Housing crisis

PHOTO: Photo: Dom Thomas

In her State of the Nation speech, National Party leader Judith Collins called for urgent temporary legislation to rezone land for housing.

Prime Minister Jacinda Ardern has rejected that call.

Senior business journalist Bernard Hickey told Jesse Mulligan that the flaw in the idea is councils do not want to be lumbered with the cost of all the extra infrastructure that comes with building houses, and their rate payers don’t want to fund it through higher rates.

“The real problem here is political parties pointing at councils and saying you must rezone land for housing and get those houses built and the council says, yip nice idea but my ratepayers won’t let me pay for all this infrastructure.

“So, you get central Government pointing at local government, local government pointing at central government, and no houses built.”

Council are disincentivised to encourage house building, he says.

“A lot of people have proposed giving councils a share of GST so that when the population grows and economic activity grows in their regions they get a share of the growth in government revenues

“New Zealand is very unusual in that when there’s growth in a particular area or city none of that money or income goes to the local government.”