Seymour DavidDAVID SEYMOUR (Leader—ACT): That has got to be the most premature closure motion I've heard in all the times I've been in this committee—Barbara Edmonds: Repetition.DAVID SEYMOUR: —in this House. The member now says that there's repetition. I don't think she's quite grasping that this is a problem. I don't think that her party grasp the subtlety of the matters that are being dealt with. The question I want to move to is actually the nature of the medium density residential standards (MDRS) itself. Now this medium density residential standard as introduced—for people who may be tuning into this at home what it says is any residential section of any size can be up to 50 percent covered by three homes up to three stories tall 11 metres plus half the roof and they can be a metre from your boundary with a six metre then 60 degree height to boundary ratio and no urban design standards outside of that basic description apply. Now there's a couple of other things: you've got to have a metre outlook outside a couple of your windows and three metres by three metres outside your primary window but basically that's it. If you comply with those rules then no question.I guess that it needs to be acknowledged that the Government has indicated that it would like to restrict that. So the biggest change they've contemplated would be to drag down the height. So it's instead of six metres up four metres up and then in at 60 degrees. It's worth noting that—CHAIRPERSON (Hon Jacqui Dean): Order!DAVID SEYMOUR: Yes?CHAIRPERSON (Hon Jacqui Dean): Can I invite the member to return to Part 1 of the bill?DAVID SEYMOUR: Well Madam Chair Part 1 introduces the MDRS. Now the details of it may well be in the schedule—CHAIRPERSON (Hon Jacqui Dean): And so I'm advising the member to return specifically to Part—DAVID SEYMOUR: Oh sure. No no no—I apologise Madam Chair. I certainly am; I just wanted to give some context about what we're talking about because it's hard to talk about Part 1 without knowing about the—CHAIRPERSON (Hon Jacqui Dean): Well thank you for that and the member's time will be—[Members seeking call]DAVID SEYMOUR: She's on her feet guys.CHAIRPERSON (Hon Jacqui Dean): The member will have the opportunity to further develop his argument and his questions when we are dealing with Part 2 but now we're dealing with Part 1.DAVID SEYMOUR: Madam Chair thank you. I take your point Madam Chair but the questions I'm asking—CHAIRPERSON (Hon Jacqui Dean): Order! The member will resume his seat and I invite the member not to argue with my ruling but I invite him to continue to with his questioning around Part 1.DAVID SEYMOUR: Thank you Madam Chair. I just want to be clear: I'm certainly not arguing with your ruling. All I'm trying to do is show how actually what I was saying—I'm just giving a bit of context—CHAIRPERSON (Hon Jacqui Dean): Well the member is now arguing with my ruling and I am now warning him that he needs right now to return specifically to Part 1 of the bill. Thank you David Seymour.DAVID SEYMOUR: Part 1 would introduce the medium density residential standard the details of which I've just outlined. What I want to ask the Minister is around some of the assumptions behind what that will do because I've looked at the regulatory impact statement and without having it immediately in front of me the gist of it is that they say that they haven't done any bespoke analysis of what the introduction of this planning instrument and specifically the MDRS within it will achieve. What they've said is they've relied on basically literature reviews that say a couple of things: one is that in some cases residential land use regulations are a constraint on housing supply. Well that is most certainly true. I don't think anyone in this Parliament has argued that for longer stronger or more consistently than I have. That is point number one. Number two is that it's not always true in all circumstances. Because the second thing that's very important to understand in any kind of economic analysis is something that Alfred Nobel came up with 150 years ago; it's called the marginal revolution—the idea that economists think at the margin. So just because something was true in some circumstances at one point doesn't mean that it's true right now. That's why they should have done bespoke analysis in the regulatory impact statement (RIS) to give the specifics of that.You take the reasoning that was used to justify the introduction of these planning intensification instruments in Part 1—well you take the analysis that was done by I think it was PricewaterhouseCoopers (PwC) the accounting firm—and the basic logic of it is: well when the Auckland Unitary Plan was introduced the introduction of the mixed housing suburban zone and the mixed housing urban zone led to some development in those areas that was greater in terms of the floor area ratio; that is the amount of additional floor area. That was larger than it was in the areas that were left in single house zone. So the logic behind this bill—they don't really compare any other issues in the RIS. The RIS starts from the assumption that it is zoning that is the constraint on home development so they don't compare any other issues.They do this analysis from PwC and I think it was Sense Partners the consultancy. They say Well because upzoning in the case of the Auckland Unitary Plan five years ago led to additional floor area per metre of land being added if we do even more up zoning then in a linear fashion we will get even more floor area ratio." That is such an error of logic. You can see the absurdity of it. It might be said "Well actually what we need to do is why stop at the cities? Why not make all of New Zealand subject to the medium density residential standard?" If we just keep extrapolating this why get 100000 houses? There could be millions tens of millions of houses. New Zealand could potentially become home to billions of people if only we applied the medium density residential standard to the whole country. But of course that would be absurd.It would be completely absurd because what people might say is that there would be additional constraints on developing new homes. People might point out—they'd say "Well we might not have roads to get to those places so people probably won't build houses there." They'll say "Oh well there probably won't be libraries near there so people won't want to live there." They'll say "Oh we'll have to have schools there." Then we'll say "Oh OK what about three waters?" That's a big issue. The Government knows that because it's been deeply contesting it. So we have a real issue here where we're getting major difficulties with the supply of infrastructure the supply of community amenities and we don't think that we're going to be able to use all of that medium density residential standard zoned land.Then people might say "What about other aspects of the supply chain?" Well you still need to get building consent. You still need to get resource consents for earthworks. There are still other constraints and then you've got to find builders. Then you've got to find materials. People might say "Well I don't know if the zoning was actually the binding constraint." Now if you can accept all of that at the admittedly extreme version of the thought experiment where you zoned it in New Zealand well maybe actually we're already at the limit of what we can achieve by simply upzoning more land particularly in Auckland. The Minister should know this because he said "Oh we need more three storey homes near the centre of the city." That's what the Auckland Unitary Plan does. It was a civil war in Auckland for three years. It allowed 430000 additional homes to be built that are economically viable. They're a million in theory but then they allowed for those other constraints.The problem is that there is no analysis. They haven't done any analysis thinking at the margin as good economists do which is: is the restriction of zoned land the true constraint on building more homes right now? They've done the analysis of: was it the constraints of when the Auckland Unitary Plan was introduced in 2016? They've done the analysis of: can we show that generally in the past in some instances that's been true? They've shown that but they've never asked the simple question: what is the binding constraint on development right now?Then people say "Oh but you know I would have thought that it would just be good to remove restrictions in any event." Well that's an interesting argument. See those of us who actually want a freer society know that deregulation has to be done in a way that actually delivers results—that actually homes have to get built and can't be held back by those other constraints and secondly it has to be done in a way that doesn't needlessly antagonise people who might otherwise support policies of a freer society.Unfortunately this policy is going to fail. My question to the Minister is very simple: what analysis do you have that zoning is the binding constraint and not infrastructure?"