Smith targets Auckland metropolitan urban limit

March 7th, 2013 at 12:00 pm by David Farrar

The Herald reports:

New Housing Minister is vowing to break the “stranglehold” of Council’s policy of containing urban sprawl – a policy he says is “killing the dreams of Aucklanders” by driving up house prices.

In his first major interview on how he plans to tackle the issue handed to him in January’s Cabinet reshuffle, he said his focus would be on opening up land supply because land prices were the biggest factor putting home ownership out of reach of many Aucklanders.

“There’s no question in my mind that we have to break through the stranglehold that the existing legal metropolitan urban limit has on land supply,” he said.

Excellent. This is the first time a Minister has been this explicit.

The MUL is the enemy of affordable housing. No amount of subsidies, intensification, central planning, economies of scale can defy the reality that if the supply of land for housing is artificially constrained, then the price of land (and hence housing) will increase in line with demand. Arguing against this is like arguing against gravity.

“When we are looking at growth in Auckland of 2 per cent a year, we are going to need sections at the rate of 12,000 a year,” he said. “The metropolitan urban limit is a stranglehold on land that is killing the dreams of Aucklanders wanting to own their home and we have to work with the council to find the tools to increase that land supply and bring section prices back.”

If someone wants to be elected Mayor of Auckland, they should run on a policy of increasing the MUL, to reduce housing costs.

But Mr Brown said Aucklanders had already agreed on the city’s “compact footprint” through developing the first Auckland Plan, and Dr Smith should stop debating it.

He said the plan was based on “a model that is developing truly internationally competitive cities with strong economic bases to them and that give rise to outstanding transport operations within a more compact framework”.

“Have a look at Melbourne,” he said. “Have a look at Hong Kong. Have a look at London. All of those cities, by and large, are operating off what is regarded as best practice.”

Comparing Auckland, one of the world’s smallest cities, to London and Hong Kong – two of the world’s three global centres is ridicolous.

But the comparison to Australian cities such as Melbourne is more sensible. is saying that Auckland should be more compact, such as Melbourne and Australian cities are. So what are their urban densities? Demographia has this 2012 report:

  • Adelaide 1,400 people per square km
  • Brisbane 1,000
  • Canberra 1,100
  • Melbourne 1,600
  • Perth 1,300
  • Sydney 2,100

And what is Auckland? 2,400 people per square km.

Auckland has twice the urban density of Melbourne – which Len Brown cites as a model. If we increased the Auckland urban limit by 50%, then it would be the same as Melbourne.

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35 Responses to “Smith targets Auckland metropolitan urban limit”

  1. lazza (381 comments) says:

    Nick Smith Roxx! His same direct no BS approach that he adopted to Local Government reform … and this one Housing affordability after all is really LG stuff too Eh?. They (Council’s) need a b*mb under ‘em.

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  2. MarkF (102 comments) says:

    “But Mr Brown said Aucklanders had already agreed on the city’s “compact footprint” through developing the first Auckland Plan, and Dr Smith should stop debating it.”

    I don’t recall Heartbeat Len asking me anything! For Aucklanders read Local Government Pollies and Town Planners not ratepayers!

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  3. kowtow (8,473 comments) says:

    Comparing Auckland to London or HK is quite legitimate.

    They’re all full of foreigners.

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  4. dime (9,972 comments) says:

    why does len brown have so much hate for those on lower incomes?

    and yes, lets compare auckland to london/melbourne/hk – all out of control house prices!

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  5. Lance (2,655 comments) says:

    I like Nick Smith.
    He opposed Bob Harvey’s mountain of bullshit over the Waitakere ranges protection, even turned up to the meeting Bob tried to have banned over the issue.
    He spoke at the meeting with sensible and sane ideas like lets actually think about this as it has wider property rights implications
    He handled the dipshit hecklers quite well (all 4 of them in a room of a few hundred normal people).

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  6. thedavincimode (6,759 comments) says:

    kowtow

    You really can’t help yourself can you. The phoney Christian.

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  7. RRM (9,920 comments) says:

    If freeing up land will reduce Auckland house prices… won’t the banks, and everybody in Auckland who already owns a house, be 100% dead set against this?

    Good on him, but I’ll believe it when I see it, not before.

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  8. campit (467 comments) says:

    Oh great, another National Minister telling Auckland what it should be doing.

    The MUL is the enemy of affordable housing

    Do you actually have any evidence to back this up? We’ve been over this 1000 times and I’ve yet to see any. Building McMansions on the outskirts of Auckland on fertile farm land does not equate to cheaper housing. You have to set up new water, transport and electricity networks to support that, and that is expensive. There are plenty of cheap houses available on the outskirts of Auckland but no one wants to live there – people want to live in central Auckland.

    When we are looking at growth in Auckland of 2 per cent a year, we are going to need sections at the rate of 12,000 a year

    No, we need dwellings at the rate of 12,000 a year.

    He said the council’s plan to contain 60 to 70 per cent of new housing within the current built-up area would fail due to “community angst over intensification” and economic reality that squeezing two houses on to one existing quarter-acre section could knock $200,000 off the value of the existing house.

    What is Nick on about here? If you put another house on your section then yes the value of the existing house might fall, but the overall value of the land with two houses increases. And what is this “community angst” that Nick speaks of? There is community angst over house prices, I haven’t seen much on intensification except from people that think the 1/4 acre paradise in central Auckland should be a realistic ambition for first home buyers.

    National really needs to pull their heads in or they risk pissing off most of Auckland with their arrogance. Nick has no mandate to dictate to Aucklanders how their city should look.

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  9. toms (299 comments) says:

    “…Nick has no mandate to dictate to Aucklanders how their city should look…”

    But his brothers own a crane hire company and they are just one of the network of land bankers, realtors, financiers, property developers, construction companies, builders, importers, and retailers who form the heartland of National’s brand of crony capitalism.

    It is simple. Aucklanders don’t get the city they want if it gets in the way of the profit margins of the government’s mates.

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  10. decanker (184 comments) says:

    If central govt is going to force open land for residential development 60km+ from Auckland City then at the least they should be supporting high speed electric rail and the city rail link – as any decent city that has expansive ambitions does.

    These same nimby central suburb dwellers complaining about intensification in their neighbourhood will be the same ones complaining about the increases in rates required to get council services out into the hinterland for these new low income home owners that apparently have the money for 100km of car travel a day.

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  11. lazza (381 comments) says:

    … “Won’t everybody (!!!) in Auckland who already owns a house, be 100% dead set against this?

    Ahh … well actually no. Not “everybody”, only those householders/landlords with over-priced inflated property already.

    There are many, (moi included) who would like to see sane added section availablity in the countryside (not! just at the periphery) where buildable/no bulldozing land formation needed land can be freed up.

    These sections currently are arbitrarily outlawed for development merely because “They are outside the MUL” … higher/lower densities being very artificially constrained by a dotted line on some myopic planners swindle sheet.

    Note; there are NO “other” reasons, drainage/stability/provision of onsite sewerage that preclude these sensitive-sane developments … just the freakin MUL.

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  12. mikemikemikemike (325 comments) says:

    Melbourne = 1600 per square km vs Auckland = 2400 per square km….Maths isn’t my strong suit but how is this twice the density? 50% higher maybe?

    Unless there is infrastructure in place to support those people as well as incentives in place for businesses to leave the ‘centre’ spreading out will do nothing for the demand in more popular suburbs. Tell the people who want to buy in Mt Eden that they can live in a shiny new house in Hunua and they’ll still turn their noses up.

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  13. Adolf Fiinkensein (2,903 comments) says:

    Len Brown. Mouth bigger than brain.

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  14. decanker (184 comments) says:

    National Govt decision-makers also don’t appear to read all the studies showing the changing values of young people – unsurprisingly many would much rather own the latest smart phone than own a car and its ongoing burden (and it is a burden in a city with proper PT and parking charges). Many want the vibrancy and social aspects of inner-city living; this doesn’t mean they expect a 1/4 acre in the city, but they don’t all seek a 1/4 acre in rural country either. Many value being connected 100% of the time more than buying the latest lounge suite, another material burden.

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  15. gump (1,647 comments) says:

    @DPF

    I’m not sure that campaigning for measures that will reduce the growth in house prices would endear a mayoral candidate to voters.

    Property owners make up a majority of local body voters. They won’t vote against their own interests.

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  16. RRM (9,920 comments) says:

    decanker – yes but that’s a temporary state of affairs – it’s fun being in town while you’re young and single.

    Then you have kids, and you want them to have a lawn to run around on, and trees to climb… like your own childhood. And suddenly the concrete jungle loses its appeal… Having the Domain or a public playground 5 minutes’ walk down the road just isn’t the same.

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  17. krazykiwi (9,186 comments) says:

    If someone wants to be elected Mayor of Auckland, they should run on a policy of increasing the MUL, to reduce housing costs.

    Or rather, “If someone wants to be elected Mayor of Auckland, they should run on a policy of increasing the MUL, to reduce housing prices“.

    Yeah, that’ll work ….

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  18. dime (9,972 comments) says:

    RRM – house prices wont go down. it would be good if they stayed as they are though.

    in saying that, Dimes addicted to real estate/ buying, renting it out, making a heap of $$$$

    but for the good of the country it would be great if houses stayed the same for the next 25 years.

    Dime can make his money some other way

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  19. Tristan (63 comments) says:

    I would have no issues making the city bigger if we had the public transport system to sustain it… botany downs is lovely (needs a few more trees to grow) but it takes an hour to get into the city each day and an hour back.

    sort the transport then you can go further out…

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  20. kowtow (8,473 comments) says:

    dawinciwanker

    What’s religion got to do with this ?
    You fuckers are always complaining about religion ruining your kiwiblog,but you can’t help yourself yourself.

    May the Lord be with you and fuck off.

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  21. BeaB (2,123 comments) says:

    Ha ha Toms. I love a laugh.

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  22. tom1980 (44 comments) says:

    Can Nick Smith just abolish the Auckland Council completely? Len Brown is completely incompetent (if he had any honour he should have resigned after the world cup opening fiasco) and the bureaucrats need to get productive jobs instead of bleeding the rest of us Aucklanders dry.

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  23. Sean (301 comments) says:

    A better target for Auckland than Sydney or Melbourne is Perth. People are quite content to drive to the usefully located train stations around the edges of the greater metropolitan region, where there is ample secure parking and then use the trains into the extremely convenient city terminus. This means they live 50-60km from the centre of Perth in relatively low density housing. Auckland is expanding to the south and east but there is no useful rail link to places like Flat Bush or Botany Downs to name but a couple.

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  24. PaulL (5,981 comments) says:

    To me this is all about choice. Some people want a largish house with a garden. Other people want to live close to the city. Two different things currently stop these:
    1. A largish house with a garden typically also implies suburbia. Large houses with gardens in the central city are kinda expensive. Freeing up land will lower the price of largish houses in the suburbs.

    2. A small dwelling (apartment, townhouse, row house, whatever) near the city. To have enough of these, we need intensification in the centre. Planning rules and nimbys stop this. So we need to loosen the RMA and free up some the the planning regs so that different flavours of medium density are actually possible.

    If we did these two things we’d be in business. Either of them on their own aren’t a solution. And if we think people really value public transport, then let’s build two subdivisions on the outskirts. One has a public transport link, it’s funded by that subdivision – so the land prices are higher. The other has no public transport like the rest of Auckland. People can buy the one they prefer.

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  25. thedavincimode (6,759 comments) says:

    May the Lord be with you and fuck off

    Is that a biblical quote?

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  26. PaulL (5,981 comments) says:

    The problem with public transport and NZ is that we don’t seem to understand incremental steps, nor understand which modes of transport work with incremental steps.

    We do need better public transport. That doesn’t mean more of it necessarily, or flash trains, or lots of other things. I means we need transport that most people could plausibly use to get to their major destinations – typically work. Irrespective of what some think, the reality in Auckland at present is that people cannot get to many workplaces in a reasonable way using public transport.

    I do think the answer is to pick a few well used routes and signal well in advance the intention to put in place public transport. People will buy houses near the stops, businesses will relocate near the terminus. But it has to be a combined development, and it has to be self contained. I tend to think that buses and dedicated bus ways are more logical because they are able to be created incrementally, light rail (aka trams) I think are a con, and heavy rail is just too expensive.

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  27. Jim (398 comments) says:

    Nick Smith showing the depth of his thinking, and DPF showing us how meaningless that linked Demographia report is.

    Auckland: 2,400 (people per sq km)
    Hamilton: 2,200
    New York: 1,800

    That’s right boys and girls. Auckland and Hamilton are more densely urban than New York. Who knew?
    The way that report is compiled is utter crap. It tells us nothing about the shape of the cities, road network, public transport effectiveness, densities where most people live, etc.

    Auckland is situated on an isthmus so efficient use of land is more critical than in most other places.

    Nick Smith’s thinking is to city planning what extending your overdraft is to financial planning.

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  28. unklefesta (13 comments) says:

    And just how big are Australia and America per person?

    If we are going to compare population densities should we not compare to countries of similar size to ours?

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  29. hj (7,019 comments) says:

    Wendell Cox is the principal at Wendell Cox Consultancy and has worked as a consultant for a variety of corporate-funded and Koch Family Foundations-funded think tanks. These include the Heartland Institute, the Heritage Foundation, the Texas Public Policy Foundation, the Independent Institute, the Maryland Public Policy Institute, the Mackinac Institute, the Reason Public Policy Institute, the Evergreen Freedom Foundation, the Georgia Public Policy Institute, and the Cato Institute, among many others.[1]

    Cox is a vocal opponent of public transit and “smart growth” policies, and his consulting firm runs the website Demographia, which advocates for fewer land-use regulations, and Public Purpose, which opposes public transport. He was characterized as “pro-sprawl” by Sprawlwatch, to which Cox responded a more accurate characterization would have been “pro-American Dream.” [2]
    http://www.sourcewatch.org/index.php?title=Wendell_Cox

    Wendell Cox’s Voodoo Economics
    http://www.cp-dr.com/node/2810

    I process satellite-generated data on terrain elevation and presence of water bodies
    to precisely estimate the amount of developable land in US metro areas. The data shows
    that residential development is effectively curtailed by the presence of steep-sloped
    terrain. I also find that most areas in which housing supply is regarded as inelastic are
    severely land-constrained by their geography. Econometrically, supply elasticities can
    be well-characterized as functions of both physical and regulatory constraints, which
    in turn are endogenous to prices and demographic growth. Geography is a key factor
    in the contemporaneous urban development of the United States.
    http://real.wharton.upenn.edu/~saiz/GEOGRAPHIC%20DETERMINANTS.pdf
    http://realestateresearch.frbatlanta.org/rer/2010/06/explaining-local-supply-elasticities-quantifying-the-importance-of-space-limitations-in-housing-pric.html

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  30. hj (7,019 comments) says:

    “According to the 5th Annual Demographia International Housing Affordability Survey, the root of the problem is planners – specifically the way their zoning rules and regulations constrain the supply of land.
    Free up the supply of land, especially at the city fringes, says Demographia and housing will become affordable again. More suburban sprawl brings housing for all.
    What may be surprising about Demographia’s analysis is not that it reflects a property developer’s ultimate fantasy, but that the Government is buying its message.
    “National understands there’ll be property cycles, but the recent cycle has been so extreme as to suggest there are fundamental problems with how the market is operating, notably around the supply of land,” said Housing Minister Phil Heatley last week.
    “This research proves that many first-home buyers are excluded from entering the property market by a number of factors, including restrictive zoning and consent laws, which not only make life difficult for ordinary Kiwis but are major factors in New Zealand’s poor productivity and economic growth levels.”
    Actually, the research doesn’t prove anything about restrictive planning. And before jumping on the Demographia bandwagon, the minister might want to take a closer look at the survey.

    The non-profit social change agency, Shelter New South Wales, commissioned research in October 2008 to do just that. It found the overarching methodology flawed, pointing out that it includes all house prices across an entire city – multimillion-dollar properties alongside lower cost homes.
    That can easily give a skewed impression. “A city with a high median multiple might have large numbers of affordable properties that operate as separate housing markets in the city,” says the research. Demographia only includes home purchases, excluding dwellings in the public and private rental sector, which are important sources of affordable housing supply.
    Andrew Coleman of Motu Economic and Public Policy Research is concerned too that Demographia’s analysis doesn’t take into account the essential financing cost of a house over an extended period of time. “For most of the last decade New Zealand has the highest interest rates in the OECD, so that makes housing far less affordable in New Zealand than elsewhere.”
    Another feature not taken into account is the increase in the average size of new houses in New Zealand – from about 130 square metres in 1990 to just under 200 square metres today. He notes too that the boom in house prices in New Zealand has occurred in places like Timaru which have few problems with land availability. “It’s not really obvious that we have constraints in finding sites to build on .”
    Shelter NSW’s research argues housing affordability is a complex mix of supply and demand variables including income levels, employment trends, access to (and the cost of) finance, demographic shifts, and housing preferences.
    “The Demographia surveys reduce this very complex issue to a simple casual relationship between house prices and assumed planning constraints on land supply,” says the research.
    The research takes issue with Demographia’s claim there is an economic consensus regarding the role of “prescriptive planning” in causing housing affordability loss.
    Demographia: “There is a growing consensus that more land must be made available on the urban fringe to accommodate new residences and that a competitive land market needs to be restored.”
    Shelter NSW: “Most authoritative economic sources focus on demand factors (eg falling real interest rates, strong economic growth, immigration rates, and, in some countries, weakening lending standards and easy credit) to explain house price growth…”
    Shelter NSW’s research also criticises that lack of empirical data on whether a city’s planning regime is “prescriptive” (bad) or “responsive” (good) and concludes that Demographia’s planning data “conveniently reflects the subjective impressions of the authors.”
    http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10554387

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  31. hj (7,019 comments) says:

    Government policies blamed for house prices

    Immigration and tax breaks for investment in residential property are being cited as the underlying causes of steep increases in the cost of housing over the past decade.
    http://www.stuff.co.nz/business/money/4622459/Government-policies-blamed-for-house-prices

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  32. hj (7,019 comments) says:

    ”Melbourne is a parasite economy,” says Bob Birrell, the doyen of immigration and population studies in Australia. ”Increasingly, the fiscal dividend from Australia’s mineral boom is having to be distributed to Victoria to pay for the needs of Melbourne’s population boom. That’s why the Victorian Premier, John Brumby, is constantly having to go cap-in-hand to the federal government for assistance.”

    ”While the other boom states have been driven by mining exports, Victoria’s boom has been driven by high immigration,” Birrell says. ”This created a buoyant economy, thanks to a rapidly-growing people servicing sector and migrant servicing sector.”
    http://www.smh.com.au/opinion/politics/the-yarra-monster-is-killing-us-20100822-13apt.html#ixzz22GnjXjDy

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  33. Viking2 (11,471 comments) says:

    The mad as a hatter Nick Smith.

    he is going to do what.? Worse than Richardson of all mouth and triousers fame but more dangerous.

    His next pronouncement is this.
    Housing Minister Nick Smith has asked officials to do some initial groundwork on a warrant of fitness for all rental properties.

    However, the minister has stressed that if such a policy was rolled out, state housing should be brought up to standard first.

    A spokesman for Smith said the first priority would be to settle on what a minimum standard would be.

    “They’d obviously need to address the state housing sector first, and then if they feel comfortable with that, they would then look into the private sector where there’s government subsidies being paid towards the tenants who are in these homes,” he said.

    A rental “warrant of fitness” – a baseline for housing including adequate insulation – was proposed in December by an expert advisory group on child poverty, led by Children’s Commissioner Russell Wills.

    So not only is he going to fight the councils he is about to piss of thousands of landlords who quite rightly rent their “property” to people who are willing and able to pay for that ammenity.
    The standard is what they pay for, no one forces them at all to rent a property, if they don’t like the standard they should move elsewhere.
    I get fed up with people expecting as of right a 5 broom 6 toilet 4 car garage mansion for $200 a week. That’s what they seem to think they are entitled too.

    This latest intrusion into a landlords business will cost so the landlord will then have to raise the rents or sell and fins a more profitable venture such as a holiday or such in which to sink their money.

    Smith is a bleeding arse socialist who should be sent to Aphganistan.

    No doubt there will be plenty come here and tell us all what a good fellow he is and that we once again need to help the fucking poor.

    Well the poor are the ones who trash houses, don’t pay the nominal rents that are currently asked of them and sleaze up to socilaists like Smith to obtain more welfare benefits which they will get when Labour becomes the Govt again. The taxpayer continues to pay for the brain farts of these usless socilaist MP’s.

    Fuck do we need a right wing bunch in there that recognises property rights.

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  34. Viking2 (11,471 comments) says:

    http://www.stuff.co.nz/business/industries/8395184/Minimum-standards-for-rentals-considered
    Here is his ranting about the poor and there housing.

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  35. campit (467 comments) says:

    Brian Rudman nails it:

    New Housing Minister Nick Smith should really try to keep up with what’s going on…

    What he seemed blissfully unaware of is that Auckland Council has come up with just the tools he desires in its new unitary plan. This document will replace the limit with a Rural Urban Boundary (Rub), an official city development wall bulging further out into the urban hinterland, providing space for 30-40 per cent of Auckland’s planned residential expansion over the next 30 years…

    Late last year, Auckland Council pleaded with Environment Minister Amy Adams to streamline the adoption of this new plan so it could come into legal effect as soon as Auckland Council adopted the document later this year. Ms Adams refused – rightly in my view – because it wouldn’t give Aucklanders “adequate recourse” to appeal against the details. Ms Adams’ decision means that the new plan doesn’t come into play until late 2016.

    With one minister having blocked Auckland’s Council desire to fast-track the new Rub, it’s a bit rich for another to be stomping around blaming Auckland Council for the delays…

    He could have saved himself embarrassment if he’d bothered to go and have a catch-up with Mayor Len Brown. But for all the minister’s talk of co-operating with city hall, the mayor’s office says Mr Brown and Dr Smith have met only once since his appointment six weeks ago, and that was a token social call soon after his rehabilitation.

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