More mismanagement, please, ministers demand

"More mismanagement please," insists Minister

In 2002 Sandra Lee's Local Government Act took the shackles off local government, and gave them written permission to build monuments and to blow out budgets. Her Act reversed the legal principle that governments may only do what they are legally empowered to do, and instead said they could do what the hell they like unless there was a law to stop them. And so budgets were blown out, monuments were built, and everyone forgot what councils had been originally constituted to do: i.e, that boring stuff like looking after pipes in the ground.

Then in 2010 Rodney Hide super-sized Auckland's Council, and debt ballooned from around $1 billion in total for the 8 councils smashed together (mainly from Manukau and Auckland) to a figure of nearly $15 billion now. And the mandarins heading the new super-sized council immediately added a whole new layer of super-sized egos to run it, or try to, literally hundreds of new six-figure staff there to attend bigger meetings and build bigger monuments. 

So what lesson do you think the Ministers for Resource Management Reform and Local Government, Chris Bishop and Simon Watts, draw from this? 

Are they to insist, in their last few months of government, that Sandra Lee's Local Government Act be reversed, and councils required to go back to their knitting? Back to a better focus, to those pipes in the ground and on the rubbish on the streets?

Not a bit of it. Instead these idiots are insisting that all councils take lessons from Auckland's monumental disaster. In what appears to be a last-minute lurch to a headline, they have given councils three months (just this side of the election) to come up with proposals to merge themselves out of existence, and those that do not will have mergers chosen for them by Messrs Watt and Bishop.

And all this while Bishop is making a bollocks of his RMA replacement.

We are led by donkeys. In politics, anyway.

UPDATE: And to reinforce the issue, here's the most recent headline on Auckland's local governance: 

'Nerves on edge as Auckland Council finalises record rate rise in cost of living crisis.' 

What sane person would look at that and say: "Let's have more of that around the country?"

It takes a minister ...

Judith Collins's legacy: image over reality.

A career summarised: no ideas, no direction, no success -- and not one car crushed

What does a career in politics achieve? 

This afternoon Judith Collins will give her valedictory speech in Parliament. Journalists call her career "colourful." They call her "Crusher." Let's review what she's done there over the years.

• she was one of 23 MPs who rented their home to themselves at taxpayers' expense
• she was always ready to give the trough a decent nudge -- costing us in 2023 more than $24,200, made up of more than $6000 for accommodation and just over $18,000 on travel (a massive saving for us from 2009 when her limos and international travel were costing us nearly $200,000)
• need we mention using her position to help the export business for which her husband was a director?
• brought down for the first time (of many) by her own Entitle-itis, one wag suggested 'Trougher' Collins would be a better nick than 'Crusher'
• as Police Minister she continued to ensure that gangs could make decent profits on illegal drugs, while also ensuring police focus more on revenue-gathering than resolving real crimes (cementing an image as tough but crushingly ignorant)
• as the #DirtyPolitics saga did reveal, she maintained a disinterest in ideas, and a consequent obsession with scandals and (ineffective) dirty tricks
• and as Police Minister (her only real job) what did she actually do beyond asset confiscation; suspension of your right to silence; and expanded search and surveillance powers for an extraordinary range of government departments? 
• apart from, of course, bringing in pathetic new laws to "crush" cars instead of simply applying laws already on the books -- the main goal of which "seems to be the generation of positive media coverage for Judith Collins"
• as opposition MP in 2007 she stood up on the steps of Parliament to swear total opposition to the anti-smacking amendment; and then one month later filed obediently into the lobbies to vote for it
• in any competition between real action or spin, it was almost always spin she favoured -- even if it made us less safe
• as Opposition MP in 2005 and desperate to be noticed, she did point out that the Labour Government's Working for Families package is an election bribe paid being paid for with voters' own money -- and then as government MP and minister continued to administer the bribe
• keeping alive the tradition of promising and reneging, Collins was happy to be photographed firing a pistol to court the gun lobby (posting one on her own Facebook page in case you missed it); before  being the only National MP to support banning semi-automatic weapons for civilian purposes, and to boast about it
• as Corrections Minister she drove the reintroduction of private prisons -- for the actual privatisation of force, an unconscionable mixing of the dollar and the gun, with all the temptation to corruption and abuse that goes with it
• as Opposition Leader, Collins did promise the National Party would reverse any attempts by the Ardern government to criminalise speech beyond the threshold of "inciting violence," and warned against ending up with "UK-style hate speech legislation that has ended up with people being criminalised and even imprisoned for foolish and silly comments." All good, except that as (In)Justice Minister she had already drawn up much the same thing under her Harmful Digital Communications Act which hit us in 2015
• as Police Minister in 2016 she did correctly observe that the primary welfare problem to solve is not a poverty of money, the premise behind Labour's Working for Families programme, but "a poverty of ideas, a poverty of parental responsibility, a poverty of love, a poverty of caring. ... it is not just a lack of money, it is primarily a lack of responsibility." And then sat back as her Government and Party kept the policy, and did nothing to arrest the real poverty she'd identified
• And just to be clear: 'Crusher Collins never even crushed one car. Not one. (Only three cars in total were crushed under her legislation, all of which were after she was moved on from the job.) Which could be her real legacy: one of image over reality.

On the credit side, 

• she did, as opposition MP, do a mini-Rosa Parks in walking out when women were refused permission to powhiri except from the back of the room
• she did, as leader, once proclaim National to believe in property rights (despite it being National who introduced the property-rights-destroying RMA) and did accurately point out that the ACT Party did not, saying "there they are arguing for more planners doing more planning rather than actually letting people get on with building their houses"
• she did, as leader of that same National Party, lead it to its second-worst-ever election defeat in 2020, with a 19% swing against
• she was one of the two National MPs who signed up to the bi-partisan accord on housing that helped lower rents and begin the blessed fall in over-priced house prices -- and then disgracefully remained silent has her new boss kicked it into touch, delaying real housing reform now for nearly four years.

Judith Collins arrived in Parliament after a decade in law and (govt-appointed) directorships as a young, fresh-faced MP in 2002, eager to solve the country's problems and to advance her own career. Without any ideas to guide her however she did nothing to solve anything, helped expand the role of government, and spent a life in service to the trough.

So, more exposure than most, but in the end no different to any of the other highly-paid beneficiaries there, really.

And now she's off to another taxpaid trough at the Law Commission ...

Collins in 2002: all promise, no substance

NB: Ele Ludemann posts a contrary assessment ...

"Chris Bishop’s primary responsibility is reforming the RMA. ... The bureaucratic class has magnificently undermined his agenda."

"[Chris] Bishop’s primary responsibility, other than completing Steven Joyce’s highway from Warkworth to Whangarei, is reforming the RMA. ... [G]iven how central the reform of the Resource Management Act has been to this government, it defies comprehension that National didn't arrive with a draft ready to go. ...

"The excellent folk at the NZ Initiative have done an analysis of the two proposed [replacement] laws [which eventually emerged]: the Natural Environment and the Planning Bills. Nick Clark, the researcher, concluded, '...in the translation from principles to legislative text, something has gone wrong. Key elements have been weakened, complexity has crept back in, and an extraordinary amount of the systems' substance has been deferred to secondary instruments that do not yet exist.' ...

"The desire to place property rights at the heart of the legislation has been superseded by placing mana whenua into their customary central role in managing the land. ...

"[Also, i]f passed, these bills will not be the final word. That will be left to ‘secondary legislation’, or regulation; binding rules made by the minister of the day that determine how the law is to be applied. The proposal is for parliament to delegate its authority to the executive with minimal oversight. This time next year, Minister Swarbrick could use this secondary legislation to mandate her own vision into reality.

"Did we vote for that? ...

"[T]he bureaucratic class ... has magnificently undermined his agenda. This should have been self-evident thirty months ago ... "

~ Damien Grant from his post 'Chris Bishop has emerged as the main pretender to a shaky crown. How shall we assess his performance?'

It's more like an RMA 2.0

"The Resource Management Act has been amended virtually every year since 1991 and reviewed several times during that period. Yet reform has consistently failed. [See here for reams of examples]

"The RMA ... [has] delivered a housing crisis, $1.3 billion a year in infrastructure consenting costs, 1,175 different zoning categories, and declines in freshwater quality and indigenous biodiversity – the environmental outcomes most directly within the planning system’s control.

"So when the Government set out its ten principles for replacing the RMA in late 2024, there was genuine reason [among some people] for optimism. The Cabinet paper was clear: the new system’s starting point would be the enjoyment of property rights and respect for the rule of law. The scope of what could be regulated would be narrowed. Nationally standardised zones would replace the bewildering patchwork of local rules. Environmental limits would be based on quantitative data and not be overly prescriptive. Consenting would be drastically reduced. ...

"But legislation lives in its detail. And in the detail, something has gone wrong. ...

"Consider property rights. The 2024 Cabinet paper said respect for property rights should be the default position under the new system. But neither Bill mentions property rights as a purpose or among its goals. They are only alluded to in limited circumstances. .... Without safeguards in the legislation, property rights are little more than a pious aspiration.

"Some will say, ‘so what’? The international evidence on institutional foundations of prosperity, recognised by the 2024 Nobel Prize in Economics, is unambiguous: secure property rights and constrained state discretion are preconditions for sustained economic development. As for the environment, the Soviet Union had no respect for property rights. Its environmental record was quite literally disastrous. ...

"The Bills confer far too much power on ministers. They will set national policy directions, national standards, standardised zones, and environmental limits. It might be 2029 before all this is in place. Parliament does not know what those decisions will be. It is being asked to build the frame of a house without knowing its floor plan....

"Clarity is further undermined by undefined terms like “inappropriate development” and “not unreasonably affect others”. These terms sit at the top of the hierarchy. Litigation over their meaning under a new framework is likely here too.

"The Bills are currently before the Environment select committee. It can recommend some principled amendments to align the Bills more with Cabinet’s intentions. One could incorporate Cabinet’s explicit and central instruction to protect people’s ability to enjoy their property. ... clearly defined terms should replace the subjective language in their goals.

"The select committee has an important opportunity to put this right [or at least try to make a pork chop out of a pig's ear - Ed.]. It should take it."

~ Nick Clark from his op-ed 'The RMA reform we were promised is not the reform we got' [Emphasis mine.]

RMA replacements "look like an improvement (which wouldn't be difficult), but it still relies excessively on trusting politicians"

"[T]he replacement of the RMA, it looks like an improvement (which wouldn't be difficult), but it still relies excessively on trusting politicians to protect property rights.

"There is clearly potential for improvement, but I fear that National Policy Statements, once the other lot get into power, could make it all much worse, by having a nationwide de-growth approach to put development into sclerosis. Chris Bishop and Simon Court talk a lot about private property rights, but it's unclear quite how important they are [here'.

"Certainly on the face of it, this isn't a reform that puts private property rights first. It could have, but the idea that MfE (which didn't exist before 1986) would ever do that or that an expert group dominated by planning lawyers would propose that, is a stretch.

"More simply there does not need to be any kind of 'resource management' law. There should be property law protecting people from infringements of property, and there are commons (that aren't going anywhere soon) that need protection from tort and nuisance from private property."

~ Liberty Scott 

Those RMA Replacements: "not a sort of RMA 3.0, but a TCPA 4.0 plus a separate environment thing."

Yesterday I was looking at the announcements. Today I'm looking more at the two replacement Bills themselves, mostly the Planning Bill. [ONLINE HERE.] (Although I can't help noting, of those announcements, that anybody who can seriously assess these sort of changes to produce 46% fewer consent applications, not 45% or 47% but 46%, has a problem only assuaged by a large consultancy cheque).

Still, if the needle were shifted to that extent it would be a start. Would the replacements do that? We have a nation who hopes so, and a Minister who seems to intend so.  But then they all told us back then that the RMA was permissive ....

So, thoughts upon reflection:

** Iignore the major hype. Property rights are still not explicitly mentioned, except as a reference to matrimonial disputes.

** Where they are mentioned implicitly, it's in terms of compensation (see below), and of effects. (Again, this follows the RMA in being allegedly "effects-based." So prepare to be underwhelmed.) Yet whereas the RMA looked at ill-defined and undefinable "effects" like "amenity values," "natural character" and "the architectural style or colour of a neighbour’s house," this seems to be somewhat more objective. A big emphasis is on which effects should be ignored, about which it is quite explicit, and which areas it insists councils meddle (equally explicit, see subsection (2)).

** Contrast all this with a common-law system – something commentators still don't understand. (Here's one ignoramus who thinks the RMA's subjectivism is an example of common law, FFS!). Common Law protections have the unique beauty that they protect both property rights AND the environment—the stronger the property-rights protection, the more the law sets up "mirrors" reflecting back to us our own actions, especially long-term ones. (As Aristotle already knew, when people need to heed their own stuff, they are more careful than when they deal with commonly-owned resources.) Here’s how it could be done. 

FIRST, ENACT A CODIFICATION of basic common law principles such as the Coming to the Nuisance Doctrine (the ideal antidote to zoning) and rights to light and air and the like. 
“Second, register on all land titles (as voluntary restrictive covenants) the basic 'no bullshit' provisions of existing District Plans (stuff like height-to-boundary rules, density requirements and the like).
“Next, and this will take a little more time, insist that councils set up ‘Small Consents Tribunals'…” 

** Anyway, I put that paragraph there to show the distance from that idea. So what do we have here? Much of the format, plans, rules, standards and zones of the RMA are still with us. Councils will still write Plans. The Plans will still have Zones. Zones will have Rules and Standards. A council planner will assess your Consent application. And then you, your planner, their planner, your lawyer and theirs will work hard at it until your bank says "That's enough." Much of that will still be with us, even if terms are changed. 

There will be fewer zones, and fewer plans, but so what? It doesn't matter whether you have 17 rules saying "no" or one-hundred and 17 ... if the rules are still telling you "no." (So ignore the headlines about that announcement as well.) It does mean that much of the law built up in courtrooms over the last thirty years is still applicable. But when much of that law should be shovelled out, that's not altogether a bonus.

** If there is a "balance" required from the law here, it's simply between the rights of land-owners to build and the effect of that choice to build on others' land, and on themselves. Note that each owner has equal rights: the right to peaceful enjoyment of their property—the boundary between land and actions being defined by that right (my rights to do whatever the hell I like, including enjoying my spread peacefully, ending where your equal right begins). That's what good law should (and common law did) recognise. it should recognise it, not restrict it. 

** The RMA had a Purposes heading, Part 2 (sections 5 to 8), around which all parts revolved. What it contained was mostly mush, the residue of the nineties non-sequitur of so-called "sustainable management." It was this wherein judges had to adjudicate on what "sustainable management" might mean for your carport extension, or whether that boundary retaining wall might avoid, remedy, or mitigate any adverse effects of activities on the environment. Or not. (This, for Henry Cooke's benefit, is the source of much of that 'judge-made law' he talks about, not the common law with which he has it confused.)

Instead, the replacement Planning Bill replaces Purposes with Goals. You can see that terms like "well-functioning" and "incompatible" will get lawyers' invoices juiced, but for the most part an effort has been made to keep things moderately objective. Except for section (i), which allows for virtually everything here to be outsourced....

** Compensation: Early opponents and the Property Council have both signalled that compensation from taxpayers for regulatory takings is a big part of both replacement Bills—which is not by any means the same thing as protecting property rights, despite what some people still think.

In the replacement Planning Bill at least, they take this form...

** Standing: I'd understood that to object to an Application one needed to have standing, e.g.., to be a neighbour on whom the effects of an application might have objective and measurable harm. Naturally, section 11(1)(i) above vitiates that, but we'd been told that, for instance, someone from Bluff couldn't object to a project in Kaikohe.

That doesn't appear to be the case (but happy to be corrected).

Sections 123 to 125 lay out the decision-making process around public notification of an Application. But I don't see that "Standing" (i.e., having a sufficient connection to and harm from the action or decision) is explicitly laid out.

** As a halfway house between a council decision and the Environment Court—a sort of limbo-land it might take months/years and several hundred thousand dollars to cross—the Planning Tribunal looks to be useful. Not game-changing, but useful.

** Remember, this replacement is resolutely top-down. Instruction comes from above. Zone are determined. Zones will be prepared with their various Rules and Standards. So a lot still rests for each property owner on what will be included as Rules or Standards with which to comply. For all the talk of "effects," when it comes to the home-owner the rubber hits the road in terms of a Rule or a Standard in a Plan. The more restrictive those Rules, the less one can do without a formal Planning Application. 

The argument of the RMA's authors' was that the RMA was more permissive than the more prescriptive Town & Country Planning Act it replaced because Application would be straightforward, with only 'effects' being assessed by council. But in reality, most home-owners did all they could to avoid an Application's perils. So the Zone's particular Rules and Standards became a sort of lockdown.

The irony is that while the  Town and Country Planning Act gave less scope to go outside those Rules and Standards, it's more prescriptive Rules and Standards themselves were often more permissive than those applied under the RMA. It was more prescriptive, but within that prescription at least one could act. 

There's a sneaking suspicion that with the replacement Environment Bill being separated, and this replacement Planning Bill being based on top-down prescription, that any sense of permissiveness will be similar. That (as one wag put it) what we have in these two Bills is not a sort of RMA 3.0, but "a TCPA 4.0 plus a separate environment thing."

RMA Announcement: Live blogging

1:23pm

It starts badly.

“A core failure of the RMA was the absence of clear direction from central government,” Mr Bishop says.

No. The core failure of the RMA is the complete absence of private property rights. It's starting position instead being: "You need our permission!"

This "reform" promises property rights, but it looks like it simply delivers more planning documents. And little more, if any, permission.

We're promised "fewer, faster plans"; "30-year regional spatial plans"; "nationally set policy direction"; and "planned national standards." So anyone who's ever said "the problem with this country is not enough planners" will be happy.

And what about property rights? “When you put property rights at the core and remove excessive government rules from people’s lives," says Mr Court, "the benefits will quickly follow." 

I'm still looking for how exactly property rights have been put at the core. I'll let you know when I find where he's put them ...

1:25pm

“The new planning system strengthens property rights and restores the freedom for New Zealanders to use their land in ways that affect nobody else." You keep saying that. Show me the evidence.

"Councils will be required to provide relief to property owners when imposing significant restrictions like heritage protections or significant natural areas." So apparently planners imposing restrictions still have more freedom to "use" your land than you do. Righto.

Not going well so far...

1:32pm

"More than 100 existing plans will be reduced to 17 regional combined plans that bring together spatial, land use and natural environment planning in one place, making it easier for New Zealanders to know what they can do with their property." That's not freedom for New Zealanders to use their land in ways that affect nobody else, is it Mr Bishop. That's the "freedom" to act under permission. 

So let me look at the specifics. I don't see "property rights" as a heading in the major release. So let me begin studying topic 'The New Planning System: Simplifying residential development ...

1:37pm

Blah, blah, "clear national priorities" woof, woof "land will be zoned" whitter, whitter "councils will have to ensure there’s enough land and infrastructure" wank, wank "regional spatial plans will guide future development "... It makes you wonder how anything ever got built here at all before town planning arrived here in 1928. 

<searching for "property rights" gives no hits in the document> <searching for "planning" gives me 18 hits>

1:46pm

"Certainty" is promised through "clear long-term spatial plans" telling investors what council planners will allow, and "front-loading decisions," whatever the hell that means. "This means clear rules and fewer surprises," says the boiler plate. Oh, and there'll be "A digital platform [that] will make it easier for you to access information, apply for consents, and track progress." That's nice, isn't it.

A key feature? "Standardised zones and overlays will make planning rules simpler and more consistent across the country." As if it makes a real difference whether there's 17 or 117 different zones and overlays telling you what you can't do. It hardly gives freedom for New Zealanders to use their land in ways that affect nobody else, does it.

"A new Planning Tribunal will offer you a low-cost way to resolve disputes, with limited council appeal rights." Possibly good, but there are still no details on this.

"Councils will also need to respond more quickly to private plan change requests, making it easier to unlock new areas for growth." Given the many problems with making councils respond quickly, how will this work? Given the cost of applying for a private plan change, how will this work?

1:59pm

The document says there will be "less need for consents." Why? is that because there's freedom for New Zealanders to use their land in ways that affect nobody else? 

No, it's because "councils will only be able to consider effects that have a minor, or more than minor impact on others or the environment." This, by the way, is precisely what the present "permissive" RMA allows. In other words, it's just the same.

It's also because, says the document, "design details that only affect the site itself, such as building layout, balconies or private views, won’t be regulated..." Except of course for the "guidance" supplied by several councils that tell you what they expect to see in your application. Oh, and "except in areas [which planners have decided enjoy] outstanding natural landscapes and heritage features." So much rurally where you want to build will still be policed to stop you fully enjoying your land; and many of the areas of our cities that were built before town planning came here will still be policed to keep them as museums. Nice.

So far I've yet to see much difference between the replacement and the original.

Let me look at the heading 'Making it easier to build and renovate your home' ...

2:13pm

Here's the promise: "The new planning system will support the Kiwi dream of improving your home or building a new one without unnecessary cost or delay." What's the reality?

"Standardised zones" blah, blah, as above.

"The public will only be notified about your project if the effects of it (the impacts like noise and shading) are more than minor." So, no different to current law then.

"Only people who are directly affected by a project can have a say." It's a lot of work to make this one small improvement.

"A new Planning Tribunal will be set up to help sort out disputes quickly and cheaply." Nice idea. But still no detail.

"You may be able to get ‘relief’, which means a form of support or compensation, if some planning controls or rules have a big impact on how you can use your land." I have a better idea, which would actually be core to protecting property rights. And it's this: outlaw every single planning control or rule that would have a big impact on how you can use your land. What about that?

This is all worse than a disappointment. Rather than a plethora of sackings of the unproductive, Bishop & Court instead propose to keep town planners hard at work. (Well, as hard as they ever get.) ...

2:32pm

Maybe I should have started with their "Overview" document instead of plunging into the details....

"Property rights" are mentioned seven times here, but only in the promises. "The new system is designed to unlock growth, reduce the costs of much-needed infrastructure, protect the environment and improve resilience – all while freeing up property rights so landowners have certainty and control over their land." That's a promise. Not a delivery.

The "expected outcomes" include "enhanced property rights through regulations that focus on only controlling impacts on the environment and other people." I'm surprised this is an "outcome" and not a guarantee. (And see above.)

"There will also be greater availability of relief," we are told, "if property rights are infringed." But here's the thing: the core is to make law that ensures property rights are not infringed.

"The proposed new system will make the enjoyment of property rights a guiding principle of reform," says the document, "so people can do more with their property." How? There are seven points under this heading including narrowing effects, simpler national rules, new national standards, binding environmental limits, better digital systems, and one Plan per region.

Not one of these seven, not one, gives any guarantee at all of protecting the enjoyment of property rights. I don't want one District Plan per region, I want none. I don't want simpler national rules, standards or limits set by planners, I want none at all, and I want the planners who write them unemployed. This idea of making the enjoyment of property rights a guiding principle of reform is less a guiding principle here than an incantation that, repeated often enough, will allow those sufficiently deluded to be convinced.

But it's not real.

The Bills promise "a fairer system for allocating resources," without defining whose those resources are, why a planner is entitled to allocate them, then admits that it will simply retain the RMA's approach to "allocation" anyway.

This is almost farcical.

The two new replacement Bills do promise "greater clarity and certainty," "clearer direction to decision-makers," and "mak[ing] the system more consistent and predictable." That's two of the four good things that objective law should do. (Protecting rights being the major one, of course, without which....) Big question still is: How?

"The Planning Bill and Natural Environment Bill will each have a clear purpose statement that describes what the Bill does." Without seeing the Bill yet, that's just another promise not a delivery.

3:03pm

Am I being too pessimistic? Well, politicians have promised to "fix" this fucking thing for thirty years, and haven't. More than a generation.  They've pledged to "fix," "fudge," "reform," repair," "enhance," and at most they've made changes to make it easier for governments to build. So every promise to date has been bullshit, and this change will likely be the last chance in my lifetime for any genuine change.  To actually have property rights protected in law. And it doesn't look promising.

Tell me I'm wrong. Please.

xxx:00pm

Not much comment in the Twittersphere, which is perhaps a measure of how little interest there is? A few quips that might have legs. Worth pondering ...

It's possible that this last is the only real nod towards property rights—unfortunate really, since 'compensation for takings' is not by any means the same thing as protecting property rights, despite what some people still think.

9:31am:

Twenty hours after the announcement, ACT's Simon Court (said to be ACT's Under-Secretary for Resource Management Reform and praised by his leader as having "driven the change at a detailed level and his contribution is enormous") is barely anywhere to be seen. No press releases on the ACT website cheering about it. No tweets posting about it.  Just two patsy questions to the Minister, two five-minute speeches to the House about infrastructure and transitions, and a three-minute stand-up with his leader.

Is he embarrassed?

"High house prices are nature’s most reliable contraceptive"

"[A]dvanced economies are halving their populations every generation ... Naturally, everyone blames 'fertility.' As though biology suddenly went on strike sometime around 1992.

"But neither ovaries nor sperm unionised. The culprit is more prosaic—house prices. ... A new study confirmed what few were willing to admit. Housing costs explain more than half the baby drought. If housing had been more affordable in recent decades, decline in fertility would have been smaller by 51%. ...

"High house prices, it seems, are nature’s most reliable contraceptive."

~ Benno Blaschke from his post 'House prices are the new birth control'

15 YEARS AGO: Houses are homes, not investments

A topical guest post from NOT PC first posted here from nearly 15 years ago (well, 13, close enough?) when house-price inflation was already rocketing ...

    Guest post by Vedran Vuk of Casey Research 

Recently, my parents were considering purchasing some real estate. As the financial professional in the family, they asked me, "What do you think? Will it go up in value? You know... not now, but eventually?" I've heard the same thing over and over again. In response, I shared my opinion: "Would you pay the current market price to live there even if its value never increased?" If the answer is yes, buy the property." Essentially, is the house worth it as a home, not as an investment?

In the past few decades, the concept of home ownership has been completely turned on its head. Previously, homes were considered a very long-term consumption good. Do you think anyone in the 18^th, 19^th, and prior centuries ever considered tripling the value of their homes by retirement time and selling them to move beachside? In the vast majority of cases, such ideas never crossed their minds.

Yet, somehow along the way, this became a reasonable investment expectation. Even today, home buyers still make their purchases with the hopes of escalating prices. But are homes really wise investments?

Consider the difference between your house and an investment such as Apple (NASDAQ: AAPL) stock. At a major company, the opportunities can be truly limitless. Apple can produce cashflows from computers, iPods, iPads, and future innovations that are just dreams and concepts today. If the local market is oversaturated, Apple has the option of spreading out all across the world. As a result, Apple's stock price has gone from $17 in 2005 to $540 today. Can your house do the same? Unless there's a hyperinflation ahead or your house is located in the New York City or London of the 21^st century, the answer is no. Why? Because your house is ultimately a product--and products have an upper bound to their prices.

To understand this difference, there's no need to drag out the Case-Shiller Index or analyze complex statistics. Suppose one bought a single-family house over a decade ago for $200K. At the peak of the housing bubble, the price reached $500K; to his joy, the owner sold it and moved thereafter to retire in the Bay of Plenty. Can the house's price go higher from here? With Apple, the stock price can just keep climbing with greater profits and innovations. But is that true with real estate?

For the sake of argument, let's say that prices do keep rising. Eventually, the second owner sells to another buyer for $1 million a decade later. Guy number two also peacefully retires in bounty. Well, where does that leave the third guy? Unless real salaries make an incredible jump in the same time period, no one will be able to afford the home next. The median worker earning $51K won't be selling such a house for retirement; instead, it will take him until retirement to afford it. In many ways, this "investment" more closely resembles a Ponzi scheme. (Yes, Ponzi schemes work: for those who get in early and get out - as the recent real-estate bubble demonstrated.) Ultimately, there's an upper bound to housing prices - they can't continue rising perpetually with no end.

The same is true of any product. At $300 for the newest iPod Touch, Apple might be doing well, but at $10,000 per unit, there likely would be very few buyers. As a homeowner, you're not holding a company that can innovate, cut costs, and enter new markets. You're ultimately holding a product which must be either sold to the next user or leased to the next renter. Houses are a good created for a specific use - to put a roof over one's head. They are not magical money machines. Previous generations understood this very simple concept. One built a home as a place to live and escape the elements - and worse yet, the squalor of tenement housing. Homes were not retirement tools, but rather long-term goods.

Unfortunately, policy makers still view homes as investments and are always worried about low prices. But is it really healthy to play another round of the same Ponzi scheme? Suppose the Reserve Bank manages to inflate housing prices again. There will be another boom in which some folks will make a tremendous amount of money. Eventually, housing prices will hit an unrealistic upper bound. Again, home prices will violently drop, resulting in homeowners deeper underwater than now. Of course, the banks will again take a hit as the mortgage holders. As long as real incomes trail the rise in housing prices, there will ultimately be a correction of some sort.

So, do I think the current real estate market is just fine? No, of course not; but I don't think shocking houses prices back into a bubbly stratosphere is the solution. Ideally, I'd like to see increasing housing prices, but only at the pace of real growth in society's wealth. Over the last few decades, houses grew in value for good reasons and bad. On the good side, the economy had been expanding. On the bad side, central banks’ low-interest-rate bubble artificially inflated housing prices beyond what made sense for economies to sustain.

If US companies such as Apple are creating greater abundance in society, it makes sense for US housing prices to grow with greater wealth. But, bringing house prices higher on a wave of printed cash does not make anyone wise investors, but rather willing participants in a Ponzi scheme where someone else will be left holding the bag. Though that might be an attractive solution for those underwater on their mortgages, it's no solution for the economy as a whole--nor for the next buyer, or the next but one. 

Vedran Vuk is a senior research analyst with Casey Research

'Planning' in two images

 

This is horrifying

[Hat tip Charted Daily]

Grocer barriers

"There are already too many reasons for international supermarket chains to decide our small set of islands far from everywhere are not worth bothering about.

"If an international grocer wanted to set up shop here, land use planning would be a substantial barrier. ... [I]t has taken Woolworths four years to get planning permission for a supermarket in Halswell. Could a new entrant navigate across dozens of councils’ systems when even experienced incumbents have a rough time? ...

"My column ...made the case for a fast-track system for new supermarket entry. ... The government ought to be keen on making sure that kind of entry is possible. ...

"And government definitely should not be doing things that would make New Zealand seem risky, unpredictable, and generally hostile to retailers. ... [The] Grocery Commissioner van Heerden [says] that international food price comparisons that adjust for GST are ‘a bit sort of sneaky.’ ... The Grocery Commissioner’s draft review of the grocery supply code is more worrying. ...

"I still hope the government sets fast-track planning approval for new supermarket entry. But unpredictable regulations give potential entrants one more reason to give New Zealand a miss."

~ Eric Crampton from his column 'The obstacles in place for any new supermarket player'

RMA REPLACEMENT: The good, the bad, and the cattle

Chris Bishop has finally announced his chosen groups' recommendations to replace the RMA.

There's a lot to think through, so here are my first thoughts on their recommendations ...

The good (or not-so bad)

• Property rights gets precisely zero mentions in the RMA, and even less recognition. Here in this report however its gets exactly 25 mentions — a decent number — the first appearing almost as point one, after talking about how the two new Acts would be split up, and even before a section on Te Tiriti [Contents]

• That same hierarchy appears to be reflected in the "Goals." Remembering in law that earlier stated paragraphs/sections/clauses take priority over those stated later, the hierarchy given here is: property rights > separation of incompatible land uses > well-functioning urban and rural areas .> development capacity > infrastructure > natural hazards and the effects of climate change > public access > Māori cultural matters. So if property rights were well-defined and well-protected, that might be sufficient. But see below for the devil ...
• The two replacement Acts (one for environment, one for central planning) are said to "both ... be based on the enjoyment of property rights" [emphasis in the original]. This is stated as "the guiding principle." Good.
• "Both Acts," says the recommendations, "will include starting presumptions that a land use is enabled, unless there are minor or more than minor effects on either the ability of others to use their own land." Good. The devil, of course, is in the detail of how those "effects" are defined, and by whom.
• The RMA was said to be "effects-based," and so are these two replacements. So prepare to be underwhelmed. Yet whereas the RMA looked at ill-defined and undefinable "effects" like "amenity values," "natural character" and "such as the architectural style or colour of a neighbour’s house," this seems to be somewhat more objective. Somewhat. (The problem here being these "externalities" that they talk about, about which see more below. And the all-but certain prospect of regulatory creep to protect "heritage" suburbs and areas of particular "character.")
• "Better recognising property rights," says the recommendations, "requires a more certain regulatory environment so people can know as far as possible what they can and can’t do with their land." The intention is good. 
• It looks like long-existing activities to which new neighbours chose to come (such as speedway at Western Springs, for example) will now be protected. "That is, those that come to the nuisance should not be able to complain about it." Great news, if that's properly done.
• Providing a low-cost tribunal to whom to object to a council's decision is good. (But may not stay low-cost.) And providing "for rapid, low-cost resolution of disputes between neighbours" also sounds good. And that's all that we do need. Maybe a kind of "Disputes Tribunal" or "Small-Consents Tribunal" staffed by experienced part-timers to adjudicate simple no-bullshit disputes about rights to light, to air, to support and so forth based on earlier precedent. In other words, much like an early common-law court ...

The bad (or not-so good)

• The so-called "Expert Advisory Group" delivering these recommendations was established only in September 2024, and given only three months until Christmas to do their job — giving, as they themselves say, only a "short time ... for what is a very substantial task." Given that National in both government and opposition have been talking about "reform" for decades, it seems almost impossible to believe that's when this work first began. And yet, there's no hint from either Bishop or Simon Court (his ACT associate) of any earlier thinking around this. Which would be incredible, right?
• So no wonder "Further detailed policy work will [still] be needed to fully develop our proposals and address outstanding issues and areas of detail." In other words, don't get excited yet. Details .. devil ... etc.
• The Planning Act's purpose is not "protection of property rights" (i.e., part of the very purpose of government); nor yet is it "allowing property owners to exercise the peaceful enjoyment of their property while recognising that same right in others" (i..e, a recognition of where right-based boundaries lie, rather than some subjective "balancing" of rights). So whatever the press releases say, it's not a bottom-up law based on property rights. Instead, the stated purpose is: "To establish a framework for planning and regulating the use, development and enjoyment of land." In other words, it's top-down planning. As will be the related Natural Environment Act.
• The RMA was said to be "effects-based," yet we see how well that turned out! These replacement Acts are also said to be effects-based, with the effects this time "regulated ... on the economic concept of externalities." [Executive Summary, Recommendations, 5b]
• externalities, however, are essentially an anti-concept, i.e., an unnecessary, approximate, and and rationally unusable term designed to replace and obliterate some legitimate concept (much like "stakeholders" or "opportunity cost" are also); in this case it's an economists' way to avoid talking about property rights. And the real cause of many “externalities” is generally that private property rights have not been adequately defined, nor sufficiently well protected! (For example, if property rights are well-defined and well-protected, a downstream landowner could sue in a court of law for an upstream farmer’s action in dirtying the waters.)
• the presumption of the proposed Planning Act
• While both replacement Acts are said to "be based on the enjoyment of property rights," these rights appear to come as  gifts from the state, subject to "approaches to regulation standardised at the national level" and requiring a "justification report" if the"approach" has any departure from that. [Executive Summary, Recommendations, 5c]. And the refusal to recognise or allow ownership of Crown "resources," but only a license, give little motivation to protect that resource, while limiting the ability of these limited license-holders to sue in common law if the resource is damaged by others.
• In a sense this whole thing is irrelevant, since the whole country will still be zoned anyway — zoned according to town planners' predilections, with their own additional "overlays," "areas" and "precincts."  So fewer zones, to be sure: but does it really matter how many principalities it takes to make up a whole kingdom — the fact is that you still have to make obeisance to a prince. (Note here that town planning (with its zones) has only been around here since 1928, and you'll notice that most of those in that alleged profession prefer to live in places built before then. Ever asked yourself why that is?)
• Whatever the headlines might say, the recommendations here still favour inclusion of a Treaty Clause. Less ill-defined than before, to be sure, listing what is said to be "relevant aspects of the statute enacted in light of Treaty obligations." But still there, poisoning all objective law. 
• One of the worst part of the present RMA is the scope given to objectors from anywhere to "submit" on a resource consent application to oppose/delay/kill it off. It's not only unjust, it's illegitimate — only those with standing, in a common-law sense, have the right to object to any "effects" on their property rights (hence the importance of well-defined and well-protected rights.)  That focus on proper standing would, on its own, limit objections to those with a right to mount one, and also kill off the potential for illegitimate objections by trade competitors. But I see nothing here to substantially change this situation. And they still explicitly allow for "public notification" of activities or effects along the lines of the existing Act.
• Providing "for rapid, low-cost resolution of disputes between neighbours" sounds good. So why involve councils at all in disputes between neighbours? (And you can complete the thought by realising that's the only common-sense part of any "planning application.")   Since these Acts still call for council, however, their halfway-house proposal of a "Planning Tribunal" to site between council and Environment Court might at least save some applicants some money. (Unless of course it becomes just another layer in an already lengthy process, or so popular and so necessary — and staffing of these "expert" bodies so difficult — that the delay in being heard becomes unconscionable.)
• Finally, one of the many uncertainties under the present RMA regime is the uncertainty faced by land-owners when "ancestral lands, water, sites, waahi tapu, and other taonga" no longer owned by iwi or hapu, but foisted on present land-owners on the basis of often non-objective oral histories or other unsubstantiated accounts. See for example Auckland's "Taniwha Tax," and other councils' "SASMs." The report nonetheless recommends "that future legislation should retain the existing RMA mechanisms for Māori participation and make further provision for Māori engagement." (The only improvement might be a recommendation for better record-keeping of the decision-making processes around these impositions.

The cattle

So they weren't given much time, and arguably in that short time came up with something better than decades of earlier meddlers and "taskforce" writers did. But who exactly wrote this report? 

We have, to list them all with their chosen "professions":

• an "environmental planner,"  
• an economist "with expertise in natural resource and environmental economics"
• a "resource management practitioner"
• the general manager of Tauranga City Council (infamous for their ill-named "Smart Growth" strategy that made the small city one of the least affordable in the country)
• and a "professional director" who chairs the kingitanga.

Nice. All folk who've made piles of money out of this ill-defined and poorly-written pile of excrement.

Chairing the group is a barrister, who's also made her career from that ever-giving trough labelled "resource management law." ( I was reminded again of Mencken's famous saying that All the extravagance and incompetence of our present Government is due, in the main, to lawyers, and, in part at least, to good ones. They are responsible for nine-tenths of the useless and vicious laws that now clutter the statute-books, and for all the evils that go with the vain attempt to enforce them. Every Federal judge is a lawyer. So are most Congressmen. Every invasion of the plain rights of the citizens has a lawyer behind it.")  

I looked in vain for someone in that list, anyone at all, who might be a business owner or developer who's had their balls in the planner's vice, or a land-owner begging for permission from these grey ones to use their own land. Not a hint of it. Just folk who've been making a killing over many years from their snouts being in that same trough. (There is one bureaucrat who's a policy chap from Federated Farmers — not a farmer although he grew up on one' —who's issued his own minority report essentially arguing for better definition and clarity, to limit the possibility of regulatory creep. )

So what to expect from that group?

To be fair, it's better than I'd expected.

But given how many decades it's taken to start turning this ship around, and this will be the one chance in all that time, it's not as good as it could be.

And there's still plenty of work to do (which is to say too much) for the various species these authors represent.

Furthermore, with the legislation not to be passed before the next election, I'd expect it only to get worse rather than any better. This, you'll realise, is the high point.

Here's the group's own table summarising their main recommendations:

NB: For a more mainstream view (some might say a "less-jaundiced" one) here are the initial reaction from planner Stu Donovan, who is focussed on affordable housing. And some short common-sense thoughts from Matt Prasad.

"Private property rights do not just protect us; they provide the strongest possible protection for the environment"

Cartoon by Nick Kim 

"The solution is simple: Don't tinker with the procedures for acquiring a Resource Consent. Don't tinker with the Environment Court. Don't 'recraft' the RMA. Don't 'streamline it, don't 'fix' or 'reform' it. 

    "Instead, drive a stake through its heart. [Draw up transitional measures] to reinstate the common law protections of property and environment -- and then get the hell out of the way."

          ~ me, writing 20 years ago in the NZ Herald

"New Zealand has had nearly a decade under the RMA, under planning legislation that abolishes property rights and provides no environmental protection...In doing so we have ignored eight centuries of common law that protects both.

~ me 23 years ago, writing on 'New Zealand's Persecuted Minority: Property Owners' 

"Protection of property rights is amongst the chief reasons for which governments are constituted, yet successive NZ governments over recent years have not only ignored your property rights, but have actively sought to remove them. ...

"New Zealanders who once themselves understood the crucial importance of property rights now seem bemused by their lack, until perhaps they themselves find they can’t build on their own property, can’t cut down their own trees, can’t use their property in ways they always have, or find that control of their property has been passed to someone else … and that someone carries a clip-board and must be called ‘Sir’ … and we must pay that person for the privilege of asking them permission to do what we want to on our own land.
It’s not right.

"Author Ayn Rand once observed that when the productive have to ask permission from the unproductive in order to produce, then you may know that your culture is doomed. Aren’t we there now?

The productive have been asking permission from the unproductive in order to produce … and you haven’t been getting it, have you. Not without a fight. Not without iwi consents. Not without a large legal bill, and several weeks months spent with a consultant.

"There is a litany of projects across the country – projects both large and small --that have never and will never get of the ground – permission having been sought at great time, energy and expense, and permission never having been granted. The number of large infrastructure projects completed in the last ten years can be counted on the fingers of one foot.

"[And there are uncountable small projects, things that you and I would have once attempted], that are just stillborn; never to be tried, as people realise that there’s no point in planning projects and paying for consultants and for permission that will never be granted.

"And there are people who have now realised that their land is no longer their own, since ownership means nothing when you must ask someone else’s permission in order to use that which you own.

"It’s not right.

"We’ve lost our property rights, and we’ve lost the understanding of why property rights are important. What we’re losing is part of our heritage: part of what made the West rich, and part of what protected our freedom, our liberty, and our lives.

...

"The need for a legal framework protecting property has been long ignored or taken for granted by economists and legal theorists of all stripes, but its importance is slowly being re-understood by contemporary thinkers. Tom Bethell’s landmark book 'The Noblest Triumph: Property and Prosperity Through the Ages' traces successes and disasters of history consequent upon the respective recognition or denial of property through the ages: Ireland’s potato famine, the desertification of the Sahara, and the near-disastrous US colonies at Jamestown and Plymouth can all be traced to lack of respect for property.... 

"Bethell identifies four crucial blessings of property that can't easily be recognised in a society lacking the secure, decentralised, private ownership of goods. These are: liberty, justice, peace and prosperity. The argument of [his] book is that private property is a necessary (but not sufficient) condition for these highly desirable social outcomes.

"Property rights then give us a firm place to stand deserving of legal protection — a Turangawaewae. Their full legal and constitutional protection is crucial, in order to ensure that their protection is not taken away by arbitrary legislative fiat, as has happened over recent years. ...

"The most glaring recent example of the destruction of property rights by legislative fiat is that of the Resource Management Act (RMA). In all the nearly five-hundred pages of the RMA there is not one reference to property rights — not one! — yet it is people’s property and their use of it with which the RMA deals directly. ...

"Private property rights do not just protect us; they provide the strongest possible protection for the environment, since owners with clearly defined and secure property rights have a strong incentive to care for their own land. Our property rights act like ‘mirrors,’ reflecting back on ourselves the consequences of our own actions.

"[Properly directed, as the common law was once allowed to,] they also give us the power to act as guardians against abuse by others — specific legal power to act against those who would damage the environmental values of our property.

"As property rights are eroded however, people become less willing to invest in good stewardship because they are uncertain as to where the benefits of their labours will finally accrue.

"Most damage to the environment is the result of ‘the tragedy of the commons’ whereby people are encouraged to ‘take the last fish’ or ‘cut down the last tree’ because if they don’t, then someone else will. Property rights solves the ‘tragedy of the commons’ by defining ‘whose tree’ it is, and by giving secure legal protection to those planning longer range by planting trees.

"As Hernando de Soto argues, property rights extend people’s time horizons by allowing them to plan longer-range rather than shorter. In jurisdictions in which property rights are not secure, he writes, it will be observed that people will build their furniture before they build their walls or their roof. The reason for this is that without the protection of property rights, such short-term action is rational: property in such a jurisdiction needs to be kept mobile as property cannot be kept secure. As property rights become more secure time horizons become longer, and planning can become longer range."

~ me, from a 2005 speech on property rights

RELATED:

• 'It's Time to Drive a Stake Through the Heart of the RMA' - Peter Cresswell (2004)
• The problem is not dirty dairying; it's still dirty government (2018)
• How the RMA continues to protect polluters (2015)
• Amy Adams’s meddling dirtier than the dairying (2014)
• The Common Law: How it Protects the Environment – Roger Meiners & Bruce Yandle
• Cue Card Libertarianism -- Common law (2013)
• Water Markets: Priming the Invisible Pump – Terry Anderson & Pamela Snyder, PERC REPORT
• Without Obstruction, Diversion or Corruption: The Power of Property Rights to Preserve Our Lakes and Rivers – Elizabeth Brubaker, ENVIRONMENT PROBE
• The role of property rights in protecting water quality - Environment Probe
• The state can't protect the environment – markets can – Fred Smith, NOT PC (2017)
• What would Party X do about the environment? Part 2: A Nuisance and a BOR – (2011)
• Environmental Water Markets: Restoring Streams Through Trade – Brandon Scarborough, PERC REPORT

Another National tax grab

Leadership aspirant Chris Bishop headed to Auckland recently to tell us of the grand plans he will very kindly allow us to build. But before that, a new tax.

David Farrar kindly ssummarises. I unkindly fisk ...

Bishop says: "Congestion stifles economic growth in Auckland, with studies showing that it costs between $900 million to $1.3 billion per year. Congestion is essentially a tax on time, productivity, and growth. And like most taxes, I’m keen to reduce it."

Yes, congestion stifles economic growth. Yet little has been to arrest it. And over the last dozen or so years councils and transport ministries and bureaucracies have done everything to promote it, with transit lanes, bottlenecks, speed humps, speed restrictions, cycle lanes, bus lanes, no-right-turns, no-left-turns, pedestrianisation, beautification ... anything but combat traffic congestion.

Sit beside almost any major Auckland thoroughfare and you'll see that useable traffic lanes at rush-hours have nearly halved, while traffic has nearly doubled. A few nights back around 10pm a friend and I sat beside Hobson St — a near-motorway that once had six lanes or so allowing motorists to get out of the city on her motorways. Those lanes are now halved (with beautification works, don't you know, as part of John Key's bloody Convention Centre white elephant) and even at 10pm motorists were in a jam.

Will Bishop improve mobility?

Will he hell: he intends instead to make mobility more expensive.

Bishop says: "The government will be progressing legislation this year to allow the introduction of Time of Use pricing on our roads."

As commenter Bill says on Farrar's thread: "OK so another tax. Is there no problem the government thinks can’t be fixed without more taxes?

"We the motorists already pay for the roads with petrol tax and registration fees. How much of this money has been spent creating traffic bottlenecks, humps, removing free left turns etc? How is any of that helping with congestion? This latest tax proposal should be vehemently opposed. The money squandered on all the traffic obstruction should instead be spent on facilitating the uninterrupted flow of traffic. It sounds like they want to tax motorists to fix a problem that they themselves created. This is not incompetence, it is villainy."

Bill is right.

Bishop says: "Any money collected through time of use charging will be required to be invested back into transport infrastructure that benefits Kiwis and businesses living and working in the region where the money was raised."

Bishop is bullshitting.

Nicola Willis is so short of the readies already that she'll be overjoyed to grab as much of this windfall as she can. And if not her, then as soon as things are "bedded down," your next finance minister will have his or her hand in your pocket to root around in your small change. Don't doubt it.

Bishop says: "Modelling has shown that successful congestion charging could reduce congestion by up to 8 to 12 percent at peak times."

As every hired modeller knows, modelling will show whatever the modeller's hirer wants it to show; it all depends on the parameters chosen for said model. Sure, make something more expensive and (depending on one's marginal utility) then less of that thing will get utilised. But if the marginal utility of getting around is high enough (and it probably is) then Bishop's new tax will just make getting around more expensive. And we'll still be congested. And poorer.

Bishop says: "New Zealand can raise our productivity simply by allowing our towns and cities to grow up and out."

Well, duh.

Some of us have been arguing for years that up-and-out will make Auckland both more liveable and affordable. (Productive? That's an odd one to claim.) But with developers and builders having to sit on their hands while Bishop's bureaucrats rewrite the RMA to say what councils will allow developers and builders to do — to relieve the uncertainty since Bishop and his boss canned the MDRS — it seems like we're as far away as ever. And that uncertainty is hardly making developers and builders more productive ...

Bishop says: "My aspiration [for Auckland] is ..."

You know, frankly, it doesn't matter a shit what Bishop's aspirations for Auckland are! Because given the piss-poor popularity of his boss, and the pathetically slow promise to abolish and replace the RMA (to protect property rights, we're promised, and to finally give some certainty to those developers and builders) then  it will be too damn late this term for any changes at all to be made, and next term he'll have lost his chance.

And this time, three years from now, we'll all be sitting here in exactly the same position.

Only by then we'll (maybe) have a new train set.

And we will have bloody Bishop's new tax.