Media release: Urban land NPS just firing blanks
Wellington (2 June 2016): The government’s draft national policy statement (NPS) on urban development, while a step in the right direction, will not fix Auckland’s housing crisis because it ignores infrastructure, according to The New Zealand Initiative.
Building and Housing Minister Nick Smith today launched draft policy guidance under the Resource Management Act, which looks to force councils to zone more land for development when house prices breach a certain affordability threshold.
The think tank said that while the NPS is broadly headed in the right direction it is unlikely to make a material difference to housing affordability levels in Auckland by itself because it fails to address the real constraint on councils: infrastructure funding.
“The reason councils trickle out land supply for housing is that infrastructure is costly, and it is existing residents that have to carry these costs upfront,” said Research Fellow Jason Krupp. “Even Minister Smith admitted it’s not a silver bullet – but without provisions for infrastructure, it’s really just firing blanks.”
Ahead of the launch, Minister Smith stated that developer contributions would be sufficient to cover these infrastructure costs. However, Krupp noted that this is somewhat misleading, as previous legislation introduced by Nick Smith has limited council’s ability to recover full infrastructure costs from development contributions.
“The government’s message is strangely mixed when it comes to housing and local government,” he said. “On one hand they’re encouraging councils to spend up on infrastructure, while on the other they limit their ability to recover these costs, and publically haul councils over the coals when spending exceeds consumer inflation. They can’t have it both ways, and we hope the final policy provides some clarity on these issues.”
To sidestep council’s financial constraints, the Initiative has recommended government create a framework to allow private developers to fund their own infrastructure using bonds finance. Known as Municipal Utility Districts, or MUDs, these private debt vehicles have been used widely to fund urban infrastructure across large parts of the United States.
The New Zealand Initiative’s research into housing affordability includes Priced Out, Different Places, Different Means, Free to Build, Up or Out, and Empty Nests, all of which are publically available online.
ENDS
To arrange an interview please contact:
Simone Evans
Communications Officer, The New Zealand Initiative
Phone +64 4 494 9109
Mobile +21 2937 250
simone.evans@nzinitiative.org.nz
About The New Zealand Initiative
The New Zealand Initiative is an evidence-based think tank and research institute, which is supported by a membership organisation that counts some of the country’s leading visionaries, business leaders and political thinkers among its ranks.
Our members are committed to developing policies to make New Zealand a better country for all its citizens. We believe all New Zealanders deserve a world-class education system, affordable housing, a healthy environment, sound public finances and a stable currency.
The New Zealand Initiative pursues this goal by participating in public life, and making a contribution to public discussions.
For more information visit www.nzinitiative.org.nz