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Helping councils will help solve the housing affordability crisis in New Zealand

Our current RMA (Resource Management Act, 1991) and LGA (Local Government Act, 2002) mix just does not work.  It is not facilitating improved housing conditions (as discussed in this article),  or even infrastructure maintenance as suggested here.  

Housing needs have changed, and our system needs to change too.  The Government will argue that they are doing it BUT the recent National Policy Statement on Urban Development continues the “push” (telling rather than helping) approach from central government which I don’t believe will ever solve the problem.

I’m sure you have seen many articles on the subject. I have too and believe this one is the closest to the mark on the current situation.

Note: see end of article for all hyperlinks in full

Council needs money and the incentive to act.  In a nutshell, I believe that councils do not have the money to:

  • adequately plan growth;
  • fund infrastructure to support growth;
  • employ (and retain) enough staff to process consents efficiently; or
  • deal with any unanticipated side effects of growth, e.g. unexpected congestion, and demand on parks and other council facilities.

As a result, councils often slow all the processes down.  The thing is, this is not their fault as they are operating under the rules, laws and funding mechanisms set by the central government.

Even when a local council is doing its best to support the development of housing, under the current system they simply do not have the resources available to do the job well or in a timely manner.  Local Government New Zealand has been campaigning on this issue for some time, as discussed here.

This graph shows one aspect of the issue – the increasing gap between central government tax revenue and local government rates revenue.  Rates income is not designed to cover all the costs of growth planning and delivery, and the supplementary methods of Development and Financial Contributions also fail to solve the issue as these systems often require
pre-funding of works by councils and they have regulatory limits on the total debt that they can take on.

 

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