The Kākā by Bernard Hickey
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Dawn Chorus for Tuesday, January 30
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Dawn Chorus for Tuesday, January 30

Coalition eyes 'optional' MDRS re-write; Eyes on RBNZ's Conway for potential dovish pivot; Wellington Water wanted $2.5b in bombshell secret report; Herne Bay NIMBYs to fight Watercare pipe
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The government’s decision to enable councils to block new brownfields housing developments is yet another example of the persistent magical thinking of voters, ratepayers and politicians. Photo: Lynn Grieveson / The Kākā

TL;DR: The new avowedly pro-growth coalition Government is preparing to enable councils to block new housing growth, especially anywhere near stand-alone houses in the leafier suburbs close to the city centres of our fastest growing cities.

As ACT promised and the coalition agreement included, the National-ACT-NZ First Government is now planning to rewrite the National Policy Statement direction from the previous Labour Government in its Medium Density Residential Standards (MDRS) to councils. The initially bipartisan Labour-National directive allowing three three-storey townhouses to be built on any section without the need for a resource consent was opposed by NIMBY ratepayers and councils who argued the townhouses would ‘steal their daylight’ and increase local traffic.

National flipped on the bipartisan deal before the election and ACT’s supporters in Epsom and Howick oppose such developments, despite ACT campaigning in the past to allow landowners more freedom to add housing supply to improve affordability.

In my view, the National-ACT-NZ First decision to enable councils to block new brownfields housing developments removes a major tool to quickly increase housing supply to improve affordability. It is completely at odds with the parties’ pro-growth and supply-side responses to our housing affordability crises, but is in tune with the magical thinking of voters, ratepayers and politicians generally that:

  • the most important way to grow family wealth is to collect leveraged and tax-free gains from land value appreciation driven by a lack of build-able land supply, high migration and the ongoing lack of a capital gains tax;

  • that high population growth is sustainable as long as the new migrants live somewhere else and do not use or need extra public infrastructure that would require existing residents to pay higher taxes and charges to pay for the investment; and,

  • that high migration with low-to-no taxation of housing land is needed to ensure high disposable incomes to back leveraged investments in rental property and low wage inflation and mortgage rates to fuel further gains in land values.

Elsewhere in the news in Aotearoa-NZ’s political economy and beyond at 6 am:

  • RBNZ Chief Economist Paul Conway is scheduled to give a speech at 9am, which some economists think will be used by the central bank to signal interest rate cuts later this year, rather than continue with its now old forecasts from late November that one more hike may be needed this year and that cuts wouldn’t come for more than a year. Economists and markets now expect rate cuts of 50 basis points by August.

  • A soon-to-be-released secret report from Wellington Water will show soaring costs and cost duplication, just days after it confirmed it wanted $714 million in operational funding and $1.8 billion in capital funding from the Wellington City Council over the next 10 years, The Post-$$$’s Tom Hunt reported this morning.

  • NIMBYs in Herne Bay are bracing to fight Watercare’s plans for a $1.2 billion sewage treatment system upgrade after discovering it would mean they temporarily could not use a local park, NZ Herald-$$$’s Anne Gibson reports this morning.

Full paying subscribers can read and hear more detail in my Dawn Chorus podcast above and below the paywall fold. Join our community of paying subscribers to get access to ‘Hoon’ webinars, our private chat system and be able to comment on articles. Paying subscribers also support the public interest journalism we do at The Kākā on housing affordability, climate emissions and poverty.

ACT wants freedom to block developments

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