Smith Nick: Housing Accords and Special Housing Areas Bill — In CommitteeText is incorporated into the Bound VolumeSmith Nick: Housing Accords and Special Housing Areas Bill — In Committee[Sitting date: 03 September 2013. Volume:693;Page:13184. Text is incorporated into the Bound Volume.]Hon Dr NICK SMITH (Minister of Housing): This is the really grunty part of this Housing Accords and Special Housing Areas Bill. It is a real test for this Committee as to whether it is serious about increasing housing supply. [Interruption] Members may laugh but let us hear what it does. At the moment it takes between 3 and 4 years to get consent for a subdivision and to bring in new land to supply. This bill will reduce that period to just 6 months. At the moment if you want to do a brownfield development it takes over a year to get through the process. This bill will enable it to be done within 3 months.I challenge members of this Committee who beat their chests around housing supply and affordability as to why they would oppose measures and provisions that will make it easier for those who actually build the houses and provide the sections.Andrew Little: Welcome to Abbotsford. We’ll have another Abbotsford within the year you watch. Poor geotechnical engineering.Hon Dr NICK SMITH: I put it to you Mr Little that it is solely politics. Those who are opposing this part of the bill cannot look in the mirror and pretend they are serious about helping Kiwi families get a home. I have been aghast at how all over the paddock the Opposition is around housing affordability. I listened to the speeches on Part 1 from members of Labour New Zealand First and the Greens who pretend that they are an alternative Government taking completely opposite positions about what the solution is to housing affordability.I also want to challenge members on bad faith—bad faith. I will tell you why. When I became the Minister of Housing members of the Opposition said that they wanted action on housing. When we get action on housing they oppose it. They said they wanted agreement with councils. We deliver agreement with councils and they still oppose it. In the first reading I heard speeches about Hobsonville.Hon Annette King: Yes let’s hear the facts.Hon Dr NICK SMITH: Let me give you the facts on Hobsonville Ms King. Labour announced 1000 houses at Hobsonville—and Hobsonville will be affected by Part 2 and I will come to that—in 2002. How many houses had been built in Hobsonville by November 2008? How many had been built Annette King? How many had been built Maryan Street? How many houses of the 1000 that you had announced in 2002 had you built? Not one. Not one. How many houses have been built by this Government on that land at Hobsonville? Answer: over 400—over 400.Why is it relevant to this part? Let me tell you why. Let me tell you why. The chairman of the Hobsonville Land Co. has put on record that if Parliament passes Part 2 the company will be able to bring 1000—Peseta Sam Lotu-Iiga: How many?Hon Dr NICK SMITH: One thousand more houses to market next year—1000 more houses to market next year. So I challenge again members opposite that they need to look in the mirror. They need to ask whether they are serious about improving housing supply because any member of this Committee who is serious about housing supply and serious about housing affordability will support this part.The last point that I make is this. Members from Labour have challenged me with the question of what price the houses will be. What price will the houses be? I have a very simple response. Any member of this House who claims that they are going to set the price of housing fails to get to first base on understanding the housing market.Dr Rajen Prasad: He’s given up. He’s given up.Hon Dr NICK SMITH: The member interjects. Can I say to this member is Mr Choudhary telling me that a Labour Government will set the house prices?The CHAIRPERSON (Lindsay Tisch): Prasad.Hon Dr NICK SMITH: Is Mr Prasad telling the Committee that a Labour Government will set the house price?Dr Rajen Prasad: I raise a point of order Mr Chairperson. I would not ordinarily stop the Minister but after I have been here for almost 5 years he might have known that Mr Choudhary is somebody else.The CHAIRPERSON (Lindsay Tisch): He did correct it.Hon Dr NICK SMITH: My simple challenge to the member: are members of Labour seriously suggesting that this Parliament sets the house price? Do they really believe that if we just pass a bill—because they have challenged me and asked where in Part 2 is the price of the house. Do members of this Parliament seriously believe that all we need to do to make houses affordable is to put in a provision of this bill that says: “House prices will be $300000.” and magically that will be the case? Well I am concerned that members opposite believe that. I have heard Labour members out on the hustings saying that magically if you just pass a law that says the wage is going to be $20 an hour—or why stop there?Peseta Sam Lotu-Iiga: $30.Hon Dr NICK SMITH: Let us make it $30 an hour. Let us just pass a bill and say: “Wages in New Zealand are going to be $30000 a year and house prices are going to be $20000.” That would be a good bill. Is that seriously what Labour members actually believe—actually believe?The answer is this. House prices are determined by a market. What we need to do is get the materials price more competitive. We need to get the section price more competitive. We need to get the infrastructure price more competitive. We need to deal with the issue of compliance costs. We need to do the work that Maurice Williamson is doing to improve the competitiveness and productivity of the building sector. We need the 1000 more apprentices that we are getting. They are the things that will make a material difference.I go back and challenge the Labour spokesperson on housing to answer the challenge that was given bySu’a William Sio. He said this: how many houses and at what price are you going to build for people on $20000 a year? Well I have not heard that answer from the Labour Party because actually members of this House do not set the house price. They never have and they never will. What we have to do is get the market conditions right.Kris Faafoi: Oh!Hon Dr NICK SMITH: That is right. The member interjects. Does the member think this is acceptable? We have got a block of land in Flat Bush that is zoned for housing. It was purchased for $800000—$800000. It is now on the market for $113 million—$113 million.Peseta Sam Lotu-Iiga: Disgraceful.Hon Dr NICK SMITH: That is disgraceful. But that is the product if you put in a very tight metropolitan urban limit. If we want to stop that sort of land banking and if we actually want to get sections at an affordable value they are the differences that we in this Committee need to mark and that is what this part is about.The last point I wish to make is this. If we are serious about addressing house price section price is critical. I will tell you why. If a section price as it averages in Auckland is $325000 you are not going to build an affordable house on that section. If it is a $325000 section the incentive is actually to build a very expensive house on that. This Government is saying that actually getting the section price down is really critical to making it affordable for us to be able to build a house in the range that average Kiwi families can afford. And I say to members opposite that if you block this bill and blockthis part you are voting against land supply and greenfields being consented in 6 months. That is what this part will do. And they are proposing against brownfield developments being consented within 3 months. I say to them again look in the mirror. You are part of the problem not part of the solution.