Funding housing trust will bring inflation: development worker

New figures show the resort is the most expensive place to rent a house in New Zealand. Photo:...
Photo: Guy Williams
A proposed plan change to help fund affordable housing in the Queenstown Lakes area will only lead to inflation and more expensive housing, a hearing was told this week.

A hearing considered a proposed district council plan change which would force developers to contribute 5% of the estimated sales value — either through land or a monetary payment — of new subdivisions to fund construction of affordable housing through the Queenstown Lakes Community Housing Trust.

It has been opposed by many developers but a submitter this week, who is neither a developer nor a affordable housing advocate, said the proposal was flawed.

Albert Town resident Ben Mitchell, who has worked with development agencies and developers over the past 25 years, said at a hearing in Wānaka this week that though he supported the funding of affordable housing by the council, he did not support this funding model.

Mr Mitchell said he had no future plans to develop property and had been involved in property for 35 years.

He said the proposal was inflationary, inequitable and was not a planning matter.

The imposed levy would lead to developers increasing the price of land which would then continue to rise.

This would lead to a new benchmark price for land and even those not involved in developments would reflect that price. The new benchmark price would then increase when the next development came along as the cycle continued.

"Anyone who imagines the developer will absorb that tax is out of touch with the reality of what is happening in the commercial market," he said.

The majority of time he had been involved in property, demand has outstripped supply in the Queenstown area.

"Lots of people in this market are relatively price insensitive.

"They do not mind paying that extra amount."

He said the council should not impose an inflationary policy during these times when inflation was running high.

"In essence we are providing for affordable housing by making all property more expensive."

In most other districts, councils funded social housing through rates, and Kainga Ora helped provide social housing nationally by using tax.

"This is the Kiwi way — fair and equitable. We have a system of funding a housing policy.

"It has been operational for longer that most of us have been alive. Why are we finding a system which is not equitable?"

He said targeted rates would be one way to make funding social housing more affordable.

Mr Mitchell also said planners thought anything could be solved by a plan change but this was not the case.

He said this plan change process was archaic, time-consuming and very expensive. It was exclusive rather than inclusive, as less than 5% of the community were engaged in the process.

Community Housing Aotearoa deputy chief executive Chris Glaudel strongly endorsed the plan change process.

Fundamentally, it came back to what types of communities society wished to have.

"Do they want everyone to put down roots close to where they work? The children go to local school and graduate with their class mates. Strong connections ... that comes from having an affordable home," he said.

"Unfortunately, that has, especially here, not been possible. Inclusionary housing is one of those tools which can have the right outcome.

"We do not think it will stop development nor unduly impact on the housing market.

"We see them going hand and glove together."

The hearings were overseen by commissioner Jan Caunter and commissioner panel Dr Lee Beattie, Jane Taylor and Ken Fletcher.

The hearings are set to continue on Monday.