Key takes aim at 'ridiculous' local government processes

John Key: The government is prepared to become more directive
John Key (left) and Economic Minister Steven Joyce after today's address

Prime Minister John Key delivered a broadside at local councils in his first speech of 2013.

The speech, at Auckland’s North Harbour Club, contained only one new announcement: $12 million higher funding for apprenticeships and a merged, nationwide apprentice scheme called New Zealand Apprenticeships.

Widely anticipated announcements of further moves to better streamline the Resource Management Act consent practices were absent. However, Mr Key warned local councils the government will make more specific moves in this area if local authorities do not lift their game.

“We need more houses built in New Zealand, at lower cost. That means we need more land available for building, more streamlined processes and less costly red tape.

“That doesn’t require the government spending a lot of money. We are already a huge player in the housing market and I’m very wary of spending more taxpayers' money.

“But there are plenty of private sector investors who want to invest in housing – if only we can remove the roadblocks that are slowing down the process and driving up costs.

“Its ridiculous, for example, that developers can wait six to 18 months for a resource consent. It’s ridiculous that we allow councils to demand almost anything as a condition for the consent. And it's ridiculous that we allow them to charge whatever fees they want.

"Until these sorts of issues are dealt with there won’t be any more affordable housing built.”

More directive

While Mr Key says the government wants to work with local councils “co-operatively” – he says it is particularly keen to see what the Auckland Council comes up with in its spacial plan and “I’m expecting it to include multiple options for both greenfield and brownfields residential property developments” – the government is prepared to become more directive.

“If councils aren’t able to change their planning processes then the government would have to get a lot more proactive, because we are very serious about resolving this issue.”

Other RMA and local government related issues concern development of the country’s natural resources – but again, there was nothing new in today’s speech, only a message to councils the government wants to see an improvement.

“The RMA is constantly cited as a source of frustration, both by investors wishing to develop on their own land, and by communities left waiting for years to know the outcome of projects.

“There is not enough national consistency across New Zealand’s 78 local authorities there are over 170 resource management planning documents.

"We also need to ensure that local plans aren't overly restrictive and that consent processes are proportionate to the scale of the activity. Public participation in whether an individual builds a deck on their property, for example, is profoundly different from a decision affecting water quality in a lake.”

The government wants to see “big improvements” from councils this year, he says.

Auckland's Deputy Mayor responds

Auckland Council deputy mayor Penny Hulse, in the audience when Mr Key delivered his speech, says the government is missing an important point.

"The community actually demands to be involved in many of the consenting processes that happen.

"The work that really needs to be done is to say, 'how do we simplify the processes that the council goes through, but not remove that community input?' "

Ms Hulse says the Auckland plan addresses most of the solutions to problems Mr Key has outlined.

She says the main issue is that previously, when plans for a development were notified, they carried legal weight.

"The government changed that, and they need to change it back," Ms Hulse says.

"We've had huge buy-in from developers, and the key thing we need now is for the government to get genuine about making a difference and allowing that unitry plan to have legal weight as soon as it's notified."

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65 Comments & Questions

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He's right.

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No, he's not. Private investors in housing will go for the highest return, i.e. McMansions on large-ish sections on the suburban fringes. The rest of us will pay for infrastructure buildout, traffic increases and loss of open space.

The invisible hand of the free market hasn't solved this problem and it never will, since it gnawed off all of its own fingers in 2008 and is now the all-too-visible stump.

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The invisible hand has been severed by local govt getting in the way. Most people who have been involved in a subdivision will know how obstructive and petty local councils are. Many vow never to get involved in development again.

John Key is not right when he says the days at 6 to 18 months. The delays often run into years. The holding cost of those delays is the single biggest contributor to section prices.

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I think a lot of council delays are due to management problems within the council. When you are dealing with people with no authority to make decisions other than ticking off the boxes of an over complicated district plan that they do not understand themselves, that is the cause of delays as they simply do not help the process.

Also a lot of new generation planners seem to take the attitude of "it's not my job to help you". A lot of ground staff/inspectors seem to think that multiple site visits to talk about the weather is a good way to justify their existence, because then they can bill for it and it looks good on the job sheet at the end of the month.

This is a different attitude to the old-school planners who realise everyone is on the same team, they realise they have a job because developers/people are subdividing/building, these people are good to deal with.

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We will happily build budget houses and get a return if Key can get the State out of the way! The problem is that the "low-cost" houses must be built to the specifications of the MacMansions.

Let us build cheap housing for poor people, its no problem if we are given a free hand in a free market! Burn the building codes and let us get on with it!

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Infrastrucure build, roads and services are all provided by the developer, and paid for by the sesction purchaser. Councils also take 'contributions' for their own purposes; and then spend an inorinately long time processing even the simplest of Consents, frequently asking questions which leaves one wondering if the Council staff have any knowledge of development.

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While your'e at Mr Key, cancel/stop the crazy system of councils increasing long-term debt when they should be looking at core business.

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He is so right. The demands and process are ridiculous. Twenty working days is a joke. The person handling it goes off sick and it stops, they go on holiday and we rewind while the new person gets up to speed. You meet their demands and deliver reports by hand and they lose them. The RMA is a make work and income producing crock. The councils actually make the rules up as they go along.
The code compliance is no better. The house is completed, the final inspection signed off, then it takes a month or more before the CC is done. In the meantime, the unoccupied house is ripped off!

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Agree. Here in Lower Hutt, we had the Greater Wellington Regional Council and the then Boulcott Golf Club versus the residents re Boulcott Stopbank. Residents wanted them to use one road - Harcourt Werry Drive [next to golf club]. GWRC and golf club wanted to bring trucks round residential side streets and busy roads. Ridiculous! After resource consent hearings, residents eventually won. Harcourt Werry Drive was used and GWRC saved a year on construction!
Don't get me started on code compliance. It's a time waster.
Now they want to amalgamate councils. More bureaucracy!

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And I might add, GWRC or the now Boulcott's Farms heritage Golf Club never came back and thanked the residents for saving a year.

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It's been said many times and is the right thing to do to get the housing development market off the ground.

I'm a Labour voter, and I once regrettably voted Green, but building cheap housing subsidised by the taxpayer is not the answer to unaffordable housing. Reducing the costs of overheads so that the market price for new housing decreases is the answer.

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Well a vote for Labour is a vote for the Greens.

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well if they can do this I'll vote National, and Grandad won't be disappointed. hahaha

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Time to swing back to the blues, mate. :-)

The speech makes a lot of sense. We need this for the country and the next generations. New Zealand must attract investment.

Pay no attention to Penny Hulse. She's left leaning.

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Does not sound good like good news for the legal fraternity if he follows this through.

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John Key will also need to deal with the cost of planners, brown-mail from iwi, and green-mail from the likes of the Environmental Defence Society and DoC.

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Everybody can see the problems in the housing industry. But I don't see any action plan, just more talk about what needs to be done and what could happen.

Is anybody actually taking any concrete steps to tackle the problem?
I don't think so.

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Exactly... more lip service, zero action. Just like the last four years. National are cruising for a bruising in the next election if they don't tackle the housing crisis.

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It's not an industry. It's a bunch of oiks and chancers in white vans in overspecced utes -- paying little to no tax and certainly having no responsibility for anything they do with their largely unskilled hands.
Even Fletchers is a labour co-op. They don't take responsibility either.
Outsourcing is king.
The leaky Homes scandal killed the industry and no one's prepared to regulate it back to a standard and with realistic costs.
When we look back....the rotting homes scam will beat the quakes in Christchurch hands down for negative impact on ALL our lives.
Make that tough US woman who gave CCH a go on crappy timber and was thwarted on a technicality another go. (name escapes me....but she is around. Just like Obama has put a mafia-slayer in charge of Wall Street.)
But hey, the govt loves the double gst on rebuilds. And the council gets double fees.
Wake up NZ

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Great start to the year, Mr Key, but you have missed the main cost to allow affordable housing, and that's the land cost. Building costs have increased at a far lesser rate than land prices.

The government owns land or could facilitate the purchase of land on the margins of cities and work with agencies and builders to ensure that the end price benefit goes to the home buyer, not the greedy developer who goes on to screw the house buyer.

If you can take the land margin out of the equation and have the benefit of lower consent costs then there will be viable avenues to offer affordable housing.

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Because the resource consent process is so uncertain and drawn out the only people who can afford to do it for a new subdivision are major delevlopers who have high costs and expectations themselves and keep the prices high by slowly releasing developments. Lower RMA hurdles = more developers/sub didvisions by property owners (land on city boundaries i developed by developers not the previous owners).

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The land cost is all relative to the cost of the RMA and the process of council and their fees and unrealistic demands of town planners who do not understand the real world other than the text book and their academic background from the lecture theatres, inexperience and inability to make to make their own decisions and then passing the buck on a whim onto consultants and,engineers who are all clipping the ticket on the way through ,the delays (holding costs ) and mentality of the rich pricks making a profit.who takes all the here ? The developer ! Does council care ? No !

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I have no problems with speeding up house approvals provided corners aren't cut on quality and the changes aren't used to push more unsustainable - and very expensive - urban sprawl. We don't need more leaky homes, and we don't need "affordable" houses no one wants to live in because they are so far from where people actually work. We also don't want the high rates that are guaranteed by low-density, single-dwelling residential developments.

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"Corners aren't cut on quality etc".
The inspectors should be qualified and know what they're doing. Over the past few years only come across ONE who really knew what's required for building compliance. From talk going on, leaky homes still around and will keep surfacing even 10+ years down the track. A builder said to me today, he's sick of fixing "leaks" in houses. We are not out of the "cowboy builder" era yet.

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Idiotic. You can't sell a leaky home now. There is no need for bureaucratic interventions to prescribe quality. The market will set the standard buyers want to fund - all it needs is good information.

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Your comment is particularly "idiotic" when viewed against the current leaky home crises, which is ongoing and caused in large part by "the market" and deregulation of the building industry. Developers did not, and do not, sell leaky homes, they were sold with latent defects and as a result subsequently became leaky. And so a leaky home is handed of to a particpant of the market. The information the market needs comes in the form of Code Compliance Certifcates, the result of many of the "bureaucratic interventions". Steve W raises a valid issue which National will have to (or rather should address) in executing their stated intention to relax building and development regulation and compliance costs which will be interesting to watch. I agree with National's intentions to reduce development costs, but it is not a simple as John Key makes it sound and it will be interesting to see what they come up with. A return to prosciptive building standards perhaps???

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Utter tosh. Buyers just needed to be warned of the risks, then take their own action and responsibility accordingly. Banks and insurance companies will enforce standards to protect their own interests. The Govt should legislate that Councils are responsible only for health and safety. Then the market will stop relying on ratepayers and meaningless certificates of compliance which are still being handed out to leaky homes and provide its own efficient solutions as it always has.

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Councils are only trying to abide by the legislation given to them. It's not a blame game - you are both on the same side of the law...

Why not help the councils rather than blame them?

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Because then all they do is increase the rules, constraints and "planning" industry faster. They have to be beaten into submission, and thrashed to death, before the Government will act.

There are now thousands of jobs that depend on this mad bureaucracy controlling every last detail of every new building. Reform must overcome that massive vested interest in the bureaucratic planning and building empires.

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Hardly inspiring stuff. I was feeling positive about this year, now I'm not so sure. Typical National and John Key, just tinkering around the edges, not willing to make the tough decisions on anything for fear of slipping in the polls.

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Why are house prices so high? In the ten years up to the start of the financial crisis, house prices rose by over 200%. Why?! The general consensus peddled by politicians is that it’s a supply and demand problem – too many people and not enough houses, caused by a slow and costly RMA. While that contributes, it is NOT the primary cause. Between 1997-2007 mortgage lending increased 370% as the banks inflated the housing bubble for vast profits that went offshore. That hyper-inflated house prices. Fix the banks. Stop them creating deposits from nothing, and you will begin to solve numerous housing and debt problems.

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We need higher density, not freeing up more "virgin" land to create sprawling subdivisions. Auckland is a geographically large city with a land area similar to some of the world's biggest cities. Yet it has 1/10th the population of these big cities. You don't need to expand the housing footprint into rural and semi-rural areas, you need to put more houses into the existing urban and suburban areas of the city.

That has the added benefit of there being existing infrastructure that can be improved to handle more people rather than building new roads, water reticulation, waste reticulation and electricity reticulation.

We don't need the cheek by jowl density of a city like Tokyo, but Auckland can certainly halve the amount of land of the average family property without ruining lifestyles.

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Beyond the councils, a "big improvement" would be for the Government to review their taxpayer funding of environmental lobby groups who have made an industry out of using the RMA as an excuse to oppose everything so that the Legal and Planning professions can gravy train their way through the Environment Court process.

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Right John, you have at last identified the problem most of us have known for some years.
John, do you realise the rules or at least the criteria for the rules that created the problem are set by government?

Have you identified the fact that you are the government?

So, John, solve the problem, change the rules - get on and govern!

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High rise is the way to go....look at the leading cities overseas.

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More houses at less cost would be a feasible dream only when protectionism is discarded, and the main building product suppliers face real competition and prices drop.

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That's one part of the problem.

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What right does central govt have to interfere with and end protective legislation so their leaky building developers can do whatever they want whenever with no regard to the environment or the ratepayers?
Sounds like he's trying an absolute complete illegal hostile takeover of local govt and blame them for the housing problems the banks and central govt created in the first place. Take some responsibility.
The banks and govts set the price of homes, whereas the local councils add only a few thousands to the cost - bird food for min protection against these rogue developers.
Why doesn't he do something positive and help us get rid of banks?

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Banks is dog -tucker; he's history.

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Get real man.
I don't know what birds you're feeding but $15 - $20k per unit reserve contributions buys a lot of bird food.
Are you really advocating the demise of banks ?? I suppose you built your house out of twigs and grass and therefore did not need a forum for borrowing other peoples savings to help you do it. Those of us who live in the real world have generally used banks to our advantage.

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When is the Auckland Council expected to come up with in its spacial plan?

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It has already produced a spacial plan in 2011!

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So what is Mr Key waiting for?

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Sorry he isnt waiting for anything, give him his due it has just dawned on him what the problerm is, however I am not sure he has a grip on what definitive action is required from the Prime Minister and his government to create a solution

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This isn't hard. Set some metrics and the government should lead by example. Councils and the public service should have the following requirements against which all staff should have 25% of their salaries at risk:
25% of all outputs in 2.5 hours
25% of all outputs in 2.5 days
25% of all outputs in 2.5 weeks
25% of all outputs in 2.5 months
Anything not complete within 2.5 months should see all bonus and at risk salaries ticking away on a daily basis.

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This Prime Minister is full of it. He knew 4 or 5 years ago that the Auckland Council and Central Government were creating a major housing time bomb in Auckand.
Suddenly now he thinks it might cost him votes and he knows something has to be done or National will be history at the next elections.

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I went to my planner and architect and said I want to build something that doesn't require a building consent and doesn't require a resource consent. I refuse to do anything that involves Council bureaucracies until the planning laws are drastically reformed.

The resulting project is an absolute pleasure without morons breathing down my neck and prescribing every silly standard they can dream up - and then changing their mind at the end and adding more.

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So what did you build a pergola?

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Well done.
If you achieved that miracle Alan you should write a booklet about it
--you'll make a fortune !!

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No, that would just invite the morons to make new rules to outlaw it. They detest anyone doing anything they don't control.

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