S01E03 - Local Councils: Lot's to do, No Money to Do It

It turns out 3 Waters was about a lot more than water

Summary

Local councils in New Zealand are contributing to the housing crisis due to debt restrictions and limited central government support. This hinders infrastructure development and leads to restrictions on local development. Changing incentives and providing councils with tools to finance infrastructure can help address this problem.

Highlights

[0:00] Local councils are contributing to the housing crisis in New Zealand due to debt restrictions and limited central government support.

[1:52] Councils face poor incentives to enable growth as they receive only a slight increase in their rating base compared to the cost of enabling growth.

[10:55] Council inspections and the consenting process can be burdensome for builders, leading to potential gray market activities, but councils have reasons to be cautious due to liability risks.

Key Insights

[3] 🏗️ Local councils in New Zealand have poor incentives to enable growth as they receive limited financial benefits but face high upfront infrastructure costs

[4] Enabling growth and housing development requires changing incentives for councils and providing them with tools to finance infrastructure, allowing them to share in the benefits of growth.

[5] 📋 The consenting process can be burdensome for builders, but councils have liability risks and can be held fully responsible for building failures, leading to cautiousness in the process.

[6] ⚖️ Balancing the need for growth and development with quality control and liability concerns is a challenge for local councils, and finding a middle ground is crucial for addressing the housing crisis.