Monday, 12 July 2021

Free Press, 12 July 2021


The Haps

Parliament is in recess for three weeks so your property is safe. ACT’s MPs are embarking on a 45 stop tour of the country, packing halls from Ashburton to Alexandra last week. This link shows when they’ll be near you. Farmers are facing an avalanche of regulations and are fed up. ACT MPs will be at Groundswell events up and down the country on Friday.

Housing

Labour were elected because National failed to arrest house price inflation, but they have managed to make it worse. Labour removing mortgage interest deductibility for landlords has proved no more successful than National introducing a bright-line test.

What these policies have in common is that they don’t get a single extra house built. If anything, they make it less attractive to own a home. Meanwhile, people whose homes have risen in value know they’re no better off if they have to buy in the same market, and the question is what it means for their kids.

Today ACT launched a new housing policy to change the underlying drivers of housing supply. It comes in three parts, building infrastructure, opening up land, and letting builders build. Without changing these practical drivers of supply, no housing policy can fix the underlying problem of too many people chasing too few houses.

Infrastructure supply is sclerotic. The Government cancelled the Mill Road project in part due to the cost of acquiring land to build the road on. The problem is, without new roads, it’s hard to get to new land, supply remains constrained, and the price remains high. What to do?

ACT’s policy combines the advisory-focused Infrastructure Commission and the procurement-focused Crown Infrastructure Partners to create the Nation Building Agency, an agency charged with setting the wish list of suppliers and inviting the world to build them, open to public private partnerships and, perhaps, tolls if they get new infrastructure built.

So long as we rely on Government to be the driver and funder behind every project, and fund every project out of tax revenue, we cannot hope to get the infrastructure needed built. We need open-minded, innovative thinking to get things built.

With that, we need to open up land. The Government’s proposed Resource Management Act reforms will do little to make development easier, and may even make matter worse. ACT would remove limits such as Auckland’s Rural Urban Boundary (as Labour promised when elected) and replace the Resource Management Act with a development focused law suited to cities rather than having the same law for conservation of precious wilderness and deciding who can subdivide a horse paddock in Henderson.

With infrastructure and land available, there is still a need to build homes. Right now the shortage of building materials, particularly timber, is dire, but New Zealanders have always paid way over the odds for building materials.

ACT’s solution is to allow materials and building techniques accredited in developed countries with similar conditions, for example Japan, Oregon (that have lots of hills, rain, and earthquakes) to be automatically allowed in New Zealand. However, there is one catch.

The catch is that, instead of council building inspections, another inefficient roadblock placed on building, new builds will have to come with private insurance. We foresee New Zealand being part of an international market for building techniques and materials, with a dynamic quality assurance markets underwritten by private insurers.

Putting these policies together and you get a revolution akin to the revolution the rest of the New Zealand economy went through in 1984. Instead of a highly regulated, locked down state dominated market place, we could have an open market with innovation and investment from the wider world.

Doing so would create an abundance of housing, so that the next generation can believe in a free and open society, rather than seeking solace from socialist soothsayers, as more and more will if they do not see a pathway to an open democracy.

If you’d like to read more about the policy, it is here. If you like the way ACT brings practical ideas to the political arena, we hope you’ll join and or donate to the party.