Housing Accords and Special Housing Areas Bill

Tēnā koe, Mr Chairman. Let me make some opening comments as we set off on Part 1 of this bill, the Housing Accords and Special Housing Areas Bill. I want to make it very clear from the beginning that Labour supports the notion of housing accords. We support the idea of special housing areas. There is a housing affordability crisis, not only in Auckland but in many of our other bigger cities, particularly the high-growth parts of the country. It is a crisis that is having huge economic and social effects on the people of New Zealand. The Kiwi dream of homeownership is slipping further and further out of reach under this Government. A generation of New Zealanders now finds it nigh on impossible to purchase their own home. A generation ago, that was considered to be part of the Kiwi birthright. Now the numbers, the very high rate of homeownership, which we treasured for so long and were so proud of, are plummeting. In the last 5 years we have seen precious little action or seriousness by this Government in addressing that problem.

As well as the dream of homeownership slipping further out of reach, the housing crisis has had a massive negative effect on the health and well-being of the poorest and the most vulnerable New Zealanders, who are driven into the private rental market in huge numbers, where they live, more often than not, crowded into substandard housing. It is not uncommon, particularly in the centres where housing is at its most unaffordable, for families to be living cheek by jowl, squashed into the spare rooms of their friends, neighbours, and relations, and for people to be living in caravan parks in a quality of accommodation that no one in this country in this day and age should have to inhabit. Children—too many of them—are being hospitalised for preventable respiratory diseases because they are living in cold and damp homes. A major factor for that relative social hardship is an overall housing crisis that has driven prices up beyond the reach of ordinary Kiwis, that has denied so many people a shot at homeownership, and that has had the knock-on effect of pushing New Zealanders further and further down the chain to face often substandard, inadequate housing. It is high time that the Government did something serious about this housing crisis.

But I am sorry to say that this bill, the Housing Accords and Special Housing Areas Bill, does not measure up to any kind of benchmark for a serious, concerted, well-thought-through response to the housing crisis. What it is is the fast tracking of the elements of the Auckland Unitary Plan that will bring in more greenfield land than would otherwise be the case, and some fast-track consenting to deliver special housing areas. As I said, Labour is not against the idea. There is a housing crisis. In Auckland, because of the historical legacy of the old metropolitan urban limits that are now about to be replaced by the rural urban boundary in the Auckland Unitary Plan, there is a land supply problem that has been responsible for driving up land prices and, as a knock-on effect, driving up residential property prices. This bill is premised on the notion that if you open up extra greenfield land, somehow it will magically flow through into affordability. In the course of this debate, we will unpick the shonky thinking and poor logic that underpins this bill.

As my colleague Jacinda Ardern commented in the Social Services Committee when the Hon Nick Smith came along as part of the estimates and was quizzed about his housing policies, the Minister explained his thinking that underpins this bill, and it is essentially that—

Let us firstly get some facts about housing affordability on the record at the beginning of this Committee stage debate. The first thing we know is that during Labour’s 9 years, house prices went up by 100 percent and incomes went up by 40 percent. So housing affordability went backwards by 60 percent under Labour’s reign.

💬 Phil Twyford: Five long years.

Let us look at the figures under our 5 years. Under our 5 years, average house prices in New Zealand have gone up by 14 percent and household incomes have gone up by 19 percent. So I say to Labour members, and challenge them at the very beginning: when are we going to hear an apology from the likes of Phil Goff and Phil Twyford for their appalling record on housing affordability during their 9 years in office—

💬 Hon Annette King: I raise a point of order, Mr Chairperson. I rise to correct the Minister’s pronunciation. It is Phil Twyford, not “Triffid”.

The CHAIRPERSON (H V Ross Robertson): Thank you for that. I think that is most appropriate. The Minister will make sure that in future he tries to use the correct pronunciation for the member’s name. All members are honourable.

The second point I want to make is that the member Phil Twyford highlighted the case of cold, damp homes causing disease. How many homes has this Government gone in and insulated? The answer is 326,000—326,000. How many times more is that the number than what the previous Labour Government did? It is 10 times the number—10 times the number. So I am not going to take a lecture from Labour members on the issue of home insulation and making our homes safer, drier, and warmer.

The Housing Accords and Special Housing Areas Bill is about addressing the issue of land supply, but never has this Government said that the issue of land supply alone is a solution to housing affordability. We have announced initiatives around getting the development costs, which went up by threefold during Labour’s time, under control. We have announced initiatives around materials costs, around apprenticeships, around expanding KiwiSaver first-home deposit grants, around Welcome Home Loans. We have announced initiatives around keeping interest rates low—all are factors.

💬 Phil Twyford: Tinkering—it’s tinkering.

The member has just said that it is tinkering. Well, I will check the record. What did Labour do during its 9 years? How many bills did we have before this Parliament that would make houses more affordable? The answer is absolutely zero, diddly squat, zip.

Then let us look at the substance of this bill. This bill is about increasing land supply and doing so quickly. Who confirms that we need to do that? The Productivity Commission. What did the Labour Party say when the Productivity Commission report came out? It said that it was an ideological burp and it opposed it—an ideological burp and it opposed it. On people like Murray Sherwin, one of our most respected public servants, the Labour Party says: “Forget it. We don’t believe it.” When the IMF says it, when the OECD says it, and when the Reserve Bank says it, Labour rejects it all. The reality is that increasing land supply is critical to housing affordability, and unless we address it nobody in this Parliament can pretend they are serious about dealing with the issues of housing affordability. That is why this afternoon is an afternoon of shame for the Labour Party—shame—shame that it has gone out and pretended that it was about housing affordability, and then wasted the time of this Parliament by opposing the very bill and the very agreement with the Auckland Council that will actually make progress.

The last point I wish to make is this. The member mentioned the issue of affordability. Affordability is specifically addressed in the accord and specifically addressed in the bill. It is specifically addressed in both. You cannot address affordability unless you address land supply. What we know—

💬 Dr Rajen Prasad: Oh!

—for the members who reject it—is this. The average price of a section in Auckland has gone up from $100,000 to the latest average of $325,000. So my challenge to members of Labour is this. They say they are going to build 10,000 homes at $300,000 each. What sort of home is it going to be when the section costs $325,000? I tell you what it is. It is a hole.

I wanted to continue with my recounting of Nick Smith’s appearance at the Social Services Committee. He came along and he was asked how the Housing Accords and Special Housing Areas Bill would result in improvement in housing affordability, given that it only allows for an immediate increase in the supply of greenfield land and some fast-track consenting. It was pointed out to him that, given the state of the Auckland property market and given the strong market incentives, it is very likely that builders will build expensive houses—houses, for instance, that are being sold for $700,000 or $800,000 or more in Auckland—bearing in mind that only 5 percent of houses that are currently being built are in the affordable range. Mr Smith came along to the select committee, and when this was pointed out to him he agreed that, yes, it is quite possible that this bill would result in expensive houses being built.

When he was asked how this would help the stated objectives of the bill, his explanation was: “Well, if builders build expensive houses, as they may well do, then someone is going to buy those expensive houses, and when they buy those expensive houses, they will move out of their existing houses, thereby freeing up some houses.” We do not know how expensive the houses that they were living in before were, but this is, as my colleague Jacinda Ardern pointed out, pure trickle-down housing economics. What we will go to debate in this Committee stage is that there is nothing in this bill that provides any assurance—and I will quote Auckland Council’s own public statements to the Minister about this—or will guarantee the building of any more affordable housing.

The Property Council came along to the select committee, as did the Salvation Army, Todd Property, Tauranga City Council, and Auckland Council, and they all told the select committee, under direct questioning, that this bill would not necessarily result in any more affordable housing being built. All we have is Nick Smith’s fairytale economics that if some more expensive houses are built, somehow that increase in the supply—no matter how expensive those houses will be, no matter how intractable the cost drivers of housing are in the Auckland market, and no matter how powerful the market incentives are for builders and property developers to build $800,000 houses—and somehow this bill, by bringing a little bit more greenfield land into the system, are going to result in an improvement in housing affordability or affordable housing. It is nonsense, it is a hoax, and, unfortunately, it fits within the tinkering approach that this Minister has made his hallmark in this portfolio.

It would not be such a bone of contention that this bill was inadequate in this way if the Government had a comprehensive package on housing, but it does not. It does nothing to deal with the problem of speculation in Auckland. It refuses to take the advice of Treasury, of the OECD, of the IMF, and of virtually every mainstream economist in this country who says that there should be a capital gains tax in order to take the speculative heat out of the housing market. For some reason, the Government has made a decision and John Key has made a promise that they are not willing to step away from. No matter how sound that proposition is, they are not willing to consider a capital gains tax. They are not willing to go along with the two-thirds of New Zealanders who believe that offshore speculators should not be able to buy housing in New Zealand, that New Zealanders should have first crack at buying a house, and that it is unacceptable for real estate agencies to be going to Hong Kong and Singapore and marketing New Zealand residential property as some kind of international bargain-basement offer because there is no capital gains tax, no stamp duty, and no restrictions on offshore speculators. In fact, the Government actively encourages offshore speculators to come into this market and bid up the prices of New Zealand houses and outbid Kiwi first-home buyers at auction.

The Government is not willing to build affordable houses, it is not willing to crack down on speculators, and it is not willing to comprehensively reform the Resource Management Act to facilitate affordable housing. All we have is this tinkering, inadequate bill, which is a short-term measure, and even then—even then—there is no assurance that it will result in any more affordable housing or any better affordability in the housing market. So this bill is a great disappointment.

When the Housing Accords and Special Housing Areas Bill was originally introduced in the House, we in New Zealand First thought: “Thank goodness! Finally, the Government is moving on the housing crisis.” We thought it was high time that it did, because it had waited at least 5 years, doing absolutely nothing while a housing crisis developed in New Zealand. So we thought: “Thank goodness! Something is going to be done.” Then, as we began to study the bill and understand it, we realised that, actually, not very much was going to be done at all, especially for low-income people seeking their first homes, and especially in terms of addressing the issue of affordability. So now New Zealand First is, regretfully, going to vote against the bill.

We are not going to now vote against the bill because we are opposed to the concept of housing accords with local government—we welcome that; we think it is appropriate that central government and local government should work together on addressing the housing crisis in New Zealand—and neither are we voting against it because we are against the concept of special housing areas, as we think that that is also a good concept and is one good way of moving forward and making sure that adequate land is made available for housing in New Zealand. Those are not the reasons we are voting against it. The reason is that this Government is actually not doing nearly enough about the housing crisis that has developed.

It is not doing nearly enough about affordability. I heard what the Minister of Housing just said about affordability, but I am one of those New Zealanders who are totally unconvinced by what the Minister says and who see what this Government is failing to do, in fact, about the problem of affordability of housing in New Zealand. We do not accept that simply flooding the market with land available for housing will actually solve anything very much at all, especially affordability and especially making it possible for first-home owners to achieve their first home in this country, which is now something that is so far beyond possibility for those people that you could call it virtually impossible.

There are additional problems. Planning instruments are to be compromised by this legislation, and local democracy will be sidelined as well because of some of the particular provisions in the bill.

I want to specifically refer to Phil Twyford’s Supplementary Order Papers 342, 343, and 344. Supplementary Order Paper 342 has a provision that provides that “No plan change or variation to a proposed plan” would be able to be permitted that is “inconsistent with the Waitakere Ranges Heritage Area Act 2008.” In fact, it is a much wider issue than that. It is a wider issue of consistency with plan changes altogether. This highlights how the bill would compromise district and city planning instruments and set local democracy aside. The bill is a pretty blunt instrument when you look at it. It is something of a panic measure. It is a measure that is unbalanced and in favour of a quick-fix attempt for a problem that has been years in the making, and we are very concerned that some of the good work done in planning by many local authorities will, in fact, be compromised by the bill.

Moving on to Supplementary Order Paper 343, New Zealand First will support that as well. It would seek to “remove the override provisions in the Bill …”. We in New Zealand First believe that that is appropriate. The amendment requires that there must be a housing accord if an order for a special housing area is to be made. We in New Zealand First believe that the Government should negotiate and negotiate and negotiate until, in fact, it reaches an agreement, and there should not be the ability to set that process aside and to simply impose an accord on a local district or city. That is not appropriate, and that should not be happening.

We do not believe that if the provision for the override were not there, that would unduly constrain the Government. That is simply because local governments are just as keen as central government is to reach agreement on special housing areas and to make sure that, in fact, those local councils can act to ensure, through the negotiating process, that their good work and planning processes are not compromised and set aside. The problem with that override provision is just this: the Government, if it is just tired of the process or does not believe in the sincerity of the local government, or simply does not agree with it, can just brush it aside and impose a special housing area or an accord of its own—or, rather, do what it likes, effectively—and that is simply not appropriate in the circumstances. That is the reason why we will support Supplementary Order Paper 343.

Turning to Supplementary Order Paper 344, it would enable housing accords to require a minimum proportion of housing that is affordable. That, as I have already said, is a very important issue for New Zealand First. We think that provisions along these lines are very, very much needed indeed. In fact, we think that that is one of the most important issues of all. You see, the profit motive for developers causes them to favour large sections and large houses, to make larger profits. I have looked around Christchurch with a friend looking for a smaller home on a smaller section. Do you think we could find one in all those subdivisions that are happening now around Christchurch? It is very, very difficult indeed to find a smaller home on a smaller subdivision, and that is a significant problem because those properties are very expensive—much too expensive for too many people, especially first-home seekers.

So if there is to be a Government lead in terms of special housing areas, then the Government also needs to lead to make sure that people needing smaller homes on smaller sections are catered for. We do not believe that the current provisions of the bill and the current intentions of the Government are actually to address the needs of those people at all. We believe that there needs to be a good mix of smaller homes on smaller sections as a mandatory requirement of all developments taking place as a result of special housing areas under this bill. In that way we can make sure that at least some of the properties that will be made available will be more affordable, and in that way we can indirectly start to address the issue of affordability.

But affordability, of course, is a much wider issue than that. In fact, we in New Zealand First think that the Government should be making assistance directly available to first-home seekers in terms of ways to assist them to find the deposit that they are now going to need—20 percent—for a first home. The Government is not doing that. That is a glaring omission, and we think that that is something that it needs to do. Just fiddling with retirement savings—KiwiSaver—is not going to address that problem. We all know that. The Government seems to think it will; it will not. Much, much more needs to be done.

Governments of the past have done much more. I bought my first section many decades ago now, admittedly with a homeownership account—a very good system for assisting people to save for their first home by giving tax refunds to help them to do that. That is the sort of thing that New Zealand First adopts as its policy approach, and we would like to see the Government consider it, as well.

So for those reasons New Zealand First will be supporting Phil Twyford’s Supplementary Order Papers. But in the end, with regret, we will be voting against this bill.

I rise to speak to the second reading of the Housing Accords and Special Housing Areas Bill.

💬 Hon Dr Nick Smith: It’s the Committee stage.

Sorry, the Committee stage is what I meant. Thank you. I quite agree with the Minister of Housing that affordability is not a new problem. It was a problem when we were in Government between 1999 and 2008. It was indeed a problem, but I have to say that since December 2008 the average residential property price in Auckland has gone up, from $496,000 to about $645,000 in July of this year. So it has increased by about 30 percent in the time since the Government has been in office. The average residential property price in Christchurch has increased by 25.6 percent since December 2008, when it was about $345,000, to $433,000 in July of this year. And on we go. We can see that although it is not a new problem, it is a worse problem.

We spent much of our 9 years in office—and, again, I agree with the Minister that this is not a single-solution problem—devising a menu of options that we could put together that would address housing affordability. I would not for a moment say that the Minister was lying, but I will say that the Minister was profoundly mistaken when he said that there had not been any other legislation addressing housing affordability. I remember it well. I was the Minister of Housing who introduced it. I was the Minister who ushered it through the House against the protestations of the people who are now in Government. It was called the Affordable Housing: Enabling Territorial Authorities Act, or some other difficult name. That is what it was designed to do. It was called the Affordable Housing: Enabling Territorial Authorities Act, and it was one of the first pieces of legislation that this Government repealed on coming into office, which was rapidly followed by abolishing our shared equity scheme. That was another way in the menu of things—the menu of solutions—that we had devised to help particularly young people get into their first home.

The Minister said in his peroration earlier that there had been no previous legislation. Because he said it loudly and got red in the face about it does not make the Minister right. He was completely wrong on that score. So I just want to set that record straight to begin with.

Secondly, I would be inclined to support this bill if it did anything. Our Act, our law, by contrast, actually gave local authorities the legislative ability to require that 10 percent of any residential development be set aside for affordable housing—10 percent. So what does this bill do? The bill says in clause 4 that ‘The purpose of this Act is to enhance housing affordability by facilitating an increase in land and housing supply in certain regions or districts, listed in Schedule 1,”. Well, the only one listed in schedule 1 is Auckland, and I will come back to that shortly. So this is the intention and purpose of this bill, and at clause 11 we get to the guts of it. That is about the form and content of a housing accord. What does it say? I go to look for something concrete like “10 percent of a residential development must be put aside, or may be by legal means put aside, for affordable housing”, and what do I see? I see that “A housing accord must—(a) be in writing;”—whoopee—and must “(b) set out the parties’ agreement about how they will work together to achieve the purpose of this Act …”—mmm, getting warm. It has got to “(c) set out agreed targets for residential development …”—talk about lacking ambition. It does not even say “10 percent”. It does not even suggest an amount of any residential development that should be set aside for affordable housing.

In fact, under that clause, it talks more about how to dissolve a housing accord and how to resolve disputes around a housing accord than it does about housing affordability. In fact, housing affordability is not mentioned—not mentioned. There is a reference to the purpose of the bill, but it does not say that there must be affordable houses. It just says that there must be more—there must be more—and, you know, we will work that out between us. This is more flimflam than you can—

💬 Hon Annette King: Shake a stick at.

I was going to say “shake a stick at”, but it sounded a bit colloquial for the Committee. It is more flimflam than you can shake a stick at, as my colleague Annette King says. The point about this is that this Government has done nothing on affordable housing in 5 years. If this is one of its great pieces of strategy to address housing affordability, which is chronic and has become worse under this Government, then I am sorry about it. It is pathetic. It does not specify housing affordability in any of the housing accord clauses.

The things that our Government did—just to refresh the Minister’s memory—were that we brought in the Welcome Home Loans, which this Government has chosen to keep. Yes, because it was very difficult for it to repeal it. Secondly, we brought in KiwiSaver deposit-matching, where the Government would incentivise new homeowners by matching what they could save if they saved a certain amount over 5 years. That is now coming to maturity. The shared equity scheme is the one where I think the Minister misses the boat entirely. Land supply, of course, is important, but what about Crown-owned land? This is what Hobsonville was about and the Whenuapai Air Base was about. The Crown land was set aside by a Labour Government for 3,000 houses—500 of them to be social housing, 500 to be affordable houses, and the other 2,000 the Minister and his mates could buy at market rates. That was not ghettoising anybody. It was not going to pull down the values in John Key’s electorate. It was going to address housing supply by freeing up Crown land.

One of the other things that was important was that in freeing up Crown land—by a Government that cared enough to do it—we could couple that with a shared equity arrangement, and say that the Government can own the land and the new homebuyer can buy the house, and then it becomes entirely possible for young first-home buyers to get a foot on the ladder. They can buy the house and the Crown keeps the value of the land. They can either buy the Crown out over time—this was our plan—or they can onsell the house, and whatever profit they make from that can then go into buying their next property. Freeing up Crown land is not something we hear this Minister talk about. He talks a lot about land supply. In the National Government’s terms, that simply means urban sprawl. Urban sprawl is not the only way to address housing affordability. In fact, it is the least efficient way to deal with housing affordability. Higher density is much more sensible than moving metropolitan urban limits and just creating sprawl and setting people up in houses where they have no access to amenities or transport nodes or anything of that kind.

The other thing I want to say very briefly is that schedule 1 applies only to Auckland. People in Wellington, Christchurch, the Minister’s own electorate of Nelson, and Queenstown live in the most unaffordable parts of the country. In fact, Tauranga is now up there amongst the top half-dozen least affordable places to buy a house. So if this is going to be one of the panaceas for housing affordability that the Minister says it should be, it should be expanded. Not only should it have some real teeth to it but it should be expanded to all of those areas that have high housing costs. This does not even touch the surface. Thank you.

I am just going to cover very quickly a few points where that member, Maryan Street, was just so wrong. No. 1: does this bill, the Housing Accords and Special Housing Areas Bill, cover only Auckland? Of course not. Anybody who has read it knows, and members on the Social Services Committee will know, that other districts and regions can be added. No. 2: the member said that this Government has done nothing of substance to help housing affordability. Well, let me give you an issue of substance. When we came into Government, interest rates were 9 percent. Today they are 5 percent, the lowest ever. What does that mean? That means that New Zealand households, this year, will pay $7 billion less in interest payments.

💬 Peseta Sam Lotu-Iiga: How much?

$7 billion. The member said that that is insignificant. She said that $7 billion in costs for households is insignificant. I say she is wrong, she is out of touch, and what worries me is that if you have got three contestants for the Labour leadership going down the track of spending money wildly, it will only drive interest rates back up again.

This is the funniest point that I found in the contributions from the Opposition. Some have said that this bill is Draconian.

💬 Hon Member: That’s right.

Others have said—and the member says that is right—is it tinkering. Well, can a bill really be “Draconian” in one breath and “tinkering” in the next? Perhaps they are arguing that it is Draconian tinkering.

Actually, this is a really balanced bill. Yes, it does go quite a long way. Yes, it will increase the supply of housing, by tens of thousands of additional houses.

This is the very last point, and when they hear this last point it should send shivers down the spines of young people aspiring for a new house: the Opposition says that supply makes no difference to the price of housing. Did you hear that? Was that not extraordinary? It said that supply makes no difference to the affordability of housing. If that is really the Opposition’s point, it knows absolutely nothing about how markets operate and it knows nothing about what this bill will achieve, which just reinforces the view that we need to get this bill through to increase the supply of those houses, to get those 39,000 new houses built in Auckland, and to make sure that Kiwi families can get their homes soon.

I am pleased to take a call straight after the Minister of Housing to talk about the issues of supply and how they relate to affordable housing. But to situate my comments, first of all, I say—and I think it is agreed probably across the Chamber—that we do have a crisis of housing affordability in New Zealand, and also a crisis of housing quality. There are three statistics that I like to quote, and they all involve the number seven. First of all, over $700,000 is the average house price in Auckland, which is completely unaffordable for your average first-home buyer. Secondly, it takes 70 percent of the average income in Auckland to service the mortgage on a lower-quartile house. On a lower-quartile house—that is, the cheapest quarter—it takes 70 percent of the average income in Auckland to service that mortgage. And, finally, 70 percent of the children living in poverty in New Zealand are living in poor-quality, private rental houses. These are three statistics that clearly illustrate the crisis of affordability and quality in our housing in New Zealand.

If we turn to Part 1 of the Housing Accords and Special Housing Areas Bill, we look first at the purpose. Clause 4 says that the purpose of the bill is “to enhance housing affordability” and it does that by increasing “land and housing supply” in those areas “identified as having housing supply and affordability issues.” Well, so far so good. I agree with the Minister that supply is very important in the question of housing affordability—that is, the supply of affordable houses is very important in the question of housing affordability. But I am not convinced by the Minister that land supply is actually the primary problem in the provision of affordable houses, and that is the first problem with this bill. There is a fundamental mismatch between the problem it sets out to solve, which is housing affordability—it says “enhance housing affordability” right there in the purpose clause—and the solution that it prescribes, which is about increasing land supply.

Land supply and affordable housing supply are not the same thing, and that is a very important distinction to get clear in this debate, because apart from Auckland, which is the only region in the schedule currently, land supply is primarily not the issue in housing affordability. We heard that at the Social Services Committee time and time again as submitters came before us from other parts of the country to say that this might be a good prescription for Auckland, though there are some issues with it, but in their part of the country where, yes, they have a housing affordability problem, the problem is not caused by a lack of supply of land; it is caused by other factors, and, therefore, this bill will not address the housing affordability problems in those other regions. So the prescription in the bill does not work to solve the problems that it sets out to solve. The select committee had to amend clause 9(3) to insert land supply as one of the criteria for deciding whether to put a region in the schedule, in recognition of the embarrassing fact that it actually was a mismatch. So it is very important that the House in Committee understands that crucial distinction and the fact that the bill is setting out a prescription that does not solve the problem that the bill tries to solve.

I want to look at the specifics in Part 1, and they are set out in Subpart 2. There are three areas I want to look at—first of all, housing accords and how they will be arrived at; second of all, what is the definition of a “qualifying development” and what should be the definition of a “qualifying development”; and, finally, the provisions around the actual conduct and the establishment of special housing areas. First of all, I will look at the housing accords. This part of the bill sets out how the Minister and the territorial authority may enter an agreement to work together to address housing supply and affordability issues. That is great. It sounds really good. It is absolutely right that local government and central government should work together on housing affordability issues. It sounds very good, until you read the fine print. The problem with this whole provision, as my colleague the Hon Maryan Street set out in her last contribution around what can go into a housing accord, is that it does not actually address the fundamental issues of affordability, but, worse than that, it gives a huge amount of power to the Minister to override the work that local councils are doing on this issue and to come in over the top of them and set up a special housing area without their consent and without a housing accord.

It gives the Minister the power to terminate an accord. That has been agreed. So they can sit down and negotiate one and work it out, but if there is something about that accord that is not working for the Minister, he can terminate that and go ahead anyway under the conditions that he would like to see. It means that, effectively, it is impossible for councils to enter into good-faith negotiations with the Government to set up housing accords, because all of the power resides in the Minister and in central government. They have the ability, if the negotiations for the accord break down, to just go ahead and set up a special housing area and set up the commissioners to make the decisions about resource consents without any recourse to the territorial authority.

So if one was part of that territorial authority sitting down to negotiate with the Minister, there is a fundamental power imbalance before the negotiations have even begun. That was a point made to the select committee by countless submitters and many, many councils from around the country, including the Auckland Council, with which an accord has already been negotiated, but which is very worried about what this legislation will mean for that accord, and including from Local Government New Zealand, the umbrella group for local councils, and including many members of the public who are very concerned about the heavy-handed power that is accorded to central government in these housing accords in the way that they are negotiated, which effectively makes good-faith negotiation impossible.

Secondly, I want to speak about the conditions for a qualifying development, because there are a lot of very technical conditions set out in the bill about what a qualifying development has to do. We spent a lot of time in the select committee talking about what the definition of “predominantly residential” was for a qualifying development, which is absolutely important to get correct. But it is bit like not being able to see the forest for the trees when we are bogged down in details about the height of the storey of a building and what it means to be predominantly residential as we talk about what is a qualifying development or a housing accord. There is nothing in the bill about the requirement for affordability or to require a percentage of affordable housing in a special housing area, yet that is the problem that the whole bill has set out to solve. Again, it is a fundamental mismatch between what the bill says it is out to do and what it actually does. So it is a major problem. It was pointed out by numerous, numerous submitters that there is no requirement for affordability to be one of the criteria for a qualifying development in a special housing area, and you would think it would be when that is the whole purpose of the bill.

When we had the second reading, the Minister addressed this point and he said: “Well, look at the Auckland Housing Accord. There is a minimum requirement for affordable housing in there. So it’s all good.” And I imagine if he gets up to take another call, he will probably say the same thing. But the only reason that that minimum requirement is in the Auckland Housing Accord is that the Auckland Council pushed very hard for it. If it was up to the Minister, it would not be there at all, and the provision is not there in this bill for future housing accords in other areas. It is not enough for the Minister to say that Auckland Council managed to get it in there. There is no guarantee that it will be in any other housing accords negotiated under this bill.

This issue of having a minimum requirement for affordable housing in a special housing area is addressed by my colleague Phil Twyford’s Supplementary Order Paper 344. The Green Party will absolutely be supporting that Supplementary Order Paper, because we think that, at the very least, the first criterion you should set out for a special housing area under this bill, which seeks to address housing affordability, should be that there is a requirement of affordable housing in that area.

Finally, I want to look at the special housing areas and the rules that are going to be created for them. This is where the override powers that are given in the bill to the Minister really kick in and where there was a lot of the concern from submitters at the select committee. In a special housing area, once it is established, if a housing accord is not negotiated or if one breaks down, this part of the bill gives the Minister a huge amount of power to appoint the commissioners who make decisions under the Resource Management Act, to set the terms of those decisions, and to approve and fast track consents that override the provisions of the Resource Management Act. I imagine that my colleague Eugenie Sage, when she takes a call later on, will talk a lot about the provisions of the Resource Management Act and how this bill undermines them.

But suffice for me to say at this point that some of the concerns about the override provision for councils are addressed in another Supplementary Order Paper in the name of Phil Twyford, Supplementary Order Paper 343. The Green Party will also be supporting that, because this is a fundamental overriding—it is indeed an override provision—of local democracy, and it is entirely consistent with moves that we have seen from this Government in terms of local government on a number of fronts, beginning back with the sacking of the Environment Canterbury councillors. But evident in this bill as well is a lack of respect for the authority and the autonomy of local government, where if central government does not like what local government thinks, says, or does, it will just come in and override it, and that—

Just a short while ago the Hon Maryan Street gave the Minister of Housing, Nick Smith, a lesson in history and in honesty, because the Minister, in what he thinks was an attack on Labour, really gave us more sound and fury than a substitute for real policy. You see, some of us remember the Minister’s track record in the last Government and the Government we are in now. First of all, he became the Minister for ACC. He said there was a crisis. He cut the funding for women who had been sexually abused, so women did not get the services they needed.

The CHAIRPERSON (Eric Roy): Come on.

No, Mr Chair.

💬 Hon Dr Nick Smith: I raise a point of order, Mr Chairperson. Those claims are incorrect, but, more important, they are outside the scope of the part that we are discussing, which is Part 1 of the Housing Accords and Special Housing Areas Bill.

Speaking to the point of order, if you had been listening to the debate, the first contribution—

The CHAIRPERSON (Eric Roy): Order! I take exception to the way in which the member started that. I will give the member another opportunity.

Earlier in the debate, in the first call the Minister took, he made a very wide-ranging contribution around the previous Labour Government’s role in housing—what the previous Labour Government had done. It was way outside this bill. He was not called up on that, and I am just setting the scene for this Minister, having taken over housing in this Government.

💬 Hon Dr Nick Smith: My comments were directly in response to the claims of the very first speaker on the part, and were entirely on housing. They were about the history of housing and why this bill was needed. In my contribution I never strayed away from the core issues and the purpose of Part 1.

The CHAIRPERSON (Eric Roy): I understand what the member is attempting to do, but this debate should be confined to issues of housing and in relation to this bill.

Just speaking to that—

The CHAIRPERSON (Eric Roy): No, I have made the ruling now.

Normally you have about 30 seconds to be able to set the scene, and I had 10, so I would just like to say—

The CHAIRPERSON (Eric Roy):1 minute.

—to the Minister that his history that he gave of housing and what had gone before was totally wrong, and he misused facts. He gave up-to-date facts, he said, of the increase in the cost of housing under Labour, and then forgot to mention that the cost of housing under National has gone up by 30 percent in Auckland alone. The cost of housing under National in Christchurch has gone up by 25 percent. I think it is important to get it on record that he was wrong about legislation. He said that no legislation had been passed by Labour when it was in Government. Maryan Street set out the legislation that had been passed, including a clause that put aside 10 percent for affordable housing. He said that nothing had been done by Labour. In fact, we brought in the Welcome Home Loan, and funding for the Welcome Home Loan was cut in the Budget this year. We also brought in a shared equity scheme, which has been cut by this National Government. So let us put on record that Labour in Government did a lot about housing, because one of the things we understood was that there was a need for more housing in New Zealand.

Now we have had 5 years of a National Government. Do you know that until very recently we were told over and over and over again that there was no crisis in housing? Bill English stood in this House and told New Zealand that there was no crisis in housing because of low interest rates, which meant that New Zealanders were getting into affordable housing. He could not be further from the truth. There may well be low interest rates, and they are certainly very beneficial for those who own their own homes, who see their interest rates drop and their ability to pay off their houses faster, but they have done nothing—absolutely nothing—for first home owners. The unfortunate thing about this bill is that it does nothing for first home owners wanting to buy an affordable house.

I have no problem with the Minister’s housing accord. I do not have a problem with his special housing zones. They sound very sensible. But, unfortunately, they do not follow through and produce the outcome he wants. In fact, he addresses only two factors out of the many factors that go to the heart of housing. He picks out the crisis in the supply of land. I ask the Minister how this bill releases land that is locked-up land owned by private developers. How does it make them put land out for affordable houses to be built on?

💬 Hon Dr Nick Smith: It removes the MUL.

It does not make them do anything but hold on to it till they can get the best possible price. There is nothing in this bill for those banking land in the hope that they can get an even bigger price for their land to say: “Oh, that sounds like a great idea. Let us get it at a cheaper price.” I mean, the Minister is kidding New Zealanders by saying that this bill does that. That is not true.

He also talks about planning regulations. Of course we need to streamline planning regulations, but they are not going to build a single house unless you address some of the other factors, which this Minister has failed to do. Those factors include the lack of scale in the building industry, the lack of competition in the supply of building materials, and the uncertain access to capital. Where in this bill and where in the Government’s policy does it help in terms of access to capital? After all, for first-home buyers—for those who want to own their first home—they have just had the tightening of access to finance for them. They are going to have less access. It is not just the Opposition that is saying that. Our bankers and commentators, those who are professionals, are saying that there is less access for people who want to buy their own homes.

Then the Minister said in his contribution that there were those who were saying that the bill is Draconian. Minister, did you read what the Regulations Review Committee wrote? It is a committee of Parliament. This committee, I believe, has a majority of National members on it. That is unusual, because usually there are equal numbers of members on the Regulations Review Committee, but, in this case, it actually has a majority of National members on it. What did it say about this bill? It said, first of all, that there have been only 2 weeks for public submissions on this bill. That is a very short time in which to hear submissions on any bill. In addition, the committee raised concerns about the bill containing excessive regulation-making powers, which reflects a poor legislative approach. That is not any old person saying that it is Draconian; those are the words of the Regulations Review Committee. Is it credible, or is it not? As I have pointed out, the majority on this committee are National members.

I say to the Minister that this bill is too little, it is too late, and it is self-serving for political gain, because in 5 years, if this Government really cared about affordable housing, it would have done something about it. It would have brought in measures. To give him credit, it was not until this Minister came in that we actually saw some action. As nice as Phil Heatley is, he was unable to make any traction. However, Minister, your idea of affordable housing can be seen in Hobsonville. That was an area of Government land where you could have had the land at an affordable cost. In the programme for Hobsonville, the housing accord would not even have been needed. You would not have had to have a special housing zone, as you have in this bill. You could have built affordable housing. Do you know the size of the so-called affordable housing being built at Hobsonville? Sixty square metres up to 80 square metres—in other words, a shoebox. In other words, it is not affordable housing for a family. Does the Minister know how few houses are being built? It is a token gesture to affordable housing. He is shaking his head. Those are the facts, Minister.

You talk about land being released. If the Government wanted to release land in Auckland, for example, it could do that tomorrow. Who owns most of the land that could be used in Auckland? The Government. You do not need a housing accord. You do not need to have a special housing zone. You can release land. You can release Government land. And you can do it at an affordable cost. You could look at a range of ways of doing it.

💬 Hon Maurice Williamson: What about the Treaty of Waitangi?

You could look at shared equity. You could look at whether the land is actually owned or not. Of course there are Treaty claims, and we have that on many, many occasions, Mr Williamson. But we got through it at Hobsonville, did we not? We have got through it in other areas. Look, the truth is that you do not actually need an accord. You actually do not need a special housing zone if the Government seriously wants to address these issues.

There have been 5 long years, no progress has been made, and, nationally, only 5 percent of new residential construction is affordable. This bill will not give us one more affordable home. So the only conclusion that you can make—to those who are listening—is that that is not the aim of this bill at all. That is not the aim. You can certainly build very big houses. You can build ones with en suites and many bedrooms, and they cost between $800,000 and $1 million. You can build those. People are buying them. But this bill will not provide a single affordable home to New Zealanders.

💬 Hon Dr Nick Smith: Of course it will.

“Of course.”, he says. Name how many. Tell us, once and for all—

💬 Hon Dr Nick Smith: Thousands.

—because this has been asked in this Parliament week after week. How many affordable homes will be built? I do not want to hear this “Thousands.” and “Heaps.” That is what the Minister is saying. This is our Minister, paid the salary, saying “Heaps.” and “Thousands.” Tell us how many houses that are affordable will be built—

It is an honour to speak in this debate this afternoon. We have heard so much misinformation from across the aisle that we have got to set the record straight. Members opposite ask “How many affordable homes?”, and they have not yet defined what “affordable” means. What does “affordable” mean? Miss King, what does it mean? Tell us right now what “affordable” means. No answer—no answer.

💬 Hon Annette King: I raise a point of order, Mr Chairperson. Do I get another call to answer that? He is asking me a question.

That is not a point of order. [Interruption]

The CHAIRPERSON (Eric Roy): Order! I think we will put that down as a rhetorical question.

I ask Miss King, what does “affordable” mean, because in the 10 minutes that she stood up—

💬 Hon Annette King: I raise a point of order, Mr Chairperson. It cannot be rhetorical when he is saying it for the fourth time. It has to be a serious question.

The CHAIRPERSON (Eric Roy): I have ruled it a rhetorical question.

Cannot handle the truth—cannot handle the truth. Let me give some facts. On TradeMe this afternoon, the biggest property website in the country, there are 4,699 homes that are $500,000 or less—4,699 homes, I say to members opposite. What I do not understand is how they can come in here and say that every new home should be affordable. Well, when I grew up in South Auckland, people went into old homes. They did not go to new homes. They went into flats in Mount Wellington. So I say to members opposite that in Mount Wellington, in my electorate, there are 34 homes under $500,000. In Onehunga there are 26. In One Tree Hill there are eight. I can go right across my electorate and say that there are numbers of affordable homes in my electorate.

But what the Housing Accords and Special Housing Areas Bill does is breach the problem of housing supply in Auckland as well as around the country. Over the next 3 years 39,000 homes are required to meet demand—39,000. How many sections are available for development right now? I ask members opposite how many. Silence—silence. Well, I have got 1,900. That is not going to quite cut the mustard is it? So land supply, as has been recognised by the Minister, as has been recognised by Treasury, and as has been recognised by the Productivity Commission—

💬 Phil Twyford: And me.

—is one of the biggest factors in bringing about—no, not you—a solution to some of the issues around affordable homes in Auckland. But what is Labour’s solution? Mr Twyford says: “What about me? What about me?”. Well, I will tell you what they want to do. They want to ban foreigners from purchasing homes in New Zealand. What are the facts around that? The facts say that foreigners are only 4 percent of those purchasing homes. So they want to attack 4 percent. But in Auckland—

💬 Dr Rajen Prasad: Four percent is a lot.

Mr Prasad, you should know as well as I know that 40 percent of Aucklanders were born overseas, like me. So when I go to an auction, under the Labour regime, they are going to ask me for a passport. The xenophobic tendencies of that Labour Opposition sadly have come to the fore. Because when it comes to winning votes, they will play the race card. I and 40 percent of other Aucklanders who look like foreigners might turn up to an auction, and we will be asked for passports. So I ask members opposite how they are going to implement that. Mr Jones is saying one thing—

💬 Phil Twyford: I raise a point of order, Mr Chairperson. I am worried that Sam Lotu-Iiga believes that he would be affected by the proposed ban on overseas speculators.

The CHAIRPERSON (Eric Roy): What is the point of order? That is a debating point.

💬 Phil Twyford: If he is a non-resident, he cannot be a member of Parliament.

The CHAIRPERSON (Eric Roy): Order! That is hardly a point of order. I am not the Electoral Commission. We have had some reasonably florid examples from either side, and that is a debating point.

I will take it as a badge of honour that there have been three points of order. They are attacking me because they do not know the truth. Coming back, I say that members opposite do not understand. They should talk to developers, talk to those on the front line, talk to nurses, talk to educators, but in the housing sphere talk to those who actually do the building. When I spoke to two developers who want to build affordable homes in Manukau and in Māngere, and—

💬 Hon Annette King: You said we don’t need them.

—I asked them: “What are the issues?”—Miss King should come and I will introduce her to them. They said to me that the delays around the Resource Management Act, and the costs of council around delays, are factors in terms of getting more houses built. These are not small developments. One is a 1,500 house development in Māngere. I challenge members opposite to come and have a look at these developments.

What I object to as well is that we heard the former Minister of Housing and the list MP in Nelson, Annette King, talk about freeing up of Crown land.

💬 Hon Dr Nick Smith: She’s not from Nelson.

Well, she lives in Nelson, but she is a list MP down there. She is freeing up land. Well, I ask her because she was the Minister who came to Tāmaki and I thought she understood at the time what that development was about. It was about using Crown land and getting in more social housing as well as community housing and private development. It is about leveraging the Crown land that we have in our possession. I ask members opposite what is going on at Maria Street and Yates Street in Onehunga. That is another development where there is pepper-potting of mixed housing, of social housing, of community housing, and private developments. So when the member opposite asks the question: “What are we doing with Crown land?”, I say that we are developing it in order to house more people.

I seriously object to the notion that those homes are not warm and dry. As the Minister has quite clearly laid out, over 300,000 homes have been insulated by this Government. That is one of the proudest achievements that we have done as a Government, and there have been many, by my own admission, but that is one of our proudest achievements. I am proud that people, particularly in my community whom I have seen across Maungakiekie, are now living in warmer, drier homes. For that they are thankful and for that I am thankful for what the Government has done.

But the Minister also said that one of the biggest costs when purchasing a home is interest rates. Unlike under the Labour Government, when tax and spend policies led to some of the highest interest rates in the Western World and one of the highest interest rates in New Zealand’s history—9 percent—now the interest rates are at around 5 percent for a mortgage. What does that equate to? I think the people of New Zealand want to know what that equates to.

💬 Phil Twyford: LVRs have just gone up.

For Mr Twyford, that equates to $300 a week on a $400,000 mortgage—$300 a week on a $400,000 mortgage.

💬 Hon Annette King: That’s if you’ve got a house.

Sadly, Opposition members scoff at it. Mr Twyford laughs and Miss King jokes around about those people who do not have houses. Well, I empathise with those people.

💬 Hon Annette King: You talk rubbish.

I side with those people, Miss King. You might laugh at those people, but I actually want to see those people in homes. I come back to the bill. This is about one of the measures that this Government is putting in place to bring about more affordable housing in this country. It is about opening up land supply, because we know that the evidence, the research, supports the fact that land supply is one of the critical things when going about addressing the housing shortage in our country. For that I think New Zealanders are happy that we are making these moves.

It saddens me today that members opposite, right across this Chamber, choose not to house more Aucklanders and more New Zealanders, because across the Chamber it is about political ideologies. I commend the Minister. I commend those in our Government who are prepared to reach out to our local councils to work together, to unite, and to bring about solutions that are going to be workable for New Zealanders in the future. This bill is certainly to be commended.

I have never heard so much rubbish as I heard from that particular member there, Peseta Sam Lotu-Iiga. For 5 years that Government there has sat on its hands and has made things difficult for New Zealanders trying to get a home. He asked a question that I am going to pose to the Minister of Housing, the Hon Dr Nick Smith. Minister, what is the price of an affordable home under your Government? Will somebody who is on the individual median income of $20,000 be able to afford a house to be built, based on the measures in this particular bill, the Housing Accords and Special Housing Areas Bill? Will a family with a combined household median income of $40,000, the likes of which we have in Manukau City, be able to afford a home under the bill that you have here? Minister, those are the questions that, rightfully, you should be answering.

💬 Hon Dr Nick Smith: Happy to.

I hope you do. I hope you do take a call, Minister, to answer that, because that is particularly important.

💬 Peseta Sam Lotu-Iiga: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): No, that is exactly what we had over there before. It is a rhetorical question.

💬 Peseta Sam Lotu-Iiga: He brought the Chairman into it. That member has been around long enough—to bring you into the debate.

The CHAIRPERSON (Eric Roy): No, hang on. The member objected when he got a similar response from the Opposition over here. There will be other calls.

Can the Minister guarantee that someone in Manukau earning a median income of $20,000 will be able to buy an affordable house under this bill? Can the Minister guarantee that a household on a median income of $40,000 will be able to afford a house? And how many will be able to buy a house, based on the measures in this particular bill?

For 5 years the Government did nothing, but when Labour started announcing our policy that we would address the problem and that we would build 100,000 houses over 10 years, and when we started talking to the industry to ensure that the price would be affordable, all of a sudden in this Budget the Government came up with this particular bill. The shame of it is that it did not even have the decency to talk to the Auckland Council—

The CHAIRPERSON (Eric Roy): Order! Would the member Brendan Horan please leave and get properly dressed. Sorry, Su’a William Sio.

It did not even have the decency to negotiate in good faith and to give the Auckland Council a heads-up. The introduction of this bill was a surprise—guaranteeing powers by this Government to simply override local councils and the ability to make decisions on behalf of their particular communities.

There is a housing crisis in New Zealand. There is a housing crisis because there is a shortage of rental property. The quality of the rental property in the private sector is appalling in some instances. There is a housing crisis because it is becoming very, very difficult for first-time homeowners to get into a home. So if we come to an agreement that there is a housing crisis, then we should also be prepared for the Government side to accept some of the sage advice that people like Maryan Street and Annette King are offering that particular Minister. I think that unless this Government recognises that that is a real problem, then it is not going to be able to solve it.

Look at the bill and look at what we have in this bill. Clause 4 says that “The purpose of this Act is to enhance housing affordability”—enhance housing affordability! All it offers up is “facilitating an increase in land and housing supply”. That does not guarantee it. If the Minister is so confident that this bill is going to guarantee that, then I would like him to state that he can guarantee that there will be more people getting into affordable houses. Recognising that in the community that I represent the median income is $20,000 for an individual and $40,000 for a household, I asked the Minister the other day whether there was any consideration given to what income levels a first-time homeowner should be earning in order for them to be eligible for a mortgage to buy one of his so-called affordable houses. Here is the answer: “The accord is about increasing supply of homes. It does not determine the criteria for eligibility for a mortgage. This is an issue for the banks.” So guess what, folks? The banks have turned round and made it really, really difficult—under the Government’s watch, extremely difficult—for the 70 percent of New Zealanders who do not own their own home.

I want to point out also the reason why it is important to highlight the median income for individuals and the $40,000 median income for households. If you look at clause 9, it states that before the Minister makes a recommendation to insert the name of a region or district in Schedule 1, “the Minister, in determining whether a region or district experiencing significant housing supply and affordability issues” in clause 3(a)(i) must have regard to whether “the weekly mortgage payment on a median-priced house as a percentage of the median weekly take-home pay for an individual exceeds 50%,”. Well, I put it to this Committee that with an individual median income of $20,000, when you consider the current prices at the moment in Māngere of $300,000—I think that last week houses that were normally $300,000 were going for $500,000 or $700,000, and this is no BS, Minister. It also says “based on a 20% deposit”. May I ask the Minister how his bill guarantees that somebody on a median income of $20,000 is going to be able to raise a 20 percent deposit on a house that is either $300,000, or $500,000, or $700,000? Those are the kinds of prices, Minister, in the South Auckland region.

I have to say that, given the context from which this bill springs, I do not have confidence that this bill addresses affordability issues. I do not have confidence at all in simply enabling greater supply, if you are not going to also attack the issues around those who speculate on houses and the issues around those who bring in foreign capital and are speculating on houses, unless the Minister is prepared to address that and include that particular package in this bill. I can tell you now that nobody in South Auckland believes that this bill is a guarantee for those who want to own their own home—first-time homeowners. Nobody in South Auckland believes, when the Minister says that this is going to provide a certain number of thousands of houses, that they will be able to get a house, simply because under your watch the banks have made it virtually impossible for many workers to raise 20 percent as a deposit. Unless you are going to provide much more than simply saying the supply of land and the supply of houses is going to ensure that there is affordability of houses, I can tell you now that that is just pie in the sky. That is pie in the sky—pie in the sky.

I think that it is an appallingly bad kind of politics where you have raised this issue just because your polling would have shown that the rest of New Zealand and the rest of Auckland were captivated by the policy that we in Labour announced: the need to build 100,000 houses to address the housing supply, the need to address the way that house prices have been inflated by speculators, the need to try to move that kind of investment into more productive investment, and the need to be able to stop overseas speculators coming in and inflating the prices of houses. How on earth can somebody earning $20,000 median income be able to get a 20 percent deposit on a $300,000 house? There is no answer.

I rest my case that despite the rhetoric and despite the spin around this particular bill, this bill is not going to provide affordable housing. This is spin to try to interfere with the captivation of the rest of New Zealand when my colleague here Phil Twyford stands up and talks about 100,000 houses, the need to build more houses, the need to reduce the prices, and the need to be able to exempt first-time homeowners from the loan-to-value ratios that the banks have now imposed. That is what is needed. That is the kind of leadership that is needed. That is the kind of leadership that we need as a country if we are going to address the issue of ensuring that people who want to own their own home are able to get into a home.

I move, That the question be now put.

Even though the Minister of Housing thundered from the chair that the Housing Accords and Special Housing Areas Bill is going to be the solution to housing affordability, this bill is not that at all. It is all about the Government being seen to be doing something about our housing affordability crisis. It is a bill to get media headlines, but it is not about tackling the substantive issue in a comprehensive policy way that is based on good evidence. That has been obvious by the fact of the very short time that was allowed for submissions and because it is a very short-term measure.

Clause 19 of the bill, I think it is, provides that the Order in Council that establishes special housing areas will be revoked 3 years after the bill becomes an Act and receives the Royal assent. That shows that the Government is not interested in working with local authorities to develop a solution that endures. It is more interested in just the short-term hit that this bill will provide by freeing up the process and making it easier for urban sprawl by allowing property developers to get consent for applications that are outside urban limits. That is because the Government sees the problem of housing affordability largely as one of land supply and says that that is the major influence on house prices. The Government is all about providing a charter for property developers, through this bill and also through the changes that it is making, or is proposing to make, to the Resource Management Act, where it will reverse the presumption on subdivision by permitting it unless a plan specifically provides otherwise.

It is a complex set of factors that influence housing affordability. It is not just land supply; it is about building materials. It is about the cost of finance, which the Minister did refer to. It is about the cost of insurance. If we were really looking a comprehensive package, we would have measures that address that—things like a capital gains tax on homes other than the family home to make it much less attractive to have residential homes as an investment. We would have things like shared equity schemes. We would have the Government working with councils—working on a genuine accord—rather than what this bill provides.

The Wellington City Council, for example, had a very detailed submission and it set out the other factors that apply to housing affordability. It is things like geography and employment patterns, and how they influence the price of houses. That is why, because you have got a lot of high-paying jobs in the centre of Wellington, you get house prices in central Wellington that are over $500,000, whereas ones in Porirua are around $370,000. It is issues like that, and the cost of building materials, that influence affordability, not just land supply.

This bill also will not work because of the standover tactics that the Minister proposes to employ through the special housing areas and his override powers. Local Government New Zealand said on behalf of all of the councils in New Zealand that it wanted to work with central government to address the issue of housing affordability, but the override provisions cut across that whole spirit of partnership. They cut across any genuine accord because they take the power away from councils to make decisions about new development and to control the pace and the location of residential development, and they give that power to the Minister. The override provisions mean that there is not a good-faith basis for working on housing affordability, because if the Minister cannot negotiate an agreement with the relevant district or regional council, he can then designate a special housing area.

Then we have the chief executive of the Ministry of Business, Innovation and Employment making decisions about where development will occur. What capacity, what authority, and what experience does a central government agency—the Ministry of Business, Innovation and Employment—have to do this, rather than councils?

If the Minister was genuinely interested in partnership, then these override provisions would have been removed from the bill. Again, the Wellington City Council said that it would not enter into any negotiations on a Wellington housing accord unless those powers of ministerial intervention were removed. It is those powers that cut right across the Resource Management Act and the Local Government Act, whereas decisions on how and where residential development should occur should be made by territorial local authorities.

My colleague Denis O’Rourke called the bill a panic measure, and we certainly agree. If you look at what is happening where councils are doing good planning—and, again, at Wellington, where the council changed the Wellington City plan in 2009—

I move, That the question be now put.

It is a pleasure to take a call on Part 1 of the Housing Accords and Special Housing Areas Bill. Really, the clause that tells us what this bill is about is very clearly stated. It says it is about housing affordability. The rest of the bill is not about that. In fact, I would have thought that the two members of the Government who have taken calls so far, which includes the Minister of Housing, would have justified these provisions and explained to us how they are going to achieve the objectives of this bill. The Minister has not done that, and neither has the chairperson of the Social Services Committee. In fact, what we have heard, really, is filibustering. Not filibustering, but really—

💬 Darien Fenton: Blustering.

—blustering. It is blustering. The Minister understands perfectly. The Minister is doing what he has done in his other portfolios, to wit ACC: create such a sense of crisis with the figures and expect everybody to believe it. Then in a very short period of time, like in ACC, there is not really a problem, but the damage had been done. It is the same kind of approach here. Other Ministers have used it in social development as well. But we know that what is being designed here is the very thing that has failed. It is the housing market that has failed. It has not worked. It has not produced the number of houses required. The Minister can say as much as he likes about the previous Government, etc., but I am not particularly interested in that, Minister. I am interested in your performance, Minister, over the last 5 years in this particular area. No affordable housing has been built. What the Minister has done is preside over a crisis. So the housing market is failing.

There are only two things that the Minister has addressed—the availability of land, and regulations around buildings. There are only two things. But the Minister ought to know, and I am sure he does, that there are a whole bunch of other things that actually contribute to making housing affordable, and they have not been addressed. How do loan-to-value ratios address housing affordability? The Minister has not answered the questions posed by the member for Māngere, in terms of what is affordability and whether that family from his electorate, on $20,000 a year, will be able to afford a house. These things will not work, and the Minister knows they will not work.

So here we are, presiding over a time when house prices in Auckland have gone to $700,000 and upwards—a 30 percent increase. The Minister’s rather cynical explanation during the first reading of this bill around affordability was that, of course, the new developers will build the $700,000 houses so that people in the $300,000 houses can move into them. Well, that is what the Minister said. I think that is a cynical approach to take. But what should be happening here is addressing the whole range of things that contribute to housing development, and that is not happening. This is failing Kiwis, I say to the Minister, in terms of getting them into houses, which is the very thing that contributes, as we know, to their well-being. So here we are.

The housing shortage is rife, affordability is a problem, and costs are high, but those things are not being addressed here. How is it, Minister, that by making land available at the periphery of Auckland, which is what the provisions will provide for—that is, actually, in the short period of time that people need houses—those houses will be built? They will not be built. The reason why the Minister has addressed this problem in this way is that that approach favours the developers. It favours those who want to build expensive houses in those subdivisions, in those areas outside, like Hobsonville. That member was part of a Government that would not let affordable housing be built in Hobsonville. I remember very well the Prime Minister saying: “Not in my backyard”—not in his electorate. That is still the context within which these provisions are built. I do not live very far from Hobsonville. Every now and again I have gone and seen the little ones that have been built.

💬 Hon Maryan Street: All seven?

Is it that many? On that note, I think some very, very good Supplementary Order Papers have been put up by my colleague Phil Twyford. He is beginning to address the notion of affordability. In these particular areas there ought to be—

Thank you, Mr Chairman.

💬 Mike Sabin: Nice tie.

Thank you. It is nice to be able to show some sartorial elegance. I am speaking to the Supplementary Order Papers on the Housing Accords and Special Housing Areas Bill. I wonder how this Government can build affordable houses when it cannot even build a decent bill. If we look at Part 1 and at all the changes in this bill, it is like all the other bills that this Government seems to be putting forward. It is full of changes. There are changes to 90 percent of this bill. How can anybody have any faith in it?

Let us talk about affordable housing and how we are going to achieve that. Developers look at a ratio of 2.5 people to 2.6 people per dwelling. There are approximately 500,000 dwellings in Auckland, and there are 1.5 million people. The shortage is actually 100,000 dwellings. How, then, is this Government going to build affordable houses? We have heard Government members speaking about building 39,000 houses. Well, who is going to fund that? Who is going to develop it? But, most important, how many town planners have been employed? How many advertisements have gone out for town planners? Because to build one house you need a town planner, and all the Auckland town planners are up to here with what they are doing at the moment with consents.

This bill works on the mushroom principle, where you keep people in the dark and you tell them a whole lot of manure. It is unbelievable. Here we have the super-city that this Government gave us. This Government wants to take over the super-city and tell it how to build its own houses. Why not leave it to the super-city to do that?

But what this Government should do is create an infrastructure so that we can have affordable housing. I would suggest that, with the Housing Accords and Special Housing Areas Bill, this Government invest in fast rail from Auckland—the beautiful city of Auckland—through to Tauranga, through Hamilton, and then we will have affordable housing areas all the way along that line, if we could get a line. It is 1¼ hours from Tauranga to Auckland. That would solve the housing problem. That is a very doable solution. But for this Government to come up and say “We’re going to give affordable houses.”, when the housing shortage is so drastic—it is just not going to happen.

I am taking just this very short call. I cannot support this bill. It is rubbish. Look at the changes in it. The last bill I spoke to had spelling mistakes in it from 5 years ago. I would suggest this Government do its homework and put forward a bill that does not have changes to 90 percent of it so that the rest of us in Parliament can actually read a proper bill, and then we can vote accordingly. Thank you very much.

I move, That the question be now put.

We move to Phil Twyford’s amendment, as set out on Supplementary Order Paper 344. This is now out of order as being inconsistent with a previous decision of the Committee.

The question was put that the amendment set out on Supplementary Order Paper 343 in the name of Phil Twyford to clause 16 be agreed to.