When the government took the Housing Accords and Special Housing Areas Bill to its third reading, it marked a shift in the past 20 years of planning in New Zealand by potentially centralising planning approvals to Wellington.

The basis of the deal is that the Auckland council agrees to expedite its approvals process and cuts down potential development approval times from years to months. If Auckland cannot do this, applicants have recourse to go to Wellington to get their development approved.

It is an attempt begin 'fixing' the problem of housing affordability in New Zealand. In this endeavour, we are not alone.

As we discussed in this column, it's very easy down in this part of the world to think that our problems are unique. Or, conversely, that our problems are the same the world over. This is no truer than when it comes to housing and local government.

The international picture is more complex, but in general, Anglosphere countries have had more price inflation than other nations (with the notable exceptions of Ireland and Spain). Much of the rest of the developed world has not experienced price spikes of the sort found in New Zealand.

In Germany and Switzerland there have been no significant price rises since the 1970s. Throughout continental Europe it is a similar story.

But why is this? Surely there are similar factors at play in most developed countries?

For 40 years the Germans have had stable house prices, as have the Swiss, although they have had a little less stability.

The three things that both these jurisdictions have in common are relatively devolved planning structures, economic incentives tied to new development, and clarity with regards to house and dwelling building.

Although both nations have rent controls and various distortions in their housing markets, both have solidly managed to supply enough houses to keep prices stable.

They have several features in common: first there is an assumed right to build. If a building complies with the local plans, there is a right to build it.

Second, both sets of local governments have their incomes tied to the amount of people and businesses existing in their area.

This gives local authorities a powerful incentive to make sure housing supply keeps up with demand, and crucially, that it remains affordable.

Houses that are too expensive do not attract new taxpayers to a region, and your ability to fund services as a local government body are severely curtailed.

Admittedly, Germany has a shrinking population so supply may be less of an issue for the foreseeable future, particularly outside of the six major cities. Having said that, shrinking household size counteracts the population effect somewhat. Switzerland is currently growing, but despite contemporary circumstances both countries have kept prices stable over a long period.

If we look at a different example, Texas, the planning culture is different again: property rights are paramount.

There is a great deal of freedom to develop, particularly with regards to new subdivision development and it's financing. The main vehicle used, particularly around Houston, is a Municipal Utility District. These are bond-financed statutory taxing authorities where residents pay an extra tax to meet the cost of their infrastructure.

There is also virtually no zoning outside of cities, so urban boundaries are rendered redundant. The upshot is a high rate of building, a lot of competition for land, as developers can finance their own infrastructure.

In everyday terms that means the average house price in Austin, which is regularly rated as one of the most desirable cities in the US, comes out at US$187,000 (NZ$229,000). In New Zealand, the equivalent is $385,000 - almost 70 per cent higher.

This low cost of housing has been credited for Texas' excellent economic growth record in recent years and its attractiveness for inward migration.

In the end, there are many ways to try and stabilise the housing market and keep prices constant or slightly rising over time. The Housing Accord is one way to try and speed it up, but as we can see, there are different ways to do it.

These are the areas where New Zealand should be looking to find long-term solutions to our housing supply problem. 

Source: Look overseas for housing solution