Auckland Housing

The Haps

The political year starts under a pall as we mourn the six missing at Mount Maunganui. We are aware of the speculation swirling around the causes of the disaster, we think it best to respect those missing and their families. The same goes for those politicising it from every angle. The local Council has initiated an inquiry that will tell the truth in good time.

Auckland Housing

With apologies to our southern friends, we need to talk about Auckland. Its housing market affects the whole country eventually, so reports that the Government will change its policy there will matter everywhere sooner or later.

If Auckland’s housing market sucks up capital, farmers compete for that and pay higher interest rates. If it frustrates young people and drives them to vote against a market economy, we all pay for that. If it means businesses don’t come or stay here, because they can’t afford the staff who can afford the mortgages, the whole country is poorer. We need a functional market.

In a functional market, each generation can afford to buy off the last, taking their place in turn. If the market stops functioning, then a whole lot of angry young people decide they don’t want to play the game anymore.

The promise of free markets and property rights is that you get lots of stuff cheaply. If you can’t afford the main thing you need, and neither can your friends, you might conclude the system’s rigged against you.

You might leave the country (which young people are doing in big numbers), or vote Green (which they’re doing in satisfyingly smaller numbers, for now).

You might decide that if you’re not going to get yours anyway, you’ve got nothing to lose by blowing up the system. Vote for someone who’ll take from others and give to you (they don’t put it that way, they prefer to call it a wealth tax).

In the ‘80s, 75 per cent of Aucklanders owned their home, which cost 3-4 times household income. Interest rates were high, but so was inflation, that ate up the debt. Now homes cost 7-8 times income and only 60 per cent own them. That fifteen per cent shift is mostly among under forties.

Free Press has gotten this for a long time. Unless it gets easier to buy a home, our whole project of building a property-owning democracy will fail. People will either go and believe in it somewhere else, or stay and militate against the system here. Either way, those who’ve invested in the country don’t win, in fact they lose.

ACT’s advocated for changing the RMA so you can build if you’re not affecting others (happening). Simplifying building consents (happening). Sharing GST from construction with councils, so they have an incentive to build (planned this year).

But, the Party hasn’t been the only one worried about housing markets, nor the only one seeing the political possibility. National and Labour have been busy dictating from Wellington to Auckland: Zone More Housing!

Those two parties got together in 2021 in secret and foisted a law that we’d have to zone every section for three, three storey homes. The floods of January 2023 killed that plan. That, and ACT’s campaigning showed people that building without infrastructure was silly and a bit of zoning might help.

ACT fought to end the so-called Plan Change 78 that implemented the 3x3 policy, and won in 2023. It is gone. But Auckland Council came back with Plan Change 120, which has similar features

The net result is five years of populist meddling that hasn’t gotten more homes built. Plan Change 78 was proposed, then withdrawn after only a handful of homes were consented under it. Now Plan Change 120 is being consented, and will be modified again, according to statements made by the Prime Minister.

It would have been much better if all parties had followed Free Press’s basic prescription: forget about the zoning wars, they are a distraction. There is enough land zoned to build adequate homes. Instead, focus on the infrastructure and consenting side, cut the red tape so developers can build more and faster within the existing zoning. That’s the path to stable property-owning democracy.

Alas, little of that has been done, the economic downturn of the past few years has done more for affordability than any Government policy of the past five years. We guess Labour did make housing more affordable, after all.

ACT’s role is to do the work, propose the solution, then campaign like hell for it. We promise a lot more where that came from, and of course not only for Auckland this year.