Using land for housing draft report presentation
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The document is a draft report from June 2015 analyzing the planning and development processes of high growth councils in New Zealand to assess land supply for housing and infrastructure management. It proposes changes to the planning system to better accommodate urban growth, including integrated spatial planning and the removal of costly regulations. The report emphasizes the importance of aligning national and local interests, improving land readiness, and enhancing infrastructure funding mechanisms to address housing supply challenges.
Using land for housing draft report presentation
- 1. Using land for housing Draft report June 2015
- 2. What have we been asked to do? • Compare performance of high growth councils’ planning and development processes – do they deliver an adequate supply of land for housing? • Investigate supply of infrastructure – including funding and governance of water and transport 2 Council planning and consenting Provision of infrastructure Community involvement and engagement International practices Identify leading practices
- 3. Some of New Zealand’s cities will continue to grow rapidly in the coming years 3Source: Productivity Commission analysis of Statistics New Zealand data. Average annual absolute population growth , 2001 – 2013
- 4. New Zealand cities have struggled to respond to population growth 4Source: Productivity Commission analysis of Quotable Value data. Nominal median land values in high-growth areas
- 5. Projected supply in Auckland is well short of what is needed 5Source: Productivity Commission based on Auckland Council data. Building consents and projected housing demand in Auckland
- 6. Allowing cities to grow matters for economic growth and individual wellbeing • Well functioning cities enable agglomeration benefits • City growth also creates costs, eg, pressure on infrastructure and housing • This puts a premium on good city organisation and on the ability to plan for growth • National and local interests regarding city size are not always aligned 6
- 7. Consequences of a poorly performing housing market 7Source: Productivity Commission analysis of Statistics New Zealand data. Share of New Zealand’s population living in crowded and severely crowded housing, 1991–2013
- 8. City planning and regulation can work better • The planning system is complex and poorly suited to fast-growing cities • We are proposing a new planning avenue that integrates spatial planning and land-use regulation for high-growth cities • Some land use rules help to make cities work better • But the cost of some rules exceed the likely benefits: – Minimum parking requirements – Mandatory balconies for apartments – Minimum floor sizes for apartments – Height and density restrictions 8
- 9. Most intensification in Auckland has occurred outside the isthmus 9
- 10. Land readiness matters • Zoned and serviced land is needed to put competitive pressure on land and house prices • High-growth councils should set supply targets for zoned and serviced land and report publicly on their performance • MBIE should work with councils to identify surplus land that could be reused for housing 10 Impact of different levels of land readiness on the housing supply chain
- 11. Infrastructure can be a major bottleneck • Infrastructure is a key part of the land supply chain and accounts for a significant share of total dwelling costs • Councils tightly control the supply of infrastructure needed to support urban growth • There can be large benefits from unlocking land supply where spare infrastructure capacity exists • Good information and asset management (eg, WCC) is needed for effective use of infrastructure 11
- 12. Funding and governance of infrastructure • Scope to make better use of existing funding tools: – Targeted rates – User charges • Case for MUDs and Tax Increment Financing not strong • Debt is an important source of finance for infrastructure assets with a long life • CCO model has potential but councils and CCOs need to be aligned re. accommodating growth 12
- 13. Incentives to put land to its best use are needed • Councils’ approach to calculating rates affects landowners incentives to develop their land • A land value rating system encourages land to flow to its highest value use • The direct incentives on councils to accommodate growth are weak. • Central government incentives used overseas (eg, UK Home Bonus) have not been effective in encouraging councils to be more pro-growth • Core Crown land is exempt from general rates. Rating Crown land would provide agencies with a disincentive to unnecessarily hold land 13
- 14. How a UDA can address barriers to resolving land supply 14
- 15. Top recommendations • Allowing large cities to undertake integrated spatial planning as an alternative to current statutory planning mechanisms • Removing costly regulations that prevent the efficient use of land for housing, eg, mandatory balconies for apartments • Giving greater priority to cities and housing in the RMA • More user charges, particularly for water services, and the removal of prohibitions on tolling and congestion charges • Greater use of targeted rates to fund growth infrastructure • Levying rates on Crown-owned land • Identifying and pursuing opportunities to develop Crown and local authority land in high growth cities • Establishing a UDA to assemble sites, master-plan scale developments, and partner with the private sector to deliver them15
- 16. Top leading practices • Identifying all public land holdings in high-growth areas that could be released for housing • Local authorities setting quantified land supply targets based on zoned and serviced land • Moving more housing-related land use activities into ‘permitted’ or ‘restricted discretionary’ status in District Plans • Increasing the take-up by councils of electronic planning tools • Making greater use of user charges (eg, volumetric water fees) • Staged infrastructure construction and developer-led infrastructure • Effective use of asset management information systems • Establishing ‘one-stop-shops’ for planning approvals in councils 16
- 17. Inquiry process Terms of reference: 9 Sept 2014 Issues paper released: 5 Nov 2014 Submissions close: 4 August 2015 Draft report released: 17 June 2015 Final report to Government: Sept 2015 More information: www.productivity.govt.nz