Wednesday, 9 October 2013

Ten questions for Nick Smith on his Special Housing Areas

While Nick Smith and Len Brown pretend in their “dramatic” joint announcement today that them “releasing” land on which to build 6000 houses is the beginning of the answer to affordable housing in Auckland, the announcement itself has less to it than meets the eye, and raises more real questions than it does answers.

The announcement itself consists of a declaration of “10 Special Housing Areas” and a map.


What makes the areas marked on the map so “special,” apparently, is this:

  1. Building projects on land so designated can hope to gain consents in six months rather than two to three years. This is called a “fast track.”
  2. Building projects on land so designated will be required to build a proportion of houses meeting some as yet undisclosed criteria allowing them to be called “affordable.”

The questions it raises are ones such as these:

  1. What makes these particular bits of land, “with the capacity” to host 6000 houses between them somewhere down the track, more worthy of special political attention than any other bits?
  2. Why are only the owners of these sites getting special political favours?
  3. Which particular consents do the politicians mean? Just building consents? Or just Resource Consents? Or both?
  4. And if the politicians truly can reduce consenting times for these 600 promised sites, which in itself is material for another Tui ad something we all have to take on trust, then why can’t they just as simply reduce consenting times for every project on every damned site in the city?
  5. And if they really can reduce consenting times on these 600 sites, if that really is even possible, then will they do it by taking more resources away from processing every other consent application in the city? Or will they do it by hiring more staff to process these applications, raising their own costs even further (all of which they will undoubtedly pass on)?
  6. And since when in any case  does“fast tracking” a consent mean waiting six months—six freaking months!—when not that long ago a builder could buy a site conditionally, in the full expectation that he could get a consent and start on site in four weeks!? Noting that by “not that long ago” I mean less than twenty years ago, just before the full stultifying effects of Jim Bolger’s Building Act and Nick Smith’s Resource Management Act really kicked in.
  7. And, given that building experts themselves accept the impossibility of building to a profit anything anyone could truly call affordable, what do you think the requirement that every developer build a proportion of unprofitable houses in their development will do to to the cost of all the other houses in these developments?
  8. And, given that developers’ expectation of profits is what is going to drive the production of the hoped-for 600o houses, and given that these increased costs of production will inexorably lower profits, or even remove any profits altogether, just exactly how excited should prospective developers and home-buyers be about today’s announcement?
  9. And, once this is realised, just how many more direct and under-the-table subsidies will developers be offered by this manipulative housing minister so he can make more headline announcements like this one?
  10. And finally, does either Nick or Len really believe this will make Auckland houses more affordable, or are they just buying themselves another headline?

And a final bonus question for Len Brown:

  • Just how excited will the the rent-seekers three private companies be out in Len Brown’s former fiefdom of Manukau  who process building consents for the council, all of whom already charge eye-watering monopolistic prices to do so, and who between them get to take 723 government-granted “fast track” bites out of today’s just announced cherry? Will there be champagne in their offices this afternoon to celebrate?

I think we should be told…


  1. Hi Peter - All great questions that we already know the real answers to. In short this is just politician headline grabbing because of the upcoming elections.
    To underscore the total absurdity of the 'affordable' bit, based on the raw land $m2 rate the land is being sold for 'affordable' housing at Hobsonville, the land is being sold for the equivalent of $1,400,000 per ha. There is some great data of this effect on the fringe of constrained land cities were the newly released token amounts of land are dearer on a m2 basis than older more established suburbs that are within the old boundary. This fringe becomes a ring or pockets of high density town housing. The only way this housing becomes 'cheaper' across the board is to go smaller. The only way it becomes 'affordable' relative to this is some form of subsidy. Yet the underlining causes of land constraints (like zoning and land banking) and shared value uplift gains by council still cause huge amounts of waste (super profits to the land owners and council) in the system.

    Smith and Brown together on this, now that sounds familiar.....

    • "No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
    - George Orwell, Animal Farm, Ch. 10

  2. Please Mr. Bumble may I have some more.

  3. hey nice post meh, I love your style of blogging here. this post reminds me of an equally interesting post that I read some time ago on Daniel Uyi's blog: Guy Ask Girls Questions .
    keep up the good work friend. I will be back to read more of your posts.


  4. For question 6, where you ask why building consents aren't really quick like they were 20 years ago .... but isn't this the era when all the leaky buildings were built?

  5. @Malcolm: No. I'm talking about the era before that. It was the introduction of the NZ Building Code that began complicating what was in consents (and was partially responsible for leaky homes, just one reason the head of the body who introduced the NZ Building Code was sacked); and it was the amalgamation of councils in the late 80s that began complicating the consent process itself.
    And in any case, and even if you don't accept that argument, the speed of issuing a consent has little to do with the nature or quality of site inspections, which is what so many councils were pinged for with leaky homes.


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