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Building minister weighs in on Auckland's housing accord

The report Darby called for found that of the 154 SHAs granted, 25 showed no sign of activity. That, by Darby's calculations, represented 2184 potential dwellings that were yet to be started.

Darby said the council's main role was to free up red tape. It couldn't "go out there and hold the hands of developers and builders and get them to start putting up 4x2s".

But "maybe there should have been a stronger whip that generates the housing itself".

Darby said he would continue to investigate, particularly if the sites had changed hands since they had been rezoned, because their SHA status would have given the land greater value.

"Most Aucklanders would expect that when you get special status under the SHA, you might get an easier pathway to getting that [development] and then to walk away and not show any interest in those sites – we are bound to ask about that."

Darby was also critical of the vagueness of some of the accord's goals.

The accord had lacked enough punch to get developers to get things done, and it also had not been able to ensure a set percentage of the houses were affordable.

He said SHAs had required developments of 15 units or more to have 10 per cent of the project priced affordably. But developers could go down another route, the Resource Management Act, which had no affordability mandates.

Darby advised other regions with a housing accord to look carefully at what they had signed.

"My recommendation ... is maybe have a look at this accord review, and look at if there are any gaps in your respective accords.

"If there are affordability purposes, as we had, are there targets? Can you easily collect the data? Are you measuring your success or otherwise on a regular basis, a quarterly basis at least."

But Building and Construction Minister Nick Smith, who as housing minister signed the accord with Auckland Council in 2013, defended the accord.

"If you look at the number of overall building consent numbers, when the accord was signed we were doing 4200 homes per year and at the end of the period we were up to 10,200 homes per year."

Auckland's housing accord had come very close to achieving its target of getting 39,000 houses and sections consented across the city, reaching just over 37,600.

And Smith said the progress of SHAs - which ultimately would produce 66,000 sections - was also well ahead of schedule.

Although just 3105 houses have been completed and 5527 consented in SHAs so far, that was about 1100 consents ahead of forecasts.

Smith said the number of consents reflected the cost of putting in services, which was so high that developers had always sold in stages.

However, enforcing affordability and forcing developers to meet certain timeframes were areas of real difficulty.

Developers had found ways around the 10 per cent affordable housing requirement, and the Government's view was it was better to increase land supply than regulate prices.

"The key way to achieve it is to increase supply and remove the artificial barriers to land supply that the Productivity Commission, the New Zealand Initiative, all say just drive the section price up."

Forcing landowners to invest in their own property by a certain time was also "not particularly workable," Smith said.

"If you make more money by sitting on your land than what you do by developing it, then you have to change the incentives by which that occurs.

"If the council and government is taking a liberal approach and allowing a release of a large amount of land, then there's no incentive to landbank."

Phil Twyford, Labour's housing spokesman, described the Auckland accord as "a joke".

"They [the Government] have got this simplistic purile view that if you just build more houses, prices will come down and houses will be affordable, completely underestimating the complexity of urban land markets."

Since the unitary plan took over,Twyford believed Auckland's housing problems had taken a step in the right direction.

Plan changes now extended beyond the urban growth boundary and density restrictions had been freed up.

"But it's still drip-feeding new land for development into a highly speculative land market."

Real Estate Investar Editor
Real Estate Investar Editor
Real Estate Investar provides intelligent software, tools and data to help you save time and make money in the residential property investment market.

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