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11 Mar 2016

Housing Supply Still a Problem

Despite renewed efforts to solve Auckland's housing supply problem, there's still a lot of work to do. In a recent speech to the Auckland Chamber of Commerce, Finance Minister Bill English spoke of many challenges that need to be addressed to meet the needs of Auckland residents. With the city expected to grow by more than 700,000 people over the next 30 years, careful planning and community consultation is needed now more than ever before.  

According to English, “It is critical that the plan provides enough scope for increasing housing supply to meet the demands of this growing city... Exactly how that is delivered – the combination of up and out – is something that Auckland should decide for itself... We want a planning system that recognises the consequences for all current and future residents, and for the country. One that coordinates these interests, but does not restrict growth.”

While numerous moves have been made to address the housing shortage, intensification plans are currently in disarray after proposed Unitary Plan zoning maps were withdrawn. Proposed zoning maps would have up-zoned parts of eastern and central Auckland to allow for townhouses and apartments, but were scrapped after opposition from the Auckland 2040 group and other residents. A number of commentators have slammed the council’s decision, including economist and housing commentator Shamubeel Eaqub:

“Councillors signalled they are against the densification and progress that Auckland desperately needs... Despite some claims to the contrary, there is a generational aspect to the issue... The sight of old people jeering as young people talked about the lack of affordable housing was unpleasant... Will they be too little too late though? I am very worried that the outcome of the Unitary Plan will be far less densification than is needed, especially in areas where there is the infrastructure to support it.”

Prominent Auckland property investor David Whitburn has also reacted strongly against the decision and its implications for affordable housing, saying “Given the population projections for Auckland, we are going to fall far short of the housing required without more intensification... We are not talking massive high-rises here. We are mainly talking terraced housing and there are quality requirements and design standards to control it... Opponents needed to think long-term, not short-term. They need to think about the future housing needs of their children or, even more, their grandchildren.”

Despite growing hurdles, English is hoping for good things from Auckland's councillor and mayoral candidates in what is an election year. The health of the housing market in Auckland has implications beyond the city itself, with housing stock worth eight times the share market as New Zealand’s biggest market and asset class. Current plans are underway to address problems in the Auckland Housing Accord and in Special Housing Areas (SHAs), which is expected to deliver at least 10,000 houses by 2020, including key Hobsonville Point and Tamaki developments.

Since the withdrawal of the zoning maps, Building and Housing Minister Nick Smith and Mayor Len Brown have announced 14 more Special Housing Areas (SHAs) for Auckland, bringing the total number of Auckland SHAs to 120, with the combined potential to produce over 52,000 new homes. Positive change will not happen overnight, however, as can be learned from past reforms of the electricity, telecommunication, and financial markets. According to English, “In each case it took years to understand the impact of existing rules, and how to change them to achieve a more efficient market. Now we are addressing housing in the same way.”

Image source: hobbit /