Smith Nick: Housing Accords and Special Housing Areas Bill — Second ReadingText is incorporated into the Bound VolumeSmith Nick: Housing Accords and Special Housing Areas Bill — Second Reading[Sitting date: 22 August 2013. Volume:692;Page:12778. Text is incorporated into the Bound Volume.]Hon Dr NICK SMITH (Minister of Housing):I moveThat the Housing Accords and Special Housing Areas Bill be now read a second time . This bill is a critical part of the Government’s comprehensive work programme to address housing supply and affordability. It unblocks the ridiculously slow planning and consenting process and will enable us to get some momentum and some pace into residential development in areas like Auckland. It delivers the mechanisms to deliver on the 39000 houses provided for in the Auckland Housing Accord. This bill sits alongside substantive reforms like the changes to the Resource Management Act that have been announced which will require councils to provide for 10 years of land supply; the changes we are making to development contributions which will reduce section costs; the inquiry we have under way into the cost of building materials; the big investments that we as a Government are making into trade apprenticeships; the development of the online building consent system; the improvements we have announced to both the KiwiSaver home deposit scheme and the Welcome Home Loan scheme.This Government is not about gimmicks or slogans. It is about a substantive package of reforms that will make homes more affordable for Kiwi families. I note that some parties in this Parliament are opposing this bill and denying that land supply and cost is any part of the housing affordability problem. Let us look at the facts.Section prices have risen significantly more than the cost of actually building the home over the past decade. They were 40 percent of the cost of a house a decade ago and they are now 60 percent. In Auckland section prices over the last decade have gone from $100000 to an average of $325000. We have seen raw undeveloped land that was worth $30000 a hectare a decade and a half ago now being sold for $4 million a hectare in places like Flat Bush in Auckland. We know from research done by the Motu Economic and Public Policy Research Trust that raw land inside Auckland’s metropolitan limit has a value ten times that of raw land outside that artificial line—the metropolitan urban limit.I also note that the number of sections that are available in Auckland plummeted from 4100 a decade ago to just 1400 and those 1400 sections need to be seen in the context of Auckland needing 13000 new houses a year to be able to keep up with population growth. Parties that are blocking the land supply measures in this bill cannot pretend to be serious about addressing housing affordability. They are part of the problem rather than being part of the solution. Members opposite state that they are going to build 100000 houses for $300000 each. My question and my challenge for members opposite is this. How are you going to build a house for $300000 when you will not deal with the issue of the section which averages $325000 in Auckland? I think that members opposite are digging themselves a hole. And how are they going to build 100000 houses when Auckland currently has only 1400 sections and they are not prepared to free up land supply? Labour members’ opposition to this bill shows that they are more interested in playing politics and grandstanding than addressing the real issues that will help Kiwi families get an affordable home.Let me remind the House how this bill will help housing affordability. We all know that Auckland’s metropolitan urban limit has to move that it is a straitjacket on Auckland’s growth and that it is allowing huge monopoly prices to be claimed by those who own the last few areas of undeveloped land. Without this bill that metropolitan urban limit will remain in place for another 3 years. With this bill we will be able to open up new areas of housing development by Christmas. This bill will enable brownfield development to be consented in 3 months as compared with the currentaverage of over 1 year. This bill will enable greenfield developments to be consented in 6 months as compared with the current average of 3 years.I want to thank and commend the Social Services Committee and particularly the chair Sam Lotu-Iiga for the diligent and effective job that he and the team on the committee have done in refining this bill. They have made helpful changes to the bill including improvements to the definition of what is meant by “predominantly residential” and what is meant in terms of defining building height. The process and tests for scheduling a district or region as having housing affordability issues have been improved. The bill was overwhelmingly supported by the 64 submissions to the select committee reflecting the very broad consensus—whether it be the Productivity Commission whether it be the Reserve Bank whether it be the IMF—that one of the most critical issues for New Zealand is increasing housing supply.I do treat with a bit of a grain of salt some of the complaints from the Opposition members that the bill has been rushed. These are the people who have been giving speeches all year calling on the Government to take urgent action on housing and when we take the urgent action they object.I want also to note the complaint that the bill does not specifically refer to the building of affordable houses. Well that is being too cute. The bill specifically mentions the Auckland Housing Accord. The Auckland Housing Accord very specifically has provisions for ensuring that the houses that are built include a portion that are in the affordable range. If you put the accord in the bill and the accord makes provision for affordability then they are simply playing games.Labour the Greens and New Zealand First need to have a very hard look in the mirror over the issue of housing affordability. Between 1999 and 2008 the average price in New Zealand grew by 102 percent—102 percent 8 percent per year. In the same period average wages grew by just 40 percent. In fact the last Labour Government has the worst record—the worst record—of any Government in the history of New Zealand in terms of deteriorating housing affordability. If we check the 5 years that we have been in Government well average house prices over the last 5 years have gone up by 13 percent or an average of 3 percent per year and—this is the key part—average incomes have gone up by 19 percent. So incomes over our period in Government have gone up faster than house prices but we know that we have to do more to address the scale that opened up over the course of the last Government.The problems of housing affordability actually go back many years and in fact several decades. This Government is taking those issues seriously. This bill is a crucial part—a crucial part—of the solution. I commend the bill to the House.