Nick Smith to housing developers: get building or I'll withdraw SHA status

Housing Minister Nick Smith denies land-banking is happening in Auckland’s Special Housing Areas. But at the same time, he says he has written to some developers saying, "Get building or we will withdraw SHA [Special Housing Area] status."

He says the letters are as much as he can do to compel developers to build on their land: "You cannot physically force a landowner to bring their land on supply.”

Dr Smith's comments come in the same week that Reserve Bank Governor Graeme Wheeler expressed fresh concerns about Auckland house prices. The RBNZ was monitoring the situation closely and there could be the need to impose further mortgage lending restrictions, possibly including a limit tied to a loan-to-income ratio.

The Governor added, “Further efforts to reduce the imbalance between housing demand and supply in Auckland remain essential. This includes measures such as decreasing impediments to densification and greenfield development and addressing infrastructure and other constraints to increased housing supply.”

More than 48,000 sections have been created in Auckland’s Special Housing Areas, but the latest monitoring report shows only 700 houses have been built.

Dr Smith says the number of builds is now 1000, but adds that is not good enough. He insists building rates are improving and “massive amounts of earthworks occurring.”

“We’ve got that rate up to 40 houses per working day being built in Auckland. We need to get it up more like 50 to 60 houses per working day if we are going to make that material difference to the market," he says.

The Housing Minister says record median house prices and more people living in their cars are “all part of the same symptom”, and blames Auckland Council for being divided over its Unitary Plan.

Dr Smith leaves the door open to Reserve Bank’s loan-to-income ratio concept but qualifies that "We’re not going to win the battle long term for those young families aspiring to own a home unless we can get that house price increase down into single digits.”

As service agencies raise concerns about the growing number of families living in cars and garages, Dr Smith says “ever having the situation of children living out of cars is unacceptable."

This week, his government announced a $41 million boost for emergency housing.

Watch Nick Smith's full interview on The Nation here.