More sprawl a costly choice for New Zealand

Building more suburbs in rural areas far from city centres will not make housing more affordable or New Zealand's cities more liveable, Green Party housing spokesperson Holly Walker said today.

Ms Walker was commenting on the National Government's response to the Productivity Commission's Housing Affordability Report. The National Government identifies "increasing land supply" as its first priority.

"Sprawl costs ratepayers more, leads to less liveable cities, and doesn't result in cheaper houses," said Ms Walker.

"Research shows that the infrastructure and transport costs of building beyond city limits are more than twice as high as building within existing urban areas.

"The land may be cheaper but only because building and living there is more expensive. The 'saving' of building on cheap, rural land is more than wiped out by long-term costs.

"Without transport, local amenities, and local employment opportunities, outer suburbs can become poverty traps for families reliant on cars and who face higher petrol costs and costs of living," said Ms Walker.

"Households in the distant suburbs that National favours are very dependent on cars for transport and often have large mortgages to service. This makes them extraordinarily vulnerable to shocks such as petrol price rises and unemployment in economic downturns.

"Recent research shows that mortgagee sales during the financial crisis have been concentrated on outlying suburbs with poor transport and infrastructure connections.

"National's plan does nothing to address the over-investment in house price speculation that is fuelled by the tax-free returns that landlords can make, which is one of the biggest drivers of rising house prices. A capital gains tax (excluding the family home) would help to get New Zealand off the housing bubble cycle and increase investment in more productive areas.

"Medium-density, small dwellings centred around existing community amenities with good transport and recreational services is a better model for helping the average first home buyer get a foot on the property ladder.

"We also need greater government commitment to affordable housing and assisting people into their first homes.

"The government should lead the way with the construction of new state and social housing; not push desperate home-owners and renters out to the fringes and create even greater inequality in our cities," said Ms Walker.

References:

Assessing the Costs of Alternative Development Paths in Australian Cities http://sustainability.curtin.edu.au/local/docs/Curtin_Sustainability_Paper_0209.pdf

NZ mortgagee sales during the financial crisis have been concentrated on outlying suburbs with poor transport and infrastructure connections: http://www.steeleroberts.co.nz/books/isbn/978-1-877577-44-4