Housing Crisis at Boiling Point

A Response

Written by Bill Cashmore

The housing crisis is very real and has been building up for 20 years or more. High population growth in recent years has exasperated the situation. This is not an apologist reply but a series of facts and context to give elocal readership relevant information.

Everybody has a bad experience council consenting story. I certainly have.

There is a housing shortage and depending on who you talk to, it is somewhere in the vicinity of 35,000 to 45,000 and probably growing. As a nation we just haven’t built enough homes.

So how about some facts. Of the 1082 dwellings consented in March 45% were houses, 33% apartments and 21% townhouses, flats etc.

In the year to 31 March 2018, 8783 dwellings were issued a Code of Compliance, that is a finished house, apartment or flat. Same year 8093 residential sections of land parcels were approved. 57% of those were inside the urban boundary, the MUL.

Green field development is expensive for the developer and for the infrastructure providers, being Watercare, Auckland Transport and Council. Think connecting pipes for water reticulation, for sewage, for storm water. Think about road builds and improvements to existing roads, new roundabouts, road widening, street lights. Think play grounds, sports fields recreation centers and the list goes on.

Watercare has a connection charge of $16,000.00 and in some cases, more depending on the infrastructure provided. This is not just for the water meter, it partly covers the cost of the financing provisions for the delivery of the water infrastructure mentioned above. The developers pay for the pipes inside their development and contribute to some of the trunk connections but there is always a shortage usually in excess of 50% which h as to be financed and paid for via connection charges and the volumetric charges for water.

The price of housing is driven by several factors. First and largest is the land cost and that is arguably way too expensive in NZ as compared to elsewhere in the world. More so in Auckland than elsewhere in NZ. And that is not council strangling supply because the Unitary Plan has enabled 422000 dwellings over 30 years and the Future Urban Land

Supply Strategy directs the most cost-effective release of the 18000 hectares of green field land as zoned in the UP.

70% of dwelling development is within the urban boundary. And all first class soil areas are protected for food production, and other rural production zones are designated as in the first instance to rural production purposes.

Housing material costs are more expensive in NZ than Australia by 40% plus and 60% as compared to USA. The industry argument there is it is the small scale of the market in NZ. The limited number of suppliers will also certainly be a factor.

Hearings are required when there is an out of scope application. For instance, an application to build a house that has more height than is allowed in that zone. Independent commissioners listen at a formal hearing to the applicant’s reasons and to any members of the public who are not in favor of the application. This is a legal process under the RMA. Costs are recovered from the applicant as they should be.

I would be very happy to discuss with the people quoted in the elocal article to get to the bottom of their issue.

Council does have a shortage of consenting staff and building inspectors. We are the only organization in NZ that trains staff in these area. Other councils and the private sector attract our staff with higher pay and conditions. This is a long standing problem and as we are free country we have to deal with the issue as best we can within the means at our disposal. Challenging.

Nobody wants to have to get a consent or contribute to infrastructure outside their front gate but certainly insists that their neighbor has to.

Some solutions council and government have been working on and continue to do so:

1. Unitary Plan allowing sufficient scope for the growing population in both brown and green fields.

2. Consistent application of the building and development rules in a timely manner.

3. State building program that is consistent to retain capacity within the building sector.

4. Ownership models that enable secure home tenure. Shareholding. Long term leases as 2 examples.

5. Revision of the Building Act to modern standard and requirements.

6. Product certification for industry use that is quicker and proactive

7. Factory house component builds that are pre-consented.

8. Whole of house factory builds that are preconsented.

9. New technologies. 3D printing of structures and infrastructure componentry.

10. Advancing greater collaboration between Government, Council and the construction industries.

The above gives context and some facts to the complicated problem that Auckland and many other areas of NZ have in the supply of housing and infrastructure provision. It is not simple and no one person or entity has all the answers. Collaboration is essential and a willingness of all parties to move faster.