Palino For Mayor
Part One
March 2016

Palino calls for the Removal the Metropolitan Urban Limit

Mayoral Candidate John Palino calls for the removal of the Metropolitan Urban Limit. Mr Palino says, “The MUL has restricted land supply in Auckland, driving up house prices for ideological reasons. It is time council stopped flogging the dead horse that is the compact city and started releasing large amounts of land for residential development.”

Auckland house prices are some of the most expensive in the world when compared to household income. Demographia rank Auckland as equal 4th most unaffordable city to purchase a house in, with a median multiple income to house price of 9.71.

Mr Palino says, “We need to be looking at Auckland as a region, rather than just the central city. It is not practical and far too expensive to concentrate all Auckland’s expansion around the CBD”.

Council regulations are the biggest driver of housing affordability. The Metropolitan Urban Limit continues to drive prices up to ever more unaffordable levels. This has been caused by an ideological desire to force Aucklanders to live in high density dwellings and use public transport.

A compact central city will not solve Auckland’s housing shortages. Previous rezoning of existing suburbs to higher density housing has not created the kind of increase in supply required slow rapidly increased housing prices. Intensifying existing suburbs is unlikely to solve the housing supply issue in the future. Buying existing dwellings, demolishing them, and rebuilding denser housing, does not provide the kind of returns developers need to undertake this type of development.

Intensifying existing suburbs also means increasing pressure on already strained infrastructure. More density means expensive retrofitting of existing water, wastewater and roading, as well as overloading schools, community facilities and emergency services.

Increasing density means existing property owners face having their views and sunlight blocked by new multilevel dwellings. Council’s insistence on density in existing areas affects the property rights of current residents, without any recompense for the loss of their views and sunlight.

Most of Auckland’s problems with house prices have come from poor regulation by council. According to the Productivity Commission2, referencing a McKinsey Global Institute study: Remarkably, in the world’s least affordable cities (including Auckland), unlocking land supply could help to reduce the cost of housing by between 31% and 47%.3 Auckland is a relatively small city on a relatively sparsely populated land. New Zealand has a landmass approximately 20,000 square kilometres bigger than Britain, with approximately a fifteenth of the population, so we do not have a land supply problem. We have a regulation problem.

The regulation that is causing the most problems is the Metropolitan Urban Limit. It has restricted land supply around Auckland, pushing up prices and stalling new home build. There is no clear, practical path to making housing affordable while the MUL remains.

For too long we have listened to the ideological warriors promoting a compact city, without understanding that cost of housing is a massive drag on Auckland’s growth.

It is also a huge financial burden on Auckland families, forcing them to spend far too much on housing, whether on mortgages or rent.

Auckland needs to expand, and it needs to quickly free up more land for housing.

We need to be viewing Auckland as part of a bigger region. Creating land supply along the spine of existing infrastructure means making the most of that infrastructure at the same time as allowing greenfield development along this spine.

Removing the MUL is the first step to building a better Auckland, creating more affordable housing and bringing across the region. Mr Palino will be releasing more housing affordability policies to help Aucklanders afford their own homes in the coming weeks and months.

1 12th Annual Demographia International Housing Affordability Survey: 2016
2 Productivity Commission Using Land for Housing: 2015
3 Productivity Commission Using Land for Housing: 2015

References

12th Annual Demographia International Housing Affordability Survey: 2016 http://www.demographia.com/dhi.pdf

Productivity Commission Housing Affordability Inquiry: 2012 http://www.productivity.govt.nz/inquiry-content/1509?stage=4

Productivity Commission Using Land for Housing: 2015 www.productivity.govt.nz/sites/default/files/using-land-for-housing-final-reportfull% 2C%20PDF%2C%204511Kb.pdf

ENDS

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