10 Jan 2015

Could rural jobs ease Akl housing crisis?

3:32 pm on 10 January 2015

Creating more jobs in rural regions has been touted as a way to help ease Auckland's housing crisis.

Housing in Auckland

Ganesh Nana says allowing Auckland to sprawl further was a costly mistake. Photo: AFP

The housing shortage in the country's biggest city has been exacerbated by swelling numbers of immigrants and returning New Zealanders choosing to live and work there.

But BERL chief economist Ganesh Nana said allowing Auckland to sprawl further was a costly mistake.

While he favours building up rather than out, he has another solution.

Dr Nana said more jobs should be in rural regions, where the economy's real wealth was created.

"Whether it's dairy, meat, kiwifruit or wine, that doesn't come out of Auckland. That comes out of the region. That's where we need the infrastructure, that's where we need to get the jobs in place, because the housing is already there," he said.

The director of social policy and parliamentary unit for the Salvation Army, Major Campbell Roberts, agrees, saying it would rejuvenate struggling provincial towns.

"We have empty houses in cities like Whanganui. And yet we're putting more and more people into Auckland. Some of the answer to Auckland's housing crisis has got to be providing jobs elsewhere and moving people from Auckland."

Some businesses are already boosting their presence in the provinces.

For example, ANZ Bank has bolstered staff numbers in Ashburton to take advantage of the dairy boom.

But New Zealand Initiative executive director Oliver Hartwich is wary about the Government stepping in to determine where development is going to take place.

"It's very difficult to achieve that because in Auckland we are seeing agglomeration effects. We see Auckland survives and thrives as a city because it can provide the asset classes needed to drive growth. So you couldn't just tell Auckland law firms or a bank to relocate. That simply won't work," he said.

Berl's Ganesh Nana said it could work if the Government looked at the broader picture, instead of having many issues dealt with separately.

"Rather than putting housing in a silo, and fix that with the RMA, and then we'll have another silo over here which says Business Growth Agenda and we'll leave that to MBIE (Ministry of Business, Innovation and Employment). And we'll have the Ministry for the Environment and Department of Conservation looking after rivers. All of those silos don't help unless someone's joining them up."

Dr Nana admits it is not an easy task to achieve, and it will not happen in five years time.

New Zealand Initiative's Dr Oliver Hartwich said the Government should redouble its efforts to speed up the building of houses in Auckland.

He said the Government could also help rural regions escape a cycle of economic decline and poverty by giving councils financial incentives to tap the mineral wealth many hold.

Get the new RNZ app

for ad-free news and current affairs