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Goff told: Help, not hinder development

Property investors are warning new Auckland mayor Phil Goff that he needs to head up a council that enables housing development - or face the possibility of affordability spiralling out of control.

Monday, October 10th 2016, 2:00PM 1 Comment

by Susan Edmunds

The new mayor has said he would institute an immediate review to determine how the consenting process can be faster, cheaper and in line with best practice, and develop disincentives for landbanking, including a "use it or lose it" clause on approvals and consents.

He has also talked about the possibility of requiring foreign investors to build new rather than buy existing properties, and imposing a 15% tax on them.

Auckland Property Investors Association president Andrew Bruce said he applauded Goff for making housing a priority but said improving supply had to go hand-in-hand with infrastructure growth and public services.

“Public infrastructure, without a doubt, has to be a concurrent priority alongside housing in order for there to be any meaningful improvement to access to housing for Aucklanders," he said.

“The thing about development and developers is that the number has to work.  If you can’t sell the end product for more than you spend building it then you are not going to build," he said. 

"What has been happening over the last 25 years in Auckland is that a lot of public assets, that are really generational assets like parks, water meter, sewage pipes, come with an upfront cost to developers in the form of development contributions, of Watercare levies for water meters. 

"But these are generational assets that are intended for use and enjoyment for much longer than five or ten years.  What the council has been doing is front loading these costs to hit the developers upfront when the more sensible thing to do is to spread the cost over the timeline of the asset to lower the upfront cost and barrier for development to attract development interest back into our city.”

He said the barrier of entry into the Auckland market was too high for investors and owner-occupiers alike. If the council did not take sensible action, it would only get worse, Bruce said.

He said resource and building consents needed to be timely and cost-effective.

"Every day of delay is costing somebody money and that cost eventually ends up being factored into the end purchase price which only serve to increasing the barrier of entry.  We want to see an acknowledgement from council staff in their consenting process that the expediency of their work has a fiscal consequence to the buyer."

But he said Goff's methods to discourage land-banking might not be as successful as he hoped.

"‘Use it or lose it’ will not directly discourage land-banking. Someone who is intent on land-banking, and does so will not be discouraged by the threat of an invalid consent since it was never their intention to use that consent. 

"We want  council to take a leadership position and address the issue of unintentional land banking for land that has already obtained a building consent. For a very long time, the anti-development attitude by previous councils had caused an exodus of developers and builders from this city.  We want to see the council do more to court these industries back so landowners can start developing and building at a reasonable price."

Auckland is subject to a new Unitary Plan, which is partially in force. But a major part – the zoning changes – is on hold due to a legal appeal by lobby groups Auckland 2040 and Character Coalition.

« Govt to build more houses in Akld?NZ property data tools on the rise »

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Comments from our readers

On 13 October 2016 at 2:36 pm Peter L said:
But then developers might make a profit!
Surely that must be resisted at all costs.

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