The Labour Party surprised many people last week, and dismayed some of its own supporters, by advocating the complete abolition of boundaries on urban expansion.
Its housing spokesman, Phil Twyford, endorsed the Government's view that boundaries imposed by the Auckland Council have been a major contributor to the escalation of house prices. His announcement was timed to get in ahead of an urban development directive to councils expected from the Government soon, possibly in the Budget on Thursday. But Labour's proposal goes further than Mr Twyford believes the Government's national policy statement is likely to go.
"What we are calling for is the abolition of the urban growth boundary, not softening it, not making it more flexible," he says. "And not just doing what the Auckland Council advocates, which is periodically adding in more parcels of land zoned for development. All that does is feed the speculative land market."
Labour supporters dismayed by this "open slather" approach to housing supply might be reconciled by the conditions the party proposes to accompany boundless urban sprawl. The main condition is that development on the urban fringe must pay the full cost of the additional infrastructure they need and the party has proposed an interesting method by which this could be financed. It wants the Auckland Council to be allowed to issue infrastructure bonds that would be repaid from rates levied on the newly developed properties.
Developers are already charged for the cost of connecting their subdivisions to a city's services but Auckland planners have long opposed urban sprawl on the basis of its infrastructure costs, so clearly those costs have not been fully covered in developers' contributions. Infrastructure bonds could fill the gap. In fact, they could permit more amenities to be built in these new communities than have usually been provided from development levies because bonds are effectively a loan to future residents whereas development levies are built into the upfront cost of houses.
