Holding up the works – Govt finally identifies issue of infrastructure costs

Finance Minister Steven Joyce recently suggested that “targeted rates” may be imposed on new housing projects in the future, in order to help fund residential infrastructure.[1]

These comments reportedly come following Auckland Council advice to the Minister that it could not afford the infrastructure (such as roading and pipelines) necessary to service land intended to be used for new residential housing over the next two decades.

No detail has been released on how targeted rates could be imposed, or what law changes might be required to support them.

While several recent resource management reforms have been cited as part of the Government’s response to the housing crisis – including the NPS on Urban Development Capacity 2016, the Resource Legislation Amendment Bill, and the Auckland Unitary Plan – we consider that infrastructure costs remain a key unresolved factor. This view was recently also expressed by the Productivity Commission in its recent report. We agree that a central Government-led solution to infrastructure funding will be required in order to see any significant increase to housing availability in main centres, particularly Auckland.

Given Prime Minister Bill English’s recent comment[2] that the RMA may be “at the end of its life” and will not be amended again (after the current Resource Legislation Amendment Bill passes), we expect to see a number of new ideas and proposals being floated. We’re watching this space.

 

 

[1] Nicholas Jones, “Targeted rates likely coming to Auckland: Finance Minister Steven Joyce”, New Zealand Herald, 29 March 2017, accessed 4 April 2017, http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11827581.   

[2] Julie Iles, Denise Piper and Michael Daily, “Work already being done on RMA overhaul – PM Bill English”, Stuff, 20 March 2017, accessed 4 April 2017, http://www.stuff.co.nz/business/90956541/Work-already-being-done-on-RMA-overhaul-PM-Bill-English.

Posted on April 5, 2017 .