Chris Meehan, Winton Chief Executive shares his views after Winton issued proceedings in the Auckland High Court under the Commerce Act, alleging anti-competitive conduct by Government housing agency Kāinga Ora.
There can be no doubt that New Zealand is in a housing crisis. There just aren’t enough houses to go around, so the laws of supply and demand have forced up the price of homes to a point that it is worsening our cost-of-living crisis. So we get two crises for the price of one.
This shortage of houses is causing all sorts of social and health issues to emerge that may ultimately affect all New Zealanders.
So why are we so short of houses? It’s the RMA. An outdated, broken piece of legislation that has artificially constrained the supply of housing in New Zealand for decades.
The paper-pushing costs of consenting houses through the RMA are often greater than the physical costs of creating the section that a new house sits on. That’s madness. Every recent government has tried to fix it, but their tinkering has only succeeded in making it worse.
To their enduring credit, in 2020 the current government introduced the Urban Development Act. This is a good piece of legislation that Housing Minister Megan Woods says was brought in to ‘tackle long-term barriers to urban development by providing a streamlined approval process for complex and transformative development projects.’
The UDA aims to facilitate urban development that contributes to sustainable, inclusive, and thriving communities, and thereby help ease the housing crisis by allowing selected large projects to reduce the costs and the 5 – 10 years or more that it typically takes for them to be consented through the broken old RMA.
The UDA gives Kāinga Ora responsibility to assess projects for establishment as specified development projects under the Act, much as a local Council might assess a resource consent application for a new garage or swimming pool, just on a much bigger scale.
Kāinga Ora however, with their access to seemingly endless government borrowings and their 3,000 plus staff, seems to believe it can fix the housing crisis all by itself. In addition to its social housing responsibilities, it wants to turn itself into the biggest developer of private housing in New Zealand. It says it will develop 40,000 houses for open market sale over the next 15-20 years. This is more than Winton, Fletchers, and Fulton Hogan will do combined.
Who knew the government could be so much better than the private sector at housing development? Do they need some reminding of how poorly they did with Kiwibuild?
Kāinga Ora is now out in the market competing with private developers to buy land and using its advantages under the UDA to justify the prices it has paid. The agency outbid eleven other bidders in purchasing Ferncliffe Farms in Tauranga in part by agreeing to pay the full purchase price up front. No private bidder was able to do that because of consenting risk, which Kāinga Ora can mitigate for itself using its powers under the UDA.
Kāinga Ora has only allowed two developments access to the provisions of the new UDA. One of them includes the Ferncliffe land, and the other also involves Kāinga Ora as a key developer.
The UDA was also supposed to facilitate similar private urban development projects. Winton is seeking to deliver thousands of affordable houses at its proposed development at Sunfield in South Auckland, and the UDA provides an efficient pathway to achieve this. One of Kāinga Ora’s statutory UDA functions is to facilitate private urban developments, but it seems that they are too busy being both player and referee on their own projects. They turned down our Sunfield project for consideration under the UDA.
At Sunfield we propose to build 4,400 affordable houses, three retirement villages, two schools, 22ha of parks, and retail and commercial spaces of a similar scale to Sylvia Park with 11,000 permanent jobs – all on 250 hectares of land only 1.6km from Papakura Railway Station.
Sunfield’s transformative solar-powered, car-less design was adopted from similar successful projects overseas. It is a very complex development but it’s a great fit for the new environmentally friendly energy and transport ideals that the government are pushing to achieve but were never even contemplated 30 years ago back when the RMA was written.
Importantly, Winton are not asking the government for any money and can fund the entire project ourselves. We are experienced developers of large-scale housing projects, so we have all the infrastructure and engineering solutions in-hand. After a year or so of trying to work with them, we were surprised when Kāinga Ora then refused to process our UDA application, so we appealed to Minister Woods for help. The Minister declined to intervene.
It’s a sad day for New Zealand when Kāinga Ora’s answer to the housing crisis is to spend hundreds of millions of taxpayer dollars cramming families into rented motel rooms whilst being unwilling to process private sector UDA applications which would quickly deliver thousands of affordable, energy efficient homes to the hard-working Kiwis who need them now.
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