NZ Housing Crisis: Local Government Still Confused

Guest post by Hugh Pavletich

Early 2007, soon after the release of Demographia’s housing affordability survey showing NZ’s housing beccoming increasingly unaffordable, Local Government New Zealand® and the New Zealand Planning Institute® expressed concern about housing affordability, stating:

The New Zealand Planning Institute® strongly supports Demographia’s call for planners, local councils and developers to collaborate more proactively and effectively on the provision of an adequate supply of affordable new residential housing.

Now, some seven-and-a-half years later, 10^th October 2014, Local Government New Zealand®  issues a media release stating … stating …

Local Government New Zealand (LGNZ) says local government, central government and the business sector need to work together with communities to address housing affordability across New Zealand.

The emphasis is mine. The sappy confusion is theirs.

My own assessment: Local Government New Zealand® is still lost and confused.

During those seven-and-one-half years since their call to “collaborate proactively” on increasing the supply of affordable housing, neither Local Government New Zealand nor the New Zealand Planning Institute have done anything either to improve housing affordability, or collaborate with those who are trying to improve housing affordability.

Not. One. Thing.

Nothing, except to resist improvement, and to help make housing affordability worse.

Remarkably, the latest media release from Local Government New Zealand states this organisation still finds this simple issue “complex” -- “a complex issue,” they say, “that needs a mix of interventions.” [Ours is an age of “complexity worship” observes philosopher Leonard Peikoff in this lecture on the nature and necessity of principles; complexity so often as an excuse for inaction – Ed]

Late October 2012, following the release of the New Zealand Productivity Commission Housing Affordability Report,  Bill English on behalf of the Government (access via www.PerformanceUrbanPlanning.org ) agreed with the Productivity Commission the focus for delivering affordability must be on …

1. Land supply
2. Infrastructure financing
3. Process, and
4. Construction costs

Local Government New Zealand makes no mention within its 10 October 2014 media release of any of these.

So much for “collaboration.” Or being “proactive.”

There have been ten annual Demographia International Housing Affordability Surveys, each new Survey showing housing affordability in New Zealand being worse than the last.

The Introduction to this year's Survey is contributed by Alain Bertaud, former Principal Planner with the World Bank and currently a senior researcher at the Stern School, New York University.  Bertaud has some advice for the complexity-worshipping members of LGNZ® and the Planning Institute®:

It is time for planners to abandon abstract objectives and to focus their efforts on two measurable outcomes that have always mattered since the growth of large cities during the 19th century’s industrial revolution:

• workers’ spatial mobility, and
• housing affordability.”

As a city develops, nothing is more important than maintaining mobility and housing affordability.

New Zealand economists collaborated in organising and financing a three-city New Zealand Speaking Tour late July by Alain Bertaud, accompanied by Marie-Agnes, his wife and fellow researcher at NYU Stern School.

The important tour was a great success, where – on an individual basis – many responsible planners and Local Government employees participated.

Alas, Local Government New Zealand® and the New Zealand Planning Institute® played no part in this important visit by Alain and Marie-Agnes Bertaud.

It was no doubt all too “complex” for these organisations to consider collaborating.

Local Government is well known as The Great Inertia Sector,  where even the simple is made complex.

For ten years the annual Demographia International Housing Affordability Surveys have tried to make it as simple as possible, demonstrating that for housing to be considered affordable a city’s average house prices should be no more than 3.0 times average incomes. Yet the median-multiple in NZ’s major cities is far above 3.0, and rising. Something Local Government New Zealand® and the New Zealand Planning Institute® remain content to dismiss as too “complex.”

In getting solutions in place on this “nonsense issue” of housing affordability, Central Government in dealing with Local Government needs to employ the General George Washington Management Method.

Washington made a point of employing as his servant and valet the thickest person he could find in his army. Washington ran all his draft speeches and orders past this man before delivery. If his valet didn’t understand them, they were re-drafted until he did.

It is hoped Prime Minister John Key asks LGNZ President Lawrence Yule … “Following 10 Annual Demographia Surveys, what part of 3.0 don’t you understand ?”

Mr Key has been excessively tolerant with Mr Yule to date.

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Hugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia International Housing Affordability Survey.