Housing crisis: National unveils plan to fund infrastructure, get houses built

National has proposed giving councils $50,000 for every extra home they consent over the historical average, in a bid to increase supply and ease the housing crisis.

Party leader Judith Collins on Wednesday unveiled the Housing Emergency Response (Urgent Measures) Bill, which places the blame of New Zealand's skyrocketing house prices on council planning rules. 

"We can't get enough building consents and land needs to be opened up for development," she told The AM Show on Wednesday.

"What we'd do is bring in legislation very similar to post-Christchurch earthquakes - we got a lot of houses built really well, and we didn't crash the market. That is to actually say to councils, every council, 'you're going to have to free up land or designate land for the next 30 years'... rather than just the three years the Government's currently talking about." 

Since loan-to-value deposit restrictions were eased in 2018, the median house price has gone up 50 percent - from $520,000 in January 2018 to $780,000 in February this year.

Though the number of consents issued has been rising for a decade - now at its highest since the 1970s - prices have continued going up regardless. New Zealand has nearly twice as many people as it did in the early 1970s, so the number of consents issued per person remains much lower.

When last in power, the National Party flatly denied there was a crisis - but Collins now has no problem calling it an "emergency". 

"The emergency is the fact we're spending now $4 billion a year on housing where the housing is basically housing allowances, accommodation allowances, it's also emergency housing. This is an enormous problem. We have around 25,000 families on the emergency waiting list for homes. We've got a massive problem and it's time we took some action."

The Government's flagship plan to increase supply - KiwiBuild - failed. Its most recent move has been to crack down on tax "loopholes" that favour investors over owner-occupiers and lengthen the bright-line tax, which it hopes will dampen demand on existing stock. To increase supply, it's not applied the same tax rules to new builds, and set up a $3.8 billion Housing Acceleration Fund to assist with councils' infrastructure costs. 

National fears that fund will only be allocated after "drawn-out" negotiations with councils, its infrastructure spokesman Andrew Bayly told Stuff, but National's plan is simple.

"The emergency measures will turn the tables from a situation where housing developers have to bend over backwards to get permission to build new housing to a situation where councils are incentivised to make building houses as quick and easy as possible," National housing spokesperson Nicola Willis told Stuff.

The $50,000 payments would be made on every dwelling a council approves over and above its five-year historical average. Collins says this will not only boost supply, but encourage councils to consent apartment blocks.

"I told the Prime Minister I was working on something earlier in the year and now I'm delivering on it," she told The AM Show. "It would be really good if she picked it up and supported us." 

She said if National wins the 2023 election, they will "absolutely" reverse the phasing out of interest deductibility for investors.