New Zealand Deputy PM Cautions That Unbridled Housing Reforms In Auckland May Backfire

Even as New Zealand is bracing to tackle the pressures of Auckland housing such as its galloping prices, Deputy Prime Minister Bill English, who is also the Finance minister, has expressed caution that hasty measures intended to tighten the overheated Auckland housing market may backfire, unless handled carefully.

Commenting on the Productivity Commission's proposals, for taking an aggressive approach in Auckland, the Finance Minister advocated a moderate and calibrated approach. The commission had mooted several proposals that included levying of congestion charges, more toll based roads and creating an Authority for compulsory land purchases. The Government feels that some of the suggestions will be hard with the public.

One of the irksome measures could be an urban authority for "compulsory acquisition powers" over private land, charging of toll and congestion charges. "I'm sure there will be things there that anyone would baulk at," the Finance Minister told TV3.

Commission Report

The Productivity Commission in its draft report, “Using Land for Housing” explored the ways and means at improving the supply of ready-to-use housing land, for keeping land and house prices as low as possible. It wants regulation toned down so that it does not add up to the cost of apartments in terms of requirements on balconies, and number of car parking slots. The draft report is kept open for public consultation until August.

English added that the government has an open mind and, “we are willing to look at all their propositions to get more houses on the ground sooner and faster.” He refused to rule out the creation of an urban agency with compulsory acquisition powers, but called the idea "a bit of a stretch.” At the same time, the minister said the general direction is good at getting a better connection between the cost of housing and the rollout of infrastructure.

The report bats for wider use of the local body planning process under the amalgamated Auckland Council. It wants Crown agencies to pay local body rates $180 million a year to boost local body finances. Policy think-tank “The New Zealand Initiative” welcomed the report's focus to improve the supply of land for housing. "Once councils are in a better position to not just release that land but also provide the infrastructure, that'll make it easier for private developers to come in and use that land," Executive director Oliver Hartwich said.

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