Using the Resource Management Act Reforms to help mitigate/remedy child poverty
The question you would be first asking is: “how can the reforms of the Resource Management Act help end or at least alleviate child poverty?” Well we know the Government in pushing through the new round of RMA reforms is looking at overhauling Section Six which deals with the consenting processes. We also know these factors contribute to either housing affordability or housing being unaffordable:
- Land supply for Greenfield developments
- Construction Costs
- Consenting process which is brought on and a consequence of planning development controls
Now the Government has moved on the land supply issue through the Special Housing Areas. We also know through a rather lame attempt Government is trying to bring construction costs under control but to be honest people don’t need to be building 200m2 plus houses for families of four and five when they will be empty nested in 20 years and dead useless.
So this leaves us with consenting processes and in part planning development controls which I have always advocated in needing to be gutted – at least in our Unitary Plan.
Eric Crampton for the NZ Initiative had this to say on the Resource Management Act Reforms and Child Poverty:
From Interest.co.nz
The NZ Initiative’s Eric Crampton says improving housing affordability is a key step the Government can take to reduce child poverty
Posted in Opinion September 30, 2014 – 09:35am, Eric CramptonBy Eric Crampton*In last week’s column, New Zealand Initiative Executive Director Oliver Hartwich urged National to tackle the ‘big ticket’ problems as he now has the political capital to do it, with RMA reform at the top of the list.
While Oliver noted the contrast between policies that are electorally popular and those that are right for the country in the long term, when it comes to RMA reform, I’m really not sure that reform comes at the expense of National’s chances in 2017. I rather expect the opposite.
Prime Minister John Key signalled last week that child poverty is to be one of his priorities for the coming term. Too many children in New Zealand grow up in families with very little disposable income. Poverty has traditionally been an issue captured by the political left, with demands for more redistribution to solve the problem. Inequality too has captured a fair bit of attention, despite strong evidence that income inequality has not really changed much since a rise in the late 1980s and early 1990s: the trend has been flat for two decades.
Even more surprisingly, data from the Ministry of Social Development shows that real household income growth in the lowest deciles has been very strong, both from 1994 to 2013, and from 2004 to 2013. The poorest decile in 2013 has real household income 40% higher than the poorest decile in 1994. And from 2004 through 2013, real household income growth was strongest for the lowest four deciles than for the richest six deciles.
So why has poverty, and especially child poverty, seemed so much more pressing?
The Ministry of Social Development data, cited above, measures real household incomes before housing costs. And housing costs have been rising. MSD reports that 23% of children aged 0-17 live in the poorest quintile of households (the bottom 20%): they’re slightly over-represented, when disposable household income is counted before housing costs. But when we take incomes after housing costs, 27% of children live in the poorest quintile: high housing costs disproportionately affect poorer children. Forty-two percent of households in the poorest quintile spend more than 30% of their income on housing; only 9% of the richest quintile do.
While child poverty is lower than it was in the early 1990s (even after housing costs) and child poverty rates are now back to levels comparable to those prior to the Great Financial Crisis, they remain substantially higher than they were in the 1980s. Housing costs substantially affect disposable incomes at the bottom of the distribution.
Housing unaffordability is consequently a substantial part of New Zealand’s child poverty problem. When poor households have to spend 30%, 40%, or even 50% of their incomes on housing, there simply is not much left to pay for anything else. And so spots of bad luck, like a car breakdown or an unexpected expense, can quickly become major issues.
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Full opinion piece can be seen here: https://www.interest.co.nz/opinion/72193/nz-initiatives-eric-crampton-says-improving-housing-affordability-key-step-government-
Eric has pretty much hit the nail on the head on a few things here. We know if a household spends more than 33% (or 40% maximum but there is stress involved) of their net income on housing whether it be mortgage or rent (or house price is more than three times the annual combined income of the household) there will be stress and the household having to make sacrifices. In more technical terms start going above 40% and you start hitting material poverty let alone “child” poverty.
So how can the RMA reforms assist in beating Child Poverty? By removing or at least gutting the biggest road block to housing affordability; development controls that give rise to the complex consenting processes. Simply put gut the development controls out so you do not need complex consents for every little thing when it comes to house (or even commercial and industrial) building and you are well on your way to lessening the cost of providing a home for someone. Go on step further and make sure the Unitary Plan zones are correct (so the entire Isthmus residential area is either Mixed Housing Urban or Terrace Housing and Apartment (so none of this Single Housing, and Mixed Housing Suburban stuff)) and the heritage controls strictly limited and watch the Freer Market right across Auckland from Greenfield to Brownfield work to provide the housing topologies Aucklanders are actually looking for (two bedroom and five bedroom).
The Freer Market would allow housing supply to meet the actual housing demand thus brining housing affordability back into line. Poverty would be mitigated more successfully than now and John Key would be making good on his Campbell Live interview in dealing with such poverty.
We await and see what the RMA reforms are and will finally be in due course.
Talking Southern Auckland 