Here’s the key news in Aotearoa’s political economy over the last day or so around housing, climate and poverty, along with analysis and detail in the video and podcast above, and in the PDF of the presentation attached below, for paying subscribers:

* The Lead: Auckland Council opted last night to recommend its two least intense housing supply plans for local boards to consider, which its economists advised would mean Auckland’s house price inflation would be 4-6% higher and its economy would be $3.9 billion smaller than if they had chosen two other plans that allowed up to an extra 600,000 homes to be built.

* The Sidebar: Politicians and the voters they serve are simply responding to the taxation and investment settings in our political economy that benefit the largest number of voters, given landowners vote at much higher rates in local elections than renters. Those settings (no capital gains tax and the 30/30 fiscal rule) mean the safest and highest returning investment after leverage and tax for any household is in leveraged residential land. These settings also mean both central Government and councils restrict infrastructure investment and maintenance to repress state spending and debt below the arbitrary level of 30% of GDP, while also encouraging strong population growth from migration to boost GDP and taxes.

* The Bottom Line: The combination of underinvestment in infrastructure and housing in combination with high population growth helps reinforce the ‘success’ of these settings, amplifying spirals ever higher for land values and ever lower for productivity growth. Little will change without those tax and fiscal settings changing, in my view.

* The Quote of the day is from Auckland Councillor Shane Henderson, who argued in the meeting last night for the plan to add the most housing: “I don’t understand why we have these conversations all the time and we don’t see enabling housing as an opportunity, as a chance for more economic activity, for diverse beautiful neighbourhoods that more people can enjoy.”

* The Scoop of the day is via Charlie Mitchell for The Press-$ about how Children’s Minister Karen Chhour expensed $16,686 for parking at Auckland Airport over nearly nine months.

* The Chart du Jour shows how the two plans chosen by the Auckland Council last night will see around 75% of new housing built more than 10km away from the city centre. (See below and in the video above)

Paying subscribers get the full Picks n’ Mixes below and access to Substack Live Chorus sessions, along with the PDF of the presentation used in the Substack Live attached below. If we get more than 100 likes I’ll open it up for the public.

Landlord Nation wins again in latest Auckland housing vote

Last month New York’s new Mayor Zohran Mamdani cited the extra housing supply enabled by Auckland’s 2016 Unitary Plan as one of the shining lights his city should emulate when trying to use a supply shock to improve housing affordability.

After last night’s decision, he may not want to include Auckland on his shining light list. The Auckland Council decided against recommending two options for housing densification that would have increased the city’s housing capacity by as much as 600,000 to 2.0 million. Instead, they chose the two least intensive options that are likely to limit supply to around 1.4 to 1.6 million. This was after the Government decided earlier this year to slash its original Plan Change 120 capacity from 2.0 million to 1.4 million.

It could have been worse. Putting forward two options, including a slightly more intense one, allows the possibility of one with a slightly higher capacity than 1.5 million, albeit still with most new housing only possible outside a 10km radius of the CBD. (See chart of the day below)

Here’s the four options: the Council chose to present options A and B to local boards.

This came after the council was advised Option or Scenario D would generate lower house prices and up to an extra $3.9 billion in economic value from more homes and productivity.

How did this happen?

It’s another win for Landlord Nation and reinforces the powers in a political economy dominated by the twin incentives of a lack of a capital gains tax and fiscal rules that push constantly for less public investment and maintenance in infrastructure, combined with ever-higher population growth.

Chart du jour: Choosing sprawl in a map

Today’s Top Six Pick ‘n Mix

* Scoop by Charlie Mitchell for The Press-$: What one minister’s airport parking bill reveals about MP spending

* Scoop by Joel MacManus for The Spinoff: Government spending $300k per year on unused limos for former PMs

* Deep-dive by Glenn McConnell for Stuff: ‘Mayhem’: Police and social workers raise alarm about government cuts hitting kids

* Deep-dive by Mandy Te for Interest: IAG NZ advocates 15-year roadmap to reduce NZ’s natural hazard risk

* Op-Ed by Te Pāti Māori for Stuff: Te Pati Maori: Whānau are navigating a fuel and cost of living crisis in addition to a public health system that requires urgent transformation

* Column by Henry Cooke for The Post-$: Becoming a politician could ruin your life, but it does pay well

Scoops & Breaking News

* Justin Hu for RNZ: Bid to strip Auckland housing plan to bare minimum defeated

* Andrew Bevin for Newsroom Pro-$: Freightways warns new levies ‘significantly distort’ courier market to favour NZ Post

* Lillian Hanley for RNZ: ‘Constitutionally abhorrent’: Expert reveals his advice to govt on climate law change

* Reuters: Trump says Iran downed Apache helicopter, US must react

The Rest of the Picks n’ Mixes

Timeline-cleansing nature pic: Rustic charm

Ka kite anō

Bernard

PS: Here’s the presentation I used above in PDF form.

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