No, we don’t need an urgent fix for the housing market, we need a long term plan.
Urgent fixes, patches, put a fire out here, tax investors there. This short-term, knee-jerk reaction to rising houses prices with no long term plan in place is not working and more ‘urgent fixes’ are not going to help.
I believe that NZ has tied itself up in knots, making housing too hard to supply. In my 17 years of development experience, the consenting process for a small block of townhouses has gone from 4-6 weeks to 6-9 months.
The blame can’t be put on councils alone. Yes, they are more difficult to deal with than they were years ago and yes, consents take longer, but they are also dealing with increased regulation and oversight while trying to manage increased workloads with less staff. You can’t hire planners from overseas, so if planners leave councils for much higher wages in private practice you can’t replace them.
Councils are also struggling to cover rising costs. While development contributions and consenting costs continue to rise, developers can’t take the entire burden alone.
Councils should be getting a share of the tax take as the NZ Initiative suggests. The way things work now, councils have no incentive to work with developers to bring on more housing quickly. More housing means more cost to councils. More infrastructure, more sewer, water and stormwater. More people on the roads etc. If councils were paid the 15% GST that is taken when new housing is sold this would provide a huge funding stimulus to councils, so much so that they would very quickly change from opposing new development to actively promoting it. In fact we could see councils competing with each other to provide services to attract new development.
We need to change the funding model if we want more new development.
#assuredproperty #housing #rentals #propertyinvestment