Housing shortage well-established; is a different approach needed to combat it?

The New Zealand Initiative (NZI), a membership research organisation, has recently released a report outlining the extent of New Zealand’s housing shortage (Empty Nests, Crowded Houses: Building for an ageing population). The report indicates that at current rates there will be a shortage of 100,000 houses by 2031.

Executive director of NZI, Dr Oliver Hartwich, has noted that construction levels are much lower than initially forecast and this, combined with the effects of an aging population, will have a significant effect on housing affordability in the future (click here to read the report).

Dr Hartwich notes that current political promises to increase the level of construction is coming too late and a different approach to focusing on the demand side needs to be investigated (although any policies designed to increase housing are welcome). His suggestion is to focus on the funding at council level, recognising that more resources are needed to deal with development planning and to ensure councils are adequately compensated for the infrastructure planning. One practical example given is that GST from new houses could be directed to local councils, encouraging further development.

Other developments suggested in the report include developing Community Development Districts which would be a body that facilitates the funding of development and its supporting infrastructure; and a reform of water provision schemes.

It is interesting to see different areas of the housing market being the focus of economic reports. The projected lack of housing is set to become a significant issue and one which most political parties will be required to consider in light of the upcoming election.

3 thoughts on “Housing shortage well-established; is a different approach needed to combat it?

  1. Thank you for linking to our research. However, the report you mention is actually ‘Empty Nests, Crowded Houses: Building for an ageing population”. The other report, ‘Up or Out?’, mainly deals with the town planning idea of ‘compact cities’, not so much with our projected housing shortage.

    Both publications are part of our research on housing and planning which we started with a trilogy of reports co-authored by former local government minister Michael Bassett last year. We have consistently argued that our housing affordability crisis is the result of a lack of supply caused by complicated planning laws and lack of adequate infrastructure finance.

    We hope that political parties will at some stage realise that solutions to it have to be found on the supply side rather than trying to fiddle with the demand side of the market through interventions such as capital gains taxes (Labour) or first-time buyer subsidies (National).

    If you are interested you can find all our publications (free of charge) on our website at http://www.nzinitiative.org.nz

    • Thanks for the comment and update Oliver.

      I have amended the post so that it now links to the correct article. Look forward to reading more of NZI’s material in future.

  2. Pingback: Solution to housing in NZ: Supply or Demand? | CONSTRUCTION LAW BLOG

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