Pressure mounts to force Auckland to open up land

Written By: - Date published: 1:57 pm, October 22nd, 2015 - 45 comments
Categories: auckland supercity, Economy, Environment, housing, sustainability, transport - Tags:

Bill English ordered the Productivity Commission do a Report on Housing in Auckland. Nick Smith is particularly excited by this statement from them:

The government should be allowed to force local authorities to release land for urban development in the face of rampant house-price inflation and current land allocation policies cause “a number of harmful social effects

 

Meanwhile the Serious Fraud Office (SFO) is investigating a large scale mortgage fraud:

Auckland’s property market and the scale of impending commercial developments represent a key environmental risk,” the SFO said in its 2015 annual report released this week. “We have invested significant resources into investigating a large-scale mortgage fraud involving highly organised teams of property developers, shell company directors, property valuers and lawyers.

Note, it doesnt involve builders or designers who are the ones with personal legal liability attaching to all their work (for ten years).

Last week a $50m apartment development was found to have passed every Council inspection despite shoddy workmanship and obvious failures.

Meanwhile the Bank that capped NZ as a “rockstar economy” has back-tracked somewhat:

HSBC has added New Zealand to a watch-list of nations it has concerns about, which also includes Malaysia, Indonesia and Norway.

In its latest Macro Health Check report, the bank flags concerns about rising house prices in this country, as well as our deep links with China – where growth is slowing – and tumbling dairy prices, according to the Bloomberg news agency.

“Although low-risk, New Zealand may be one to watch,” HSBC economist James Pomeroy is quoted as saying.

If the Government chooses to intervene in the functioning of Auckland, it needs to intervene to ensure ALL of it functions well. That includes public transport, sewerage and so forth. Picking and choosing will end in disaster. It also needs to explain why it continues to choose to let developers use shell companies, collect money, sell property, remove profit, close company and repeat, all while escaping genuine legal liability for projects they control and direct (financially at least).

IF developers were to be personally liable, as builders and designers are, we would see a drop off in development by some operators. Just as liability for builders and designers was intended to get rid of the cowboys.

There are some great developers out there. There are awful developers. From my work in the leaky home area I know of developers who budgeted and designed projects with the ten year limitation period in mind. They told me “we just spent enough to get us through the ten years”.

Section 393 of the Building Act 2004 provides that no court case dealing with building construction may be brought against a person, 10 or more years after the building was constructed.

Everything I see and hear in the Building Industry worries me. If anything has been learned from building over 100,000 leaky homes in Auckland, it is how to build to get past that period… and not much more by those who think only about maximizing their own profit.

The signs are all there. Those with vested interests will try to convince people that this is all isolated. I’m not convinced. Trouble lies ahead.

45 comments on “Pressure mounts to force Auckland to open up land”

  1. dukeofurl 1

    “Release land for Urban development” – means rezone it for housing and vastly increase it value.

    The under supply is a deliberate move from the larger developers to restrict supply and drive up prices. Build a 300 lot subdivision a and then release it as 75-100 sites per year and watch the remainder raise in value right before your eyes.

    We can see some tardiness for the Special housing areas which were supposed to fast tracked – but that just came another ‘feature’ to boost the value for the owner before on selling to a developer- builder

  2. Draco T Bastard 2

    The big problem with releasing more land that increases sprawl is that it costs a huge amount to get the infrastructure in place to support those houses and then the ongoing maintenance costs are sky high as well. these massive costs are going to come out of rates.

    Then there’s the fact that outlying housing costs a hell of a lot more to live in.

    So, if the Productivity Commission want to push rates up far faster than inflation and to cause poor people to be even poorer then they should push the delusional idea that more sprawl will lower prices…

    Oh, wait…

    • dukeofurl 2.1

      WE have the ‘twin evils’ of high land prices AND high construction costs.

      The National party is chaffing at the bit to increase land zone urban( but not yet developed) and there was a bit of a whimper about high prices for construction materials , but that has gone away to be replaced with high inspection costs by Councils.

  3. mpledger 3

    What does this incentivise?
    “The government should be allowed to force local authorities to release land for urban development in the face of rampant house-price inflation … ”

    It incentivises the developers to create as much inflation as they possibly can, by pushing the price of genuine sales through the roof, so that more land will open up for them to develop on .

    So, what will happen, a new house will sell at, say $1 mill – $200,000 below it’s real value – pass through a number of shell companies that the developer or their friends own and then sell for $1.5 mill to a genuine buyer. But look at all that inflation!!!! And the developers will cry out for more land.

    It’s an incredibly ill thought-out idea that will create appallying bad perverse incentives at a cost of rushed infrastructure builds.

    • tracey 3.1

      If you look at the productivity commission board you get an idea of the particular world view they came at this from

      • srylands 3.1.1

        It is a rational world view.

        Graham Scott and Murray Sherwin are eminent economists and were a top choice to oversee the inquiry.

        Hopefully the Government will move quickly to implement all the recommendations.

        • One Anonymous Bloke 3.1.1.1

          Support from S Rylands is as good as saying it’s a corruption funnel.

          • tc 3.1.1.1.1

            Exactly OAB as they’re going all out to plunder for the backers this term and lock in future govts as well as whoever end up attempting to sort out their dodgy supershity construct.

            Blinglish signalling future tax cuts after his smoke n mirrors layby ‘surplus’ is another sign they’re going all out for the .01%

            • tracey 3.1.1.1.1.1

              Note that English ordered the report, but Smith will decide on whether to implement it.

            • weston 3.1.1.1.1.2

              what got me was english saying that he MIGHT NOT have to borrow to fund the tax cuts !!

          • Draco T Bastard 3.1.1.1.2

            +1

            Exactly.

          • tracey 3.1.1.1.3

            One woman and the rest white chaps in suits. Probably just a coincidence.

          • Karen 3.1.1.1.4

            +1 OAB

          • KJT 3.1.1.1.5

            Economists, the new chicken entrails, and about as accurate.

            Bring back the Augeries, I say.

        • One Anonymous Bloke 3.1.1.2

          As for the economists, can someone explain why presiding over NZ’s disastrous slide into inequality and homelessness is considered “good credentials”?

        • tracey 3.1.1.3

          No, it is your (and their) world view. Neither rational nor irrational. Like Hooton you think that those that reflect your opinions must be rational and sane. An argument can be made for the opposite too.

        • tc 3.1.1.4

          ’eminent economists’ i.e. more handpicked nact folk who know how to construct a prima facie argument that arrives at the outcome the hollowmen seek.

          Of course the govt will move quickly, it already is, that’s why it needs this strawman and probably their love of urgency to slam it through.

        • miravox 3.1.1.6

          It always amazes me how irrational it is to believe that [economic] rationalism can solve the dilemmas of being human.

          • One Anonymous Bloke 3.1.1.6.1

            August 1993 to March 1999 independent Chairman with role to set up the Electricity Market Company (EMCO) to establish a functioning
            wholesale electricity market. Led the development and implementation of the wholesale electricity market, which is the only market in the world that is not under the control of a government regulator.

            I guess Scott isn’t applying for any positions where honesty and self-awareness are valuable qualities then.

  4. Smilin 4

    Shocking reality of graft and corruption disguised at huge expense to the tax and rate payers as development deemed necessary by govt spin and carry on as Auckland has always done.
    When the cost of food and all the other utilities really get out of hand then we will know theres no more room left in Auckland

  5. David Scott 5

    Hmm HSBC is on *my* watchlist as a bank which deliberately aided people hide their wealth and avoid paying tax.

    Come to think of it, all banks are dishonest and greedy just some are worse than others.

  6. maui 6

    I know of a council that makes development decisions based on a panel of 3 councillors, all chosen by the mayor. One of the people often chosen has strong links to real estate. How’s that for democracy…

  7. tc 7

    “Last week a $50m apartment development was found to have passed every Council inspection despite shoddy workmanship and obvious failures.”

    Wow that supercity that Rortney and Shonky built is really delivering on its promises to the hollowmen isn’t it.

    • dukeofurl 7.1

      I wondered about that.
      It seemed like an internal hit back at some inspectors not checking things they should.

      Is there corruption ? There are people from council facing charges relating to roading contracts.
      THis development is supposed to be a $50m so we could be looking funny business

      • Tracey 7.1.1

        more likely not enough people to inspect.

        auckland city allocates about 45 mins for the final inspection, including travel time.

        • tc 7.1.1.1

          If you alert them to suspect activity they don’t even show up and BS about it being acceptable having never even visited the site.

          • Tracey 7.1.1.1.1

            That’s because they are too busy focusing on some agents that they don’t like. I know of one very qualified and well-versed on the BA and Code expert whose clients have been told that if they use him, expect long delays and fine tooth comb assessments. The bully mentality still exists at ACC. The developers know that to advance things they have to be sugaring and make out that the building officer is the brightest most knowledgeable person in town. Flattery can get you everywhere.

  8. tracey 8

    “Social Housing Minister Paula Bennett has told community housing providers that they need to become sustainable businesses and not to depend on Government grants.”

  9. tracey 9

    This government openly states there is no place for a social component to NZ society

    “”That will mean looking at ways to build your balance sheet and your financial capability, or forming a consortium to get it.”

    It could also mean working with iwi, other housing providers, larger financiers, or companies with experience in large scale asset management.

    “The Government has signalled that we expect providers of all sizes to be seriously looking at all options to build a sustainable business,” Mrs Bennett said.”

    Anything which can’t make a profit must go.

    • AmaKiwi 9.1

      “Anything which can’t make a profit must go.”

      Except the National government.

      They can screw up the economy, destroy our environment, destroy the health and life style of the lowest paid, waste money on inefficient highway schemes, promote diabetes and alcoholism which our public health service will have to pay for, etc.

      Tracey, I think I misread your last comment. You meant anything which can’t make a profit for corporations at the expense of the NZ population.

  10. Ed 10

    The proposal to force land to be released to housing once adjacent properties go over a certain level has some superficial appeal to anyone that doesn’t think. A bit of further thought gives the possibility of “land bankers” being rewarded for waiting – they then have an incentive to only put expensive into the first part of development, thereby ensuring that further land can be “forced”to be released – or just held again until prices rise . . . A developers dream! I wonder who owns a lot of land near residential boundaries? I suspect there are not many beneficiaries . . .

  11. weston 11

    high time i think for a complete survey of all the arable land left in nz BEFORE we cover anymore of it in houses ….unless of course society is quite happy eating glasshouse food grown with artificial nutrient and token sunshine ?

  12. millsy 12

    Why not just build more state and social housing (the NZ Super Fund and ACC have ooodles of cash to pay for it), and bring back the housing subsidies of yore?

    Probably better than giving developers everything they want and hoping we get soaked in urine sometime in 2034.

  13. savenz 13

    The problem is not the land but the sky high price of building on the land. Building material monopolies, and high connection charges like $12k for transformers to connect to the electricity supply and $13k septic tanks and $12k water connection charges for metro water are all adding to the costs of building. It costs more per square meter to build here than Australian or the US.

    As many building charges are fixed charges it makes it a lot more expensive to build a small house compared to a larger one. So the new houses coming through are often large and unaffordable.

    New developments should be forced to sell 10% or more at an affordable level for social housing.

    Granny flats should be encouraged as they can exist with the existing houses. At present developers are often demolishing the existing house which has heritage value in favour of large unaffordable mansions. Over 20 years there will be no NZ kids left in some suburbs. Not sure where the elderly are supposed to live. Granny flats are useful with the older population were families can pool resources to live on the one site.

    Totally agree with…

    It also needs to explain why it continues to choose to let developers use shell companies, collect money, sell property, remove profit, close company and repeat, all while escaping genuine legal liability for projects they control and direct (financially at least).

    IF developers were to be personally liable, as builders and designers are, we would see a drop off in development by some operators. Just as liability for builders and designers was intended to get rid of the cowboys.

    The RMA reforms are just a dream for the government to pollute and have the rich get even richer and destroy our heritage even more than they are already doing so. Fancy getting rid of height to boundary and putting up a 12 story building on the waterfront blocking everyones views – at present you probably still can, but it makes it even cheaper to be a prick and wreck the neighbourhood for your own profit with the government’s proposed RMA.

    Land is not a problem in NZ and all the research shows that there are plenty of sections. People just do not convert them to build because of the cost of building which is the real problem. But that does not fit in with the governments ideology of cracking down on corrupt business.

  14. Grim 14

    Leave Auckland alone!

    If the government really wanted to fix the Auckland housing crisis, they could simply remove the incentive to live in Auckland, why do people flock to Auckland? well paying jobs, or lack of jobs outside Auckland.

    Auckland house prices are what they are, forget trying to reduce prices by increasing supply, it does not help, those already in the market lose wealth, and those purchasing either have longer commutes with increased congestion, smaller dwellings or reduced infrastructure. This all increases strain on infrastructure placing additional costs on a council that can’t balance the books (you do realize that by 2020; 20% of your rates bill will go towards paying interest only on the council debt, no plan to pay the principle down)

    Create jobs and infrastructure in another location, no new houses in Auckland.

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    No Right TurnBy Idiot/Savant
    1 week ago
  • A Movement That No Longer Moves.
    Moving And Shaking: There was a time when people spoke matter-of-factly about the “labour movement” – a political phenomenon understood to embrace much more than the Labour Party. Included within the term’s definition was the whole trade union movement – many of whose members looked upon the Labour Party as ...
    1 week ago
  • NZ ‘left’ politically embracing extreme postmodernism
    by Philip Ferguson Much of the left, even people who formally identify as marxists, have collapsed politically in the face of postmodern gender theory of the sort pioneered by American philosopher Judith Butler. For Butler even biological sex is socially constructed. “If the immutable character of sex is contested, perhaps ...
    RedlineBy Daphna
    1 week ago
  • The obvious question
    The media is reporting that the (alleged) Labour party sexual assaulter has resigned from their job at Parliament, which means hopefully he won't be turning up there making people feel unsafe in future. Good. But as with everything about this scandal, it just raises other questions. Most significantly: why the ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • The moment I found out that you found out, I acted swiftly
    By Prime Minister Jacinda Ardern I am every bit as angry as you are. I am every bit as disappointed as you must be. The people with power, oversight and the ability to do something about these processes within the Labour Party should be ashamed. Whoever those people are, I ...
    The CivilianBy admin
    1 week ago
  • This is why people hate property developers
    Property developers think there is an "oversupply" of houses in Auckland:High turnover rates and falling prices may be a sign that there are too many new houses going in to some parts of Auckland, commentators say. [...] Property developer David Whitburn said there was a "bit of an oversupply" in ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Australia to Pacific: “Fuck you, you can all drown”
    World leaders are meeting in New York in two weeks for the 2019 Climate Action Summit, where they are expected to announce new and more ambitious targets to stop the world from burning. But the Australian Prime Minister won't be there, despite being in the USA at the time:Scott Morrison ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Implausible ignorance
    Labour Party president Nigel Haworth resigned yesterday over the party's sexual assault scandal. But while that's good news, its unlikely to take away the stench of a coverup. Because according to Paula Bennett in Parliament yesterday, pretty much everyone in the Prime Minister's office was involved as well:I have been ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Labour’s Fatal Flaw.
     Two-Faced? Labour insiders' commitment to the neoliberal status quo puts them at odds with their party’s membership; its trade union affiliates; and a majority of Labour voters, but this only serves to strengthen the perception they have of themselves as a special elite. Among the lesser breeds, they’ll talk up a ...
    1 week ago
  • Ten reasons the Tories do NOT want an election
    There has been a lot of talk about Boris Johnson wanting an election, and he has blustered with great gusto about 'chicken' Jeremy Corbyn refusing one, but I think there are many reasons why he is secretly glad he has been refused the opportunity:The Tories are an utter rabble,tearing themselves ...
    1 week ago
  • Prorogation Illegal, rule Scottish judges
    Scottish appeal court judges have declared that Boris Johnson’s decision to suspend parliament in the run-up to the October Brexit deadline is unlawful. The three judges, chaired by Lord Carloway, Scotland’s most senior judge, overturned an earlier ruling that the courts did not have the powers to interfere in the prime ...
    1 week ago
  • Let me explain what I meant by Everyday New Zealanders
    By Simon Bridges. The following is a press release from the office of Simon Bridges, leader of The National Party. Key ora, New Zealand. Happy Maori Language Week. Look, I’m writing to you today because I want to clear something up. There’s been a lot of kerfuffle around some things ...
    The CivilianBy admin
    1 week ago
  • Yes, the SIS is subject to the Public Records Act
    I understand there's some stuff going round about how the SIS "was removed from the list of public offices covered by the Public Records Act in 2017". The context of course being their records derived from US torture, which will be disposed of or sealed. The good news is that ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • An evidence-based discussion of the Canadian fluoride/IQ study
    Dr. Christopher Labos and Jonathan Jarry discuss the recent Canadian fluoride/IQ research. They provide an expert analysis of the paper and its problems. Click on image to go to podcast. The critical debate about the recent ...
    1 week ago
  • Climate Change: Australia in denial
    Australia is burning down again, and meanwhile its natural disaster minister is denying climate change:Australia’s minister responsible for drought and natural disasters, David Littleproud, has said that he doesn’t “know if climate change is manmade”. Clarifying earlier comments that the question is “irrelevant” when considering the Coalition government’s response to ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Philippines activist speaking on the Duterte tyranny
    Auckland Philippines Solidarity is excited to host Professor Judy Taguiwalo for a speaking tour of NZ in September. She is a well-known activist in the Philippines and was a political prisoner under the Marcos dictatorship. Professor Taguiwalo briefly served as a Cabinet member under President Duterte but was forced from ...
    RedlineBy Daphna
    1 week ago
  • Disgust
    I have no special insights to offer on the Labour sexual assault coverup. All I have is disgust. Disgust that an organisation could fail its people so badly. Disgust that they punished the victims rather than the perpetrator. Disgust that its party hacks are apparently blaming the victims for demanding ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Speak Up for Women calls out Greens’ censorship
    This open letter to the Green Party was penned after an opinion piece by Jill Abigail, a feminist and founding member of the party, was censored by the Greens’ leadership. (Redline has reprinted her article here).The intolerance of the Green Party leaders and their acceptance of the misogyny of gender ...
    RedlineBy Daphna
    1 week ago
  • Member’s Day: End of Life Choice, part 3
    Today is a Member's day, and David Seymour's End of Life Choice Bill continues its slow crawl through its committee stage. They're spending the whole day on it today, though the first hour is likely to be spent on voting left over from last time. After that they'll move on ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Flight to Los Angeles turned back after passengers decide they don’t want to go anymore
    An ambitious plan to fly to Los Angeles petered out into a brief sight-seeing trip and a desire to return home and get some sleep before work tomorrow. Air New Zealand has confirmed a flight to Los Angeles last night was turned back about a quarter of the way into ...
    The CivilianBy admin
    1 week ago
  • Indigenous Futures: defuturing and futuring – an analytical framework for policy development?
    There appears to be consensus – by omission – that the concept of indigenous futures should be accepted at face value. So I scavenged the internet to see if I could locate an academic descriptor or a framework around how we think about it as a concept, and whether it ...
    EllipsisterBy Ellipsister
    1 week ago
  • Cadbury rumoured to be releasing the Pineapple Trump
    Here’s another novelty chocolate to shove in your gob, New Zealand Cadbury could be seeking to make itself great again with a rumoured new release: Pineapple Trumps, a spin on its classic chocolate-encased pineapple treat and do-it-yourself tooth remover. The global confectionery manufacturer and bumbling “before” character in an infomercial, ...
    The CivilianBy admin
    2 weeks ago
  • The coming resource war.
    During my time in the Pentagon I had the privilege of sitting down with military leaders and defence and security officials from a variety of Latin American nations. Sometimes I was present as a subordinate assistant to a senior US defence department official, sometimes as part of a delegation that ...
    KiwipoliticoBy Pablo
    2 weeks ago
  • Māori Language Week with The Civilian
    Kia ora, Aotearoa. It’s that magical time of year. Te Wiki o te Reo Māori. In English, the week that frightens talk radio. As you probably know by now, all your favourite media outlets are participating, some more successfully than others. Stuff has changed its name to Puna for the ...
    The CivilianBy admin
    2 weeks ago
  • Will Horizons act on climate change?
    Local body elections are coming up next month. And it looks like all Palmerston North candidates for Horizons (the Manawatu-Whanganui Regional Council) want to take action on climate change:Climate change is set to be a key issue in Palmerston North for the next three years if those wanting to get ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • BORA reform is stalled
    Eighteen months ago, the government promised to strengthen the Bill of Rights Act, by explicitly affirming the power of the courts to issue declarations of inconsistency and requiring Parliament to formally respond to them. So how's that going? I was curious, so I asked for all advice about the proposal. ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Corbyn and Brexit
    As the Brexit saga staggers on, the focus is naturally enough on the Prime Minister and his attempts to achieve Brexit “do or die”. But the role played by the Leader of the Opposition is of almost equal interest and complexity. The first problem for Jeremy Corbyn is that he ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • A ditch for him to die in
    Last week, English Prime Minister Boris Johnson boldly declared that he would rather die be dead in a ditch than delay Brexit. Unfortunately for him, the UK parliament accepted the challenge, and promptly dug one for him. The "rebellion bill" requires him to ask for and secure yet another temporary ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Warning! Warning! Danger Jacinda Ardern! Danger Marama Davidson! Warning!
    Lost In Political Space: The most important takeaway from this latest Labour sexual assault scandal, which (if I may paraphrase Nixon’s White House counsel’s, John Dean’s, infamous description of Watergate) is “growing like a cancer” on the premiership, is the Labour Party organisation’s extraordinary professional paralysis in the face of ...
    2 weeks ago
  • Union solidarity with Ihumatao land occupation
    by Daphna Whitmore Every Sunday for the past two months unionists from First Union, with supporters from other unions, have set out to the Ihumatao land protest, put up gazebos and gas barbeques, and cooked food for a few hundred locals and supporters who have come from across the country. ...
    RedlineBy Daphna
    2 weeks ago

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