Article: Property Investment

Government Sidesteps Councils with Frank NewmanGovernment Sidesteps Councils with Frank Newman

Housing and Urban Development Minister Phil Twyford has announced he will be introducing legislation in Parliament to create a new Crown agency “to tackle housing shortages of all types”. The new authority, called the Housing and Urban Development Authority (HUDA), is expected to be in place by 2020.

The HUDA will have sweeping powers, including being able to ignore existing council designations, amend or write its own by-laws and grant its own resource consent. Councils will have no veto power and will be in effect be elbowed out of the way.

In other words, it can thumb its nose at council planning rules and do whatever it likes. In the Ministers own words, “It’s going to be a tooled-up agency that can cut through the red tape”. The Minister expects it will reduce the time taken to move a project from concept to completion from five years to one.

While I fully understand why the Minister would want to get councils out of the way - and I applaud him for doing so - it is totally outrageous and astounding that the Minister thinks its OK for the Government to override the Resource Management Act (RMA) but it expects everyone else to have to abide by it. It’s unbelievable and incredibly arrogant.

If the RMA is not OK for the Government, then it’s not OK for everyone else, and the Minister should deal with that problem. The Minister seems so self-focussed that he doesn’t seem to recognise that if he made the rules less restrictive for everyone, then the market would come up with solutions to make housing more affordable and we would not have ended up in the mess we are now in. But as is true of all socialists governments, they think the state can do things better that the free market.

The powers of the HUDA do not stop at giving local councils the boot. It will also have the power to force private landowners to sell via compulsory acquisition if HUDA thinks the land is needed for development. The Minister played down this power, saying the provisions are “in the back pocket” just in case they are needed!

The government will put $100 million into HUDA initially but it will also have access to KiwiBuild and Housing NZ Funds as these entities will be absorbed into the new authority.

Local authorities are, of course, not happy about getting trampled all over by central government. Auckland Mayor Phil Goff stressed the need for “collaboration” with government. He said, “We need to be sure there are sufficient safeguards so that people and communities who are affected can have their voices properly heard” - which is code for saying council staff want to stay in control of the outcome.

The truth is, the government is right to come to the view that the only way to build affordable housing is to reduce the development time frames substantially, and the only way to do that is to bypass local councils. The RMA and local councils are the problem. The answer is surely to make the RMA better, not worse, as the Minister for the Environment is now proposing through the new amendments that he has recently announced, by taking the planning process away from local councils and giving it to state controlled entity.

Meanwhile, up north, a lobby group called Vision Kerikeri, headed by an ex Green MP, is calling on the Far North District Council to reintroduce development impact fees, which the Council scrapped in 2015. At the time it said, 

“As a means of encouraging development and growth in the Far North, Council has proposed to remove Development Contributions as an effective funding tool…Council is keen to remove any perceived barriers to potential development because it recognises that this is vital to the enhancement of the district…Council recognises that once conditions change, Development Contributions may once again be a useful funding tool but this is likely to be in a much more focussed manner.”

The short sighted Vision group clearly has no problem creating additional barriers on home ownership and making the cost of housing more unaffordable.

The Council should not entertain their ideas. They should do what most council’s don’t, and that is put the interests of the community as a whole ahead of any temptation to grab for more money and new revenue streams.

Frank Newman is the principal of Newman Property Consultancy. He is the author of numerous books on investment matters. For questions or comment about this article contact .(JavaScript must be enabled to view this email address)

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