“National’s plan to subsidise the sale of state houses to first home buyers in provincial areas will do nothing to tackle the housing affordability crisis which is occurring in our biggest cities, ACT Leader John Banks said today.
Housing Minister Nick Smith today unveiled a plan which would see around 400 state houses located in provincial areas sold to first home buyers. The buyers could receive a direct subsidy of up to $20,000 to purchase the homes.
“Vacant state houses should be sold outright, with no subsidy, Mr Banks said.
“It is a very poor use of tax payers’ money to subsidise first home buyers in areas where the housing affordability crisis is the least pronounced.
“People struggling to buy a modest home in Auckland or Christchurch will feel aggrieved that those in much more affordable areas are being given a hand out by the Government.
“In addition, a plan that only focuses on the state house sector fails to tackle the issue of rising house prices in our biggest cities.
“The majority of people live in owner occupied housing or private rentals. That is the sector of the market that needs to be tackled.
“ACT’s Freedom to Build policy would significantly increase the supply of land in areas like Auckland, so developers can start responding to the high demand and build more houses.
“A core part of this policy is to significantly reform the RMA so that people can more easily subdivide their land and build on it.
“We should not be giving tax payer subsidies for people to buy their first homes in relatively affordable areas. We should be removing the current restrictions that are stopping enough new homes be being built”, Mr Banks said.
ACT Leader John Banks today expressed disappointment at the Maori Party and United Future’s decision not to support National’s proposed reforms to the Resource Management Act (RMA).
“I am disappointed but there is still hope. New Zealand has a once-in-twenty year opportunity to fix the RMA and we have to take it now - doing nothing is not an option,” Mr Banks said.
“The business community and farmers who have been held back by the costly and unwieldy red tape imposed by this flawed legislation are looking to Parliament for leadership.
“Home owners who want to improve their properties and would-be home buyers who are most hurt by the housing affordability crisis want Parliament to get on and fix the RMA.
“Most property owners and businesses know the RMA is stopping investment, growth and jobs.
“It does this through poor drafting and bad case law. That’s why giving local government and the Courts clear law was so important.
“In the face of poor drafting both the Māori Party and Mr Dunne should offer real proposals for reform of the RMA that address the concerns of homeowners, builders, farmers and business.
“As I said doing nothing is not an option,” Mr Banks said.
The Reserve Bank’s new restrictions on high loan-to-value ratio housing mortgages are a classic illustration of how bad policies are self-propagating.
The originating problem is the artificial shortage of land for housing:
- Not enough homes have been built to cater for a growing population
- House prices have become too high relative to incomes
- Mortgage burdens for the average house buyer have become too high as a result.
The banks are not to blame for this problem.
The Reserve Bank is not to blame for this problem.
And the Reserve Bank's new restrictions will not solve the problem, as it freely concedes.
To the extent that the restrictions reduce house prices, they will reduce the incentive to build more homes.
National’s policy of subsidies for first home owners will not make houses more affordable. Instead it will increase demand and make houses less affordable for others.
Tackling the issue of supply is the only policy that will get more New Zealanders into affordable homes, and ACT's Freedom to Build policy is the only one that really cuts to the chase.
It will free up land for residential housing and make subdivision easier. This is the quickest and most effective way to make housing more affordable.
Freshwater is a vital component of human life and our economy. The management of the freshwater resource is therefore very important but as knowledge about freshwater evolves that management must adjust to avoid unnecessary scarcity or quality problems.
A key part of management is to oversee systems that efficiently allocate freshwater, avoiding the waste associated with both under- and over-exploitation. It is very important to get these systems right.
ACT acknowledges the valuable work undertaken by the Land and Water Reform on these issues, particularly in respect of its examination of the case for tradable rights or consents and the desirable design features of such a mechanism.
ACT's April 2013 submission on the government discussion document: Improving our resource management system stressed the value, environmentally and otherwise, of a system of well-defined and well-enforced property rights for resolving disputes over the allocation of natural and physical resources and maximising the well-being of people and communities.
That submission explained why government interventions of a specific nature might be desirable in situations of a public good character, but such interventions needed to be respectful of private property rights. The RMA differed markedly from the Public Works Act in that respect.
Another problem with the RMA that this submission identified was the failure of its purpose statement to clarify whether the purpose was to improve the well-being of people in their community, or to sacrifice it to some other cause.
This submission on the government's March 2013 discussion document, Freshwater reform 2013 and beyond is largely supportive of the approach taken in this document, yet finds the same issues potentially arising to a significant degree.
New Zealanders are rightly proud of our beautiful country.
The early colonists stamped their mark on the landscape, as did the cities that were built on the fruits they seeded. Our forbearers created the wealth and prosperity that makes an even more congenial environment more affordable.
The government's February 2013 discussion document, Improving our resource management system, makes the case that good resource management should improve both future economic prosperity and the quality of the environment. ACT strongly concurs.
ACT also strongly agrees with the document that the current resource management system is imposing costs, uncertainties and delays that are adversely affecting jobs, investment, and productivity. We would go further and say that the 900-page Resource Management Act 1981 (RMA) has become one of the greatest investment- and job-destroying machines that has been inflicted on New Zealanders.
The increasing focus on imposing petty paternalistic restrictions on the urban built environment is only making matters worse.
Auckland's housing affordability crisis is just one manifestation of this growing problem.
ACT broadly supports the reform directions in the discussion document, but does not consider that they get to the heart of the matter – the need to better confront disputants with the cost to communities of delivering what they want. Most RMA disputes are about the best use for a scarce natural or physical resource. Confronting the contending parties with the costs of securing the benefits they desire would improve both environmental and economic outcomes, for reasons which are explained in this submission.
Instead, the proposals in the discussion document tend to treat symptoms – such as delays and compliance costs – rather than causes. More intrusive central government direction and control would be a fine thing, if it were in the right direction; but not necessarily otherwise. Similarly faster decision-making might of little value unless it produces better decision-making.
ACT considers that National's recognition of the magnitude of the problems being caused by current arrangements creates a rare one-in-twenty-year opportunity to effect changes that can really make a difference. The most effective changes are bound to be ones that address fundamental causes.
In this submission ACT analyses the fundamental problems with the RMA, lists indicated (partial) remedies in general terms, and relates them to remedies put forward in the government's discussion document. An appendix suggests how the indicated remedies might be implemented through drafting changes to specific sections of the RMA.
The concluding section points out that what is really needed is a more comprehensive review of the RMA in the context of other relevant legislation, including the Local Government Act. Moreover, government ownership in itself can independently weaken accountability for poor environmental and commercial decisions.
These are important matters for the well-being of New Zealanders.
No one wants to see environmental quality in New Zealand deteriorating, along with relative living standards, when materially better outcomes are attainable from better policy settings.
ACT welcomes careful, reasoned public debate about the best remedies for the RMA's fundamental problems. This contribution is made in that spirit.
It doesn't matter whether the Unitary Plan allows for relatively intensified development inside the Rural Urban Boundary, or greenfield developments outside of it, aka subdivisions.
That is because the problem Auckland has at its core is anti-development legislation - the Resource Management ACT (RMA).
It isn't right when developments in Long Bay, for example, take 18 years to get off the ground and can be held up by people living in the Coromandel.
The RMA came into effect in 1991.
At that time the ratio of median house price to median income was around 3 to 1.
That means before the RMA, a median house price was $300,000 and the median household income was $100,000. That's easily affordable.
Today it is almost 6 to 1.
Even if median incomes moved to $150,000 (which they haven't), median house prices have increased to $750,000. That's quite unaffordable.
It takes too long to build a house in Auckland, and it costs too much.
The RMA has created the situation in Auckland where perfectly responsible developments are opposed and delayed to the extent that, if they ever get off the ground, the extra costs have pushed up the price of the final product. It has made housing unaffordable, and created a crisis.
It is therefore irrelevant what the Unitary Plan says about where properties can be built, and what land can be developed.
Unless the RMA is dramatically reformed to create a presumption of development and a restriction on the opposition to developments, the Unitary Plan will mean nothing.
And that is because people in Coromandel will still be permitted to oppose, and thereby delay, developments in Auckland.
Author of this blog post, Nick Kearney, is the Local Board Member for the Kaipatiki Ward.
The inner Waitemata Harbour suburbs of Beach Haven, Birkenhead, Chatswood, Birkdale, Northcote Peninsula, Glenfield, Hillcrest and Marlborough make up the Kaipātiki local board area. It is bounded by the Northern Motorway to the east.
Labour’s David Parker has shown remarkable ignorance of his own Government’s poor economic record with his claim today that a current account deficit of 7% puts New Zealand’s economy in a ‘danger zone’, ACT Leader John Banks said today
“Under the last Labour Government, the current account deficit was 8.7%, 8.0%, 8.0%, and 7.9% of GDP in the years ended March 2006, 2007, 2008, and 2009 respectively. But did we hear Labour warning of us of the ‘danger zone’ then?” Mr Banks said.
“Labour claims that it’s the policies of the National Government that has caused our economic growth to suffer. But the reality is, it’s National’s failure to wind back Labour’s wasteful spending binges that’s the problem.
“Labour’s policies of big government spending undermined the competiveness of exports and firms competing with imports, and turned surpluses in the balance between exports and imports into deficits.
“But rather than see the error of their ways, Labour is doomed to repeat their mistakes.
“Labour’s continued commitment to intrusive regulation of New Zealanders’ financial affairs, its antipathy to commercial enterprise and its love of big, wasteful and ineffectual government programmes show that it has learnt nothing from the mess the Clark-Government had made of the economy by 2008.
“If David Parker and Labour are serious about improving competiveness, they should join with ACT in calling for less government spending and lower tax rates to give our internationally exposed industries a greater ability to compete. Less restrictive labour market legislation and RMA reform would also help,” Mr Banks said.
ACT Leader John Banks today congratulated the Minister of Housing for agreeing with ACT that land prices for residential housing were absurdly high in Auckland because land supply was too tightly constrained.
Freeing up the supply of land is the only rational answer to this problem and ACT fully supports Nick Smith’s focus on easing the Metropolitan Urban Limit,” Mr Banks said.
“The Productivity Commission report into housing affordability found that in Auckland, land accounts for approximately 60 per cent of the cost of a new home. Outside of Auckland, land only accounts for 40 per cent of a new home.
“In other words, Aucklanders are paying a 20 per cent premium on land as a result of Auckland Council’s urban planning policies.
“This isn’t fair – and the Council’s plan to constrain 60 – 70 per cent of all new development within the current MUL will only make it worse.
“ACT believes New Zealanders should be able to choose for themselves where they want to live – whether that be in intensified, compact apartments close to the city, or on the city fringes in a home with their own bit of lawn. The role of the Council plan is to enable lifestyle choices of Aucklanders rather than dictate them.
“ACT’s Freedom To Build policy provides a blueprint for RMA reform which would restore private property rights and free up restrictions on land supply.
“We are pleased Housing Minister Nick Smith supports the principles of ACT’s policy and we hope he encourages Environment Minister Amy Adams of the need to go further with the proposed RMA reforms,” Mr Banks said.
Wellington property owner Mark Dunajtschik’s fury at being denied permission to demolish a heritage building that is uneconomic to earthquake strengthen highlights the costly and unfair burden posed by the RMA, ACT Leader John Banks said today.
“The Resource Management Act denies landowners the right to compensation which allows councils to get away with this behaviour,” Mr Banks said.
“The owner is forced to pay for something he does not want, while the council doesn’t have to pay a cent.
“I support protecting heritage buildings but Councils should do that by working with property owners and coming to a voluntary arrangement, not by putting them in an impossible position.
“If government – local or central - wants to dictate what a building can be used for, it should either buy the building under the Public Works Act or compensate the owner for losses they suffer as a result of not being able to upgrade their property.
“The RMA needs to be amended to better reflect the property rights that all New Zealanders are entitled to, and once had.
“ACT’s Freedom to Build policy would restore the recognition of property rights in the RMA and restore a right to seek compensation for the effect of land use controls like those suffered by Mr Dunajtschik,” Mr Banks said.
ACT's Freedom To Build policy can be found here
Fury over quake-risk demolition refusal can be found here
Today's comments by Labour leader David Shearer and Green MP Holly Walker prove that neither Labour nor the Greens have any interest in addressing the real cause of housing unaffordability - the lack of land supply, ACT Leader John Banks said today.'
“David Shearer bizarrely asserts that increasing the freedom to build would increase red tape. How does this make sense and since when did Labour oppose increasing red tape? Labour put around 30,000 pages of new legislation on the books between 2000 and 2009 – by far the largest number in any decade in the history of New Zealand,” Mr Banks said.
“Labour could demonstrate its road-to-Damascus conversion to opposing red tape is genuine by publicly supporting the Regulatory Standards Bill that was recommended by the high-powered Regulatory Responsibility Taskforce. The Bill would oblige new and existing regulations to be tested against sound principles more rigorously than in any time in New Zealand’s history.
“As for the Greens, their assertion that freeing up the supply of land would make housing less affordable is, if anything, even more incoherent than Labour’s statement. At least they deserve credit for consistency in that respect.
“The Greens are staunchly opposed to the reasonable desire of most New Zealanders to own a house with a bit of green land around it for the kids to play on, the whole family to enjoy a summer BBQ, and off-street parking. They want to force New Zealanders to intensify but New Zealanders don’t want the chicken coop high rise living that the Greens want to force on them and their families.
“ACT’s Freedom To Build will address the key cause of housing unaffordability – land supply. It will give families the choice to live in an affordable home with a bit of green land, or in an apartment if that’s what suits them best,” Mr Banks said.
ACT's Freedom To Build policy can be found here