Editorial: Caution needed on land supply

The region's stunning beaches, warm climate and laid-back lifestyle must be tempting to anyone who has to spend hours in traffic getting to and from work each day. Photo / NZH

It's easy to see why so many people want to relocate to the Bay.

The region's stunning beaches, its warm climate and laid-back lifestyle must be tempting to anyone who has to spend hours in traffic getting to and from work each day.

Its popularity as a lifestyle destination was confirmed by Statistics New Zealand estimates released last week that showed Tauranga's population grew by 1900 during the year ending June 30.

The 1.6 per cent increase boosted the estimated population of Tauranga to 121,700.

Net migration was the biggest factor affecting increases, adding 1300.

Natural increase, the number of births offsetting deaths, contributed the other 600.

The most significant population growth was in the 65-plus age group, which increased by 1000 to 23,700.

It's good to live in a vibrant, growing city.

However, rapid growth also creates major challenges for city planners.

This week, Tauranga Mayor Stuart Crosby said he feared the city could end up with "collateral damage" from a Government-ordered inquiry to improve how councils regulate land use, planning and development.

The inquiry by the Productivity Commission expands on its housing affordability report which identified constraints on land supply as a major driver of housing affordability problems.

Mr Crosby has valid fears.

Infrastructure must be supplied before housing developments can go ahead. Councils provide this infrastructure and as long as demand for housing continues then development fees meet most of the costs of this growth.

However, when demand for housing drops councils can be left shouldering large amounts of debt, as happened during the global financial crisis.

The Tauranga City Council has been roundly criticised in the past for its high level of debt and there is a certain irony that moves by this council to fast track the supply of land could increase its risk exposure.

A cautious approach is needed.