Housing affordability - Productivity Commission inquiry material 2011 - 2012

The inquiry#

Housing affordability is essential for the wellbeing of New Zealanders. It can also have significant ramifications for the wider economy as housing comprises the main share of both household assets and debt, and the scale of the housing industry and its employment is significant.

The Government asked the Commission to evaluate the demand and supply factors influencing the affordability of housing and examine potential opportunities to increase housing affordability.

Key points#

The Commission found that taxation was not a key driver of the recent housing boom.

Containment policies such as 'smart Growth' and Auckland's Metropolitan Urban Limit were found to have an adverse effect on housing affordability by limiting the availability of land for housing.

Pressure on land prices needs to be reduced and there needs to be an immediate release of new land for residential development in high demand areas such as Auckland and Christchurch.

Councils should ensure they aren't putting up barriers to development and should take a less constrained approach to urban planning. There needs to be a review of regulatory processes with the aim of speeding up and simplifying consent processes.

We can construct quality, affordable homes, but it will take councils and developers to work together so that sections can come to market quickly at a price that allows the building of homes at an affordable price.

Current social housing reforms should be reconsidered. The social housing sector will need considerable assistance if it is to scale up to the extent required, and do so within a reasonably short timeframe.

Government response#

The Government issued its response to this inquiry in October 2012. In response to the inquiry recommendations, the Government commenced a comprehensive work programme, including follow-on work for relevant government agencies. The Government agreed in full, or agreed in principle, to 21 of the 33 inquiry recommendations. Of the remainder, the Government considered 4 were adequately in-hand through current initiatives and the remaining 8 were the subject of ongoing reforms or further policy review work.

Insights into local government#

In 2020 the Productivity Commission released Local government insights report informed by this inquiry. Understand the major challenges for both local and central government, what they need to get right, how to do things differently and the benefits of making these changes.

This report brought together the learnings of five of the Commission's inquiries into local government performance: Local government funding and financing (2019); Better urban planning (2017); Using land for housing (2015); Towards better local regulation (2013); and Housing affordability (2012).

Evaluation#

An independent evaluation of the Commission's performance was undertaken with inputs from expert review, focus groups and participant survey.

Timeline#

• Terms of reference - 1 April 2011
  • Engagement and consultation starts
• Issues paper - 22 June 2011
  • Submissions closed 3 August 2011
• Draft report - 16 December 2011
  • Submissions closed 10 February 2012
• Final report - 11 April 2012
• Evaluation - May 2012
• Government response - October 2012
   

Key documents#

Final report and Government response#

Terms of reference and issues paper#

Research#

Draft report#

Submissions#

Public submissions on issues paper - Housing affordability

Public submissions on draft report - Housing affordability

Evaluation#