Following the familiar theme of housing supply, the Productivity Commission has released its draft report on council processes in relation to provision of land and zoning matter. We noted the upcoming report in an earlier blog post which also set out the areas which the report was to cover (click here to read).
A link to the draft report and earlier documents can be found here.
A summary of the draft report
- The report focuses on 10 high growth areas in NZ (including Auckland, Wellington, Christchurch and Queenstown).
- NZ’s population has grown at one of the fastest rates in the OECD (mostly concentrated in cities).
- There is a nation-wide shortfall in lower priced housing and higher land prices encourage developers to build more expensive housing on the land (continuing the cycle).
- It is in NZ’s interest for its cities to grow as cities provide higher wages and access to specialised amenities that people in surrounding regions benefit from (i.e. education and healthcare).
- The costs of expansion are incurred by those in the cities (despite others also gaining benefits) – for example increased rates and congestion.
- Existing home owners benefit from policies that restrict housing supply (as their properties increase).
- Therefore local residents prefer to see cities grow at a slower rate than may otherwise be in the nations interest.
- Home owners have a disproportionate influence on local council process.
- Better planning system – more focus on special plans and cohesion with other policies. Increase central government input into these plans.
- Use public land more efficiently – the Crown does not pay rates on its land and there is no justification for this exemption. If there was a cost to holding this land it would encourage the public agencies to use it more efficiently.
- Cost v. benefit analysis needs to be improved – on a number of levels including placing more emphasis on housing in the Resource Management Act.
- Improve quantity and use of infrastructure – the costs of infrastructure deters growth; often land can be re-zoned but there are no amenities to service the land and it is a risk for councils to install this ahead of time. Existing infrastructure that is below capacity should be identified and other financing structures need to be investigated (examples include increasing debt, user charges and targeted rates).
- Align council growth plans with infrastructure providers – some use separate organisations and others have an in-house team. This also links back to the first suggestion around cohesion of operations/plans.
The Commission notes that the recommendations made in the report will go some way to easing the lack of housing, although it is not a complete fix as there are a number of other factors.
If you want to make a submission on the draft report you have until 4 August 2015. There is a 40 page summary of the draft report or if you feel like parking up for the night there is the full draft report is 374 pages.
The final report is expected to be completed by the end of September.