“An important piece of the jigsaw”: Property Institute boss

by NZ Adviser14 Jun 2017
The Auckland Mayoral Housing Taskforce Report was released yesterday and Property Institute of New Zealand CEO, Ashley Church has called it ‘an important piece of the jigsaw’.

Applauding the practical proposals outlined in the report for to address Auckland’s housing shortage, Church says, “Finally, we have one of the key players recognising that the shortage of housing in Auckland will only be resolved through substantial private sector involvement and coordinated public/private planning”.

The report identified three key areas that need to be addressed to increase supply in Auckland.

•    Remove impediments to the construction sector developing at scale, including identifying investors who can build through the dips to lift construction in the peaks
•    Unlock the availability of land with appropriate zoning and infrastructure, at the right price, to enable more development, faster
•    Deliver efficient and certain planning, consenting, and risk management to reduce costs, enable innovation in construction and delivery, and create communities with high-quality built and urban form outcomes

But Church adds the proposals alone will not work without cooperation from other parties such as the Government and the Reserve Bank.

“The obstacles to obtaining sustainable funding is one of the major roadblocks to housing development at both small and large scale – and that’s primarily due to pressures on the Banks from the Reserve Bank and APRA. If you can’t borrow money – you can’t build houses”.

Church says that the second tranche of measures, aimed at unlocking land, contains some worthy ideas and proposals but says that a more coordinated approach to funding mechanisms is needed. 

“Council is going to need funds to pay for the land and infrastructure required for the construction of new homes – but the proposed mix of ‘value capture’ rates, land rates, congestion pricing and infrastructure pricing looks more opportunistic than coordinated and a smarter model is needed if this is going to get public buy-in”.

Where the report lacks however, according to Church, is in addressing the issue of ‘market incentives’.

“There’s some great proposals in this document – but when push comes to shove you still need to give people reasons to buy new dwellings in preference to existing dwellings. That can be achieved through positive incentives such as tax or rate concessions – or punitive incentives such as higher LVRs on the purchase of existing homes or higher rates on undeveloped land. Some of these could be implemented by Council – some would require cooperation from other parties”.

Church says that the Report should also now ‘put to bed’ any talk of the establishment of a Unitary Development Authority by the Government.

“The SuperCity was set up to act as a Unitary Authority for the Auckland Region and recent talk of a new, draconian, Authority to sit alongside the Auckland Council has been misguided and unhelpful. With this report, Phil Goff has demonstrated that he understands the issues and that he’s quite capable of taking steps to address them. He should be supported rather than threatened with a new, unnecessary, bureaucracy”.
 

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