Protecting your property rights

Two years ago, our mayor sent a submission to central government calling for foreshore freehold properties to be compulsorily converted into 99-year leasehold properties owned by the government, as a way to adjust for climate change “with little or no compensatory payments”.

This came to council unannounced on 9 Nov, 2023, after the submission was already made without reference to the full council. A number of councillors (myself included) pushed for it to be rescinded as this is clearly a proposal for unfunded nationalisation and an attack on our ratepayers’ property rights. The submission was based on a false narrative that the value of the properties would “slowly decline in a steady and predictable way”.

The motion before us was to receive the submission. This seems innocuous but it was the only opportunity we had to stop this dangerous idea in its tracks, so a few of us (including Cr Tracey Coxhead, an expert in property finance) tried to convince our colleagues that this was a foolish idea. We lost on the casting vote of the mayor after it was deadlocked 5-5.

The idea offered, with no supporting evidence, was clearly not true. The only example pointed to, in (offline) discussions, was that properties have been moved between leasehold and freehold in the UK. However, in Britain the direction is generally from leasehold to freehold in a highly regulated system as large aristocratic estates that date back to medieval times are gradually broken up.

A much more appropriate comparison would be with Singapore, where almost the whole population lives in 99-year lease apartments built by the government’s Housing Development Board. That is still different (as the flats are built new, not converted freehold) but the evidence is that these properties generally drop sharply in value within a few decades of being built.

I believe that compulsorily converting freehold land to leasehold in New Zealand would lead to an immediate sharp drop in value for a property that, in many cases, is the main asset of the family that owns it.

Whether you accept that or not, it is clearly the case that our council is NOT an expert in property valuation differences between leasehold and freehold land and should NOT be putting in any submission without testing the theory first - both with experts (we have one in Cr Coxhead) and also with affected residents.

Yes, we need to deal with the increasing risks to our coastal communities, but it needs to be based on science and evidence, not flimsy proposals such as this.

This submission was clearly a mistake and the error was obvious at the time, yet one mayoral candidate has just written a 1,700 word letter to a coastal community defending their inability to see this issue clearly at the time.

Our meetings are videoed for the public to view and this meeting is a good example of differing leadership styles.

So what are the learnings from this sorry episode of poor council leadership?

1. Submissions should be limited to areas in which council has real expertise. If in doubt, keep quiet.

2. Council must be more transparent and open with residents when it does things that affect them.

3. Draft submissions should be distributed among councillors before being submitted (in credit to the mayor, this now happens, despite his claim at the time that this would be impossible).

4. Voting to receive a faulty document at council, when that is the only chance to turn it back, is a substantive matter, not just a matter of procedure.

The minutes of the 9 November meeting recorded our concerns as follows:

• There was concern that ideas shared following the workshop were not made available to all Committee members prior to being added to the submission.

• The Mayor acknowledged the process regarding the submissions was not easy, due to incorporating a large variety of ideas and thoughts, as well as having to meet the submission deadlines.

• There was concern that the ideas included in the submission were big and required further conversations prior to being submitted on behalf of Council.

• Some members did not feel comfortable being included in this submission.

You can read the controversial submission in the meeting agenda (Page 195): https://westernbayofplenty.infocouncil.biz/Open/2023/11/SPC_20231109_AGN_2731_AT.PDF

You can watch the video of the meeting here:

https://www.youtube.com/watch?app=desktop&v=JOJbPKFUsTQ

Questions start 46:30 minutes into the meeting and substantive debate at 53:30 minutes.

Voting in favour: Mayor Denyer, Cr Crawford, Cr Grainger, Cr Dally, Cr Thwaites;

Voting against: Cr Coxhead, Cr Joyce, Cr Murray-Benge, Cr Sole, Cr Wichers;

Carried on the casting vote of the mayor.