The Government’s $70.4 million purchase of a large Tauriko farm is “total insanity”.
That’s the opinion of Act Leader David Seymour after it was announced Kāinga Ora had bought Ferncliffe Farm on November 25. The land was independently valued between $72m and 74m.
The agency plans to build 1000 homes on the land, 200 of which will be state houses. A further 200 will be “affordable housing”.
Seymour lashed out at the Government’s housing strategy during a recent visit to Tauranga, calling the purchase “totally nuts”.
But Housing Minister Megan Woods defended the purchase as an example of smart government housing investment.
Local Labour list MP Jan Tinetti also said Seymour’s comments did not do justice to the reality of Kāinga Ora’s skillset.
Seymour told the Bay of Plenty Times the Government should not be borrowing money to bid against private businesses.
He believed the Government in general was not qualified to be involved in housing development. Instead, he thought it should be left to private companies who specialise in that area.
Seymour further claimed the Government would ultimately pay more for the development than businesses would have.
He highlighted rising house prices, debt, cost of living, and housing shortages as problems the Government should be tackling, instead of “making the problem worse”.
Bob Clarkson, a commercial landlord and former National MP, said he bid $37 million for Ferncliffe in 2004, and he thought that was “way over the top”.
In his view, “that [the amount Kāinga Ora paid] is just ridiculous.”
He believed collaboration between the public and private sectors would be the most efficient way to develop housing, although with minimal government involvement.
Clarkson proposed the Government ease regulations and provide infrastructure alongside private developers managing the building.
“In three or four years, you’d have a massive amount of houses done, and the Government wouldn’t have to put any money out.”
In his view, the Government buying Ferncliffe Farms was a political strategy and believed its intention was to appear to be helping the housing crisis, rather than actually managing it.
Woods, responding to Seymour’s comments, said Kāinga Ora was capable of quickly developing land to have affordable, quality homes.
“It’s not surprising other developers, who have their own economic interests at heart, will sometimes be disappointed when they are unsuccessful on land purchases.”
She said Kāinga Ora has strict protocols on what it pays for land, with a general rule to not pay any more than 5 per cent above its valuations.
“This is what smart government investment in housing looks like; unlocking development in strategic locations, increasing the pace, scale, and mix of housing while providing local builders with a predictable pipeline of business.”
“The reality is that private developers won’t deliver the housing Tauranga, New Zealand’s fastest-growing city, so desperately needs, including for public homes, and at the affordable end of the market.”
In response to Seymour’s comments, Tinetti said, in her view, they did not do justice to the reality of Kāinga Ora’s skillset.
She said Kāinga Ora was an urban development authority – as such, she said, it took a “more integrated approach” to housing developments. She said it was nothing like the former Housing New Zealand and was more than qualified for the job.
“They do have the skills in this area.
“I can’t think of a group that are more suited to taking on this [development].”
She believed Kāinga Ora would turn the land into a community, rather than a block of houses.
“I’m totally amazed at how they [Kāinga Ora] have the best interests of this city and this region at the heart of what they do.
“They’re putting people at the centre. They’re not only looking at housing, they’re looking at community.”
In her opinion: “It’s a bit rich for someone [Seymour] to come in from the outside and talk about our area and think that they know what that’s about, when those of us on the ground are doing that work and finding out what’s going on.”
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