Point England Development Enabling Bill

Kia ora tātou katoa e Te Whare Pāremata. Thank you for this opportunity to take this call on the Point England Development Enabling Bill. Labour is dedicated to ensuring that our families have safe, warm, affordable homes. It is a base—having a house, that is—from which families can build and ensure that their children are safe. In Government, Labour is committed to building thousands of affordable houses for our whānau, for our children and tamariki, and for Aotearoa New Zealand.

Labour is supportive of this bill to the select committee because, particularly in Auckland, we know that we are facing a housing crisis, a housing crisis that has been blown up under the watch of this Government, and a housing crisis that is spreading across the country like a virus, unfortunately, at this time.

This bill has been designed to enable housing development on 11.69 hectares of land within the Point England recreational reserve of the Tāmaki estuary. This reserve is owned by the Crown; however, it has long been held and vested in Auckland Council as a recreational reserve. It is land that is zoned as a public open space. The area includes sports fields, it includes a walkway, and it also includes recreational facilities. However, a portion of this reserve, near the CBD and major infrastructure in Auckland, is underutilised right now. In fact, it is currently fenced off as grazing land for cattle. The bill that is being proposed, which we have before us, will allow a range of houses to be built on that prime land, with the balance remaining as a recreational reserve providing public spaces for this area, which we know is facing considerable intensification in both the short term as well as the medium term.

With regard to local government, the development on this particular land will mean a loss of green space for the community. The call from the incoming mayor, His Worship Phil Goff, as well as from councillors and from the chair of the local board, is that all proceeds from the sale of this piece of land should be reinvested in new and improved public open spaces for the local community. Given the expected growth for this area, the desirable facilities, and the social infrastructure that will be needed for our future generations, this is a call that I fully support.

With regard to the local iwi, Ngāti Paoa, this proposed development is a great opportunity for Ngāti Paoa as a developer of houses on their land. They have the right to purchase and develop this land for housing, under the right of first refusal, and Ngāti Paoa already has an agreement with the Tāmaki Redevelopment Company to build houses on this 11.69 hectare site. It is, indeed, fantastic to see that at least some of the historic wrongs will be addressed, through the right to build houses on this land by the local iwi. They will also be providing 2 hectares of the land to develop a marae. It is at least a step in the right direction. I would like to acknowledge the aspiration that Ngāti Paoa have for their grandchildren and for the return of their ancestral lands, and I wish them well in the future.

When it comes to affordability, however, we know that in Auckland especially affordability is something that is debatable right now. The average price of a house in Auckland is over a million dollars. One of the criteria under the special housing accord is that affordable houses should sell in Auckland for no more than 75 percent of the Auckland region’s median house price. But that median house price was close to $900,000 as of October. It is a 5 percent increase on the previous month. As we saw in the New Zealand Herald’s coverage yesterday, in terms of Auckland’s housing affordability: “To get a KiwiSaver first home grant on a property (up to $5000 for an individual or up to $10,000 for two or more buyers), it must be priced under $600,000, up from $550,000 in August. But the latest QV estimated median values show this increase has done little to make even houses in the cheapest areas within reach of many first home buyers.” Bernard Hickey, in the New Zealand Herald yesterday, is quoted as saying: “Across the rest of the country house prices continue to hit new highs.” There is also the other issue, which is an effect of housing being so unaffordable in Auckland: homelessness. We know that there are at least 41,000 people who are homeless. Thousands of them are homeless, living in cars, garages, and other places in Auckland.

Although this bill is worthy for several reasons, it is only going to enable the development of 300 homes. The sad reality that we see in Auckland is that it needs to build thousands of homes, new homes, to be able to house the demand that we see in that city. The basic truth that we know is that too many of our people are locked out of homeownership.

There is also another issue: the issue of a skills gap. We know that the major providers in construction and infrastructure got together with Auckland Council, way back in 2013. They wrote a detailed report and they presented it to the Cabinet Minister of the time, the Hon Steven Joyce, basically setting out that in Auckland alone they are going to be short by at least 32,000 skilled people just in construction and infrastructure. Before we can rebuild our own houses, including in Auckland, we would need skilled people.

I believe that there is only one party that has a comprehensive housing proposal that will deal with Auckland’s housing crisis, and that is the Labour Party. We look forward to the day when we will come into Government and we will be able to implement our comprehensive housing policy. Thank you so much.

I rise to take a call on this bill because I think it is fundamentally important to the redevelopment of the Auckland area. I have been quite interested in housing—to find out what is going on up there. I have been up to Auckland a number of times to visit a number of housing developments. I have been to property developers to see what they are doing privately, where I have seen developments of 1,000 to 2,500 homes. I have seen developments that include having to build the road, having to bring the water, having to bring the power, having to put the lights in, and having to put the footpaths in, all by the developer. What that means is that before they can even build a house, the section is now costing $400,000 to $500,000. We have not even started to build a house yet, because the Auckland Council cannot afford to put the infrastructure into those areas.

Then I have been to see a social housing development, where we are building a hundred-ish houses. I have been to see mixed social housing areas, where we are building a mixed tenure of houses—some high density, some low density, some affordable ones. But here is the thing: we are requiring only 10 percent of those houses to be affordable, and the property developers I have met have said that “affordable” is about $475,000. They take a loss to get that in there, but they are building a thousand homes, and every single other house in that development is the minimum $900,000. If you get 10 percent and build 100 houses, that is 10 houses. We do not have a problem with houses just on their own; we have a problem with affordable houses. If we are building houses that are already priced out of the range of people who can already not afford them, then we are not actually solving anything.

In Point England, why this is significantly important is because there we have an iwi who is about to take on a development plan where, yes, there are these 300 houses, but right next door there are possibly another 2,000 houses. They can decant people out of their homes into the new homes, instead of just pushing them out on to the streets somewhere, maybe—I do not know where—and then build some homes. They are thinking about the community they live in and they have seen the developments, at Ngāti Paoa. Here is the thing: I have been down to social housing developers, private property developers, and mixed tenure developers, and none of them are building an adequate number of social houses—of affordable houses—except for one that I have seen, or two now, and one of them is this development at Point England by Ngāti Paoa.

Who is building houses to help the people who most need them? Māori are building houses. When I talk to the property developers, they say: “Marama, why the heck would I take a section that I put all the infrastructure into, and build a house for $300,000 and get $30,000 out of it, when I can put a $1 million house on it and get $100,000 out of it? It does not make fiscal sense to do that, Marama.” So they then stick to the 10 percent limit that they have to, and what does that provide? It provides a 2-bedroom home with low specifications inside, no internal garage, but maybe a carport or maybe not—a car space next to the house. That is what $475,000 will buy you.

But wait. You have to have that house for only 2 years, and after 2 years you can take that house and sell it on. You can sell it on and immediately get $1 million. Why would you not do it? You have to fit the income criteria to get that house in the first place, but that on-selling is already happening. In the first lot of apartments that were built on one of these property developments, they first sold them 5 years ago for $500,000. They are now being flicked on for $1.3 million. That is for an apartment in the middle of a property development where every other house in that area is $900,000.

Here, I am supporting this Point England bill because, finally, we have a developer with a heart. It is an iwi who has given up the land they fought to get back in the Treaty settlement so that, under first right of refusal, they can provide low-income, affordable houses and rental accommodation for the people who most need it. So I commend this bill to the House.

Bill read a first time.

Bill referred to the Local Government and Environment Committee.

I move, That the Point England Development Enabling Bill be reported to the House by 28 April 2017.

Motion agreed to.