English points finger at councils
Finance Minister Bill English has laid the blame for housing affordability problems with the country’s councils.
Wednesday, October 8th 2014, 12:00AM
by The Landlord
He said Auckland’s council in particular was guilty of worsening poverty and inequality with its restrictions on land supply.
English said some families were spending up to 60% of their income on housing costs. “That’s pretty devastating at the low end. Councils needs to understand that when they run these policies that restrict the availability of land and the opportunity for lower value housing, they are causing poverty. When you look at the historical impact of the growth in housing costs on our households it's clear that the lowest-income households have been the most affected. So our planning processes have probably done more to increase income inequality and poverty in New Zealand than most other policies.”
Treasury's update on the state of the Crown's books showed state houses’ value had increased $2.1 billion in the last year.
English said the increase was driven by rising land prices, caused by distortions of the planning process on the Auckland market.
Those planning rules meant "it's pretty much illegal to build a house, or has been until recently illegal to build a house under half a million dollars in Auckland", he said.
The Government is working with Auckland Council to fasttrack land for special housing areas but National is planning changes to the Resource Management Act as a more permanent solution.
It has also signalled a big Housing NZ sell-off on the way. Thousands of properties will hit the market.
About 22,000 of the 68,000 Government-owned homes in New Zealand are in the wrong place or are the wrong size.
The money raised in the sell-off would go to social housing run by community groups, English said.
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