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Government response misses the mark on housing

Gordon Copeland Press Release For Immediate Release

Tuesday, 19th February 2008

Government response misses the mark on housing affordability

Independent MP Gordon Copeland, who is Deputy Chair of the Commerce Committee which is currently conducting an Inquiry into housing affordability, today expressed his deep disappointment at the Government's prescription for change announced last week.

"In my view it completely misses the mark," said Mr Copeland. "Unless the Government get to grips with the factors which have created the housing unaffordability crisis in the first place then they will never know how to fix it."

In questions to the Minister of Housing in Parliament today, Mr Copeland stated that Hugh Pavletich of Demographia, Arthur Grimes of Motu Research and Chairman of the Reserve Bank, former Reserve Bank Governor Don Brash, Ian Page of BRANZ, Owen McShane of the Centre for Resource Management, and David Chasten of all indentify the increase in the price of land as the central issue that needs to be addressed if we are to see New Zealand housing again become affordable.

"This group includes economists and others all of whom understand the simple basics of supply and demand. If supply is constrained (as it has been in New Zealand for a number of years now) in the face of increased demand then the price of the commodity involved (in this case residential land) will increase significantly."

"One example of that, quoted by Motu Research, is that land just inside the Metropolitan Urban Limit (MUL) in Auckland is worth between 8 and 13 times more than the land immediately outside that limit. That reality has also attracted "land banking" activities by a relatively small group of wealthy people who purchased suitable residential land inside the MUL and sit on it, in the knowledge that its value will likely continue to increase in the years ahead."

"The Government's answer, which is to explore the possibility of using existing Crown owned land in Auckland for new housing, just ignores those realities in the vain hope that a little tinkering will fix the problem. It will not."

"Arbitrary restraints on land availability such as the MUL should be outlawed immediately. Not only would that bring land banking itself to a halt but, more importantly, drop section prices back to a level where new housing once again become affordable for first home buying families."

Mr Copeland pointed out that people presently commute from Huntly to Auckland and from Featherston to Wellington each day precisely because housing is affordable in those locations. Given the choice however, they would likely live in closer proximity to their work place if sections were available, at an affordable price, closer to the city.

"I'm just disappointed that Government chooses to concentrate on peripheral matters while ignoring, and indeed not understanding, that central issue.



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