Govt Housing Affordability initiative misses mark
Gordon Copeland Press Release
For Immediate Release
Wednesday, 5th December 2007
Government Housing Affordability initiative misses the mark
Independent MP Gordon Copeland, Deputy Chair of the Commerce Committee, today expressed his disappointment at Government’s initial response to New Zealand’s housing affordability crisis.
“Housing Minister Maryan Street’s Affordable Housing Bill is merely a drop in the ocean when a much broader sea change is required,” said Mr Copeland.
“Based on the evidence already presented to the Commerce Committee’s Housing Affordability Inquiry, three principal issues need to be addressed as a matter of urgency. Maryan Street has missed the boat on all three.”
“Firstly we need to remove arbitrary interventions in the supply of land through restrictive zoning such as Auckland’s Metropolitan Urban Limit (MUL). Research undertaken by Motu Economic and Public Policy Research is that land just inside Auckland’s MUL is worth between 8 and 13 times more than land just outside! Much of this land is held by ‘land bankers’, i.e. people who have purchased the land just to make a fast buck. As a result, section prices are greatly inflated.”
“Secondly, as pointed out by Demographia, the so-called ‘development levies’ charged by local councils are, in reality, a ‘new house purchaser infrastructure charge’. They add thousands of dollars to the cost of a new home and should go. Infrastructure should be financed through debt repayments spread over 30 or 40 years.”
“Thirdly new requirements imposed by the Building Act have vastly and unnecessarily increased both the cost and time taken to obtain a Building Consent.”
“These three bedrock issues, taken together, essentially explain why housing has become so expensive. New Zealand’s current severe housing unaffordability crisis is the result of poor law and regulation and can be fixed by Government if it has the wit and political will to do so.”
Mr Copeland also queried the home ownership figures quoted in Minister Maryan Street’s press release.
“She claims that home ownership has fallen from 74% in 1991 to 67% in 2006. However figures provided to me by the Parliamentary Library (copy attached) indicated that private home ownership peaked at 73% in 1986 and had declined to less than 50% by 2006”
“This gives a much better snap shot and shows the truly disastrous situation which now faces young families endeavouring to purchase their first home.”
Attachment: <<Percentage of home ownership 1960-2006.xls>>