"With respect to so-called urban sprawl, I think that's a nonsense. If you're against urban sprawl and that means lower to middle income Kiwis can't buy a house and you can't build an apartment in the middle of Auckland for less than NZ$600,000, then that's too high a price to pay. And if it means driving up house prices in a way that wrecks the economy then that's too high a price to pay," he said.
"Funnily enough the people who are most worried about urban sprawl live in the middle of the city. They don't get to see it. How much time to they really spend out the end of the Western motorway or Botany? None actually. They think you should be able to walk to the countryside. Well...welcome to Gore. If you're really mad, that's where you should go. But they don't. They stay in Auckland Central," he said to laughter from the audience.
"What's actually happened is that the local authorities were keen for a denser city, but the inhabitants weren't, so they've jettisoned a fair bit of the densification aspect," he said.
"So if Auckland wants to grow now, it has to grow out because you don't want it to grow up. Now that's a fair choice, but please don't stop it from growing out as well, otherwise we'll get another few years of 15% house price growth and you get a real mess when it crashes," he said, adding the special housing areas agreed under the Housing Accord with the Auckland Council "do spread the city because the planning rules don't let you do anything else."
"We're indifferent as a government as to whether you grow up or out. But you said don't grow up, so we expect to help you grow out."
English said people making planning decisions in Auckland, Wellington and Christchurch needed to understand they were making decisions about New Zealand's largest asset class, where the decisions they make affect the whole economy, not just your neighbourhood.
"Of course there's tension there, but we are pretty determined to turn ourselves into an affordable housing market," he said.
"There's no obvious reason why little old New Zealand should be one of the most expensive housing markets in the developed world. It really puts pressure on our households. It's one of the reasons why we have interest free student loans, working for families, subsidised early childhood care and savings are low," he said.
When land use regulations are all messed up, everything else gets screwed up too.High mortgage costs were a reason why the Government provided payments supplementing incomes costing billions, "and a lot of that is driven by planning decisions in this city."
Oz economist Leith van Onselen's right:
@EricCrampton @bernardchickey You are very lucky to have someone of the calibre of English. Runs rings around Australia's clowns.But while he pines for sound people on the Australian right, I wish that the New Zealand left could match the Australians. Here's Australian Council of Trade Unions economist Matt Cowgill on housing in Australia:
— Leith van Onselen (@leithvo) February 27, 2014
There's a trade-off at play here, one that can't be wished away or ignored. With a growing population, you can't restrict rising density in established suburbs, prevent sprawl on the urban fringes, and prevent housing from being unaffordable. Pick two out of the three. The urge to preserve historic neighbourhoods, the desire the conserve all the green bits around our cities, and the wish to maintain affordable housing are all noble impulses with which I sympathise. But, again, we can't have them all.Which is pretty much the same thing that Bill English said. Sound economics, left or right, is on the same page on this stuff. Stupid land use regs hurt poor people while benefiting middle and upper class homeowners.
Here in NZ, we're stuck with the Council of Trade Unions' Helen Kelly.
Bill English, in the speech linked above, talked about selling off some of the Housing New Zealand stock of housing so that they could better match social housing to locational needs. It makes no sense to have a Housing NZ house in an expensive part of town when selling it off could fund social housing for three families instead. Here's English:
"In housing and other areas we will continue recycling taxpayer assets to free up money for reinvestment in areas where there is genuine demand," he said.
Later in the questions and answer session with the audience, he expanded on the plans.
"We actually don't need to own all those houses to help those people who need help,"he said, referring to the Government's partnership with the likes of the Salvation Army, the New Zealand Housing Foundation and IHC's Idea Services.
English said the Goverment wanted to assess a family's need for housing in an area close to jobs and schools, which was difficult to do with its existing stock of 60,000 to 70,000 houses. "You've got to stick them in a house that's empty," he said.
"That will mean growing the non-Housing Corp social sector and redeveloping the Housing Corp assets."
English said there were big tracts of Auckland such as Mt Roskill and Tamaki where "there's endless potential for supplying medium housing to the Auckland housing market if we redevelop those areas."
"But our top priority is to meet the needs of the people in the houses first, and then redevelop what we don't need in order to supply the market better, and there could be a lot of that happen."Here's how Helen Kelly responded.
Govt planning 2 sell off up to 1/3 of State Housing stock 2 private sector. Adding 2 the housing crisis. They wld sell their grandmothers.Pure partisan idiocy. Why oh Why is the NZ left so freaking dumb?
— Helen Kelly (@helenkellyCTU) February 27, 2014