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'We can't allow prices to go up in Auckland by another $50K a house next year' – Nick Smith


Housing Minister offers olive branch to Mayor Len Brown amid tension over whether the city should build up, or sprawl. UPDATED: Key weighs in, raising interest rate rise fear.

NBR staff
Mon, 25 Mar 2013

UPDATE / March 25: Auckland Council is pushing ahead on its Unitary Plan without enough consultation, and the city's focus on building up, not out, is at odds with the government, the Prime Minister says.

"Auckland wants to bring in its Unitary Plan, and it wants to do it straight away, so no rights of appeal or input from Aucklanders," Mr Key said on Breakfast this morning.

"Essentially the government’s saying the normal timeframe – which would be 10 years – would be far too long and so here’s an option: we do it over two or three years. They’ll be a hearing panel that can hear objections from people and we’ll go from there."

Up or out?
"So that’s one part of the minor disagreement. And the second bit is what does the future shape of Auckland look like?" the PM said.

"So Auckland council is saying ‘We’re going to intensify, and pretty much go within the current metropolitan urban limits and just go straight up’, and we’re saying ‘You need to go up and out’.”

He added, “It’s not a full-on massive scrap, it’s just a bit of a disagreement at the margins.”

Mr Key said his government was concerned about housing affordability overall, but had a sharper immediate concern.

Interest rate fears
“If there are really fast-rising house prices in Auckland, that puts pressure on the Reserve Bank Governor. That’s likely to lead to interest rates going up, then all New Zealanders pay for that – so it’s not just related to the young couple who want to buy their first home [in Auckland],” Mr Key said.

The Prime Minister said his government wanted the Auckland housing shortage addressed quickly, but was warned there could be choppiness ahead if  the council pushed ahead to implement the Unitary Plan from October 1.

Once the final plan was released, objections were likely from people whose suburbs were ear-marked for highrise development. 


March 24: Housing Minister Nick Smith has offered an olive branch to Auckland’s Mayor Len Brown after weeks of sniping over the super city’s Unitary Plan.

Mr Smith told OneNews deputy political editor Jessica Mutch that the government and council were not worlds apart in what they wanted to achieve to alleviate Auckland’s housing problem.

“There's a lot more agreement between the Auckland Council and the government than what some might have you believe. We both agree that Auckland needs a lot more houses. 25,000 is the agreed shortage."

The council's 30-year plan, released last week, favours building up for the majority of development as Auckland's population doubles. The government's centre of gravity is more towards build-out sprawl. But both sides favour mixed development, with some degree of up, and some degree of out.

“Me and Len are in the same paddock,” Mr Smith says.

Possibly. Earlier, Mr Brown said talks over the past week clearly showed the council and the government had different views for the direction of the city.

“There have been discussions over the last week or so where there were clear positions in terms of, in particular, whether we’d have a city that would be more urban-sprawl
city or a more sort of quality compact city, as we’re indicating in that plan," the Mayor told Ms Mutch.

Mr Smith acknowledged there had been tensions: “There’s been a bit of constructive tension between the government and council,” describing his relationship with Mr Brown as “constructive, robust”.

“We’ve just got more work to do. For instance, you know, if we look at the unitary plan, there are key parts of it that are a work in progress, where the council has said, “Well, this is sort of where we’re going. We’ve got some more detail to do.” And the government is saying, “Hey, we need to see that detail because we need to be satisfied that this plan is going to deliver affordable housing.”

He’s vowing to work closely with local government over Auckland’s housing crisis and says without the government on board it could take a decade for the Unitary Plan to come into effect.          

“If the government stood back and said, “This is only Auckland’s business. We’re not going to do anything,” then it would take between seven and 10 years for that unitary plan that the council has done tremendous work on to become operative. Now, Auckland can't wait seven or 10 years. We’ve put a fast-track process in place that will enable that plan, which the council is looking to notify in September, to come into effect probably in about three years. My biggest concern, and where the dialogue between myself and Mayor Brown and his council is really important – well, OK, that’s in the three years. We can't wait three years. We can't allow house prices to go up in Auckland by another 50 grand a house next year. We need to have a discussion about some of the short-term measures that are required to take the heat out of the housing market.”

Tomorrow, Smith meets with Brown and Auckland Council officials to discuss the Unitary Plan.

Watch Nick Smith on Q+A here.

NBR staff
Mon, 25 Mar 2013
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'We can't allow prices to go up in Auckland by another $50K a house next year' – Nick Smith
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