Finally a policy that will increase housing supply

National has released a policy to get more houses built. They key aspect is:

$50,000 infrastructure grant would be provided to all local authorities (urban and rural) for every new dwelling they consent above their five-year historical average.

This aspect is crucial. It radically changes the incentives from Councils from less housing to more housing.

Councils generally don’t like new subdivisions and the like. Because it costs them money. They have to pay upfront for extending infrastructure and the income from extra rates only comes in over many decades. And even developer levies only go so far (and increase house prices).

By saying every extra dwelling (including apartments) that gets consented will get you $50,000, this will absolutely turn around the Council roadblocks. The NZ Initiative have done many reports on how you need to incentivise Councils to increase the supply of housing, or it will never happen.

So if a Council consents 1,000 more dwellings than their current average, that’s $50,000,000 in the ban for them. If they do 5,000 more dwellings that is $250 million.

Taxing landlords more will not increase the supply of housing. This policy will.

Great to see National coming out with serious policy. New Zealand needs it.

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