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The Dunedin City Council could be forced to open up land for development - sidestepping long-term council planning in the process - as part of a Government push to bring down house prices.
The concern was raised at yesterday's planning and environment committee meeting, as Dunedin city councillors discussed a council submission on the Housing Accords and Special Housing Areas Bill.
The Bill, which is before a parliamentary select committee, would allow the Government to create ''special housing areas'' in parts of New Zealand deemed to have significant housing affordability problems.
Councils would be able to enter into accords with the Government to create the new zones but, if they resisted, the Bill would give the Government the power to force the creation of the new areas.
And, while the Bill appeared aimed primarily at Auckland, Dunedin could also qualify for one of the new housing areas, city councillors were warned. Dunedin could be deemed in need of a special housing area, based on criteria proposed under the Bill, council city strategy and development general manager Sue Bidrose told the meeting.
That was largely because of the high population of students and the elderly, whose economic circumstances skewed the city's housing affordability results, the council's submission said.
Few in either group were likely to be in the market for a house so it was ''inappropriate and misleading'' to include them, it said.
That was overlooked by the Bill and the proposed solution could make matters worse, Dr Bidrose warned councillors.
The cost of building a small, 145sq m home in Dunedin was only $16,000 less than buying at the city's median house price of $255,000, according to Department of Building and Housing figures, she said.
However, the cost of building did not include land prices, which would add another $140,000 to overall costs.
That meant there was a risk that Government intervention could actually drive up house prices in Dunedin. It was expected the Government's focus would initially be elsewhere, beginning with the biggest cities and high-price centres such as Queenstown, she said.
However, council economic policy analyst Hamish Orbell warned the Bill would capture just about every local authority in New Zealand and give the Government the power to intervene in Dunedin.
''The Government would be within its power to apply the proposals under the Bill to Dunedin, and those proposals are fairly intense.''
The council's submission called for removal of the power to override councils' plans, changes to the housing affordability criteria and a detailed study of residential land availability in each region.
The council also took a swipe at the Government's handling of the changes, criticising the short deadline given to those wanting to respond to the Bill.
The council had been given just 10 working days from May 16 to respond, which was ''completely insufficient'' to allow councils and the public to assess and provide detailed feedback on the Bill, it said.
''In our view, these consultation time frames raise serious concerns about the democratic nature of our legislative process and New Zealand's system of representative government.''
The process could also affect the outcome, as hasty legislation ''often leads to poor regulatory outcomes and greater costs to society in the future'', the council warned.
The submission, made initially by Mayor Dave Cull because of the tight deadline for a response, was endorsed by councillors at yesterday's meeting.