Actual Alternative to Betterment Taxes Proposed by Council?

 

Recently I had written a post on basically what is a new round of taxes better known in slang as Betterment Taxes. In my “BETTERMENT TAXES AND INCLUSIONARY ZONING? – Some Homework for Auckland Citizens” I had set readers some homework via posting the Auckland Plan Committee Agenda on finding out what “Sharing Land Value Uplift from Rezoning” and “Inclusionary Zoning” was. If you haven’t done that homework yet then click on the Betterment Taxes hyperlink in blue above.

 

Now I would like to remind you that nothing is set in stone with the Unitary Plan. What Deputy Mayor Penny Hulse who is spearheading the Unitary Plan work is for Auckland to read the plan (although at 500 pages it is a heck of an ask Penny) the from March 16 through until some time in May give your (informal) feedback on the draft Unitary Plan before it goes to formal notification and submissions in September.

 

So while the Deputy Mayor is asking for your feedback about two betterment taxes I would like you to read this comment left by a reader in my previous Betterment Taxes post:

Hi Ben
It is interesting in itself why some people in public office see the solution to any problem as more Government intervention, not less. In this case, they see themselves as the distributaries’ of wealth from the wealthier to those less well off, as this in itself will solve the problem. By increasing the price for some, they will reduce the price for others; will them being a paid guiding hand in between. Yet they fail to address the real root cause which for want of a better word is ‘waste’. Remove waste costs, which are costs that add no value, like those caused by restrictive and inclusionary zoning and shared land value uplift, most development levy costs etc. and prices would naturally be cheaper, and by default you would not need the type of intervention they are proposing because the need would not be as great. And they fail to see that their very intervention is a further waste, costs and housing process will go up, not down. Their very solution further exasperates the problem, as there is always a line that before the price increase (as it is a non-value cost), that will inevitably follow their solution, there would have been a group of purchasers that now cannot afford to purchase, but will now qualify for the council (developer/end purchaser funded subsidy). Follow this warped logic, the more they charge, the less will be able to afford to buy, but more will qualify for the subsidy, although of course without enough sales, there is no funding for the subsidies. And of course once we all qualify for a subsidy, then we will all be able to own a house. Of course this type of logic will only end in housing unaffordability disaster (as it is heading towards), but the real skill with any parasite is to know how much it can suck from its host without killing it. The other side effect of this type of solution is that it grows council bureaucracy and revenue, which for those involved is securing employment, growing the size of their business, further increasing their salary expectations and self-importance. There is a degree of self interest in this also. These two items within the draft plan highlight a continuation of an ideology that has been responsible for causing the problem that are now attempting to solve. Doing more of the same, will only cause more of the same.

 

Now I have submitted before (the Auckland Plan) an alternative to these betterment taxes to fund the infrastructure required for both Greenfield and Brownfield developments. That alternative is called a MUD or Municipal Utilities District and it comes from Texas of all places.

MUD’s were used as part of a liberalised planning suite of options for urban development in Auckland in my submission to the Auckland Plan and the concept was first mentioned in MarcoBusiness Australia Super Blog. You can read on Municipal Utilities District over at MarcoBusiness by clicking the respective hyperlink.

 

This liberal planning suite for Auckland urban development and land use as I mentioned earlier was in my submission to the Auckland Plan. To cut down having to go through the rest of the comprehensive submission as it covers other aspects including transport and climate change, I produced a dedicate sole section on alternative suite which you can read in the embed below:

SLPD and MUDs

 

The concept of the Semi-Liberal Planned District and the Municipal Utilities District will be the back bone of my feedback and submissions to Auckland Council on the Unitary Plan. As our commenter said above, government (including council) believe the best type of planning is more interventionist planning which only drives costs (and thus taxes) up. What our Deputy Mayor and her planners need to do is take a full look at my SLPD idea and the Texan MUD system as part of an actual suite of options for actual affordable housing rather than just looking at betterment taxes.

 

So Deputy Mayor Penny Hulse I have some homework for you. Can you please research Municipal Utilities Districts used in Texas as a “tool” for your affordable housing options that you are chasing for. Yes I know MUDs go down the liberal line but as a representative I do have an expectation you consider ALL options – please 🙂 .

 

I am also happy to sit down with you after I return from Australia to go over SLPDs and MUDs – as we both want what is best for our city, and actual affordable neighbourhoods.

 

So what do readers think? Betterment taxes, or SLPDs and MUDs for a more affordable Auckland?

Comment away below