Some more thoughts on the Special Housing Area debacle

With Auckland Council failing to deliver on the Special Housing Areas in a deliberate attempt to thwart the Government and bolster its own compact city aspirations – a solution is required.

I hear that the Nat’s don’t want to push the issue too hard because they are worried about the political backlash.

But, it’s already happening.

Whilst it is a catch 22, the reality is that there are only two choices:

1. Do nothing, be hammered by Phil Twyford and Andrew Little and eventually lose the next election because the housing woes get worse and New Zealanders get sick of it – voting for change out of desperation;

2. Step in to take control of the process. Sure there will be blood on the floor, but if the problem is solved Kiwi’s will think the Nat’s are decisive, strong and solve problems and that’s a winning formula.

The problem is the stepping in bit.

Nobody is sure what the blood on the floor will be and in the dark of night they fret that its political suicide. Except I don’t believe that it is really is.  

Not a peep of complaint was heard when the Government stepped in at Christchurch to take control of planning and consenting. There is a reason for that – the Council was dysfunctional and useless and everyone knew it.

But that public sentiment about a Council isn’t limited to just Christchurch – it’s country wide and in Auckland the people loathe Auckland Council who have done just about everything they can to upset Aucklanders and alienate themselves.

Political balls are not needed here to solve this problem.

There will be barely a stir except from Len Brown and perhaps a few of his cronies.

I’d wager a bet that the Government could step in, take control and resolve the issue without even a stir. Sure they will spill blood with such a coup but the collateral damage will be limited, and if they do a good job of resolving the matter it will be washed out and forgotten in no time.

Unless something is done, the status quo will stand and it will be very very hard for National to cling on to power.

Voters simply won’t put up with it.

 


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  • ozbob68

    There is a 3rd option; National start getting into local politics, rather than being stand-offish like they are now. They need to separate Auckland’s problems from New Zealand’s problems, otherwise yes, they may well lose the next election because of it.

    Maurice Williamson, former minister of transport, needs to get in there and speak authoratively (rather than emotionally) on Auckland’s issues. Rather than leaving the mayoralty to ACT, let’s get someone else in there.

    • mike

      That I agree with. National should proudly support and endorse local candidates.

      It should be considered a stepping stone on the way to the House, if a candidate fails or performs badly in a local Government capacity then they shouldn’t be allowed near central Government.

      But yes, it is time for central Government to step in and do what we pay them for… get rid of the rubbish and fix the problems inept Mayors and toothless Councils have gotten us all in.

      Sorting local Government out would win National a 4th term! I hope you National MP’s who read WO pay attention to this.

      • kaykaybee

        Yes mike and ozbob, Auckland’s housing crisis is the major spanner in National’s re-election. I have never understood the party’s failure to address the need for a serious contender to man the helm here. I mean what did they offer us last time and remember that debacle!

        Problem is whoever is fielded needs to win the South and the West and Brewer (who I think very highly of) is hardly likely to do that at this stage. I feel that Hulse will be a shoo in unless someone like Michael Jones or a similar AB/League hero type gets on board and starts campaigning yesterday.

        Anyone else have a candidate in mind!

        • mike

          They need to find a local business person who has credibility and the respect of the community. Someone willing to give up a good job to “serve” the public.

          Lets not forget a Mayor is a Public Servant… as are Politicians and bureaucrats. They serve us, not the other way round.

          • ozbob68

            Colin Craig for Mayor? (ROTFLOL)

          • mike

            Credibility and respect Oz… come on mate! :-)

          • ozbob68

            Sorry I only ready to “local business person”. :)

        • botti

          It’s a demand side issue. If National wanted to restrict foreign investment and put residential property off limits for residency investment purposes, it could easily do so.

  • kaykaybee

    When you have a council who have procrastinated and sat on their hands as they thwarted developers, landowners and would be house buyers what did we expect and why wasn’t the government more mindful and less dismissive as prices rose weekly? When it is now officially cheaper to buy a house in LA or New York we are officially in crisis and loath as I am to suggest govt intervention they need to do something and NOW.

    The other week I heard from someone very senior in Auckland’s property management arena that they managed over 900 properties for one overseas-domiciled Chinese investor and that they had “plenty more of them on their books” who owned over 100. Surely that’s not an acceptable situation when we now have a generation of born and bred Aucklanders shut out of buying in their home town because any foreigner, not invested in this nation in any way but as a cash cow can buy as many domestic properties as they wish.

    I am a longterm National Party member and have supported them pretty well unequivocally, however this issue is the constant subject at every social event I go to and people are angry and perplexed. Also, it’s at the stage where even people vested fiscally in this industry (real estate sales and property management) are saying enough is enough.

    Do something National and do it now – failure to do so will be the death knell for 2017 if you don’t.

    • ex-JAFA

      Would you still have a problem if the 900 managed properties were owned by someone from Balclutha? Or Torbay? What if it was only 90 properties?

      Each of those properties was previously owned by someone who put them on the market to realise the greatest gain they could get. If someone local outbid the nasty Chinese man, they’d own it. Would you curtail the previous owner’s gain just to spite someone else?

      • justin

        Yes I have an issue with a Balclutha kiwi investing in unproductive sector of economy – shrinking the pool of housing for kiwis. Would, undoubtedly, be lining the pockets of aussie banks in the process.

        Yes I have an issue with a foreigner owning 900 auckland properties – imagine how much accommodation support (my tax dollars) going directly into foreign hands.

        I’d curtail the owners gains to enable young kiwis a chance to own their own home.

        I tell you what you create a politicial party that will support those invests with 900 houses and I’ll support a political party that is about fairness and best interests of NZers – I figured that was National.

        • ex-JAFA

          I don’t need to create any such thing. I’m already a member of (and candidate for) ACT, which holds personal property rights as paramount.

          You make the same mistake as many others when you talk about funding going offshore: you forget that the funding first came onshore from the purchaser to the seller. There is no loss.

          • justin

            What? You don’t understand the volume of invisibles in the balance of payments? Where is the benefit to the economy when a house in Auckland is mortgaged up and up by purchaser after purchaser over years?

          • philbest

            Exactly: Adam Smith had all this sorted, time to go back to basics: he pointed out in “The Wealth of Nations”, 1776, that “dwelling places” are merely a necessary expense like clothing – they just take longer to wear out than clothing. And making it more expensive might seem nice to some, but it is at the expense of the stock of productive capital.

            http://www.macrobusiness.com.au/2012/04/melbournes-enormous-property-over-supply/#comment-142944

        • unitedtribes

          About a third of most wage earners income goes into funding their home, be it owned or rented. Why is it you think that sector unproductive. I inadvertently tried it for a time and can tell you its no free lunch.

      • Tanmedia

        I would feel bitter if the Chinese man was laundering stolen money from the Chinese taxpayer; from corruption; or from the proceeds of crime.

        • ex-JAFA

          Crime is crime. I’m sure you wouldn’t like a nice young local couple to purchase their home with funds they’d embezzled from their employer, either.

  • George Carter

    I can’t see a downside to National stepping in to solve the problem. Results I see include;

    Housing problem, well on it’s way to being solved
    Other councils around the country put under pressure to perform
    Loony Len shown to the world as the waste of space he is
    One less platform for Labour to stand on
    National seen as a government that does rather than a government that talks
    Conservative members of Auckland Council encouraged to grow some b**** knowing they have backing

    I’m sure there are more but these immediately spring to mind

    • botti

      One obvious thing the government could do is restrict foreign ownership of residential property and and remove residential property as an allowable investment for gaining residency. Currently, the $1.5 million investment can be made in residential property. Before 2011 you couldn’t put the investment in residential property.

      • ex-JAFA

        Governments have no business interfering in trade between consenting adults. People who own property should be free to sell it to whomever they like; anything else is artificially capping the owner’s potential return. If someone offered you a million for your house, wouldn’t you be a wee bit miffed if the government stepped in and said you’d have to accept a much lower offer from someone else?

        • Dog Breath

          Government interference is fraught with danger. There is no incentive for the market to respond by flooding the market with houses, its a balancing act of market forces. The only way the government could possibly have any control is to be a house builder and seller of significance then my first sentence applies.

          • botti

            The government does have control over residency and foreign investment. It could easily clamp down on the demand side of the equation, but it won’t.

        • botti

          ***Governments have no business interfering in trade between consenting adults.***

          Disagree. If ISIS started buying up Auckland residential property I suspect people might find that problematic.The governments core role is to protect and represent its citizens, and that extends to enforcing borders and limiting the extent to which land/property can be sold to non-citizens.

          Similarly, the government sets the rules for residency. If it genuinely has any concern about housing, then it would reinstate the pre-2011 position which did not allow the investment to go into residential property.

          • ex-JAFA

            *** that extends to … limiting the extent to which land/property can be sold to non-citizens***

            How does that protect or represent citizens?? “Protection” doesn’t mean mollycoddling; if it did, importers would be barred from charging for the goods they bring in, lest they impact citizens’ purchasing power. It certainly wouldn’t “protect” the citizen trying to realise a capital gain on the sale of their property.

        • philbest

          I am generally on your side on economic libertarianism per se; however I am quite prepared to make a difference re foreign ownership of property in a nation like ours. Our land values could be a plaything of the global speculator class just like our dollar is. Of course having 0.7% of our land inside urban growth boundaries and even more hostage to speculation is a particular madness, but the global speculator class could do what they liked with our entire market turnover of rural land too.

          I regard National changing the rules on this in 2011 as a shameless betrayal of young Kiwis and a deliberate bubble-pumping move to the benefit of crony capitalists in property and finance. Us free market capitalists need to NOT man the barricades in defence of the worst kinds of Gordon Gekko crony zero-sum wealth transfer greed.

          This actually harms the genuine producers of wealth both directly, and indirectly via workforce cost pressures.

  • sheppy

    Skycity cost overrun, unpopular government handout requested, special housing areas not happening in Auckland, unpopular with many – one common denominator here – Len Brown and his council, one benefactor a Labour Government next time around.
    Unless National get their finger out and actually start governing its what will happen. This far out from the election they have time to shake things up a bit WHY aren’t they doing it?

  • STAG

    I don’t want to lose a National Government to the likes of Pants Down Brown come on JK enough is enough .

  • HunuaRanger

    I keep trying to marry the Auckland “housing crisis” and the facts, so after some completely unscientific research on my part (I did a search for properties on a well known real estate website in New Zealand) I found a total of 1504 houses/apartments within the Auckland region for sale between $200,000 and $500,000.
    After finding these figures, I have to ask, What housing crisis?

    • Donald

      Olly Newland pulls this stunt all the time; you aren’t Olly are you? Go back and exclude all the listings that are for sale by auction or tender. Find out how many of those are actually firm listing prices you could pay today.

      • HunuaRanger

        As I said “unscientific” but after searching again using your exclusion of tenders, auctions, etc, I found 940 properties within the 200k to 500k mark(47 pages x 20 listings per page)

        • Donald

          Good work. Now if the definition of “affordable” is 3 times median income (don’t ask me why that number, I don’t know) then affordable for the Auckland region is $225,000.

          How many houses with more than 2 bedrooms are there at that price or below? At a rough count Auckland needs about 40,000 affordable houses just to get the 200,000 residents officially living in overcrowded conditions into the same conditions most of the rest of the country enjoys.

        • justin

          I found 138 3+ bedrooms with a price below 400k same website.
          138 houses for a population of 1.4 million.
          Time to act.

    • Tanmedia

      I think you’re just trolling. Sure, these places might exist but they would be little more than dog boxes.

  • Donald

    Christchurch was not the same. The government didn’t have a lot to say about residential housing apart from compulsorily removing about 10,000 houses from the city. Their intervention in the central city will serve the interests of some the National Party’s best friends including most of the family of the current Speaker of Parliament.

    But, to do anything about housing affordability in Auckland would require the government to do the exact opposite: visit large financial losses on their best friends.

    Ain’t gonna happen. So the strategy will be to walk away and set the councils up as patsies to take the fall.

    • Dog Breath

      Don’t leave us hanging. If u are so sure this is happening don’t hold back, name and shame the best friends of national who you are so sure are being targeted specifically to make a fortune out of the chch rebuild including the family of the speaker. Same in Auckland name and shame the people that national will go out of their way to protect from financial losses, else your comments are nothing more than political clap trap generalisations or a warped interpretation of events based purely on ideology with no basis of fact.

      • Donald

        In other words I fit right in around here :-)

      • philbest

        The fact that there are such people is obvious. If we had proper investigative journalism, what you are requesting would already be happening. It would require a bit of title searching and checking out of connections and political donations and other links.

        WhaleOil has done good work re Cr Bill Burrill’s obscene capital gains; but he is just one of dozens or hundreds of site owners on the make.

        • Donald

          As for Christchurch it’s all pretty much a matter of public record. After the February earthquakes all property within the four avenues was worth $0. Not only were all structures razed to the ground but all existing occupiers of those properties had relocated. There was literally no demand for central city property.

          Government intervention has re-inflated values for some of that land much of which is owned by groups such as the Carter Group, the Gough family, possibly Ngai Tahu Property.

          I can’t categorically tell you whether any of these entities are financial backers of the National Party what I can say is that the wider Carter family includes the current Speaker, David Carter and Waimakariri MP, Matt Doocey. Draw your own inferences.

    • Mike Webber

      The single best thing National need to do is remove zoning laws as they promised for the 2008 election. But like tax cuts we have not seen any of these promises kept. The real problem we have all around the country is that half the cost of a new house is due to state regulations and taxes.

      • Donald

        Agree 100%. Little known fact: there are no zoning laws. The RMA does not mention them once. Zones are a fabrication of councils.

        The problem for the government now is that a lot of the undeveloped land inside the Metropolitan Urban Limit is in the hands of various land-bankers. Any move that would make it possible for new entrant developers to develop much cheaper land elsewhere would almost certainly cause significant financial loss to those who have already snapped up the zoned land.

        It’s possible the land bankers support the Green Party. It just doesn’t seem likely to me. Any move that would reduce the market value of the banked land will result in some tense words behind the scenes at National Party HQ I imagine.

  • KGB

    Getting out of dodge. Going on the market because I know how this will end. The Government will eventually step in and take control of AC. Public pressure will ensure a down-fall . Interest rates have dropped, and the Auckland market continues to rise. There is no stopping this until the Government does. Hope to sell really quickly. Bye, bye AC.

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