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National's U-Turn on Housing throws the Party into Treacherous Waters

One News is reporting the National Party is "U-Turning" on the bi-partisan accord it signed with Labour for denser housing, allowing for three story townhouses to be build on most residential land in our big cities. That change is dangerous for four reasons.


First, it is bad economics. Several years ago we invited out to NZ the world's leading urban economist, Edward Glaeser. In his book, How Skyscrapers Can Save the City, the Harvard scholar puts the high-rise at the heart of a newly accessible, affordable, vital and sustainable metropolis. The city that doesn’t build up must build out, Glaeser points out, sucking up resources, lengthening commutes and putting pressure on undeveloped land. He sees densely populated, vertical cities not only as environmentally responsible, but as engines of innovation and prosperity. Expanding Auckland into "green fields" would be a mistake.


Furthermore, it heightens economic policy uncertainty - how can anyone planning to build apartments now have faith that the rules wont be changed again, leaving them out-of-pocket? National has thrown long-term planning into doubt and confusion.


Second it raises suspicions that National is getting terrible economic advice, including from the likes of KiwiBlog and its affiliates, who wrote a few weeks ago, "The only serious way to reduce house prices is to increase supply, and that means cities need to both build up and build out. Just doing one without the other will not work". Not true, according to Ed Glaeser. You don't have to be a genius to work out that cities like Singapore can't build out even if it wanted to, and instead built up, and enjoyed wild economic success.


Third, it looks like the decision maybe driven by lobby groups. Folks in posh suburbs have no doubt been giving Luxon a hard time about 3 story buildings going up next door. If there are issues over how they look, then those issues should be addressed, but banning them as a result of upset wealthy folks is a bad look for National.


Fourth, it makes the Nats look like a party under pressure, consumed with self-doubt. Is it nervous about losing their heartland Tamaki electorate where ACT's Brooke van-Veldon is standing? Could the bed-rock of National's support have been so riled by the re-zoning that the issue became an existential threat to the Party? Is the U-turn designed to prevent ACT gaining too much power at the election, weakening National to the extent that even if National-ACT won, then the former would have to cede huge powers to David Seymour?


Luxon must build trust that he's boss of a new National Party that respects the likes of Ed Glaeser, who has proven how cities play a crucial role in productivity growth - but only when people are physically close & can share & build on other's ideas. That cross-fertilization doesn't happen with one person living in Whangaparoa and another with whom she is trying to collaborate near Bombay Hills, which are a two hour drive apart in traffic, though both are called "Auckland City". Working from home on Zoom doesn't crack the innovation job.


National must reassure the country it is not blowing in the wind, ready to change policy because a party donor rails at one of their MPs at a Cocktail Party about flats going up next door. This is a bad look a few months out from the election.


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