Tuesday 31 May 2016

Never Let A Crisis Go To Waste.

Greenfields: Minister of Building and Housing, Dr Nick Smith, has argued consistently that Auckland needs to grow out as well as up. He has just acquired a powerful ally in Prime Minister Key, who has hinted that if Auckland Council doesn't delete the Urban Growth Boundary from its forthcoming Unitary Plan, then it may suffer the same fate as "Ecan" - the Canterbury Regional Council - whose elected councillors were sacked by Dr Smith and replaced with his hand-picked commissioners.
OUR PRIME MINISTER has not ruled out denying local democratic representation to nearly a third of New Zealand’s population. If the Auckland Council’s forthcoming Unitary Plan retains the city’s much-maligned Urban Growth Boundary, John Key is threatening to replace them with Commissioners.
Once again, councillors’ strongly held opinions about highly complex planning issues are being used to justify a significant curtailment of democracy. Aucklanders have been put on notice that if a majority of their elected representatives refuse to vote for a resumption of urban sprawl, then the Council’s “Governing Body” will be sacked and replaced by a group of unelected “experts” appointed by Cabinet.
Cantabrians know better than to doubt the Prime Minister’s resolve in this matter. Since 2010 their right to a say in how their regional taxes are spent has been suspended. After six years of no regional democracy, they are now being invited to participate in a hybrid system featuring both elected and unelected councillors. The full restoration of democratic regional government in Canterbury will not take place until 2019.
The present government justified its suspension of democracy in Canterbury on the grounds that, in its deadlocked state, “Ecan” was incapable of making a number of extremely important – and long delayed – decisions about regional water allocation. At the time, National was under enormous pressure from Federated Farmers to break the deadlock and green-light the irrigation schemes farmers needed to make dairying feasible on the dry Canterbury Plains.
Government ministers argued that, economically, New Zealand could not afford the interminable wrangling between urban and rural interests. If the only people standing between Canterbury’s farmers and an irrigation-assisted boost to New Zealand’s dairy exports were a bunch of intransigent regional councillors, then the temporary suspension of democratic norms was a small price to pay for their removal.
That the deadlock between the representatives of farmers, and the representatives of those who valued water for cultural, environmental and recreational reasons, might signal the presence of a genuine policy dilemma, does not seem to have occurred to the National Government. Clearly, the deterioration in the flow and water quality of Canterbury’s rivers and streams was also a small price to pay for economic growth.
Equally clear, however (at least from the National Government’s perspective) is that most Cantabrians and, quite possibly, most New Zealanders, did not – and do not – consider a nine-year suspension of regional democracy to be all that big a deal. Regional government, unlike local government, has never really engaged the emotions of its electors. (Unless, as happened in Canterbury, a vocal minority of voters came to the view that it was thwarting their commercial ambitions.)
The question raised by Mr Key’s threats to the Auckland Council, therefore, is whether or not the suspension of local (as opposed to regional) democracy will be met with Cantabrian levels of voter indifference. In the years since the constitution and ancillary economic institutions of the “Super-City” were imposed on the citizens of Auckland, has it inspired sufficient loyalty and affection to render it invulnerable to such naked central government aggression?
Not without a crisis big enough to justify such heavy-handed interference.
Fortuitously, in the absurd escalation in Auckland house prices; and in the related, socially catastrophic, shortage of affordable housing for first-home-buyers and the poor; a crisis is exactly what the Prime Minister has got.
Rahm Emanuel, Barack Obama’s cynical chief-of-staff, infamously affirmed that: “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”
So, what is it that John Key believes the current Auckland housing crisis will let him do – that he could not do before?
The Prime Minister’s defenders will say that it offers him a virtually politically costless opportunity to rid Auckland of the irksome Urban Growth Boundary which so many politicians believe is responsible for its eye-wateringly high land prices. The only problem with this response is that Key and his government, as legislators, can abolish the Urban Growth Boundary any time they like.
So, what else will Auckland’s very real housing crisis let National do?
Helen Kelly put her finger on it during Saturday’s broadcast of TV3’s The Nation. Key’s threats, she insisted, mark the beginning of his party’s campaign to seize control of the Auckland Council.
Against all of the Right’s expectations, the first and second elections for the Auckland Council did not deliver it into the hands of the hard-line neoliberals for whom it was intended. Nor have the recent efforts of the Auckland National Party to assemble a winning team borne much in the way of palatable political fruit.
Enter the professionals.
Auckland’s housing crisis is entirely the Council’s fault. Therefore, vote out the guilty councillors. Then, give the Government a council it can work with.
Or else.
This essay was originally published in The Press of Tuesday, 31 May 2016.


greywarbler said...

By George, I think you've got it.

Anonymous said...

I'm guessing Phil Twyford's comments made it easier for the government to threaten overriding the council.

"With the Budget coming up, the Government has a chance to finally do something to genuinely rein in Auckland’s housing crisis. But unless Nick Smith deals to the urban growth boundary – and its proposed watered-down replacement – integrates transport planning and investment, frees up the density rules, and reforms infrastructure finance, his national policy statement won’t amount to much.”


peteswriteplace said...

And now the fascists can seize Auckland with both hands.

Guerilla Surgeon said...

Never let a crisis go to waste? Roger Douglas was the master at that.

I must say, I usually laugh when capitalists eat each other, but in this case I think I prefer the capitalists that are in favour of clean water. And it's not just urban capitalists, but people who make a living from trout fishing and the like.

Funny how the mainstream media never seemed to hold national to account for its bullshit. They promised to release land around Auckland. How much have they released? Maybe enough to build 100 houses? Like that's going to help.
Not only that, but where is the money going to come from for all the necessary infrastructure? For Christ's sake Auckland is already spread beyond the bounds of sanity, as anyone who drives there even in the middle of the day would testify. It desperately needs some form of rail – and we all know who disposed of that in the 1950s.

Anonymous said...

I hope the government dismisses the Auckland council and charges them in court with dereliction of duties as servants.
The council has lost control to the Managers and there is now twice has many managers earning $100,000 per year as when the Super city formed.
What would you and Helen Kelly want?, that we endorse this shower??????.

Anthon said...

@ Anonymous, 11:08. Seriously??? How can you possibly believe that somehow this assault on the core principles of democratic freedom by our authoritarian neo-liberal paymasters in Wellington can be in any way laid at the feet of Twyford! Stunning, truly stunning.... No wonder the right look and laugh at the folly of the masses in 'Gods Own'.

greywarbler said...

Vader quoted Twyford WHO got his sound bites into the Not PC blog - Promoting capitalist acts between consenting adults. Very droll, and sounds like RW approval so that is a bad sign for a Labour pollie.
Phil T sounds very upbeat - from my left point of view I feel he has been naive in the way he has explained the problem and National's challenge. Vader has noticed that they have chosen to accept it.

But apparently Labour has a rose-scented future for Auckland housing in front of it.
"Over 25 years the urban growth boundary hasn't prevented sprawl, but it has helped drive land and housing costs through the roof. It has contributed to a housing crisis that has allowed speculators to feast off the misery of Generation Rent, and forced thousands of families to live in garages and campgrounds," Twyford said.
"Labour's plan will free up the restrictive land use rules that stop the city growing up and out. It will stop land prices skyrocketing, and put the kibosh on landbankers and speculators."

I wouldn't put any bets on it though. Pie in the sky, pigs might fly.
And that betting system on politics, what happened to that. Even gambling isn't a sure thing in NZ, the shaky isles. The ground shifts all the time. But Nick Smith still goes on. He has been doing this pollie thing since he was a young fella. When can we get a three-term limit? Just long enough to register for polly super crackers.

Anonymous said...

You do not mention the exorbitant rate rise's under this council, this council should be sacked.

Andrew Nichols said...

It's a potential constitutional coup not dissimilar to what has just toppled Dilma Rouseff in Brazil. Cant win at the ballot box - so sack the govt and put in your cronies anyway.

jh said...

Population increase is government policy. Mai Chen says that the masses of new arrivals (primarily from Asia) will deliver a diversity dividend . Banks (mortgages) academics (Department of La la) and tons of progressives agree. So there is the current political climate that alows a great sickness to go unresolved.
On the news an economist is giving the economy a big tick based on migration, construction and tourism. What happens if migration was to be curtailed and our larger population had to earn a living on other than what has been the core activities of our far flung land mashed economy. We would then see for sure if the Emporer had any clothes on?

Anonymous said...

The age-old tensions have reached boiling point, with three popular tourist destinations on the coast taking steps to ban second homes. Battle lines were drawn in May, when residents in the seaside resort of St Ives voted by 83% to ban second-home owners buying any new-build developments. This groundswell of defiance was picked up by two more of Cornwall’s most popular destinations on the south coast: the historic town of Fowey and picturesque fishing port of Megavissey. Both towns followed St Ives’s example by including similar proposals in their own draft neighbourhood plans. Second homes account for a third of properties in Fowey and a quarter in Megavissey. Cornwall has 29,015 second homes and 242,213 main-residence homes, according to 2015 figures from Cornwall council.

John Laurie said...

I am quite happy to see the urban limits boundary redrawn to incorporate a lot of extra land. A lot of New Zealanders want decent-sized sections, and if we could afford them in the 1920s I don't see why we can't today in a much richer country. There is a lot of land around that's marginal agriculturally. However I also think the time has come to reduce immigration by some huge amount. I don't believe in any immigration dividend. Small numbers of immigrants are good and they are almost all good people. However, huge numbers from any one country will lead to problems as anyone with any knowledge of Eastern European and near Eastern history could tell you. And don't quote me the USA - why did it never develop a proper welfare state? Why was it so slow to get involved against Germany in both world wars?

I would also like to see a capital gains tax and other drastic measures to stop foreign and New Zealand speculators and landlords.

Michael Wynd said...


As one who lives on the North Shore, over 70% of ratepayers [by that I mean people whose names are on the rates demand] want this Council gone and a commissioner/s installed ASAP. The Council is wildly dysfunctional and has such narrow vision that it for the most part ignores the North Shore, a part of Auckland that pays the largest amount of rates for the city. I do not think that there will be any tears shed or angst if Lying Len Pants Down Brown and his ship of fools are cast out. It should be done before the election as the Council is not a post-Parliament role for Phil Goff, who will be just as bad or worse than Len Brown.

There is a case to be made that a Commissioner could fix the council and let the local boards remain as they could play an effective role in supporting the commissioners.

AB said...

Plus if commissioners take over there will be lots of juicy asset sales / privatisations going too, in order to fund infrastructure extension out to the new areas of dystopian sprawl. And maybe each of these new areas of sprawl should have their own useless convention centre just to load the council up with more debt and force more asset sales?
How many Aucklanders would take to the streets if this happened?

Anonymous said...

Coming back from Arrowtown I remarked on the expensive homes on the hill to the south of Lake Hayes, they were bathed in sunlight but all had their blinds down. My guide (an avid John key supporter) caught my gist and said "that's all right"! (next day he helicoptered half the tour back from Milford sound making a large tax free commission for himself).
Looking back you can see how the ownership of property is what allows people to live comfortably in Queenstown . There used to be simple bachs along the lake to the east of Queenstown gardens; working people could point to their houses from Camp street. Since then they have been squeezed out. These days the government dangles residency to subsidise Queenstown's real estate industry.
The Rent Trap

For the housing market’s winners, the gains have been spectacular.

Infometrics director Gareth Morgan calculates that between 1989 and 2005, the residential property market has provided investors - and owners - with a tax-free 319% gain.


Anonymous said...

New Zealand is the new Eden, its clean and green image the beneficiary of a public-relations windfall direct from Middle-earth. Americans are not just visiting the country in numbers unimaginable only five years ago—they're immigrating, drawn by an arcadian ideal (never underestimate the pacifying effect of several billion sheep), breathtakingly cheap waterfront real estate, see-through fish-tank architecture, and an investment climate that, as one Las Vegas resort owner–cum–South Island winemaker puts it, makes New Zealand "the Switzerland of the South Seas."

One of the most powerful forces in the shilling of the nation is Helen Clark, familiar to all Kiwis as Madame Prime Minister. In her book, there are no bad tourists, only ones with shallow pockets. And in a recent campaign that will go down in history, Clark aggressively packaged and promoted New Zealand as a place where Californians in particular, because of their relative proximity and the kinship in lifestyles, might consider putting down roots. "Active recruitment," she called it, and some of the state's richest residents signed up. Vive le marketing.


“Foreign investors encouraged to buy up

Aug 27, 2008 9:16 AM

Foreign property investors are being encouraged to eye up New Zealand real estate bargains.

A thinning supply of local buyers for higher value investment properties has seen real estate agency Bayleys increase its offshore marketing activity.

Executive Director David Bayley says sales at the top end of the market have slowed in the last few years. He says because of that, they are focusing more attention on promoting properties in Hong Kong, Shanghai, Dubai and Europe.

Bayley says if the recent fall in the kiwi dollar is sustained, he’s expecting a significant pick up in offshore interest - especially out of Asia.”


Anonymous said...

There are also seminars being held overseas where New Zealand rental properties are being sold to overseas investors who will never live in New Zealand. They have the opportunity to borrow at lower local interest rates and property here looks cheap compared to their own country. For them it is good business, but are they out-bidding all of us and how many are actually doing this

The fact is that we don’t have good information on what is currently driving house prices. If it is local buyers, then affordability issues should have an affect over the following year and the normal nature of the property cycle will come into effect. If it is overseas buyers then perhaps we need to look at whether this is good for our nation and, if not, what we can do about it.

Property Council of NZ, National Conference 2000, Tauranga

First, I would like to thank the Council for the invitation to attend today.

Secondly I would like to acknowledge the importance of the sector and the size of the interests that the Council represents;

•20 corporate members

•$14 billion of assets, and

•Contributes significantly, through rates to the functions of Local Government.


Imagine a news paper/ news outlet offending these boys???!!
Interesting that the experts (Connell Townsend on RNZ) see no link between immigration and house prices?

Anonymous said...

Slowing net migration could disappoint property speculators and other businesses counting on ongoing rapid population growth.


jh said...

Mass media is a mixed blessing as it is too easily controlled by a few even though it may in effect be an oligopoly (liberal/progressive and vested interest - property development etc)

Guerilla Surgeon said...

Have any of you buggers who insist on opening up 'land for settlers' thought about the implications for the economy? Given that we depend very much for our income on agriculture, how much agricultural land can we afford to hand out, before we go broke? Just askin'.

jh said...

Michael Reddell puts house price rises into perspective

Perhaps too, the Bank might worry about the spillover from higher house prices into the rest of domestic demand. But, in fact, over the last 25 years, despite huge increases in real house prices, the private consumption share of GDP has been essentially constant.
That is largely what we should expect: after all, higher house prices don’t make New Zealand any better off, and the individuals who are better off must be offset by other individuals who are made worse off.

The P.M is saying there are lots of houses for $500,000 and under. He is playing on the fact that the world is just a model in our heads and trying to use his mana as PM (the man who knows finance and money "Mr Success") to make us think we are deluded.

Nick J said...

Michael, as an ex resident of Devonport I understand your concerns but your take on democracy is truly disturbing. If I understand you what you suggest is that because the Shore pays a higher proportion of rates that the Shore deserves some preference AND that if you cant get that democtatically you want central government to strip local powers and appoint unelected dictators favourable to your viewpoint. Why not go all the way and demand you are one of them?

You point out local boards could help the dictators....nice concept that places them between electors and commissioners. When electors clash with commissioners who are the meat in the sandwich?

It is obvious to me that Burkes principle of no taxation without representation is fragile amongst the property owning self interested classes of Auckland who would claim it to overide other electors interests and rights. Such is the decline in the practice of democratic principles under Keys watch.

Guerilla Surgeon said...

"The P.M is saying there are lots of houses for $500,000 and under. "

Radio New Zealand concisely and rather contemptuously put that idea to bed. They seem to be about the only people doing this sort of investigative – loosely speaking – reporting these days.

jh said...

Given the immigration is deliberate, one could then say the “non” crisis in the housing market has been self-inflicted, i.e.; the government is to blame.


Geoff Simonds fact checks John Key & NS. Failure of housing policies while deliberately maintaing high immigration.

Guerilla Surgeon said...


Now THAT was interesting. More like this please.

Robert M said...

It is certainly true that there was a general perception in many circles that in 2010 Banks would easily enough truimph over Brown in the first super city election. However Banks struggled for financial support from the New right and as a recent arrival to Auckland at the time, what staggeered me was the low quality of the candidates or Mayor and the council. The positions of the health board were even being contested by 85 year old former Tamaki MP Bod Tizard and some recently arrived Californains on the Medical School staff. Banks had failed UE three times and Brown had only managed three school certificate passes. Half the council seemed to live in houses worth less than half the estimated averge value of owner occupied residencies in the greater Auckland area.
The design off the super city seemed to be largely the work of Rodney Hide, the Act party leader and the detail by former Aliance MP Labour Harre, who even Heeln Clark viewed as a left wing trouble maker and whose priority would clearly be protecting the established council bureaucracy and council employees. Neither Hide, Act or Banks could acurately be described as Neo Liberal, they are essentially social conservatives and much more influenced by Neo Con values and beliefs than Neo Liberal Marketeers or social liberatian values. Argumements could well be made that Brown was far more liberal than John Banks. One of the main characteristics of the Banks years was a determined effort to restrict and control the hetrosexual sex industry and its associated pornography, topless bar and orgy activites. Banks seems to have done as much to support the the activities of Aucklands powerful gay lobby in its activities, business ownership and political power and influence in Auckland as any Labour Party interest, other than Helen Clark. Therefore Banks was not necessarily ever the shoo in, with the greater Auckland electorate that was expected and proved unmarketable in West Auckland, as he clearly lacked appeal either in Henderson or Titirangi.
Since then in 2013 the Auckland right has lacked either credible Mayoral candidates or oouncil representives, neither Quax or Fletcher having the right qualities, with both likely to be overshadowed by the ageing Bill Ralston, who is seems authentically right wing, market oriented and hetrosexual and even like Brian Edwards an authentic drinker at the Chapple Bar, probably then most notorious and hetrosexual bar in Ponsonby Road, its a matter of degree, but probably more than the glossy fake opium den decorated joint ( Revelry or something- I have brain fade from the cheap black stout they serve on Sundays) a couple of doors down from the main arterial to Grey Lynn.

charles e said...

I don't know about Auckland but way more people in Cantab have voted for Key in three elections than for Ecan ever. We don't give a stuff for Ecan. It should be abolished.
We do not need three layers of government.
This is not a party thing either. I'm a national supporter but I support our ex labour mayor and her council, which has no time for Ecan either.

Currently I'm in Boston, a strongly left wing place, US context. Guess what? They have a terrible housing crisis with sky high prices and are desperately trying to get built more affordable housing. Same in Tel Aviv where I was last week. Another liberal place. Auckland & CHCH. Left wing Councils too. Maybe right wing councils could solve the problem so I hope National does take over Auckland, so we can see if it helps get affordable housing built.
Personally if I lived and owned a house there I would sell and move..... probably to Boston! It's lovely. Even has nice tea houses and not a puritan in sight.