Finance Minister Bill English hit out yesterday at local
body planners and councillors for contributing to the growing
unaffordability of housing in the country's least affordable
The Government is under attack from Opposition parties over
the issue of affordable housing and Mr English used a
pre-Budget 2014 speech yesterday to deflect some of the blame
on to local authorities.
He said it was difficult to build some types of affordable
housing in some of the country's cities.
House prices doubled between 2001 and 2007, and prices had
resumed their upwards march in most areas since the global
financial crisis (GFC).
''There are a number of reasons for this but there is little
doubt that planning processes and rules are important drivers
of land and housing costs.''
Giving two examples, the Finance Minister said planning rules
in Auckland required apartments to be at least 40sq m and
balconies to be 8sq m.
Other rules set minimum subdivision size, ceiling heights,
bedroom size and even the width of the front door. All of
those pushed up the cost of housing.
''Local body planners and councillors are not aware of the
wider social and economic effects of their complex rules and
The consequences included higher prices created by excessive
planning rules putting pressure on interest rates, reducing
business investment, lowering productivity and hitting
household budgets, Mr English said.
Housing supply that was unresponsive to demand caused price
''Secondly, as the cost of housing consumes a greater
proportion of income, pressure goes on councils and the
Government for greater assistance.''
Around 40% of households that were renting received
accommodation support from the Government.
That would increase if housing became less affordable.
The third consequence was that rising house prices drove
inequality, he said.
Inequality in New Zealand had been flat since 2004, but the
situation could have been better had housing been more
affordable, he said.
''That is why we're working with councils to ensure New
Zealanders have access to more affordable housing.''
The Government had signed a housing accord with the Auckland
Council which was already delivering results.
It was working on accords with councils in Christchurch,
Tauranga, Queenstown and the Wellington region.
The Government was reforming the social housing system to
bring in community housing groups, increase competition and
get social houses where they were needed the most, Mr English
''We're reforming the Resource Management and Local
Government Acts to cut red tape and reduce costs. And we're
continuing to invest around $2 billion annually in
accommodation support for Kiwi households.
''So, we're making steady progress to deliver more affordable
housing to more New Zealanders.''
It took time to change the way councils made decisions on
housing and for developers to get more projects up and
running, he said.