tools to free up the land supply" before 2016. If he'd talked to the mayor, he'd have learned he should be waving his wooden stick at his colleague Amy Adams, not Mr Brown.

Of course, opening up the edges of Auckland to urban sprawl is not going to be the panacea for affordable housing that the Government is trying to make out. Even the Productivity Commission's March 2012 report on housing affordability, which Dr Smith and his colleagues quote from selectively as though from some kind of Bible, declares it's not that simple. Although it does claim it is an important factor.

The commission, for example, argues that "the value of land just inside the MUL boundary is almost nine times greater than the price of land just outside the boundary, indicating that the MUL is a binding constraint on land supply".

But in a free market situation, surely once the land on the "wrong" side of the existing MUL becomes available for housing, it's going to rise in value to reflect its new worth.

It's certainly not going to retain its cheap rural value. The existing farmer, or land-banker, is going to make a killing from the rezoning, if or when they sell to developers. But how is that going to make the eventual housing estate any more affordable for the end buyer?

Then there's the new infrastructure to consider. Dr Smith can demand all land north to Whangarei be opened for residential if he likes, flooding the market with "cheap" land. But is he going to pay the huge costs to connect scattered developments up to the town water, sewerage, electricity and roading? Of course not.

The Housing Affordability Bible, if Dr Smith were to open it to page 102, chapter 7, verses 2-4, would tell him that "bringing significant tracts of both greenfield and brownfield land to the market in Auckland ... "for residential development would help address affordability".

It further recommends "both intensification within existing urban boundaries and orderly expansion beyond them", and calls on councils to "reduce barriers to densification and consider more flexible approaches" in existing suburbs.

Auckland's new unitary plan does all the above. It provides a whole garden shed of the tools Dr Smith is demanding. All he has to do to get his way is to persuade Amy Adams to let Auckland put the tools to work.