John Walsh (JW): Mr Twyford, since the election your ministerial responsibility has extended across areas that previously were discrete portfolios.  

Phil Twyford (PT): There were three housing ministers in the last government and we decided we needed an integrated approach that treats housing, the built environment and transport as one system, so we brought them all together and added urban development to broaden it out to a much more holistic picture of our towns and cities.

JW: What’s your personal background, Minister?

PT: I’m an Aucklander born and bred. My parents were migrant Brits – my mother raised five of us on her own. I was always argumentative and idealistic, a typical Kiwi in many ways, always batting for the underdog. My teen years were in the 1970s, and I was influenced by the great social movements of the time – around the treaty and Māori land, the environment and the anti-nuclear movement. 

I did a degree in politics at Auckland University and then worked as a union organiser and journalist. In my late twenties, I was one of a group of people who set up Oxfam in New Zealand. I spent nearly a decade working here for Oxfam, and then spent four years running Oxfam International’s campaigning and policy out of Washington DC.

I came back to Auckland with my family in 2003 and spent a few years doing political work with the Labour Party, and was elected in 2008. I’ve been in parliament for a decade, and through the years of opposition I carved out an interest in cities, infrastructure and housing.

JW: Were those your interests, or were you told to be interested in them?

PT: In politics, it’s often the latter. I had just been elected and the Royal Commission on Auckland Governance was about to hand down its report. It occurred to me this would be one of the biggest issues in the next few years, so I put my hand up for it and I became the Auckland Issues spokesperson. The housing crisis was starting to really have an effect in Auckland. We had to start asking some hard questions about why.

JW: How do you define ‘housing crisis’?

PT: We talk mostly about affordability, but there are a whole lot of things. You have a generation of kids growing up in cars and garages – literally. We’ve now had three successive winters of worsening levels of homelessness. We have rapidly falling rates of home ownership and some of the most expensive housing in the world relative to local incomes, and household debt has ballooned.  

JW: This situation, or ‘crisis’, grew at pace under the administration before yours. Was that a matter of neglect, political expediency or ideological orientation?

PT: A mix of all three. Many of this country’s housing problems have their roots in decisions and policies that are 30 or 40 years old. The last government didn’t create the crisis, it just failed to do anything meaningful about it.

JW: Because?

PT: I think [former Prime Minister] John Key was fundamentally of the view that some people were making money because house prices were going up and that was a good thing. The other factor is the longstanding orthodoxy of New Zealand politics, across all political persuasions, that the housing cycle is so powerful you don’t try to get in the way of it. The view that these things are too complex and too powerful for governments to change, and that when house prices go up, voters get happy and home owners vote – that’s been the orthodoxy for a long time. But what the last decade showed was that New Zealanders feel deeply uncomfortable about their kids being shut out of the same kind of opportunities our generation took for granted.

JW: New Zealand did not always believe it was helpless in the face of economic cycles. Look at the home-building programme of the first Labour Government, for example.

PT: And in the decades following the Second World War, through to the advent of the neoliberal era, successive governments intervened in the market to try to deliver better housing outcomes. There have always been housing shortages, there have always been cycles, there have always been concerns about poor quality housing, but for a long time governments intervened to try to get better results for people. There were measures such as state advances to homeowners, capitalising the family benefit, and working with group home builders to build volume housing. These were really full-throated interventions in the market. 

Prior to the 1980s, we achieved some very high rates of home ownership. Then the idea took hold that you should get the government out of it, and the market will look after itself. Now we spend $2 billion a year subsidising rents. I wish we could spend that money better.  

JW: Let’s talk about the place of design in your portfolio areas. Design is a word you’re not afraid to use – your immediate predecessors in office were more ambivalent. You’ve lived in different places and travelled around the world. Have you been conscious in that time of the design quality of buildings and the urban environment?

PT: I’m not a design expert, John. I’m very much a lay person in this. One thing I do remember from Auckland in the 1980s, during the share market boom and speculative frenzy, is seeing a generation of amazing heritage buildings in Auckland being destroyed. I remember standing with all the protestors outside His Majesty’s Theatre on Queen Street. I lived in the States for year when I was 17 as an exchange student and spent time in San Francisco. I loved San Francisco – the urban experience of it. Later, I travelled through Asia and Eastern Europe and spent some time in London. I’ve always loved cities – their density and the human scale of street life and neighbourhoods.

JW: Well, density is another ‘D word’ that we have issues with in New Zealand, given the long post-war suburbanisation of our cities.

PT: There is a lot of mythology. One of the silver linings, perhaps, of the housing crisis in Auckland over the last couple of decades has been that it has made people think about things and see things a bit differently. It’s not just that the economics of the housing crisis make density and smaller plot sizes necessary, it’s also a changing demographic. New Zealanders who’ve lived in places where urban density is just part of life, and young people who don’t necessarily want to own a car and live the ’burbs, are much happier living a more urban lifestyle. And there are now some good precedents for denser urban development, like Beaumont Quarter in Auckland and Zavos Corner in Wellington.  

The old model, the 1950s model, of urban development is essentially single-storey, standalone, suburban bungalows on large sections. Cities expanded out horizontally and we built roads and motorways to get to reach them. That model is basically dead. 

JW: To you, maybe, but not to outfits like Demographia which advocate for greenfield development as the solution to housing supply and affordability. 

PT: Demographia only gets part of the solution. I’m not, and our government’s not, in favour of urban containment – of stopping cities from growing out in the hope that they’ll only grow up. That creates the appalling urban land markets that are at the heart of many of our problems.

JW: This is where your portfolios are interesting. On the one hand, as housing minister, you want to encourage denser habitation of available land. Then, as transport minister, you have to deal with the implications of allowing urban expansion.

PT: To stay with density for a second. There are a number of things we’re doing about that. In Auckland, the Urban Development Authority is going to be charged with leading mostly large scale brown- and greyfields projects in the city. Large scale, urban regeneration projects and density done well are big parts of what the Urban Development Authority is about.

We need to build a transport system that can sustain this kind of urban growth. That’s why it’s our really big priority to build a rapid transit network across the city that is the backbone of the whole public transport system. Thirdly, David Parker, [Minister for Economic Development and the Environment], and I are working on changes in national direction through the [Resource Management Act] in the form of a national policy statement. That will require all of our councils to free up height and density restrictions to encourage quality intensification. 

JW: What is ‘dense’ in the New Zealand urban context? Twenty-storey buildings? Five-storey buildings?  

PT: Much of the value that we think we can get from increased density will be from medium density, so up to three-stories across our suburban landscape. 

JW: Three storeys is a low bar for urban intensification.

PT: It is, but three-storey developments can be walk-ups, and the economics of them work well. They provide a human scale and they deliver a density that makes for vibrant neighbourhoods. As long as you don’t have rules that are stopping people from building up, you’ll get more density naturally, and you’ll get more height. We need to allow that to happen. Around rapid transit interchanges, we should be allowing 10 or 20 stories. In the urban core of our cities, in the CBDs, why do we have any density restrictions at all? The sky should be the limit.

JW: Okay, and what happens on the outer edges of our cities?

PT: Our view is that if you don’t allow a city to expand on the fringes, you artificially limit the supply of new land and then you just create very expensive urban land across the whole market. if you don’t allow the city to grow out, you never deal with the problem of land prices. Cities have to be allowed to grow but you have to build proper transport systems, including rapid transit and rail, to support urban expansion. And you have to ensure that communities are not subsidised to build out on the fringes and in the countryside – they have to carry the cost of their own infrastructure.

JW: The market knows you will allow expansion as well as intensification so aren’t you inevitably encouraging land banking on the city fringe?

PT: We’re are going to deal with those land bankers, though. 

JW: How are you going to do that?

PT: Land bankers game the distinction between rural land and urban land. They wait for the zoning to shift. Under the system we’re moving towards, that distinction will no longer apply. A decision about a new development will be on the basis of whether it’s commercially viable and whether the developers are prepared to take the commercial risk and whether they can fund the infrastructure to support it. If they can’t, they won’t do it. They won’t be allowed to do it.

JW: When you got into power and looked at the bureaucratic landscape in Wellington, where did you think the mechanisms or the means to achieve your ambitions were located?

PT: We realised early on that the public sector simply didn’t have the capacity and the capability to implement our reform agenda. The capacity in this area was scattered across several different ministries and departments, and there was no clear focus of accountability or expertise. That’s why, in our first year, we established the Ministry of Housing and Urban Development (MHUD). The idea is to have a ministry that is responsible for all of housing and urban development, the whole system, and has the wherewithal to be the public sector leader on all those issues. 

We’re also about to bring legislation to the Parliament to establish the Housing and Urban Development Authority (HUDA), which is the delivery agency that will be responsible for the whole build programme. It will have Housing New Zealand and all of our public housing sitting in it. It will be responsible for large-scale urban development projects. All of the procurement – for KiwiBuild, emergency housing and all that work – will sit within the Housing and Urban Development Authority. 

We’re building capability that hasn’t existed for 40 years, since the abolition of the Ministry of Works and State Advances.

JW: Yes, the Ministry of Works. When it was around, and when there was a Government Architect, you had people inside government and the bureaucracy who were committed to a social building programme. Now, we have the Ministry of Business, Innovation and Employment (MBIE).

PT: There’s no shortage of will and commitment within the public service to make this work. It’s a matter of providing the leadership and putting in place the structures, resourcing people properly and giving them direction. I feel quite optimistic about that. The Housing and Urban Development Authority is going to be a challenge, though, because government hasn’t seen this kind of work as part of its job description for decades.

JW: You have talked about embedding design in government processes and departments. How do you do that?

PT: Good design will allow us to build neighbourhoods that are safe, that people are happy to live in, are functional, efficient and easy on the eye and all of those things. Design is the thing that will unlock so many of these challenges. Government doesn’t have a magic wand. It can’t solve all these problems on its own. It’s really about trying to affect a system change, so that all of the other actors in the system, like local government, the broader community and the private sector are aligned. Design is the thing that I think people really understand.

JW: Do you really think so?

PT: I think that when people live in a house that really works or a house that is warm and dry, they go, “Wow, that is great.” When people walk around Britomart or the Wellington waterfront they go, “This is good, this is really nice. Why don’t we have more things like this?” When they see neighbourhoods or street environments that are vibrant and attractive, I think people get that. And they also get the apartment buildings on Nelson Street and Hobson Street in Auckland. People know what they don’t like. 

I don’t believe we can prescribe design with a detailed catalogue of things that people can and cannot do in the built environment. I think we have to create an environment where the creativity of design and the choices that people make create a built environment that we are proud to live in. That relies on us building a design literacy or a greater design sensibility. 

Government has been absent from this. Since the urban design protocol in the early 2000s, central government has been completely absent. All of the work on this has been done by councils – particularly the larger urban councils and the design professions – groups like the NZIA and companies going about their business. I want government to lift its share of the weight here and play some kind of leadership role.

JW: In your consideration of the issue of design advocacy, and who can provide it, have you explored an agency such as the Government Architect’s office that exists in all of the Australian states except Tasmania? These are not design offices, but they advocate for design and they are part of the government process.

PT: I’m very open to that idea. I know the NZIA’s been advocating for it, and I’ve been thinking about it for the last few years and whether it’s a good idea. The responsibility for championing design thinking has to sit somewhere in the system. I think the science advisors in government have made a really positive difference. There’s a discussion within Ministry of Housing and Urban Development about if there should be a science advisor-type role there and what that position would look like.

JW: You mean a design advisor?

PT: Yes, they’re a similar thing, whether you call it a Government Architect or whatever. I think you do need some person in the system who is the leader on design thinking and acts as a bit of conscience and a bit of a critic. What I want to see out of this process that we’ve started is design thinking. I want MHUD to have some leadership and capacity on that. There’s no question that, as a delivery agency that’s partnering with the private sector and working on actual projects, design thinking has to be fully integrated into it. 

I’ve been saying to Housing New Zealand for the last few months, “Why isn’t state housing a design leader in New Zealand?” They’re building several thousand new homes every year. They’re redeveloping whole neighbourhoods and whole suburbs. Their subsidiary was responsible for Hobsonville Point, which has transformed the way Aucklanders think about suburban medium density.

I would love public housing, state and community provided housing and KiwiBuild affordable housing to be so good, to have such great design, that it had the same cachet of some of the early state houses. Why shouldn’t state housing be really innovative and have a level of design?

JW: Let’s talk about procurement, a horrible word – it sounds like pimping. What do you think of the system of procurement in New Zealand’s construction industry? 

PT: The first thing is, the system hasn’t been working. The former government took a least-cost, short-term approach to the procurement of construction projects that has had direct consequences for vertical construction companies. Driving down costs by transferring all the risk to the contracting partner has created a completely unsustainable environment. We found that government departments weren’t even following the government’s own procurement guidelines that MBIE had produced.

JW: Why weren’t they following the guidelines?

PT: There’d been no leadership from a ministerial level. There are a whole other set of issues about whole-of-life value, which is critically important. If we are building public buildings and infrastructure that’s going to be around for 50 or 100 years, we have to think about the whole cost, not the cost today. We have to do much better at trade training and growing our workforce in the construction and infrastructure industries. We’re not using government procurement yet as a tool to do that, so we’re going to. 

JW: Was MBIE a mistake?

PT: Yes, I would say it was. With all of the different functions within one super ministry, there was no real focus on, for instance, the industry and the system that we’re responsible for, which is housing and the built environment. That’s why we went to the trouble of setting up a new ministry.

JW: Where do the lines sit, or are they blurred between the new ministry (MHUD) and your portfolios? 

PT: Transport is separate but, with the new Ministry of Housing and Urban Development, the Housing and Urban Development Authority and my ministry, there’s a very clear line of accountability and responsibility. Transport is closely related and it helps that I’ve got both portfolios.

JW: What are you going to say about KiwiBuild in the next election campaign? 

PT: Here’s what we’ve done: we’ve built a whole lot of houses and we’ve made a whole lot of system changes that are going to deliver the goods in three years/five years/10 years. These are really long term changes. We’re dealing with problems that have built up over a couple of generations. You can’t fix them overnight, they will take time.

We are effecting a generational change in the way that government thinks about and delivers housing and urban development. Some of the biggest things that we’re doing are things around planning reforms, infrastructure, financing and spatial planning with central government and councils working together and integrating transport with housing and urban development. They’ll take five years or 10 years to deliver, but they are the things that will make the big, long-term difference. 

In the meantime, we’re building a whole lot more state housing. We’re investing more than ever before in housing people who are homeless, and we’re building more affordable homes through KiwiBuild and will continue to ramp that up, including through large-scale urban development projects such as Hobsonville and Unitec and the light rail network in Auckland.

JW: There must be a sense of urgency about all of this, given New Zealand’s short political cycle?

PT: Labour is always the party of reform in this country. National tends to administer the status quo – that’s in their DNA as a party. Our DNA is about reform and change. The test is to put in place changes that people can see make a difference. 

JW: Since you brought up the dichotomy of reform versus managerialism – a capital gains tax (CGT), and the abandonment thereof: comment?

PT: We’re an MMP government. You can only deliver in government what a political majority allows you to do. As a coalition government, we were unable to achieve a consensus about reform and on the recommendations of the tax working group around the CGT. It’s just recognition of the political reality.

The desire to change the tax settings, to make our housing market more sustainable and less driven by property speculation, our desire for fairness in the system, our desire to reduce inequality, those things are not going to go away.

JW: It’s just they won’t be dealt with by a capital gains tax.

PT: There are a lot of other ways to get to the top of the mountain.