This is an amusing account below of an important public meeting. Important in the context of making Auckland an affordable city.
Here's some quick context: Auckland's town planners have strangled the city in red tape for years. In recent times however, many planners and councillors (and mayor Wayne Brown) have come around to the realisation that the fewer houses built, the higher the prices for those houses: that, just maybe, people might be allowed to do a bit more on their land, to maybe build a little more densely.
Opposing this, of course, are the councillors and politicians of the leafier suburbs like Christine Fletcher -- and of course David Seymour, who's dropped his party's alleged principles about property rights to wring his hands instead about there being 'no density without infrastructure.'
There's no greater hand wringer than Christopher Luxon however, who decided over summer that Auckland Council must 'downzone' their proposed plan change that would allow greater density.
So this meeting Wednesday night was to confirm where the push for greater density would be maintained in the upcoming Plan (where would be upzoned), and where that push would be relaxed a little (where would be downzoned).
When the government’s efforts to intensify Auckland were debated at council back in August last year, critics took turns wringing their hands about the strain it would place on infrastructure. Plan Change 120 [which will allow greater density] could end up putting apartments in places that weren’t set up to handle them, they fretted. “Ultimately you can’t do all this upzoning without making the commitment to provide the infrastructure that will support it,” warned Albert-Eden-Puketāpapa ward councillor Christine Fletcher ...
Yesterday the worriers got their wish. Thanks to a government backdown wrangled over chardonnays and summer barbecues, councillors are allowed to reduce the capacity in the new plan from two million to 1.6 million houses. Council’s policy and planning committee was meeting to decide where to make those cuts, and its chair Richard Hills started out explaining the staff recommendations to prioritise places 10km or more from the city centre. Asked why those areas should get first dibs on downzoning, council planner John Duguid was clear: it was because the land within 10km of the city centre had the best access to public transport, employment opportunities, regional amenities like parks and pools and three waters capacity, as measured by Watercare:
Three waters capacity in the central areas is set to improve even more when the Central Interceptor comes online soon. (Image: Watercare)
It should have been a celebration. But what would you know, most of the people who were once so concerned about ensuring housing is near infrastructure weren’t happy. Instead they were stewing over the revelation that the places with the best infrastructure were in their well-to-do wards. North Shore councillor John Gillon had looked at the maps and found that a 10km radius from the city centre would include the entire area he represents. He moved an amendment, seconded by Fletcher, to delete the 10km clause, saying he was “concerned” about the figure.
Waitākere councillor Shane Henderson was having none of it. He pointed out that west and south Auckland had accepted the vast bulk of the new houses in Auckland since the Unitary Plan passed in 2016. As for strain on infrastructure, those areas have limited pipe capacity and less access to public transport, and we see the effects of that outside-in planning in rush-hour congestion, parking shortages and sewage overflows, he said. Henderson argued Fletcher and Gillon were engaged in “a poorly dressed up move to take away intensification from the best-equipped parts of the city”. “The intention is simple: to downzone wealthy suburbs. There is no sensible reason for excluding central isthmus communities – again – from doing their part.”
The mayor was, if anything, more blunt. He said Gillon’s motion was aimed at putting housing in Pukekohe rather than areas close to “all the infrastructure”. “I don’t want to see endless sprawl just so nimbys in Parnell and politicians can get re-elected,” he said, in what appeared to be a shot at his political nemesis, Act leader David Seymour. “That’s disgraceful, I can’t vote for it.” ...
As Brown saw it, his colleagues’ first purpose was elitism. But if they had a second priority, it was delay. Gillon and Fletcher also put forward an amendment proposing to ask the government for more time to enact Plan Change 120. ...
The demand was familiar. Fletcher has asked for more consultation in just about every planning meeting for years, and the mayor was incensed. “I want to get out of this without further delay and dithering,” he said. “God almighty, it would be great to do something this three-year period.” ...
“For fuck’s sake, get on with it,” he said, as Fletcher spoke for the final time. ...
Afterward, Brown expanded on his frustration with Fletcher, saying the meeting was “one long filibuster to stop poor people living in her area.”
Read the whole thing here. It's an entertaining lunchtime read.
"Wanting to afford rent and food on 40 hours isn’t unreasonable. But declaring it should happen doesn’t make it happen.
"Affordability isn’t created by slogans. It’s created by productivity, supply, and competition.
"If housing is expensive, ask why supply is restricted. If food is expensive, ask why production and distribution are burdened. If wages are stagnant, ask what’s blocking entry level opportunity.
"You can’t legislate 'I should be able to afford it.' You either remove barriers that lower costs and raise productivity, or you shift the cost to someone else. And when you shift the cost, you don’t make things cheaper. You just move the bill.
"The real question isn’t whether your desire is reasonable. It’s whether the policies being proposed actually increase supply and opportunity… or quietly reduce both while promising relief."
Christopher bloody Luxon has now announced his fourth major housing policy backflip as National party leader.
I say "announced," but since the pissweak pipsqueak is too pusillanimous to even consider openly putting his head above that particular parapet, he's instead allowed news of his latest flip-flop to leak out from the likes of the oleaginous Matthew Hooton.
Sadly, since most of those backflips have come when Luxon's party is in government, the big loser here is anyone who wants sufficient certainty to plan, build, lend on, borrow against or borrow to buy a house. Let alone several houses. Which means: Almost all of us.
Ever wondered why the Auckland residential construction industry is in a hole? One big reason is the hole in Luxon's head that swings from NIMBY to YIMBY like a weather vane in a storm —making him first abandon bipartisan agreement on housing intensification, then talk about "going for growth," then abandon that again, then talk up Auckland's planned intensification, and now, apparently, abandon it once again. If it's certainty you're after to plan and build, then this Prime Minister and his weather-vane brain is not doing much for you.
Asked for details this morning of his latest backflip, suggesting a reduction in the requirement for Auckland Council to zone for a minimum two-million sites, the pissant Prime Minister spoke to Radio NZ for eight minutes while saying effectively nothing beyond we'll all just have to wait and see. So there.
Asked if it would make a difference if the two-million housing figure was pulled back to 1.5 million, [Scott] Caldwell [from the Coalition for More Housing] said lowering the two-million figure would undermine the feasible capacity of new homes.
And so it will.
“Any pulling back would be compromising Auckland’s housing affordability,” he said.
Which it will.
Caldwell said constant back and forth over new planning rules for more housing since 2020 inevitably meant more delays, and it could be the 2030s before more houses were delivered.
Which is true.
“Waiting until 2035 to deliver real cost-of-living wins is a generation too late for those struggling to find affordable housing in our largest city,” he said.
It's a rule in politics. The devils is not always in the details. It's often that the details reveal the real devilry.
If the large print ever giveth, then the small print will surely taketh away.
Let's look at a few examples in an area I know something about: Building.
*** Building Minister Chris Penk seems a jovial character but unfortunately he knows little about his subject area. His first move was to promise faster building consents. Exciting. Encouraging. Mighty work.
Here's hist first step: "requiring councils to submit data for building consent and code compliance certificates every quarter." There are no other steps.
He adds "hope" to the idea of anything being faster. Council inspectors "must" issue building consents in a timely fashion, he insisted. And yet every council inspector ever employed knows how to legally delay a consent application. In fact, if you fine a council for being legally overtime, they'll just legally delay applications for even longer to give themselves some head room. Which is what they've done.
Score One for the Grey Ones.
*** Another move by Building Minister Penk was "remove barriers to overseas building products." At least, that's what it said in the headline. His idea, sensible enogh on its face, is that if enough similar jurisdictions to ours have passed a product (places like Canada, US, UK, Europe, Australia etc.) then that product would be deemed to pass here too.
So far, in the three months since introduction, they'e okayed some taps from Sydney. Next year, they might look at concrete codes in the US. Done properly, with due consideration, this will take most committee members through to retirement.
Score One More for the Grey Ones.
** And then the Minister for Regulatory Reform (sic) stepped up to announce a new measure to "liberate" builders and designers. For years, some of us have suggested that instead of applying to councils for permission to build (which asks for more knowledge than council employees really have, and puts ratepayers on the hook for the risk should they fail) we instead use insurance companies to take the risk.
You know, like if you build a hot rod or street racer instead of a bog standard car, then you ask the insurance company to take the risk, and they use their acumen to discern the risk, and charge you accordingly.
This allows for good design, with risk properly underwritten.
But you see that word above: instead.
Rather than placing the risk and the onus on designers and builders and insurers instead of on councils and ratepayers, the Minister for Regulatory Reform is doing this as well as. So it's no more "liberation day" than were Trump's tariffs: we end up getting the worst of both worlds: councils assessing risk, and insurers granted a monopoly charging like wounded bulls. And the ratepayers? Still on the hook.
So it's Several More there for the Grey Ones.
** It's like education, where a "regulatory review" by the same Minister for Regulatory Reform intends to "clarify" and "simplify" Childhood Education's overwhelmed sector. One imagines a quick fix might be going back to say, 1996, when things were working tolerably well, and just before regulations began piling on and classrooms and centres became over-regulated, under-performing, and wholly unaffordable for parents.
Instead, the "reform" begins by (and I quote) "establishing a new statutory role, the Director of Regulation, with responsibilities for performing key regulatory functions in the Early Childhood Education system." Which means another red carpet rolled out in yet another floor of a new office building in Wellington.
Back of the Net with another great effort by the Grey Ones.
*** It's a bit like the "cap" on rate rises.
Let's stop rate rises!! Yay!! Well, not so fast.
We know that the "cap" will be supplemented for weepy boomers with top-ups for water use, for mayors who plead public transport debts, and councillors who claim infrastructure shortfalls. We also know that the minister "responsible" ( I use the world loosely) is happy with "soaring" council debt, just as long as the effects and the headlines are only felt after he's gone.
Yes, a minimum. By law, councils must increase rates by at least 2% every year.
It a sop, not a cap.
Grey Ones score again.
** And not to mention that the new-fangled means by which councils can "fix" their bloody awful traffic problems—traffic jams being a clash of capitalism (in the form of car production) confronting socialism (in the form of too few roads). The "new" solution is a tax. A new tax to be called "congestion charging," which will of course not replace any other tax but just be added to all those under which we are already burdened.
With this government, as with every other in recent times, it's always one step forwards, and three steps back. Too many ministers with too little nous giving too much help to the unproductive to whom too many of us must seek permission before we can do anything.
"Look at me, I'm on a bus!" Second-prize winner in the "my council spends too much awards," Greater Wellington's spender-in-chief Daran Ponter unfortunately ignores the exits.
BY HOW MUCH HAVE YOUR rates gone up by this year?
If you're "lucky," they've only risen by under 3 percent — that's if you're under the regime of either the Whanganui or Waitomo District Councils, or the Bay of Plenty Regional Council. You, dear people, are the "lucky" ones. Only a 3-percent rates rise
Not so lucky however if you live under the arm of the Clutha District Council, Upper Hutt City Council, Waipa District Council, Hamilton City Council, or Hastings District Council. If you're unlucky enough to have those folk on the letterhead of your. rates bill, then you're forced to pay more than 15 percent more this year than last year.
And pity those poor folk in Hastings. Over the last three years, under Mayor/Chair Sandra Hazlehurst, their rates demands have gone up by just under 50 percent. Fifty percent in three years! And there are four councils demanding even more over these last three years — West Coast Regional Council demanding 66 percent more than they did in 2022, and Greater Wellington 55 percent more.
Well, I guess Wellington does need to fix its pipes, right?
But here's the problem. Those rocketing rates rises haven't been going to fix the pipes, have they. Like every other council ni the country, the Greater Wellington Regional Council has found what its politicians and planners think are far more important things on which to spend your money.
THE FIGURES ARE FRIGHTENING. BUT they still don't reveal the whole truth. 'Cos even with rates rocketing, these profligate bastards still can't pay their way. They're not just over-spending, they're over-borrowing.
At least 11 councils have net debt-to-revenue ratios of more than 200 percent.
Hamilton is on 281 percent, just four points away from the limit on councils’ debt covenants. Queenstown Lakes is on 265 percent. Tauranga is on 248 percent now, but forecasting to blow the 285 percent lid from 2030 onwards.
“Some are reaching their debt ceilings, which will have the auditors in a twist,” says [Greater Wellington's Spender-in-Chief Daran] Ponter. “That’s a real issue. If you look to the UK, Birmingham has effectively gone into liquidation in the last few weeks. There’s a city of two to three million people that basically can’t pay its way anymore.”
Hamilton’s mayor Paula Southgate [42% rates rises over three years]and Local Government NZ vice president Campbell Barry, who is the Hutt City mayor [45% over three years], today published research showing the wide gap between council revenues and capital spending obligations, over the 10 years of the new longterm plans.
The research, by Infometrics, shows councils had already committed to $23.3 billion capital investment from 2021 to 2024. Infometrics principal economist Brad Olsen says once construction inflation is added in, that’s nearly $3 billion more.
Sandra Lee, 2002: Let's get councils spending more, and doing less core
Nicola Willis is Finance Minister. She should have a good talk to her hopeless Local Government Minister Simon Watts about repealing the one Act that gave explicit permission for councils to begin focussing on all the fanciful projects, and to ignore the things people expect them to do, such as the rubbish, the roads, the pipes, the basics ...
That Act was the Local Government Act, which receives far less opprobrium than it should.
JUST OVER TWO DECADES AGO, in 2002, the then-Local Government Minister was the hard-left Alliance Party's Sandra Lee. And it was then that local government debt began to rise dramatically — not because councils around the country were over-investing in infrastructure; not because they were going hard on their core business; not at all because they were building, maintaining and upgrading roads, bye-roads, drains, pipes and parks as they were damned well supposed to. For the most part, instead, with some significant exceptions, they weren't. What they began building instead was a lot of expensive fucking monuments.
Monuments mostly to themselves.
The culprit here was Sandra Lee's Local Government Amendment Act 2002, which granted to city councils, district councils and regional councils a "power of general competence" (I know, right?) which would enable them to enter into any activity they wished, with the only limit being their imagination and the pockets of their ratepayers.
Prior to Sandra Lee's Local Government Act, councils could only do what they were legally permitted to to, i.e., to carry out their core business. After Sandra Lee's Local Government Act, however, the leash was off. And council credit cards started straight away racking up debt for vanity projects everywhere.
I'd like to say I told you so. I'd like to, so I will. Because I was as outraged then as I am now:
Libertarianz Leader Peter Cresswell is outraged at today's announcement by Helen Clark and Minister of Local Government Sandra Lee to grant local authorities "a power of general competence" in order to "enhance the well-being of their communities." "The well being of everyone in a community is more likely to be enhanced by retaining a tight leash on councils," says Cresswell, "since most councils have already well demonstrated they struggle for competence." "Local government throughout New Zealand's history has demonstrated its utter incompetence in handling the loot they confiscate from ratepayers by wasting it on such idiocies as the New Plymouth Wind Wand, the Auckland Britomart edifice, and the Palmerston North empty civic building." he said. ... "More substantially," says Cresswell, "there is a crucial constitutional principle at stake -the constitutional principle that citizens may do whatever they wish, apart from what is specifically outlawed, whereas governments and councils may only do what is specifically legislated for. The main purpose of this constitutional principle is to keep a leash on government, both central and local. It is this leash that is beginning to gnaw at local governments, and it is this leash that Clark and Lee propose to untie." "It is a dangerous step to take," warns Cresswell, who points out that councils are being given more 'freedom' at he same time as the Resource Management Amendments Bill threatens to take away even more freedom from New Zealand property owners. "The constitutional principle is being reversed," he says. "Even as they propose giving local government wider powers to act, they are taking away the power of individuals to act for themselves," says Cresswell. "Every property owner should rise up in protest," he says. "Libertarianz will be making a strong submission on the consultation document," says Cresswell.
Which we did. For all the bloody use that it did: The Clark Government passed it, a succession of Local Government ministers since since has kept it, and every bloody local councillor ever since Sandra's "permissive" Act has spent like a drunken sailor on shore leave with a start-up founder's credit card.
The New Zealand Local Government Funding Agency (LGFA) supplies around two-thirds of that council debt, and last time I looked their tab was just over $18 billion. That's about $20,000 for every ratepayer. Add to that an existing $5 billion of Auckland and Christchurch council debt. And those numbers are every year by around a billion a year as ballooning rates rises fail to keep up with even-more ballooning council spending.
And as you can now see, it's not like they've been spending much of it underground.
In Christchurch they've been turning the city into "an innovative and modern community with major facilities from Akaroa Wharf to Te Kaha Canterbury Multi-Use Arena." In Wellington they've been watching the city's infrastructure crumble while they vote to spend hundreds of millions on earthquake-prone inner-city monuments of questionable value. And here in Auckland, council have allocated yet another billion dollars (plus fuck-ups) to pour down the ever-expanding black hole of the train set with the ever-disappearing-opening date, plus several hundreds of millions more to continue transforming the place into "one of the world's most liveable cities."
A shame there are still very few plans to make it an affordable one.
What on earth is to be done?
You know, here's an idea.
Instead of keeping Sandra Lee's Local Government Act and binning Three Waters, which is where this new Coalition Government went, how's about — and hear me out, now that you've all heard the story —how's about we bin Sandra Lee's act and tell fucking councils to stop over-spending, to close down their PR departments, and to get back to their core fucking business.
Maybe you could suggest something like that to Simon Watts, who's the current Local Government minister.
But you'll have to explain to him first who Sandra Lee is, and what she did back then to stuff things up. Because the gormless twit does appear a bit simple.
UPDATE: It's been pointed out to me that Simon Watts is trying to overturn some of Sandra Lee's Act, and argued that I've been unnecessarily harsh about him in my conclusion.
Nearly two years into his job, he is introducing an Act he says will "refocus" councils to their core jobs.
. . . .
. . . .
. . . .
Unfortunately, however, while this is good as far as it goes, it's the Act from way back in 2002 that still needs a bullet.
“Last year the Government consulted on allowing\granny flats of up to 60 square metres to be built without building or resource consents. The proposal received huge support, and as a result the Government has agreed to go even further by increasing the maximum size to 70 square metres.”
Never mind the misnomer "granny flat," When/if this is introduced, any house with a decent sized-section will now give owners the opportunity to add one new minor dwelling. (Let's call it that, shall we, rather than the more popular but slightly derisive 'granny flat'.) One minor dwelling in all the places that's possible can do amazing things for making dwellings more affordable — helping make up for three decades of cementing in the opposite trend.
"But," I hear you ask, "how much can you do with a 70 square-metre house?!" Answer: a lot. If you do it right, a minor dwelling might even become your major dwelling.
To give you some idea of that size, until recently, the average size of a New Zealand house was 200 square metres. Now that we've been overdosing on bland, cooky-cutter townhouses, it's just under 160 squares.
So even with that drop, a house of just 70 squares represents a fairly drastic compression of space.
So ... how much can you do with a 70 square-metre house?
Turns out, with a knowledge of good spatial design and a little bit of cunning, an awful lot.
Yes, I know those of you living in homes with kitchens the size of a large double garage won't fit in. But, for the record, I live in a very workable house of just 45 square metres. So to me, 70 square metres looks like a luxurious surplus of useable space!
So let's have a look at what a little bit of ingenuity and exploiting a few legal loopholes can do.
Architect James Schildroth recently designed this artful 2-bedroom 756 square-foot house below (around 70.2 square metres) and will make it available to build. In the States (where the sun is a different way around and building is much cheaper), he reckons it would cost around US$270,000....
Despite the size, it has almost all a home needs. There are several space-saving measures here (smaller bedrooms and closets, minimal kitchen, etc.) and a number of 'tricks' that help space appear larger—most especially carefullly "nesting" spaces, and opening spaces up at the corners. That low roof corner outside the lounge is especially effective, offering privacy from a possible neighbour, while also suggesting to occupants that the edge of the main space is defined by the outside edge of those overhanging eaves, at once both sheltering and opening up.
These psychological "tricks" are important in every home, but especially important in one so small, when every square metre has to justify itself many times over — space that's not just flexible, but hard-working!
Floor plan & diagram overlay for Frank Lloyd Wright's Pope-Leighy House (above) suggests how 'nesting'
spaces within even a small home can help produce an illusion of larger space by virtue of the shared
spaces — the particular space experienced depending on the observer's location at any point in time
HERE'S ANOTHER: A 72 SQUARE-METRE home-office by (Organon Architecture) over two levels, the lower of which is just 55 square metres, but with extensive pergolas — and a hill!
And you can do a whole lot with even less, if you're cunning enough.
The key, really is breaking the box. Understanding how to play with the visual field to suggest a larger apparent space. And to properly 'nest' spaces so that every square metre within works harder, and suggests more.
Prefabricated modules and the like are part of the thing, but not the main thing. It's how modules and spaces are arranged that becomes the main thing.
HERE ARE SEVERAL MORE EXAMPLES.
Several years ago, when it looked like Auckland Council were about to relax rules around 60-square-metre "minor dwellings," I was commissioned to produce a few floor plans and systems for what, it was anticpated, could have become a modest business. Sadly, the relaxing of rules never happened, and my client instead decided to try for better things in Queensland. But the idea is there in each of these homes: that a modestly-sized home need not feel smallif it is well laid out.
The aim was to build these homes on a precast-prestressed concrete transportable deck — using a container module in order to show the many limitations of container design, and to allow factory-built homes to be fully transported if possible. They featured both "ceiling decks," to help with services and the manipulation of space, and a "smart slab" in which dimensions were set for the builder and in which all main services were to be run as a "plug-and-play" system.
The New Zealand Government's gross debt — the amount taxpayers must service — will now increase by another $73b by 2029, reaching a massive $283b. That's $94,000 for every New Zealand family (with nearly $6000 of that just to pay the government's interest!).
Things are desperate. It's the middle year of an election cycle. Time for something bold.
No?
No.
Its not about doing more with less, or vainly trying to to. It's about doing less with less. Less with our money.
Several years ago when Helen Clark's Labour Party was about to lose an election , then Finance Minister Michael Cullen placed a fair proportion of New Zealanders onto welfare. His Welfare for Working Families programme made sure that, until ended, more than half of the country will now be beneficiaries. On the mooch. More than half of the country pulling down more from other taxpayers than they can ever give back.
This National Party Finance Minister could have done nothing with the programme — allowing inflation to make the maximum threshold for the programme dissolve.
She could have ended it altogether — signalled in good time, of course, to let folk plan ahead — but ending it could have saved $2.5-3billion.
Instead, she raised that threshold below which working families get welfare. Around 142,000 New Zealand families. Which means even more working New Zealanders will continue to be moochers off (further normalising the behaviour perpetuating the Welfare State).
Many years ago a National Party Finance Minister introduced an Accommodation Supplement to, supposedly, help out poorer renters. Of course, it did nothing of the sort: instead if helped out their landlords, who could simply raise their rents to meet this new "supplemental" monetary demand for their supply. The Supplement — a grant to landlords — currently costs around $5 billion.
This National Party Finance Minister could have announced a lowering of the Supplement, saving some of those billions.
She could have announced it would end altogether, saving them all (while lowering rents). Instead, another expensive, destructive market-distorting subsidy continues.
I highlight these two measures because, for all Nicola Willis's hand-wringing about being prudent, about being responsible, about needing to achieve a surplus — and with the economic system flatlining while government debt vaults up decade by decade, bold measures to get there are not just a nice-to-have but a have-to-have — this budget is neither prudent, nor careful nor responsible.
Not being bold is to be irresponsible.
It's to be a coward.
Opposition parties are trying to paint this as an austerity budget. National Party pollster David Farrar boasts that it isn't.
"Nicola Willis has failed,” says Taxpayers’ Union Spokesman Jordan Williams. “This Budget could easily have been delivered by Grant Robertson."
“Willis promised to tackle the last Government’s ‘addiction to spending’. Spending is going up as a proportion of the economy in this year’s Budget compared to the current year. Core Crown Expenses are forecast to be 32.9 percent in 2025/26 compared to 31.8 percent under Robertson in 2022/23.
“She promised to balance the books. The OBEGAL never gets into surplus according to Treasury forecasts. Willis has had to make up a new measure to exclude the ACC deficit to create an illusion of a laughably small surplus in 2029.”
“And she promised growth. But the headline measure – an accelerated depreciation regime – is basically no better than what the last Labour Government tried immediately after COVID.”
“According to the Budget documents, the Government's headline ‘growth’ policy adds just 1 percent to GDP over 20 years. It is laughable in its small size.”
“More spending, more debt, and nothing to materially shift the dial and grow the economy. It’s not a Growth Budget, it’s a fudge-it."
It's very much a centrist budget to not please those wanted a balanced budget and shrinking of the state, and of course isn't a budget of new grand larceny and profligate handing out to preferred causes, it basically just holds the line of NZ's Jacinda-era bloated state. ... a[nother] kick-the-can-down-the road budget.
Eric Crampton mentions some political sleight-of-hand:
"At some point, we have to wonder about the fiscal responsibility provisions in the Public Finance Act matter, because those effectively say you should not be running structural deficits for a decade, and we will have been running structural deficits for a decade. The ones during Covid were excusable - now, not so much. ....
"If you want to see the state of the government's books on the more traditional OBEGAL measure, rather than the one that excludes substantial ongoing ACC deficits, you have to go to the "Additional materials" in the online appendix.
"The Growth Budget" has just one growth-oriented policy [i.e., accelerated depreciation for business investment], estimated by Treasury to raise GDP by a mere 1% over 20 years (0.5% in total in the next five).
"[T]he government chose to title its effort [yesterday] 'The Growth Budget.' The Minister spoke today against a backdrop emblazoned repeatedly with that label.... the Prime Minister made a big thing of the need to accelerate growth ... The Minister of Finance in announcing the Budget date ... [boasted] 'the Budget will contain bold steps to support economic growth' ...
"They did not deliver.
"There was a single growth-oriented initiative in the Budget ... [T]he best Treasury estimate is that it will lift GDP by 1 per cent, but take 20 years to do so
"This year’s Budget represents another lost opportunity, and probably the last one before next year’s election when there might have been a chance for some serious fiscal consolidation. The government should have been focused on securing progress back towards a balanced budget. Instead, the focus seems to have been on doing just as much spending as they could get away with without markedly further worsening our decade of government deficits. ...
"We used to have some of the best fiscal numbers anywhere in the advanced world, but as things have been going – under both governments – in the last few years we are on the sort of path that will, before long, turn us into a fairly highly indebted advanced economy, one unusually vulnerable to things like expensive natural disasters. ...
"The government seems to have become quite adept at rearranging the deckchairs (cutting spending that they consider low priority and increasing other spending) but they are choosing to make no progress at all in reducing the structural deficit. ...
"Which brings us to the most recent IMF Fiscal Monitor released a few weeks ago [showing how our] primary deficit now compares ... Depending on your measure we were (based on HYEFU/BPS numbers) worst or close to worst in the advanced world. Today’s Budget will have done nothing to improve that ranking."
Demographia's annual study on housing affordability around the world has just been released for 2024.
The good news is that Auckland has become marginally more affordable.
Yay!
The bad news is that still doesn't mean it's anywhere near affordable. And one major reason for that good news has been in abeyance since the last election campaign.
A city's Affordability Index is generally measured as the city's median house price divided by its median annual salary. Increased densification allowed under the new Unitary Plan and then the Labour-National bipartisan agreement on house-building (essentially relaxing rules to allow 3 story 3-unit developments "as of right"), allowed a brief period in which more building was allowed to be done, and was. The effect was to reduce Auckland's Index Number from the severely affordable 8.6 (i..e, median house price was 8.6 times median annual salary) to the still frightening 8.3 (the number should be much closer to 3.0).
That puts Auckland squarely in the top rank of the world's unaffordable cities, edging out more affordable cities such as Miami and Greater London (8.1), New York, NY-NJ-PA (7.0), and Brisbane and Perth (8.1, 6.8).
The even more bad news however is that building has almost slowed to a halt since National backtracked on that bipartisan agreement — "figures from Statistics NZ show building consents were issued for 2931 new dwellings throughout the country in March. That's down 26.2% compared to the 3971 consents issued in March last year." In Auckland, the number of consents issued dropped by 30.6%! Housing researcher Dr Greenaway-McGrevy now says "any future benefit from the up-zoning change now had a 'question mark over it'."
"Far too many New Zealanders already suffer from serious financial stress because of the ridiculous price of houses. The problem is only going to get worse unless the Government delivers on the promise made by the Minister of Housing, Chris Bishop, who, in a major speech near the end of February, said the Government is aiming to get house prices back to where the median house price is between three and five times the median household income. To protect himself from the anger of thousands of property-owning voters, he did say that that was his ambition over the next 'ten to twenty years,' but if he is at all serious New Zealanders better get used to the idea that house prices will not be rising steadily year after year into the indefinite future. "Increasingly, as houses get older and in need of repair, and if the market is working as it should do, they will sell for less than they cost to buy. "But what about the land they sit on? Surely that won’t decline in value? Certainly there will always be land which has special appeal: that will quite likely rise in value faster than other prices and faster than incomes. But given New Zealand has a great abundance of land, section prices should be nowhere near where they are currently in most of our cities. That implies that section prices are likely to stagnate or decline from present levels if Mr Bishop delivers on his promise. [Yes, "if" - Ed.] "In an earlier article I quoted the case of a 455 square-metre bare section on sale in Drury – nearly 40 kilometres from downtown Auckland – for $842,000 including GST, or $1,850 per square metre. This is more than 10 times the average price per square-metre of sections in the US. This difference is caused primarily by the tight restrictions imposed by local governments on where houses are allowed to be built. "Those who demand that housing be confined within tightly prescribed urban boundaries – as is true in all our major cities – must be told again and again that they and they alone are primarily responsible for the appalling social costs arising from the outrageous price of housing in New Zealand’s major cities."
New Zealand needs more houses, and less Resource Management Act.
Fact is, if houses are going to be anywhere near affordable again, New Zealand needs many more houses, and no RMA.
Instead, we have RMA for several more years, and a housing/RMA minister (Chris Bishop) who's created uncertainty and fewer housing starts by allowing councils to opt out of the (formerly) bipartisan Medium-Density Residential Standards (MDRS).
What can you do now on many sites in New Zealand's major cities? Don't know, because councils haven't decided (or announced) where and how they might relax things. The uncertainty means that on many sites in major cities desperate for housing, nothing gets started at all.
What could you do under the MDRS? In simple terms (see pic above), you could build up to 3 dwellings up to 3 storeys high without having to even think about the Resource Management Act. It was far from perfect, but still the most permissive housing change from government since ... well, before I was born anyway.
But Chris Bishop has "fixed" that, hasn't he. Too permissive for Mr Bloody Bishop. Too many "externalities." Too urban.
Urbanist Malcolm McCracken has a simple solution however that even this housing minister could (should!) get behind. He calls it Graduated Density Zoning, so it's still a bloody zone, but one that allows owners who amalgamate sites to get extra density and height -- and by their amalgamation build better things and ameliorate the effects on neighbours.
By being larger and a more appropriate shape for multiple dwellings, such a site would also encourage better housing typologies to be built than the simple long 3-storey-"sausage"-arranged-along-a-single-driveway that means everyone's window looks into every neighbour's. Things like perimeter blocks, garden apartments and the like, with better privacy, garden outlooks and less iunmpact on neighbours (so what's not to like?!).
I propose that a condition of a council opting out of the MDRS, in whole or just in certain suburbs, should be the requirement to introduce Graduated Density Zoning6(GDZ) to residential land that is zoned below three storeys. GDZ is where, when a developer buys neighbouring sites totaling more than the set threshold, e.g. 1400m2, they can automatically build to a higher density. The details of that can be debated but I believe GDZ should be introduced to enable better housing choice and new supply in every neighbourhood. While resource consent would be required, once the threshold has been met, three-storey apartments and terraced houses would become a permitted activity.
Adopting GDZ could provide several key benefits:
Larger sites can make it easier to manage the externalities of greater density, which have been some of the driving reasons behind the backlash towards the MDRS. This should see fewer sausage flats on single sites, which generally have poor design outcomes and interaction with neighbouring sites. Larger amalgamated sites will enable greater master planning that considers the interaction of outlook spaces with neighbouring properties, limiting driveway crossings and the design of open and communal spaces.
It enables the market to deliver greater density in areas of high demand and better match this with new supply. While councils can plan through future development strategies for ‘enough’ capacity to meet future demand, this is always based on a range of assumptions, which can never be completely accurate. Amenities and accessibility of an area, along with personal preferences, can change shifting demand greatly. We should design our system to be more responsive and flexible to meet demand. GDZ would be a step towards this.
Enabling three storeys, as I have discussed many times previously, can enable greater housing choice to be provided. It also enables ageing in place, where you can find housing suited to your needs at different stages of your life within the same neighbourhood.
It’s worth noting that this can also benefit neighbouring landowners, who could choose to sell together to seek greater profit, which is possible as an amalgamated site is generally a better development opportunity. This has occurred previously, including in Te Atatū Peninsula in 2020.
Until or unless the RMA is abolished, this could be a start.
