Housing Legislation Amendment Bill

It is great to be taking part in this Committee stage debate on the Housing Legislation Amendment Bill. I want to address one of the major concerns that we have on this side of the House with not only this bill but the whole special housing areas policy, and that is the very weak affordability requirements that are at the heart of this policy.

I want to address my comments to a couple of Supplementary Order Papers that are on the Table. The first is in the name of Metiria Turei and the second is in my name, and both of them make a proposal about how affordability requirements could be better incorporated into the housing accords and special housing areas legislation. But I think it is important to understand the context of this, and the context is a debate that we have been having in this Parliament for some time, really, about the best way to deliver affordability.

The Minister’s view, if I may characterise it—and I invite him to take a call on this and put me straight, if he wants to—is that the only real way to deliver sustained improvements in affordability is by increasing the supply of dwellings in the market, and in an innocent, fifth-form economics textbook kind of way, he rejects the idea that actually building homes that are affordable might help. He considers that to be, I think, an unnecessary distraction and, really, the focus should be on increasing supply. There is an irony that members will have noticed, which is that a Minister who places such great store on increasing the supply of houses has so signally failed to do that during his time as housing Minister, but what we have seen as the accords and special housing areas have been rolled out is that with the first one, the accord with Auckland Council, there was quite a lot of debate about whether there should be, in fact, the ability of the council to require that special housing areas should have to deliver a percentage of affordable housing.

There was some pressure on the Minister, I think, from within the Parliament and some pressure from Auckland Council, and at the last minute he conceded—I think it was possibly in the Committee stage or at the select committee—that, yes, the Auckland Council, under that accord, would have the ability to require that 10 percent of homes in special housing areas be affordable. We have always taken the view that that is extremely modest—in fact, far too modest—because the market, on its own, is delivering about 5 percent of new dwellings in the so-called affordable range. Students of history will know that only 30 to 35 years ago, actually, the market was delivering about a third of all new dwellings in the affordable range, and that is one of the really crucial indicators of how badly out of whack the housing market has become, because so few houses are affordable—about 5 percent. So, anyway, that was the situation with Auckland Council.

In some of the other accords—and I am thinking particularly of Tauranga—the mayor and council officials directly asked the Minister to insert affordability quotas into their accord so they could require that a certain number of homes in their special housing areas be affordable. The Minister point-blank refused. He and his officials said: “We’re not interested in that. We’re only interested in increasing the supply of homes. We’re not interested in requiring developers to provide a share of new dwellings that are affordable.”

What we know—and this completely kind of busts out of the fifth-form economics textbook from which the Minister’s thinking is derived—

💬 Clare Curran: Year 10.

—year 10; thank you—is that in an overheated, undersupplied market, developers will always choose to build more expensive dwellings because that is where they make bigger profit margins, and that is the story of Auckland in the last 10 years. If you look at the apartments that are being built in Auckland at the moment, 99 percent of them are at the luxury end of the market. Very, very few of them are affordable. If the market was in perfect balance, and if it was a perfectly functioning market, yes, the market would—

I am happy to engage. I note that this is a bill that is going through all stages, and so I do want to be able to engage in a proper debate about the issues.

The first thing I want to challenge Mr Twyford on is that in his opening comments he said that I had been singularly unsuccessful in growing residential investment in New Zealand. Well, let me actually give the numbers from Statistics New Zealand. In my first year, 2013, the growth in residential investment was 27 percent.

💬 Phil Twyford: It’s not all about you, Nick.

Well, no, I am simply saying what the record is. It is actually about building houses. I am just simply saying, let us look at the actual record: 27 percent growth in 2012; 27 percent growth in residential investment in 2013; and another 29 percent growth in 2015 and 2016. That is the longest—[Interruption] Well, I have a simple question for members opposite: cite me 4 years when there has been faster growth in residential investment. Tell me the years in which there has been stronger growth in residential construction than in the official statistics from 2013 to 2016.

💬 Tracey Martin: We ask the questions; you answer them.

Oh! I am making the point that you do not know the answer. So we know now that that is incorrect, and members should stop making that assertion.

The second thing is the question of how you get affordable houses built. So let us look across New Zealand. Where are the most new homes that are being built in an affordable range? Answer: Christchurch. Actually, if you look at the figures from Statistics New Zealand, you have over 4,500 homes built in Christchurch—brand new homes built—under $500,000. Is there affordability regulation in Christchurch? No, there is not—no, there is not. I say to Mr Twyford, the Productivity Commission—not the Government, but the Productivity Commission—concluded it did not work. The independent hearings panel in Auckland concluded it did not work. Actually, the Auckland Council concluded it does not work.

So I simply challenge the member and say there is no evidence that shows that regulating house prices is the way in which we improve the affordability and supply. The best means is to increase supply. That is what this bill does. Let us be very clear in this Committee that this bill will enable Auckland to have 8,000 homes sooner—8,000 homes sooner—and it is a litmus test for parties in this Parliament as to whether they are part of the problem or part of the solution in terms of growing housing supply in New Zealand.

Before I was so rudely interrupted, I was saying that I think this is a debate worth having, because there is clearly a difference between, certainly, our side and the National Government benches on this question. The Minister for Building and Housing referenced the Productivity Commission, he referenced the experience in Christchurch, but, curiously, he did not reference the situation in Auckland, where not only are we falling dismally behind in supply and the deficit has accumulated, the 42,000 dwellings that the independent hearings panel estimates has built up on the Minister’s watch not only has supply been such a signal failure but also affordability has been a disaster. We can see that today with the average dwelling in Auckland—not just old Auckland City, but across the entire amalgamated city and the Auckland region—now costing $1 million.

It is an absolute disaster. There is no affordability. We desperately need more affordable housing, and I suspect that the Minister is among the kind of dewy-eyed optimists who think the unitary plan, by injecting some greenfield land into the system and upzoning to allow more density in the city, is automatically going to deliver big gains in affordability. There is a lot of smart money and a lot of urban land economists and others who are highly sceptical about that contention and do not believe that on its own it is likely to go anywhere near what is needed in terms of increasing the volume of supply. That is why—because urban land markets are so imperfect and because, for example, there are demand pressures in the real estate market—under this Government’s policy, settings are unchecked, and there are vast amounts of foreign money flooding into the real estate market. There is a whole system of tax policy and incentives that encourage the investment of massive amounts of capital in real estate speculation under this Government.

So because those things are all in place, because we have this massive accumulated deficit in the number of dwellings that are needed, and we will have for a long time to come—in fact, the Minister’s own officials say that the deficit of dwellings in Auckland will not be eliminated before 2030. That is the advice of Ministry of Business, Innovation and Employment officials released to Labour under the Official Information Act. The Minister denies it—I know he does not want to hear, because it is bad news for him—but that is the fact, and that is why Labour believes that measures like inclusionary zoning and being able to require a percentage of affordable dwellings is the sensible thing to do. If we care about affordability, if we care about making homeownership and, in fact, renting affordable, we need to be willing to intervene in the market to market to make that happen. We cannot wait until some great nirvana, decades into the future, when we have a perfectly functioning urban land market. That is certainly not going to happen on this Minister’s watch. People cannot afford to wait.

We need affordable housing, and that is why I think Metiria Turei has, very sensibly, put up Supplementary Order Paper 210, which would require a prescribed percentage of affordable dwellings and “must include a percentage of dwellings to be available for sale at a price equal to or below the price that is 4 times the median household income in that area.” Four times the median household income—I think the Minister would probably agree with that. He would agree that that is a worthy goal. His eyes are going from side to side—I am not quite sure how to interpret that—but I think, based on the Minister’s previous comments, he would agree that four times the median household income is a good thing. That is why my amendment that is on the Table would require that all future special housing areas—and it would be prospective, not retrospective—that would be enacted under the 3-year extension in this bill would be required to have a percentage of affordable dwellings.

The Minister agreed to that. He agreed to the principle of exclusionary zoning—that is, a quota of affordable dwellings. He agreed to that in the sweetheart deal that he negotiated with Auckland iwi in the wake of his vacant Crown land fiasco. If it is good enough to put a quota of affordable homes—

Can I start by correcting the member who has just resumed his seat, Phil Twyford. The policy of having a certain quota of houses for sale in a new development below a certain price level is not exclusionary zoning; it is called inclusionary zoning. Let us just talk a little bit about what that policy is and why it does not work.

The best summary of inclusionary zoning is that it is a narrow tax designed to achieve a broader public policy purpose. Let me just expand a bit on that, particularly for the benefit of Grant Robertson, who is already shaking his head with confusion, something that he has been quite used to doing throughout his life. If the Government is to make a rule that a certain proportion of dwellings within a development have to be sold at a given price, that rule will only be binding—i.e., it will only have an effect—if the price level that is set is lower than the price that the developer would have otherwise sold that particular dwelling for. The only effect of that could be that the developer loses revenue on their overall development in order to achieve compliance with the law, even though they do not necessarily achieve any wider public policy purpose.

What we are talking about is, effectively, the same as imposing a tax on a particular developer in order to achieve the wider public policy purpose of making housing available for people in all price brackets. So then you might ask the next question: what will be the effect of imposing that narrow tax on developers, the very people whom we wish to bring housing into existence in order to solve the shortage of housing? Well, we often discuss in this House the effect of taxes on behaviour, and we often hear from the other side of the House that we should have higher taxes on bad things such as tobacco because when taxes are higher, less of the behaviour that is taxed will take place.

On this side of the House, where we respect savings, investment, and hard work, we often lament that high taxes discourage those activities. But if we follow the consistency of principle that both sides of the House sign up to at different times, then having a tax on developers could only lead to—wait for it—less development. This is how stupid the policy of inclusionary zoning is. It deliberately imposes a discouragement—a tax—on the very people society needs to bring forth housing development in an effort to bring forward more housing development for the people who need it most.

Only Metiria Turei, who has just told me that she did not pay attention in fifth-form economics, could bring a Supplementary Order Paper to the Committee tonight that will have precisely the opposite effect of the intention that she purports it to have. And, as I have said in this Chamber—it seems like too many times in the short time I have been here—it is not good enough to make public policy with good intentions. Sometimes the softness of the hearts of the people making these proposals extends that softness all the way up to their heads. We need to properly analyse the outcomes and effects of public policies rather than purely their intentions, and the intention of inclusionary zoning will not be matched by its outcomes. Therefore, I cannot support Supplementary Order Paper 210, which Metiria Turei has put forward.

I will just shuffle through and see whether there are any others from Metiria Turei that I might not support. Actually, we might leave that for another call, but I hope it is very clear why I will not be supporting the Supplementary Order Papers relating to inclusionary zoning, and neither should any member in this Committee who has the best interests of New Zealanders at heart. Thank you.

Funny story, actually: I applied at my high school to do economics and they put me in the home economics class because I am a girl. So there you go. There you go, Mr Seymour. And yes, if you had known me in fifth form, you would have had a really fun time.

Anyway, I do just want to deal with Mr Seymour’s criticism and what he is saying of Supplementary Order Paper 210, which I have on the Table to require that the special housing areas (SHAs) have a proportion of building that is sold at a price that is either at or below four times the median house hold income, which is the median multiple that is used internationally as a general definition of affordability.

The reason why I think that is justifiable to require in SHAs is that those who get access to an SHA get fast-tracked consenting processes. They actually save money—significant amounts of money—and time in the process of developing that land. It is good that they are developing that land for housing, if it is required—because, remember, there is no obligation for them to build once they get access to the benefit of the fast-tracked consenting process. This Government will not require them to build. In fact, even under this new bill they are required only to make an application for a resource consent; it does not require them to get a code of compliance, which is indicative of their having built a property. So these speculators, these investors, and these developers have access to an enormous financial advantage by having their land declared as a special housing area, with no obligation to build but with fast-tracked access through the resource consent process.

What is their reciprocal obligation to the community, whose efforts—through us, as representatives in Parliament—time, and money are delivered to them for free? These developers get access to the special housing areas and the fast-tracked consents. It is a public interest that is delivered to them for free. What is their reciprocal obligation?

💬 Hon Dr Nick Smith: They build houses.

What is their reciprocal obligation back to the public? The Minister says “houses”, but he is talking about houses that cost $600,000 - plus to buy. That is not in the public interest. It is delivered by the whole of the country for developers to be able to get fast-tracked access through the consent process, save money—considerable amounts of money—in the process, and still, at market rates, sell off those properties. That is not providing a reciprocal responsibility back to the public, who have provided to those developers some access to services and support that costs money and that the developers do not have to pay for.

We want to make sure that if there is going to be a gift from the public to these developers, there is a reciprocal obligation for them to provide a public benefit. One of the public benefits that has to be provided as part of any housing development process that is driven by the Government on behalf of the country as a whole is that affordable housing is built and provided. That is the whole point of the special housing areas—that affordable housing is built and provided for sale.

There is no requirement in the special housing areas policy, as it is or under this bill, for genuinely affordable housing to be provided by those developers. The Green Party says that that is part of the deal. You, the developer, get access to this special, fast-tracked process. You get to save money as you do it. You get to make money from quite a big proportion of the properties you build and sell, but you have a reciprocal obligation back to the New Zealand public, who have given you that opportunity.

Why is it so difficult for the Government to understand that reciprocal obligation? It should also be understandable by the ACT member. I know he has got a philosophy that he lives by in ACT, and it is great that ACT has got one of those—

💬 Hon Members: Ha, ha!

—I did mean that nicely; it came out kind of not quite—but even in that sense, he should be able to understand that if there is a genuine balance or equitable relationship between two parties to a deal, then both parties need to benefit from that deal in a genuine way. That is part of the philosophy.

At the moment, all of the benefit rests with the developer of the special housing areas. We know that because most of the special housing areas in Auckland have not had any building on them yet. That is because land banking those special housing areas and getting the consents fast-tracked, but not building, provides those developers with a financial windfall that is delivered to them by the public.

So let us just find a way—a gentle way. It is not going to scare anybody massively. It is not going to make a huge financial imposition on those developers. It is not going to stop further SHAs from continuing. If this Supplementary Order Paper passes, it simply provides a mechanism for making sure that there is some reciprocity in this deal. That is at least the minimum that we should be requiring, as members of Parliament representing constituents who are locked out of the housing market and who are telling us every day that there is a housing crisis and that they cannot afford to buy houses when they need them. This is at least some way that we can make sure their interests are better represented. It is not complicated. It is a small amendment to the existing legislation. It makes it clear what the affordability target is, which the Minister himself has agreed is a good target: four times the median household income. He has publicly said that he understands that to be the right target.

Let us make sure that when we, as a Parliament, are doing deals to improve housing in New Zealand and to increase the supply of housing in New Zealand—as we know needs to happen—there is a clear target for what affordability means. This is so that everybody who is involved in the deals around building homes knows what they are getting into, with full disclosure about what is expected by the Government in engaging in this deal, and so that it is financially responsible—because, of course, this is not a huge imposition on those developers. It gives them an opportunity to look more comprehensively at their overall building package—how many homes they are going to build and sell for significantly more, and there will be some people in the market who can afford to buy those homes at quite an inflated price—and to make sure that they will be able to make a significant profit and keep on developing. This is not going to provide any chilling effect on these developers; it just slightly changes their price points and how they manage the properties they have got.

It is absolutely essential that we get more affordable housing, and the only way to do that is to be clear about what affordability is—which is three to four times the median household income—and to make sure that those who are getting a public benefit from this legislation have an obligation back to the public to build those houses.

More than 80 percent of Aucklanders have said that there is a housing crisis. Well over 50 percent—in some cases 60 percent—of New Zealanders say that house prices need to fall, including homeowners and including Aucklanders. We know that it is a crisis and it needs to be dealt with. This is a small change that could be made to fix at least some of the problems we have with SHAs that are not delivering. It is not expensive. It is not complicated. It is just sensible and it respects the public benefit that these developers are getting. Thank you.

I am particularly interested in the clause of the bill that extends the Housing Accords and Special Housing Areas Act from what was supposed to be September the 19th—was it?

💬 Hon Members: 15th.

It was the 15th or 16th?

💬 Hon Members: 16th.

September the 16th 2016 to September the 16th 2019. I guess my real concern is how did the Minister allow it to get to this point? So, 10 days out from this particular part expiring, here we are in urgency actually having a debate about this and trying to push it through quickly. Obviously we have had 3 years to think about this, and we have had 3 years to see whether the short-term measure was going to be effective. I mean, when we look at the regulatory impact statement, it does say that it was supposed to be a short-term measure to streamline and fast track housing development and associated infrastructure through the Resource Management Act. Well, we have known for a lot longer than the last week that that short-term measure was not going to be enough and it was going to need to be extended. So I really want to know from the Minister what was the delay? What was the delay in making the decision to bring this to the House to extend this?

There are problems that have been highlighted in the regulatory impact statement in relation to this, problems with regard to what had been hoped to be achieved that has not been achieved, and it is spelt out really clearly here. It does say that “The principal issue discussed in this RIS is whether to amend HASHAA [to extend the] timeframe to allow further SHAs to be established, and to create new provisions in the HASHAA for a 12-month time limit to lodge consents within SHAs, and ministerial discretion to extend this time limit.” It basically says that there are still consents waiting that need to be put through. The Minister must have already known that they were not going to be completed by 16 September 2016, so why the delay?

I also want to point out that it is not something that has recently come to light. For the last few months at least there has been an ongoing discussion about this. I just want to refer to an article in the newspaper—[Interruption] Thank you. I want to refer to an article in the newspaper where one of our mayoral candidates, Phil Goff—who we think has a strong likelihood of winning the mayoralty—pointed out that this transition was going to be a problem. He expressed his concerns that the Minister had done nothing to deal with this transition. The actual headline is “Legal stuff up could hamper plans to build 15,000 new homes in special housing areas”. He highlighted that on 25 May, and at that time Mr Nick Smith is reported in this article as saying that the Government was: “open-minded about legislation to effectively extend the special housing area legislation but would not make a decision until it had seen the plan recommended by the hearings panel and the council’s response.”

So I would like to know from Minister Nick Smith whether or not that is what delayed him. Did he see the plan just yesterday, or last week, hence why he has had to bring this to the House only 10 days out from when it was due to expire, and why we could not give it the public scrutiny and the due process that it deserved—is that why we have delayed to this extent? I just want to know, really, what other special housing area projects are on the cards that the Government had anticipated would get through by the 16 September date that have not actually made it to that mark, so that we are fully aware of the reasons why we do need to extend this for 3 years.

I guess we do accept that, despite the fact that what the Government has done here has been underwhelming and has not achieved anywhere near the extent of what we needed it to achieve in terms of actually addressing the housing crisis, it has done something, even if it is just a little bit. For that reason, we want to support that part of the bill. The second part—obviously we will not go into it now, but we do not support it at all.

So I just want to know from Mr Smith what the delay has been and why we are here, 10 days out from when this expires. Why are we here under urgency? Why was this not brought to the House sooner? Why could we not have had a more robust, formal discussion about this?

I do want to give a fair answer to the challenge that Carmel Sepuloni has given around the timing of the bill, and I want to take you through the process and the reason for that timing. The eight developments that are at risk and that this bill addresses arise because of two specific factors. The first is that the council and the Auckland Unitary Plan Independent Hearings Panel have chosen not to zone them residential. If it was a special housing area and the independent hearings panel and the council decided that they were to be zoned residential, there is no issue—no issue on 15 September. It is a special housing area up to 15 September, and on 16 September it is zoned residential under the Auckland Unitary Plan—no problem. The first thing is that we could not know where it was a problem and where it was not a problem until that process was completed on 19 August.

The second issue is that in each of those special housing areas, there is a legal process for the plan change, and that process for the plan change is before independent commissioners. So if you look through each of those eight special housing areas, they are being heard by independent commissioners, whom neither the council nor myself is lawfully allowed to ring up and say: “Hurry it up, come on and make a decision before that deadline of 15 September.” There are some special housing areas that, back in April, I was worried would not be through the process but actually are, and are not a concern.

Here is the further point: I think the Parliament would agree that we want these special housing areas progressed into houses as quickly as possible. The more pressure that we can put on those landowners and those councils to get on and get the plan changes and the resource consents and the houses built, I think the better off we are. If, for instance, I had come to this Parliament in April and provided a generic “get out of jail free” card and said: “Don’t worry about the 15 September date, because I’m going to extend that date.”, it would have had exactly the opposite effect that the Parliament would want, and that is maximum pressure on both the council and on the landowners to be able to do that transition.

So it is for those good reasons—we did not know where the unitary plan had completed, we did not know, in each of these areas, where they were going to be finished, and we wanted people working as fast as possible to bring those special housing areas into homes—that the timing of this bill is such that it has been brought before the House today.

My question for the Minister for Building and Housing is: why is it that he is opposing Metiria Turei’s amendment to add new clause 4A as set out in Supplementary Order Paper 210? I assume he is opposing it, because I heard some of his interjections that it would not work, or words to that effect.

The only contribution we have had from the Government side on Metiria Turei’s Supplementary Order Paper (SOP) is from David Seymour, who seemed to take the view that having affordable housing, requiring developers to build affordable housing, was somehow a tax on developers and that it would stifle development of these special housing areas. He expressed that as the Government’s view—that there should be no room for putting requirements in place that affordable housing should be built on special housing areas.

I want to explore that a little bit, because if we look at Metiria Turei’s actual Supplementary Order Paper, it is to amend section 14(1)(d). Section 14(1)(d) in the principal legislation says that “a ‘qualifying development’ in a special housing area is a development— … (d) that will contain not less than the prescribed percentage (if any) of affordable dwellings.” So the legislation as it stands actually already allows for affordable homes to be prescribed in a special housing area. What does “prescribed” mean? Well, section 14(3) says that the word “‘prescribed’,—(a) in subsection (1)(b) and (c), means prescribed for qualifying developments in special housing areas by an Order in Council made under section 15(1) …”. Section 15(1) lists the criteria that the Governor-General may, by Order in Council, include in the criteria for a special housing area. Section 15(4) says: “The affordability criteria that may be specified are not limited by section 9(3)(a) but may include, without limitation, criteria defined by reference to median house prices, median household income, individual income, the median multiple (as referred to in section 9(3)(a)(ii)) or any other matter relevant to affordability as it applies to the district in which the special housing area falls,”.

So the legislation actually already takes a small step towards doing what Metiria Turei’s Supplementary Order Paper would require. The difference is, of course, that it enables affordable housing to be a requirement in a special housing area. Metiria Turei’s Supplementary Order Paper would require affordable housing to be built in special housing areas, and has a definition of what affordable housing is. If that is so evil, if that is going to stop developers building in special housing areas, then why was it included in the original legislation? If it was included in the original legislation, what does the Government have against (a) making it a requirement, and (b) setting some definition of what affordable housing is?

If the Government and the Minister disagree with the definition, which is that it should be no more than four times the median household income in that area, then what is the Government’s definition of affordable? What does the Government actually believe is an affordable home? What is the point of setting aside special housing areas if not to make housing more affordable? If the point is to make housing more affordable, then what is the Government’s definition? If it is not the definition that Metiria Turei has offered, then what is it? We have not heard that from Government members. We have not heard that from the Minister.

So I would appreciate answers to all of those questions. Why not make it a requirement? Why is having affordable housing so much of an issue if it was already included in the principal legislation? Why not have a definition? What is the definition? So there are four questions there, and I would very much appreciate an answer from the Minister to those questions, because it would certainly enlighten me as to the Government’s position on Metiria Turei’s SOP.

It is a pleasure to take a call on Part 1 in this debate on the Housing Legislation Amendment Bill. I want to continue along the theme that a number of my colleagues have spoken on, around affordability. I do want to point to paragraph 10 of the regulatory impact statement, which is on Part 1, which says that three-quarters of the special housing areas require around 10 percent of homes within the development to be affordable. Either way you look at it, special housing areas are a form of market intervention, and therefore I do not think our friend Mr Seymour would agree with those.

I think we really have to question the effectiveness of special housing areas. I do pay respect to my brothers and sisters from Auckland, but there is an issue emerging in Wellington, too. I do not have a special housing area within my electorate. I know that the Government has an agreement with Wellington City Council that does not cover my area, but when you look at the market as it operates in a raw sense in Porirua, you can see the market at the very top end working quite well, if you are a developer. There are plenty of houses in some new developments in Porirua that are around the $750,000 to $1 million mark. [Interruption] Yes, that is right. If you are in that area of the market, construction is going well—that end of the market is booming.

But if you are at the affordable end of the market—and you can look at defining that however you like, and I do acknowledge Supplementary Order Paper (SOP) 210 from Metiria Turei—there is nothing available for you. In theory you could claim that the special housing areas would be able to come in and make a difference, but as we have seen in Auckland that is not the case, and we seriously question whether or not the affordability percentages around the special housing areas are having any effect in Auckland and, if they were to come further south, what they would do to a market such as Porirua.

At the moment in this region we have got around 460 empty State homes. In my particular area of Porirua there are 126 empty State homes, along with large swathes of land that used to have State homes on them that the Government demolished. It promised to return some homes to those areas, and has not done a single thing.

💬 David Seymour: Halfway, mate.

Mr Seymour has got something to say about that; I do not think it would be helpful. So we have got a market in Auckland that is not working, and a market in other areas of the country that is not working. Although we support the extension of the special housing areas, I think we have to take a good, hard look at the effectiveness of these special housing areas and look at just whether or not they are working and whether we have got a large enough percentage of those affordable homes being built for Kiwis.

I do remember at the beginning of the process of the Aotea block being built that there was a proposal that a certain percentage—larger than 10 percent—had to be deemed affordable. That did not happen. What you have got now is that people who have got plenty of money are fine in the Porirua market, but people who have got no money are struggling to get into the property market to buy a house or even find a house to rent in the private market, and there is almost nothing available in the Housing New Zealand sphere. Of the 42 houses that are available in Porirua at the moment, I cannot see why those houses are not being given to families that are on the waiting list. I believe the waiting list as it stands, which was cut down about 2 or 3 years ago, is about 60 families. So we have got empty homes in Porirua and 50 or so families that desperately need them.

I think the extension of the special housing areas might be something that the Government is trying to do to make more affordable homes available, but it is certainly not meeting the demand from those people who want affordable homes. I would suggest that this Committee looks really closely at SOP 210 from Metiria Turei, which defines affordability. Mr Seymour does not like it because it is a market intervention. But if you look at it, if you look at how the market is operating now, it is not working for all New Zealanders. It might work for Mr Seymour and his friends.

💬 Grant Robertson: It’s not working for him.

It may not be, but it is certainly not working for all New Zealanders. So we have got some serious concerns about Part 1 of the bill and the effectiveness of the special housing areas. We have got even more concerns about Part 2, but we will come to them when the time comes.

I believe I may be able to assist with some of the points raised. I do not know whether I will be able to make it simple enough for a King’s College old boy, but I am certainly going to try my damnedest.

💬 Iain Lees-Galloway: Jealousy will get you nowhere.

Jealous of what? The issue at hand comes down to a clash between two similar but really quite different concepts. One is affordable housing, and the other is housing affordability. On the one hand, when you talk about affordable housing you talk about a certain number of homes being available at a price for a segment of the market. Many of the interventions that are proposed by the political left are what I would refer to as affordable housing initiatives. Let us have inclusionary zoning to try to section off a part of the market at a certain price. Let us have the Government, or some Government-related entity, develop housing, because it will somehow have different means and motives from the private sector.

💬 Denis O’Rourke: Exactly. What’s wrong with that?

Let us have some sort of subsidy for people to be able to afford housing. Denis O’Rourke—not much gets past Denis O’Rourke. I told the Committee that I was describing the policies of the political left, and Denis O’Rourke has correctly surmised that I am describing his policies. Not much gets past Denis O’Rourke.

The problem with the affordable housing agenda, as opposed to housing affordability, is that you cannot have affordable housing without housing affordability. The reason housing becomes unaffordable in the first place is that there is a shortage of housing supplied to the market, and when that happens, inevitably there is going to be a bidding war, which those with the least income are going to lose. Until housing becomes affordable you are not going to achieve housing affordability.

What will it take to increase the supply of housing supplied to the market, and therefore achieve housing affordability across New Zealand, and therefore make it possible for there to be more housing that is affordable for those with the lowest incomes? It is interesting to hear Metiria Turei referencing the median multiple measure, which is a measure that has been popularised by my good friend Hugh Pavletich from Christchurch, who is one of the co-authors of the Demographia survey.

I wonder whether Metiria Turei has carefully read those Demographia surveys, and I wonder whether she has spoken to Hugh Pavletich or Wendell Cox. I wonder whether she has discussed with Julie Anne Genter what she has read. What those reports say, in no uncertain terms, is that the reason we have a shortage of affordable housing in New Zealand, as with any other market, is that we have adopted land-use planning laws that constrain the amount of land upon which people are able to build, thereby leading to a shortage of housing, thereby leading to a bidding war that not everybody can win, and those with the least money end up losing and end up with a shortage of housing that they are able to access.

The economics of it are that simple, and it is very good to hear that Metiria Turei has become a convert to this line of thinking, referencing the Demographia International Housing Affordability Survey—something that those of us on this side of the House have long looked to as a guide for making better housing policy. But if we wish to follow in those footsteps, we need comprehensive reform of New Zealand’s land use planning laws. It is not good enough that councils are able to draw a line around a city such as Auckland, such as the metropolitan urban limit, and say: “Thou shalt not build beyond that line.” That has created an enormous shortage of land, which has created an enormous shortage of housing, which has left people unable to afford any home whatsoever.

Finally, we must reform the way that we do infrastructure funding. Presently, the councils cover too many of the costs and central government gets most of the fiscal benefit, and that is why councils are unwilling to build more housing. What this Government really needs to do is reform those underlying fundamentals, not tinker, as Metiria Turei has suggested in her amendment.

I feel like the parent who has to do the thing that they never ever want to do—to sit their child down and say: “I am sorry, there is no Santa.” So for David Seymour’s benefit, this is the ACT Party equivalent of the difficult parental conversation: the market is broken. It is completely broken. It is not delivering housing to the majority of New Zealanders who want to buy it. It is broken—it is completely broken—so standing up and making semantic arguments about the difference between affordable housing and housing affordability is just perpetuating the purist model that I know David Seymour believes in. I know David Seymour believes in this as an article of faith, but Mr Seymour actually needs to look around and realise that the market is broken. It is not delivering housing affordability; it is not delivering affordable housing.

Bill English, the Minister of Finance, stood up straight before the Budget and said that in the last 10 years, only 5 percent of new builds have been affordable. He acknowledged it. It was interesting that while Mr Seymour gave his first intervention this evening, Nick Smith was in the chair saying things like “He absolutely is right.” and “Hear, hear.” when David Seymour said that there was no place for an affordable housing requirement within special housing areas, which seemed a little odd to us on this side of the Chamber because it is already in the Government’s law. In fact, they have got a requirement for 10 percent affordability in Auckland now, so it is a little odd for Nick Smith to do that.

He then followed it up, brilliantly, with another intervention—I think it might have been when Iain Lees-Galloway was talking—saying: “It won’t work. It doesn’t work.” Well, it is in his law. Why is it in his law if it does not work? The point is that it is not working because the whole special housing area process is not working. That is the problem. We have got only 57 of the 154 special housing areas with anything actually happening—even remotely close to happening—on them, so the problem here is that the market is broken and it requires an intervention. That is the problem that David Seymour has.

It is surprising that the Minister is not prepared to back the Supplementary Order Paper (SOP) in Metiria Turei’s name, because he himself has already started the ball rolling here. We need these special housing areas to be delivering a range of housing, because what we want in New Zealand are communities to develop that are not ghettos, that actually do provide opportunities for people to live in cities close to where they work, and that are not only for those who are the very, very wealthy. That is not what New Zealand was built on. If David Seymour has got a big problem with all of this, he needs to go to any public meeting in New Zealand, which are mostly attended by slightly older New Zealanders, and say “Who in this room got their first house through a State Advances Loan?”, or “Who got their first house by capitalising the family benefit?”. Successive Governments have intervened in the housing market to give New Zealanders a fair go at the Kiwi Dream of owning their own home, and that is what needs to happen here. Here is an opportunity to do that.

The ultimate way to do this, Mr Seymour, is actually a programme where we really intervene in the market to fix it, which is KiwiBuild—where the Government leads the housing development programme of affordable housing, where we do not just leave it up to the private developers, and where we actually say: “Here is a chance for the Government to show some leadership and develop affordable housing.” For the special housing areas, we do not know what the counterfactual is in terms of how many of these areas would have been developed anyway. I know here in Wellington when you look at the list of special housing areas, most of them are ones that were already under way or would have been developed anyway. But we are prepared to give it a go. We are prepared to say: “Yep, let’s get in behind the special housing areas and see whether we can make them work a little bit better.” But they are not going to work to deliver affordable housing unless we actually commit as a Parliament to making that happen.

That is what this SOP is about. That is what the Government should be delivering on. It has already got it in the legislation for Auckland, so let us make it possible for everyone around the country.

I have to say that at the beginning of that speech by Grant Robertson I felt like I was in a bit of a whānau family moment, but happy Father’s Day. I know that you were making out that it was like sitting down your son, and you were doing this to David Seymour. I was not sure what was going on there, but obviously you wanted to school him in what you believe your facts say—what your belief is.

I just wanted to respond to some of the comments. Mr Robertson talked about the capitalising of family benefits. I have to say that my family works for one of those, but if we look at the history of that, it actually was initiated in 1956. I ask the members on the other side whether they remember when it was taken out—1986. Do you remember when that was? [Interruption] OK. It was actually under a Labour Government, with David Lange, and that is when it was removed. So if you are going to use that as a point of difference, just remember to remind yourselves of your history and your heritage—where you actually come from. It was taken away under a Labour Government.

But the conversation has been around affordability, so we can talk about semantics—and I actually agree with my colleague Mr David Seymour in regard to inclusionary zoning, which is what he talked about. Let us talk about some of the facts, then. The Minister used the example of what was happening down in Christchurch previously. I can remember the wailing and the gnashing of teeth in this House when talking about affordability in Christchurch. We know that rents were high, affordability of housing was in a terrible state, but the intention of this Government, of course, was to ensure that we built to the supply, to meet the demand—these are the facts of what we are talking about.

The CoreLogic sales data in regard to home loans and price caps for the existing sales—I will go straight through to the facts of this. This was on 31 March 2016: out of the 7,889 homes sold in Christchurch, 5,009 homes—63 percent—were sold for under $500,000. That is right. That is what the number is. In fact, if you go further along, the 5,652 that sold for under $550,000 were 72 percent of the market. That is right. There is the silence of the lambs, because we know we did not regulate the market then and there was no inclusionary zoning. Instead, there was an intention to ensure that we built more to meet the demand. We built more to meet the demand, and you cannot argue with that because those are the facts, that is the reality, and that is what we are doing. The reality is that the special housing accords approach is not the silver bullet. It is one of a range of initiatives that we believe are important to ensure that we meet that demand. We know that is what is important.

There was some response in regard to consents, and every time we talk about the number of consents that are out there, which this Government is putting through—we think that is important and we use that as a basis. I want to dispel some of that myth. It was surprising to see, firstly, why would those developers want to spend $10,000 for a building consent and not proceed to build? We think that is important. The special housing accords will ensure that there is a time limit to ensure that they apply for a building consent. If you are spending that amount of money, then the intention is that you will do this. But the census data actually proves this. The number of dwellings in the Auckland regional area from 2006 to 2013 under the census data was 33,777. So when we look at the number of consents, 32,419 falls about 10 percent below that. But if we look at the 6-month lag and we bring that up, that is 33,703. I believe that that addresses the issue, which is that the consenting is a good indicator of the fact that not only does it allow them to build but it ensures that they will build. I think that is critically important as well.

I just want to finish off with the facts and figures again. If we look at the numbers that are there in regard to March 2016, these facts are actually hard to argue with. So for affordability, of 31,963 houses sold in the Auckland region, 30 percent were sold under $600,000—9,638—and 11,840, which is 37 percent, were sold for under $650,000. There is an affordability margin there. Of course we want that to grow, and hence the reason why we are focusing our attention on building more for the demand. Then we believe that what will happen is that we will read out those statistics just like they have been now in Christchurch. Sixty-three percent of the market is affordable. We believe that is important.

I just want to perhaps get some assistance. I just want to walk through this a little bit. We are talking about special housing areas, where developers are provided with an opportunity to fast track consents. The notion of fast tracking consents would necessarily mean that you could fast track the building of homes—is that right? Am I correct in assuming that the fast tracking of consents by developers means that you can fast track the homes? That is not a difficult assumption to make.

So what I would like to know is this. Of these special housing areas—which have been in existence for about 3 years, which is why we are in urgency right now to pass legislation so that they do not expire—how many houses have been put through the process where the developers have got the consents and they have actually built the houses?

💬 Denis O’Rourke: 1,300.

Wow! That is amazing! How fast is that? So in 3 years, with this fast-track process, we have built 1,300 homes. That is amazing! And do you know what else—

💬 Kris Faafoi: Slow down!

Yeah, you are moving too fast! Do you know what else is amazing? What else is amazing is that the Minister the Hon Dr Nick Smith—or whichever way the honorifics go—talks about the affordability issue in Canterbury having been wiped out, because the three-headed housing monster over there has been pulling all these levers in Canterbury. I welcome the National Canterbury MPs getting up and challenging this—that the three-headed housing monster has been pulling all these levers in Canterbury and making houses more affordable. The Minister is saying that the Government has intervened in Canterbury and made it more affordable for housing. Well, I just have to challenge that because actually it was Rūaumoko who did that. Rūaumoko was the one who intervened in the housing market in Canterbury and made it more affordable because we got all this insurance money. We got all this insurance money to rebuild our homes.

So when the Minister talks about the Government and its special housing areas in Canterbury—well, we had our leader, Andrew Little, down there only a few weeks ago looking at one of those special housing areas, and what was it?

💬 Hon Member: Bare land?

It was a vacant lot.

💬 Carmel Sepuloni: Special.

It was very special. It was so special that there were ghost houses on it. So when this Government claims that it has intervened in the Canterbury housing market and brought back affordability to the people of Canterbury, I say no, that is rubbish. It was Rūaumoko who did that, and the insurance companies.

I ask the Canterbury MPs over there on that side of the Chamber to get up and tell me that that is wrong, because that is blatantly not wrong. That is so, so not wrong. When this Government claims affordability in Canterbury, I have to get up and challenge that member on the other side of the Chamber Alfred Ngaro, when he claims all these statistics, which are clearly, clearly not right.

And who has the oversight of these developers? There is an example; I want to quote from my own electorate, where developers have been given carte blanche to redevelop Housing New Zealand land. They have taken one property out and they have put five, or six, or 10 properties in. Because we have fast tracked this, because we have given developers a whole lot of power under this legislation, who has the oversight of these developers?

The example I want to quote in my electorate was where a developer was not given any oversight. He built some homes that sat outside of the boundaries of the recession plane, and do you know who discovered that? It was not the council, it was not Government officials, it was the local people who looked at those buildings and said: “Hang on a minute. There’s something not right about this. The sun’s not getting into my backyard like it used to. This building is clearly, clearly outside of the boundaries of this.” So we are expecting developers to actually have oversight of their own developments. In this case, what happened was that building actually had to be taken down because it sat outside of the council consent process. So we have got a cautionary tale right there in Christchurch East—in Christchurch where this Government claims it has intervened and brought affordability back to our housing market, which is clearly not right. So I really challenge this Government to actually live by the affordability.

I am very happy to take a call on this bill. The Green Party believes it is a fundamental right for every person in Aotearoa to live in a warm, dry, secure home—or have the opportunity to—a place that a family can count on, whether they own or whether they rent, to be their home as long as they wish to be there, and it should be affordable.

In the debate this evening there has been a lot of talk about what it is that affordability means—affordable housing, housing affordability, what is the difference? I think it is pretty clear. We do not have to make reference to the median multiple. If people have to spend more than 30 percent of their income on housing, that is not affordable. So it is not about just first-home buyers, although that is important too. It is about people having access to a place to call home without having to spend more than 30 percent of their income, so that they have enough for all the other things that every person needs to live a good life in this country. The problem right now is that there are too many people for whom this is not available. They have to spend far more than 30 percent of their income to have a place to call home. As we have been hearing over the last few weeks, during the homelessness inquiry that the Labour Party and the Green Party have been running together, there are too many families, young families, and women, and too many vulnerable people who do not have a place to call home, and that is not right. It is not good for any of us in this country.

This National Government has been irresponsible. The National Government members cannot blame anyone but themselves when they have been in power for 8 years and house prices are completely out of control. Homelessness is at a record high. They cannot point the finger at anyone but themselves. The reason why we do not have affordable housing is that some people in this country are making a lot of money from buying investment properties. They have got no incentive to rent them out or to do them up. Land prices are increasing so fast that they can just buy a house, hold on to it, and make hundreds of thousands of dollars on which they pay no tax. That is not fair and it is not right, and this irresponsible National Government has done nothing about it because those are the people it represents—the people who are making a lot of money off investment property.

You know, under the National Government, not only is it not easier to buy a first home but it is a lot easier for those property investors to buy a third or a fourth home. The numbers show this: 5 years ago 36 percent of property investors owned three or more properties. Today it is 51 percent of investors who own three or more properties. So people are able to buy houses, but not everyone has access to an affordable home, and that is not right and not fair.

There is a whole range of policies that we need to implement to achieve affordable housing in New Zealand. One of them is social housing. It is not rocket science. The Government needs to build more State houses, and everyone in the Opposition has been talking about this. We need to tax all income the same. Capital gains tax—it is fair, and it is only right. Those two things alone are not going to solve the problem.

Although there is a lot of talk about supply, and supply is an issue in some places like Auckland, the reality is that foreign capital is impacting house prices in cities all across the world, and it is really ridiculous for the National Government not to acknowledge this. Basically, in all of the current account deficit countries, of which New Zealand is one—New Zealand, Australia, Canada, the US, the UK—they have had huge housing bubbles. In the current account surplus countries they have had flat or very slowly rising house prices. This is because a disproportionate amount of the foreign capital we attract is going into real estate, which is not the productive side of the economy that we need it to go to, and it is making housing less accessible for people who live here in New Zealand. It is not just foreign buyers, although that is part of the issue. The reality is a lot of New Zealanders are accessing foreign capital to get mortgages to buy houses, and that bids up housing prices. You can see this in a place like Vancouver, which is very similar to Auckland. Suddenly it has had a big drop in house prices because it put a 15 percent tax on foreign buyers.

Thank you, Mr Chair, for this opportunity to address some of the comments made by Grant Robertson, I think, who, sadly, will not be able to hear my comments. Hopefully, he is listening on his crystal set at home. He took it upon himself to tell me that there is no Santa Claus. What a cruel, cruel man is Grant Robertson! But the reality is that there is a Santa Claus. There is a market and, overwhelmingly, it works. If you want to question that, then the first thing you might ask yourself is why it is that the cost of goods that people consume, whether it be cars, whether it be electronics, whether it be clothing, or whether it be food, has gone down relentlessly in real terms, for decades and decades and decades.

There is one asset that people choose to consume in New Zealand that, strangely enough, has not gone down in real terms, and that is housing. You would have to ask yourself: what is different about the housing market from every other commodity that people like to consume? I will just give you a suggestion that there is no other market that has more intervention by councils and the New Zealand Government than the housing market, because all of those other things I listed are things that can be produced offshore and imported, and that is why we have a competitive market the New Zealand Government cannot touch.

But what the New Zealand Government is able to touch is the infrastructure and the regulatory environment surrounding land. Those are the things that are regulated by the Government, where there is extensive Government intervention, and, strangely enough, we have found ourselves with a great shortage of that commodity, and at the same time steadily rising prices, which is what has occupied most members and much of the New Zealand public for some time now.

So here is the world that works: free markets providing many of the things that we consume, with continually dropping prices and increased welfare for citizens. Here is the world that does not work: the world that is regulated and monopolised by Government, and that is access to buildable urban land and the infrastructure to service housing. That is the world that does not work, and that is the world where we have had increasing prices and a shortage of supply. If only members opposite were able to understand these simple distinctions between a free market and a market where the critical inputs are regulated by Government or monopolised in their provision by local councils.

Of course, if it is a Government failure that has led to our difficulties with housing affordability, then what needs to be done is that the Government needs to change its policy approach to those areas of the market that it dominates. This Committee needs to be debating legislation to seriously reform land-use planning, particularly in urban settings. It is not good enough that our Resource Management Act has grown from 400 pages to 900 pages in the last 25 years. It has simply become more complicated. Only Grant Robertson, only the Labour Party, would believe that an activity governed by 900 pages of legislation—the purpose of which is just to set out the rules for another level of the Government’s interventions—was a free market.

When we do development, we need infrastructure, and the roads and the pipes that make up urban infrastructure are extremely costly to councils, yet the development that councils are in charge of consenting is extremely profitable to central government. We need to renegotiate the deal between central government and local government and actually share revenue to incentivise councils to consent more land. That is the public policy prescription that New Zealand needs. We do not need to fix the free market where it operates. We need to make the inherently interventionist housing market more efficient, and that requires better Government policy. There is a Santa Claus.

The only assertion that comes close to having an evidence base to it in Mr Seymour’s speech just now is his statement that Santa does exist. We have heard a lot about this free market. There are some things about the free market that Mr Seymour has not articulated that I will come to, but perhaps I could reassure Mr Seymour this way: although it is official Labour policy that Santa does not exist, there is a possibility that there may be fairies at the bottom of the garden, and I am prepared to concede that point.

The thing about free markets is this—if you want to have a free market there are a number of other conditions that have to apply, such as symmetry of information and equality of power, and that includes financial power as well. The reality is that in our housing market right now there is not equality of bargaining power through equality of financial power, there is definitely not symmetry of information—there is asymmetry of information—and all the evidence that is available to Mr Seymour, and everybody in this Committee, and the rest of New Zealand is that our housing market is just dysfunctional. How is it that in a country of 4.5 million people, in a city of l.5 million people, and when the average income is, what, $55,000, $57,000, we have an average house price of $1 million? That is not the mark of a functioning market; that is the mark of a dysfunctional market. So interventions are required.

You could say the Government has heroically embarked upon housing accords and special housing areas as a justified intervention in the market. Certainly the objectives were good. Certainly the intentions were good. But, actually, when you look at the evidence and the practical effect of those special housing areas so far, they are not achieving what they were intended to achieve. Roughly a third of the special housing areas—only a third—have had houses built on them, which means two-thirds have not. We know that in special housing areas, set aside for the building of houses, including affordable houses—it simply has not happened in two-thirds of the special housing areas and the land available in those housing areas.

The policy is not working. Noble as it is to say “Listen, let’s extend it. Let’s give it another 3 years.”, that will be meaningless without Supplementary Order Paper 210 advanced by Metiria Turei requiring and specifying a proportion of affordably priced houses in those areas. That is vital—that is vital. That has been the missing element in the special housing areas programme so far.

There have been some great projects in which affordable houses have been delivered, and some of them have been in special housing areas, and others have not. The truth is this—the reality is this—the need for affordable housing of a huge volume is now urgent. We now need urgent action to get affordable houses built. Getting special housing areas working properly, and a policy working properly, could be a solution. But it will be a solution only if they deliver affordable houses. It will not be a solution if we just extend the period during which special housing areas can be created and housing accords can continue to be activated, without a statutory mandate for a proportion of those houses to be affordable. That is what is needed.

That is the Labour Party policy proposal. That is the Labour Party comprehensive housing package—to have a housing programme dedicated to affordable housing. That is the desperate shortage in New Zealand at the moment. Young couples, no matter how hard they work or save, cannot afford to buy their first home, and how could they when the proportion of their income—or the multiple of their income—required to buy a house, at least in Auckland, is now pushing 10 times that income? It is out of reach. If we are to stave off a bunch of other social issues, or social problems, further down the track, then the need to get affordable houses built in New Zealand today is utterly urgent.

The bill as it stands at the moment, in this part, in Part 1, does not go far enough. We need a specific mandate, as provided for in the Supplementary Order Paper, for a proportion of affordable houses.

I do want to respond on three important points. The first is that members have claimed that you need to get the house price to income ratio back to 4, as is proposed in the Supplementary Order Paper (SOP). I challenge members to reflect on the history. There is actually only one period in New Zealand in which that ratio was less than 4, and that was when interest rates were at 15 percent.

💬 Jono Naylor: How high?

Fifteen percent. That is the only time. So the point is this: actually, you need to include interest rates in your measures of housing affordability, because, actually, whether it be the interest.co.nz index, or whether it be Massey University’s index, it is absolutely proper to look at the proportion of a person’s income in that criteria for affordability.

The second thing is that there is a belief from Opposition members that putting an affordability criterion into each of the special housing areas (SHAs) will help. Let me tell you why that is incorrect. The experience that the Auckland Council has had, and the reason that the Auckland Council decided not to include affordability requirements in their plans—

💬 Andrew Little: They got it wrong.

I will explain why. It is important. It is because the developer has a choice as to whether they use the SHA mechanism or the normal planning process. If you put a whole lot of barriers in the way of the special housing area, the developer will simply choose to use the normal planning process, and you will defeat exactly what you need—more houses being built.

💬 Phil Twyford: So apply it to all developments then.

Then Mr Twyford says: “Well, let’s just apply it to all developments.” I draw his attention to the evidence and the decision of the independent hearings panel, and I think every member in this Committee would accept the judge in that panel as an expert. Equally so, I would refer to the reports of both the OECD and the Productivity Commission that say those measures do not work, are counter-productive, and actually make houses less affordable, and the evidence is absolutely strong on that—

💬 Phil Twyford: Rubbish! There is no consensus on that.

Effectively, what Mr Twyford and Mr Little are saying is “No, the Productivity Commission got it wrong. No, the independent hearings panel got it wrong, and no, the Auckland Council got it wrong.”, whereas the Government is saying: “Actually, the research shows it does not work.”

Let me give a very practical dimension. The original Auckland Council proposal was that if a housing development was more than 20 houses, it required a block of affordable houses. What the developers who were doing an 80 section block did was divide it into 19 section lots to be able to avoid that provision.

💬 Phil Twyford: There are ways of dealing with that.

And he says: “There’s ways of dealing with that.” Actually, when you come to do a housing project, it is often the case that you will slice it up because of the capital costs of doing the investment.

I will respond to one last point. The members have said: “Why is it that the Government insists on price points and affordability on the Government’s Crown land programme, but not in the special housing areas?”. There is a very good reason for that. When the Government owns the land, it can set the conditions about what occurs on the development, but if the land is privately owned, actually, you cannot force people to invest. If you have got a block of land, for instance, that is typically worth $10 million, and it is going to cost $30 million to build the infrastructure and to convert that into sections, I challenge Labour members to say how you will force people to invest that $30 million. That question they cannot answer. That is why those provisions do not work. That is why, actually, increasing housing supply is the key. This provision will do that, and Labour’s opposition to these provisions shows that it is more interested in playing politics than actually getting roofs over the heads of Kiwi families.

I want to begin by making some comments about what the “Minister for Houselessness” said about affordability of housing in Christchurch because it is a most inappropriate example to use. As some others have indicated, the reason is that in Christchurch, as a result of the earthquake, huge amounts of Earthquake Commission and insurance money went in, and, as a result of demolitions, there was a lot of land that became available for building both in the central city and in the east. In addition to that, a lot of people simply moved out of Christchurch to areas immediately next door, like the Selwyn and Waimakariri districts. So the issue in Christchurch was not so much a land supply problem; it was actually, much more, a house supply problem because land always was, and still is, available. So you cannot use the Christchurch situation as a valid example of proving the effectiveness of Government policy. It is just not applicable.

What is applicable and what is core to this issue is affordability, and that cannot—and I challenge the Minister for Building and Housing on this—just be solved by supply of land. There is a lot more to it than that because affordability refers to appropriate-sized sections for modest homes at prices that people can therefore afford. What is actually happening as a result of the free-market approach—which is really the approach supported by the Government—is that developers like to build larger homes on large sections because they get larger profits from doing it. It is no good the Minister shaking his head, because I have looked around in all parts of New Zealand, especially in Christchurch where I live, and tried to find a modest-sized home on a modest section for a reasonable price. It is very difficult to do. What is available are plenty of large expensive homes on large sections. So the market does not really solve the affordability problem as a result of just opening up supply.

Affordability also refers to access to terms of purchase that people can handle, and that is the thrust of New Zealand First’s policy. It divides the purchasing of a section—that we would assist them to do—with the building of a house, and if the security for the section is at second priority, people can still go out, therefore, and get a loan for a house on first mortgage and build their own home. That is the approach that we want to take. But affordability also—and this what the objective is of some of the Supplementary Order Papers that we have before us—applies to the total cost, whether it is within the range of people to finance or not. It is really as simple as that.

Now David Seymour seems to think that the market will look after that as well, but that is not true—that is not true. There are so many people in this country who will never be able to finance their own home under current conditions. It is not just a supply issue; it is beyond that. It is an affordability issue. So just extending the time for special housing areas (SHAs) is not actually going to be enough at all. So I would like to ask the Minister: why has the Government not done more than just extend the period for SHAs in this legislation when there are so many other things it could do, not just to assist supply but to assist the problem of affordability?

For that reason New Zealand First will support Supplementary Order Paper 210, because we would support anything that would assist that issue, although we do think that our policy is better than that set out in Supplementary Order Paper 210. Nevertheless, it is doing something positive, so we will support it.

The Government, obviously, has no better ideas. It is just going to vote against that but not put anything in its place, and that is unsatisfactory. David Seymour seems to think that the market is going to be enough and the market will look after everything—just give them a free hand and away they will go. That is no way to address affordability. It will be a failure, as the Government’s policy and proposals are.

First, I just want to thank the Ngāpuhi whanaunga over here, the member David Seymour, for paying, apparently, so much attention to my speeches, often, and including tonight. In one of his earlier contributions I think he said something about my female fury righteousness. He has called me the Donald Trump of New Zealand, and he plays violins after I get up and speak, very often. Then tonight he gets up and he talks about the free market—

💬 David Seymour: I raise a point of order, Mr Chairperson. The member is engaging in a hearty debate, but she has also accused me of attacking her in a sexist way, which I have not done and would not do, and I think she should withdraw and apologise.

The CHAIRPERSON (Lindsay Tisch): Order! If the member has taken offence by what the member has said—[Interruption] I am on my feet. If the member is offended by what has been said and takes personal offence, he can ask me to intervene.

💬 David Seymour: I would not attack another politician on sexist grounds, and I am offended by that accusation, and I think she should withdraw the statement.

The CHAIRPERSON (Lindsay Tisch): I will ask the member to withdraw that comment.

Mr Chair, I am only quoting what he said.

The CHAIRPERSON (Lindsay Tisch): No, no. [Interruption] Order! All you have to do is to withdraw the comment.

💬 Hon Annette King: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): No, I have just ruled—

💬 Metiria Turei: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): Metiria Turei will sit. [Interruption] Sit. I am on my feet. [Interruption] You sit too. David Seymour has taken offence at a comment that has been made. The process is—[Interruption] He has taken personal offence, I am intervening, and I have asked the member Marama Davidson just to withdraw the comment, and that is all you have to do. You do not have to make any other comment, and then you can continue your speech.

Thank you, Mr Chair. I withdraw my comment.

💬 Hon Annette King: I raise a point of order, Mr Chairperson. I wonder whether you could spend some time looking at a ruling the Speaker gave some time ago about personal offence. The Speaker at that time ruled that it was not a matter of an individual taking personal offence; it was a matter of whether it offended the House. [Interruption]

The CHAIRPERSON (Lindsay Tisch): No, look, I do not need any help on this matter. I am happy to look at that point. I have ruled in the past on this matter, and I am being consistent in what I have done. Marama Davidson has the call if she wishes to take it.

💬 Metiria Turei: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): Is this a new point of order, Metiria Turei?

💬 Metiria Turei: It is seeking your clarification on your ruling. Can we get some clarification, then, on when Speaker Carter makes a ruling—

The CHAIRPERSON (Lindsay Tisch): I have just said that.

💬 Metiria Turei: Yes. Can I finish the point of order?

The CHAIRPERSON (Lindsay Tisch): The member will sit, then, because I have just answered that question.

💬 Metiria Turei: No, Mr Chairperson, I have not asked the question.

The CHAIRPERSON (Lindsay Tisch): You just said you wanted clarification of a point that had been made that the Hon Annette King brought up. I said that I would consider that matter.

💬 Metiria Turei: It is a different point, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): Well, what is the new point? All you are doing is trifling with my decision.

💬 Metiria Turei: Thank you, Mr Chair. My point of order is this: when Speaker Carter makes a ruling about the definition of personal offence in relation to the House, and you, Mr Chair, make a ruling that is different from his, how then are we to interpret, between the two rulings, what constitutes sufficient personal offence that another member will be required to withdraw and apologise? That is my point of order.

The CHAIRPERSON (Lindsay Tisch): Any member, if they feel offended by something that has been said—and it relates to a personal offence—has the right to protect their integrity, but—[Interruption] I am on my feet. The member David Seymour did take offence, and it is a very simple process to actually ask the member—in this case, Marama Davidson—to withdraw the comment, which she has done. Now we can continue. Any member has the right to take offence at a comment that has been made. It is very, very straight forward. Marama Davidson, you have the call.

💬 Iain Lees-Galloway: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): I hope you are not going to be—is this a new point of order?

💬 Iain Lees-Galloway: It is a new point of order. Thank you, Mr Chairman. I am not sure whether there is a Standing Order or a Speaker’s ruling that refers to the issue I want to raise, so I ask that you, perhaps, reflect on this and maybe bring a ruling regarding it. What is a member to do when they are accurately reflecting—

The CHAIRPERSON (Lindsay Tisch): No, that is a matter of opinion. The member has taken offence. That is all that I am concerned about. I have asked the member to withdraw. So I am ending the matter. We are moving on, because all you are doing is interfering with the decision that I have made, and the member took offence, Marama Davidson has withdrawn the comment, and I am asking her to continue.

💬 Iain Lees-Galloway: I raise a point of order, Mr Chairperson.

💬 David Seymour: Speaking to the point of order. I may be able to assist—

The CHAIRPERSON (Lindsay Tisch): No, no, I do not need any assistance from the member; he will sit. Marama Davidson, you have the call.

💬 Iain Lees-Galloway: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): If this is relitigating anything I have said, the member will leave.

💬 Iain Lees-Galloway: I move, That the Speaker be recalled.

Motion agreed to.

House resumed.

Speaker Recalled