(Planning) Less is More (Productivity)

An article came up from The NBR today on Housing Prices – or more to the point ‘Housing Affordability.’

From The NBR:

House pricing: Heatly agrees on need for land reform – but vague on answers

NBR staff | Sunday July 29, 2012

Housing Minister Phil Heatley says land reform is needed to bring down house prices, but sees local rather than central government leading the charge. Picking up on Finance Minister Bill English’s comment that house pricing is “ridiculous,” MrHeatly told TV3′s The Nation the “the fundamental issue is the cost of land.”

“The cost of sections is so high that when a builder comes along and buys a bare section, he has to build a flash big house to make any money,” Mr Heatley said. City boundaries needed to be extended, but it also had to become easier to intensify housing.

“You’ve got an elderly couple in Auckland, and I tell you what there’s thousands in this situation, they’re in a quarter acre or a half acre section, they’d love to cut it in half, build a new house for them on one half and sell the other bit off, and make you know three or four hundred thousand dollars for their retirement. They don’t do it because it costs them $40,000 two years and they may not even be consented. So that’s crazy,” Mr Heatley said.

But the Housing Minister was short on specifics about how the craziness could be addressed.

The government was talking to Auckland Mayor Len Brown, who was also concerned about the problem, Mr Heatley said. The minister pointed out his government and Mr Brown’s council are co-investingin an $8.5 million, 20-year project to re-generate the lower socio-economic areas of Tamaki (neighbouring Auckland’s posh eastern suburbs). Elements of the project will involve more intensified housing. Most cities had unproductive land that could be released for housing, Mr Heatley said.

Others see the issue as more of a central government problem.

In the wake of a Productivity Commission report that found the cost of land too high, due to artificially constricted supply, ACT leader John Banks has called for a full review of the Resource Management Act. Mr Banks says in Auckland, land now accounts for 60% of the total cost of a home, as opposed to 40% elsewhere.

First of all, ignore the Productivity Commission solution on free for all in land supply for urban development. They (the Commission) would be miles off course in their overtly simplistic  but wrong solution for getting housing to be more affordable.

THUS I want to point out the main crux of the argument for housing affordability in Auckland:

“You’ve got an elderly couple in Auckland, and I tell you what there’s thousands in this situation, they’re in a quarter acre or a half acre section, they’d love to cut it in half, build a new house for them on one half and sell the other bit off, and make you know three or four hundred thousand dollars for their retirement. They don’t do it because it costs them $40,000 two years and they may not even be consented. So that’s crazy,” Mr Heatley said.

Our land situation has been sorted via the 60:40 Brownfield:Greenfield urban development split in The Auckland Plan. That 60:40 split once of the few things I supported in the “C-” grade super Plan as I advocated for it via my submission and resulting hearing to The Auckland Plan Hearing Panel. The 60:40 split with land for urban development should be ample enough for Auckland’s growth over the next 30 years – although I can find more land via my Port of Auckland Relocation Project if need be.

So if it is not our land situation then what is killing our housing affordability? This is where Auckland Council and I need to have a wee chat.

Minister Heatly has hit the nail on the head with it is Council’s urban planning regime that kills our housing affordability. When the Unitary Plan comes out I bet my bottom dollar it will be thicker than the current Resource Management Act book – and I know how thick that book is as it is sitting right beside me. Thus we are being planned to death and out of our houses and business by Auckland Council Planners  through a planning document that should be (as the late Owen McShane famously said) no thicker than one’s thumbnail. Because if a Council Plan was thicker than one’s thumbnail, it is too complex thus repressive against the city and its citizens.

So Council, we need to have that chat and get that Unitary Plan”s (which will “plan” Auckland’s urban development and activities) thickness down to the width of our thumbnail – AND KEEP IT IN PLAN ENGLISH!

Central Government will do its bit to reform the Resource Management Act, but Council needs to take the lead and get that Unitary Plan under control.

In short, provide the guidelines and leave us alone (to the point respect our property rights unless it contravenes the RMA).

I have my alternative in basic form to thinning out the Unitary Plan in my submission to The Auckland Plan. You can read it in the embed below, for after which we will sit down and have that chat.

Plan Less Auckland Council for a More Productive and Freer Auckland

Less is More