KEY POINTS:
Local councils say they could face 10 years in court if developers challenge their development levies under a proposed new law aimed at encouraging "affordable" housing.
Five of the Auckland region's six local councils lined up at a parliamentary committee hearing in Auckland yesterday to oppose the bill, which would give councils powers to make developers include a proportion of cheap housing in any new development.
The Waitakere City Council was the only one to support the bill. It suggested going further and making affordable housing policies compulsory for all councils.
Auckland City legal adviser Pat Mulligan, a partner at Buddle Findlay, said the bill threatened to drag the councils into long court challenges similar to a still-unresolved 10-year battle by developers against Rodney District's proposed regime of financial contributions by new developments under the Resource Management Act.
That case led to changes to the Local Government Act in 2002, which allowed councils to impose different levies called "development contributions", which can no longer be challenged in the Environment Court.
The new bill would allow councils to waive development contributions for subdivisions that included affordable housing, and would also allow appeals to the Environment Court against council housing affordability policies.
Auckland City's manager of arts, community and recreation, Ruth Stokes, said developers could therefore challenge development contributions on the grounds that a council should have an affordable housing policy even if it didn't have one.
Mr Mulligan said that, based on Rodney's experience, that meant court challenges could take "10 years plus".
"With financial contributions there was a framework around what we were doing. Here it is very loose," he said.
Property Council policy director Daniel Newman told MPs that development contributions, including reserve contributions, loaded up to $40,000 to $50,000 on to the cost of new inner-city Auckland apartments.
Mr Mulligan said such levies were justified by the need for open space in high-density developments.
"When you have got developers throwing a whole bunch of people into a small area, you need greater provision for parks and open space," he said.
Manukau Mayor Len Brown said the bill was "seriously flawed" and should be withdrawn.
But he supported one clause in the bill which would ban covenants in new developments aimed at keeping out "affordable" or "social" housing.
National MP Phil Heatley said Housing NZ had identified such covenants barring the agency from buying or renting houses in an 88-unit development by Amberley Ltd at Mangere and in a 61-unit project, Baverstock Park, in Flat Bush.
Former Housing Minister Chris Carter has also complained about a similar covenant in the 2900-unit "Stonefields" project being developed by Landco in the former Mt Wellington quarry.
Landco Land Developments manager Andrew Stringer did not mention the covenants in his submission, but asked the committee to make affordability policies compulsory for all councils rather than letting some go ahead and others not.
"Capital is fluid," he said. "In Auckland where you have five territorial authorities, if one decides to impose a system, where it is seen as inequitable in a market sense, capital will flow out of that area and into other areas and that will undermine the intent of the bill," he said.
Waitakere Deputy Mayor Penny Hulse also urged the Government to make all councils adopt affordability policies - and to pay for them.
"It has been estimated that the unbudgeted costs of assessing housing affordability and adopting plans will be about $300,000 per council.
"Waitakere City Council believes that assessments and affordable housing policies should be mandatory and led by Housing NZ. Only a government agency will show where the real pressures are and how they change year by year across New Zealand."
HOUSING AFFORDABILITY BILL
* Allows councils to make developers set aside a proportion of developments for affordable housing.
* Allows councils to waive development contributions for companies that include affordable housing.
* Bans covenants stopping homeowners from selling or renting to social housing agencies such as Housing NZ.
