Housing

Three modest proposals for restoring housing affordability.

Increased affordability will not make Aucklanders feel richer – but it will make the country better off as a whole.

In the interest of an ever wealthier New Zealand, let’s make our cars more expensive. It might even help future politicians win elections on the back of a buoyant vehicle market.

If there is a housing shortage at the root of our affordability crisis, the best response is to increase housing supply.

The best we can do about Auckland’s housing shortage apart from building more houses is to establish a rational expectation that houses will be built in the future.

Land regulations are a cost and concern to New Zealand businesses, and they are probably a factor affecting the cost of living through land prices and competition effects.

We need a local government finance system that rewards councils that go for growth and punishes those that inhibit development. Our current rates system achieves the opposite – and that is what is wrong with rates.

The current local government finance system might in fact incentivise a council against development. Extra residential or business development typically costs councils money as they have to provide additional infrastructure and services to make it happen. Meanwhile, the benefits for councils are at best indirect and at worst non-existent.