Baby boomer government lets down a generation
Press release: ACT New Zealand
January 25, 2016. 9:25am
The 12th Annual Demographia International Housing Affordability Survey is a reminder of how little resolve the
Government has applied to fixing a dysfunctional housing market.
“Watching the Annual Demographia updates is a reminder that a Cabinet of baby boomers has done nothing effectual on
housing affordability," said ACT Leader David Seymour.
“In a past life I was a spokesperson for Demographia and I watched the Auckland market grow progressively out of
control. Where the median house was 6.4 times the median income in 2009, for instance, in this latest report it has hit
9.7.
“The report again reminds us not only that Auckland’s market is dysfunctional, but why.
“Those who grumble about a lack of a capital gains tax should look at the ten least affordable markets in the (global)
Demographia Survey. All of them except Auckland are there despite having a capital gains tax.
“Those who like to blame the immigrants should take a look at fast-growing American cities such as Atlanta and Houston,
that have maintained functional housing markets despite rapid growth.
“The real explanation is closer to home. In the 1990s there were 50,000 homes built in Auckland. In the past decade
there were only 40,000 built. That is despite home buyers paying record high prices and the population being 50 per cent
larger than it was in 1991.
“Again, the international evidence is crystal clear. Ideologically driven restrictions on the growth of cities has
pushed up house prices and the government is doing little about it, certainly nothing effectual.
“If the Government were serious about housing affordability it could begin with the following steps:
• · Ban the use of city limits such as the Rural Urban Boundary. Analysis suggests that such boundaries have
increased the price of residential land by as much as eight times over the cost of bare land
• · Introduce tax incentives for councils that allow development, for example sharing the growth in company tax in
any physical jurisdiction with the local council, as proposed by the New Zealand Initiative.
• · Propose proper RMA reform rather than the one-step-forward-two-steps-back mish mash that it’s negotiated with
the Maori Party. It would reform the ambiguous ‘principles’ sections and introduce a recognition of property rights
“ACT is the only party that has consistently campaigned on evidence based policies for expanding housing supply and
making the housing market function."
ENDS