Institute proposes competing Development Authorities

Sunday, 26 June 2016

Property Institute proposes competing Development Authorities

Property Institute of New Zealand Chief Executive, Ashley Church, is asking the Government to consider setting up multiple Urban Development Authorities in Auckland rather than the single Authority which is being proposed.

Last week Prime Minister John Key floated the idea of a single agency to oversee major building projects, purchase building sites, master-plan large residential developments and partner with private sector groups to deliver them. The idea was first proposed by the Productivity Commission last year - and Key indicated that the Government was now giving the proposal serious consideration.

However, Mr Church says that competition and private investment are the keys to fast tracking the development of new housing projects in Auckland and is encouraging the Government to consider a commercially focused multiple-Agency approach along the lines of the Energy Company reforms of the 1990s.

"Most of the focus of those reforms was on price competition - but we forget that an equally important aspect of them was a need to rapidly find new ways to generate energy and avoid 'brown-outs'. In that regard the creation of Mighty River Power, Genesis and Meridian was a huge success and solved a problem that was every bit as serious as the Auckland housing crisis, at the time".

Mr Church is proposing that the Government should take the same approach to housing by establishing a series of competing Urban Development Authorities - possibly domiciled in different parts of Auckland - but with free rein to operate throughout the City. He says that these could be Crown-Owned entities, Council Controlled Organisations (CCOs) or a combination of both.

Mr Church says that the creation of the Super City provides a stark example of why a single Authority isn't the solution for Auckland.

"If the creation of a single Authority was the answer to the housing problem Auckland would now be well on the way to solving its housing issues".

Instead, Mr Church said that it hadn't gone unnoticed that this property boom - the first since the creation of the Super City - was taking much longer to resolve than any previous boom since at least the early 70s.

"To be fair - that's not all the fault of the Auckland Council. It's also the result of strong migration and a strong economy. But I don't think anyone gets the sense that Auckland Council 'has matters under control' - so the last thing the City needs is a new 'Soviet style', central planning agency".

Mr Church says that there is some irony in the fact that the multi-city structure of Auckland, prior to the creation of the Super City, would have been much better equipped to handle the current housing problem.

"Under the old structure cities competed with each other for residential development and investment - so, by now, you would have expected to have seen areas throughout the isthmus opened up for commercial and residential development in a way which would also have encouraged private investment at a local level".

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