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Housing affordability inquiry.

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New Zealand Productivity Commission, ,

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This report offers an analysis of the housing affordability crisis in New Zealand, focusing on factors such as land supply, infrastructure, construction costs, and regulatory framework.

A key finding of the Commission is that taxation was not a significant driver of the housing boom. Instead, containment policies like ‘Smart Growth’ and Auckland’s Metropolitan Urban Limit were identified as having a detrimental impact on housing affordability by constraining the availability of land for housing. The report emphasises the necessity of reducing pressure on land prices and advocates for the immediate release of new land for residential development in high-demand areas, particularly in Auckland and Christchurch. It underscores the role of councils in housing development, suggesting that they should avoid creating barriers to development and adopt a more flexible approach to urban planning. The Commission calls for a review of regulatory processes aimed at accelerating and simplifying consent procedures. Regarding construction, the report observes that it is feasible to construct quality, affordable homes. However, this requires effective collaboration between councils and developers to ensure that land is brought to market swiftly and at a price that allows the construction of affordable homes. The inquiry also tackles the issue of social housing reforms, suggesting that the current reforms be reassessed. It points out that the social housing sector will need significant support to expand to the necessary scale within a reasonable timeframe. The report has a section focused on Māori housing. It is noted here that: Māori communities value housing primarily for cultural and communal connections rather than as financial investments; challenges in Māori housing include lower average household incomes and financial literacy; Māori can overcome housing barriers using their social and cultural resources; the Whānau Ora program is well-suited to assist with Māori housing aspirations; housing affordability for Māori also encompasses maintenance costs; the Pūtea Taiwhenua (Rural Fund) could provide necessary funding for rural housing improvements; the effectiveness of the Kāinga Whenua loan program for rural Māori is limited; achieving housing on Māori land requires coordinated efforts from public services, families, and financial institutions. Overall, the inquiry provides a detailed examination of the multifaceted nature of housing affordability in New Zealand. It offers practical recommendations for policymakers, industry stakeholders, and the public, highlighting the need for a coordinated approach across various sectors and government levels to effectively tackle the challenges of housing affordability.

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