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Can’t Fix Housing Without Addressing Funding

Local Government New Zealand says today’s announcement of yet more planning reform is unlikely to fix the housing crisis without addressing how we sustainably fund infrastructure.

“As place-makers, council have worked closely with the Government on urban planning reform through the National Policy Statement for Urban Development Capacity, its beefed-up successor the National Policy Statement for Urban Development, and the resource management reforms. In all these processes it has been clear a better planning system is necessary to unleash urban development capacity,” LGNZ President Stuart Crosby says.

“However, planning reform in and of itself is not enough to solve the problem unless it fixes the infrastructure funding challenge.

“Despite all these planning reform processes, a substantive discussion on a sustainable funding system is still to be had. Yet, the brownfield development the Government wants to unleash with this policy is exactly where the infrastructure costs are highest, and where council balance sheets are most stretched.

“We also need to work carefully through the implications of today’s announcement to ensure it doesn’t unleash unintended development outcomes – urban form endures for a long time, making it difficult and costly to undo mistakes,” he says.

LGNZ recognises the funding central government has made available through the Infrastructure Acceleration Fund, but noted it is a one-time intervention. It still leaves the politically problematic rates system to pay for infrastructure long-term, which is the real constraint.

“This reform needs to be worked through within the context of the system-wide reform that’s going on right now. Local government is severely stretched with three waters reform, Covid-19 civil defence work, the future for local government review and the resource management reforms. We’re not the only sector — the capacity of iwi/Māori, the private sector, and communities is over tapped.

“Unless we start working in partnership better, coordinate our collective resources carefully, and share thinking earlier, we’re all going to drop the ball on the current reforms, let alone anything new that gets thrown at us. This puts massive additional risk in the system,” he says.

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