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Geddis on Auckland housing land

Written By: - Date published: 8:25 am, June 4th, 2015 - 54 comments
Categories: housing, law - Tags: , , ,

Yesterday we covered National’s blunder in not considering Treaty settlement obligations in its plans to free up state land for Auckland housing. Today you can read someone who actually knows what they’re talking about on the issue, check out Professor Geddis’ piece at Pundit:

A tangata whenua shaped elephant on the path

… In essence, all Crown owned land (except for that occupied by tertiary institutions) in an area that stretches coast-to-coast from Massey in the North to the mouth of the Waikato River in the South is classified as being “right of first refusal land”. (There’s a map of exactly where is covered on p.59 of this pdf of the Settlement Deed.) This right then means that if the Crown wants to pass on title to that land to anyone else (whether by selling it or otherwise), it first must offer to let a body representing the various iwi and hapū have it on those same terms.

Note that this isn’t just a polite suggestion. It’s a rule of law:

121 Restrictions on disposal of RFR land

(1) [The Crown] must not dispose of RFR land to any person other than the Limited Partnership or a rōpū entity (or the Limited Partnership’s or rōpū entity’s nominee) unless the land is disposed of under subsection (2) or (3).

However, Nick Smith seems confident that everything will be OK:

“There is first right of refusal in the Tamaki Redress Act that Parliament passed last year, but it specifically makes reference to the capacity for the Government to be able to develop and sell land for housing purposes and what the Government is doing is absolutely consistent with what’s in that Act.”

Now, of course, it may be that Nick Smith is thinking of trying to pull a swifty here. Maybe he’s thinking that once the Government says “we’re going to use this land of ours that was set aside for something else for housing”, then this immediately makes it into land “that is held for State housing purposes” as per s.136. All I can say to that line of thinking is … good luck getting it past a High Court judge on judicial review proceedings!

Or, alternatively, there’s always s.131 of the Act:

[The Crown] may dispose of RFR land in accordance with an obligation under any enactment or rule of law.

What odds a Foreshore and Seabed Act for the Auckland property market?

Go read the full article at Pundit.

54 comments on “Geddis on Auckland housing land”

  1. mickysavage 1

    The opposition really needs to look at this. Smith must have gone so close to misleading Parliament in relation to the law that there ought to be some sort of sanction.

    • Sacha 1.1

      He has been choosing his words carefully. The sanction ought to be political egg on his face if opposition can skillfully work with media on this story. And some very well-crafted questions in #nzqt

  2. Charles 2

    From Pundit:

    “…subsection 3 says that if the various iwi and hapū haven’t acted on the offer within 12 months, then the Crown can go ahead and do what it likes with the land.

    Which looks to be a big problem for the Government. For even if the various iwi and hapū eventually decide not to exercise their right of refusal, they have 12 months to sit and think about it. And note when the right of refusal kicks in – when the Crown “disposes” of the land by transferring title.

    Under the Government’s current proposal, they want developers to build houses on its land, with title then being transferred once the development is completed. But how’s that going to work if, once the development is done, the body representing the various iwi and hapū then gets a peremptory right to purchase the land in question? What sort of developer is going to enter into the house building game under that cloud of uncertainty?

    A government in waiting, perhaps?

    Is it at all possible for Labour/Greens/Mana/Maori Party, the Iwi concerned and “maori” in general, to allow National to try this and then delay (using whatever means necessary) the proceedings into an election year promise i.e. an agreement/MoU between a government not yet formed, an Iwi with nothing to lose, a nation with a big problem, and a Left wing portion of politics that needs a game-changer gesture of goodwill towards a public starting to get either uncomfortable by their own excess, or crushed beneath it?

    It would be a remarkable (and possibly impossible) feat to get so many historically adversarial groups united for one cause, but is there any way to do it?

    Labour would pay penance for the Seabed foreshore and recieve a boost.
    Maori Party would recieve a boost and find new allies
    Iwi get to protect their land, increase their standing, and make a few bucks
    Mana Party gets resurrected
    Greens find new ways to connect with the wider left

    **maybe even NZF too, but not sure how they’d feel about it.

  3. Colville. 3

    I covered this in yesterdays thread.
    All the tender process does is set the price.
    Land is then offered to Iwi , if it isnt taken up it goes to best offer in the tender.
    This process is nothing new.

    • Sacha 3.1

      See 2. Geddis notes the law allows iwi 12 months to decide whether to say yes or no. That seems like new information.

      • Colville. 3.1.1

        There was always going to be a time frame. 12 months isnt long in land development terms.

        Reality is tho that Iwi will want to be very friendly with the Crown on this as they will fancy themselves as having a go at being developers and want their bid looked at favorably.

        I would pick that the various Iwi (how many are we talking?) will indicate interest in some and decline others early so the process can proceed.

        • Sacha 3.1.1.1

          Ngati Whatua in particular are already significant developers. I reckon Smith’s stuff-up gives them good leverage to negotiate a joint role now to avoid prolonged legal action.

    • dukeofurl 3.2

      Except Smith is saying nothing of the process you have invented applies.

      Tender process set the price ? Any capable valuer and large block real estate agent could do this. Its a hard commercial deal, not subject to a homeowner ‘falling for ‘ the property.
      The real difficulty will come from the settlement conditions. Developers can be loath to put too much of their own money down on settlement and banks dont want to be stuck if it goes wrong.

      As for Nick Smiths legal go ahead. Im sure the question wasnt asked ‘ Is this legal’

      They would have carefully constructed questions to put to legal advisors for formal opinions.
      And which career lawyer in the public service wouldnt give a carefully worded reply when they know their bosses are looking for a ‘right answer’.

      To many this manipulation of the process brings to mind the means by which Keith Holyoake and family obtained a large block of Maori land behind Kinloch at lake Taupo around the early 1960s.

      • Colville. 3.2.1

        dukeofurl
        Valuers are bought and sold every day, the have opinions that are paid for by their employers. They do not and can not set prices. prices are set between buyer and seller.
        The tender will set a price that is fixed in the market. It is a number that cannot be argued with.
        Iwi will have a yes or no decision based on a number that is not an opinion.

        The Crown has already hinted at very favorable settlement conditions so that wont be a problem. Pay when paid type terms. All good for pumping the price sky high.

        • Tracey 3.2.1.1

          What has the Maori Party said so far?

          • Colville. 3.2.1.1.1

            Tracey,
            I havent noticed a release from the MP.
            I am sure they will play it very close to the chest as this will be a huge win for Iwi both as developers and re-sellers of land.

    • Flashing Light 3.3

      Under the Act, land is offered to iwi at the time of its “disposal” – i.e. when the land is sold by the Govt to the developers after the houses are all built on it. Remember, that’s a key point to this whole deal – the developers don’t have to splash out capital up front to buy the land because the Govt will continue to own it until the development is complete. This massively reduces the developers’ financial commitment to the exercise.

      So – if the Govt tenders with developers to sell them the land for $X after houses are built, and the developers then build the houses, the iwi then get first rights to buy the land at the “unimproved price” of $X that the developers agreed to buy it for even though the developers have improved it by putting a house on it!!!

      Which sort of makes the prospect of any development pretty much zero.

      • Colville. 3.3.1

        You really have not thought that thru have you.

        Govt will offer Iwi land at an indicative price.
        Govt will get on with tender.
        Tender will firm up price.
        Iwi says yes or no.
        Developers get what is left. (Tho Iwi will also be developers)
        Developers (and Iwi) will develop the land.

        Developers are tendering on unimproved land and paying for it piecemeal after it has been sold with a house on it.

        • Flashing Light 3.3.1.1

          And you haven’t read the Act in question! Go look at the definition of “dispose of” in s.117 and when the right of first refusal accrues in s.121&122.

          And in any case, your outline of what will happen is completely different to what the Govt says is going to happen – it says it wants the first developments underway in 6 months time. How will that work with a 12 month consideration period before developers other than iwi can know whether or not they will have the land that they want to build on? And note – the right of first refusal doesn’t commit Iwi to building houses. If they buy the land to develop into a swimming pool, or a shopping center, or anything else, then that’s their call.

        • dukeofurl 3.3.1.2

          Are you an idiot ?

          Smith has ruled out iwi completely. he says his paper shuffle to get around land designated for public housing is the way HE IS DOING IT.

          You are just running a fantasy in your head.

          • toad 3.3.1.2.1

            Smith’s “paper shuffle” will inevitably seem him on the pointy end of judicial review proceedings.

            If you don’t go to court with clean hands, you inevitably lose.

          • Colville. 3.3.1.2.2

            Duke?
            I was just answering a question posed to me.

        • Tracey 3.3.1.3

          Under your assessment above, how will the government be able to have the first developments underway within 6 months?

          Remember, iwi right to refusal aside, this land has been found to be suitable for building upon yet.

          • Colville. 3.3.1.3.1

            Tracey.
            If this was aimed at me.?
            By consensus.
            Iwi will be very keen to engage and be part of this. They will allow psome parts to go to the market ASAP to keep the Crown happy while keeping their fingers in the pie with other bits.
            Iwi will make a lot of $$ out of this.

            • tracey 3.3.1.3.1.1

              by making alot of money do you mean by way of crown compensation or being given part of the 500 hectares for a lowish price to do as they wish? if yes, how does the crown make the transfer legally if the land is not for social housing?

              • Colville.

                Iwi will engage in negotiations from start to finish and extract a goodly pound of flesh.

                Some would call it the Treaty gravy train.

                Iwi wont be given anything. They will negotiate in good faith and for an outcome that is best for their members.

        • tracey 3.3.1.4

          iwi are only one proble. social housing purpose is another problem.

          • Colville. 3.3.1.4.1

            Building any house in Auckland at the mo is a social need. hard to argue against.

            • tracey 3.3.1.4.1.1

              nope. you need to work within legal parameters to explain away social housing purpose. no magic wands allowed.

  4. I am sort of interested in subsection (2) or (3) now, i assume those are the bits that say the government can use the land for housing…

    • Flashing Light 4.1

      Subsection 2 simply says that the Govt can sell the land without going through the right of first refusal process if s.136 applies (the bit that says the Govt can sell land designated for State housing purposes if doing so will further its social housing policies).

      The original article covers this fully.

      • Tracey 4.1.1

        Is it really going to argue that selling to private developers is social housing?!?

        • Tracey 4.1.1.1

          again Mr Geddes states

          “First of all, under the definitions section a State housing purpose “means the erection, acquisition, or holding of dwellings and ancillary commercial buildings by the Crown under this Act…”. That’s not the plan for this land – the building of the houses is to be done by private developers.

          Second, there’s the question of whether the Government can even let private developers build houses on land it says is held for State housing purposes. Under the Housing Act there is power to develop such land using public money, or to build houses on it using public money, but no express power to let private interests build houses on it. So if this land is deemed to be held for State housing purposes, then the entire development plan may be contrary to the scheme and policy of the Housing Act 1955.”

          OOPS

          • Colville. 4.1.1.1.1

            The developers are acting as the Crowns agents, so that isnt a problem.

            No one expect Crown employees to hammer in the nails.

            • tracey 4.1.1.1.1.1

              are you saying that geddes legal analysis is wrong because no crown employee will physically build the houses?

              • tracey

                on what basis do you claim the developers are crown agents when the relationship is crown/developer with a deferred payment clause in the contract? that is not agency.

                • Colville.

                  An agent is anyone employed to carry out a task.
                  Building houses is a task.
                  The fact that these builders also need to build roads and sewers etc is just semantics.

                  • Flashing Light

                    “An agent is anyone employed to carry out a task.”

                    The Crown won’t be employing anyone to carry out tasks with their policy. They’ll be giving private developers the right to build private homes for sale to private persons. Where in the Housing Act does the Crown have the power to grant such rights over land it has designated to be held for “State housing purposes”?

              • Colville.

                Tracey.
                from your quote errection of houses is a social aim
                Using an agent to have houses built seems to cover that.

                But I dont have a Phd. Just a trade Advanced Certificate 🙂

            • Flashing Light 4.1.1.1.1.2

              “The developers are acting as the Crowns agents, so that isnt a problem.”

              No. They aren’t. They are building the houses for their own private purposes to on-sell to private owners.

              The Crown may get some ancillary benefit out of this (in terms of there being more houses available). And it may even be a good policy approach to take. But that’s not what the Housing Act 1955 is set up to achieve – it’s set up to empower the Crown to use public money to build public housing stocks. Trying to upgrade it into a vehicle for private development just doesn’t work.

          • Macro 4.1.1.1.2

            Sorry Colville doesn’t understand that.
            He thinks it’s all like Nick Smith says – but just wait till it’s tested in Court… iwi will be well aware.
            Colville – you know Prof Geddis is a prof of law right?

            • Colville. 4.1.1.1.2.1

              Marco.
              i understand this better than you do.
              Iwi will come along for the ride. Very very happily.
              For here to be a court case there needs to be someone with standing to make a case.
              I cant see who has standing who would bother to make a case?
              can you?

              • tracey

                do you mean the crown will pay compensation to the iwi to make this problem go away?

                • Colville.

                  Iwi will buy and onsell bits.
                  iwi will develop bits themselves. (and possibly lose money)
                  Iwi will agree to ignore some bits.

                  Its a negotiation. Iwi are very good at it, the Crown not so great.

                  I would LOVE to be working for Iwi on this. On a bonus pegged salary.

                  • lprent

                    Ngāti Whātua are not well known for selling any property. Like the Anglicans and Catholics, they are known in the business community in Auckland for not selling it.

                    Thye lease property because that way they increase their net worth to achieve their other objectives for their people and their territory. After spending so many years trying to recover property grabbed by the crown in really dodgy dealings, they are very reluctant to part with it.

                    But hey.. Keep your opinions in the absence of thought or even the most basic search for information. It makes you look like a really ‘bright’ person for someone with such severe brain damage from dumb racist bigotry.

                    • Adele

                      Kiaora

                      Completely agree. Iwi are not in the business of acquiring land within its area of interest to then onsell for profit. Once the land is acquired it will stay within Iwi ownership.

                      The Treaty settlement process has always been about regaining what was fundamentally lost – the land.

                    • lprent []

                      It is pretty noticeable when you look at the leasehold properties coming up for reviews.

              • Macro

                I don’t think you understand it at all!
                You loud mouth off as if you know it all and just show your ignorance.
                The Government plan is not as you say it is and if they were to act deceitfully as you propose, against the law that they themselves enacted you can bet that one of the iwi (and there are more than one involved in this – you really should read Prof Geddis’ article – would be taking court action and they would have a very vested interest in doing so.

  5. Skinny 5

    This is a cunning dog whistle “bloody Maori’s stalling the housing crisis in Auckland”. With sellout ‘Sir Pita’ gone and a not so submissive Fox as an MP the writing is on the wall. National will distance themselves from the Maori Party by 6 months out from 2017 election. Plenty of votes in Maori bashing as the Nat’s know. I hope Fox out foxes these Nat weasel’s and ditches them real soon. There are votes in this too.

  6. Brendon Harre 6

    What this shows is that Nick Smith’s token 500 hectares (10,000 dwellings max) of Crown land that is less than one year of his SHA targets is so flawed it is next to useless.

    Nick Smith is a muppet, firing a pop gun at an elephant sized problem.

    Note: Labour’s KiwiBuild programme would require 500 hectares a year to produce there target of 10,000 houses. Maybe the idea is that Nick Smith makes such a mess of National’s KiwiBuild-lite initiative that it discredits such ideas?

    • Tracey 6.1

      I guess this is what happens when you take an opponent’s idea at the very last minute for self interested political reasons… you have to make up answers as you go cos you never thought it through

    • Colville. 6.2

      Brendon.
      With some medium density housing the 500 Ha would stretch to 40,000 units.

      • Brendon Harre 6.2.1

        I was assuming 20 dwellings per hectare, which works out at one house per about 300sqm (about 1/3 of a subdivision is roads, footpaths and parks). This being what Hobsenville and such like is being built like.

        It is possible to go to 80 dwellings per hectare like you say, but I think that would be classified as high density apartment living. I doubt that all of Nick Smith’s 500 hectares is suitable or zoned for this high density living option.

        40,000 homes would be a bigger drop in the bucket but is still only 40% of Labour’s promised KiwiBuild programme.

        My original argument being that Nick Smith hasn’t thought this though and is basically firing a pop gun at an elephant sized problem still stands.

        • lprent 6.2.1.1

          I doubt that all of Nick Smith’s 500 hectares is suitable or zoned for this high density living option.

          I suspect most of it could be. He hasn’t given any details yet…

          Provided that it is close to transport routes, as much of the government land is already (old depots, military land, etc), then it is probably currently zoned for commercial use. Zoning it for medium density is just as easy as zoning it for spread out housing for the rich.

          I’m sure that the Auckland council would happy to only zone it for medium density.

  7. adam 7

    I do have to wonder – how many times will the government of the day will break it’s own laws – till people realise. Laws are not needed for good people, and bad people break them anyway?

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