Media release: Initiative supports call to ban urban limits
Wellington (18 May 2016): The New Zealand Initiative has welcomed calls to scrap Auckland’s urban growth boundary, saying the evidence unambiguously shows that these sorts of policies artificially push the costs of housing up.
This comes after Labour Housing Spokesman Phil Twyford today said his party would abolish Auckland’s city limits should it be voted into government.
The think tank’s own research in the housing market has shown how the Metropolitan Urban Limit choked off the supply of land amid a fear of urban sprawl. The effect was to reduce new home construction numbers from over 30,000 a year in the 1970s to less than 10,000 ahead of the Global Financial Crisis.
This has since picked up due to interventions by the current government, but still falls short of demand. Official figures showed immigration had swelled the country’s population by net 67,000 over a 12-month period, while only 27,000 new houses had been consented over the same timeframe to accommodate these new arrivals.
“A huge component in the cost of a new house is the price of land, but this is something we have an abundance of in New Zealand,” says Jason Krupp, a Research Fellow at the Initiative. “It is absurd that in a country the size of the United Kingdom, but with only a 14th of their population, city officials are obsessed with urban sprawl. Less than 1% of New Zealand’s surface is built upon, and that includes landfills and roads.”
Auckland has proposed replacing the MUL with a Rural Urban Boundary, which includes more greenfield land for development, but the think tank said it falls short of the supply injection needed to shift land prices lower.
The think tank also called for reforms on how public infrastructure is financed, saying opening land for development is only part of the solution. This other part is infrastructure, such as roads, water and footpaths, which councils are largely responsible for providing. However, their ability to do so is constrained by limits on their limited ability to borrow, and the burden that these costs would impose on rate payers.
The Initiative has recommended government create a framework to allow private developers to fund their own infrastructure using bonds finance, which can be later assimilated into the broader urban infrastructure network.
“As long as councils have a monopoly on infrastructure provision their ability to release land for housing will be limited to a trickle, which does nothing to solve the affordability crisis,” says Krupp. “We are pleased to see that this is a policy recommendation that Mr Twyford is also supporting.”
The New Zealand Initiative’s research into housing affordability includes Price Out, Different Places, Different Means, Free to Build, and Up or Out, all of which is available for free on its website.
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