10 Sep 2014

Housing inquiry to be launched

5:54 pm on 10 September 2014

The Productivity Commission is to investigate ways of speeding up the way land is made available for housing.

The Government-initiated inquiry will focus on how council rules and processes can be improved both to increase the supply of land and lift the number of houses in existing urban areas.

Phil O'Reilly.

Phil O'Reilly. Photo: BUSINESS NZ

The commission said it would identify authorities in New Zealand and overseas which were freeing up enough land to meet demand, while balancing the social, environmental and economic consequences of development.

It said although lifting the capacity for more housing was an essential part of making houses more affordable, it was not the only one.

Housing affordability has been a key issue in the election, particularly in Auckland.

Inquiry director at the Commission Steven Bailey said previous research showed freeing up enough land to meet demand would make houses cheaper.

"Our research found that there was a direct link between the supply of land and greater land development lead to improved affordability, it was a clear conclusion, and that's why our recommendations focus on how can you remove some of the constraints and regulations around that."

Chief executive at Business New Zealand Phil O'Reilly said the experience in Auckland, where rules have been relaxed to encourage more building, should help the investigation.

"The productivity commission will look very closely at Auckland of the past and Auckland of the current because it's still not perfect by any means, to say 'what has improved there?' and 'what caused the improvement to occur?'"

Mr O'Reilly said the had been pressure from central government to and the public to make changes. He said there was still "ridiculous house price inflation in Auckland" and building more houses would solve that.

Auckland deputy mayor Penny Hulse said the council was already one of the best local authorities for ensuring land was made available for housing as quickly as possible.

The council had already overhauled its planning processes, and freed up land under government-driven changes, she said.

"It's about finding the right leaders to deal with affordability issues, availability of loans, investigating capital gains tax and looking at providing money and help to developers."

The commission will report to the Government by the end of September next year.

Get the new RNZ app

for ad-free news and current affairs