Phil Heatley MP National Party Housing Spokesman

10 April 2008

HNZ slams affordable housing bill

National Party Housing spokesman Phil Heatley says the Housing Minister's own department has inadvertently slammed Labour's heavy-handed plan to force developers to build 'affordable housing'.

"Maryan Street's fatally flawed bill has already been rejected by a number of local authorities as it will push up rates and force up house prices. Today, Housing New Zealand confirmed that conclusion."

In a written report to the Local Government and Environment Committee today, Housing New Zealand said about Maryan Street's bill:

* Territorial Authorities wishing to develop, consult on and adopt an affordable housing policy will incur further compliance costs. * Territorial authorities will face ongoing costs implementing an affordable housing policy. These costs would be incurred negotiating with developers retaining affordable housing, and monitoring and reviewing the policy. * The affordable houses are generally sold at below their normal market price, so the discount below the market price will need to be covered by someone. In theory there are four parties that the discount can impact including the council, landowner who sold land to the developer for development, the developer, and the final consumers or owners.

Mr Heatley says Labour's approach to home affordability has been to snip at the edges, rather than deal with substantive issues like high interest rates and red tape which can add as much as $55,000 to the cost of building a new home.

The Government's House Price Unit said that in 2000, 59% of renting couples and 11% of singles could have afforded the lowest quartile priced house, but by 2006 that had dropped to 29% of couples and only 2% of renters.

"On top of these embarrassments, Labour's 'affordable' homes in Hobsonville don't pass the Government's own 'affordability' test and over a third of the initial list of Crown land that Helen Clark said could be freed up for affordable housing included DOC land and even the Auckland zoo."

National agrees with Master Builders: the bill will have a reverse impact on housing affordability - rather than improving the situation, it will make it worse.

"It appears Housing New Zealand also agrees.

"Labour's new rhetoric on home ownership does not measure up to the reality."

ENDS

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