The “Productivity” Commission’s housing affordability report

The news has been awash lately with views and opinions on the Productivity Commission’s housing affordability report. The same old diatribe is brought out saying that more land needs to be freed up for more urban sprawl (1). This is somewhat of an oxymoron coming from a commission that is supposed to be all about productivity. By increasing urban sprawl, we will inevitably reduce productivity by smothering hundreds and thousands of hectares of productive agricultural land with concrete, asphalt and ticky-tack. Not to mention the inefficiencies of continued reliance on the private car for transportation, resulting in increased traffic congestion. The list could go on.

Not only is continued urban sprawl a recipe for decreased productivity, it is also presents a moral dilemma. Our major cities (Auckland, Hamilton, Tauranga and Christchurch) are surrounded by some of the most productive agricultural land in New Zealand, if not the world. By effectively destroying such land as a result of urban development, we are reducing the ability of future generations to feed themselves. Not only that, but in a world of 7 billion and growing, productive land in becoming scarce. ‘The United Nations has completed the first global assessment of the state of the planet’s land resources, finding in a report that a quarter of all farmland is highly degraded and warning the trend must be reversed if the world’s growing population is to be fed’ (2) .

As usual the elephant in the room is ignored. Population growth, due to natural increase and continued net positive migration is the largest driver in housing demand. Our Prime Minister has said that his government would look to continue the trend of net positive migration to New Zealand, thereby affirming that his government is committed to ensuring New Zealand continues on the path of unsustainable population growth and that housing affordability continues to decrease. (3)

Obviously much of natural increase is a good thing due to longer healthier lives, and migration brings richness and diversity to our nation. However, we must acknowledge the consequences of continued population growth and the impacts it will have on future generations in New Zealand and the World. A growing population may not increase productivity but it will increase consumption, and increased consumption will result in economic growth which every government must deliver for the benefit of…if I may borrow from the occupy movement…the 1%.

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