Dr Michael Bassett

Dr Michael Bassett

< Columns

Bill English, Local Authorities and Poverty


Did you even hear such nonsense coming from Labour politicians, city councillors, journalists and planners? They seem bent on dismissing Bill English's comment about the link between local government rules and regulations, the unaffordability of houses, and the flow-on effects for the poor. One wonders what some of them read. Labour's Phil Twyford, of course, has made it clear over a long time that he is seriously challenged in this department.

When English spoke this week he was doing no more than stating what is now obvious. For years experts have researched and written about local authority planning rules, regulations and charges, and their flow-on effects on the availability of land for housing. We have also known for a couple of decades that council charges for house consents are excessively high. The Productivity Commission's report on housing affordability dealt with several of these things back in 2012. The New Zealand Initiative's first report on housing called "Priced Out: How New Zealand Lost its Housing Affordability," published eighteen months ago, had a lot more to say about local government's role. "Priced Out" identified the partial introduction of a Metropolitan Urban Limit (MUL) in Auckland in the early 1980s that was made total in 1998 as the main contributor to escalating land costs. Examples were provided of the sharp rise in the value of the land component of a house within the MUL once it became nigh on impossible to build beyond council-imposed limits. Demand for land simply outstripped supply, and its price rose accordingly. That report also identified our planners, most of them influenced by British socialist ideas where land has been pushed sky high, as the culprits. On p.23 of "Priced Out" a 1982 warning from at least one planner at the then Auckland Regional Authority was cited. He warned that imposing a MUL would cause land and house prices to rise rapidly, thus making housing less affordable for ordinary folk. The report also noted that councillors at the time pushed this warning aside, with the very results that Bill English, thirty years later, has to tackle.

There is a pile of literature showing that entry-level houses for the newly married and the poor have only ever been readily accessible when money is available to first home buyers, and local authorities have striven to ensure there is an adequate supply of new land. But as the Productivity Commission showed, land that constituted 30% of the total price of a house in 1994 had risen to more than 60% of the total price by 2011. It is now clear that a shortage of land has become the biggest factor in reducing the number of new houses being built and pushing house prices beyond the reach of poor people. Local authorities, especially in Auckland, have been responsible for bringing about rather too much of today's homelessness, and therefore poverty. It's time they accepted responsibility for their foolishness.

Bill English was only stating what is obvious to people who try to keep abreast of the news. Penny Hulse, Auckland's Deputy Mayor, who seems to be fronting for the mayor rather a lot these days, complains that English hasn't stated these things in her hearing, thus inviting us to the astonishing conclusion that he therefore can't be right. The reality is that the current Auckland Council's preoccupation with compact cities is a left-wing cause that has pushed up house prices everywhere it has been tried around the world. A series of studies in Britain show that compact cities have been the major cause of escalating housing unaffordability. In other words, left wing planners have been let to produce a scheme that will hurt the very people they claim they want to assist. It's time that Susan Houston, chief executive of the New Zealand Planning Institute, came up to speed, and started reading the reports. They are easily available to her profession. Planners should no longer be allowed to blight so many people's lives.

With fewer ideologically-driven planners, more alert journalists, a new Labour spokesperson who is prepared to read, and an Auckland Council willing to act, we just might be able to fix the current housing shortage in Auckland. Thanks to Bill English for re-stating the obvious.