Nice idea but knock out the road blocks

Leading property players seek solutions to systematic road blocks if the government hopes to achieve Kiwi Build targets.

Chief executive of Property Council New Zealand, Connal Townsend says the housing crisis is only the beginning if roadblocks to city development are not addressed.

The Council says if the incoming government does not address three key factors blocking effective development of our cities, the country’s current growing housing crisis will be the least of our issues.

The view was endorsed at least in the case of Auckland by McConnell Property’s General Manager, Nigel Richards, who called on the new Housing Minister Phil Twyford, to have an urgent and frank discussion with the private sector about the ineffectiveness of the Auckland City Council’s consent processes and timeframes.

He labelled them “broken” and “frustrating”.

“I’m not knocking the aspirations of the Kiwi Build scheme, or out to criticise the approach. But I’m suggesting the new government needs to be made aware of the challenges of dealing with the Auckland City Council’s consenting regime especially when we compare it to some of the other local authorities around New Zealand,” says Mr Richards.

Mr Townsend says that currently our planning system is ineffective and those within it are working at cross-purposes.

“Councils are struggling with outdated funding tools which has led to ongoing underinvestment in public infrastructure, and the construction industry is facing rising input costs, poor procurement practices and skills shortages,” he says.

“All those factors together mean that getting development projects to completion is expensive, difficult and increasingly lengthy, the result is we’re not building enough homes, schools, transport and social spaces in our cities to cater for those who need them.”

Mr Richards says the critical issue is, if you want to get on with the job of building even 5,000 additional new homes each year in Auckland, there must be a radical change to the council’s processes and systems.

“As an industry we face constant and expensive delays because the council is not resourced adequately.

“It is a city-wide problem. If there is one thing holding up progress and threatening ‘affordability,’ is the Council’s inability to process consents and manage inspections and sign offs in a timely manner.

Mr Richards says the time has come for the private sector to take a leadership position, suggesting they could perhaps be given the leeway to self-regulate on some aspects of the approval process.

“Given the current sensitivity around Council’s wage bill why not flip the current model on its head and ask the developers – in partnership with the insurance companies – to take responsibility for some aspects of the building process? If something goes wrong, it’s on us.”

The Property Council says that local Councils are struggling to fund vital public infrastructure because the current system of charging residents via rates or developers via levies just isn’t keeping up with the need for new infrastructure.

“We’re seeing that manifesting in rising housing unaffordability in our main centres that will increasingly spread to the regions.

“And we’re seeing decisions that affect the liveability of our future cities being made by Councils and government departments with often opposing desired outcomes resulting in lengthy tugs of war within the system.

“Every year the effects on those living and working in our cities are getting a little worse.”

Mr Townsend says it’s not all doom and gloom and there has been considerable progress in many parts of the country.

“Projects such as Wynyard Quarter and Hobsonville Point in Auckland and Christchurch’s SCIRT have provided vibrant hubs supported by shops, restaurants, homes and businesses.

“There’s been a lot of tinkering over the years – new legislation tacked on, new working groups and organisations. All it’s done is add to the complexity and lack of coordination. If we want modern, well-functioning cities with safe and attractive places to live, work and socialise in the future, then we need to make some changes right now,” says Mr Townsend.

Mr Richards says we are at a crossroads.

“Whether it’s a private or public-sector initiative, there needs to be a paradigm shift to deal with the inadequacies of Auckland council. With the current council holdups, I’m struggling to see how the Kiwi Build Scheme will deliver the homes Auckland desperately needs unless there is a fundamental change to the way we consent our housing,” Mr Richards says.

In the past 12 months just over 10,000 dwellings were consented in Auckland and that’s in a buoyant market with Council struggling to keep up. Self-regulation would certainly be a way to keep things moving,” he says.”

Property Council’s 10-point plan for removing urban development barriers

1. Replace one-size fits all district planning system with a flexible, dynamic system that enables home and infrastructure affordability and is an effective response to growth and a changing future.
2. Integrate the urban planning system to ensure alignment with economic development, environmental protection and infrastructure investment by making the Resource Management, Building, Land Transport Management and Local Government Acts work together rather than at cross-purposes.
3. Replace traditional funding mechanisms such as rates with a suite of funding tools that can be used on their own or combined to reignite investment in public infrastructure.
4. Review the commercial property tax system to ensure alignment with other capital-intensive sectors.
5. Amend the overseas investment screening regime to level the playing field for investment in commercial property so funding is available for quality buildings in New Zealand cities.
6. Simplify the building consent process so that it focuses on risk rather than detailed box ticking so building better buildings (and upgrading existing ones) is more efficient and affordable.
7. Improve construction industry productivity by building quality housing at scale near job hubs and multi-modal transport connections to increase liveability and affordability of cities.
8. Champion the role of technology and use of alternative products and innovative building construction methods.
9. Liberalise the approved building products regime, especially for quality international products from reputable businesses and countries.
10. Support upskilling and education within the construction industry to address lack of skilled labour and ensure employees are equipped with the skills they need into the future.

 

More detail: Property Council Manifesto 2017/18