Tuesday 14 May 2024

"You're free to build, but ..."


The National-led Coalition boasts that it will "fix housing" by bringing in rules requiring councils to zone enough land* on which land-owners are free to build sufficient housing to allow for the next thirty years of demand.**

Doesn't that sound great, you think. "Free to build," you say! 

The National-led coalition's housing honchos are either stupid, naive, or they think that we are.

As should have been obvious from Auckland council's passive-aggressive resistance to government diktats on the Medium-Density Residential Standards (MDRS), telling councils to "free up land" only works if councils are so inclined. If they are already so inclined, ministers wouldn't need to tell them. And if they aren't so inclined then, well, as Bryan Caplan points out in his new "graphic novel" Build, Baby, Build: The Science and Ethics of Housing Regulation, councils can hinder construction in dozens of other ways ... if it's so inclined. (And it is.)

For starters it could ...

Go tell Minister Bishop. (Or send him a copy of Bryan's book.)

* * * * 

* Zoning is a restriction on land telling owners that the planners know better than the owner (and would-be buyers) what should go there. How is it a restriction, you ask? If the planners' zone allows what the owner would do anyway, it's not needed. If it disallows it, it's not wanted.

** This presumes that the grey ones would even know, to any standard of meaningful proof, what demand would look like over the next thirty years. I mean, it's not like there's any thirty-year stretch in recent history they could point to and say "look, we got it right."

1 comment:

MarkT said...

I've spent the past 15 years delivering over 1000 residential house sites in NZ in multiple new subdivisions, and over that time learnt what works and doesn’t work when navigating the regulatory hurdles. So I would have hoped that if I'm somewhat optimistic about the government's new plans, it would give you pause to reconsider if you're being overly pessimistic, rather than assume my optimism is stupid or naive.

The proposed massive increase in zoned land would not leave us "free to build", but nor would it be completely useless either as you're suggesting. I've already explained why in another post, so I won't repeat that, except to note again that it did have a clear beneficial effect in constraining house prices in Christchurch (relative to other cities) when they rezoned around 10 years worth of land around 2012 after the earthquake, despite the new regulatory hurdles and additional expenses that also came with the earthquake.

Instead I’ll just give you an analogy. Someone owns a china shop, and someone advises them they’re about to let a bull loose in it. You’re worried the bull is going to smash all your china to bits. In this analogy the china shop owner is the Council not wanting development, and the bull is rampant market forces. The china shop owner can do various things to limit the ‘damage’ – they can put all the most expensive china away, they can try to barricade off sections of the shop, they devise plans to try to trap the bull and get him under control - but it’s almost certain that a lot of china is going to be damaged, despite your best efforts otherwise.

One of my projects was originally zoned rural, and my client needed to firstly go through the painful process of getting it zoned residential. When they got the rezoning after many years it was handed over to me, and it still took me at least 5 years of design and consenting to get to a point where we were free to build. So I know full well that rezoning is not the silver bullet that will instantly bring new housing online. But I knew that once the land is zoned for an activity, then local government cannot stop it, if I had enough persistence. Also I didn’t have the option of switching to other vast swathes of appropriately zoned land that were easier to consent if this one proved to difficult, which would have made it easier.

To the extent you’re trying to ward off complacency, I agree with your sentiment. You can’t win a battle if you don’t have sufficient determination, or don’t execute it properly. But you seem more intent on waving the white flag and giving up before the battle’s begun, rather than encourage a good step in the right direction.

Sure, it would be better if we did away with zoning completely and repaired to common law property rights – as you’ve been proposing for 20 years. That’s the nuclear option – just like dropping a nuclear bomb would end a war more quickly and decisively. But when the nuclear option off the table because it's not viable politically, a good battle plan with conventional weaponry is better than no battle at all.