Report highlights the need to change incentives for housing growth

Local Government New Zealand (LGNZ) welcomes the focus the Productivity Commission has brought to issues around housing affordability in its draft report “Using land for housing.”
The report identifies both leading practices and areas for further policy consideration.

LGNZ Chair of Metro Sector and Mayor of Tauranga City, Stuart Crosby, agrees that there are improvements to be made in the system.

“This includes setting targets for zoned and serviced land for growth, and greater monitoring of completed dwellings. This will give the ability to monitor whether housing shortfalls are building up,” says Mr Crosby.

“We agree with the Commission’s views that we need to shift the incentives for growth so that growth is not an “expensive inconvenience” for councils and ratepayers.” A regime that rewards communities for sound management of growth is likely to achieve better outcomes over time.

“LGNZ also supports targeted funding for growth-enabling infrastructure and removing exemptions so the Government pays rates on Crown-owned land, which is consistent with the conclusions being reached by LGNZ’s own review of local government funding. LGNZ will be launching its report on local government funding at its upcoming conference in July.”

LGNZ sees that one of the biggest challenges is the need to re-gear the system so that the existing ratepayers support change. As the Commission points out, it is the existing property owners who resist the changes that might reduce housing prices through increasing densities and building heights.

LGNZ agrees that we need to take a step back and reconsider how we manage urban design and heritage.

“Areas experiencing high growth may need special tools, including those that enable a stronger partnership between central and local government, and those that strip out complexity such as a Spatial Plan with regulatory force,” says Mr Crosby.

“Of importance is getting scale into the cities that are experiencing the highest growth and having the biggest problems with affordability. We need to make this a high priority for central and local government to work on together.”

The Commission devotes some time in its report on water infrastructure governance. LGNZ’s members are presently engaged in a substantial review of 3 Waters governance. That work, together with the work on the possible establishment of a Local Government Risk Management Agency, may well address many of the concerns the Commission has stated. LGNZ believes that policy makers should be cautious about setting up complex regulatory structures to address problems that may only be present in some areas of the country.

LGNZ looks forward to working with the Commission to get greater granularity on this aspect of its report.

ENDS

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