How Phil Goff’s housing plan aims to break Auckland’s infrastructure deadlock

by Finlay Macdonald / 13 June, 2017
Mayor Phil Goff. Photo/ Simon Young

No wonder Auckland mayor Phil Goff is frustrated: fixing Auckland’s housing (and other) problems requires breaking government’s ‘think small’ mentality.

Mayor Phil Goff is at pains to warn that there is “no magic bullet” when it comes to solving Auckland’s housing crisis. It will take a variety of new strategies, the first of which has been his convening of a Mayoral Taskforce to determine those strategies. Incredibly, it is the first such initiative ever to confront the city’s myriad growing pains, and Goff clearly holds high hopes for the recommendations made by his think tank of builders, bankers, economists, architects and bureaucrats. The taskforce picks up where the 2013 Housing Accord between the city and central government left off. But for all the good intentions of the latter, in the years since, Auckland has only seen housing shortages, unaffordability and homelessness grow. The taskforce report focusses on three main things: scaling up the construction sector, unlocking the right land for development, and adapting the consent process to allow for innovative solutions. “It can work,” says Goff at the press conference to release the report. Of course, his next word is “if”.

FINLAY MACDONALD: As the Housing Accord showed, the trouble with trying to fix Auckland is that it’s growing faster than anyone’s ability to react. So how does the Mayoral Taskforce’s new report avoid a similar fate?

PHIL GOFF: Yeah, well you see a lot of cases where massive reports, such as the one the Productivity Commission has done, or the government on many occasions, simply become doorstops or gather dust. And we made this report deliberately slim, but direct in terms of the things that can and should be done. And this is not simply a report by a group of officials looking at it as an academic exercise. This is a report by the major players in the industry … so I’m hoping that the way this report is couched – and it’s not a partisan report, it’s an objective report – I’m hoping it carries enough weight that it persuades government we need more radical and bolder measures to address a problem, which a One News Colmar Brunton poll said, two-to-one, New Zealanders didn’t think was being well addressed.

Radical and bold are not words I’ve often heard associated with you. In fact, I’ve heard you called an incrementalist. Anything changed?

I think your vision is bold and you move incrementally towards it [laughs]. When I was a teenager I thought I could change the world immediately, and I’m still trying to change the world, but I now realise it’s taking me a little bit longer. I’ve said radical, but the concept of the government being a major player in the building industry to provide certainty and continuity is not a radical or new concept.

It’s quite old-fashioned, you’re right.

It’s something that we did for years, and when you look at why we’re building a whole lot fewer houses than we were in the 1950s, 1960s and 1970s, it’s because the government has stepped back from the role it once played in the area of social and affordable housing. And I’d like to see the government back in that sector. And the government has moved slightly toward that … I just think they need to move faster and at greater scale.

Auckland has failed to keep up with population growth for 20 to 30 years now. That is the period in which free market economics have held sway since the 1980s…

Oh yes, it’s my fault! [laughs].

Well, it’s market failure, pure and simple isn’t it?

It is a failure of the market because the market will not provide for people who cannot afford to buy their own home, or even those who can’t afford to rent their own home… The cause of the problem is that when you have a huge increase in demand, and supply is not catching up, the price mechanism comes into play. So the price of property and rent goes up.

And your report looks at supply. But you can’t control demand, much of which is created by immigration, a central government policy. Is it the elephant in the room here?

I’m pro-migration in the sense that it brings talent and energy and diversity to our country, from which we ultimately benefit. But I’ve never been in favour of a disconnect between the rate you increase the population and the ability of the infrastructure to cope with that growth… I welcome the growth to Auckland, but you’ve got to match it with the infrastructure. And if you’re not, then you’ve got to slow the growth. And that should be the approach that is taken.

I was struck by how many of the ideas and initiatives put forward in this report are in some way contingent on central government support. Are you confident you can win them over?

I’d like to be more confident. I think it’s been a valid criticism of central governments over a long period of time that they have not seemed to trust local government, and they have not wanted to empower local government. And that might have been a fair enough approach when Auckland consisted of 29 boroughs. But now it’s one city of 1.5 million people. And you cannot create a city of that scale and that importance to New Zealand, 36 percent of our population, without giving it the means by which it can raise the revenue that it needs to invest in infrastructure. And the government to date has neither devolved funding to us in the same way that the Australian federal government devolves GST to state governments for infrastructure purposes, nor has it been willing to give us the mechanism to enable us to raise our own revenue independently.

You sound frustrated.

It’s kind of a frustration with “think small” that Auckland has suffered from since the days when Robbie [former mayor Dove-Myer Robinson] had to argue whether the Harbour Bridge should be two lanes or four lanes, and within eight years it was eight lanes. Everybody knows what Auckland needs. With a growing population it needs infrastructure that can cope. Everybody knows that local government doesn’t have the ability to raise that money at the moment. So the solution seems obvious to me, and also a lot of other people, including the business community. But government, in line with the pattern of previous governments, is incredibly reluctant to act in a timely way. And yet, they are still paying for it – in the cost of lost productivity through congestion, by the need to pay huge sums in accommodation supplements. So I’m saying, let’s invest that money differently. Let’s invest it in solving the problem rather than treating the symptoms.

So how do you feel when you see a headline about schools having to build accommodation for teachers, because they can’t afford to rent or buy in Auckland?

Whenever I see the story that a professionally trained, qualified and reasonably well-paid person can’t afford to live in Auckland, I think, ‘what does that mean for the hundreds of thousands of other Aucklanders who aren’t paid at that level, but nevertheless have to do the jobs that this city depends on?’

It’s a canary in the coal mine, too. 
Are you confident you can get what 
is recommended in this report, and that it will make the difference we need, as urgently as it’s needed?

It will make a significant difference, but it’s time-lagged. On Sunday we open the Waterview tunnel – that I in government nine years ago was a participant in making a decision about. In 2023, we open the City Rail Link, which started three or four years ago. The frustration is we not only have a time lag that is inevitable because of construction times, but we have a time lag that is aggravated by the fact it took so long to reach the decision. And the area where we’ve got to start resolving this problem is that we have to reach the decisions more quickly… and then working out how to bring forward those projects within the other constraints we have, such as shortage of building materials, shortage of skilled labour, land not developed…

It could overwhelm you if you let it, I’m sure.

Yeah, but you know, this is still a great city to live in, and there are solutions to our problems. It’s not that the solutions don’t exist, it’s just the will and the priority to solving them aren’t being given to us. And if I had the ability to raise those funds in an equitable and sound way, then I’d take responsibility for the slowness of the decision making. But as mayor of a third of this country’s population, I’m still having to wait for decisions that are made at the other end of the country, that don’t always take into account the reality on the ground in the city we live in.

Well, there is the Housing Infrastructure Fund [HIF], which is a billion dollars earmarked for “growth councils”. Trouble is, Auckland would eat that for breakfast.

Of course it could. It wasn’t a purpose-ready scheme, so we had to have discussions with Bill English and Steven Joyce to get it to the point where they’ll now create an alternative vehicle. And secondly, we’re not short one billion, we’re short billions and billions. Seven billion just on transport alone in the next 10 years, to do the minimum necessary we have to do to stop a transport crisis. So, I welcome HIF not as an adequate answer to the problem, but a signal that the government accepts that as a central government it has the responsibility to provide revenue to make these things happen. And in that, it implicitly does.

So if there was one bit of this report that you’d most like to see happening by your first anniversary in office later this year, what would it be?

The first and best thing that can happen is we get the means to invest in infrastructure to turn zoned land into housing-ready land. That’s what we need to do quite quickly… If we get that money I can bring forward the construction of probably up to 36,000 homes, earlier than they would perhaps have been.

Good luck then.

Yes, good luck and keep hope alive!

 

See the full Mayoral Housing Taskforce Report here

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