There should no longer be any argument about the need to release more land for housing in New Zealand if we want to make housing as affordable as in times past. However, while increasing the number of available lots is the necessary condition, it is not sufficient.

We must also reduce the cost of those lots.

One way would be to write a clause into the RMA requiring Councils to provide two “classes” of lot, especially in greenfield and rural areas. At present a swarm of consultants have persuaded councils that new lots need to be fully certified before sale, mainly to prevent Councils from being liable for downstream failings or difficulties. The end result is that new lots require a specified building platform, a geo-tech (foundation) report, a certified street crossing, a certified driveway, a stormwater management report , a sewage treatment report, and a soil stability report – and any other report the consultants and staff can dream up to increase their revenue flows.

The end result is a collection of costs, which are out of the reach of most families, especially those on low incomes, and hence these people can neither produce new sections nor buy them on the market. They are priced out of both ends of the supply and demand chain.

Incredibly, by the time a dwelling gets a building permit it may have had three reports on its on-site sewage treatment plant.

The solution is obvious and proven. When we buy a car we can purchase one with a warrant of fitness and registration, or we can buy it “as is – where is.”

A reformed RMA could require councils to offer sections which meet the most basic requirements – such as four pegs in the ground, and a safe street crossing, but nothing else. The LIM report would advise buyers to “beware” and record that the section has no geo-tech report or any other report. This may sound radical but there are thousands of old rural lots on the market with no certification but which are sold at prices set by the costs of new lots. Naturally, these “as is – where is” lots would be cheaper – cheaper to make and cheaper to buy.

In the ideal situation a potential buyer should be able to approach a farmer and say “I want to buy an acre of your land”, go out and peg it out, get the survey and complete the purchase. If that person does not want another house next door then the parties can enter a covenant to that effect. But the bureaucrats and consultants would not get a look in. And the lots could cost no more than $30,000, which would set a useful baseline.

As it happens the present downturn in the land and housing market could make councils more amenable to this idea. I have been watching local auctions and getting feedback from people with properties on the market and the harsh reality is that in many places the costs of buying the “raw material” – the raw land – and the costs of “manufacturing” the legal title, now add up to more than the market is willing to pay for the end product.

Until the recent bursting of the bubble, councils and their advisors, have regarded the land development process as a cash cow to be milked as near to bone dry as possible because the punters were prepared to keep paying up whatever it cost them to get their properties to the market.

Suddenly, people who are half way through the process, now face paying their council demands for reserve contributions, roading contributions, development contributions, and for all manner of road works, and environmental enhancement. They face the prospect of carrying all these costs, on top of their other holding costs, for some indeterminate period. Unsurprisingly, they are simply throwing in the towel.

Councils have prepared their next year’s budgets on the basis of these streams of cash pouring in from developers, but may soon find that while their own costs remain, these revenues have dried up.

They might actually rediscover the benefits of encouraging long term ratepayers to come and live in their districts rather than fining newcomers with these one-off, up-front payments. Long term infrastructure bonds, financed by the long term rating stream will become the favoured option once more and we will finance the infrastructure of our towns and cities the way we did in the past.

Can you imagine any retail business deciding to fine every new customer with a massive lump sum to pay for the upgrading and maintenance of the store?

I don’t think so.

The Planners’ Dilemma.

Many of our District Plans contain policies such as the following:

Policy X

Provide for the extension of existing and planned rural and coastal villages in a structured manner that supports nodal growth: and

Policy Y

Require proposals to assist in the consolidation of any rural township in the vicinity and create efficiencies in the provision of infrastructure, transport and community facilities.

These are real policies from a “real” plan. I have no idea what constitutes a “structured manner” but presumably it means whatever the bureaucrats want it to mean – a standard ploy.

“Supporting nodal growth” is part of the standard lexicon of “Smart Growth”.

Of course the assumptions embedded in Policy Y have no foundation in theory or practice and reflect what Randal O’Toole identifies as the dependence on “pre-conceived notions and the latest planning fads”.

For example, I live in Oneriri Peninsula near Kaiwaka, a small rural town, within a rural area with a multitude of nearby “nodes”.

I shop at the following locations for the following goods and services:

· Kaiwaka – for the Supermarket, the Italian Bread Shop, and the Dutch Delicatessen.

· Mangawhai Village – for the Library, the Butcher, the Vet, the Builders’ Suppliers, and the Market.

· Wood Street Shopping Centre – for the Garden Centre, the Medical Centre, the Pharmacy, the Electrical Store, the Petrol Station.

· Warkworth – for the Dentist and Optician.

· Whangarei – for the Hearing Clinic, the Spa Pool Centre, the Garden Centre, the Airport.

My wife has her own list, and her destinations would be quite different. My neighbours would have their own lists and destinations.

If some planner decided we should have been forced to locate so as to “support” their preferred “nodal centre”, given the dispersed nature of our preferred list of suppliers of goods and services, which nodal centre should we have been forced to support? And how can any planner determine which location would give us all the most efficient travel times?

Individual householders are the only people with the information to make their location decisions. Moving our household to be closer to one of those destinations can actually increase the overall trip length and travel time for most of these regular trips.

It’s time we based our plans on sound economics and engineering, rather than on preconceived ideas and the latest planning fads.

“Sustainability” should be the first fad to go.

ENDS

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