Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18455] 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party has been under tremendous pressure to vote against this legislation. The pressure has come from builders district councils across the country developers across the country and community organisations involved in housing affordability issues and the provision of affordable housing to first-home buyers and even to those renting. This legislation on the face of it seemed like a good idea 6 or 7 months ago but when questions were asked about the detail it appeared that the legislation would drive property prices for first-home buyers even higher than they are today. It seemed the legislation would not help first-home buyers in the long run at all. 
National Party members were very very concerned particularly when local authorities mainly smaller local authorities across the country told us they are already struggling with their statutory responsibilities. The legislation that has been pouring out of central government in recent years has meant that local authorities have had to go to their ratepayers cap in hand year after year to ask for additional rates in order to deal with the growth in their own bureaucracies. Costs have been imposed on them because of the extra legislation coming out of this place. Local authorities have told us they do not want more legislation that will oblige them to spend ratepayers’ money. They have said that the resources they would need to undertake for example a housing needs assessment are too much in addition to what they already have to do. They have said also there is no proven gain for their local communities. 
This legislation puts another layer of expectation upon councils in their view. It is another expectation that communities will have of them and it is another responsibility that central government has imposed upon them and they do not need more compliance costs. That is what local authorities had to say at the Local Government and Environment Committee and certainly that is what they said to the media. In fact very few local authorities were happy about this legislation. 
Interestingly we know that the genesis of this legislation came from activities undertaken by the Queenstown Lakes District Council. It has an affordable housing programme whereby developers and builders when undertaking a development set aside some of that land and it goes into a land portfolio to be used for affordable housing initiatives. The reason they need that down there of course is that the cost of housing and renting is so high for people on average incomes or those we expect would normally be able to afford housing—people such as nurses policemen teachers and those in the hospitality industry which the Queenstown lakes district relies on so much. At the select committee we asked how without legislation the Queenstown Lakes District Council was able to set up a programme whereby developers set aside an amount of their land to go into such a pool. 
We asked how it was able to do that without legislation because it begs the question of why we need this legislation. Why do we need to legislate to ensure that councils go through these responsibilities and go cap in hand to the ratepayers to pay for these additional compliance costs when the Queenstown Lakes District Council is doing this activity already? The answer from that district council is that it would have preferred to have more clarity and that it was difficult at times to work through its processes but it did it without this legislation—and other councils could as well. 
The interesting thing is that Maryan Street the Minister in charge of the bill said that the bill would drive down costs for first-home buyers. But what this legislation does is force builders and developers to set aside a portion of their land and give it to trusts for affordable housing. So they might have to carve off 10 percent of their land and not sell it but essentially give it to an affordable housing trust. Instead of giving land they could write out a big cheque and put it into the trust and that could be used for affordable housing. 
That sounds great on the face of it and it certainly sounds great for that trust but the problem is that builders and developers then have to somehow make up that loss. They make up that loss by selling the sections they retain at a higher price because quite frankly they have mortgages to pay too. When builders and developers buy land they have to pay interest they have to pay rates and they have to pay for the development of that land and if we take away a portion of that land—particularly if it is as high a value as 10 percent—then clearly they have to get those gains from elsewhere. So on the 90 percent of land they retain they have to make greater profits in order to cover those costs. So the cost for the sections in the other 90 percent goes up and the cost of housing overall will go up. Again we have a problem there. That is why builders and developers oppose this legislation and we can understand why that is the case. So there we have it. Local authorities are objecting to this legislation builders and developers are objecting to it and many of those involved in community housing objected to it at the select committee. 
Members of the select committee were also very interested in another matter raised in this bill. It is certainly associated with housing but not necessarily with the issue of first-home buyers. It is the intention in the legislation to void covenants that restrict the provision of affordable public or institutional housing within a residential development. That was intended to address problems such as we see in Auckland and Housing New Zealand Corporation gave us examples of where developers have put covenants over their developments saying that social housing cannot be placed within that area. For example Housing New Zealand Corporation homes or houses provided by other social housing providers cannot be in those particular developments. 
We could understand why there was an intention in the legislation to do that. We note however that exceptionally large-scale or high-density social housing developments do need local community support in order to succeed. So if we have a development where there are say a hundred or a couple of hundred houses then surely we would want some sort of community consultation where half of them—say fifty or a hundred—are Housing New Zealand Corporation houses. It is not a minor thing. It is a minor thing where we have two three or 10 State houses in a subdivision and covenants surely should not be passed in those cases. But where there are hundreds of State houses in a particular development that is a very significant step indeed and we would want community buy-in and consultation in that case. So although we support the intention in the legislation to void covenants that restrict the provision of affordable housing or public or institutional housing we note that exceptionally large-scale or high-density social housing developments require community support and buy-in in order to succeed and we make that note here in our speeches tonight. 
This legislation does not address the real cost-drivers of housing supply. Meeting residential land needs making sure that enough land zoned is for residential housing beating back over-regulation—particularly where it comes from the Resource Management Act and the Building Act—and streamlining the planning and consent processes are key issues that need to be addressed. It must also be remembered that take-home pay pays the mortgage and the higher taxes that we have seen year on year under this Government do not help the value of take-home pay. People are getting less in their back pocket to service a mortgage. It is take-home pay that counts and only lower taxes will improve the situation and put more money in the back pockets of those who want to pay off their mortgages. Of course interest rates also need to be brought under control and there is no way that that will happen when we continue to see the low-quality spending that this Government has put into various services across the country.