Housing Accords and Special Housing Areas Bill

This is the really grunty part of this Housing Accords and Special Housing Areas Bill. It is a real test for this Committee as to whether it is serious about increasing housing supply. [Interruption] Members may laugh, but let us hear what it does. At the moment it takes between 3 and 4 years to get consent for a subdivision and to bring in new land to supply. This bill will reduce that period to just 6 months. At the moment, if you want to do a brownfield development, it takes over a year to get through the process. This bill will enable it to be done within 3 months.

I challenge members of this Committee who beat their chests around housing supply and affordability as to why they would oppose measures and provisions that will make it easier for those who actually build the houses and provide the sections.

Andrew Little: Welcome to Abbotsford. We’ll have another Abbotsford within the year, you watch. Poor geotechnical engineering.

Hon Dr NICK SMITH: I put it to you, Mr Little, that it is solely politics. Those who are opposing this part of the bill cannot look in the mirror and pretend they are serious about helping Kiwi families get a home. I have been aghast at how all over the paddock the Opposition is around housing affordability. I listened to the speeches on Part 1 from members of Labour, New Zealand First, and the Greens, who pretend that they are an alternative Government, taking completely opposite positions about what the solution is to housing affordability.

I also want to challenge members on bad faith—bad faith. I will tell you why. When I became the Minister of Housing, members of the Opposition said that they wanted action on housing. When we get action on housing, they oppose it. They said they wanted agreement with councils. We deliver agreement with councils, and they still oppose it. In the first reading I heard speeches about Hobsonville.

Hon Annette King: Yes, let’s hear the facts.

Hon Dr NICK SMITH: Let me give you the facts on Hobsonville, Ms King. Labour announced 1,000 houses at Hobsonville—and Hobsonville will be affected by Part 2, and I will come to that—in 2002. How many houses had been built in Hobsonville by November 2008? How many had been built, Annette King? How many had been built, Maryan Street? How many houses of the 1,000 that you had announced in 2002 had you built? Not one. Not one. How many houses have been built by this Government on that land at Hobsonville? Answer: over 400—over 400.

Why is it relevant to this part? Let me tell you why. Let me tell you why. The chairman of the Hobsonville Land Co. has put on record that if Parliament passes Part 2, the company will be able to bring 1,000—

Peseta Sam Lotu-Iiga: How many?

Hon Dr NICK SMITH: One thousand more houses to market next year—1,000 more houses to market next year. So I challenge, again, members opposite that they need to look in the mirror. They need to ask whether they are serious about improving housing supply, because any member of this Committee who is serious about housing supply and serious about housing affordability will support this part.

The last point that I make is this. Members from Labour have challenged me with the question of what price the houses will be. What price will the houses be? I have a very simple response. Any member of this House who claims that they are going to set the price of housing fails to get to first base on understanding the housing market.

Dr Rajen Prasad: He’s given up. He’s given up.

Hon Dr NICK SMITH: The member interjects. Can I say to this member is Mr Choudhary telling me that a Labour Government will set the house prices?

The CHAIRPERSON (Lindsay Tisch): Prasad.

Hon Dr NICK SMITH: Is Mr Prasad telling the Committee that a Labour Government will set the house price?

Dr Rajen Prasad: I raise a point of order, Mr Chairperson. I would not ordinarily stop the Minister, but after I have been here for almost 5 years, he might have known that Mr Choudhary is somebody else.

The CHAIRPERSON (Lindsay Tisch): He did correct it.

Hon Dr NICK SMITH: My simple challenge to the member: are members of Labour seriously suggesting that this Parliament sets the house price? Do they really believe that if we just pass a bill—because they have challenged me and asked where in Part 2 is the price of the house. Do members of this Parliament seriously believe that all we need to do to make houses affordable is to put in a provision of this bill that says: “House prices will be $300,000.” and, magically, that will be the case? Well, I am concerned that members opposite believe that. I have heard Labour members out on the hustings saying that, magically, if you just pass a law that says the wage is going to be $20 an hour—or why stop there?

Peseta Sam Lotu-Iiga: $30.

Hon Dr NICK SMITH: Let us make it $30 an hour. Let us just pass a bill and say: “Wages in New Zealand are going to be $30,000 a year, and house prices are going to be $20,000.” That would be a good bill. Is that seriously what Labour members actually believe—actually believe?

The answer is this. House prices are determined by a market. What we need to do is get the materials price more competitive. We need to get the section price more competitive. We need to get the infrastructure price more competitive. We need to deal with the issue of compliance costs. We need to do the work that Maurice Williamson is doing to improve the competitiveness and productivity of the building sector. We need the 1,000 more apprentices that we are getting. They are the things that will make a material difference.

I go back and challenge the Labour spokesperson on housing to answer the challenge that was given by Su’a William Sio. He said this: how many houses, and at what price, are you going to build for people on $20,000 a year? Well, I have not heard that answer from the Labour Party, because, actually, members of this House do not set the house price. They never have, and they never will. What we have to do is get the market conditions right.

Kris Faafoi: Oh!

Hon Dr NICK SMITH: That is right. The member interjects. Does the member think this is acceptable? We have got a block of land in Flat Bush that is zoned for housing. It was purchased for $800,000—$800,000. It is now on the market for $113 million—$113 million.

Peseta Sam Lotu-Iiga: Disgraceful.

Hon Dr NICK SMITH: That is disgraceful. But that is the product if you put in a very tight metropolitan urban limit. If we want to stop that sort of land banking, and if we actually want to get sections at an affordable value, they are the differences that we in this Committee need to mark, and that is what this part is about.

The last point I wish to make is this. If we are serious about addressing house price, section price is critical. I will tell you why. If a section price, as it averages in Auckland, is $325,000, you are not going to build an affordable house on that section. If it is a $325,000 section, the incentive is actually to build a very expensive house on that. This Government is saying that, actually, getting the section price down is really critical to making it affordable for us to be able to build a house in the range that average Kiwi families can afford. And I say to members opposite that if you block this bill and block this part, you are voting against land supply and greenfields being consented in 6 months. That is what this part will do. And they are proposing against brownfield developments being consented within 3 months. I say to them again look in the mirror. You are part of the problem, not part of the solution.

Just before the member starts, we are having some problems. You just have to give me some flexibility. We are having a problem with the timing.

A longer call is fine, Mr Chairman—it is fine.

The CHAIRPERSON (Lindsay Tisch): I have got my watch.

PHIL TWYFORD: OK. Now we are getting to the nub of the problem. Now we are getting down to brass tacks, because on that side of the Chamber, the view represented by the Hon Nick Smith is basically to trust a failed market and blame the councils. That is the National Government’s housing policy: trust a failed and failing market and blame the council. That is all—that is all—that the National Government is willing to do. It washes its hands of any responsibility, any obligation to actually roll up its sleeves like previous Governments have done over the decades and do something substantial to build affordable houses. As far as Nick Smith is concerned, no, the Government has no control whatsoever about the price of houses. The Government has no ability to deliver affordable housing to the people of New Zealand. The Government has washed its hands, it is putting all its faith in a failed market, and it is not prepared to intervene to fix a failed market. That is the difference.

We on this side of the Chamber will not stand by while speculators outbid first-home buyers. We will not stand by and watch a failed market drive first-home buyers out of the market. We will not stand by as another generation of New Zealanders is denied the dream of homeownership because all that the National Government is willing to do is tinker with the Resource Management Act and blame local government for a problem that is largely the fault of the economic settings that this Government has refused to tackle. That is hands-off government from National.

We do not subscribe to that philosophy. We are willing to use all the powers available to us when we are in Government to build 100,000 affordable homes. We will reform the Resource Management Act by producing a national policy statement on affordable housing. We will intervene in the market. We will use Crown land, as we would have at Hobsonville, to deliver a high-quality, new urban development that includes social housing, affordable housing for first home owners, and open market housing.

Minister, you and your Prime Minister chose to drive out social housing and affordable housing from the biggest, finest opportunity for urban development in decades, in Hobsonville, Auckland, and you bear responsibility for that. It will always be the Minister of Housing and the Prime Minister who will bear the shame of having said that it would be economic vandalism to allow State housing or affordable housing in Hobsonville. Low to middle income New Zealanders, according to this National Government, should never have houses on land that has a view of the sea. That is the operating principle of the National Party. Well, we do not subscribe to that.

We believe that it is the role of the Government to improve people’s lives, and we will intervene in the housing market. We will use the balance sheet of the Crown, which will be fiscally neutral over 10 years, to stimulate the building of 100,000 affordable homes. We will break the cartel. We will use procurement arrangements to drive down the cost of building supplies. We will use all the powers available to us to do that. Mr Smith, people believe us. The public believes us. By two to one they do not believe in the Government’s policies. They understand that this bill, the Housing Accords and Special Housing Areas Bill, is tinkering with local government and the Resource Management Act.

I want to go back to the issue of affordability and the failure in this bill to actually deliver any affordability. Mr Smith’s view on this issue, and what he told this House, is that he notes the complaint that the bill does not specifically refer to the building of affordable houses. He says we are being too cute. His reply is: “The bill specifically mentions the Auckland Housing Accord. The Auckland Housing Accord, very specifically,”—and I am quoting the Minister—“has provisions for ensuring that the houses that are built include a portion that are in the affordable range.” Let us be very clear about what the Minister told this House. He said that the Auckland Housing Accord has provisions for ensuring that the houses that are built under this accord include a portion built in the affordable range.

Well, let us talk about the wording that is in the Auckland Housing Accord. This is the best it gets. This is Nick Smith’s idea of requiring affordable housing. The Auckland Housing Accord says: “All Qualifying Developments are … required to give consideration to the provision of affordable housing …”—all qualifying developments are required to give consideration to the provision of affordable housing. That does not mean that they are required to build a share of affordable housing. It says: “Conditions of consent may include requirements for a proportion of the development to include affordable housing ...”—conditions of consent may include requirements for a proportion to include affordable housing. That is the best the Government can do, and we know from the reported comments from Auckland Council and from the mayor and the deputy mayor that they tried to negotiate with Nick Smith holding a gun to their heads. They asked for stronger language allowing a proportion of affordable housing to be included in qualifying developments. That Minister and his officials stonewalled and blocked it. They would not allow affordable housing.

The Minister is shaking his head, but that does not tally with all the reported commentary on this issue, and that is why the very party the Minister negotiated the first housing accord with, Auckland Council, is on record in a news report from Radio New Zealand National from 1 August saying: “Auckland Council says it’s not yet clear that new housing accord legislation will require genuinely affordable homes to be built.” That, Minister, is from your partner, the party you negotiated with for 6 weeks to produce the Auckland Housing Accord, and it says that it is not yet clear that the new legislation will require genuinely affordable homes to be built. The council says further that the Housing Accords and Special Housing Areas Bill “shows nothing to support the affordability focus.” That Minister is being utterly misleading in this House.

There is nothing in this bill, and the language in the Auckland Housing Accord is weak. It is diluted from what Auckland Council required, and, Minister, if you were honest and candid with this Committee, you would admit to this Committee that you blocked stronger language requiring affordable houses in the negotiation of the Auckland Housing Accord. The Minister cannot come to the House and pretend that his bill includes any kind of requirement for affordable housing, because it does not, and it would be misleading to suggest otherwise.

After 6 weeks of negotiations and in the last 2 months of this bill being before Parliament, Auckland Council, which was party to the very first housing accord, came along to the Social Services Committee and, under questioning, told the members of the committee that it did not believe that any more affordable housing would be built as a result of this bill. And in only the last 3 weeks it told Radio New Zealand National that it is not clear that this legislation will require genuinely affordable homes to be built. So, Minister, I invite you to get up and tell us what language there is in the bill and what language there is in the housing accord. Unless I have missed something, Minister, and unless you have got something better than the language that says that they are required to give consideration to, and that qualifying developments may include a share of, affordable housing, then I challenge you to withdraw the comments that you have made before this House that have given the clear suggestion that this bill could require affordable housing. I do not believe that that is the case.

It is a hoax to bring this legislation to the Committee pretending that this Government is doing something substantial about affordable housing when all this Government is doing is bringing in some extra greenfields land and fast tracking consenting—stuff that could have been achieved by fast tracking the Auckland Unitary Plan and giving it legal weight on notification, as Auckland Council requested. That could have been achieved, and much more. All of the other provisions on affordable housing in the unitary plan could have had legal weight from now, but, Minister, you refused to do that. For some weird political reason, because of some hang-up that you and your colleagues, Minister, have with Auckland Council, you refused to do that. You have brought this tinkering bill to the Committee.

Let us clarify something else. The Minister asked before how it could be both tinkering and Draconian. Well, I will tell you that it can be tinkering and Draconian. It is tinkering in that it achieves very, very little to give Aucklanders any assurance that it will increase the supply of affordable housing or make housing generally more affordable. It is Draconian in that it takes democratic rights and freedoms away from local government.

The member Phil Twyford has challenged me and said there is absolutely nothing in the Housing Accords and Special Housing Areas Bill referring to affordable housing. He is letting his side down quite seriously. Let me read it, and I quote it very specifically: “one of the criteria that must be prescribed is the percentage of dwellings that must be affordable dwellings, according to the affordability criteria specified in the Order in Council for the special housing area or part of the special housing area.” Labour members, you are being badly let down by your housing spokesperson.

Phil Twyford: How many affordable houses?

Hon Dr NICK SMITH: No, no. See? He has changed his tone now. The simple point is this: why is it—

Phil Twyford: There is no requirement to provide affordable housing.

Hon Dr NICK SMITH: Well, let me just—well, no, he is wrong. I have quoted specifically from the bill. But let me go just one step further. Does this bill require that every single qualifying development include a proportion of affordable homes? The answer is no, it does not. Let me explain to the member why.

Phil Twyford: So why does Auckland Council say that?

Hon Dr NICK SMITH: No, hang on a second. I am giving the member the courtesy of debating with him. I could just sit in the chair and ignore him. I would rather have an intelligent debate if that is what he is interested in.

Why do we not require an affordable home criterion for every single development? Well, let us say that in one of these special housing areas somebody comes along with a development of just four houses—quite possible, quite right. So how do you get 10 percent of four? It is a nonsense. Is the member really suggesting—is this where the Labour Party is at—that every single development has to include a share of affordable housing? Is that the Labour Party position? Is that the Labour Party position?

Phil Twyford: These are weasel words.

Hon Dr NICK SMITH: I see the member interjecting. Is that the Labour Party’s position—that every single qualifying development has to include a proportion of houses within the affordable price range?

Phil Twyford: No. We are saying there should be a mechanism—

Hon Dr NICK SMITH: Oh! See? When you test Labour members, they are all over the paddock, and that just exposes that the Labour spokesperson on housing is not doing his job. What he said about the bill is wrong, and it is not practical to require affordable housing in every single development.

I feel that I must rise to respond to some of those points that the Minister of Housing has just raised. First of all, about the latter point, if we work backwards through his speech, our position in 2008 was, as it is now, that there should be legislation that legislates for affordable housing. We are opposing this Housing Accords and Special Housing Areas Bill because it does not. It simply sets up accords that are ill-defined, that have no particular target, and that, judging by the words on these pages, will not advance affordable housing one jot in New Zealand, or at least in Auckland, which is the only part that this bill applies to at the moment, despite the fact that there are housing affordability pressures in many other parts of New Zealand, including the Minister’s own electorate.

Just to correct the Minister again—although I am getting a bit tired of having to get up and correct him—the law that we passed on affordable housing was not mandatory. It was voluntary, and it did allow councils to take up a legal option that was not previously available to them. We did not mandate it. This is nonsense, this kind of approach that the Minister takes where he says: “Oh, well, does the Labour Party want us to legislate for house prices and legislate for affordable housing or not?”. Well, we did that, and we did it in a way that was much more effective and worked in concert with other measures such as shared equity in Auckland, Wellington, Christchurch, Nelson, and Queenstown, which were at that time the top five most expensive places to live in.

So there is no ambiguity about our position at all, Minister. The position in our legislation had been that here was a tool that was available to local authorities to use.

Hon Michael Woodhouse: And none of them used it.

Hon MARYAN STREET: Queenstown did. Queenstown—

Hon Michael Woodhouse: No, Queenstown didn’t.

Hon MARYAN STREET: The member opposite says nobody took it up. Well, in fact, Clive Geddes, who was the Mayor of Queenstown Lakes District at the time, did take up the use of that legislation. So it is not true to say that nobody took up that legislation. Certainly that far-sighted mayor at the time in Queenstown did.

The other thing relating to this that I want to pick up on is that the Minister says this is—what did he say? Grunty. He said it is the grunty part of this legislation. I wish it were. I just wish it were, and I wish that it did something that was a bit more detailed than it is. We had the usual complaints about the Resource Management Act. The Minister does what he does really well, and that is isolate one example and talk about it as if it is the norm. He takes one example of a consent difficulty—and I must say that he has managed to pass this disease on to the Minister for the Environment as well, who tends to take the exception and project it as the norm for consenting.

This is relevant to Part 2 because speeding up consents to 6 months may not be in anybody’s best interests. When consents under the Resource Management Act take a long time, they usually take a long time for a good reason. It is possible to get past objections that are frivolous and vexatious. It is entirely possible to get past those, and the Environment Court has now set down 22 years’ worth of case law to avoid those objections happening. What we have got here is something that risks consents being so rushed at 6 months that they will deliver an imperfect result. I do not want to see another Abbotsford, as the people from Dunedin will know well, occur because this Minister has decided that we need to speed up the process. Never mind if the engineering reports have not been done accurately. Never mind if the geological reports have not been done adequately, or if the right people have not been consulted, or if the nature of the soil or the rock bed or the susceptibility to natural disaster have not been sufficiently gauged. Never mind that—what we will do is say that we delivered consents in 6 months. I would rather the Minister delivered safe, affordable housing than consents in 6 months.

One further point I wish to make relates to a point the Minister made earlier where he took sole and personal responsibility, as far as I could tell, for the drop in interest rates, for the lowering of interest rates. Never mind that there has been a global financial crisis and a period of reasonably prolonged recession around the world, never mind that the United States is printing money to keep down interest rates artificially, and never mind that there is cheap money available around the world; the Minister says that it is he and his Government that have caused interest rates to drop.

I just wanted to give one story. I bought my first house in 1985. I was a young teacher and I had two mortgages. The house cost $66,000. It was half a house. It was a terraced house in Auckland Central and it cost me $66,000. I had a $20,000 deposit because my parents had died and I borrowed the money my sisters got. We clubbed together and put down a deposit. Can I just say that I had to get two mortgages. First of all, the banks were not that keen on lending to women alone. Never mind, we got over that hurdle. My first mortgage was on an 18 percent interest rate and my second mortgage was on 23 percent. I remember it vividly. I remember it vividly because it took every part of my $35,000 or whatever I was earning as a young teacher at that time, and it was difficult. It was really difficult. Interest rates are all relative. If the prices of houses are out of the reach of anybody who is on a median income or below, then it does not really matter what the interest rates are if they do not have the income to sustain borrowings of $360,000 or $380,000. It is all relative.

So for the Minister to get up and crow about low interest rates as if it was all his own work—I think that if it was all his own work, there are things we should be a bit cross with him about. If that is the case, then what the Government is failing to recognise is that it is low incomes that prevent young families from being able to finance the prices of houses these days. My first house was $66,000, and it was still hard work because of the interest rates. Now the interest rates are low but the house prices are hugely high. So we are, in fact, worse off now, Minister, even with low interest rates, than we were years ago. Thank you.

I just want to take a short call in the debate on Part 2 of the Housing Accords and Special Housing Areas Bill. I want to address one of the key issues in the debate so far about this idea of having a minimum prescription of affordable housing as a criterion for a qualifying development. Then I also want to talk about the regulation-making powers and the transitional powers that are set out both in Part 2 and in schedule 2 of the bill, which we are also debating this afternoon. First of all, can I thank the Minister of Housing for being here and for being in the chair and taking some calls on this. It is good to have the Minister responsible for the legislation present through the Committee stage and actually engaging with the debate. I wish we saw it happen more in this Chamber. I want to address what he spoke about when he got up most recently and quoted from the bill, looking at the minimum provision of affordable housing.

To give some credit to the Minister, it is true—and I can see here in Supplementary Order Paper 351, the tracked changes version of which has been put on the Table of the House—that there is now an ability through Order in Council for one of the qualifying development criteria to be a minimum provision of affordable housing or a percentage of affordable housing. So that is good to see. But my question for the Minister is this: why not go the whole hog? Why not put it in the legislation as a requirement for a qualifying development, rather than putting it in as something that can be done through an Order in Council? If the purpose of the bill is to increase the supply of affordable housing—and we have established in earlier debates on earlier parts of the bill that it is—then why would you create a special housing area if not to improve the supply of affordable housing? If you want to improve the supply of affordable housing, why would you not include a minimum percentage in that special housing area? If you can, if the powers are going to be inserted into the bill, why not make it a standard criteria that applies to all special housing areas, if, indeed, the purpose is to increase the supply of affordable housing?

I want to use the example of Hobsonville, because Hobsonville is really what this bill could have enabled. Under the previous Government, as we have heard from other speakers, it was a very good model of using Crown land to establish a new housing development that was a mixed development with a proportion of affordable housing and a proportion of social housing. In fact, that is another question that perhaps this bill fails to address—that there is no requirement for any minimum provision of social housing in any special housing areas. That is also a very important part of the housing affordability question—social housing. There is no provision for that either. What Hobsonville could have been and was intended to be when it was set up was, indeed, a special housing area of a sort, with a mixed provision of housing, with a provision of affordable, social, and private housing.

What happened with the change of Government was that we had a Prime Minister, who happens to be the local MP, who said it would be “economic vandalism” to have State houses in his nice, comfortable electorate. So those provisions were removed from the requirement for the development at Hobsonville. It is a good development. I have been and had a look at it. It is exciting. There could be great prospects for other such developments, but it is a great shame that we allowed a Prime Minister to say that it would be economic vandalism to have social housing in that area, and that we allowed the provision of the Gateway Housing Assistance loans to be reduced so that only 17 families got to use one to purchase a house in that development. If we put into this bill a qualifying criterion for qualifying developments so that there had to be a minimum percentage of affordable housing in new special housing areas, then what we could see are a lot more areas like what Hobsonville was supposed to be when it was first mooted. It is a great shame that we have not done that. I do not think that putting it in as a possibility for an Order in Council, as this Supplementary Order Paper does, is enough.

I want to turn my attention to the regulation-making powers and the transitional provisions in the bill, because we heard from a number of submitters at the Social Services Committee and, indeed, from the Regulations Review Committee that in addition to the unpopular override provisions in the bill, the bill delegates a high level of regulation-making powers to Ministers that may not be justified. We in the Green Party very much share those concerns, although it is true that the select committee did, to the best of its ability, take the concerns of the Regulations Review Committee into account, and did take them seriously. There are some changes recommended by the select committee to modify those regulation-making powers and those transitional provisions. Yet we remain concerned at the level of power that this bill concentrates in central government over local decision-making.

It is something that we have seen only in recent years in emergency legislation, and the model, of course, is the legislation around the Christchurch earthquake recovery. I have been concerned for some time—and this legislation plays out that concern—that having established that precedent through the Christchurch earthquake recovery legislation for that extensive use of regulation-making power, that extensive use of Order in Council, and that extensive use of transitional provisions, we would begin to see it creep into other legislation in non-emergency situations. Indeed, I believe that we have in this Chamber seen the increasing use of those kinds of provisions by this Government in various types of legislation, and this is another example.

Although New Zealand is absolutely experiencing a housing crisis—and many speakers have spoken about that in the debate so far this afternoon, and I would concur with all of those who have done so—it is not yet a national emergency. We could get there, and I doubt that this bill will help to prevent that coming catastrophe, but we are not yet at the point where we can call the housing crisis a national emergency. Therefore, that high level of ministerial power and intervention, that high level of delegated regulation-making power, and that excessive reliance on transitional provisions are not justifiable, in our view.

Instead, what the Green Party believes is that we need a more considered national plan to tackle housing affordability. Such a plan would treat housing as core national infrastructure. It is a debate that I think we need to have as a country to actually turn our way of thinking about housing away from it as a solely private and personal asset and good to national infrastructure, because it has some of the most significant bearing on the health and well-being of our population, much more so than roads or other things that we currently consider core national infrastructure. Our housing stock has a huge bearing on the health and well-being of our population. So we need to start seeing it as core national infrastructure and develop a concerted plan to treat it as such. That would focus on the increase in supply of affordable housing, both social housing and affordable rental housing and housing to buy, and it would need to be developed in true partnership with relevant territorial authorities, not with the kinds of provisions in this bill that override them. The Housing Accords and Special Housing Areas Bill, unfortunately, is no such plan.

What we would like to see is a national housing infrastructure plan that looks at things like a capital gains tax exempting the family home; a systematic Government build programme that is not just building and knocking down Housing New Zealand Corporation houses at the same rate that they get built, which is what the Government is doing at the moment; a progressive ownership or shared equity scheme that helps families into their own home without having to go through the conventional route of a deposit and a mortgage; secure tenure for renters; a rental warrant of fitness; and restrictions for non-residents and non-citizens for purchasing homes in New Zealand. Those are the kinds of measures that we could put into a national housing infrastructure plan, which would truly tackle the crisis of housing affordability and housing quality that we have in this country before it gets to national emergency status.

As it stands, we cannot support this bill. We are not convinced that the regulation-making powers and transitional provisions are warranted at the present time, and we cannot understand why, if you think that affordable housing is an important criterion and if you think that a minimum percentage of affordable housing is an important criterion, those criteria have not been written into the bill. Thank you.

I think it is obvious that the parties on this side of the Chamber believe that there is a problem with the lack of affordable housing, but I am unsure as to whether the Government believes that there is a lack of affordable housing, because what we have had today is a whole lot of conflicting statements and contradictions in terms. We have actually had that for the last 5 years, because we were told year in, year out that we did not have a housing problem. And then when the Labour Party came out with a very popular housing policy, and more to come, suddenly the poor old Minister of Housing Phil Heatley got the heave-ho, and the Government brought in the new Minister of Housing with a flurry of activity and bills that were going to fix the problem—only they do not.

What I cannot get to the bottom of is what the Minister is saying when he says that you cannot set the price of affordable homes. We know from announcements by Government members and things that they have said about Hobsonville that they are telling New Zealanders that the Government is building affordable homes, and then it sets the price at between $400,000 and $480,000 for around a 60-square-metre box. So, on one hand, the Government says that you cannot set the price for an affordable home, and then tells people: “Yes, yes, we are building affordable homes at Hobsonville. This is the price of them.” So what is it, Minister? Can you say what an affordable home is? Can you say that you can set the price? Because that is exactly what the Government is doing with its so-called affordable homes in Hobsonville, which is to tell us that they are affordable homes and then set the price of those affordable homes.

The Minister also said that the cost of land is over $300,000 for a section in Auckland. What is the cost of the land for the affordable houses at Hobsonville? What is the cost of each of those sections? If the Minister was being upfront with this Committee, he would tell this Committee—as we learnt from the Social Services Committee—that the land at Hobsonville for the so-called affordable homes is being subsidised. It is being subsidised from the unaffordable homes that most New Zealanders cannot buy. So if it is possible to have cheaper land prices subsidised, even though that is hidden by this Government, then it is possible for any Government to put up Government land and say that it is affordable and to have prices on that land that are affordable. That is the truth, but that is not what we are hearing from this Government about Hobsonville.

This Housing Accords and Special Housing Areas Bill does not provide a direct way of providing affordable houses. The Minister stood up and said: “Oh yes, it does. There is an Order in Council.” What will that Order in Council say? Tell this Committee tonight. Tell New Zealanders who are listening what the wording of that Order in Council will be. You see, the sneaky thing to do is to put in legislation that you are going to have an Order in Council to achieve something that everybody says we need. The poor people of South Auckland, whom you heard about from Su’a William Sio, said: “We can’t afford houses at the moment, but we are hoping we can.” And the Minister said: “Yes, yes, there will be affordable housing. I am going to have an Order in Council in this bill.” So tell the people what the wording of that will be. How will it be defined? What will it say? Otherwise, it is hot air and false promises. The Minister has stuck in an Order in Council, which does not have a date, and we do not know when it will be done—this year, next year, 10 years, never. You see, it is just a ploy, an underhand ploy, because that Minister knows that there is real concern about affordable housing in New Zealand. Be upfront, Minister. Get to your feet and tell us what that Order in Council will say, when it will be brought in, how long it will be in place for, and how many affordable houses will be arising from your Order in Council, which you told us about today. The Minister did not answer one of those questions.

You see, I find this whole bill rather shonky because I have always been a strong believer in regulatory impact statements. We saw the regulatory impact statement that came out of the last bill the Minister had when he was Minister of Local Government. It was the most appalling regulatory impact statement I have seen, because it challenged all the assumptions the Minister had made about local government. There has been only one worse, and that was the redacted one that went with the bill for those parents who were trying to look after disabled adults, where the Government actually took out most of the information. But let us look at the regulatory impact statement on this Minister’s bill. I read it and I thought: “Wow! The Minister has not mentioned this.” It says: “Insufficient information on land supply restrictions across local authorities to allow precise views to be formed on the urgency of the problem or the extent to which land supply is a problem outside of Auckland”—insufficient information—“Insufficient information on the specific detail and operation of each of the options to allow for a more precise analysis of how each option might impact on the behaviours of commercial decisions of land owners and property developers”.

In my last contribution, I asked the Minister how he was going to make private landowners and property developers give up their land at an affordable price for houses to be built on it right now, because of this bill. They are the ones who have land banked their land, waiting for a good deal when it is the right time to put it on the market. The Minister’s own regulatory impact statement says that there is insufficient information on the specific detail and operation for each option to allow precise analysis of how each option might impact on behaviour. So if the Minister knows something more than those from the housing affordability programme and the Ministry of Business, Innovation and Employment, he should get to his feet and tell us why this regulatory impact statement, where it says that the ministry never got sufficient information, is wrong. He did it on the local government one, of course, and then was shot down in flames by the New Zealand Institute of Economic Research, which came out and showed that all his assumptions were based on false assumptions. He made an absolute fool of himself.

This regulatory impact also says: “The development of the option under budget secrecy rules, which has meant that options have not been consulted on with stakeholders and affected parties outside of government”. That, Minister, is from your own regulatory impact statement. When he put his bill together, he put it together before he spoke to the Auckland Council, and he had it set in place in his mind before he ever went to talk to the council. So Auckland Council actually did not really get a fair go at all, and that is why it came to the select committee and why it said that it could not see anything in this bill that was going to make housing affordable. That is why it was worried that it was not going to do what the Minister said.

So, Minister, there are some questions that I believe that you must answer in this Committee tonight. He is saying he will not answer them. Did you see that? He said he will not answer them. I give him credit for sitting in the chair, which is more than some of his colleagues do. But tell us about the Order in Council, Minister. Do not sit there smiling like a crocodile. Tell the people what will be in the Order in Council. When will it be introduced? How long will it be in place? Come on, Minister. That is your responsibility. This is the only chance this Parliament has to debate these issues, and for the public of New Zealand to know—

I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.

Sitting suspended from 6 p.m. to 7.30 p.m.

Well, it was pretty extraordinary, listening to the debate this afternoon, and before dinner particularly, as more was being revealed about this bill that is called the Housing Accords and Special Housing Areas Bill, which purports to be about affordable housing. We have got to the bit where there has been an extra clause added in right at the end, which is trying to give a justification for, and putting in a way of providing, so-called affordable housing. This bit is going to be in clause 15. It was referred to by the Minister of Housing in his speech in this last part of this debate on Part 2. It is clause 15(2A) in Supplementary Order Paper 351, where an Order in Council gets to declare a special housing area and prescribes as one of the criteria for qualifying developments in the special housing area or part of it “the percentage of dwellings [in the development] that must be affordable dwellings, according to the affordability criteria specified in the Order in Council”. What does that mean? What does that mean? It is like a circular sentence. I have read that about five times. I think it was debated by Annette King before the break, and before her the Green member Holly Walker debated it as well. It is actually an extraordinary sentence. It looks like a load of bunkum, which is ultimately what this bill is.

I would like the Minister, if he is willing to take another call tonight, to actually get up and tell us what an affordable house is, what affordable housing is, and what sort of percentages we are going to be looking at for this Order in Council that is going to prescribe the percentage of dwellings in a development. Are we going to be looking at the sorts of percentages that were called for by a number of submissions? For example, I would like to refer to the submission by the University of Otago’s department of public health, which specifically asked for the bill to “direct decision-makers to grant consents for housing developments with a minimum of 20-30% social and/or affordable housing.” Well, at least it mentions a percentage of dwellings in a development in this particular add-on Order in Council circular clause, which has been a last-minute tack-on. But it would seem to me that if you are going to actually have a bill that is devoted to the principle of affordable housing, then you would actually have a definition of affordable housing and you would have an explanation of how much affordable housing in the body of the bill. This seems to me to be an enormous gap.

This whole bill is what you could describe as being a classic Orwellian bill, because it is a bill that says it is about affordable housing but is not, actually. It uses the term “accord”, which in my book means partnership or more than one body working together in an equal manner. But when you actually read the bill and you debate the bill, it is actually a power-grab by the Minister, taking power and using that power in an inappropriate way with local authorities. We have heard earlier tonight the rather—and I hope you will excuse the Chaucerian reference—choleric contribution from the Minister. He really had a go at this side of the Chamber for what he saw was a discrepancy because we describe the bill on one hand as Draconian because it is around that power-grab and the local authorities really get to have very little say, but on the other hand there is a tinkering around the edges of this so-called problem of affordable housing, which this Government has not defined. It cannot define in the bill what is actually meant by “affordable housing”, how many people will be able to get affordable housing, or what percentage of an accord or special housing zone would actually need to have affordable housing.

There have been numerous submissions, as I understand it, during the process—the very short process—of this bill going through the House. Submitters were not able to be given the time to properly consult and provide submissions and have the discussions that needed to be had. Instead, there was a very short consultation period. During that time, as I understand it, most submitters asked for there to be an assurance that developments within this bill would be affordable, or that there would at least be a percentage of affordable housing. Unfortunately, what we have ended up with is this last-minute, tack-on clause in Supplementary Order Paper 351 that says that a “percentage of dwellings [in the development] that must be affordable dwellings, according to the affordability criteria specified in the Order in Council”. What are the affordability criteria? I think that probably one of the most important questions to be asked during the debate on this bill is what the affordability criteria are.

The other issue that I just want to point to is the establishment of a procedure that gives some sort of cover: a dispute resolution process that must be followed before the housing accord may be terminated, which is also specified in the bill. Again, we go back to what this bill must do and what this bill may do. I think that it is really important that people listening to the debate tonight know, again, that many of the submitters argued very strongly that there needed to be some sort of mitigation between the power-grab of the Minister, who is able to determine and make all these decisions, and the ability of local authorities to have some sort of say in the process. Again, it seems as if there has been a late change that institutes a dispute resolution process. But it is not something that must happen; it is something that may happen. It is very clear. People must realise that around these housing accords, these so-called partnerships that, in my mind, should be equal, because that is what the word “accord” means, as far as I am aware. It is not an imbalance; it is actually more of a balance between parties. Instead of it saying that there must be a dispute resolution process, what this bill does is say that there may be a dispute resolution process—so there only “may be”. As to who determines whether there is a dispute resolution process, well, it appears that under this bill that is really ultimately up to the Minister. Yes, if there is a dispute resolution process, then that must be followed before the housing accord may be terminated, but the fact that there is one is not actually a true mitigation if there is a problem between the parties. I think what it highlights is that ultimately there is a true imbalance.

There are many imbalances in this bill. The major thing that must be done tonight before the debate concludes on this is to determine just what the criteria of affordability are that have been inserted so late in this process. We have seen 5 years of inaction by this Government on housing affordability and the housing crisis in this country—5 years under this Government. What we have ended up with is a bill that tinkers around the edges in terms of addressing the real, substantive issues, and, as we are seeing with so many other bills in this House—

I move, That the question be now put.

I certainly agree with the Minister of Housing that Part 2 of the Housing Accords and Special Housing Areas Bill is the grunty part of the bill. That is because it deals with the planning process, resource consents, plan changes, and variations for qualifying development in these special housing areas that have been identified by the Minister or by the Minister and the relevant council through the housing accord. I join with Holly Walker in expressing the Green Party’s appreciation for the Minister in the chair being active in that role and for taking a number of calls on the bill.

But although the Minister is proud of the fact that this bill fast tracks consent processes and promises a 6-month time frame for greenfield developments and a 3-month one for brownfields development, that comes at quite a high cost. The costs are to local democracy—the cost of development not necessarily being well planned and integrated with the council’s district plans, and the cost of reduced public participation and reduced appeal rights to the Environment Court. I would like to comment briefly on each of these issues.

As Holly Walker also noted, we have a crisis in terms of housing affordability, but I do not believe we have a national emergency that justifies that ability of the executive, through the Minister, to override the decision-making powers of councils and to cut across how they have planned where development should occur through their district and city plans, working with their communities. So we strongly object to the provisions in the bill that would remove territorial local authorities as the consent authority for these qualifying developments in special housing areas where there has not been an accord agreed and where the Chief Executive of the Ministry of Business, Innovation and Employment has that role. We think that if we want sound planning that looks to the future—not just the next 3 years—we need to have councils retain their role in regulating land use and making decisions on these planning consents. The Minister and the bill are silent on how councils are going to have to deal with the extra costs of allowing development that is not well integrated with existing infrastructure.

The problem that this part of the bill creates is that because the Minister and the Government are wanting to speed up decision making, the bill is ostensibly establishing an alternative planning regime to what exists in the Resource Management Act. Although it takes ingredients of the Resource Management Act, it also changes some of the criteria for making decisions that would exist under the Resource Management Act and the processes for making those decisions. As a number of submitters on the bill said, creating this alternative system may result in unnecessary duplication and costs. There is also a very real risk that it will lead to decisions around the location, the scale, and the design of new subdivisions and new residential developments that have not been anticipated, planned for, and agreed to by the local community in conjunction with their council, as would normally occur through the district plan process.

When you read through Part 2 and you try to consider how the provisions here work, how the ones in the Resource Management Act work, and how they mesh, it is very complicated. So you would certainly need to be a planner or a lawyer to understand them. But my particular concern, in terms of this lack of meshing with council plans, is in clause 14, which is in Part 1. Those criteria there for special housing areas are very narrow because they do not include factors such as the proximity of the area where special housing developments are going to occur to existing retail, employment, and social services. They do not include proximity to public transport, and they do not include any relationship to urban design so that we get good-quality development. Certainly the Social Services Committee has included an extra provision around infrastructure, but the whole issue of where development is located has a major impact on what our communities look like and the whole built form.

So where there is a reliance on the market and on a private developer coming to the council and saying that it wants to do a plan change and to have fewer planning constraints applying, you potentially get situations as happened in Northwood in Christchurch, where you get roads in the subdivision that are too narrow to accommodate buses easily. So that is not sound development, and it is the sort of speedy development that the bill promotes at the cost of sound development.

The bill is also going to encourage sporadic, ad hoc development because of clause 32. That outlines the matters that a decision maker must take into account when assessing a qualifying development. The problem here is that the matters are ranked and the bill’s purpose of housing affordability is ranked first. So that means that decision makers must give greater weight to housing affordability and promoting that than to the usual matters in the Resource Management Act. As the Hamilton City Council said: “This in effect raises and prioritises undefined residential development as being of greater significance than other forms of development in New Zealand and undermines the intent and effectiveness of the RMA 1991 and consent authorities ability to make informed, balanced and sensible decision on development matters.”

The last matter that I want to comment about is the other cost of fast tracking, which is the reduced ability for the public and councils to participate in the planning process. That is because my understanding of the provisions in Supplementary Order Paper 351 and the bill itself is that they are going to provide a form of limited notification where the decision maker has to consult the local authority, the adjacent landowners, any infrastructure providers, and anybody who has authorised a designation. But if those parties are consulted and agree, there is no need for it to go out to the public for submissions. So that means that if this is not consistent with a plan, the public does not get a right to say: “Well, we do not like this because it is going to allow development in an area where we would prefer to see it provided as open space, for example, or where we think it has impacts on amenity or landscape issues.”

We want compact, liveable cities where people can connect with each other and with good public transport. If we get ad hoc, sporadic development, we are not going to get the good planning that you would normally get through city and district plans and metropolitan urban limits. If we have development occurring outside of those urban limits, it is a recipe for sprawl. It may be more affordable because land prices are cheaper, but it is not affordable to the people who live in those houses, because they will have much higher transport costs. That is what we have seen in Melbourne, where a lot of the houses further out are not selling. There has been a glut of them. They are not affordable for the people who live in them, because of the very high transport costs. So we need integrated development, and this bill does not promote that.

I move, That the question be now put.

Phil Twyford’s amendment to replace clause 23 set out on Supplementary Order Paper 343 is out of order. It is inconsistent with the decision the Committee has just made.

The question was put that the amendments set out on Supplementary Order Paper 343 in the name of Phil Twyford to clauses 82 to 84 be agreed to.