Taken together, we can now see the Government’s comprehensive strategy to increase land availability, incentivise councils through GST revenue sharing, and reform the planning process.
Minister Bishop’s explicit long-term target that the median house should not cost more than five times median household income is particularly welcome.
Bishop’s proposal to liberalise planning and encourage infrastructure development echoes our calls for enabling better local decision-making.
Like Minister Twyford before him, Minister Bishop recognises that supply constraints, driven by inadequate incentives for councils, are at the heart of New Zealand’s housing affordability issues.
In the previous government, Minister Twyford did make progress with important initiatives like the National Policy Statement on Urban Development. But easing the barriers preventing councils from embracing growth would have required greater buy-in from Twyford’s cabinet colleagues.
By contrast, Minister Bishop seems to have stronger backing from the Prime Minister and the Minister of Finance. Thus, Bishop’s speech announced that he will be the final arbiter of disputes between independent hearings panels and councils.
Furthermore, sharing GST revenue with councils from new housing construction would encourage councils to enable more building, more closely aligning the financial interests of councils with national housing supply goals.
Broadening GST sharing to encompass construction more generally would encourage councils to welcome more forms of development, encouraging a virtuous cycle of growth.
Getting those incentives right is tricky. Until they are right, councils will game targets that central government sets around housing.
National will allow councils to opt out of medium density requirements if they immediately release thirty years’ worth of zoned land. But remember that Wellington’s Independent Hearings Panel believed that a rather restrictive district plan had plenty of supply.
The government will need to set better measures to prevent such gaming.
Rather than relying on council forecasts of housing demand and feasible supply, it could instead look to prices. If land zoned for apartments carries a massive price premium over land zoned only for townhouses, and if land zoned for housing is worth hundreds of dollars per square meter more than paddocks, more upzoning is obviously needed.
We commend the Government and Minister Bishop for their proposals. And we are thrilled to see the Initiative’s long-standing positions on land-use planning and local government finance reflected in them.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE.
Bishop’s proposal to liberalise planning and encourage infrastructure development echoes our calls for enabling better local decision-making.
Like Minister Twyford before him, Minister Bishop recognises that supply constraints, driven by inadequate incentives for councils, are at the heart of New Zealand’s housing affordability issues.
In the previous government, Minister Twyford did make progress with important initiatives like the National Policy Statement on Urban Development. But easing the barriers preventing councils from embracing growth would have required greater buy-in from Twyford’s cabinet colleagues.
By contrast, Minister Bishop seems to have stronger backing from the Prime Minister and the Minister of Finance. Thus, Bishop’s speech announced that he will be the final arbiter of disputes between independent hearings panels and councils.
Furthermore, sharing GST revenue with councils from new housing construction would encourage councils to enable more building, more closely aligning the financial interests of councils with national housing supply goals.
Broadening GST sharing to encompass construction more generally would encourage councils to welcome more forms of development, encouraging a virtuous cycle of growth.
Getting those incentives right is tricky. Until they are right, councils will game targets that central government sets around housing.
National will allow councils to opt out of medium density requirements if they immediately release thirty years’ worth of zoned land. But remember that Wellington’s Independent Hearings Panel believed that a rather restrictive district plan had plenty of supply.
The government will need to set better measures to prevent such gaming.
Rather than relying on council forecasts of housing demand and feasible supply, it could instead look to prices. If land zoned for apartments carries a massive price premium over land zoned only for townhouses, and if land zoned for housing is worth hundreds of dollars per square meter more than paddocks, more upzoning is obviously needed.
We commend the Government and Minister Bishop for their proposals. And we are thrilled to see the Initiative’s long-standing positions on land-use planning and local government finance reflected in them.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE.
3 comments:
>Minister Bishop’s explicit long-term target that the median house should not cost more than five times median household income is particularly welcome.
At present it is 7 times that (800,000 / 115,000). However, the latter figure is somewhat arbitrary. Stats NZ notes on its website that average (not quite the same as median, but close enough for our purposes here) annual household income from wages and salaries was at just under $80,000, which would mean a median house costs about 10 times the median household income.
More telling is that just over a quarter of households spend more than 40% of their income on rent whereas fewer than 20% spent more than that proportion of their income on mortgage repayments (bearing in mind, of course, that most of these mortgages are old and many are laughably low by today's standards).
The way to look at this issue realistically is to focus on people trying to get into the property market for the first time. Never mind about data that includes old-timers still paying off a house they bought for 50 grand 30 years ago that's now worth a 7-figure sum. The best judges are those very people, fully half of whom now see no way of ever owning their own home.
In Queenstown the council is the biggest hurdle to construction bar none . The idiotic requirements that emanate from council increse construction costs demonstrably yet QLDC and their in house idiots are spending money without reference to cost control , value , or completion.
To make matters worse than orange cone fever, QLDC take over public carparks as work lots for their QLDC controlled work schedule and the town is like a war zone . Still beautiful looking away to the lake but a pycho paradise in the QLDC et al offices.
David Seymour and ACT are more correct than ever . Government and Council , PLEASE get out of the way
My impression was that Twyford was one of the more “differently competent” ministers of the last administration. Talk was that the ministry under his direction was a shambles.
LFC
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