OECD report a damning indictment on Auckland’s status quo

Media Release

11 June 2015 OECD report a damning indictment on Auckland’s status quo

A report by the OECD reiterates the importance of heeding Property Council’s warnings on housing supply and infrastructure in Auckland.

The biennial report says house prices have increased sharply in Auckland, “eroding affordability and raising financial-stability risks”. It points to efforts to address this being impeded by NIMBYism and community resistance to rezoning and intensification of neighbourhoods.

Property Council chief executive Connal Townsend says the report leaves no room for mistakes. “The OECD report makes it crystal clear that while Government considers a more substantial review of the Resource Management Act, fiscal policy measures must be put into place at the soonest to give councils clear guidance on what is expected of them. A National Policy Statement is a powerful tool.”

The report notes environmental regulations slowing down housing development and economic activity, including residential investment. It says the development sector is shouldering a massive share of regulation costs due to the Resource Management Act’s land use changes and quotes the Grimes and Mitchell report (2015) which found costs can add between $32,500 and $60,000 per dwelling in subdivisions and between $65,000 and $110,000 per apartment or entirely halt projects.

“The whole country has known for a long time, that regulation costs are adding thousands upon thousands of dollars to dwelling prices which are passed onto the customer. Of course people are not going to be able to afford their own home when developers are having to bump up their prices to be able to afford council fees.”

Property Council believes intensification and up-zoning of land are essential to meeting Auckland Plan’s housing target. “We’ve been reiterating the importance of releasing land for new houses by upzoning residential areas and even then, according to the Ministry of Business, Employment and Innovation, we’ll be need another 22,000 houses next to the Plan’s 50,000 target.”

Property Council supports the Government’s efforts to address housing supply through the Housing Accords and Special Housing Areas 2013 and the Crown’s recent announcement of nearly 500 hectares of land for housing purposes in Auckland. But in order to achieve success, it is absolutely crucial that infrastructure-provision related issues are addressed at the earliest.

“Government, Auckland Council, Auckland Transport and Watercare must come together instead of pulling in opposite directions. We need to give immediate consideration to public private partnerships for mega projects, including build-operate-and-transfer mechanisms.”

ENDS

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