Power plan­ning body lurk­ing

With the gen­eral elec­tion just a week away, Sun­day Busi­ness takes a look at some of the busi­ness is­sues tucked away in the par­ties’ man­i­festos. To start, Cather­ine Harris looks at Na­tional and Labour’s ur­ban de­vel­op­ment idea.

Sunday Star-Times - - BUSINESS -

Ur­ban plan­ning. The very phrase makes many eyes glaze over. Yet tucked away in Na­tional’s and Labour’s poli­cies, is an idea for an en­tity which, as a last re­sort, could force peo­ple to sell their land.

The ve­hi­cle is called an ‘‘ur­ban de­vel­op­ment au­thor­ity,’’ and both Na­tional and Labour have cham­pi­oned them as a means to amass­ing big ar­eas of land to get a ma­jor ur­ban project rolling.

UDAs are fairly dras­tic things, but over­seas they have been used to good ef­fect. They ne­go­ti­ate, ac­quire and master­plan, and can do this with­out com­pul­sory ac­qui­si­tion pow­ers in their back pocket, although ar­guably are more ef­fec­tive if they do.

A dis­cus­sion doc­u­ment re­leased in Fe­bru­ary by MBIE, ex­plored the idea of hav­ing UDAs hav­ing re­course to the Public Works Act as a last re­sort, af­ter a pe­riod of good faith ne­go­ti­a­tions.

Stephen Sel­wood, chief ex­ec­u­tive of sec­tor group In­fra­struc­ture NZ, says few agen­cies use the Public Works Act ex­cept Trans­power or the New Zealand Trans­port Agency. and he be­lieves Na­tional ‘‘will al­ways be more re­luc­tant ide­o­log­i­cally to im­pose on pri­vate prop­erty rights’’.

Nev­er­the­less, it is an ef­fec­tive means of tack­ling hold­outs and de­lib­er­ate land­bankers.

One land ac­qui­si­tion is­sue is who gets the ex­tra value cre­ated when the land is re­leased, ei­ther through re­zon­ing or through shift­ing the ur­ban bound­ary, as Labour wants in Auck­land.

‘‘UDAs could work two ways,’’ Sel­wood says.

‘‘One is they could part­ner with ex­ist­ing land own­ers in the de­vel­op­ment of land, so it be­comes a shared eq­uity kind of de­vel­op­ment. That means the ex­ist­ing landown­ers would not be forced to sell, but would re­alise some of the ben­e­fits of the hous­ing de­vel­op­ment.

‘‘The al­ter­na­tive is the UDA could ac­quire the land, ei­ther at mar­ket rates or a ne­go­ti­ated price, to en­able the de­vel­op­ment to pro­ceed. And of course, the public sec­tor gets the full value up­lift op­por­tu­nity.’’

On other as­pects of ur­ban plan­ning, Na­tional is quite clear. It would re­visit the Re­source Man­age­ment Act (the much­ma­ligned RMA), this time with a view to cre­at­ing a sin­gle piece of leg­is­la­tion for cities, that brings in parts of the trans­port and lo­cal gov­ern­ment acts.

Sel­wood says cur­rently, land is re­leased by coun­cils in­de­pen­dently of road­ing or in­fra­struc­ture, and it’s just not work­ing. All po­lit­i­cal par­ties ac­cept the sys­tem is not work­ing well, but Labour is ‘‘still quite strongly wed­ded’’ to the RMA.

Another Na­tional pol­icy is the ’’Na­tional In­fra­struc­ture Com­mis­sion,’’ which would woo more ’’PPPs’’ (public pri­vate part­ner­ships) for new schools, hos­pi­tals and road­ing.

Sel­wood says Labour is not op­posed to PPPs but prefers them for road­ing and trans­port, rul­ing them out for in­fra­struc­ture like schools, pris­ons and hos­pi­tals.

To ac­com­pany the NIC, Na­tional has al­ready set up an en­tity called Crown In­fra­struc­ture Part­ners, which has been seeded with $600 mil­lion to ‘‘de-risk’’ land de­vel­op­ment for de­vel­op­ers. It has al­ready promised $1 bil­lion in in­fra­struc­ture loans to coun­cils wor­ried about debt.

Labour favours ’’in­fra­struc­ture bonds,’’ gov­ern­ment-run bonds re­paid with tar­geted rates.

On UDAs, Labour’s hous­ing spokesman Phil Twyford, says the two par­ties are prob­a­bly very sim­i­lar, sup­port­ing the use of the Public Works Act only in ex­cep­tional cir­cum­stances.

‘‘When you’ve got say, one landowner who is hold­ing out against a ma­jor de­vel­op­ment and gam­ing the sys­tem in or­der to pocket a mas­sive wind­fall gain at the ex­pense of the public purse.’’

New Zealan­ders tol­er­ated hav­ing land ac­quired for road­ing projects, but ‘‘there is no his­tory of us us­ing the Public Works Act to ac­quire land from peo­ple and then use it to re­de­velop into pri­vate hous­ing’’.

‘‘We do not an­tic­i­pate us­ing it to ac­quire the land for hous­ing, be­cause there are so many other ways to do it.’’

For the record, Twyford says the land that Labour hopes to use to roll out its tar­get of 100,000 houses, is in a mix­ture of hands.

It would use Crown land (for ex­am­ple, the work done at Hob­sonville air­field), and re­de­velop state hous­ing land, re­plac­ing it with state, af­ford­able and mar­ket-priced hous­ing.

But it also an­tic­i­pates work­ing with pri­vate landown­ers and coun­cils to re­ju­ve­nate brown­field land (like New Lynn).

De­vel­op­ers could also of­fer up some of their sub­di­vi­sions to Labour’s Ki­wibuild pro­gramme. The Gov­ern­ment would buy the houses and on-sell them, help­ing to re­duce the de­vel­op­ers’ risk.

‘‘Both par­ties have good ideas,’’ Sel­wood says. ‘‘But even if you added them to­gether, it’s in­suf­fi­cient to tackle the prob­lem we face.’’

‘‘We’ve got to lift our vi­sion.’’

Both par­ties have good ideas. But even if you added them to­gether, it's in­suf­fi­cient to tackle the prob­lem. Stephen Sel­wood, chief ex­ec­u­tive, In­fra­struc­ture NZ

AN­DREW GORRIE/STUFF

A wave of in­fra­struc­ture is about to hit New Zealand and both par­ties are weigh­ing how to man­age it.

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