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A law change allowing councils to make developers include cheap housing in projects has been approved by a select committee, despite complaints by councils that it will increase rates and drive up prices for other homes.
The Affordable Housing Bill will allow councils to set affordable housing policies but was almost unanimously panned by councils.
While most supported its broad goal, they said the costs of developing policies would be onerous and hit ratepayers in the pocket.
The select committee reported the bill back yesterday, saying it had made several changes to simplify the bill to meet council concerns.
However the National Party minority report says the proposed changes will make little difference to their complaints.
It says builders and developers would simply recoup their lost profits by charging more for other houses in a development.
It says councils - especially smaller ones - would struggle with the extra costs of doing housing needs assessments.
"Such a process imposes yet another layer of expectation and responsibility on them, another compliance cost, and another opportunity for delay in processing positive housing development opportunities. Council costs will simply flow through to taxpayers."
It said the bill did not address a primary cause of higher house prices, which was the supply of housing.
The bill will allow councils to require developers to allocate homes in developments for cheap housing or pay cash towards cheap housing elsewhere.
The bill also ensures the cheaper homes cannot be on-sold for market prices in the longer term.
The select committee made numerous changes to the bill, including simplifying some of the requirements on councils for consulting, developing and applying their policies.
The committee has also restricted the rights to object to decisions made under the policy to landowners of affected developments, developers, or immediate neighbours - much narrower than previously, when anybody could object.
