Building height restrictions and NIMBY attitudes in inner Auckland are standing in the way of an adequate supply-side response to Auckland's housing shortage, Reserve Bank governor Graeme Wheeler suggested today.
Appearing before Parliament's finance and expenditure select committee he reiterated the bank's estimate that the backlog of unsatisfied demand in the city is between 15,000 and 20,000 houses.
While dwelling permits issuance had risen to an annual rate of around 7500 -- "a huge improvement" -- that was still well short of the 10,000 a year over the next 30 years the Auckland Council had estimated the city needed, let alone eating into the backlog, he said.
"Some very good work has been done on opening up new areas but a major challenge there is getting the houses built quickly enough and a lot of those areas are in the periphery of Auckland where people may decide the transport costs make it less attractive for them or the infrastructure needs might be considerable," he said.
"I think work needs to be done in inner Auckland in addressing the height restrictions and the not-in-my-back-yard syndrome that's there."
He welcomed the work the Productivity Commission has been asked to do on issues related to zoning decisions, regulatory reform and approval processes.
When asked what he saw as the role of central government in increasing supply, Wheeler said he was probably not the right person to ask.
"But from what I can tell looking at the issues around Housing New Zealand and social housing it may well make a lot of sense to release some of those houses to the market.
"It may make a lot of sense to look at who the tenants are and what their income status is, so that people on low incomes are the beneficiaries of that sort of state investment."
Wheeler said the loan-to-value ratio restrictions the bank introduced in late 2013 had cooled the market, reducing prices by perhaps more than the forecast 2 to 3 per cent, compared with what they would otherwise have been.