Tuesday, 12 July 2016

#HousingCrisis | Zoning for special interests [updated]


In not being able to pay its own way, Labour's cure for affordable houses is unaffordable -- and in planning to confiscate private property both National and Labour plans are immoral. Yet even in their intentions (and politicians actions are judged not on results, but only on intentions) then even then, neither party are actually proposing producing houses that are actually affordable.

Affordable houses are generally considered to be houses with an average selling price of only 3 times average income for that area (a house price-to-income ratio met by Auckland as recently as the early 1990s).* Labour’s stated aim is to produce houses of around $500,000 to $600,000 – and National’s plan lacks even that paltry ambition. Yet at that price, that would still make a house price-to-income ratio of around 5 or 6.

So Labour’s seriously unaffordable plan is to make houses that are severely unaffordable.

Table from 12th Annual Demographia International Housing Affordability Survey: 2016


And meanwhile, the current state of the law ensures that the housing crisis will continue.

It’s like neither party actually has any genuine solutions to the crisis their laws have caused. Yet the answers have been known for decades.

HCrisisI refer you again to a simple book that’s been on my shelf for well over thirty years. Its solutions are comprehensive – one simple solution being to outlaw zoning --

If … there were no zoning or land-use control laws, there would be considerably more housing at considerably lower prices and in areas considered more desirable.

Both common law and the systems set up in un-zoned cities like Houston protect freedom and property owners far better than zoning, which has only been imposed for a few decades. The problems are evident, the solutions are known, yet zoning of every New Zealand city continues.

Men are born free but nearly everywhere in zones. Why? Because (as my well-annotated copy told me so long ago) so many cronies benefit from it.


These are just a few of the interest groups who benefit from zoning – to them these days we might add the councillors and politicians whose campaigns are part-funded by the beneficiaries, the bankers who get to lend in an over-priced market, the increasing sea of well-remunerated resource consultants (who will become even richer come the dawn of Auckland’s new Unitary Plan), the older owners of rapidly inflating inner-city property, and the circle of land-owners around the outer ring of NZ’s cities awaiting and lobbying for re-zoning; all of them  making hay out of other people’s misery.


But it doesn’t need to continue …


* “The Median Multiple (this house price-to-income ratio) is widely used for evaluating urban markets, and has been recommended by the World Bank and the United Nations, and is used by the Joint Center for Housing Studies, Harvard University. Similar house price-to-income ratios (housing affordability multiples) are used to compare housing affordability between markets by the Organization for Economic Cooperation and Development, the International Monetary Fund, international credit rating services, media outlets (such as The Economist) and others.” [Source: 12th Annual Demographia International Housing Affordability Survey: 2016, p. 6]


  • “The winners in this equation are those who already own property in the inner suburbs, mostly older generations. Restrictive land-use regulations have severely constrained the supply of housing in most Australasian cities, pushing prices up.
        “It is, in effect, a massive wealth transfer from the young to the old.”
    'Regulations that limit the stock of housing suitable for younger people, such as height restrictions and view shafts, need to be axed and pronto' – Jason Krupp & Alex Voutratzis, INTEREST.CO.NZ
  • The Coming to the Nuisance Doctrine is the only objective means of determining who has the right to continue using his property in the event of a nuisance. If zoning is to be replaced, therefore, it must be replaced with the Coming to the Nuisance doctrine.”
    The "Coming to the Nuisance" doctrine: The antidote to zoning – CAPMAG
  • “’When the productive have to ask permission from the unproductive in order to produce,’ said Ayn Rand, ‘then you may know that your culture is doomed.’ That’s true. Just ask anyone who has waited in line for a resource consent.”
    What would 'Party X' do about [affordable housing]? - PART 3: Small Consents – NOT PC
  • “Here is how the housing market works under John Key’s crony capitalism: he and his housing minister and the council’s planners have between them just made around half-a-dozen land-owners around Auckland rich beyond their wildest dreams.
        “Announcing out of the blue some land allowed to selectively slip through the council’s zoning net, the land-owners quickly discovered their land formerly zoned rural by planners now had the politicians’ and planners’ tick to build houses – and the value of said land immediately went through the roof.”
    Windfall profits for some at the expense of affordable housing for others – NOT PC, 2014
  • “Is zoning and urban planning racist? Are environmentalists guilty of racial injustice? Are planners the new segregationists? Yes, says Randal O'Toole of the Thoreau Institute.”
    Zoning and 'Smart Growth': The New Segregation? – NOT PC, 2006
  • “Here's a lesson that town planning advocates everywhere should note.  While most of the American housing market has experienced boom and bust in the face of expansionary Federal Reserve policies, housing in Houston has remained relatively immune -- even though it's been at the epicentre of rapid economic growth due to the commodities boom.
        The reason?  While most of the western world is under the thumb of town planners, with the result that housing in much of the western world has become seriously unaffordable, the city of Houston remains unzoned, and its housing among the most affordable anywhere.”
    Why Houston housing has avoided boom and bust – NOT PC, 2008
  • “Kip's Law:  "Every advocate of central planning always — always — envisions himself as the central planner.”
    “Planning” to stop Aucklanders plan – NOT PC, 2011
  • “What do town planners mean when they talk about things like ‘affordable housing’ and ‘community’?
    What they don’t mean is making houses affordable, or about any ‘community’ other than their own.
    The weasel words of “planning” power-lust – NOT PC, 2010

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