Affordable housing

It’s supply not demand

Auckland’s housing issues can’t be solved by fiddling with demand.

Taxes and high LVRs don’t work, and the proof already exists.

That’s because demand outstrips supply so much that even with the possibility of tax, or with a high LVR, the growth curve is so large it negates the effect. There is still plenty of cash to be made on the upside.

Demand levers won’t change a thing. Only supply will.

Which brings me around to it. So far supply hasn’t mustered any more capacity than 8,000 dwellings.  It’s possible that the property industry is peaked out on capacity.

Except that in 2003-2005 the supply curve did hit 12,000 dwellings.

The main difference was that the majority of it was standalone houses on sections. Whereas now there is a vastly greater proportion of intensive housing.

Hint: greenfield development is the easiest way to increase supply.

The Government pretends to want it with talk of SHAs but isn’t really doing much more than sabre rattling.   Read more »

Changing the zoning won’t solve the immediate problem

My eyes are rolling in my head and glazing over.

It’s just possible that everyone in the city drinks from the Council Kool Aid and forgets everything that’s happened over the last five years.

Remuera home owners may not like it, says Peter Jeffries, but three-storey apartments in the suburbs offer the last real chance at housing affordability in Auckland.

The chief executive of CORT community housing is a vocal supporter of the compact city model in Auckland Council’s Unitary Plan, a new planning rulebook that will define the shape of Auckland’s future for decades to come.

The plan decides what can be built and where – and it has sparked a generational and politically divisive debate about housing density and height in traditional suburbs.

The council did itself no favours with a proposal to rezone about 30,000 properties in a late change to its submission on the proposed Unitary Plan without informing homeowners.

The proposal – which would have had to come back to the council from an independent hearings panel in July for a final decision – was rejected by a majority of councillors, after a long, often emotional debate in which young supporters of change accused their older opponents of selfishly protecting their own interests.

Jeffries argues that the problem will not go away. Auckland is going to grow by 75 per cent over the next 30 years, he says, and suburbs like Remuera have to share the burden of growth.

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Why you can’t have affordable housing and a compact city together

Auckland Council and politicians are seeking an impossible dream, an affordable housing city, yet compact in design.

There problem is there is nowhere in the world where this occurs.

The Wall Street Journal investigates:

Across the country, a divide is emerging between cities that are growing outward and remaining affordable and ones that are hemmed in by geography and onerous zoning codes and are becoming  more and more expensive.

As a whole, U.S. cities are expanding as rapidly as they have throughout the last half-century. From the 1950s until the 2000s they have added about 10,000 square miles per decade, or an area roughly the size of Massachusetts, according to research by Issi Romem, chief economist at real-estate site BuildZoom, to be released Monday. But beneath the surface a divide is deepening.

On the one side are cities such as San Francisco, Boston, New York and Miami that have slowed their pace of expansion dramatically since the 1970s, in part as they have added layer upon layer of building regulations. On the other side are cities concentrated in the southeast and Texas, which have grown outward and seen much slower price growth.   Read more »

Penny Hulse thinks rich suburbs are distasteful for wanting to stay rich

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​If west Auckland is to be intensified and inner-city suburbs are not, then “all the money can come out west too”, Penny Hulse says.

In Auckland, which suburbs pay the highest rates? Which suburbs have old well-established trees and character homes? These suburbs are the “aspirational” suburbs that Penny Hulse finds distasteful for wanting to protect the value of their homes.

112 Mountain Road, Epsom, Auckland City

112 Mountain Road, Epsom, Auckland City

If you were trying to build “affordable housing” in Auckland (the most expensive city in New Zealand) where does it make sense to build, financially? People who need affordable housing do not live in “aspirational” suburbs. Even if they were tenants of “affordable housing” in an “aspirational suburb” the rent would be significantly higher than the same house in West Auckland, for example. Other costs would be higher too. People who need affordable housing cannot afford to send their child to a school in a suburb like Parnell, for example.

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Well, I guess that is one way to make housing more affordable

The NZ Herald, in its ongoing campaign against rising house prices, has hit upon a brilliant strategy for crashing the value of your house.

This week the Herald will investigate burglaries across the country in the most in-depth series on the subject ever done in New Zealand. Over five days we will examine where burglaries happen, talk to victims, burglars and the police and find out how you can protect your home and business. In part one we look at which areas are the most burgled and ask why so many crimes are unsolved.

Labour will be really pleased that the Herald has embraced their strategies for making housing more affordable.

They’ve even produced a handy interactive map to check if you can save thousands by living in a crime zone. Complete with handy colour coding to show the no-go zones…or, as I prefer to call them, bargain housing estates.

interactive_graphi1 Read more »

Why isn’t this state house being sold, or a market rent being charged?

Yesterday Simon Collins tried a Pimp the Poor story about a state house worth nearly $2 million and being rented for under $100 per week.

I don’t know what drugs he was on in pimping this story but what is now likely to happen is that the hapless family he used for his story are likely to be turfed out, the house sold and the resulting cash used to buy more houses in other  areas…and that is precisely what should happen, or the house rented at a market rates.

The most expensive state house in the country is in the exclusive Auckland suburb of Westmere and valued at $2.54 million.

For the same price, house-hunters could buy 5.6 houses for the national median house price of $448,000, or 10.7 houses for the median house price of $236,000 in Southland.

The three-bedroom 100sq m house tops a list Housing New Zealand released following an Official Information Act request of the 10 most valuable properties on its books.

They were valued in July last year. All were in Auckland and worth more than $1.9 million. The list did not reveal the exact locations but did reveal the suburbs, which were some of the city’s most elite, including Westmere, Remuera, Mangere East, Ponsonby, Ellerslie, Orakei and Epsom.    Read more »

Crisis looms for Auckland’s unitary plan

Auckland is now about to plunge into a crisis of sorts.

With substantially increasing population and an already limited supply of housing stock that is not meeting demand there is a serious need for housing to be pumped into the market.​

Years of perverse Council socialist tinkering with planning tools has reduced supply and caused massive housing value growth. The Government certainly wanted that to be overcome and has been pushing hard for housing supply to be ramped up to control inflating house prices.

In the meantime Auckland Council has stuck to its utopian ideas for a compact city. The notion that the city can be retrospectively converted to an intensive city is fanciful, in the same way that bringing dinosaurs back to life is. But they have been determined and said they could fit everyone inside the city limits.

Then during the Unitary Plan process they took a hammering when the evidence showed that there is not enough land to achieve a compact city. Panicking they zoned more of Auckland for apartments only to have that decision overturned by the politicians last week.

So the only solution left is more greenfields.   Read more »

Stephen Berry gets it on rates

After yesterday’s Media party hatchet job I was looking to see how long it was before other candidates reacted to John Palino’s promise to reduce rates.

It was no surprise to see the sensible Stephen Berry endorse the position, but with some additional things to consider around rates.

It’s worth considering whether or not these two should consolidate their position and policies.

Following John Palino’s official announcement that he intends to run again for the Auckland mayoralty, Mayoral candidate Stephen Berry has called Palino’s pledge to cut rates by 10% over three years “refreshing.” Berry adds, “The three media favourites have tried to get by on policy-free platitudes about waste cutting and fat trimming. Now a proper contest of ideas can begin.”

Stephen Berry has a two-pronged approach to controlling rates and says that Palino’s plan will only be successful if he looks beyond the percentage charged on a property’s value. “In January, Affordable Auckland announced its policy to freeze rates at their current level for three years.. Costing approximately $35 million a year in lost revenue, this is a credible step towards arresting rates growth; however it is not the only step that need be taken.”

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Hey Phil, will you also be wanting to develop Keith Hay Park?

Phil Goff has decided that a former swamp should now be developed into affordable housing because the land is currently occupied by a bunch of rich pricks and their golf club. Rich pricks who include John Key.

Only a moron would want swampy land turned into housing. The land is presumably still swampy underneath. So the infill housing would likely be damp (unless carefully designed). So, is Goff proposing a damp cold cheap housing estate?

But the man who was once against asset sales is now for them. Yet another flip-flop from a man who is becoming known as a political pretzel.

But I wonder…will Phil Goff look at the council chucking Akarana Golf Club off their council land at Keith Hay park and develop that land into housing as well?

akaranagolfclub Read more »

Hate trumps rationality every time

Rawabi

Hate has short-circuited the rational part of the average Palestinian brain. That is the only conclusion I can come to after reading this article. When people with a fully functioning brain are handed a brand-new city on a platter, they celebrate. Palestinians, on the other hand, have  not only rejected the new city, they have done everything in their power to stop it being built.

How do you build a state for people who don’t want it built? That’s the obvious question that emerges from the latest chapter in the ongoing saga of Rawabi, the first new Palestinian city. It’s a flagship project that international diplomats routinely laud as a model of Palestinian state-building, but it has won no such praise from fellow Palestinians. Instead, the very people it was meant to benefit are now accusing Rawabi’s founder of collaboration with the enemy for having committed such horrendous crimes – this is not a joke – as providing residents with electricity and running water.

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