Tuesday, June 11, 2013

What Local Governments Do

New Central Gubmint legislation could "potentially neuter a big part of the what this country's local governments currently do"

Which is (e&;oe):
  • restrict land supply against a rising demand thus causing ECON101 price rises
  • as the first side effect, handing a luvverly CG to a selected lucky few landowners
  • as the second side effect, watching as that vastly increased land price for undeveloped land instantly transmits itself across all comparable developed land plots in the adjacent market, thus multiplying the initial if localised CG thinly across that entire market.
  • as the third side effect, handing banks and financiers a vastly increased interest revenue stream, as eager or desperate buyers borrow to buy said plots (existing or new)
  • effectively lock out new entrants to the housing market
  • effectively transfer development to the many thousands of lifestyle blocks outside the MUL/RUB or other squiggle on a map
  • levy fees, contributions and other costs upon any and all attempts to develop the land or densify existing properties
  • add multiple cost layers to any attempt to develop, densify or otherwise improve properties in a way which attracts a resource consent (a sampling: pre-application consult, require engineers/surveyors/feng shui consultaterations, inject time into processes, impose conditions during the process)
  • display a breathtaking ignorance of such basic economic fundamentals as supply and demand, or the time value of money
  • make decisions, plans, policies and processes which (what else) ignore economic fundamentals
  • act rilly, rilly surprised when one of the following occurs:
    • massive public opposition to cherished policies and plans
    • first home buyers throw in the towel
    • developments Unexpectedly are cancelled or deferred (Always the U-word!)
    • people don't want to live where and how the Planners want them to live

For the life of me, I just cannot imagine why a Gubmint would want to clamber in and alter Any of the above.....

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