Consequences continue to the Unitary Plan vote on Wednesday
Fallout continues to be measured from Wednesday’s anti-democratic vote that removed Council from the rezoning topic of the Unitary Plan Hearings. While Ministers are pretty much calling Council a shambles (Fall Out to Yesterday’s Anti-Democratic #UnitaryPlan Vote) Finance Minister Bill English has sent even more signals that the Government is looking intervention into Auckland’s housing market.
From the NZ Herald
The Economy Hub: Is National the new Labour?3:26 PM Thursday Feb 25, 2016 – Liam
Is our famously tight-fisted Finance Minister finally opening his cheque book to drive this economy through the dairy downturn.
As we head towards a crucial Budget on May 26 it certainly looks that way.
Bill English went big on Auckland housing issues in his “state of economy” speech today.
But the bit that out stood out for me was how close the one-time right-wing reformer came to using the magic word: “stimulus”.
“We can chose to invest when the need arises,” English said as he talked about infrastructure and social investment and the Government having the “toolkit” to deliver better results for our communities.
Certainly in economic terms, if not social or cultural, National now seems to be occupying space closer to the Helen Clark, Michael Cullen regime than the kind of hard-nosed reform we saw from Jim Bolger and Ruth Richardson in the 1990s.Still these are very different times.
This week even the typically conservative International Monetary Fund called for G20 governments to loosen the spending reins as the global economy slows.
New Zealand now seems likely to follow suit.
A cynic might say we are heading into the business-end of the political cycle and with the commodity slump dragging, the Government doesn’t want to find itself with the low point of an economic cycle in election year.
That begs the question: do we have the firepower to stimulate right through this slump?
After years of chasing a surplus, albeit small and short lived, it looks like we probably do.
And from Stuff:
Bill English won’t rule out Government intervention over Auckland housing
Chris McKeen – 26/02/2016
Finance Minister Bill English will not rule out stepping in to the stoush over housing density and affordability in Auckland.
He said the Government had confidence in Auckland Council’s process, but would take “a pretty hard look” at the final Unitary Plan.
On Wednesday, councillors voted 13-8 to withdraw plans to increase density in some Auckland suburbs.
In his first major economic speech of the year, English said it was critical there was enough scope to increase the housing supply in the city.
“Auckland has to grow up, or out. They get to decide which way, but it does have to grow.”
English said central government worked closely with the council, and had set aggressive targets.
“We’ve made pretty clear our view to the council for some time, to anyone who’d listen, that Auckland needs to come up with a plan that accommodates growth.”
English said the council had a tough job to do, and arguments around density and NIMBY-ism were legitimate community discussion.
“We remain confident,” he said.“The process has got some way to go – we’ll see how it rolls out.”
Asked whether the Government would step in if the council failed, he said it wouldn’t rule anything out.
“Achieving a sensible Unitary Plan is pretty important in the national interest.”
But the question of whether Government could overrule the final decision was a legal one, he said.
“I couldn’t really give you any answers on that.”
English also sent a coded signal he was concerned about the impact of the Auckland local body elections, and the possibility former Labour leader Phil Goff would win the mayoralty.
“It is my hope that election year in Auckland won’t affect the positive relationship between central government and Auckland city, developed in recent years.”
He said urban planning was a key focus of the government.
Rapidly rising house prices affected the economy and financial stability and drove inequality because higher prices favoured current owners.
They also pushed up Government costs, given it subsidised accommodation at a cost of $2b a year.
That $2b subsidy cost and Council’s inaction over the Unitary Plan will be at the front of the Finance Minister’s mind. Now both he and Housing Minister Dr Nick Smith have said that they are waiting for the Hearings Panel to come out with their recommendations on how Auckland should grow. While this is the case both Ministers will also know the capability of the Governing Body handling those recommendations is diminished after Wednesday.
So English has got his cards to play and is keeping his options open. While the ball is technically back in Council’s court the ultimate consequence will come from Government itself especially after they intervened in the Three Kings development which got protracted both in the Governing Body of Council and now the Environment Court.
As I see while there are three options the Government is faced technically with two:
- We continue as is and hopefully the Panel can make recommendations back to the Council in August. Now given the Panel has tended to more intensification in the past this leads to a rather interesting situation in August with the Governing Body of the Council. I’ll go into this further down (see above on toxic culture).
- Government passes legislation to enshrine the recommendations from the Panel all at once as soon as they have been made while bypassing the vote from the Governing Body. Now appeals and Plan Changes can still be made risking a potential for a yesterday to repeat (also see below).
- Government pre-empts off and installs Commissioners thus sacking the Governing Body until a predetermined time (most likely until 2019 when hopefully the appeals against the Unitary Plan are complete in the Environment and High Courts).
There is one risk that leads to the same consequence regardless of which of the above options are taken. The Panel is more likely to go for even higher intensification than what the Council had put its evidence on, as the capacity numbers must match the 60:40 ratio set out in the Auckland Plan. The current PAUP (as notified in 2013) that is going through the hearings does not allow the housing required and we risk more sprawl.
It is for this reason modelling was done and Council subsequently submitted in its (now defunct) evidence more intensification was needed to avoid more sprawl and associated costs to the taxpayer (which Finance Minister Bill English even wants to avoid (see Footnoot 2 previous page)).
It can be thus concluded as a result that Auckland needs to intensify more.
Given 13 Councillors have basically voted against that increased level of intensification thus reverting back to the PAUP (where we have the mismatch) it can be reasonably assumed that the same 13 will vote against further recommendations for more intensification thereby causing the September 16 deadline to be missed (and subsequently the Special Housing Areas lapse).
Even if the recommendations make it through via Option 2 there is still the same risk the 13 on the Governing Body would either force a set of appeals in the Courts to revert back to the 2013 PAUP version or try and trigger a Public Plan Change after the elections in October to again revert back to the 2013 version.
In all cases the risk of litigation or protracted debate and inaction via the Governing Body would continue to present itself until possibly even the new term of Council late 2016.
Again the protracted debate and fights with the Three Kings development is the mini-version of the fight that happened on Wednesday and is bound to continue in August as beyond.
The Ministers will be both weighing up intervening action against the cost of inaction to the national taxpayer.
Given that apart from Bernard Orsman the media have roundly condemned Wednesday as well the 13 Councillors might want to reconsider what they did.