Thursday, 1 October 2015

“Price-to-income ratio the key issue for housing affordability,” says council economist [updated]

Auckland council’s chief economist has written a personal report on Auckland’s housing bubble burgeoning problem with unaffordable housing.

The good: identifying that median house price as compared to the city’s median income is a key measure of how affordable or unaffordable housing is in this big little city. Auckland’s present price-to-income ratio is approaching ten-to-one. He argues that by 2030 that should be nearer five-to-one.

The risible: the fellow speaks a foreign language. “The report identifies a range of levers … that could be considered … employing a multi-layered collaborative approach that uses the best mix of the available tools we have.”

The bad: as his talk about “tools” tends to indicate, he’s still of the top-down school, his many “levers” revealing him to be another timid tinkerer who’s part of the central-planning persuasion, the unintended consequences of all those tools with their “unified approach” and “joined-up thinking” having delivered us the present rather pressing problem. One looks in vain from any of them for the simplest solution of all: recognise property rights and then get the hell out of the way. But I shall scour the present report more thoroughly in case I missed that ringing phrase amidst all the buzzwords.

UPDATE:  The Property Council likes the report:

Property Council strongly urges Auckland Council to adopt:

  1. Explore the greater use of targeted rates to fund and finance infrastructure growth.
  2. Collaboratively review transport policy, legislation, planning to ensure it supports Auckland’s housing surge.
  3. Omit excessive restrictions on urban design unless benefits exceed costs.
  4. An advocacy plan to consider replacing joint and several liability with proportionate liability…

We call on Auckland Council to embrace the report’s findings… Auckland desperately needs integrated infrastructure and urban planning that complements and supports residential development.

What Auckland and this country actually does need is a Property Council that would tell the urban planners to go to hell—not one that would meekly accept non-excessive restrictions on design and development, or who would applaud yet another layer of bureaucracy in Christchurch.

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