Housing Accords and Special Housing Areas Bill

I move, That the Housing Accords and Special Housing Areas Bill be now read a second time. This bill is a critical part of the Government’s comprehensive work programme to address housing supply and affordability. It unblocks the ridiculously slow planning and consenting process and will enable us to get some momentum and some pace into residential development in areas like Auckland. It delivers the mechanisms to deliver on the 39,000 houses provided for in the Auckland Housing Accord. This bill sits alongside substantive reforms like the changes to the Resource Management Act that have been announced, which will require councils to provide for 10 years of land supply; the changes we are making to development contributions, which will reduce section costs; the inquiry we have under way into the cost of building materials; the big investments that we as a Government are making into trade apprenticeships; the development of the online building consent system; the improvements we have announced to both the KiwiSaver home deposit scheme and the Welcome Home Loan scheme.

This Government is not about gimmicks or slogans. It is about a substantive package of reforms that will make homes more affordable for Kiwi families. I note that some parties in this Parliament are opposing this bill and denying that land supply and cost is any part of the housing affordability problem. Let us look at the facts.

Section prices have risen significantly more than the cost of actually building the home over the past decade. They were 40 percent of the cost of a house a decade ago, and they are now 60 percent. In Auckland section prices over the last decade have gone from $100,000 to an average of $325,000. We have seen raw undeveloped land that was worth $30,000 a hectare a decade and a half ago now being sold for $4 million a hectare in places like Flat Bush in Auckland. We know from research done by the Motu Economic and Public Policy Research Trust that raw land inside Auckland’s metropolitan limit has a value ten times that of raw land outside that artificial line—the metropolitan urban limit.

I also note that the number of sections that are available in Auckland plummeted from 4,100 a decade ago to just 1,400, and those 1,400 sections need to be seen in the context of Auckland needing 13,000 new houses a year to be able to keep up with population growth. Parties that are blocking the land supply measures in this bill cannot pretend to be serious about addressing housing affordability. They are part of the problem rather than being part of the solution. Members opposite state that they are going to build 100,000 houses for $300,000 each. My question, and my challenge, for members opposite is this. How are you going to build a house for $300,000 when you will not deal with the issue of the section, which averages $325,000 in Auckland? I think that members opposite are digging themselves a hole. And how are they going to build 100,000 houses when Auckland currently has only 1,400 sections and they are not prepared to free up land supply? Labour members’ opposition to this bill shows that they are more interested in playing politics and grandstanding than addressing the real issues that will help Kiwi families get an affordable home.

Let me remind the House how this bill will help housing affordability. We all know that Auckland’s metropolitan urban limit has to move, that it is a straitjacket on Auckland’s growth, and that it is allowing huge monopoly prices to be claimed by those who own the last few areas of undeveloped land. Without this bill that metropolitan urban limit will remain in place for another 3 years. With this bill we will be able to open up new areas of housing development by Christmas. This bill will enable brownfield development to be consented in 3 months, as compared with the current average of over 1 year. This bill will enable greenfield developments to be consented in 6 months as compared with the current average of 3 years.

I want to thank and commend the Social Services Committee and particularly the chair, Sam Lotu-Iiga, for the diligent and effective job that he and the team on the committee have done in refining this bill. They have made helpful changes to the bill including improvements to the definition of what is meant by “predominantly residential” and what is meant in terms of defining building height. The process and tests for scheduling a district or region as having housing affordability issues have been improved. The bill was overwhelmingly supported by the 64 submissions to the select committee, reflecting the very broad consensus—whether it be the Productivity Commission, whether it be the Reserve Bank, whether it be the IMF—that one of the most critical issues for New Zealand is increasing housing supply.

I do treat with a bit of a grain of salt some of the complaints from the Opposition members that the bill has been rushed. These are the people who have been giving speeches all year calling on the Government to take urgent action on housing and when we take the urgent action they object.

I want also to note the complaint that the bill does not specifically refer to the building of affordable houses. Well, that is being too cute. The bill specifically mentions the Auckland Housing Accord. The Auckland Housing Accord, very specifically, has provisions for ensuring that the houses that are built include a portion that are in the affordable range. If you put the accord in the bill and the accord makes provision for affordability, then they are simply playing games.

Labour, the Greens, and New Zealand First need to have a very hard look in the mirror over the issue of housing affordability. Between 1999 and 2008 the average price in New Zealand grew by 102 percent—102 percent, 8 percent per year. In the same period, average wages grew by just 40 percent. In fact, the last Labour Government has the worst record—the worst record—of any Government in the history of New Zealand in terms of deteriorating housing affordability. If we check the 5 years that we have been in Government, well, average house prices over the last 5 years have gone up by 13 percent, or an average of 3 percent per year, and—this is the key part—average incomes have gone up by 19 percent. So incomes over our period in Government have gone up faster than house prices, but we know that we have to do more to address the scale that opened up over the course of the last Government.

The problems of housing affordability actually go back many years and, in fact, several decades. This Government is taking those issues seriously. This bill is a crucial part—a crucial part—of the solution. I commend the bill to the House.

In a week when the National Government showered $40 million on that tiny group of New Zealanders who plan to invest in Meridian Energy, things continue to go downhill badly for young Kiwi first-home buyers. The price of housing has gone up even more. The Real Estate Institute of New Zealand reports that Auckland house prices went up 14 percent in the last 12 months. The announcement by the Reserve Bank of loan-to-value ratio limits on mortgage lending without any kind of exemption for first-home buyers is a kick in the guts for first-home buyers, because that Government on that side of the House mishandled its negotiations with the Reserve Bank and failed to agree to an exemption for first-home buyers. And now, the Housing Accords and Special Housing Areas Bill, in the House today for its second reading, the centrepiece of the Government’s housing policy, is a timid, flawed, badly thought through bill that will surely fail to meet its objectives.

We have in this National Government a Government that will not think twice about bailing out the insurance companies, about bailing out South Canterbury Finance. It is a Government that at the drop of a hat will rewrite this country’s laws at the behest of Warner Bros, of Skycity, of Anadarko. It is a Government that will shower taxpayer largesse on Rio Tinto, on investors in its botched privatisation of our country’s energy companies. It will do all that, but it will not pull its finger out to do something serious for first-home buyers. The public knows it, the media know it, the Government is floundering around and Nick Smith is the Minister who has been delegated to give the appearance of doing something about the country’s housing crisis. Well, people see through it. This bill—this timid, flawed bit of draft legislation—is all the Government has, and it simply will not cut the mustard.

What is our attitude on the Labour benches to this bill? Well, frankly, we are underwhelmed by it. There is nothing wrong in principle with the idea of special housing areas. There is nothing wrong with the idea of fast-tracked consenting. We have a housing affordability crisis. It requires bold, extraordinary measures but this falls a long way short of what is required. It would be nice if the Government approached the housing crisis with boldness and with a determination to tackle the fundamental, intractable, complex array of problems that underlie the housing affordability crisis, but this bill is all the Government has, and, frankly, it amounts to tinkering. That is all it is.

💬 Hon Dr Nick Smith: KiwiSaver. Welcome Home Loans.

KiwiSaver and Welcome Home Loans. I am really glad the Minister of Housing mentioned those—I am really glad he mentioned those. The New Zealand Herald devoted an entire editorial to describing that Minister’s announcement on KiwiSaver and Welcome Home Loans as insipid as it is ill-directed. That is what the country’s biggest newspaper had to say about Nick Smith’s latest housing policy announcement.

The weird irony of this whole bill is that it is the centrepiece of the Government’s response to the housing crisis, but the Government would not even have to be wasting the House’s time with this bill if it had not made some serious errors of judgment earlier.

The bill quite rightly sets out to bring in new greenfields land into Auckland. There is no problem with that. It attempts to fast track consenting to speed up the construction of houses. Fine. There is no problem with that. But if Nick Smith had not changed the law in 2009 to prevent new plans having legal weight from notification, the Government would never have had to do this. If the National Government had acceded to Auckland Council’s request to fast track the Auckland Unitary Plan and allow it to have legal weight upon notification, it would never have had to bring this bill to the House, which simply cherry-picks some aspects of the unitary plan. If it had allowed the unitary plan to be fast tracked, that would have been much better, because it has a raft of other housing affordability measures that would have been much more useful than this bill.

There is no doubt—and I want to put to rest any suggestion by the Minister of Housing in his last speech—that this party does not accept that land supply is a problem in Auckland. It is clearly not a problem in Tauranga and other regional centres that suffer extreme housing unaffordability. But for the sake of this argument let us be very clear and put it on the record that there is no doubt—the data makes it crystal clear—that constraints on land supply in Auckland and the failure to intensify is behind an increase in the price of land that has flowed on to the price of housing. But land supply is only one factor in the housing crisis, and the National Party has a fixation with it. Its idea is that if it can just bring in extra greenfields land, then that will solve the problem. That is the intellectual flaw underlying this bill. The price of housing is determined by an interaction between the supply and the demand for land.

This Government refuses—refuses—to consider a capital gains tax that would crack down on land speculation and residential property speculation and take the steam out of the speculative pressures that are driving up house prices in Auckland. The Government refuses to consider the idea of putting limits on offshore speculators that see overseas property speculators outbidding Kiwi first-home buyers at Auckland property auctions. It refuses to stand beside first-home buyers. The National Party backs property speculators every time.

The Government is doing nothing substantial about tackling the extreme low productivity that we have in the construction industry. The lack of scale and the lack of competition are entrenched problems that mean that the construction and building industry in this country has some of the lowest productivity in the OECD, and the Government only has weasel words to say about that. It has a dinosaur mentality reflected in this bill that says that the problems causing housing unaffordability are planning laws and regulations. Its only response is to say: “Let us deregulate. Let us get rid of planning rules.” But simply bringing in some extra greenfields land, in itself a perfectly sensible idea, will not, given the complex and intractable forces that are making Auckland housing prices so prohibitively expensive for Kiwi first-home buyers, result in any more affordable housing.

One submitter after another—including the Todd Property Group, the Property Council, the Salvation Army, Auckland Council, Tauranga City Council, and Waikato District Council—came to the Social Services Committee and said that this bill on its own will not result in the building of any more affordable housing. All of those submitters, highly credible and involved submitters, came to the select committee and said that this bill will not result in one more affordable house being built.

The premise of this bill is that if you open up more greenfields land and allow property developers to build some new houses, no matter what the cost of those houses, somehow that will reduce the cost of housing in Auckland. That is fairy-tale economics that Nick Smith is engaging in. The premise of this bill is that if you build some more houses, no matter how expensive they are, on the fringes of Auckland, then that will make houses in Auckland more affordable. Well, Minister, that is a fairy tale, and it is a lie that underlies this bill.

I want to comment briefly on the override clauses in this bill that are undemocratic. They are unnecessary. They make a mockery of the fact that this bill is called the Housing Accords and Special Housing Areas Bill. How can a council in good faith negotiate an accord with central government when it knows, sitting across the table from the Government, that this bill gives the Government the power to do whatever it wants no matter what the council says or believes? It is a mockery. It is undemocratic. It should not be in this bill.

Finally, I want to note that this bill weakens the protections of certain parts of our country, including the Waitakere Ranges, which currently are protected by the Waitakere Ranges Heritage Area Act, which gives that Act primacy over other local or district plans. This bill dilutes those protections requiring decision makers to have only regard to those objectives in the bill. That is a substantial dilution of the protection that those special areas currently have, and I think that is a real shame. This bill is insipid and ill-directed, just like the New Zealand Herald said about Nick Smith’s other housing policies. It is timid, poorly thought through, and it will not meet its objectives.

It is a pleasure to speak on the Housing Accords and Special Housing Areas Bill. May I first acknowledge the Minister of Housing, the Hon Dr Nick Smith, for his leadership, his ability, and his hard work in bringing this bill to the House. The reason why is that he understands the issues that relate to affordable housing in the country. He understands that there is a plan to address those housing issues in this country. He is taking action to address those issues that pertain to housing affordability in this country.

We all know that the Minister has set out the case for this bill, which is to enable the Government to work with councils to fast track consents for new housing developments across this country. When you talk to the developers out there, they say the one thing, the one barrier, that does not allow them to get on to building houses, especially in Auckland, is around the red tape and bureaucracy. This bill will address that by freeing up land and bringing down the bureaucracy that really does not enable our developers to build homes in this country.

The Opposition member Phil Twyford crowed that land supply is not the only answer. We on this side of the House agree with that. But this measure goes to attacking the single most important issue around affordable housing. The Productivity Commission, the IMF, the Reserve Bank, and Treasury have said that land supply is critical, so it saddens me today to listen to Labour members not allowing this bill and not voting for this bill when this bill critically increases land supply across this country. This bill is about the Government working with local councils.

There are other issues. They include material costs. They include the building of infrastructure. They include productivity in the construction sector, because we know productivity has actually declined over the last 20 years in that sector. I have already talked about red tape, compliance costs, and bureaucracy. So this bill will speed up resource consents.

It is evident, as the Minister has already said, that in Auckland we need 39,000 homes over the next 3 years. Clearly, 1,400 sections available for construction is not going to do it, so this bill aims to redress that issue. If Mr Twyford and his mates across the aisle say that this is not going to do that, then why has the de facto leader of the Labour Party in this country, Mayor Len Brown, brought into this piece of legislation being able to at least release land in the Auckland region? I challenge him to go back to his mates in the Labour Party and ask why Mayor Len Brown is supporting this.

The Social Services Committee made a number of changes. I want to thank the select committee members. I also want to thank the officials who worked under what were quite challenging circumstances to assist the committee to get this legislation to the House. We heard submissions both here and in Auckland. Submitters generally supported the Government’s intent. Unlike what Mr Twyford said in his speech, they actually support this bill to streamline consent processes and release land. One of the changes that the committee made was to clarify how and when the powers of the bill can be used, and to clarify how the provisions of the bill will work with other legislation, primarily the Resource Management Act. Submitters were also concerned that in determining which regions have housing supply and affordability issues, the critical criteria around affordability were around land supply.

Amendments enabled the Minister to consider other factors, including projected demand and other things such as shortage of supply or lack of affordability or infrastructure. I think that is really important, because we listened to the submitters and we inserted clauses in the bill to allow it to reflect the views of New Zealanders. We also looked at the definition of “predominantly residential” and what that means for qualifying developments, and clarified that it must therefore have the supply of residential dwellings as its primary purpose.

Mr Twyford also referred to the override provisions. To allay some of the fears of councils that made submissions, the bill now includes the option of inserting a dispute resolution process into a housing accord.

💬 Phil Twyford: It’s a sop.

Mr Twyford knows it. He knows that those types of clauses are effective. Where both parties to an accord agree to a dispute resolution process, then that will take priority. For clarification, we inserted that into the bill. We have also dealt with definitions around what is adjacent or adjourning. Land owners are to be notified of new developments. The committee was generally constructive in bringing about some of those changes.

I conclude by saying that high housing prices in Auckland raise debt and increase demands on the social assistance of both the Government and NGOs. Making housing more affordable is good for the economy, it is good for our communities, and it is good for those families who are seeking to get affordable housing in our communities. This bill, as I have said, is not the panacea. It is one of a number of initiatives that this Government is progressing to address the issue of—

💬 Phil Twyford: Like Welcome Home Loans and KiwiSaver.

—housing affordability, and we will continue. Mr Twyford might laugh at the fact that this is a serious issue in Parliament—it is a serious issue for my communities in Maungakiekie—but we will continue to act in the best interests of all New Zealanders who want to live their Kiwi dream, who want to live in their own home. We will continue to support and encourage those New Zealanders to aspire to their dreams and aspirations. That is why I commend this bill to the House.

You will notice that neither the chairperson of the Social Services Committee, Sam Lotu-Iiga, who has just resumed his seat, nor the Minister of Housing himself actually gave any sense of how many affordable homes would be built off the back of this bill, the Housing Accords and Special Housing Areas Bill. And why is that? Because they have absolutely no idea. One reason for that is that there is actually no requirement that any affordable homes be built as a consequence of this piece of legislation.

💬 Hon Dr Nick Smith: Read the bill.

I am happy to—later on in my speech, in fact, I will read the bill to the Minister, because he seems to have forgotten that he left those provisions out.

The chair of the select committee said that the case has been made for this bill. Look, there is no question that the case has been made for action—no question whatsoever. We have dipped, in Auckland alone, in homeownership to 60 percent, a new low for New Zealand—a record, if you will. There has been a 30 percent increase in house prices since that Government took office. Auckland right now—right now—needs 30,000 new homes in order to plug the housing supply issue.

That Government claims that it has a large suite of options available to try to improve the situation, and what are they? Well, it is going to let first-home buyers draw down a little more of KiwiSaver but, oh, by the way, the threshold for how much you need for a loan has gone up at the same time, so that pretty much nullifies any advantage from that. Welcome Home Loans—I would like to see some of the numbers around Welcome Home Loans and whether they are making a dent in this massive issue.

Then we have this bill. Let us absolutely acknowledge that supply is an issue. There is no doubt that in Auckland supply is in issue, but it does matter what kind of supply. The Minister of Housing will be able to tell me how many affordable homes have been built in, say, the last year and what percentage of homes being built is affordable. Well, if he does not give the answer, I can tell him: 5 percent. Five percent of new builds are affordable. So how will this bill change the proportion of houses that are being built that will be affordable? Well, it simply does not. It assumes that the only problem is land supply and planning regulations—and it is part of the issue. We have never questioned that that is part of the issue, nor have we ever suggested that it represents the biggest part of the problem.

Let us get down into the nitty-gritty of the content of the bill, because Nick Smith seems so convinced that this bill stipulates that everyone who builds in a special housing area must build an affordable house. First, though, before we have a special housing area, the Government must negotiate with a council a housing accord. It says in the bill, at clause 11(2): “A housing accord may” “(a) provide for the Minister and the territorial authority to work together across a range of housing issues, according to the matters that they may identify as relevant to improving housing supply and affordability”. It may—there is no requirement. There is absolutely no requirement, and we need to keep in mind that that is just for the accord. So that is just to establish the grounds on which a council and the Minister may say: “In future, we might create a special housing area.” But in reality it is functionally the way that the special housing area is set up that really matters, because that is the thing that determines specifically where houses are going to be built and where they will have the special consenting process apply.

So let us get down to the nitty-gritty of what is included in a special housing area and what a qualifying development is. The bill clearly sets out in clause 14 that a qualifying development is predominantly residential—yep—mostly has to be less than six storeys, contains no fewer than a prescribed number of dwellings to be built, again predominantly residential—blah, blah, blah. There is nothing about affordability.

A qualifying development does not have to be affordable. The Minister knows that this is in fact true because I asked him at the Social Services Committee. I asked him why he has not required that a qualifying residential development has to be an affordable development. His response was that he did not want to be too prescriptive because, of course, someone who goes and builds a new house that might be worth, say, $700,000 might be vacating a house that might be worth, say, $300,000, so why would we want to prescribe that the new building has to be affordable, because at least they might leave an affordable house behind them. Trickle-down housing—trickle-down housing is what the Minister has presented to us. It is an absolute farce for him to now claim that he required affordable housing, because he admitted at the select committee that he has not, and he even tried to give us a rationale for why he had done this.

Secondly, this bill assumes that the council is the barrier to this particular set of issues that this bill addresses. Even the chair of the select committee claimed that the council were all gung-ho and on board with this bill because of what it allows them to do. Let us be frank. Of course the mayor wants to try to speed up housing development. That is what he tried to do in his Auckland Unitary Plan. But when he presented to the Government his intention around housing development, he said: “In order for me to progress what I need to do now for housing, I need legal weight of my unitary plan from notification.” And what did that Government say? It said: “No way.” No way. But suddenly Nick Smith sat back and thought to himself: “It is election year, and I’ve got a housing issue. I will go back to the council and tell them that on my own terms I will let them do what they want to do anyway, but I will do it whilst being able to veto all of their rights if they do not do it in a way I want to.”

It is a complete fallacy for the chair of the select committee to claim that the council is all on board because this is a great new idea. It is the only way it could do what it wanted to do in its own unitary plan. If that Government was serious it would have listened to the council when it first said: “Give us legal weight.” That is what it initially asked for. This is just about trying to negotiate an election sweetener so that the Government could look good at the end of it, and it is absolutely appalling. [Interruption]

The ASSISTANT SPEAKER (Lindsay Tisch): The phrase “Tell the truth.” is out of order and unparliamentary. We will not have that for the rest of this debate.

Thank you, Mr Assistant Speaker. The fact is that in doing so, it had to build in override provisions that further erode the ability—and I say “further erode” because that seems to be a mantra of this particular Minister—of the council to govern in the best interests of its citizens. Of course the council wants housing. Of course it wants housing, and it has tried to achieve that on its own terms. But it is not just the council that the Government rides roughshod over; it is also riding roughshod over existing law, like the Waitakere Ranges Heritage Area Act.

Advocates from the Waitakere Ranges came and said that they fought long and hard to get special legislation to protect the area of the Waitakere Ranges and to make sure that their legislation takes primacy over any other legislation to protect those ranges. This bill dilutes that. Now the Waitakere Ranges Heritage Area Act will only have to be given due regard. The Government could have strengthened that and it did not.

We have always said that we need a complete solution, but we have never just said it; we have also demonstrated what we would do. Part of the problem at the moment is scale in the building industry. We know that it is scale, and the Minister of Housing knows we do not have enough housing developments of the scale we require. Labour has said that it will build 100,000 houses. We know that it is possible. We have already talked with the building industry in order to develop it.

A second issue is the lack of competition in building materials. You need only compare us with Australia to know that that is the case. Again, our KiwiBuild programme will address that. We know that tax treatment encourages speculative investment, and the capital gains tax that Labour will introduce will resolve that. We know that overseas buyers are reducing supply and leading to greater speculative activity. So we will address that. We know that quality matters, and that is why we have a Healthy Homes guarantee. We will work with the council—with the council—to deliver housing in the areas where we need it most. Labour does not believe in tinkering in this area. We believe in step change, and that is exactly what a Labour Government will do.

I am pleased to stand once again in opposition to the Housing Accords and Special Housing Areas Bill. The Green Party and the Mana party were, in fact, the only parties to vote against the bill at its first reading. We are proud to continue to oppose it, and are pleased to see that other parties are now joining us in that opposition.

There are two key concerns at the heart of our opposition to this bill. The first is that it will not do anything to increase the supply of affordable housing. That is a fairly fundamental point when the principal, stated purpose of the bill is to increase the supply of affordable housing. I will shortly go into some detail in my contribution about exactly why this bill does nothing to increase the supply of affordable housing.

The second key concern at the heart of our opposition to this bill is that we are profoundly uncomfortable with the provisions that override the autonomy of territorial authorities and that limit consultation and appeal rights under the Resource Management Act, although that is entirely consistent with this Government’s anti-democratic attitude on a number of fronts, particularly its dismissive attitude towards local government. Indeed, it is entirely consistent with its continued attack on environmental protections under the Resource Management Act, so we should not be surprised. But we have serious concerns about those provisions, and they are the other key reason why we are opposing this legislation. I will take each of those concerns in turn.

First of all, on the question of whether the bill will actually do anything to improve housing affordability, we have heard some contributions on this topic already from Phil Heatley and Jacinda Ardern. There is no doubt that we do need legislation to improve housing affordability.

💬 Hon Simon Bridges: She just called you Phil Heatley.

💬 Phil Twyford: You called me Heatley.

Phil Twyford—my apologies, Mr Twyford. Ha, ha! They both have a history of housing, but one perhaps understands the issues better than the other. There is no doubt that we need legislation to improve the affordability of housing, when the average house price in Auckland is over $700,000—that is the average house price. And when it takes 70 percent of the average income in Auckland to service the mortgage on the lowest-quartile house, we have a crisis, and we need legislation to do something about it.

It is not just in Auckland, because the national average house price is around $400,000, and that is unaffordable for many New Zealanders. There is also a particular crisis in Christchurch as a result of a lack of supply of housing because of the earthquake. It is a nationwide crisis, so we need to do something about it.

The Minister of Housing said in his speech that this bill was “a core part of the Government’s work to improve housing affordability.” Therefore, you would imagine that a core criterion of anything in the bill would perhaps be that it would actually do something to improve housing affordability, but unfortunately that is not the case. Actually, it is not even what the Minister wanted to do. I had a look through the Budget papers about the housing measures that were introduced in the Budget, including the measures in this bill. Actually, up until quite recently, before the Budget—quite soon before the Budget—the Minister wanted to establish an urban development agency, which perhaps would have been quite an interesting and novel way of looking at the issue of housing affordability. But, obviously, he could not get it across the line for some reason, so instead we got this bill patched together at the last minute. That was very apparent in the rushed way in which the bill was brought to the House and in the substantive amendments that were required at the Social Services Committee.

The essential problem with this bill is that it defines the problem as the supply of affordable housing, but it sets out a solution that is designed to address something different, and that is land supply. The two are not the same thing. In fact, they are very different. Numerous submitters pointed out to the select committee that with the possible exception of Auckland, where the housing accord has already been negotiated, the regions of New Zealand that display high rates of housing unaffordability do not, in fact, have a problem with land supply. So the measures in this bill to create special housing areas and to fast track consent processes will actually do nothing to address the issue of housing affordability in those other regions of New Zealand because the problem in those places is not land supply. So it is a land supply solution to a housing affordability problem, and it will not solve the problem.

That was a consistent message that was given to the select committee from council submitters as well as property developers and individual submitters. Peseta Sam Lotu-Iiga spoke before, and he said that land supply was the single biggest issue that we need to address when it comes to housing affordability. Well, in fact, the Property Council, which consists of property developers, came in front of the select committee and said that in its view it was, at most—at most—half the problem. So this bill is not well designed to tackle the problem that we actually have.

Secondly, it was widely acknowledged by submitters that even if the special housing areas created by this bill facilitated faster building and property development, the houses that were built as a result of that would be unlikely to be in the affordable category, because there is no requirement that a certain percentage of those houses are affordable. The Minister said: “Oh yes there is, because it’s in the Auckland Housing Accord.” Well, it is in the Auckland Housing Accord only because the Auckland Council demanded that it be there. The Government would not have put it there if it was up to the Government. It has not included a provision in this legislation for other housing accords that might be developed in other parts of the country. So it is thanks only to the temerity of the Auckland Council that we have that provision there.

Again, even the Property Council acknowledged to the select committee that it did not expect that the bill would actually result in the provision of any more affordable houses. As my colleague Jacinda Ardern has said, the Minister was asked about this when he appeared before the committee for the estimates hearing for Vote Housing. He basically acknowledged that that was the case. He said that it would be OK because wealthy people would move out of their smaller, more affordable houses and move into the larger new homes and leave those houses free for other people to move into—trickle-down housing, as Ms Ardern has said. That is a flawed assumption, and it is a very indirect way to go about trying to tackle the problem of the lack of supply of affordable housing for a bill that is supposed to address that problem directly.

What we should be debating in this House is much more direct legislation that tackles the problem of affordable housing head-on, and we in the Green Party have got some ideas about how we might do this. For example, we would tackle the housing affordability crisis with a direct programme of Government-built homes, coupled with a progressive ownership scheme—effectively, a rent-to-buy scheme, so that families can move into those homes and pay a basic weekly rent to cover the cost of the investment to the Government, and anything they pay in addition to that goes towards purchasing equity in that house. That is a way—a genuine way—to both increase the supply of affordable housing and help first-time buyers into homes without the need to qualify for a traditional bank mortgage and without the need for a deposit. That is a real solution to housing affordability, but it is not what we are debating in this bill.

We would also do this in combination with a suite of other measures that tackle housing affordability, such as introducing a comprehensive capital gains tax that would exempt the family home and restricting non-citizens and non - permanent residents from purchasing residential property. As well as that, we would address the problems of the rental market, which are significant, through having a warrant of fitness for rental properties and more secure tenure for renters. But, sadly, that is not the legislation we are debating today.

Finally, I want to address the issue of overriding local democracy, which is the second major concern we have with this bill. There was overwhelming concern from submitters, including, but not just from, territorial authorities—from a number of other organisational and individual submitters, as well—about the override provision that would allow the Government to establish special housing areas, to appoint commissioners, and to grant consents in those special housing areas without the cooperation of the relevant territorial authority.

We see this as an unacceptable curtailment of local democracy. It is entirely consistent with the dismissive attitude that this Government takes towards local democracy. It is quite literally dismissive in some cases, such as the Environment Canterbury councillors, who were actually dismissed by the Government. It will be impossible for councils to negotiate housing accords in good faith with the Government when they know that if they disagree with anything that the Government puts on the table or if they push back against any of the terms that the Government is demanding, then central government can just go over their heads and establish this special housing area in the way that it wants to do it anyway. It puts councils at an incredible disadvantage in those negotiations, and it means that good-faith negotiations essentially will not exist.

The disputes resolution process in clause 11(2)(ca) that has been included by the Social Services Committee, which was referred to by Peseta Sam Lotu-Iiga earlier, is actually optional. It has absolutely no teeth, and so it will do nothing to redress this incredible power imbalance. As well as that, as I mentioned earlier in relation to local democracy, all of the protections under the Resource Management Act that we would expect to see applying in this situation will not apply under this legislation, and that is a major curtailment of local democracy, as well. So for those reasons, we are very proud to stand in opposition to this bill.

It is a pleasure to rise in support of and talk about the Housing Accords and Special Housing Areas Bill in its second reading. New Zealand is actually facing a housing challenge, and I think many members have traversed that point. Not only is our housing market heated but we are seeing a shortage in the number of homes available to Kiwis. With housing demands projected to rise, this bill will be a core part of our efforts to provide much-needed homes in Auckland, where housing shortages remain serious. It was interesting to note the Labour Opposition and the Green member talking about the fact that we do have a shortage in housing supply. It is interesting to note that the only answer that Labour has actually provided is KiwiBuild.

Let us talk about KiwiBuild, which Labour provides as an answer. It actually says that it can provide 100,000 homes for $300,000 each, and we all know that an average section in Auckland costs about $325,000 to $350,000. So Labour is probably talking about only the homes, without the land. If that is the case, I say to you that it is paying far too much for a house, at $300,000. The Hon Maurice Williamson has proven that in his Starter Home Design Competition, in which I think they built a house for $165,000. We know we can actually build homes cheaper; it is just that the land itself costs so much more, and there is no way that Labour can possibly say it will deliver 100,000 homes for $300,000 each. That is delusional.

We know that for housing developments to happen, we need to focus on five key areas: material cost, infrastructure, productivity in the construction sector, compliance costs, and—most important—land supply, particularly in Auckland, as I have just mentioned. We cannot actually meet the needs of real Kiwis looking for real homes—realistic home prices—without addressing our land supply issue, and that is exactly what this bill does. It responds to the supply issue at hand and gives local councils the tools they need to do it while longer-term reforms are being put in place. While drafting this bill we had the opportunity to hear more than 60 submissions and understand the concerns raised by many members of the community. Some of the issues raised were just how pressing the need for this bill was, whether our policy was justified, and what the unintended consequences of this bill might be, and we have made great efforts to address these diverse viewpoints. We also appreciate the large number of submissions that have helped shape the bill as it is now.

This is this Government’s answer to the shortage of housing that is available in Auckland. I cannot actually say the same for the Opposition, which has not come up with a single idea that is valid. This is a great bill. I commend it to the House.

The National Government’s housing policy and the Housing Accords and Special Housing Areas Bill are a totally inadequate response to the housing crisis in New Zealand. There are severe housing shortages, especially in Christchurch and Auckland, and first-home buyers cannot afford to buy a house. In a home-owning democracy, which New Zealand has always been, this is a national disgrace. The Government waited for several years while a housing crisis developed, and now it blames local government and pretends that with the introduction of housing accords and special housing areas it can solve the problem. In fact, the problem is much bigger than that.

The Government’s policies overall are to blame. Over the last 5 years the Government has allowed a housing price bubble to emerge in Auckland by its inept immigration and housing policies. Only a comprehensive housing strategy designed to address both demand and supply factors, as advocated by New Zealand First, will make housing affordable for home buyers. New Zealand First supports a broadly based housing policy that will again make homeownership a reality, rather than a dream, for working New Zealanders. Although New Zealand First has no problem with the concept of housing accords and special housing areas, they will not be enough. In Auckland there is already a housing deficit of well over 30,000 houses, and it is growing. The Government’s plans are unlikely to result in more than 10,000 to 12,000 houses per year, but we do not know how many, because the Government will not say. It will not choose a figure, and, in fact, it does not know. Anyway, it will never catch up on that basis.

The Government’s plan is obviously a failure. To make matters worse, the hopes of first-home seekers have now been well and truly killed off by the Reserve Bank’s limiting of the quantum of high loan-to-value ratio mortgages that the trading banks can make by introducing an 80 percent loan limit as a ratio of the total property value. The Reserve Bank wants to restrict high loan-to-value ratio mortgages to reduce demand. This is a flawed policy that will do great damage to the proper expectations of younger people to access loans to buy a family home, and this Government has done next to nothing about it. In any event, the Reserve Bank strategy is a second-best strategy. Normally, it would raise interest rates, and it may do that as well, despite raising an already overvalued dollar and inflicting all sorts of damage on the New Zealand economy. In addition, the Reserve Bank’s housing policy is Auckland-centric. In Christchurch and elsewhere in New Zealand people face different housing issues, and the results of Government policy and Reserve Bank policy are therefore likely to be patchy and inappropriate for much of the country.

Another problem not being addressed by the Government is that it is doing nothing to deter overseas property investors and speculators who have been buying up Auckland property and who have ample equity. They, of course, are not hurt by the Reserve Bank’s loan-to-value ratio restrictions. Some can get cheap overseas loans and outbid Kiwis who are trying to buy a family home. The Government does nothing about the migrant flows, which have been concentrated in Auckland. It does nothing to tighten immigration policy in areas such as parental reunion, which have added significantly to housing demand in Auckland. Lastly, and most important, the impact of Government and Reserve Bank policies will fall most directly on first-home buyers. It is not the first-home buyers who are driving the bubble, especially in Auckland, but they will be the sector most heavily penalised by the limits on high loan-to-value ratio lending. Perversely, that policy will encourage them to seek the extra funds they now need from potentially risky sources, such as finance companies and loan sharks. This will add even more risk to the system. The Government’s response has been pathetic. It is allowing easier access to KiwiSaver savings for home purchases. There is nothing wrong with that in itself, but it is not nearly enough. Most first-home seekers will still not be able to raise a 20 percent deposit, with or without access to KiwiSaver—and, by the way, that should be preserved for retirement purposes.

Therefore, New Zealand First’s policy to assist first-home seekers is this: firstly, to establish a new State agency to acquire land and create a land bank in areas where demand clearly exceeds supply. These are currently Christchurch and Auckland. The agency would sell residential sections of modest size on the basis of long-term agreements for sale and purchase up to 25 years to first-home buyers. This reduces the upfront capital cost of a new home by about one-third. Interest rates would be highly concessionary at 2 percent for an initial period of at least 3 years. Purchasers would build their own homes using normal bank financing and would have title to the section transferred to them, with the amount owing to the agency secured by way of a second-ranking statutory land charge. Under that policy the 20 percent deposit problem simply does not arise.

The Government’s special housing areas are not enough, and its policy, along with the Reserve Bank’s approach, will kill off the hope of a home for most of New Zealand’s first-home seekers. New Zealand can do a lot better with New Zealand First’s policy on housing. It is very disappointing to see that this Government is willing to put up with the fact that first-home buyers will not be able to buy a home in this country for some considerable time. It is doing considerable economic and social damage by not doing enough on this problem. Everybody in this country knows it is not doing enough, and yet Government members sit there today telling us that this bill and their policies will be sufficient to solve the problem. Everybody knows they will not, so let us get real. Let us do something genuine about it, such as some of the policies that Opposition parties have been advocating. The Government would do very well to listen to some of those. For those reasons New Zealand First will certainly oppose this bill.

I happily rise in support of this Housing Accords and Special Housing Areas Bill. What it does is it fulfils the suite of initiatives that this Government has worked on across housing. What we have done is we have made it very clear to the electorate that there is no silver bullet, and that is certainly the reflection back to us from builders, developers, those buying a home, and those in the banking sector. The New Zealand First Party policy—its whole immigration policy, I guess—of attacking Asians and saying: “No more Asians in the country.” is not the silver bullet. The banks, builders, and developers are saying that the Greens’ policy is just to write a cheque, with the country going into more debt. The Greens’ policy of borrowing money overseas to build houses for people, I guess, and handing it over to them, with minimal contribution from those people, is not the way to go. And, of course, the Labour Party policy, which is confusing and difficult to follow, is also not the way to go.

Bankers essentially, builders, developers, and first-home buyers are saying to us that there is no silver bullet. There is a suite of measures that you have to take, and this bill really is the last of those that we are putting in place. We have been interested in the demand side. National has looked very hard at the Welcome Home Loan scheme, where we provide insurance for those who are borrowing—borrowers’ insurance—so that they can borrow, and we have looked at KiwiSaver deposits, as well. Colleagues across the House and all parties cannot deny the statistics that interest rates under this current Government for the last 4 years have sat at around 5 and 6 percent, compared with 5 or 10 years ago under the previous Government—the spend-and-tax Labour Government—when interest rates were sitting at 9, 10, or 11 percent consistently.

I do not think New Zealanders have forgotten that interest rates were around 9, 10, or 11 percent under the previous Government. They appreciate the fact that good economic management, under our team, has seen interest rates sit at around 5 or 6 percent. Those percentage differences are 4 or 5 percent between a Labour Government and a National Government. On a $300,000 mortgage, 4 or 5 percent, well, 5 percent is $15,000 in interest a year. That is an awful lot of money. One percent on a $100,000 mortgage is $1,000, and 5 percent on a $300,000 mortgage is $15,000 interest a year. Under Labour policy that is an awful lot of money each year to come up with. That is something we have focused on—interest rates.

Also, of course, we are getting Housing New Zealand to better use those quarter-acre and half-acre sections. A lot of subdividing is going on, on public land and Housing New Zealand land. We are subdividing and using the proceeds to build new State houses, and using the land that is subdivided to also build houses on for families to buy privately. That is an excellent idea—the use of Crown-owned, State-owned, or Housing New Zealand - owned land. We see it at Tāmaki, and obviously we see it at Hobsonville. There is also the Social Housing Unit, the investment that we are putting into the social housing sector, where we are going for a dollar for dollar, and sometimes a $2 for $1, investment in housing as well.

But this bill specifically looks at the last piece of that puzzle. It is not just interest rates, it is not just the Welcome Home Loan scheme, it is not just subdividing Crown-owned land, and it is not just those other actions that we are taking. We are also looking at the land supply across New Zealand. What this legislation will do is it will mean that more land is freed up for subdividing, particularly in high-demand areas like Auckland. There is a concern from those on the far left that we are carving up New Zealand’s beautiful countryside, but it is a great reminder to people, when you consider that New Zealand’s residential housing sits on around 1 percent of New Zealand’s land. So about 1 percent of New Zealand’s land—give or take a bit; it is not that accurate—is actually under residential housing. Even if you doubled it, it would be only 2 percent. So the absurdity—the absurdity—of claiming that we are taking over New Zealand’s green space or keen agricultural land is brought to the point when you consider only 1 percent of New Zealand’s land is actually under residential housing.

This is good legislation. I acknowledge the Auckland Council for how it has worked hard to make it even better in the select committee. I commend the bill to the House, as part of a suite of measures that we are taking right across the board. I commend it to the House.

It was interesting to hear from the previous Minister of Housing, Phil Heatley, about his ideas. They were so successful that he had to give up that portfolio to somebody else. Clearly, although he argues that this is a comprehensive programme that the National Government has, it actually is not. What members on this side have been arguing quite consistently is that this is a piecemeal approach. We all agree that there is a problem. We would have thought we would agree on how to fix that problem. In fact, that is not so difficult. The general approach to fixing a problem is to identify all of its pieces, address all of them, and integrate the solution. Any idea that the Government has come up with in any area that is like that, members on this side have supported. This is a bit like the welfare reforms—bits and pieces, here and there. We have not been able to reach agreement on this particular prescription.

This bill, the Housing Accords and Special Housing Areas Bill, primarily is about addressing the housing crisis in Auckland. Because there is a sunset clause, it expires after 5 years, and it is a response to a particular problem. But it fails—it fails on several dimensions to address those problems comprehensively. I want to talk about these. Others have talked about these as well. The stories of the holes in this particular policy prescription are legendary. We can all tell that time and time again. There is actually daylight between the problem of housing, as we all understand it, and the impact of the policy prescription that this bill contains. There is daylight. Just to name one or two problems: it does nothing about affordable housing and it does nothing about social housing. I will come back to that as I go on.

What drives this policy is this Government’s ideological understanding. What it has done is it has converted that ideological understanding into a theoretical position. The theoretical position that it has come up with is that this problem has all to do with land availability. This has now filtered down to that one prescription. Somehow it is the hallmark of those who do not have the capacity to think about complex problems in their entirety in addressing solutions, so they simplify them along single dimensions. There is this kind of philosophy of National, and the theoretical underpinnings that this reflects, and this has all come together. That policy is laissez-faire. In the end, the policy prescription that emerges from that kind of thinking is laissez-faire—do the least possible and then expect the market to resolve the rest of it. That actually creates a huge hole—

💬 Simon O’Connor: Actually laissez-faire’s a prescription; it’s not a philosophy.

—in the distance between, I say to the member from Tāmaki, the solution and the problem. This might be a solution to the problem, but it is not a comprehensive solution to housing our people.

I think the story is told much more graphically when we take what the Minister of Housing said. The lack of any requirement for affordable housing is because if we build a $700,000 home, then those with a $300,000 home will move to the $700,000 home, and this creates affordable housing. There is no concession to communities at all. There is no concession at all to where people have lived for a long time. There is no concession at all to where people have made their homes. Somehow they will move out into the distant suburbs. They will move into some other suburbs and create housing.

There is this notion, as Jacinda Ardern said, where trickle-down housing is also a hallmark of the right. It is a hallmark of laissez-faire philosophy. It is a hallmark of conservative ideology. The market is the mechanism, Mr O’Connor, which your party has come up with to say it will solve everything. Where has it done that? Give me an example where the market has solved these kinds of problems. There are none. There are not any. There are not any. They have all had to be cultivated, developed, in a whole series of solutions. So, Mr O’Connor, there are not any. I think that to stand up and defend half-baked policy must really hurt members on that side. The Minister has adopted a theory that does not work. The theory is to increase land supply and everything else will fall into place. Well, it will not. And, of course, I do not think they care. I do not think that members opposite actually care, because so long as somebody will build those very expensive homes—[Interruption]—for that member’s mates to occupy, then it does not matter.

Well, this side cares. This side cares about those who are on modest incomes—middle-income and low-income New Zealanders—who have saved enough money and want to get into a house. Of course, the Government says: “Look, we have brought interest rates down.” That is rubbish. That side has not introduced one policy that has brought interest rates down. That is interesting. That side says that when things go wrong, it is the global economic crisis. When things work right, it is the Government’s own doing. Well, that is disingenuous—absolutely disingenuous—and that does not work. We know very well that there is a major problem of housing affordability, and National Government members do not have any interest in addressing that, because there is nothing here to address it.

We all remember when that Government first came into office in 2008. Moana Mackay will remember this. Hobsonville was being developed right in the middle of the Prime Minister’s own electorate. What a hullabaloo there was there. There will be no show home—[Interruption] He was—that is right. There will be no social housing over there at all, because the land there was so expensive that the poor could not live there. The modest-income earners could not live there. Nothing has been done. What has happened to that? Now, somehow, it will happen. Well, that was the honest position of National. It does not want low and middle-income people in those flash suburbs. That is what it is.

💬 Hon Simon Bridges: Oh, we’re the “Workers’ Party”.

The member well knows it. The member, Mr Simon Bridges, may now deny it, but that is so. That is absolutely so, Mr Bridges. That is exactly what happened. Was he a member, then, that member? Was he a member? I am not sure. But that is what happened. No one believes this Minister. No one believes that the solution that National has come up with here will make the difference.

The issue of rocketing costs is another aspect of the current housing crisis. That is not being addressed here, as well. In fact, if we look at the whole range of factors that impact on housing, then it would be great if the Government addresses it. Poor productivity in the area is not being addressed. We have not developed the workforce here. We have not ensured that there are opportunities available. The ability to do large-scale building in the industry has not happened, and that can be done. We need bold solutions, and there is nothing bold in this. Cost of materials is one—why is it that the same materials we use here are cheap in Australia? When will this Government address that particular problem? The cost of that material is so high. The developers need more access to capital. That has not been addressed—a tax treatment.

When we look at the range of matters that need to be addressed, then that side does not have the answers. But probably the real cynical thing, the real bullying tactic here, is about the override provision. The override provision is a bullying tactic. What kind of belief does the Government have in its own prescription, when it has to put in a clause that says if you do not do it this way, then we will have an override provision. There is no need for an override provision. Every person who submitted to the Social Services Committee, who knows about it, agreed that this was highly objectionable. The lack of confidence in its own policy—it is one thing to bully those who want to build, so here they have a set of provisions that says it will override. Well, it is just not going to work.

It will again be left to Labour to be hands-on in the housing area and to address these problems comprehensively. The Government talks about $300,000 per section, and how you can build more? I do not think the members opposite have heard about building several units on the same piece of land, so that the unit cost of the land actually comes down. I do not think Melissa Lee has heard about it. I do not think Simon O’Connor has heard about it. Simon Bridges certainly has not heard about it. This can be done. This can be done and it will be done. So this is a bad bill and we will not be supporting it. Thank you.

It is a sad day when that member, Rajen Prasad, writes his own speech notes. I think he should stick to the notes given to him by his communications team. The only cynicism, really, is from that honourable member there—he is an honourable member—who was, along with me, on the Social Services Committee when we were hearing submissions on the Housing Accords and Special Housing Areas Bill. We know that this bill is a short-term process in order to facilitate what we believe is an important part of the process to addressing these issues. This bill provides a short-term legislative tool that seeks to improve housing affordability by facilitating an increase in land and housing supply. There were 64 written submissions, and there were 40 submissions that we heard as a select committee, and we did hear the concerns. We heard from Local Government New Zealand, and the Mayor of Tauranga, Lawrence Yule, came and spoke on behalf of all the territorial authorities.

💬 Hon Simon Bridges: He’s the mayor of Hawke’s Bay, buddy.

The Mayor of Hawke’s Bay; sorry, I apologise.

💬 Hon Member: Hastings.

Hastings. Oh, well, there you go. He is moving all the time. He is a very fluid mayor. Can I just read from the submissions because we want to deal with the facts and not just with assumptions.

💬 Dr Rajen Prasad: The member doesn’t write his own speeches so the member may as well read it.

This is important, and I would like that member to listen to this. Here are the key points that were brought out by Lawrence Yule when he spoke to the Social Services Committee. This is what said: “The local government sector fully understands the rationale behind the Housing Accords and Special Housing Areas Bill. We support many aspects of the Bill, but there are key matters we diverge on—the principal matter we do not support is the ‘override’ provision proposed.” That is fair. It is fair to understand that. But let me just say that we heard that time and time again. The Opposition has continued to say that there was total opposition to the bill. Many said that they understand and support the intent of the bill and they understand the rationale of the bill, but the devil is obviously in the detail.

I want to go straight to the point that was raised by Lawrence Yule, particularly in dealing with the override principle, because it did cause some concern. We even heard from the Auckland Council, which shared this concern. As a select committee, we heard those concerns. However, we also know that it is important to have a process that allows us the opportunity to act—we need to be able to act—when there is no ability to have an accord and when there is no agreement. That is what our communities are asking for—they are asking for action. So these are some of the amendments that the select committee has made. Some submitters were concerned about central government being able to intervene to speed up development if agreement cannot be reached with local councils. The Government wants to partner with councils, but if agreements cannot be reached, there must be a mechanism to streamline consenting and plan changes when these are also needed. The bill now includes the option of inserting a dispute resolution process into the Auckland Housing Accord. This option actually came from a number of the submitters. They said they did not like it but they knew it was there, and that it was a principle of last resort. However, if the provision is in there, they asked for a clause to allow them to go to some form of arbitration or dispute resolution so they can ensure they come to some agreement.

There are a number of things that are also very important. The Productivity Commission had identified that land supply is definitely one of the key issues, and the honourable member, Mr Prasad, said of Auckland that many of us do not know what the issues involved with the purchasing and procurement of homes. Many of our families are in the very same situation. Housing can be made affordable by focusing on five key areas. We have heard the Opposition say that this bill does not allow us to actually realise affordability, because it is not factored in there. But those who do understand construction and do understand consenting know that there is a multiplicity of different things you need to tackle at the same time, and this has been evidenced by the Productivity Commission.

There are five key areas. Land supply is one. The cost of materials is another. Also, there is infrastructure, productivity in the construction sector, and compliance costs. At the moment, for instance, my taxi driver—his name is Rick—is purchasing a house over in Melbourne. He told me that to build there it is costing him around about $800 per square metre. Back here in New Zealand, in Wellington, it would cost him about $1,700 to $1,800 per square metre. That is the average cost. We know it is an issue. We know it is important. But there are five key areas that we are focusing on, and that is what this bill is doing.

Lastly, I have been concerned about New Zealand First’s concern about what people are calling the “Chan ban”—this hatred against Asian people who have come here, have become citizens, and have wanted to be productive and contributing citizens to our society. Some have begun to say that this is about the pressure those people have put on the pricing and the purchasing of homes. But can I say that the BNZ survey shows that around 3 to 4 percent of house sales are to foreign buyers—3 to 4 percent. Barfoot and Thompson has also put the number of foreign buyers at around 4 percent. Can I also say that the honourable member Denis O’Rourke talked about the fact that we should ban these foreign buyers. Well, the majority of those who purchase and are foreign are actually Australians, so where does it end?

This is an important bill. It is part of a suite of other things that we are doing. There is another piece of legislation coming through. This is the Housing Accords and Special Housing Areas Bill. We are tackling five key areas. We believe that this bill will allow us to see not only land supply being more available but also the sales and cost of homes coming down. This is a good bill. I commend this bill to the House.

Moana Mackey—5 minutes.

Labour will not be supporting this Housing Accords and Special Housing Areas Bill. It is not because it thinks that those accords or those special areas or fast tracking of consents are necessarily a bad thing. It is simply because this bill will do nothing to increase the supply of affordable housing.

We seem to have a Government that says it wants to do things but then refuses to put those things in legislation. That has been a bit of a theme this week: put it in the bill. If what you want is affordable housing, put it in the bill. The fact that the Government has refused to actually enshrine in legislation that this bill is about affordable housing leads us to believe that that is not really what it is about at all. The fact is that if what this bill will deliver are more houses, it will deliver more unaffordable houses. How is that a solution to affordable housing?

From our perspective, in the Labour Party we think that if you are not prepared to actually make it clear in the legislation that this is not just about any old home in these parts of the country that are unaffordable but about affordable homes, then you are probably not that serious about it. That probably indicates that you are not that serious about it. This Government is not serious about affordable housing at all.

If you look at the Government’s track record, you see that it has not been serious about the issue of affordable housing. The great initiatives of the National Party are two things. One is interest rates. The global financial crisis delivered lower interest rates, but National has tried to take credit for that, saying it has somehow been by its good management and not by a complete collapse of the global economy that interest rates have come down. But interest rates have come down because we have been in a recession, and I say to the Hon Phil Heatley that a recession is not a housing policy. It is very worrying to hear from the National Party members that they seem to think that a recession is an affordable housing policy. Well, even with the recession and the global financial crisis, we have not seen the affordable housing crisis go away.

The second big scheme the Government had was the Gateway Housing Assistance scheme. This was going to be the big game changer that was going to deliver affordable houses to first home owners who needed them in those markets where housing was particularly unaffordable—the main one being Auckland. Hobsonville, a greenfield development, was going to be the first place where we would see all these hundreds and hundreds of affordable homes. And how many did we have? I think we had seven. I think that policy delivered seven Gateway Housing Assistance homes, and none of them were affordable. And this is the wonderful thing: the only people who could qualify for National’s Gateway Housing Assistance scheme were people who from day one could afford a home at market rates. The banks would lend to people on the Gateway Housing Assistance scheme only if they could see that down the track they could pick up the full cost of the land and the house.

So in National’s first term what it did to help first home owners into their homes was to have tax cuts for the wealthy, which none of these first home owners got, and an affordable housing scheme for the wealthy. I actually know one of the young women who got one of those Gateway Housing Assistance homes, and she got it only because her parents put up their house as collateral. Well, they could have done that in the private market as well. So that was an epic fail on both fronts by the National Government in its first term.

What we have seen is Labour introduce its KiwiBuild policy of 100,000 affordable homes for first home owners. That is where Labour has targeted the policy, and it has scared the bejesus out of the National Party. Let us be honest: we are here passing this insipid piece of legislation because now National members know that they have to show that they are taking the affordable housing crisis seriously. Well, this bill is not going to deliver affordable homes. It is not going to do anything to deal with the affordable housing crisis.

There is a horrible moment coming for the National Party when it is going to have to accept that the invisible hand of the market is not going to deliver affordable first homes for first home owners. National is sitting back, just hoping and wishing that at some point the omnipresent invisible hand of the market will finally show itself and deliver a housing market that means that first home owners can get into those homes. Well, it is not going to happen.

That is not going to happen without a Government that takes this issue seriously enough to actually intervene and assist and make sure that the levers are there for affordable first homes. It is not going to happen. The market is not going to deliver. So, as I said, there are things in this bill we support, but it does not go even vaguely near the level of action that we need to see from this Government if affordable first home ownership is going to become a reality in this country.

Tēnā koe, Mr Deputy Speaker. Well, the Green Party continues to oppose the Housing Accords and Special Housing Areas Bill, because, as Holly Walker explained, we do not believe it will increase the supply of affordable houses, and also because it represents another erosion of local government and local democracy by this National Government—[Interruption]—and I say to Mr Ngaro that democracy is a fairly important detail. The bill does this because it is overriding the decision-making powers of city and district councils in terms of urban planning, and it is curtailing public participation rights under the Resource Management Act. It is certainly not about a partnership between central and local government. It is much more about a centralisation of power—more power to the Minister.

This bill is going to have quite bad implications for urban planning, because it cuts across the work that councils have done to identify areas for growth; to set urban limits in place; to prohibit residential development from going beyond those limits, to make sure that our cities and towns promote compact well-planned residential development; and to make sure that residential development is integrated with existing infrastructure like public transport services, major roads, water supply, and sewerage.

But this Government hates planning. It hates to look beyond the short term to consider the needs of future generations for well-planned cities and towns. It is all about letting the market prevail with as light a regulatory hand as possible. This bill is a charter for property developers and for urban sprawl, because it is giving the Minister and property developers a free hand to challenge and cut across urban limits and well-planned development. It does this through the strong-arm provisions, which allow the Minister to designate these special housing areas where we will get much more permissive resource consent processes and a much greater fast tracking of those processes whether the council agrees or not.

There is no requirement for the Minister to consult the affected local authorities, and if you do not have an accord negotiated with the relevant council you get the Chief Executive of the Ministry of Business, Innovation and Employment becoming the decision maker on resource consents for residential development. The council is effectively strong-armed into agreeing to a so-called accord. As Local Government New Zealand noted in its submission, where you get the Minister swooping in and where you get these ad hoc decisions about where residential development is to occur and is not in line with existing council plans or existing council priorities for infrastructure development, you are going to get very fragmented decisions.

It is really ironic that the Minister in charge of this bill, Nick Smith, was repeatedly beating up on local councils for their rates increases when he was the Minister of Local Government, yet is now promoting legislation that encourages poorly planned residential development that does not integrate with infrastructure and will potentially increase the costs on councils if they have to provide, for example, new waste-water infrastructure or new water-supply infrastructure, which they were not planning to provide in response to the new development in the special housing areas. That potentially increases rating costs and potentially, as Local Government New Zealand noted, affects the creditworthiness of councils.

Also, the bill is anti-democratic because it completely overrides, through these special housing areas, the investment that councils and their communities have put into developing their plans. It is those plans that reflect community aspirations, yet the plans are given very little weight in the decision-making process—the fast-track decision-making process—for the new residential development that the bill allows. Again, one hand of government does not seem to know what the other is doing, because councils will limit areas where residential development can occur not just to set urban limits and encourage compact cities but also to ensure that development does not happen in areas at risk of natural hazards, like areas that are flood prone.

So we have got the Minister encouraging development that does not take account of plan provisions, yet his colleague the Minister for the Environment is proposing to strengthen the natural hazard provisions in the Resource Management Act. As submitters on the bill noted, the rush to reform means that we potentially get—

💬 Mr DEPUTY SPEAKER: The member’s time has expired.

I am please to take—there I go, my microphone is bursting into life—the last call on this Housing Accords and Special Housing Areas Bill, a very pragmatic bill. Actually, it is a bill that is about doing. One thing that we know about and that everyone across this House accepts is the challenges that Auckland, in particular, and cities similar to it are confronted with in terms of the housing supply and demand conundrum. We can sit around and stare at the fluff in our navel as much as we like, but ultimately someone has to get on and do something. So I find it ironic but unsurprising to see the Opposition opposing yet again another initiative that is ultimately about trying to create a circuit-breaker in something—

💬 Le’aufa’amulia Asenati Lole-Taylor: A window-dressing initiative.

Oh, I hear some murmurings from across the floor—some subtle murmurings! Talk up—I cannot quite hear the member. So what we are being criticised for yet again, and what we are failing to have support from Opposition parties on, is actually meeting the challenges that councils and communities have been stumbling over. I find it very ironic that the member Eugenie Sage is saying that this could bring unexpected costs on councils, which might have to put in infrastructure and drains and such like. Is that not what we actually need in subdivisions to get houses built? It is only just slightly less ironic than what we hear from the Labour Party members, who talk about the fact that they are going to get out there and build 100,000 homes in I do not know how long it was—10 years was it, or something like that—at a cost of $300,000 per home. They are obviously using Mr Parker’s—I was going to say David Clark, but Mr Parker is the man I am talking about—calculator, because it does introduce a factor of seven into his calculations. But what they have failed to do—and I guess this is why they have had a wee leadership hiccup today—is realise that, actually, houses do not levitate above the ground. There is actually something that generally you have to anchor them down on to. That is earth—terra firma, generally. In Auckland you may be not surprised—sorry, not you, Mr Deputy Speaker—but members may not be surprised to know that the average section price is in the vicinity of $325,000. So how does one build a house for $300,000 on a section that costs $325,000?

💬 Hon Simon Bridges: David Cunliffe couldn’t.

Well, I am sure the member David Cunliffe will be a person getting out his calculator and checking its accuracy over the next wee while, because he will want to make sure that his numbers add up exactly correctly.

💬 Hon Simon Bridges: What’s a house cost in Herne Bay?

Goodness knows—Mr Cunliffe will be able to tell us. But I will not dilly-dally on too much further.

I want to commend the Hon Nick Smith for what he has done with this bill. I want to commend the Social Services Committee and the chairmanship of Sam Lotu-Iiga and my colleagues. This is another good example of the National Government getting on and doing what people need.