Kia ora koutou katoa
Is it a pleasure to be able to speak with you today, and to be able to answer some questions you may have.
I would like to acknowledge the organisers of this event, the Property Council.
The theme of this year’s conference is City Shapers. Together Stronger – an ode to the power of collective expertise, insight and industry alignment.
In line with this theme, I want to talk about the importance of housing and what this Government is doing to alleviate the acute housing stress being experienced by many.
I will also highlight opportunities where we can come together, – I’m sure you’ll agree, we all must do our part.
There are few things more important to people and whānau than the homes and communities they live in.
This Government believes everyone should be able to have a warm, secure, affordable home whether they rent or own. We have learnt through our experience in responding to COVID-19 that this is even more important now as homes also provide our first line of defence in order for people to have a safe place to isolate when needed.
A well-performing housing system is critical for our social, economic, health and environmental wellbeing.
But for over a decade, housing supply has not kept up with demand and there is a shortage of homes being built, especially affordable homes.
House prices are rising at record speed and we are still seeing demand for housing outstrip the rate at which supply is increasing.
Rising rents and house prices have resulted in too many people in need of housing support, living in overcrowded homes or experiencing homelessness.
These problems are caused by a complex interaction of factors and long-term structural issues, including:
Fragmentation and low productivity within the residential construction sector
Poor urban planning regulation and practice contributing to high land cost, and
Inadequate infrastructure planning and investment to support house building.
We came into Government knowing we could do more to help people into homes.
The housing crisis is a problem many decades in the making, and it will take time to turn it around. We are committed to doing this.
We have been responding to the housing crisis on three fronts:
Providing immediate housing support to our most vulnerable – this includes housing rough sleepers and supporting people in motels and temporary accommodation and introducing the Aotearoa New Zealand Homelessness Action Plan in February 2020, through which we are aiming to support over 10,000 people at risk of or who are experiencing homelessness over a period of three years.
Increasing supply, improving affordability and enabling infrastructure – we are achieving this through loans, grants, KiwiBuild properties and the progressive home ownership scheme. We also announced, in March this year, a package of initiatives to increase the pace and scale of housing delivery and to support more people into home ownership, including the $3.8 billion Housing Acceleration Fund.
Undertaking fundamental reforms to ensure system settings respond to people’s needs – this includes initiatives such as the reform of the Resource Management Act, the implementation of the National Policy Statement – Urban Development and this Government’s approach to climate change mitigation and adaptation, including the Emissions Reduction Plan.
Only by making progress on all three of these strategic priorities can we turn the tide.
While we have made significant progress, the wider impacts of COVID-19 have hampered progress.
For example, construction productivity – the actual ability to build homes – has been constrained through disruptions to building material supply as well as labour shortages.
However, we are continuing to make progress, despite the impacts of COVID-19.
In response to disruptions to building material supply and construction labour shortages we have, as a short term measure, restarted the manufacturing of critical building products in Auckland in Alert Level 4.
We’ve also begun break bulk shipping, which is being led by the Ministry of Transport, who also have interventions in place to support port capacity to support Auckland and Tauranga.
In response to labour shortages, the immigration rebalance, publicly signalled by Minister of Immigration, will provide an opportunity to attract highly skilled workers where they are needed in the sector, while ensuring that there are jobs for New Zealanders and promoting investment in the sector.
As part of a wider infrastructure response, we announced in July last year a $3 billion investment in infrastructure, of which an initial $464 million was allocated for housing and urban development. The $3 billion in funding has helped unlock infrastructure projects throughout Aotearoa New Zealand and created more than 20,000 jobs.
In March this year we announced the $3.8 billion Housing Acceleration Fund. This fund is part of a wider Government build programme to support first home buyers and encourage investment in new housing supply.
As part of this funding, we have ringfenced a $350 million Māori Infrastructure Fund. This funding will unlock a range of Māori-led housing projects, such as papakāinga developments, developments on whenua Māori or rural developments with onsite infrastructure needs.
This funding complements an additional $380 million investment in Māori housing through Whai Kāinga Whai Oranga.
Build-to-rent is an example of housing providers across the spectrum coming together to provide quality rental options as well as address supply issues.
Increasing rental supply is a key part of creating better housing outcomes.
The shortage of a good supply of high-quality, well-located and well-managed rental properties offering secure tenure at affordable rents helps explain many of the poor outcomes many New Zealanders who rent continue to experience.
While this Government has made positive steps in this area, for example, recent amendments to the Residential Tenancies Act and removal of land constraints under the National Policy Statement – Urban Development, a lack of rental supply to meet growing demand is a key problem.
I know a number of investors and developers are interested or have begun to develop build-to-rent. This type of rental development has the potential to increase the supply of housing serving the ‘intermediate housing market’ – broadly the large group of people who do not qualify for public housing, but who may not be able to afford to purchase or may not want to own a home.
It also provides an opportunity to attract more institutional capital towards the construction of new housing supply and re-direct investment away from the trading of existing investment properties.
While build-to-rent properties have been delivered already, including by some of you here today, the New Zealand market is small and there are some barriers to its further development. Many of these constraints are common across all forms of residential property development, and this Government is committed to supporting more affordable housing supply across all forms of housing, including build-to-rent.
In March 2021, Te Tuāpapa Kura Kāinga – Ministry of Housing and Urban Development established the purpose-built rental reference group to explore issues and test ideas related to the build-to-rent sector in Aotearoa. This group is made up of various representatives across the sector, including private sector, the community housing sector and iwi.
I have asked my officials at HUD to report back to me on issues raised by the group and the broader build-to-rent sector. These issues include constraints within the Residential Tenancies Act and the Overseas Investment Act, and concerns relating to the recently announced changes to interest limitation settings.
Government is also considering multiple options to help facilitate the growth of the rental sector and to deliver positive outcomes for tenants and housing affordability. I expect to be able to update those of you who are stakeholders in the sector as decisions are made.
So to wrap up, as a country, we have a lot of good work underway, but there’s much more to do.
The housing and urban systems need to deliver more homes and support communities and local economies.
At the same time, we need to ensure we protect our natural environment, adapt to climate change and transition to a more sustainable, low emissions economy.
Addressing our housing crisis requires a multi-pronged approach that combines a responsive resource management system with more direct housing policies and solutions, including policies that are effectively targeted to those who need it most.
While we have laid the groundwork for changes, the biggest results will emerge in the medium to longer term.