Affordable Housing: Enabling Territorial Authorities Bill — First Reading 
Affordable Housing: Enabling Territorial Authorities Bill — First Reading 
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Affordable Housing: Enabling Territorial Authorities Bill 
First Reading 
Hon MARYAN STREET (Minister of Housing) 
: 
 I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Local Government and Environment Committee. The Affordable Housing: Enabling Territorial Authorities Bill enables territorial authorities as it says to promote the provision of affordable housing to low and moderate income households in a way that encourages mixed communities. The bill will provide new powers to local authorities to help solve affordability problems.  
Housing is becoming increasingly unaffordable. More working households are locked out of the housing market because of escalating house prices in relation to household incomes. In Auckland alone the number of working households unable to buy a modest house that meets their needs rose from 20400 in 1996 to 54900 in 2006—an increase of 169 percent. At the same time starter homes are not being built in new developments. Houses are increasingly getting bigger with more modern amenities making them too expensive for first-time home buyers. In addition more people are renting. Renters have become a more diverse group including households with children and older renters who will increasingly out-compete single-parent and single-person households that have traditionally relied on the rental sector. Without affordable rental options households are spending too much on rent and less is left for other essential living costs including saving a deposit to buy their own home.  
A lack of suitably located affordable houses has economic and social consequences. People live further away from work and have to spend extra hours commuting at a cost to families and to the environment. Without a range of house types within neighbourhoods people have to move out of their community if their housing needs change. Homeownership has significant social and economic benefits. It can promote greater family stability improve the connections with communities and create continuity of education as well as community stability. Homeownership also provides long-term security and a buffer against poverty before and after retirement.  
This bill gives territorial authorities the ability—not the compulsion—to require some affordable housing to be built in new developments or to contribute money or land towards affordable housing being built elsewhere. Territorial authorities have been asking for this legal clarity and this mandate for some time. The Affordable Housing: Enabling Territorial Authorities Bill is enabling rather than prescriptive and provides a robust and transparent process for any territorial authority wanting to use the new powers.  
Only those territorial authorities that want to do so need to develop an affordable housing policy. The bill requires territorial authorities to carry out a housing needs assessment so that they have a clear picture of housing need in their areas. Based on this assessment territorial authorities can develop an affordable housing policy that sets out how they will respond to the housing need. The territorial authority must consult with its community before adopting any housing policy. An affordable housing policy will form part of the territorial authority’s long-term council community plan and will therefore be a public document. It will state what is required of developments how any contributions will be collected and used and what models the territorial authority may put in place to make sure any resulting housing continues to be affordable for future community needs and this is a very important provision in the bill.  
Territorial authorities can choose how they keep housing affordable. A territorial authority could for example vest a house in a community housing trust that sets up a shared ownership scheme or rents the house to a moderate-income household. Alternatively a house may have a deed restriction that preserves its affordability over the long term. Territorial authorities will also need to consider what incentives they can provide to developments that are contributing affordable housing. The bill permits territorial authorities to use a range of incentives to offset the costs of providing affordable housing. For developers this is an opportunity to target housing at a growing segment of the housing market. The bill is designed to encourage affordable housing not deter development.  
Safeguards will be put in place to ensure that any affordable housing contributions are considered reasonable by the community. Territorial authorities will have to consult with their communities before adopting an affordable housing policy and that policy can be appealed to the Environment Court.  
The bill will also prevent the use of covenants on land titles that aim to exclude social and affordable housing. These covenants which are used in urban areas in particular unfairly discriminate against some of our most vulnerable people such as older people children and people who require assisted living such as people with intellectual disabilities. The use of such covenants is a small but growing issue. The bill does not aim to address building costs. Nor is it the purpose of the bill to address land supply or land price issues although it may have a positive effect on these in the future.  
This bill is one of a number of tools that will be necessary to address the housing affordability problem. It is only one tool but it is an essential one. The Affordable Housing: Enabling Territorial Authorities Bill balances the need of the community for affordable housing—and what is wrong with that—with developers’ needs for consistent and predictable planning guidelines. The bill promotes housing choice through ensuring that a range of housing type tenure and cost to meet the needs of moderate-income households is being built into new developments. I commend the Affordable Housing: Enabling Territorial Authorities Bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party will not be supporting this legislation quite simply because it does nothing that matters in a climate where for the last 5 or 6 years property prices for both land and buildings have got out of reach for tens of thousands more New Zealanders. Many of them are young New Zealanders but the Minister ignores the fact that many of them are also older New Zealanders entering retirement who would love some sort of accommodation stability. In a climate where housing is getting out of reach for more and more New Zealanders the Government has tabled legislation that it heralds as its magic bullet but all it does is give district councils more and more work to do at the expense of their ratepayers and give builders and developers more and more paperwork and regulatory hoops to jump through costing them more. Quite simply they will pass those costs right back to the first-home buyer. The question the National Party has is why the Government does not do something that matters. There are lots of things it could do to address the appalling housing affordability problem that would actually do something for first-home buyers. 
First of all we found out through the housing affordability inquiry which the National Party called in front of the Commerce Committee—and which the Prime Minister and the Minister of Housing at the time said was not necessary—that developers builders first-home buyers consultants university representatives those in the Department of Building and Housing and all sorts of others say it is the cost of land that is driving up property prices more so than the cost of building. Are building costs driving up property prices? Yes absolutely over and above the cost of inflation but their effect is nothing like the cost of land in driving up property prices overall. When I say “property prices” I mean the cost of building and the cost of the land underneath. So the land component is driving up property prices much more than anything else. 
The Government says we need to free up more land for development so that the supply-demand equation is met. That is land on the outskirts of cities and new land and land within city boundaries. At the moment if a couple say an elderly couple want to split their section into two or four sections which would supply more housing for those in the market the lengths they have to go through the hoops they have to jump through in terms of local council regulations or of legislation that this Government has given councils mean that it is all too hard. Why would a couple within the city boundaries of Auckland want to split their property in half? It would take 2 or 3 years and cost tens of thousands of dollars. They would have to consult with someone in Bluff if the local council wanted them to because through the Resource Management Act anyone can object to anything anywhere! That is the first thing. Why does the Government not make sure that more land is freed up for subdivision? 
After 8 years of this Government and 15 years of the Resource Management Act everyone up and down the country on the front line not just to do with housing but also to do with electricity generation and transmission road building telecommunications you name it—anything to do with infrastructure—is saying that the Resource Management Act needs to be streamlined. This Government has ignored that call for 10 years. How can it be that a subdivision in Whangarei can be objected to by someone living in Invercargill? How absurd is that! The hoops one has to jump through quite simply have to be fixed so that builders and developers are not paying $10000 to $30000 per section to get their applications through the Resource Management Act process. When they have to pay $10000 to $30000 through that process they slap it on the price of the section and the first-home buyer ultimately pays it. But this Government ignores calls to streamline the Resource Management Act. 
We have seen two or three pieces of amending legislation to the Building Act brought before the Parliament in the last 3 or 4 years. Has the Government made it easier to build better houses? No it has not. If builders want to shift a window 3 inches to the right they have to submit more plans to the council get more consent and have more visits from an inspector. Does that make the house any less leaky? No but it certainly slaps another five or 10 grand on top of the price of housing for first-home buyers—just another bill they have to pick up. 
Lastly housing affordability is made up of two components. Firstly skyrocketing property prices have occurred over the last 5 or 6 years because supply has not met demand. Secondly take-home pay has not kept up with those prices and interest rates have gone through the roof to a point where they are the highest in the developed world—at roughly 9 to 10.5 percent.  
Let us take the interest rate component first before we look at take-home pay. Interest rates have skyrocketed in the last few years simply because of the Government’s poor management of the economy and its unproductive spending. It is unproductive spending to pour billions of dollars into health but not provide for more doctors nurses and operations. It is unproductive spending to pour billions more into health and billions more into the bureaucracy but not provide for more operations more doctors or more nurses. Unproductive spending drives up the costs in the economy. This Government will pour money into the Ministry of Education but it will not provide for more teachers or for teaching more children. Unproductive spending has driven up interest rates in this country and first-home buyers pay the bill. 
The second aspect is take-home pay. If only this Government would recognise that a significant tax cut to those young families who are trying to pay off a mortgage would make all the difference in the world.  
Hon Members 
: Ah! 
PHIL HEATLEY 
: Labour members mock me. The Government has railed against tax cuts for 7 years but with an election looming—less than 12 months away—and people across the country saying they are sick of the Government wasting taxpayers’ money Michael Cullen has done a U-turn and said: “We’ll do tax cuts.” But the country does not believe that Labour will give tax cuts because it is so reluctant. The Government does not want to do it. I tell the Government that a difference in take-home pay—a tax cut for young families—would make all the difference in the world when it comes to being able to service a mortgage. 
National opposes this legislation because it is so convoluted; it will not help first-home buyers—certainly not today. Councils that pick this up have to do a study in their districts which will take 12 months and then they have to include it in their long-term community plans. That is just lovely! That will take another couple of years. So 3 years down the track if councils want to they can invoke this. The interesting thing is that Queenstown Lakes District Council is doing this at the moment without this shoddy legislation. Unbelievable! How is it that we are having to pass the first reading of this legislation in the debating chamber today yet the Queenstown Lakes District Council is doing this at the moment without this legislation? National will not be supporting this bill. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am pleased to take a brief call in support of the Affordable Housing: Enabling Territorial Authorities Bill. Before I begin I observe that we have just heard a most extraordinary contribution from a member of a previous Government that gave us leaky homes and of course the Resource Management Act; but those discussions I will keep for another day. 
I am pleased to speak in support of this legislation. I refer Mr Heatley and his colleagues to the bill’s title. This is another example of a pattern of behaviour that Labour has demonstrated since 1999—of working with local government to achieve solutions that it is happy with. The solutions that happen in each area will be determined by local communities not by people who rely on the free hand of the market to mess up most things. 
I compliment my colleague the Hon Maryan Street on the introduction of the bill. It meets and will begin to address some of the challenges that this Government and this community face. The first challenge in the wider housing area was the assault by the previous Government on the State housing stock. The community has not forgotten that members opposite who are bleating right now tried to cover with a most unsuccessful smokescreen the fact that National sold over 13000 State houses. The other pattern of behaviour that has contributed to some of the difficulties that we all acknowledge in our community in this area right now is the interesting and extraordinary behaviour of the banking and non-banking financial sector. Clearly people who have not been required to put equity into loans have unfortunately exposed themselves more than prudent investors would have done in terms of the housing market. 
As the Minister said earlier this bill is one part of a palette of initiatives that will address those challenges. First of all we have the work that the Housing New Zealand Corporation is doing right now in our communities in terms of replacing reconfiguring and restoring our housing stock; secondly we have the initiative around the Welcome Home Loan scheme; and thirdly we have the very very great success of KiwiSaver enrolments. Members will be aware that we were expecting KiwiSaver enrolments to be at 300000 at this point. Well they are already at 316000 so the end-of-year target has been well exceeded. That will be very good news for a large number of New Zealanders when it comes to moving into their own affordable housing. This involves work with local government in order to enable what is appropriate for its communities. 
As the Minister said in her first reading speech this bill is one of a number of tools that will lead to further productive collaboration with local communities and it will help New Zealanders to build their communities in the shape in which they want them to be built. I am pleased to commend the bill to the House. 
Dr WAYNE MAPP (National—North Shore) 
: 
 The disappointing issue about this Affordable Housing: Enabling Territorial Authorities Bill is that after 8 years all the Labour Government can promise is a survey. I have heard and I have read that the new Minister of Housing Maryan Street is quite promising but her first initiative is to promise a survey. She tried to say to the National Party that we should not be too worried about this bill because it is not prescriptive that no one has to do anything and that no territorial local authority will force anyone to do anything.  
You know in some respects that is our fundamental complaint is it not? This particular response is pathetic. The best that her hard-working department and her hard-working Cabinet team can come up with today is a survey and the ability I guess to make a few by-laws—an ability not for the Government but for local authorities.  
I guess she will go out next year to the voters of New Zealand and say: “Vote for Labour because we are going to fix your housing problem with a survey. That is our solution and in fact we did such a good job of it that we sought to pass the legislation through urgency because that is how important the survey is.” I have to say to the Minister that it is simply pathetic.  
If a survey is Labour’s response to the front-page article in the  
New Zealand Herald  
today that shows an increasing gap of wealth between Australians and New Zealanders in housing affordability frankly it is not surprising that more and more New Zealanders are making the choice to go to Australia. Last year 40000 New Zealanders moved to Australia; 40000 New Zealanders made a vote of no confidence in the Government. That is the truth of it. New Zealanders are moving to Australia because they are sick and tired of this Government and its lacklustre response to all sorts of problems.  
The Government could have done a whole raft of things. My colleague Mr Phil Heatley pointed those out: more land availability and fewer prescriptive building regulations. I just point out to the Minister—she may not know this you see—that in Wellington City according to the council as a result of the Government’s building legislation people now have to provide 300 pages of documentation and 12 A3-sized plans just to build an ordinary house. We are not making this up; these are Wellington City Council’s own figures. That is a tenfold increase from just 4 years ago. I know there has been a leaky buildings crisis and I know that things had to be done to fix that up but multiplying the paperwork tenfold is not a solution.  
Earlier this year I went to a forum in Auckland run by Arthur Grimes. He identified the most critical issue for housing affordability as the lack of urban land for subdivision. He specifically identified metropolitan urban limits as driving up land prices and he had a huge amount of data on that. My colleague Mr Phil Heatley was also there. We read that material. I want to share something with members: not a single Labour person was at that meeting. This is important research. Arthur Grimes is a highly respected economist and there were hundreds of people at that meeting but not one member of the Government was there.  
Arthur Grimes identified the critical problem as being lack of land availability and because the metropolitan urban limits have not shifted for well over a decade. What has this Government done about that? It has done absolutely nothing.  
David Benson-Pope 
: What did the National Government do about infrastructure for Auckland? 
Dr WAYNE MAPP 
: We did do things actually. I say to that member that we had the economy growing. This Government is simply missing the big picture. It does not understand that the real causes of the housing issue are problems such as lack of land availability.  
The second point I might add is clearly stated on the front page of the  
New Zealand Herald  
today. New Zealanders are too poor— 
Hon Judith Tizard 
: Oh well it must be true. 
Dr WAYNE MAPP 
: Do members hear that? Labour hates the  
New Zealand Herald  
at the moment. The Prime Minister is saying: “We hate the Herald. The Herald is unprofessional and does not know how to do journalism.” That is Labour’s approach and the Minister of Housing has joined her plaintive voice to that chorus as well. “We hate the Herald.” is Labour’s mantra. I guess we will hear a bit more today in a certain third reading about how Labour hates the  
New Zealand Herald 
. Why do Government members not go and read the  
New Zealand Herald  
and read the data that says New Zealanders are poorer than Australians?  
There are some key reasons for that. One of the fundamental reasons is the tax situation. Labour has not given a tax cut on rates or thresholds for nearly a decade. In fact its only response was to increase taxes in 1999. In the last election Labour promised to change the thresholds. Do members know what it has done now? It has broken that promise. It has broken that promise to New Zealanders and National will be reminding them of that.  
Today New Zealanders are paying more in tax than Labour’s promise indicated and they are doing so because Labour broke that promise. If it had kept that promise then there would be more money in the hands of New Zealanders. That is actually how people pay for housing. I know that is a startling revelation but if people have more money in their pockets then they can pay bigger mortgages they can buy properties and we can actually solve the housing crisis. But Labour ignores those obvious steps.  
After 8 years in office Labour’s best approach is to have a survey. If that party is saying: “Well National is concerned about housing affordability”—we are—“therefore it should be voting for this bill.” then we say no. We say no because it is simply the wrong solution. Actually it is not even a solution at all. Why call it the wrong solution? It is no solution to go out to the public and say that the approach to this issue is to have a survey and to perhaps just give the option to local authorities to have a little bit of affordable housing here and there.  
Labour will ignore the real issues of course. It will ignore the Resource Management Act it will ignore Arthur Grimes it will ignore metropolitan urban limits and it will ignore reducing taxes. It will ignore all of the things that matter. It will ignore all of the things that would reduce the cost of housing and make housing more affordable for hard-working New Zealand families.  
New Zealanders know that. They have seen this Government in action now for 8 years. They know the Government has failed and frankly young New Zealanders are voting with their feet. This Government should be alarmed by that article in the  
New Zealand Herald  
today. Actually the Minister was alarmed but the Government has no solutions. It has alarm but no solutions. And when the new Minister comes up with her magnificent solution under urgency it is to have a survey. National will not vote for a survey. We are voting against this bill. 
RON MARK (NZ First) 
: 
 I rise to take hopefully just a short call. It is interesting is it not? I actually enjoy listening to my colleague over there Dr—Captain—Wayne Mapp. But I have to say that I get tired of these Maoris who cannot pronounce English who are all the time standing up and talking about “New Zillun”. Mr Mapp had me wondering for a while which country he was referring to. Here in New Zealand we have had— 
Dr Wayne Mapp 
: Blame my Kiwi accent. 
RON MARK 
: I am sorry Mr Mapp is not Maori—that is right. Not being able to pronounce the Queen’s English properly is the sort of mistake that we often get accused of. 
I guess the fact that we are talking about affordable housing here in New Zealand says a lot in itself. Many of us simply want to focus on ensuring that those vulnerable New Zealanders have housing. Affordability has become the issue because of a range of things that have happened in this country. We must remind ourselves where these things started from: they go back to the 1980s. There was a time in New Zealand when people considered that it was part of the great Kiwi dream—it was a right—for every New Zealander to aspire to owning his or her own home. That was something that we just took as read. It was not taken for granted; it was the way it was in this country. I remember very very clearly as a young boy growing up in Pahiatua that New Zealand was known as the country of the quarter acre section pavlova and the flagon of beer. We proudly talked and joked about New Zealand being the home of rugby racing beer and homeownership. That was the way it was.  
I remember a great leader of this nation a man whom many of us admired. Having lived in the Waimakariri for so long and in Canterbury on and off for 30-odd years and having campaigned in Kaiapoi I am very familiar with that great man Norman Kirk. When I came into this House I actually quoted one of Norm’s statements. His words—and I hope I get them exactly right—were: “People don’t ask for much. They simply want somewhere to live somewhere to work someone to love and something to hope for.” That pretty much summed it up did it not? That is the Kiwi dream. In a nation that has always prided itself on being very egalitarian classless and very conscious of its obligations socially to those less advantaged housing was always key to that.  
I guess what is sad is that in the argy-bargy that goes on between the two old parties Labour and National both seem to forget a couple of things. The reason that Labour is in this position of trying to do something to make housing affordable and therefore available to those who have been priced out of the market is largely due to the economic reforms of the 1980s and the way in which philosophically the Government of the day—in fact there were two of those Governments one after the other—moved towards user-pays and a businesslike approach through all of the social agencies. 
Sue Bradford 
: That’s right. 
RON MARK 
: Sue Bradford agrees with me.  
It is interesting that the National Opposition of the day railed against many of these changes. It debated and campaigned and told the whole of the nation that Labour was a horrible nasty Government that had forgotten its roots had forgotten where it came from and had forgotten what it stood for. Then National got into power in 1990 and by crikey it ramped things up. It set to and sold State homes from one end of this country to another and none of us will forget the fact that certain members of Parliament within the National caucus profited out of that. They took advantage; they bought some of those State homes. That is the history; that is the background.  
Then of course to compound the problem we had these two Governments which one after the other opened up the doors to rampant uncontrolled immigration and we got the consequential effects of that. When I got to Parliament in 1996 I opened up my electorate office and started taking in work as a list MP—we all do that and some people tend to forget that list MPs actually do constituency work particularly in constituencies where the constituency MP is lazy or is not particularly liked; one gets a heck of a lot of work out of those MPs and one quickly comes to know who those MPs are. One of the things that really annoyed me was finding New Zealanders citizens of this nation who had paid taxes worked hard and strived to bring up their children who were in desperate situations—like a matrimonial break-up or a mum with two kiddies—and were quickly trying to get into a home only to find that there were no emergency homes available in Christchurch because they were chock-a-block full of refugees asylum seekers and other people who had been brought into this country and given priority over New Zealanders.  
New Zealand First members shake their heads. Pita Paraone has asked the previous Minister of Housing Mr Chris Carter so many times why it is that the prioritisation of housing allocation in this country does not go to New Zealand citizens. Why is it that we have all these foreigners who are given the privilege of residency and of coming into our land to take up employment and who get here on the basis that they have the means and the wherewithal to support themselves being given a Housing New Zealand Corporation house while a whole bunch of New Zealand citizens who were born and bred here end up on a waiting list unable to get one? New Zealand First is absolutely unashamedly for putting New Zealanders first not foreigners who have been given the privilege of residency and who are allowed to come here and work.  
That is one of our great disappointments when we look at the Labour benches and at the Labour Government members particularly Chris Carter. He just did not get it did he? He still does not get it. It is not a question of saying to those residents who have been given that privilege that honour of coming to our land and starting afresh that they will get some assistance. We have given them the assistance; we have let them come here. They said in their applications that they had a job to come to they had qualifications they fitted all the criteria and they had the money to support themselves and to look after themselves. But then hello somewhere along the line they get a Housing New Zealand Corporation house. Then we wonder why we have a housing issue for New Zealanders—citizens of this land.  
New Zealand First will support this bill going through to the select committee because we are interested in hearing the debate. We have heard some good arguments put up by Phil Heatley and we have heard the counterarguments on the other side of the House. Those arguments are best played out in the select committee so let us hear them. Let us not delude ourselves: the reason we are in this situation is that there has been faulty flawed foreign investment and a faulty flawed immigration policy and we have no understanding of the pressures that we create in the real estate market when we allow people to come into this country and simply buy up what they want then move offshore and manage what they have bought from offshore. We have no care and no concern about the impact on low-income or moderate-income families who simply want one thing: somewhere to live someone to love and somewhere to work. They want that Kiwi dream and the right to own their own home and we need to remember that when we manipulate the economy and start talking about market forces because the losers are always the vulnerable. 
SUE BRADFORD (Green) 
: 
 The Green Party is pleased to be supporting the first reading of the Affordable Housing: Enabling Territorial Authorities Bill which is in front of us this morning. As I think every political party in this House realises and accepts barriers to homeownership are huge at present and the percentage of people in this country owning rather than renting their housing is dropping all the time.  
Like other members here I am sitting on the Commerce Committee’s affordable housing inquiry at present where we are hearing a large number of excellent submissions all stressing the enormity of the problem we face and the complexity and range of possible solutions. I find it very ironic that Mr Heatley and Dr Mapp from the National Party are opposing this bill given that National actually called for the housing affordability inquiry and like the rest of us it has been hearing the realities of what is going on out there. This bill at least presents us with one small and rather tentative part of the answer.  
In respect of this I am glad that the Minister and the Government have seen fit to change the name of the bill to more accurately reflect the limited scope of what it seeks to achieve. In its original form the bill was labelled the Affordable Housing Bill. One of my main objections at that point was to the fact that the name was rather grandiose in the context of legislation that attempts to achieve only a very small incremental and non-binding improvement to one aspect of a much larger crisis. I was concerned that somehow the Government was conveying the impression that it could sort out the housing affordability problem with just one bill perhaps for political or tactical reasons but I am sure that this would have backfired when people realised its limitations. So I commend the Minister and the Government’s common sense in bringing the title back to a more realistic reflection of what the bill might hope to achieve.  
The Green Party certainly supports the underlying purpose of this bill which is to enable local authorities to develop and implement affordable housing policies in relation to new developments. I have been aware for some years now of the sterling efforts being made in the Queenstown district by its local council and others in the community there to try to turn back the tide on its becoming simply an enclave for the wealthy. That district has had a crisis for decades with the shortage of affordable and available accommodation for workers and their families. For example a recent study found that someone on the average income in the Queenstown Lakes district of around $63000 or $1227 a week would spend about $900 a week servicing an interest-only mortgage on a low-end house in the area—with “low-end” being around the $500000 mark. With tax as well the homebuyer would have only a few dollars left to live on.  
In response to this situation the council is working hard at strategies to help homebuyers both through the council’s partnering with a local housing trust and the Housing New Zealand Corporation to work on a new affordable housing scheme and through plans to add new rules definitions and incentives to develop affordable housing for over 2000 households by 2016. I commend the Queenstown Lakes District Council for its progressive and far-sighted efforts.  
I contrast these with the attitude of the new Auckland City Council which seems to have the opposite approach despite Auckland also having one of the biggest problems with unaffordable housing in the country. A meeting is happening in Auckland today I believe that will evidently decide whether to break an affordable housing contract that the council signed up to earlier this year when it formed a partnership with the New Zealand Housing Foundation to build about a hundred affordable homes over the next 5 years. This is trifling compared with what Queenstown is attempting to achieve but even this small worthy progressive first step by Auckland City may be doomed because of John Banks’ apparent commitment to reverse any socially responsible policies now that he is in charge again. And this is despite the fact that although Auckland prices might not be quite as bad as Queenstown’s it does take nearly a whole average wage to pay off an average mortgage on an average house in the Auckland region.  
I understand that one of the motivating factors for the Government in bringing forward this bill at this time is that the Queenstown Lakes District Council may have run into some legal and technical difficulties in being able to do anything about requiring developers to include affordable housing in their plans. I think it is great that this bill aims to break the deadlock over this and that where a council has a will it will be able to go through with its planning once this bill goes through. Councils will have legal certainty about pushing forward with planning which is so important.  
At the moment it is apparent that the regulatory tools available to councils including the Local Government Act 2002 do not directly address the issue of affordable housing. This bill will allow those territorial authorities who choose to do so to develop an affordable housing policy that specifies what actions a developer may be required to undertake on the one hand and what the council must do on the other hand to help compensate the developer—for example through excusing payment of development contributions having rates remission policies providing direct funding assistance or applying things like a density bonus. Before a council can do any of that it has carry out a housing needs assessment and consult the community about the development of an affordable housing policy.  
The Green Party thinks that all this is grand. Our only problem with it is that it is completely optional and that only some councils will choose to go down this path. I am sure Queenstown will take the lead and I hope it will be followed quickly by places like Wellington and Christchurch which seem to have a comparatively progressive attitude towards accepting that there is a council role in helping to house the local citizenry. However in places like Auckland City Rodney Northland and others I fear we might see quite a different approach despite a very high housing need among low and middle income earners in those districts.  
The Green Party believes that housing is a fundamental social good and that it is a basic human right for all citizens and residents not just for some. We believe that not only central government but also local government must play a leading role in developing policies that ensure that everyone has their basic housing needs met through either renting or buying their homes. Therefore although we will be supporting this aspect of the bill as far as it goes we would prefer it if the Government were to go a lot further.  
We believe that all local councils should develop affordable housing policies after undertaking needs assessments and consulting well with all stakeholders. All councils where a housing need is identified should be required to put together policies that require developers to facilitate the provision of affordable housing as per the trade-offs allowed for in this bill. All councils should also be willing to facilitate the release of surplus land to help with future land supply for community and State sector housing and where need exists they should also be actively building more housing themselves and supporting community sector social housing initiatives. Thus our main problem with this bill is not with what it sets out to do but with the fact that it does not go anywhere near far enough.  
One further aspect of this bill that I have not mentioned so far is the element that brings to an end restrictive covenants on developments that attempt to exclude any or all affordable housing from those developments. This tool has been used with increasing frequency in the Auckland region. I am not sure about other areas but it is certainly a feature in our part of the world. Such covenants prevent the Housing New Zealand Corporation and other social housing providers from buying or leasing properties within a development. This means from the developers’ point of view of course that covenants are keeping property values high while keeping low and middle income people out. But from a social justice perspective they are increasing and rigidifying the gap between the haves and have-nots that sadly is already increasing in this country as it is in many parts of the world.  
In a small way this provision within the bill is a microcosm for a decision about which way we want Aotearoa to go. Do we want a future where the rich live safely within their gated communities and secure compounds and no riff-raff are allowed within the walls? Or do we want a country that still has some notion of social equity and a fair go for all? The Green Party totally supports the removal of the power to place exclusionary covenants on developments and I congratulate the Minister and the Government on taking this step. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa e te Whare. The link between decent housing and good health is well established. Indeed for centuries the saying “A man’s home is his castle” has represented the concept of a man’s home reflecting his identity and character. Even in te Ao Maori we say something similar: He matua pou whare e rokohia ana; he matua tangata e kore e rokohia—the main ridge pole of a house will always stand but not so a person.  
For far too many citizens of Aotearoa New Zealand and in particular for more and more Maori and Pasifika the problems of housing affordability are rapidly eroding these longstanding values. This bill seeks to remedy these problems by providing councils with the tools to address housing and rental affordability. But for many of our whanau the low level of incomes and the fact that many Maori whanau have young children and larger families poses real challenges for suitable housing options.  
On top of that developers are building larger and more expensive homes the starter-home market is shrinking a property price boom has seen the rate of homeownership plummet in recent years and today hardly any low to medium income whanau can even consider buying a home.  
I will share with the House some staggering statistics on housing affordability and homeownership that show that fewer than 30 percent of Maori own or even partly own their own homes compared with 65 percent of non-Maori. Of those who do own or partly own their own homes only 6.7 percent are Maori. Of those who rent their homes 67 percent are Maori compared with only 44 percent of non-Maori. And with rentals of $275 a week in Auckland and $211 a week in Wellington dramatically eroding the standard of living for far too many of our people even rental affordability is becoming a major issue for the future.  
I would like the House to consider the critical state of available housing options in this country particularly in light of a national forum held at Te Papa Tongawera less than 10 days ago. There we learnt that homelessness is becoming a significant and growing problem for people moving between temporary forms of shelter for people living in boarding houses or other inadequate housing and for people forced to sleep rough in parks streets deserted buildings and so on.  
Dr Guy Johnson from the Australian Housing and Urban Research Institute has analysed the frightening reality of the homeless population. He told us that 75 percent of homeless youths become homeless adults that 30 percent of all homeless people were first homeless in their youth and that there is a growing population of people who have been homeless for much of their life. The effects of this are apparent in a life characterised by a lack of continuity and certainty anxiety about the constant search for where to go next; the disruption to education or employment prospects and the increasing likelihood of exposure to violence discrimination and exploitation. As a consequence of such a lifestyle physical and mental health decline and the impacts of isolation and alienation are profound. In the land of plenty these increasing levels of homelessness are an indictment on our society and a condemnation of this Government’s current housing policies.  
I also refer the Minister to the very valuable resource published last August by the Family Centre social policy research unit and the research centre for Maori health and development at Massey University. The study— 
Maori Housing Experiences: Emerging Trends and Issues 
 by Charles Waldegrave Peter King Tangihaere Walker and Eljon Fitzgerald—confirms the fall in Maori homeownership rates and catalogues the issues of overcrowding inadequate heating and substandard housing as critical factors in any discussion on the status of Maori health.  
We know that the economic conditions we have regularly profiled in this House have also had a massive and adverse effect on the ability of whanau to afford adequate housing. We note that this bill enables but does not require councils to assess the level of affordable housing in their districts. Given the dire circumstances surrounding Maori housing and the access to appropriate housing in Aotearoa we are keen to know why such an assessment is not a core part of the business of local bodies.  
The Maori Party commends those councils for pushing for legislation to help resolve the desperate housing crisis we are in and encourages local bodies—particularly those in and around Auckland and other high-growth areas—to respond positively to the lack of affordable housing in their regions. The Maori Party urges the Minister of Housing and her ministry to consider the vital need for policies that will help to house the homeless and prevent homelessness. The Maori Party urges the Minister to ensure that Maori will be involved in further developing Maori housing policy—particularly around design and location and the conditions pertaining to Maori whanau.  
This bill is worth supporting if it will genuinely promote the provision of affordable housing to low and moderate income earners. We will support it as part of our efforts to work with councils and any other agencies to develop affordable housing policies that can be taken up throughout Aotearoa New Zealand. Tena koe Mr Assistant Speaker. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak to the first reading of the Affordable Housing: Enabling Territorial Authorities Bill. United Future will be supporting this first reading because affordable housing is an issue that we are passionate about. But I will signal at this first reading stage that we have some concerns. We are not sure that this legislation is the solution but it certainly is an opportunity to hear from the wider public particularly those with a vested interest in the housing industry. Over the last few years members from United Future have had some very interesting discussions around the issue of affordable housing. I remember very acutely some of the issues that came up at the affordable housing summit in Wellington that we attended. 
We are concerned that this bill is an opportunity wasted and that there could be more helpful things included in it. The bill enables but does not require territorial authorities to assess the level of affordable housing in their districts and following that assessment it allows a territorial authority to develop an affordable housing policy and to implement it. 
The bill says that the implementation of that policy includes enabling territorial authorities to require developers to facilitate the provision of affordable housing and it says in clause 12 that an affordable housing policy must state how territorial authorities might assist those developers who are facilitating the provision of affordable housing. Territorial authorities will be asked under clause 11(2) to consider in their policy development a requirement of a developer to include a proportion of affordable housing in a development. That is an area that concerns us because there will have to be some fairly good incentives in there for developers to factor that into their thinking. I guess a territorial authority could include in its own plan an intention to free up appropriate land specifically for affordable housing. This would mean that when people were purchasing land for development they would understand what the intention of the territorial authority was. We are a little bit concerned that people who have invested in land for development will then discover after the fact that they have all sorts of requirements slapped on them in a way that I think could be extremely “business unfriendly” and unfair. 
One of the things I am acutely aware of is a discussion I had with one of the leaders of the Registered Master Builders Federation who talked about the federation’s estimates around the issue of compliance costs. It figured allowing for reasonable and fair compliance on a residential property that New Zealand homeowners could save up to $30000 per average house if there were more sensible compliance regulations around housing. The fear being expressed at the time was that in the wake of the weathertight homes issue the industry had become so risk-averse that it had a level of compliance around the building of houses that was unreasonable and that added to the problem of making houses unaffordable for middle to low income New Zealanders. 
We recommend to the Government and to the committee that they look at some of the very fine work that has been done by the social policy unit of the Salvation Army which has some fantastic recommendations about the way we could be making greater progress on the issue of affordable housing. We are not completely convinced that this bill reflects the kinds of suggestions that the unit has thoughtfully put forward and that is of concern to us. [ 
Interruption 
] The Green member is quite right: there are some positive things in this bill. I am not trying to say that this bill is not worth the paper it is written on; I think there are some interesting and positive provisions. I guess our fear is that those provisions do not go far enough and that they have some heavy-handed ways of approaching affordable housing that penalise the wrong people and do little for the people who are in need of affordable housing. But we are very happy to support the bill’s first reading because this is a discussion that must be had. United Future wants to reassure the House that we are supporting this first reading. 
MARK BLUMSKY (National) 
: 
 I rise to speak to the Affordable Housing: Enabling Territorial Authorities Bill. “My house my castle” is a term that is well used when people talk about their houses. I suggest that with this bill that may not be the case anymore. Under this legislation it could be that when people want to sell their houses they will sell at prices that are not the prices they want to sell them for or the prices they would expect because in this legislation there is a caveat that will be placed to ensure that people’s houses when sold will be affordable. 
Normally people would want to be able to sell their houses for what they are worth. With this legislation they will not be able to. Other people will decide what their houses can be sold for. If a person gets one of these affordable houses that is fine but when that person sells it he or she will not be able to sell it for the price that it may well worth—someone else will decide the price. 
People in this situation may say: “OK fine I bought my house cheaply; therefore maybe there should be an obligation to sell it cheaply to keep the affordable housing stock at a certain level.” But I ask members not to forget that if a house is bought cheaply initially it is because it was made cheaply. It either had a smaller floor plan one garage less or maybe not such ritzy fittings inside the house. A house bought cheaply as part of a bigger development will have some characteristics about it that make it cheaper. People will say: “Fair enough I bought it cheaply it should be sold cheaply.”  
But the problem is that when Kiwis own their own house no matter what price they bought it at many have a pride in it. It is their castle. They make adjustments to it they develop it they put on an extra room they make the garden bigger they add to it they built on—it is the Kiwi way. It is DIY and it is what we do as Kiwis. They add value to the house because they love their house. But what will happen with one of these houses is that the owners ain’t going to be able to get the value for their efforts in the house because someone else will decide what price they can sell it for because affordability needs to be retained.  
So why would people bother? If they get one of these affordable houses why would they then bother adding value to it? Why would they put in the effort? There is no upside. At the end of the day they will have probably the worst house in the best street because they will not bother. Their neighbours will love it when the person next door has the worst house in the best street. What could well have started as a pretty swanky smart development with 20 houses—a couple of them being affordable and all of them looking pretty sharp at the start—will at the end of the day be dragged down. It is the old story: the worst house in the street drags down the rest of the street. My goodness there are a lot of people who have put their life-savings into investing in houses and that investment will be impacted on.  
It is sad that the Labour-led Government when it wants to make housing affordable and talks affordable housing immediately picks on the developer to fix that. Why should it pick on the developer? It is because developers are a very easy target. There are not very many of them so there are not too many lost votes. It is a bit like deciding: “Right affordable housing—let’s make the developers do the work. Let’s blame them; let’s make them carry the can.” To use an analogy it is a bit like deciding that kids need to be healthier. To make kids healthier we think they need to eat more apples so we pass legislation that forces greengrocers to sell two apples every day to every customer. But the problem is that not everyone will want to buy those apples. Yet if there is legislation forcing the greengrocer to give away green apples to the kids they will be given away—they will not be sold. And who will carry the cost of those apples? I can tell members now that it will certainly not be the greengrocer; it will be every other customer who will carry the cost. There is no difference in what this legislation is doing.  
In the last 24 hours I have managed to speak to a couple of significant property developers who build a lot of housing in New Zealand. I have to say they all endorsed the concept of affordable housing. There is no doubt that these people would love to see more affordable housing in New Zealand. But none of them felt that this bill and what it is trying to do is in fact the answer.  
It was thrown at me—and I thought it was a very good point—that when cars were first manufactured Henry Ford decided he wanted cars to be available for the masses to be cheaper so he developed the Model T. He developed an affordable car for the world to drive. He did it because he manufactured a lot of the same car. So it makes one wonder—as it was thrown at me yesterday—why we do not encourage one or two manufacturers to make the Model T of houses and develop and produce a range of houses that are all very similar bulk produced and available to be put on the land that becomes free. I thought there was some real merit to that. The only difference is that we would probably not want all the houses to be painted black as the Model T was—the cars were any colour a person wanted but they had to be black. By definition if houses are mass produced in that way they will be cheaper.  
Then the issue just comes down to land availability and that is when councils can play their role in this crusade on making sure there is affordable housing. A council can and does have a huge role in making sure that land is available. Councils can revisit their city boundaries. They can revisit the containment line that they put around cities currently beyond which development cannot go. Land on the other side of that fence could become available for housing which it currently is not. I know Wellington City for example actually puts the containment line around Wellington City to force housing development to go to infill. We are suggesting that maybe that containment line should disappear to make land available for housing. The other thing that could happen is that councils instead of selling land could make land available for affordable housing and charge just a lease—a rental of say 5 percent return on the leased property; a subsidised mortgage. A council could own the land and lease it to the housing owner on a perpetual lease. By having that subsidised mortgage the land costs become a lot more affordable.  
One has to wonder just how much difference this bill will really make. In a 20-storey apartment building with 120 apartments 12 of those might be made to be affordable. If there were 100 of those 20-storey apartment buildings there would be 120 of those apartments that may be affordable. At the end of the day what difference will that make? I say that because in San Francisco which is often used as an example of a place where there is good affordable housing in the last 10 years 278 affordable houses a year have been developed using the type of concept suggested in this bill—that is 278 houses a year in a city of 7 million people. So we have to wonder whether this is the solution.  
The bigger picture is the bigger answer and that is to make sure that personal tax cuts are delivered—and the National Party will do that. The bigger answer is to enable people to have more money in their pockets to sharpen up the regulatory regime to keep interest rates lower and to reform the development rules and make sure the Resource Management Act behaves—because it certainly does not behave—to make it easier to build a house. The bigger picture is the answer not picking on developers and suggesting that that is the way to answer the problem—it is not. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I want to take a brief call on the Affordable Housing: Enabling Territorial Authorities Bill. I certainly want to commend the Minister for her excellent introductory speech. I also take this opportunity to observe that even in Hamilton in the Waikato the issue of affordable housing is very important. I want to make a couple of brief observations.  
To those people who say that all we need to do is create more greenfield sites and that it is purely an issue of supply and demand I ask them to have a look at Hamilton. The city has grown literally by about one-third or more in the last decade or two with new greenfield sites. Have we had affordable housing sections in those new greenfield sites? No absolutely not! So obviously legislation is going to be required to have some impact in order to create those affordable housing projects.  
The other week the Minister visited Habitat for Humanity in the Waikato and met Mr John Gallagher the chairman and also Pete North. It was a fantastic meeting and I have to say I was exceptionally impressed as was the Minister with the wonderful work that Habitat is doing. I am hoping as a result of this bill that that will be one of the organisations that will be a partner in this context. We visited one of the residents of a Habitat property who is moving to own her own property and she said: This is not just about the bricks and the mortar—the structure—it is about having a home and a house that realises our dreams and aspirations and lets us get on with our life journey.” 
That was a very very fantastic day. As the member for Hamilton West I give credit to that organisation. [ 
Interruption 
] The difference between Labour members and Opposition members is that they talk and we do. 
JOHN CARTER (National—Northland) 
: 
 What a laugh that is! 
Hon Dr Michael Cullen 
: Is he still here? 
JOHN CARTER 
: Here I am again and I will be here a hell of a lot longer believe you me. 
The problem with the Affordable Housing: Enabling Territorial Authorities Bill and why I want to speak on it is that when we read this legislation we see that it does nothing. That is the sad part about it. I listened carefully to the speeches made by my friend and colleague Ron Mark and also to those of Sue Bradford and Hone Harawira. I was interested in Sue Bradford’s speech because it was quite negative about the bill and its likely outcomes. Ron Mark raised some serious questions about the bill. Hone Harawira raised issues about the need for affordable housing and then asked whether this bill would achieve it. 
This bill is just typical of a Government that is failing which brings this sort of legislation into an election year as window dressing. It is disappointing to think that the smaller parties might support this bill not because of what its intention is but because of what it will actually do. When we study it carefully we see that it will achieve nothing at all other than to put significant costs on to the ratepayers of this country. 
That is the issue that concerns me because we know this Government has put huge costs into local government over the time it has been in Government. This Government has passed 69 different pieces of legislation that have caused costs to local government and to ratepayers and that have caused a rates revolt. The Government has had to have a study on the issue of rating but quite honestly it has done nothing with regard to that at all. But here they are passing more legalisation; if there is a cost at all—and there will be—it will be imposed on the ratepayers of New Zealand. 
Let me take the House through the way that will happen and what this bill is going to achieve. My view is that the end result will achieve nothing. The bill basically says that if there is to be affordable housing the first step that has to happen is that the local authority has to do some research to find out whether there is a need for affordable housing. That is strange. In the area that Hone Harawira and I represent for instance we both know there is a need for affordable housing so I ask the House why we need legislation that asks that question and that says to local authorities “You have to go and research to see whether the area that you represent needs affordable housing.” We do not need a law to find that out; local authorities already have the ability to go and find that out and some of them do. We do not need to pass more legislation under urgency to do that. We do not need legislation that tells them to go and do that—if they want to.  
The second thing is the research which will cause costs bureaucracy— 
Dr Wayne Mapp 
: Rates. 
JOHN CARTER 
: Of course it will hit ratepayers. What happens then? For local authorities if they find out much to their surprise that they need the ability to do something in regard to affordable housing the next step is that they have to put that into their long-term council community plans. We know what that process means. It means that it goes into the books it means there are rounds and rounds of consultation and it means there are discussions and opportunities to object and to debate and to have meetings. So we will have not just 1 year of research but probably at least another 2 years after that of going through the long-term council community plans of the local authorities. 
If this bill passes and goes through in 2008 and we have not done anything about it by 2011 all we have found out is that maybe there is a need for some affordable housing—well hello! Do we not know that already? If it is done by 2011 and gets through the councils’ long-term council community plans they will say “Yes we are going to address the issue.” The issue then will be that we will have done nothing other than cost ratepayers a lot of money discover something we probably already knew and spend 3 years finding that out. I say that that is a waste of this Parliament’s time a waste of ratepayers’ time and a waste for the people who actually needed some help. That is the first thing. 
We must also remember that we are talking about costs to ratepayers because the Government is putting nothing at all into this affordable housing bill—not a sausage; it is totally the responsibility of local government. I ask those members on that side of the House what consultation they have done with local authorities on this bill. I ask the small parties whether they have asked that question. I ask Ron Mark of New Zealand First whether that party has asked the Government whether it has actually consulted with local government on this. I can tell members the answer as to that consultation; the answer is “Not a stitch.” Local authorities are bemused by yet another cost. I ask Sue Bradford whether she asked the Government about what research it was doing with local authorities. I can tell members that the answer is “None.” Local authorities are not happy with that because they know that the bill will put more cost on them. 
We have got to the stage where we have put the whole thing through research and we have done at least a couple of years of long-term council community plans so now we have to go through the audit process. The audit process costs local government and ratepayers a whole lot more money. So far then we have caused a whole lot of bureaucracy and cost to ratepayers for research and we have had to go through the consultation of the long-term council community plans at the cost of ratepayers and a whole lot of time and bureaucracy and now that we are going through the audit process—at more cost to the ratepayers—the Government still has not put a stitch in. Michael Cullen is sitting there with his pockets bulging with money but not one stitch of a dollar is going to address the issue of affordable housing. He is happy to make sure that the ratepayers of this country pay when they are already stretched. Then having done all that someone will say they are not happy with the legislation and it had better be taken to the Environment Court. That will mean more cost. By the year 2011 and going maybe into 2012 or longer the Government will still not have paid one stitch—not put in a cent or a penny.  
The poor ratepayers of this country will have been asked to address an issue but no one will have a house. Not one house will have been built at this time. All these people who need affordable housing will still be hanging in saying “In 2008 the Government put up a window-dressing bill trying to garner some support. But it is just a political ploy.” And Government members will be going out and saying “Aren’t we lovely; we are worried about you. We have got a bill called affordable housing”—that is what they’ll say—“we have passed all this legislation to help you because you need an affordable home.” They will not tell people they will have to hang on 4 or 5 years and continue living in their tents and caravans. The Government will not tell people that it is not putting money in but is expecting the ratepayers of this country to provide the funding. The Government will not tell people that it might never happen. The Government will say: “We are a good Government and we are making affordable housing affordable. We have passed a bill. We know you have a need. We don’t care if it costs the ratepayers of this country a whole lot of money.” 
This bill is good for the Labour Government because it will stand on the stage and say that it is doing something. Well that is a joke and it will be exposed. I hope the small parties change their minds about supporting this bill. 
A party vote was called for on the question  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a first time. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Bill read a first time.