A comprehensive plan to get on top of housing

The Government has a comprehensive plan to get on top of New Zealand’s housing and housing affordability issues.

Our announcement of a $1 billion Housing Infrastructure Fund to help build more houses faster is the latest step in that plan.

We’ve seen a number of factors combine over many years to boost housing demand and push up prices.

They include low interest rates, growing incomes, more jobs and a rising population on the back of our growing economy.

Housing affordability is an issue for successful cities around the world and the answer is building more houses and building them faster.

To help do that the Government has created over 200 special housing areas across New Zealand to speed up the development of land for an estimated 70,000 new homes.

We’re reforming the Resource Management Act to make it easier for councils and developers to get houses consented and built, have freed up surplus Crown land for new housing and over the next two years, another 2,000 Housing New Zealand homes are expected to be built.

The construction industry is the biggest it’s ever been with around 40,000 more people working in the sector than two years ago and 42,000 apprentices being trained across the country.

Last year we tightened the rules to ensure people buying and selling property for a profit pay their fair share of tax and we’ve given the Reserve Bank more tools to manage wider issues associated with the housing market.

All of this work is delivering results and we’re now in the middle of the biggest building boom New Zealand has ever seen.

We’re on track to build 85,000 new houses across New Zealand in this term of Parliament alone - nearly twice the number of existing houses in all of Dunedin.

But we need to press on.

The Government’s firm view is that increasing supply is the most important thing we can do to improve housing affordability.

Christchurch shows us what can be done.

The earthquakes there saw about 10 per cent of the city’s housing stock destroyed, and combined with the rebuild workforce and need for new homes for locals, the city had an acute housing shortage and prices spiked.

Through freeing up extensive land for development and amending intensification rules we have addressed that shortage.

As a result, annual house price inflation in Christchurch has fallen from 13 per cent after the earthquakes to around 3 per cent last year.

Three years ago, rents in the city were rising by up to 16 per cent. Last year, they actually dropped a little.

Councils around the country have pointed to the cost of infrastructure as one of the issues restricting new housing supply – at least in the short-term.

So we’ve announced the $1 billion Housing Infrastructure Fund to help overcome this.

It will accelerate the short and medium-term supply of new housing where it’s needed most by investing up front in infrastructure like roading and water to ensure more housing can be built in a timely fashion.

It will be open to applications from councils in high-growth centres – currently Christchurch, Queenstown, Tauranga, Hamilton and Auckland.

And it’s great to see councils welcoming the measure and keen to get on board.

We’re considering a number of options for managing the fund and processing applications and we’ll work on these details with councils before we call for applications later this year.

This is not a hand-out. It’s about getting infrastructure and housing built faster in high-growth areas.

The new fund will sit alongside other parts of our comprehensive housing plan.

It includes increasing the number of social houses, our emergency housing programme, special housing areas, the expanded HomeStart Scheme for first home buyers, freeing up surplus Crown land, the National Policy Statement, RMA reform and extra tax measures.

By any definition, this is a very comprehensive plan to meet our country’s extra housing demands.

The Government is also considering independent Urban Development Authorities for specific areas of high housing need.

They will have streamlined powers to override barriers to large-scale development. This could include responsibility for planning, consenting and other powers.

We’ll consider the best approach for New Zealand’s fastest-growing centres over coming weeks, with a view to introducing legislation later this year.

The Government’s expectations about housing are very clear:
We will not allow unresponsive planning and slow infrastructure development to lock New Zealanders out of much-needed housing.