New Housing and Urban Development Ministry being formed

Patrick O’Meara

Wellington, June 8, 2018

A new standalone ministry will be set up to help tackle the housing crisis.

Housing Minister Phil Twyford this morning announced the establishment of the Ministry of Housing and Urban Development, which will provide policy advice on affordable housing, homelessness and urban development.

“Having a more focused and capable public service to deliver the [government’s] reform agenda will ultimately allow us to build more houses, better houses, more quickly,” Mr Twyford said.

Integrating responsibilities

The new organisation will include functions currently spread between the Ministry of Business, Innovation and Employment (MBIE); Ministry of Social Development (MSD) and Treasury.

Mr Twyford said that the new Ministry would cost about $8 million in the first year, and it be funded from existing operational budgets of the units that shift to the new Ministry.

The new ministry will be established on August 1, and officially start operating on October 1.

Mr Twyford told Morning Report that the new Ministry was about putting in place the focus, capability and accountability to deliver on the government’s housing strategy.

“We need an end-to-end approach … to the whole housing system. One of the problems in the past is that government, through the public service, has tended to see these things in isolation,” he said.

Key priority

The government has made fixing the housing crisis a key priority in its first term.

The flagship $2 billion KiwiBuild Programme aims to build 100,000 affordable houses over the next decade, with half of those in Auckland.

Hundreds of millions are also being spent to house homeless families, while reforming tenancy laws, introducing minimum insulation standards for rentals and tougher tax rules to discourage property speculation are also in train.

Nevertheless, critics doubt the government can achieve its ambitious housing goals, arguing a thicket of red tape, unresponsive planning processes and worker shortages are constraining house building.

Mr Twyford remains confident that the new Ministry will help address some of the challenges.

“It’s only a small part of it … (but) it certainly will help us fix the housing crisis,” he said.

National Party critical

National’s housing spokesperson Judith Collins said that shifting officials from one ministry to another would not make a scrap of difference.

“We’ve got a Minister who is desperate to look like he’s doing something. A new logo, and a new Ministry is not going to build one more new house,” she said.

New Ministry shape

Changes to the Resource Management Act were crucial to building more houses, she said.

Under the planned changes, MBIE’s housing and urban branch policy functions, its KiwiBuild unit, and the Community Housing Regulatory Authority will shift to the new ministry.

This is a reversal from 2012 when the Ministry of Building and Housing was folded into MBIE.

MSD will lose its policy for emergency, transitional public housing unit, while the Treasury will lose the monitoring of Housing New Zealand and Tamaki Redevelopment Company.

Other units could be moved, but no decision has yet been made on that.

Mr Twyford said an Urban Development Authority to lead the KiwiBuild Procurement Programme and large scale track urban development projects was still in the pipeline.

Some of the KiwiBuild unit could eventually shift to the authority, he said.

Minister confident

Mr Twyford is confident that the government will meet its targets of 1000 KiwiBuild homes in 2018-2019; 5000 in 2019-2020; and 10,000 in 2020-2021, before averaging 12,000 annually.

So far, 30 KiwiBuild houses are expected to be built in Papakura by the end of the year, while more than 3000 houses will be built on Unitec’s campus in the Auckland suburb of Mt Albert over time.

Mr Twyford had previously said KiwiBuild would also finance cash strapped developers to complete projects to help meet its targets.

The government has also been criticised for the rising cost of an affordable home in Auckland, which stands at $650,000 for a three bedroom home.

Prime Minister Jacinda Ardern admits that will be out of reach for many.

Patrick O’Meara is Economics Correspondent at Radio New Zealand. Indian Newslink has published the above Report and Pictures under a Special Agreement with www.rnz.co.nz

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