Seymour DavidDAVID SEYMOUR (Leader—ACT): Well thank you Madam Chair. I think we've just seen one of the problems with this whole exercise of attempting to do urban planning on every suburban street of New Zealand from this Parliament. The Minister just said Well I don't think it would be right for Parliament to try and do urban design from here." and he's absolutely right. So he actually does understand and accept the problem but equally by putting a zone prescription on every residential section in the country—and I say "every" because according to the Minister all the tier 2 cities as he calls them are going to be jumping up and down and wanting to have this. We shall see—we're going to actually have a terrible terrible problem here. And it's this: this statute is going to put into law a medium-density residential standard that effectively says you can have a three-storey building a metre from your boundary with no urban design standards with a floor to ceiling window on the third floor looking into your kid's bedroom and there's nothing you can do about it. Of course the Minister might say "Oh but it's laissez-faire. Everyone should support that." Well actually here's the thing: if you think hard about public policy then you understand that the role of Government as a regulator is to address market failures. Here's another thought: market failures are not when a market outcome is something you don't like; specifically it is when the game theory outcome of people participating in a market is not Pareto optimal. This is just basic 101 stuff.People who believe in markets and free society often come to the conclusion that in some of those circumstances it's actually worthwhile having a regulation. And one of those is urban design standards: things like overlooking things like overshadowing. Often the balance and the cost-benefit analysis of whether you need a certain level of intervention and regulation is specific to the place to the characteristics of the location to people and community and to the provision of infrastructure in that place. Those are all the reasons why you might want to have urban design standards. That's why for example in Auckland we have the Auckland Design Manual to stop two people doing what is best for them but getting an outcome that is actually worse for everyone. That's the simple basis for having regulations. It can actually increase overall welfare. This statute which puts in place this medium-density residential standard denies that opportunity to communities and that is why it actually reduces people's overall welfare. Now the Minister would like to say that "Oh no no it's OK. We've got 150 pages of analysis." but I asked him in the previous stage: where is the analysis that defines the problem with housing supply as being one of zoning capacity? And he couldn't do it. All he could say was: "In general it will be more efficient if people live closer together." and "In general it's going to be good to have more zone space." He couldn't answer the question: where's the analysis that it's actually going to work in Auckland in Hamilton in cities in New Zealand as we stand right now thinking at the margin? So what he's left with is an increase in zoning capacity that may not be serviced but if it is it is going to lower people's overall welfare because of the kinds of market failures tragedy of the commons development that goes on side by side where people actually lower each other's quality of life. Now ACT has thought a bit about this and in particular we have read the analysis that this bill was based on by Sense Partners and PricewaterhouseCoopers and we understand how it works and that's what we've been explaining throughout this committee. The Minister is either wilfully ignoring it or hasn't read it because what that analysis said is that when in 2016 the Auckland Unitary Plan introduced the mixed housing urban and mixed housing suburban zones there was a proportionate increase in floor area ratio in areas that were denser. He's extrapolated that's going to keep happening here. But what's interesting is that they didn't model the medium-density residential standard. That's never been modelled. What they did model was mixed housing urban and that's what they based their projections on. They also modelled mixed housing suburban and what that analysis says—if we just accept for a moment that there isn't actually a binding constraint of infrastructure and that actually there is going to be a linear extrapolation of the amount of homes they get built allowing for proximity to city centre and a few other variables they used—is that actually you don't get much less additional homes by using mixed housing suburban. That is a zone that is widely used in Auckland. It allows two homes. It allows a 3-metre high and 45-degree setback. It's one that is familiar to the planners and the processes there. We think if the Government wanted to rely on the modelling it's got—and I've given all the reasons why they shouldn't rely on that modelling because there's a non-sequitur that because you added more zoning capacity and that gave you more homes at one point in time that will always be true; at other points of time it's simply illogical. But if we just accept that for a moment because clearly it's going to be difficult to move the Government on it then why not use a familiar zone that is going to have less effect on other people's welfare? That according to their own modelling shows we'll get almost the same amount of increased housing. Now that's got to be a good deal. You know they could achieve some of their goal they could get more housing they could make it more acceptable to people who will be upset about this when they get no design standards three storeys a metre from their boundary; floor-to-ceiling window on the third floor looking in on their kid's bedroom—people will be upset about that. They could avoid that outcome and get more housing. Now that's got to be a good deal.Thankfully my ever-diligent colleague Simon Court has produced a fairly detailed Supplementary Order Paper. There are amendments on Supplementary Order Paper 107 that would replace the medium-density residential standard that these guys have provided with a standard that basically replicates the mixed-housing suburban (MHS) zone in Auckland. So in Auckland it would mean that all areas that are single-family home for example would be upgraded to MHS. MHS areas would stay the same areas that are mixed housing urban would stay the same areas in town centres will stay the same terrace housing and apartment building areas—they would all stay the same. But the net effect would be to upgrade single-family homes to mixed-housing suburban and you know the Government's modelling shows that would actually give the increase of housing that they want or very close to it notwithstanding the other constraints in the supply chain and it would be familiar and it would be a lot more acceptable to people who will otherwise object. The Government should think about that. The National Party should think about that.You know it's interesting they say "Oh David Seymour he just stands up for his constituents." but keep saying that by the way you know like every time you guys accuse me of standing up for my constituents they hear it and it's helpful. So thank you. Please keep saying it. And people outside the electorate I currently represent they hear it too. So you know the more you guys say that I do appreciate it and I hope you'll keep saying it.But this amendment would increase the outlook spaces—that is the zones outside primary windows such as the primary bedroom window. It would increase the outlook space outside secondary bedroom windows to be like the mixed housing suburban zone that is so familiar to us in Auckland. It would allow urban design consideration so that we don't end up with the kind of unfortunate circumstances where two neighbours do what they view is in their own best interest but they end up in conflict and they both end up worse off than they could have otherwise been.I say all this because you know the Minister likes to talk about me and my political philosophy; I don't think he understands it that well. We're engaged in making good public policy of having the role of Government restricted in a principled way to make people's lives better to regulate genuine market failures and to spend tax on things that are public goods that can't otherwise be produced—although that's not really relevant here. We are wary of market imperfections about network effects of infrastructure. These are all the things that you have to do when you do public policy as a big kid. But unfortunately the Government hasn't left any time because they want to rush this through Christmas."