Parmar Parmjeet: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeParmar Parmjeet: Oral Questions — Questions to Ministers[Sitting date: 22 October 2015. Volume:709;Page:7504. Text is incorporated into the Bound Volume.]5.Dr PARMJEET PARMAR (National) to the Minister for Building and Housing: How does the Productivity Commission report support the direction of the Government’s reforms to improve the affordability of housing?Hon Dr NICK SMITH (Minister for Building and Housing): The key message from the report is that the critical issue of land supply is undermining housing affordability. It notes that land prices have increased by fivefold in the past 20 years and that this is largely due to regulatory failure. It argues that councils have imposed planning rules on both greenfield and brownfield developments without properly considering the flow-on costs. The housing accords and special housing areas legislation was a short-term fix that has enabled 129 areas to be approved for housing outside the normal planning rules. This report will feed into the longer-term reforms including a national policy statement on urban development and changes to the Resource Management Act.Dr Parmjeet Parmar: What is the Minister’s response to the planning argument that tools like metropolitan urban limits are needed environmentally so as to ensure that not too much of New Zealand’s land area is used for urban purposes?Hon Dr NICK SMITH: The Government considers that these arguments are very weak. The environment report out yesterday shows that only 0.8 percent of New Zealand land is used for urban purposes despite it accommodating 80 percent of the population. That area of land is growing at a rate such that even by 2050 only 1 percent of New Zealand land would be urban land. The idea that we must constrain our cities because we would use up all the land is a nonsense. There are some valid arguments over infrastructure as to why we want a mix of both greenfield and brownfield growth but artificial metropolitan urban limits that just drive up house prices—Mr SPEAKER: Order! The answers from the Minister are consistently far too long.Dr Parmjeet Parmar: Does the Minister agree that councils’ plans need to take into account economics and price signals as recommended by the Productivity Commission?Hon Dr NICK SMITH: Yes. The Productivity Commission’s report recommends that where land prices are artificially high due to planning constraints there should be a requirement for councils to open up new land. This is a radical shift from the current planning ethos but one that needs considering in response to the substantive report.Julie Anne Genter: Will he act on the Productivity Commission’s recommendation to remove the council regulations that require an oversupply of car-parking given that they are a major driver of increased housing costs as well as traffic congestion and pollution?Hon Dr NICK SMITH: The Productivity Commission report makes good points about things like parking requirements about balcony requirements and about adding extra requirements over and above the Building Act. What we need to understand is that every time we put those sorts of rules in place they undermine affordability and that is why this report rightly recommends reform. I look forward to the Green Party’s support for the reforms backing up the recommendations from the Productivity Commission.Julie Anne Genter: I raise a point of order Mr Speaker. My question was whether he will act on the recommendations.Mr SPEAKER: The difficulty I had was actually understanding the question. I invite the member to ask the question again.Julie Anne Genter: Will he act on the Productivity Commission’s recommendation to remove onerous council regulations requiring an oversupply of car-parking given that they drive up the cost of housing and create traffic congestion and pollution?Hon Dr NICK SMITH: It is more complex than the member presents because of course the parking requirements are not in the Resource Management Act; they are in the district plans that are put in place by councils. So what the Government is planning to do—through both a national policy statement on urban development as well as reforms to the Resource Management Act—is to get the incentives right for councils to better take into account the cost that these sorts of regulatory impositions put back on to homeowners.Julie Anne Genter: Why did he not act on this issue earlier given that experts in the field and the Green Party have been raising these costly rules with the Government since 2009 because they have been standing in the way of affordable medium-density housing around good bus and train routes?Hon Dr NICK SMITH: Quite the opposite. I have repeatedly seen the Green Party support metropolitan urban limits which according to the Productivity Commission report have actually been at the core of the problem around housing affordability. In respect of the parking requirements and in respect of brownfield developments the special housing areas legislation is enabling us to bypass some of those stupid requirements. I note the Green Party vigorously opposed the special housing areas legislation.Julie Anne Genter: Can he confirm that according to the recent report on housing by Auckland city’s chief economist removing the planning barriers to high-quality medium-density housing development in the inner suburbs around bus and train routes as the Green Party has been advocating for years—Mr SPEAKER: Order! Just complete the question.Julie Anne Genter: —is the most effective way to create more affordable housing in Auckland not removing urban limits?Hon Dr NICK SMITH: This Government is of a view that good quality intensification of housing is part of the answer but the Green Party cannot have it both ways. Take the heritage provisions that are blanketly applied in Auckland. They actually apply to many of the areas where there is the potential for greater apartment development. I note that that party has been opposing changes to those heritage requirements that actually get in the way of new and more affordable houses.Julie Anne Genter: I seek leave to table a graph from this report that shows that removing urban boundaries is—Mr SPEAKER: Order! [Interruption] Order! The report I presume is easily available to members if they want to source it. Yes they can so I will not be putting the leave.Julie Anne Genter: I seek leave to table a letter from myself and other traffic economists from 30 October 2009 to Minister Nick Smith raising the costly issue of minimum parking requirements.Mr SPEAKER: It may be of interest to members. I will put the leave as members may be interested. Leave is sought to table that particular letter. Is there any objection? There is objection.Julie Anne Genter: I seek leave to table a letter from 12 August 2009 from the Hon Steven Joyce to myself denying that councils require—Mr SPEAKER: Order! Leave is sought to table that particular letter. Is there any objection? There is none. It can be tabled.Documents by leave laid on the Table of the House.