Bayly Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeBayly Andrew: Oral Questions — Questions to Ministers[Sitting date: 24 June 2015. Volume:706;Page:4696. Text is incorporated into the Bound Volume.]3.ANDREW BAYLY (National—Hunua) to the Minister of Finance: What reports has he received showing why more housing is needed as part of supporting a growing New Zealand economy?Hon BILL ENGLISH (Minister of Finance): The Productivity Commission last week released its draft report on using land for housing. It finds that New Zealand cities have not been able to provide enough greenfield and brownfield land to meet growing populations particularly in Auckland and that planning rules have increased the cost of housing. Among its draft recommendations are that councils do not seek requirements that exceed the Building Act for the construction of homes that there should be better use of existing infrastructure by allowing intensification where supporting infrastructure is in place and that councils monitor and report on new dwellings and infrastructure delivery to highlight where their regulations are too restrictive.Andrew Bayly: What are some of the factors the Productivity Commission points to as affecting the supply of more housing where it is needed?Hon BILL ENGLISH: The commission points out that New Zealand’s housing supply is only moderately responsive to demand due mainly to restrictions on land supply and densification. It says that the costs of some urban design requirements may outweigh the benefits including rules around minimum parking balconies and interior design—requirements that raise housing costs without delivering enough benefits to justify them. The report also says that some of these council rules may be unlawful. The commission says that rules around densification are affecting housing supply. The Auckland Plan sets out a 30-year goal of 70 percent of future growth occurring within existing limits. So achieving these growth targets will require reasonably liberal rules around densification.Andrew Bayly: What does the Productivity Commission say are the consequences of limits on the supply of housing for the economy?Hon BILL ENGLISH: The commission points out three major consequences from council rules around land use. First the impact on prices has a disproportionate effect on the less well-off because it is the prices and rents of housing at the bottom end that are most affected by red tape. There is a nationwide shortage of lower priced new housing as the commission’s report shows. Second an unresponsive housing supply is a risk to macroeconomic stability as well as a barrier to productivity gains by limiting employment opportunities. Thirdly the cost of housing puts pressure on the public purse. The accommodation supplement and income-related rents will in 2015-16 exceed a cost of $2 billion.Andrew Bayly: What steps is the Government taking to deliver more houses by supporting the growing economy?Hon BILL ENGLISH: The most important one has been to work closely with Auckland City to understand how we can assist it to expand the land supply and ensure that the required infrastructure can be put in place at reasonable cost and in a timely manner. The next step in that process will be when we see the Auckland Unitary Plan again and then we can see whether Auckland City will be able to deliver the supply of housing that its own demand forecasts indicate are required. Alongside that we have suspended duties and tariffs on building materials rolled out the HomeStart scheme from 1 April ongoing reforms to the Resource Management Act and in particular lifting the Government’s investment in the supply of new housing to the Auckland market.Phil Twyford: Why if he believes that the answer lies in more intensification and greenfield development has he been talking about this for 9 years now while doing absolutely nothing about it for 7 years and a shortfall of 32000 houses has built up on his watch?Hon BILL ENGLISH: Over that time there have been some significant changes like the formation of the single city in Auckland. I have to say—well actually it was initiated by the Labour Government and we implemented it. Secondly we have brought in place a truncated process for the Auckland Unitary Plan and the member may not realise this but it is Auckland Council that makes the decisions about houses in Auckland. We have worked hard to influence them and will continue to do so.