What land banking means for Auckland's housing woes
Welcome to the world of land banking: People own pieces of land, don't build on it, wait for the value to increase, sell for profit and pay no tax.
It's not illegal and seems like a good idea right?
"You've effectively been given a money printing machine where you can hold the market to ransom," says Building and Housing Minister Nick Smith.
Land banking is majorly contributing to the housing crisis at present.
"That flows on to the section price, flows on to the house price and that's at the core of the housing pricing problems."
For Emma Ryder of Generation Zero, the housing market is impossible to get into and she says everyone is struggling.
Former Reserve Bank Governor Don Brash says it's not just big developers regarded as land bankers but every person with a small quarter acre section who is hanging onto it because of the value.
Another issue is the metropolitan urban limit and it's a limit Auckland Council plan to do away with.
Some boundaries will remain but Auckland Deputy Mayor Penny Hulse believes there will be a much more flexible approach.
"There's so many brownfields sites and infill sites within the city limits that are close to transit hubs that we could really intensify and create nice city centres around," says Ms Ryder.
Dr Smith believes the best way to get land banking under control is to free up more land supply so there isn't a monopoly.
But if the Government can acquire houses for roading, why can they not acquire land for housing?
"We have to pay fair market price and under the law that market price includes the benefits that come from very limited supply and that's not a realistic solution," says Dr Smith.
Since 2006, the number of vacant sections has grown from 3200 to 5000.
Ms Ryder questions what sort of city will be left for future generations.
Dr Brash suggests a tax on unimproved value of land and getting rid of the metropolitan urban limit.
Once that happens, Dr Smith believes competition will follow which is key to affordability.
So should we be feeling more optimistic about the future? Or have we heard it all before?