A big part of the problem in Auckland is escalating land costs. Linked to this, too few houses are being built. The houses that are being built are too expensive.
To quote Bill English: “It costs too much and takes too long to build a house in New Zealand. Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand.”
We agree with the Minister.
Labour have almost ignored land costs to date. They put all the blame on profits for property developers and the lack of a capitals gains tax. This is despite numerous reports highlighting land cost as the major factor.
So this is a huge concession from Twyford.
Our own research leaves no doubt that planning rules are a root cause of the housing crisis, particularly in Auckland but not only there.
Again this is great.
In our view, there are three issues to be addressed.
First, urban growth boundaries driving up section costs. Second, anti-density restrictions stopping affordable housing. Third, the expensive and inefficient way we fund infrastructure.
The parties of the left have been hostile to expanding urban boundaries. To have Labour’s spokesperson say that the first issue is the urban boundary is a huge change in rhetoric.
My view has consistently been you need to build out and up. You need both. You can’t just choose one. Sure there will be some areas where you don’t want 20 story apartment blocks, but there are many many areas where you can go taller.
So it is great to see Labour finally focusing on the real drivers of house prices inflation, rather than peripheral issues such as tax. This, combined with their support for RMA reform, is starting to show them as a party that is getting fit to be Government one day.