The price of land draws housing developers to poorer soils and away from high-priced, high-quality land.
That is evident in Christchurch where, after the 2010 and 2011 earthquakes, the city expanded south onto the light, rocky soils around Rolleston in Selwyn District.
“There is a natural ally in the economics,” Pavletich says.
While concern at the loss of high-class soils is understandable the amount lost to urban development is infinitesimal.
Residential housing for between 1000 and 2000 people requires about a square kilometre.
“It’s not a disaster.
“We need to let economics dictate how land should be used and price signals are the best measure.”
The planning system has created the housing shortage and inflated prices.
“By strangling the housing supply all we are doing is artificially ramping up prices.”
In the 2017 speech from the throne Prime Minister Jacinda Ardern committed the Labour-led Government to increasing Auckland’s housing supply through in-filling and removing the city’s urban growth boundary.
Pavletich co-wrote the Demographia International Housing Affordability Survey, released in January, which found Auckland, Tauranga, Wellington and Christchurch house prices are severely unaffordable.
The report attributed that to urban containment policies or controls on where urban development can occur.
“In NZ, as in Australia, housing had been affordable until approximately a quarter century ago,” the report said.
“However, urban containment policies were adopted across the country and, consistent with international experience, housing became severely unaffordable in all three of New Zealand’s largest housing markets, Auckland, Christchurch and Wellington.”
Tauranga is ranked eighth least affordable out of 92 major international housing markets surveyed and is Auckland ninth.
Buying a house in Tauranga requires 9.9 years of pretax median household income and Auckland 8.8 years. For Auckland it represents an increase of three years since 2004.
Christchurch at 5.4 and Wellington at 5.5 are also expensive.
For metropolitan areas to rate as affordable and ensure housing bubbles are not triggered house prices should not exceed three times gross annual household earnings, Pavletich said.
A Demographia study noted that in contrast to well-functioning housing markets, all the severely unaffordable major housing markets covered in the survey have restrictive land use regulation and overwhelmingly urban containment.
That includes urban growth boundaries, which, the report says, inflate house prices within those boundaries and encourage investment at the top end of the market that has little or no impact on middle income housing affordability.
“In fact, the higher land prices and the resultant higher house prices are consistent with the basics of economics. Virtually across the road land value gaps of ten or more times result.”
The use of urban growth boundaries also contains infrastructure costs and restricts urban sprawl to protect rural land and contain transit services.
The report claims as exaggerated the need to protect rural land, saying added reserves of cultivatable land are available to feed the planet in perpetuity.
“Unless urban fringe restrictions are relaxed enough to restore the competitive market for land, housing affordability is likely to worsen even more.” it said.
Planning Institute chairwoman Karyn Sinclair said the Town and Country Planning Act identified and protected high quality soils considered of national importance when she started work.
That protection was removed when replaced in 1991 by the Resource Management Act because the intensification of production, such as glasshouses, negated the need for broad protection.
While rules discouraging subdivision provide some protection, housing demand in some metropolitan areas in the last 20 years has put pressure on those rules.
If communities decide they want to protect productive soils the best way to achieve that is by a national policy statement that would be included in planning documents.
She described that as a significant step because the RMA is a broad church, established to manage soil, water and air interests and opportunities but also taking in to account community wishes.
Any change to planning laws is a two to three-year process but that time ensures community involvement and inclusion in decision-making.
In rural planning laws livestock farming and forestry are largely treated the same, though some councils have rules protecting distinct landscape values, Sinclair said.
