Bill English has taken on local councils, blaming them for increased housing costs and its impact on the poor. As we pointed out last week, English is setting up a scapegoat; a sprawling Auckland for example is no answer to the plight of our worst off citizens. But what can local councils do in the face of increasing Government pressure to sprawl? Councils – and existing ratepayers if they have any sense – should make it clear before subdivisions are built that these new suburbs are at the back of the queue when it comes to services.
Sprawling suburbs will not reduce poverty
First up, let’s be clear. As we discussed last week, making new land available on the fringes of cities will not solve our poverty problem. Yes, rising housing costs are an issue for the poor, but building new houses on ¼ acre sections on the Bombay Hills merely shifts these costs from housing to transport. The poor will be no better off from this sleight of hand, as any savings in rent or mortgages will get spent on petrol or bus tickets. These over simplified claims from our Finance Minister can be simply myth-busted.
Bill should shoulder some of the blame personally
Bill should shoulder some of the responsibility for this problem himself. For starters National had a chance to make reasonable changes to the Resource Management Act (RMA) last term, and they blew it by chasing major reform which would have come at the expense of the environment. Most political parties agreed that the planning process is too complicated and needs simplifying. Some tweaks to the Act would have been worthwhile, as would a National Policy Statement on housing. These changes would have had cross party support and sailed through Parliament. Instead, National wanted to gut the RMA and make the environment no more important than short-term growth. This was rightly a bridge too far for their coalition partners. It remains to be seen what their approach will be this term.
Secondly, National’s tax policies are contributing to the housing bubble. House prices have been driven by demand rather than supply factors primarily. And because every rational investor in housing knows that, they just keep speculating that the government won’t do anything about it. It’s a no brainer for people with means to keep buying houses – well beyond one’s accommodation needs. To remove that problem we need a tax on the effective income received from capital – not a lily-livered, exemption-riddled capital gains tax as suggested by Labour and the Greens, and certainly not negligence on that front as the Nats have shown. A Comprehensive Capital Tax is required together with a review of the RBNZ policy of risk weighting on mortgage lending.
Councils – and ratepayers – should be worried
Some Councils may well be able to do a better job of resource consents, but generalising about them all doesn’t help – particularly when Councils are hamstrung by a raft of legislation they must follow including promulgating all sorts of plans for public consultation.
Auckland Council has tried to force development ‘up not out’ – pushing higher density housing over new suburbs. But they haven’t found the job easy, because many in Auckland’s swanky inner suburbs don’t want higher-density housing near them. The age-old NIMBY problem again. Except in Auckland it comes with a twist – in most cities the high-density houses are in the inner city, the expansive estates further out. But because we’ve been so slow out of the blocks anticipating and dealing to the agglomeration abomination that Auckland’s become, those inner city plots are all taken by the PM and others.
Instead of helping Auckland Council deal with that issue, the Government stomped in over the top of them by creating Special Housing Zones that will only worsen Auckland’s sprawl. No wonder Councils are upset by English’s latest comments.
Ratepayers should be worried too – as they have to shell out for the added infrastructure and transport costs that this sprawl will generate. The Government is effectively running up a tab at the bar and asking Councils and ratepayers to pay it.
How could Councils and ratepayers hit back?
Councils and existing ratepayers should make it clear that they aren’t going to pick up the bill for sprawl. There are good reasons for this – successful public transport systems overseas focus on providing a high quality, cheap service for short trips. Spending large amounts of money subsidising trips from Pukekohe to Auckland is a waste – in most countries in the world that trip would be viewed as a long distance trip between cities. Councils should make it clear that new suburbs will not be the priority for their investment, and any rational ratepayer should back that stance.
Of course ratepayers are part of the problem – the same people that stand to lose from sprawl are the ones opposing development in the city. House owners in the central city need to swallow their pride and accept that high-density housing – if done well – can bring all sorts of benefits. A major one is future proofing – a major new report shows that denser cities have far lower carbon emissions.
Instead of spending their money on new suburbs, Councils could calm ratepayer concerns by focusing their investment on making areas of high-density housing very liveable. Councils need to ensure that high-density housing areas have the best services in terms of parks, access to shopping and cafés, and transport. They also need to ensure the high-density housing itself is high quality to avoid repeating the mistakes of the shoddy apartments that went up in the 1990s.
Once people see that high-density housing can actually be a very pleasant way to live, attitudes will shift. After all, high-density housing is a way of life for the majority of people living in the most liveable cities in the world.