Hon Maryan Street

Minister for Housing

13 December, 2007 Speech

Affordable Housing: Enabling Territorial Authorities Bill

First Reading Speech

I move, that the Affordable Housing: Enabling Territorial Authorities Bill be now read a first time. At the appropriate time I intend to move that the bill be considered by the Local Government and Environment Select Committee.

The Affordable Housing: Enabling Territorial Authorities Bill enables territorial authorities to promote the provision of affordable housing to low-and-moderate income households in a way that encourages mixed communities. The Bill would provide new powers to local authorities to help solve housing affordability problems.

Housing is becoming increasingly unaffordable. More working households are locked out of the housing market because of escalating house prices in relation to household incomes.

In Auckland alone, the number of working households unable to buy a modest house that meets their needs rose from 20,400 in 1996 to 54,900 in 2006, an increase of 169 percent.

At the same time, starter homes are not being built in new developments. Houses are increasingly getting bigger with more modern amenities, making them too expensive for first time homebuyers.

In addition, more people are renting. Renters have become a more diverse group, including households with children and older renters who will increasingly out-compete single-parent and single-person households that have traditionally relied on the rental sector.

Without affordable rental options households are spending too much in rent and less is left for other essential living costs, including saving a deposit to buy their own home.

A lack of suitably-located affordable houses has economic and social consequences. People live further away from work and have to spend extra hours commuting, at a cost to families and the environment. Without a range of house types within neighbourhoods, people have to move out of their community if housing needs change.

Home ownership has significant social and economic benefits. It can promote greater family stability, improve the connections with communities and create continuity of education. Home ownership also provides long-term security and a buffer against poverty before and after retirement.

This Bill gives territorial authorities the ability to require some affordable housing to be built in new developments, or to contribute money or land towards affordable housing being built elsewhere. Territorial authorities have been asking for this legal clarity and mandate for some time.

The Affordable Housing: Enabling Territorial Authorities Bill is enabling, rather than prescriptive, and provides a robust and transparent process for any territorial authority wanting to use the new powers. Only those territorial authorities that want to, need to develop an affordable housing policy.

The Bill requires territorial authorities to carry out a housing needs assessment so they have a clear picture of housing need in their area. Based on this assessment, territorial authorities can develop an affordable housing policy, that sets out how they will respond to the housing need. The territorial authority must consult with their community before adopting any housing policy.

An affordable housing policy will form part of the territorial authority’s long-term council community plan and will therefore be a public document. It will state what is required of developments, how any contributions will be collected and used, and what models the territorial authority may put in place to make sure any resulting housing continues to be affordable for future community needs.

Territorial authorities can choose how they keep housing affordable. For example a territorial authority could vest a house in a community housing trust that sets up a shared ownership scheme or rents the house to a moderate income household. Alternatively, a house may have a deed restriction that preserves its affordability over the longer term.

Territorial authorities will also need to consider what incentives they can provide to developments which are contributing affordable housing. The Bill permits territorial authorities to use a range of incentives to off-set the costs of providing affordable housing.

For developers this is an opportunity to target housing at a growing segment of the housing market. The Bill is designed to encourage affordable housing, not deter development.

Safeguards will be put in place to ensure that any affordable housing contributions are considered reasonable by the community. Territorial authorities will have to consult with their communities before adopting an affordable housing policy. An affordable housing policy can be appealed to the Environment Court.

The Bill will also prevent the use of covenants on land titles that aim to exclude social and affordable housing. These covenants unfairly discriminate against some of our most vulnerable people, such as older people and children and people who require assisted living such as IHC. The use of such covenants is a small but growing issue.

The Bill does not aim to address building costs. Nor is it the purpose of the Bill to address land supply or land price issues, although it may have a positive effect on these in the future.

This Bill is one of a number of tools which will be necessary to address the housing affordability problem. It is only one tool, but an essential one.

The Affordable Housing: Enabling Territorial Authorities Bill balances the need of the community for affordable housing with developers’ needs for consistent and predictable planning guidelines.

The Bill promotes housing choice, through ensuring that a range of housing type, tenure and cost to meet the needs of moderate income households are being built in new developments.

I commend the Affordable Housing: Enabling Territorial Authorities Bill to the House.

ENDS

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