A spat over how to run a housing accord has brought threats from Housing Minister Nick Smith – demagoguery in its purest form – and defence by Auckland Council of the central principle of its Auckland Plan, the compact city concept.
Although I haven’t been at various events such as the post-Cabinet press conference in Wellington, the divide seems to be this:
From the minister:
- The Government wants faster production of housing
- If the council doesn’t move fast enough in providing for more housing through special housing areas under the Government-council 2013 housing accord, the Government can create special housing areas itself
- There are developers who will pay for infrastructure
- Not all infrastructure has to be done by the council
- Once houses are built, the council collects $1 million from every 300 new ratepayers
- The council can use that money to build infrastructure.
From the council:
- The council has a 70:40 split under the Auckland Plan – up to 70% of new housing inside the new rural:urban boundary, up to 40% in greenfields outside it
- The council has an intensification policy which encourages better public transport networks
- The council can’t whip up infrastructure to reach every part of the region immediately on the whim of developers
- Infrastructure to the subdivision gate requires funding, and the council doesn’t have unlimited funds.
The most important question about housing is price. Slowly, New Zealand is also waking up to the fact that travel costs – to work, to shops, to leisure – should also be considered in the cost equation. Fringe housing may be cheaper for the building if the land price is lower, but that gain can be lost if travel to work is long & tiring through congestion, or if other means of transport are inadequate.
New Zealand will also start to wake up to new facts about the work/housing relationship, about how to create jobs locally (other than the service sector), and about how to commuting that not all one way.
As BNZ chief economist Tony Alexander wrote last week, and explained in some detail yesterday, it’s anybody’s guess what Auckland’s housing shortage might be. I’ve seen no indication of how small new family homes on the fringe might stack up against demand for century-old villas in the inner suburbs, or of how “starter” homes which are built large for occupancy needs well into the future stack up against the kind of need New Zealand’s older generations had, of a small home on a section which availed additions.
Auckland politicians have been well aware for a decade that new ways of infrastructure funding would be needed. This should have been achieved through local/central government discussions before the Auckland Council super-city was invented.
New Zealand’s recession hit bottom in 2011. In November 2013, the Auckland housing accord was created with a target of 39,000 new homes & sections in 3 years, though the word ‘sections’ was lost in the small print.
That target of 13,000 homes/year (because the development of serviced sections would also turn into homes at some point) was well above long-term output of about 22,000 new homes/year nationally.
Consents for the March 2015 year totalled 25,000 nationally, just under 8000 in Auckland, which means production is running at peak, albeit in unusual circumstances of rebuilding in Canterbury and building more than usual to make up for whatever the shortfall is in Auckland.
Another factor enters the picture at this point: the quality of workmanship. In every boom the last buildings before the bust have a better chance of featuring poor workmanship because novices have been brought onsite to do work they’re not capable of.
Without adequate safeguards, it’s easy to create the conditions for construction which has to be remedied. Haste is the best cause of those conditions.
Back to the spat of the last month, which has resulted in closed-door meetings of Auckland Council’s development committee turning down 3 Huapai special housing area applications because infrastructure will be inadequate.
Deputy mayor & committee chair Penny Hulse said yesterday the development committee decided last month it wanted special housing area proposals to have at least 50 houses or “be exemplars of the desired outcomes & objectives of the council’s housing strategy.
“The council has considered more than 300 requests for special housing areas over the past 18 months and 84 have been approved by the Government, so we are doing really well.
“But now we are halfway through the housing accord period [the 3 years from its 2013 onset to the scheduled endorsement of the new unitary plan for the region in late 2016], we need to become even more targeted in our selection of development sites with the best outcomes for Aucklanders.”
Cllr Hulse said the 3 Huapai applications would have yielded a combined 230 sections. And, she said, traffic congestion was an issue: “Councillors had received a very clear message from local Huapai residents at an earlier public meeting that they did not want a whole lot more people living in an area with terrible roading and no way of getting down the North-western Motorway on public transport.”
She said the committee also signalled the need for high-level engagement with the Government on the funding of key infrastructure to service special housing areas: “As a council we are doing everything we can to speed up the building process, but it’s absolutely imperative central government takes Auckland’s housing crisis seriously and commits to funding the vital infrastructure required.
“We can now focus on brownfield sites which already have good levels of infrastructure service, but we still need central government help to shore up the funding for roads & water & electricity supply.
“Otherwise the cost of growth will be borne by Auckland ratepayers. Developer contributions only cover some of the costs of new subdivisions, the rest downstream are covered by ratepayers and those ratepayers do not want larger rate rises.”
Cllr Hulse said the council was working with developers on 56 pre-applications in special housing areas which had the potential yield of more than 4700 new sites & homes. It had also approved, or was considering, 169 consent applications for more than 2280 new sites &/or dwellings within special housing areas.
The council was considering another 45 requests, including the 3 deferred, and would determine them partly on the results of discussions with the Government about infrastructure.
Attribution: Council release, minister’s comments.