Editorial: Serious flaw in housing accord

Housing Minister Nick Smith and Tauranga Mayor Stuart Crosby. Photo / Rebecca Savory

Developers have highlighted what they see as a major flaw in the Government's much-hailed Housing Accord, which would see 1175 sections in the region fast-tracked for new homes over the next two years.

The accord aims to provide more affordable housing in the region by increasing supply but developers say it will not happen if an "artificial handbrake" on development is not removed.

Developers say the region is facing a housing affordability crisis if councils do not reduce the length of time taken - and the cost involved - in providing infrastructure such as sewerage, water and roading.

They are pushing for the council to consider a range of options, including allowing the private sector to deliver core infrastructure to speed up the process. They say they can also reduce the cost of the work.

Clearly, developers stand to make more money if the process is streamlined.

However, if a handbrake is being applied then demand will continue to outstrip supply, and affordability will continue to be a serious issue.

According to a recent Roost Home Loan Affordability report for Tauranga, it took 64.7 per cent of one median income to pay the mortgage on a median-priced house. Responding to these points, Tauranga City Council Mayor Stuart Crosby says infrastructure has to be of a high standard.

He is right.

Cheaper is not always better and no one wants roads or sewerage that are not built to last, because it will be the consumer who pays at the end of the day.

Privatisation of infrastructure may make local authorities nervous but other options have also been put forward which deserve to be considered.

One includes the possibility of Tauranga retaining a percentage of the GST on houses built and sold in the city.

Another was the Bay of Plenty Regional Council's commercial arm, Quayside Holdings, funding a Regional Infrastructure Bank that had a return.

If the Government and local authorities are determined to make housing more affordable then they need to confront these issues and consider all possible solutions to the problem.