Ngaro Alfred: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeNgaro Alfred: Questions for Oral Answer — Questions to Ministers[Sitting date: 16 October 2013. Volume:694;Page:13922. Text is incorporated into the Bound Volume.]8.ALFRED NGARO (National) to theMinister of Housing: What progress has the Government made in addressing Auckland’s housing supply issues over the past two weeks?Hon Dr NICK SMITH (Minister of Housing): On Thursday 3 October we formally signed the Auckland Housing Accord with the unanimous support of the Auckland Council. We also announced the first 11 special housing areas in Auckland last week made possible by the Housing Accords and Special Housing Areas Act which was passed in the last session of Parliament but opposed by members opposite. It will enable the first tranche of 6000 new sections in Auckland which is crucial given the supply of sections has dropped from 4500 to just 1700 over the past decade.Alfred Ngaro: How long has the land at Weymouth sat vacant and how has this Government’s programme helped bring the very positively received community development for housing over 1000 people to fruition?Hon Dr NICK SMITH: Despite house prices doubling and there being acute shortages and overcrowding issues in South Auckland these 16 hectares of public land sat vacant all of last decade. Four actions by this Government have enabled this exciting development to proceed. The first is theNgā Mana Whenua oTāmaki-makau-rau Treaty settlement led by my colleague the Hon Chris Finlayson. The second is the housing accords and special areas legislation which enables the subdivision to be fast tracked and the first homes to be completed mid - next year. The third is the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill which opens up the income-related rent subsidy to other social housing providers and so has encouraged them to invest tens of millions of dollars in these houses. The fourth and final is the Government’s own Social Housing Fund which is directly investing $29 million into this Weymouth project.Denis O’Rourke: Will the Minister give an assurance that the special housing areas proposed for Auckland will produce no fewer than 39000 sections in the next 3 years; if so how will he ensure this?Hon Dr NICK SMITH: Yes the accord does provide for 39000 houses over the next 3 years—9000 in year 1 13000 in year 2 and 17000 in year 3. We have a special officials’ group between the council and the Government and it is required to report monthly to the governance group which includes me and Paula Bennett as my Associate Minister—Rt Hon Winston Peters: I raise a point of order Mr Speaker. The Minister was asked a question on how many sections would be provided—not houses. Anybody could tell you that you could put six houses one on top of the other if you liked. He was asked a question about sections and he should be asked to answer it.Hon Dr NICK SMITH: The question from the member was how I would ensure that that number of houses would be built and I have set out the process by which that will be monitored.Mr SPEAKER: Order! There were certainly two questions. The second part was how would he ensure—I am at a loss to understand the point the member is making. If they are going to ensure that 39000 houses are going to be provided that will require 39000 sections for the houses to go on will it not? To clarify the matter if I have misunderstood the original question from Denis O’Rourke I invite him to ask the question again.Denis O’Rourke: Will the Minister give an assurance that the special housing areas proposed for Auckland will produce no fewer than 39000 sections in the next 3 years; if so how will he ensure this?Hon Dr NICK SMITH: The accord sets a target as I have said of 39000 houses with the Auckland Council over the next 3 years. The way in which that will be monitored is by the joint officials’ group that has been established between the Government and the council.Denis O’Rourke: I raise a point of order Mr Speaker. Could I ask that the Minister make an attempt to—Mr SPEAKER: No no. Order! The Minister has now had the question twice. He has answered it. He has answered I think the second part particularly rather than the first part. The member asked two parts to the question and he certainly got an answer that addressed the question. If it is not to his satisfaction I can do no more.Alfred Ngaro: What other Government housing initiatives took effect over the adjournment that will also help address the challenges in housing?Hon Dr NICK SMITH: On 1 October the Government’s changes to the KiwiSaver first-home deposit subsidy scheme took effect. These increase the housing price cap in Christchurch by $100000 from $300000 to $400000; in Auckland by $85000 up to $485000; and in many other areas by $50000. They also increase the income cap from $100000 to $120000. These combined changes will enable a further 25000 families to pull together a bigger deposit for their first homes over the next 4 years. The other change on 1 October was a trebling in the number of Welcome Home Loans. These are particularly significant because they are exempt from the loan-to-value ratio limits from the Reserve Bank and they will see an additional 6000 families helped into their first homes.Phil Twyford: Does he agree with the comments of the Deputy Governor of the Reserve Bank who said yesterday that the “relatively slow response of housing supply” is one of the reasons for loan-to-value ratios; if so why has it taken 5 long years for the Government to announce its first building programme in Auckland?Hon Dr NICK SMITH: The Government has had a very active programme over the last 5 years in which there has been good solid progress. The question I have got for the member—[Interruption] House prices doubled in 9 years and Labour did absolutely zip.Hon Craig Foss: I raise a point of order Mr Speaker. I am finding it very difficult to hear many of the answers. I am not far away but the barracking and bellowing from the other side is making it impossible to hear the answers. [Interruption]Mr SPEAKER: Order! Every member has the right during question time to hear the question and the answer. The level of noise was relatively loud from this side.Denis O’Rourke: Why has the Minister told developers that they need devote only 10 percent of developments to affordable homes when prices are already well out of the reach of most first-home buyers?Hon Dr NICK SMITH: A developer is hardly going to build a house that he cannot sell. They are in the business of building things that they can sell. I think a better way to describe it is the number of houses that are going to be built through the accord and the special housing areas that are low cost. In one of the special housing areas the Weymouth subdivision there is going to be 100 percent low-cost houses for families. I can assure the member that many of the other special housing areas as they come to the qualifying development stage will also have requirements for building lower-cost houses.Denis O’Rourke: Given that the costs of consents and development contributions average only 4 percent of the cost of a new home according to Local Government New Zealand by what means will the Minister ensure that a minimum proportion of new sections will be affordable when all he has said about this so far is: “Alongside freeing up land supply we need to constrain the impact of development contributions on section prices get better value for building materials make [efficiencies] in building consents and improve productivity in the [building] industry.”?Hon Dr NICK SMITH: The research shows that the biggest increase in house prices has been in the section price and the reason section prices have become so expensive is that their supply has been very deliberately limited through the Resource Management Act with tools like the metropolitan urban limit. If the member wants lower-priced sections he should support my colleague the Minister for the Environment and her Resource Management Act reforms and the member would have voted for our special housing areas legislation which frees up the land and gets lower-priced sections.Denis O’Rourke: Will the special housing areas so far proposed have a requirement for smaller sections designed for modest-sized family homes as a means of reducing total capital cost; if not why not?Hon Dr NICK SMITH: Under the accord that we have with the Auckland Council the primary rules in those special housing areas about the section sizes will be determined by the council. The council has made plain that its desire is to move to smaller sections where they can be well designed. But I point out to the member that the only way we can bring those extra special housing areas and the smaller size sections into place is because of that special housing areas legislation which that member vigorously opposed.