Free up the land

The Herald reports:

The Productivity Commission has renewed its call for more land to be freed up for lower-cost housing.

The commission in April released a report into which found house prices doubled in the last decade.

Among its recommendations was for more land to made available to ease housing affordability pressures, particularly in Auckland where the pressure was most acute.

Productivity Commission chairman Murray Sherwin today renewed his call for lower-cost land to be made available.

Even if you ignore the extra million people that will live in Auckland in the next 40 years, there’s already an estimated shortfall of 15,000 houses. The Government can not build 15,000 houses (unless you know of $6 billion it has spare), so the private sector needs to. But people will only buy (and in turn rent) these houses if they are affordable – and it is the land rather than the house which is pushing prices up.

Mr Sherwin said councils and developers needed to work together to bring section prices down.

“In Auckland now the analysis we did suggested that around 60 per cent of the value of the property is represented by the land alone, and the rest of the country it’s around 40 per cent. We need to get that back down.”

If you get Auckland in line with the rest of NZ, then that is a 20% reduction in price.

He said that could come about through more green fields development or more intensification within existing urban limits.

We need both. Just as only idiots argue that it is a choice of roads or public transport (they are complementary not substitutes), only an idiot would say all new development should be just brown fields or just green fields – we need both.

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