Sensible approach to improving housing affordability

ACT Leader John Banks today welcomed the Government’s response to the Productivity Commission’s report on housing affordability, saying it is now time to get on with implementing the policy suggestions.  
“Current policies have created a tenant generation who cannot afford to buy their own homes,” Mr Banks said.  
“According to the most comprehensive international housing affordability report, ‘Demographia’, it is now more expensive to buy a house in New Zealand than in the UK.  Once upon a time people came here from the UK in the hope of buying their own place.  Under current policies they would be better off going back.
“Council restraints on the supply of land for residential homes have had a big impact, pushing land prices up and with it the average price of a modest home.   This has seen the proportion of 35-44 year olds renting double from 20 to 40 per cent since the mid 1990’s.  
“ACT has long called for an increase in the supply of buildable land as a solution to the problem of housing affordability, and it is good that the Government has finally agreed to facilitate more greenfield and brownfield developments.       
“Expensive and time wasting RMA processes have also added to the cost of housing, so today’s announcement for a six month time limit for all council processing of medium sized consents is a step in the right direction, but in reality this is still far too long.
“ACT believes more work on the RMA is required to reduce this time frame and in the long term the Government must accept that major RMA reform is necessary if it is truly committed to improving housing affordability.   
“ACT believes the housing affordability crisis we face today is not a result of market failure, but of poorly drafted legislation and government interference.   We are pleased that steps are finally being made to reverse this trend,” Mr Banks said.