Increasing Auckland’s housing stock potential

Guest Post

The extraordinary increase in house prices over recent years is not solely confined to Auckland. Cities such as Vancouver, Stockholm, London, Sydney and Melbourne are also undergoing unprecedented price increases. In Stockholm, prices have doubled in 5 years, compared with Auckland’s 52% in 4 years. In Australia’s biggest cities, house prices have risen 50% since 2008.

Rising house prices are forcing more people to rent. In England and Wales, 46% of 25-34 year olds now live in rented accommodation, up from 24% a decade earlier.

As the Economist notes (30 April 2016), costly rents and mortgages transfer wealth from poorer people, who tend to spend what they have, to richer folk, who save it. As a result, there is less demand to support the economy.

In Auckland, intensification of housing has been proposed as one solution.

Over the years, gradual intensification has been acceptable e.g. building on a vacant section, cross- leasing the back half of a property or building a small block of home units. However, if building density limits are raised too rapidly, an outburst from the public is the result.

As Professor Kenneth Palmer wrote in a letter (Herald 17 Feb.. 16), the ” mixed housing urban” zone to be imposed widely by the Unitary Plan will allow for buildings up to 12m high of 4 and possibly 5 stories. Such buildings have the potential to overshadow neighbouring land and spell an end to the private backyard.

In the longer term, such an abrupt change in density can cause what planners call urban blight. This is due to a significant change in land values. Thus a developer might pay $1m for a suburban section with house, on which, after demolition,  he can build 2 units. If, as a result of a zoning change, the property will now take, say a multi-storey block of 8 units, its land value would immediately increase to, say, $3m  after allowing for the increase in cost per sq.m. of multi-storey construction. The message this sends to the owner of the section with a house is that, if his property is now worth $3m or more, it is clear that when he sells, it will be to a developer as the property will be redeveloped because the value lies in the land.

Besides the higher value, the increased rates also would be a deterrent to any family man wishing to purchase the bungalow. Therefore, if the house is ultimately to be demolished, why bother maintaining it?
Initially, the residents of the new apartments will enjoy the existing amenities of an old established suburb. However, as the number of apartments increase and traffic flows swell and vegetation is removed and the existing housing stock becomes rundown, the amenity of the area will suffer. Who will mow the grass verges ? The suburb now becomes a less desirable area to live in and this in turn inhibits further quality multi-storey construction. After all, who wants to live in a rundown area?

An alternative to intensification is to abolish the planning boundary confining the metropolitan area and to rezone more land for housing. This would need to be coupled with the raising of loans for the infrastructure development, repayable from rates levied over a defined special rating area. The principle is not new. It must be remembered that the former Auckland City Council raised Works Loans to seal roads and to construct sewers in areas such as Blockhouse Bay where infrastructure at the time was minimal.

It is instructive to examine some current development constraints affecting land beyond the urban boundary. Two examples will suffice.

First, a 40 ha block of land in 4 titles located in Albany Heights, about 3 km from Albany Village.
The zoning is Countryside Living. The land was bought by the recent owner 50 years ago to plant exotic timber trees on, to be milled on his retirement. It was cutover farmland with remnants of native bush and had been running dry stock at the time of purchase. The tree planting was not a success and the project was abandoned. In the intervening years, manuka regrowth and scrub enveloped those exotic trees which survived. The Council, in its draft Unitary Plan, decided that the whole farm was an SEA – a Special Ecological Area. After considering objections from the Owner, parts of the ecological overlay were removed. The restrictive zoning and the remaining overlay severely limit subdivision opportunities, particularly the extensive earthworks which would be necessary. Currently, 4 dwellings would be allowed on the 40 ha, one on each lot.

A second example is from Karaka where a farmer has a 30ha block which is now uneconomic to farm. The Unitary Plan allows one house which is existing, although the contour could comfortably take 6-8 houses, or more with earthworks. However, under the Proposed Unitary Plan, subdivision is not permitted in the Mixed Rural Zone, notwithstanding that properties abutting have previously been subdivided into so-called lifestyle blocks of about 10 acres.

In fact a glance at the planning map for the area shows numerous lifestyle blocks in existence from Patumahoe through to Karaka arising from previous subdivisions.

Moreover, the Unitary Plan tacitly recognises that small farms are uneconomic as it states that the minimum site area in Mixed Rural and Rural Production  Zones is 150 ha !!

Meanwhile the Karaka farmer is left with 30 ha on which only one house is permitted.

A rethink about the Zoning of the land beyond the Metropolitan Limits is long overdue. The current zoning is not inalienable. As Professor Bogunovich and his co- author pointed out ( Herald 29 Feb 2016), we need to think about Auckland not as a traditional city but as a multi centred linear city- region extending from Helensville and Wellsford in the north to Pokeno and Orere Point in the South and plan accordingly. The authors note that increasing density in places like St Heliers and Kohimarama makes little sense.

David Chandler graduated as a civil engineer and led the multidisciplinary team which was in charge of  redeveloping Freemans Bay in the 1970’s. He was a Planning Hearings Commissioner on retirement.


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