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Three Simple Remedies for Housing Affordability


Housing Policy

Three Simple Remedies for Housing Affordability

Since neither of the two main parties appear to have any actual concrete ideas of how to solve the problem of increasing housing unaffordability -- a problem they've only even noticed now its election year -- Libertarianz housing spokesman Peter Cresswell has some policy solutions that can be introduced tomorrow "that will neither destroy property rights as the policy sugestions of the two main parties will do, nor frighten the horses timidly residing in the electioneering stables of the main parties' respective campaign teams."

"The problem of housing unaffordability is one of undersupply caused by over-regulation," reminds Cresswell. "To state the problem is to begin to cure it," he says.

Libertarianz has three simple solutions that can be effected tomorrow to bring cheaper rural, urban and suburban housing.


The Clark Government's 'Army Surplus approach to housing' in which the bottom of the Crown land barrel is scraped to provide spare land for public-private partnerships on which to build is neither sensible nor sustainable -- "and will do little to seriously address affordability concerns," says Cresswell, "and much to reward the Clark Government's favourite developers."

Libertarianz suggests instead that selected urban 'brownfield sites' be simply designated as Enterprise Zones of maximum freedom in which taxes and compliance costs have been slashed, and landowners be left free to promote whatever projects they can put together without the restrictions of either National's Resource Management Act, Labour's Building Act or Roger Douglas' GST -- all of which regulatory relaxations potential house purchasers and insurers will be made fully aware.

"We would expect to see an explosion of innovation and choice in such zones," says Cresswell, "and the rapid provision of the affordable urban housing people are crying out for."


Genuinely affordable rural homes will only be built if, in principle, everyone can go to a farmer, buy a hectare of land for $30,000, and freely build a house there at a cost, perhaps, of just $100,000. That kind of transaction would lead to significantly lower prices than the $390,636 average asked for a home in NZ today. Instead of preventing such deals being done the state should step back, and instead provide the infrastructure to let that house-on-a-freely-bought-hectare thrive. "That such deals still can't be done and won't be done as a result of either Clark's or Key's recent announcements is a measure of how the overbearing powers of the state will still restrict the supply of land," says Cresswell, "whoever the public elect into power next November."


Every project large and small must presently navigate the polluted waters of the Resource Management Act while project champions await permission to do what should be theirs to do by right. The long delays associated with every step mandated by the RMA adds significant costs to projects -- cost that can only be recovered by raising the price paid by purchasers at the end of every development.

As a simple means by which to make it easier to produce the affordable housing all major parties now agree is required, Libertarianz suggests the setting up of 'Small Consent Tribunals' for all projects under $300,000 which can deal with all low-cost projects swiftly and objectively. Instead of considering projects on the basis of the 'sustainable management' nonsense of National's Resource Management Act, the Small Consents Tribunals should refer instead to basic common law principles such as rights to light, air and support, and to existing basic District Plan provisions such as height-to-boundary and basic density requirements. [More details here: http://pc.blogspot.com/2007/09/what-would-party-x-do-about-environment_15.html]

Cresswell concludes that any of the three solutions proposed here would on their own revolutionise the issue of housing affordability, and begin the means whereby a permanent solution to the problem may be cemented in: the total removal of the state from the issue of housing supply. "Until that finally happens," says Cresswell, "these three solutions would at least begin to effect the start of that necessary process without introducing any new coercion of existing property owners."


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