Government Intervention in Housing Was Going to Happen #AKLPols

Three Kings Intervention sends a clear warning

 

The announcement that Minister of Housing and Building, and for the Environment Dr Nick Smith is going to intervene on the side of Council with the Three Kings housing development comes of no surprise me. Although it is a surprise that the intervention was now so soon after I had made comments that this sort of thing was incoming.

It was my comments to Russell Brown of Public Address last week after the Prime Minister’s State of the Nation Speech that had me again reflecting again yesterday after the Minister’s intervention with Three Kings.

 

The comments were:

Key’s speech also covered the issue of housing supply. My fellow blogger Ben Ross thinks that there is a subtext to what Key said that signals government commitment to the principles of the Auckland Unitary Plan. And he may well be right: because there is no way to “continue lifting the supply of new houses in Auckland to meet the demands of this growing city” without fitting more dwellings in Auckland, and not simply endlessly expanding the hinterland.

……

Source: http://publicaddress.net/hardnews/the-crl-and-the-nature-of-change/

 

Russell continues further on the Unitary Plan experience since 2013 and how the Government especially Finance Minister Bill English has evolved from being hostile to intensification to now pro-intensification.

 

Unitec and surround area Source: Google Maps Another place Government could intervene to speed up houses getting built
Unitec and surround area
Source: Google Maps
Another place Government could intervene to speed up houses getting built

 

You can see the case of Government intervention and reaction against it here: Government accused of ‘standover tactics’ over Three Kings Quarry redevelopment

I have been watching the case since it came to the Auckland Development Committee where the Committee resolved to allow the Private Plan Change to happen rather than try to force Fletchers to wait until the Unitary Plan went live later this year.

I am holding a neutral stance to the Three Kings situation apart from Auckland Transport dropping the ball like it did with Stonefields in getting at the minimum a feeder bus shuttle into the new development (Three Kings due to hold around 6,400 people) and run that shuttle between Mt Albert and Onehunga Stations (which on the way also pass high frequency buses heading into the City Centre).

 

However, the situation on Government beginning large-scale interventions in housing if it is perceiving NIMBY’s are getting in the way on the Isthmus or North Shore has been both forewarned through their own submissions to the Unitary Plan and will become more regular post Unitary Plan as well.

What gives rise to the increased intervention approach?

 

From Dr Bryce Edwards – University of Otago:

7) Audrey Young’s verdict on the State of the Nation speech was that Key uses tried and true formula in attempting to set the political agenda: “if in doubt, announce a rail or road project, or preferably both. And just to be sure, re-announce a project or two.”
8) National will continue to face a major problem with the Auckland housing market this year. Sam Sachdeva provides a summary of National and Labour’s views on the issue in Rising housing prices in 2015 put pressure on politicians.
9) Based on an interesting interview with the Minister of Finance, Richard Harman has published an important article on How Bill English undermines Labour. It concentrates on National’s social policy reform, with English declaring it a huge success in terms of making meaningful reform as well as strategically improving his party’s electoral positioning. His social investment approach, together with welfare reform, has “probably saved between $700 million and a billion over what the Government thought welfare would cost four years ago” says English. And English believes he’s achieved a major change in the way the bureaucracy works. Electorally, he says “At the margins It’s worth 2 -3% to us, I reckon, in 2017.” This is because the social investment reforms have pulled the rug out from beneath the political left, as he argues the significant achievements made by National means the left can no longer attack it.

…….

 

English knows the Economy is slowing down (see below) and Key is seeking for a fourth term. Thus English will begin setting that agenda towards loosening up the Budget strings and start targeting more public investment into most likely in Auckland through housing and transport.

 

Figure 4 @TheEconomist The World in 2016's forecast for New Zealand http://econ.st/1YvvRny
Figure 4 @TheEconomist The World in 2016’s forecast for New Zealand http://econ.st/1YvvRny

 

English will also know Auckland is in negative productivity despite adding to the GDP growth currently happening.

Productivity for the 2014 year. Source; Auckland Plan Annual Implementation Update https://www.scribd.com/doc/295077521/TR2015-030-Auckland-Plan-Targets-Monitoring-Report-2015
Productivity for the 2014 year.
Source; Auckland Plan Annual Implementation Update
https://www.scribd.com/doc/295077521/TR2015-030-Auckland-Plan-Targets-Monitoring-Report-2015

 

 

So watch the Prime Minister for sure but definitely watch English, Smith and Bridges on direct interventions with housing and transport in Auckland as Key has all but confirmed road tolling from 2017 onwards.

(Again from Dr Bryce Edwards):

1) Last week John Key gave his eighth state of the Nation speech as Prime Minister. Its major announcements were aimed at the third of New Zealand’s voters who live in Auckland and, true to form, involved policy co-option and a blatant U-turn over Auckland’s public transport. In a paywalled column for the NBR, Matthew Hooton argues that the Auckland rail decision reveals generational change in National.
Hooton declared it a “win for the cosmopolitan wing of the National Party” – epitomised by Simon Bridges and Nikki Kaye – who “understand that mass rapid transit is at the heart of how global centres of capitalism thrive.” This is in contrast to long-time Ministers such as Gerry Brownlee and Steven Joyce who Hooton characterises as the provincial old guard who “see something a bit socialist about people sharing a train.”
Hooton promotes the policy announcement as a “massive political achievement” for Simon Bridges in convincing Key to side with him against the “passionate and personable” Brownlee and “cold and calculating” Joyce, who merely “saw Auckland’s City Rail Link (CRL) as costing $1 billion per station.” Of course he notes that the U-turn is also about strategic electoral calculations and that is where the pragmatism of Key and Joyce comes into play: “There is an Auckland council election this year and Mr Key wants light-blue centrists to win a majority.  He has no intention of allowing Labour’s Phil Goff to campaign on rapid transit.”
2) Tim Watkin also makes this point in The lame duck wins the day for Auckland, saying there are “numerous” reasons for this major U-turn but, “Most obviously, Key and Joyce are not ones to stay on the wrong side of public opinion for too long, and their unpopular position put a fourth term at risk. Elections are largely won and lost in Auckland, and they had come to be seen as the men standing in the way of progress on Auckland’s second biggest gripe – congestion.”
3) Fran O’Sullivan is unimpressed with National’s conduct over the rail link, and she suggests that Auckland business leaders are hardly ecstatic with Key’s reluctant fillip two years too late. O’Sullivan also says local body election considerations drove the decision, which “had the potential to spill over into the 2017 national elections”. She accuses National of allowing “its concerns over Len Brown’s leadership to spill over to poison decision-making.”
4) National’s U-turn over the Auckland rail link is vintage Key, according to Duncan Garner, who says Flexible principles help Key, while Labour continues to flounder: “On many occasions he’s late to the party, often he’s dragged kicking and screaming, but he gets there and the polls confirm the public are OK with that. And it’s this appearance of flexibility that is safely keeping him ensconced in office. Take the massive $2.5 billion rail tunnel under Auckland’s CBD. It was Len Brown’s baby and Labour and the Greens wanted it. Key and a swathe of senior ministers scoffed at it, rubbished it, questioned it, said it wasn’t necessary.  But its time has come and Key’s not worried about re-writing history. He doesn’t care.  This week it was his idea and he wrote out a $1.25b cheque to help the project on its way. Remarkable really.”
Garner says that Key has stolen so many policies from other parties he “should really be arrested for theft as a servant”, but because Key “largely tacks Left”, it works.

…….

Full reckons can be read here: http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11583554

 

Finally what might the Government intervene more on?

I say Minister of Transport Simon Bridges is going to intervene on Airport Rail (the next big thing) seeming Auckland Transport are making a total hamfist of it right now and as a consequence have annoyed both the communities and Councillors over it. You might just see Bridges kicking the project over to NZTA away from Auckland Transport and as a result opting for heavy rail whether it be from Onehunga or even Otahuhu.

Airport Line with Sky Train and buses Black = Heavy Rail Connection Blue = Buses Yellow = Sky Train
Airport Line with Sky Train and buses
Black = Heavy Rail Connection
Blue = Buses
Yellow = Sky Train

 

As for Housing?

Watch to see if the Government starts intervening with Panuku Development Auckland on Council (and for that matter Crown) Land and wielding “influence” to speed up the provisions of housing on that land. Otherwise it will be interesting to see if Government continues intervention against the NIMBYs on the Isthmus and North Shore for reasons I mentioned above.

Manukau City Centre Source: Auckland Plan Implementation Update 2015
Manukau City Centre
Source: Auckland Plan Implementation Update 2015

 

Government intervention – it was bound to happen and now it has….

 

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One thought on “Government Intervention in Housing Was Going to Happen #AKLPols

  1. Ben – excellent review of all these commentaries and opinions! Very useful – thank you.

    Yes, there has been a ‘climate change’ inside the government in its attitude to Akl Plan, intensification, public transport and housing intervention. It’s a big shift.

    However, the sad fact is that JK’s and Government’s U-turn is not about a genuine belief in a strong government role in the public domain and for the benefit of all NZ-ers, but a cynical maneuver to derail the Labour on the road to the elections.

    It may work. But what will not work – eventually – is the idea that you can cram 3 million people onto a narrow, volcanic peninsula without tragic consequences. Not in the the mid-21st century. The world is in the process of accelerated climate change, and after 2020 or so, cities and other human settlements will start facing the music… Auckland will be among them.

    All this politicking – between Akl Council and Government, and between the National and Labour – will end in tears. Tears for Aucklanders, desperately clinging to struggling, over-centralized, heavy-energy-input-dependent infrastructure… many of them on the umpteenth floor of some high-rise apartment block or office tower…

    I only place my hope in the fact that the development around Auckland is ignoring the council’s ignorant Plan and instead happening in a decentralized, peri-urban and regional-scale way anyway. It’s a mess, as there is no strategy of any kind (thanks to the four blind regional authorities and the negligent MfE and MBIE), but at least it is decentralised enough to give me some hope that when Auckland gets a hit of some kind, not everything will stop working, or turn into a heap of rubble – like the Christchurch CBD five years ago.

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