By Alex Tarrant
There has never been a better time for apartment building in Auckland, as lessons learnt from previous failures will mean good quality design and building work on new projects, Auckland Council Deputy Mayor Penny Hulse says.
Following yesterday's response by the government to the Productivity Commission's report on housing affordability, Hulse said the Council was looking at ways to encourage 'going up in the city,' construction of a wider range of housing, and releasing more land on Auckland's outskirts for residential development.
Underbuilding in Auckland over recent years - Westpac economists reckon that for every new dwelling built in the city in the three years to June 2011, Auckland got seven new residents - has seen prices hit new highs in recent months.
Speaking on TV3's Firstline on Tuesday morning, Hulse put the underbuilding down to a combination of factors, "the predominant factor being the global recession."
"Simply put, our developers just aren’t in a position to do some of the big developments that we need," she said.
The council was working with developers on how it could better incentivise more residential construction by changing some of its planning rules.
“We’ve been working on this for the last year – before the government told us that we needed to," Hulse said.
“We’re looking at extracting the best possible value out of the land that the developers have. In other words, looking for creative ways to fit a different kind of housing on site," she said.
That included “going up in the city, looking at a different range of housing, and also releasing land on the edges.”
Asked about Aucklanders' distrust of apartment building following the leaky homes debacle, Hulse said those concerns would be dealt with via urban design guidelines.
"We simply need to have better designed houses, we need to work with our architects, and our builders," she said.
“The reality is, the government, bless their hearts, have probably given a reasonably simplistic approach, which is, do it faster. We’re saying, cut the red tape, but do it well. That’s the work that we need to do.
“There’s probably never been a better time to look at building apartments, because we know all of the things that we don’t want to do," Hulse said.
“We’re working with architects, designers and builders. We’ve got the new unitary plan, that I’m chairing, that we’re working on, and we’re making good urban design absolutely central to that. It doesn’t always have to be expensive, but there are some things that we need to do better than we have done before," she said.
“So this is a really good time to look at good building in our city, the range of housing choices, with a better quality than our community are used to. That’s the only way that we’re actually going to get the Auckland we want."
41 Comments
The evidence for population densification delivering affordable housing is not good from what I can see. The demograpia survey lists Sydney and Vancouver as the least affordable cities in the world. Both these have stopped all house construction at the city boundries. We have just returned from Vancouver. House prices there are at lunatic levels. Multiple miliion$ for average to pleasant stand alone properties, $1.3M for an unremarkable 2 bedroom appartment. Still the city seems to swarm with people, but to me it seems a diminished existance; comming down from their little boxes in tower blocks and wandering aimlessly arround the shops and fast food outlets. (lousy coffee generally). Do we really want to exist like the people in Shanghei or Hong Kong. There seem to be a lot of people emigrating away from these places to get away from this sort of lifestyle.
Agreed. Ego driven politicians want to make NZ cities as "bustling" as other Asian Pacific mega cities. Convention centres, stadiums etc etc. They think if they allow enough people in and the population grows sufficiently they will be able to pay for it. No real vision apart from bigger is better.
I see you haven't responed yet over on:
http://www.interest.co.nz/property/61749/govt-release-response-housing-…
It's only a pop quiz, I wasn't asking you to design me a quantum computer!
I know it's childish, but I'm indulging you here...
So I flicked around on the net and found an home test on the mensa NZ website:
http://www.mensa.org.nz/online-test/
Without any practise runs and without having done that type of thing in years, in 15 minutes (less than the prescribed 20 mins) I scored 31 out of 33, with a slip up on Q17 and Q32, (but I think that there is stronger pattern in Q32 that justifies a different answer).
But anyway in your constant ranting about IQ tests, are you trying to say you are a genius and I am a nincompoop? (I'm no genius, but I'm no fool either!).
The IQ test was because you (and DavidB) seem to find belittle the person an acceptable way to debate. It is fallacious anyway, but it is a matter of put up or shut up. There is of course the further question of "how" people think in addition to capacity.
Funny thing is I find myself agreeing with you today on the matter of what people want. I would suggest any successful businessman, developers included, are successful because they give people what they want. Only problem I see with what I know about housing is that despite better options being possible, we don't have them in New Zealand. Detached housing will remain desireable for now.
I am not aware of the Pauanui high rise but I am well aware of the Orewa one. I think this question relates well to my previous post in that people can only select from the choices they have available. In the case of the Nautilus my understanding is that people thought they would like the lifestyle offered but they have a high turnover, indicating people don't like living in them. There are currently 4 for sale on trademe and two more up for rent, so I am not sure if those numbers support the anectodal evidence. Retail/commercial units at street level always seem to have a high level of vacancy.
Visually and practically the thing is an abomination. Research has been done to show that living or working above four stories results in higher levels of mental illness. The higher you go the worse the rate, the trouble being that you can't perceive the ground as ground from that high. In the case of the Nautilus you can't perceive the life and heart of Orewa, living up there is isolated and sterile. It is not often you observe people using their decks. I would suspect people don't like living in the building but don't know why.
Locals fought pretty hard to prevent it, for good reason I think, it is totally out of character to the holiday home history of the town. Same would apply to Pauanui. I often wonder how the local engineer, Ian Hutchinson, feels about not getting any morning sun at his office now. At a winter sun angle of 27° the shadow is pretty extensive, extending past the adjacent commercial areas into the residential. If you sit there and observe most people won't walk straight beneath it, they will cross the road and walk there instead.
if I said to you good design should be egoless, what would you think of the Nautilus in that context? Contrast this to the development just up the road at Kensignton Park, trouble is my theory about developers being right goes out the window with that one. Will be okay in the long run though and will surpass the Nautilus.
If I was to redesign Orewa CBD (after flattenting the Nautilus) I would gradually buy the waterfront back from Florence to Moenui. The main drag would be cut off and Centreway Road would become the main thoroughfare. The four streets including Florence and Moenui would become pedestrian only and three stories would be permitted extending to where the Hibiscus Coast Hwy is now. From there on would remain be an expanded esplanade with perhaps street vendors permitted. Residential would be encouraged above street level and the schools are probably within realistic walking distance so can stay put. You wouldn't need a car if you lived there but back access to apartments could be provided. Parking for tourists would need to be catered for though, because I bet they would come. I bet in this scenario the apartments wouldn't come on the market often either.
That is what this debate is all about. High-Rise apartments in Auckland.
Hard to believe, but they did exactly the same thing at Pauanui, slapped a high rise right on the promenade in the middle of the surrounding low-rises which, in my opnion destroyed the nature of the place.
With those experiences at hand, and with the topography of Auckland lending itself to low-rise so everyone gets a share of the sun and the views, it seems the current proposals would be the kiss-of-death for auckland. Just like the Nautilus is the kiss-of-death for Orewa. The developers make a motza, the surrounding properties are diminished, the buyers who think they've got a real gem don't stay. Imagine a whole lot of "The Circles" at Stanley Point all around the place, yet experience wise, the Nautilus is unliveable in the summer.
Those advocating inentsifying the density of auckland only need to examine pre-existing examples and interview the people who try to live in them. I'll lay odds the Government (in it's infinite wisdom) and Auckland City Planners won't do that.
I hadn't thought of the solar load, but yes it isn't sustainable on that front either. The air speed up there would be another reason to keep people off decks, that goes for any coastal region of New Zealand. I will give you another law of design that is broken by most apartments in New Zealand, and that is that each unit should have its own access to the street.
Interviewing people who live in them, don't be so stupid why would you want to do that?
You know when I have been to Asia the overwhelming feeling I get is that I am viewed as a walking ATM. I think the homeowner in this country is viewed the same way. The real fight is about who gets a cut of the action, in Auckland the Banks are foremost with the Coucil not far behind. The real problem that developers like Hugh have is that there isn't enough left in the pie for them anymore, but make no mistake they are still fleecing the home owner.
There are I think enough reports of ppl living in families or friends garages to realise there is a (price) problem, however to meet what some can afford would take a 30~50% collapse in house prices and rent. If that happened those same ppl would probably be un-employed so couldnt afford the now cheaper accomodation anyway.
regards
I have dozens of rellies and I am not seeing it, in fact the falling prices on the periphery has seen one cousin buy his first house. I just think that stating price is because of a shortage is not necessarily a link that has been proven, I mean contributors were talking about vacant houses in central suburbs recently. How big an effect is the money coming from offshore and is that what is really driving the price rather than domestic demand for somewhere to live?
in hamilton units are going up all over the place.
not big enough to swing a cat in and the garages are okay provided you drive a mini.
most of them being built in areas of lower income.
plenty to look forward to if you buy or rent one of these.
fights,loud music, noisey cars and thats all before the parties start.
The developers should look at how they did in Aus, such as Brisbane's Kelvin Grove, Bowen Hills etc..
Kelvin Grove in particular, 4km from the CBD where they managed to build quite a number of sizable apartments, shops, school, parks and an univeristy for 16 ha of land
All most posters seem to want is for everyone to be in a nuclear family living in a freestanding house on 600sqm site within a few km's of an urban centre for under $300,000. They want the government and/or developers/builders to provide this housing without any profit or incentive.
Perhaps developers aren't developing this type of property because they know that it's not what the market wants!!
Christchurch residents know how terrible it is to own a unit title when major problems occur. Insurance wrangles can take years to resolve and end up in court rooms, all while your life savings are tied up in buildings that you can't occupy.
Why would anyone want to get involved in this type of ownership?
Apartments are not the solution for the suburbs. No one but renters and low lifes want to live in a suburban street with half a dozen yobos breathing down their necks, parking in front of their garage and playing rowdy music in the early hours.
Detached homes are what the market wants. Anything else is not going to better New Zealand.
Why not let them decide - they take the risk and do the market research.
If a developer builds an apartment building they can't sell it's their problem - they are the ones the go bankrupt, someone else gets below cost accomodation and the other developers don't try the same thing. Why have rules to protect them from themselves - why care about their financial situation so much?
Freehold sites with high density rules sell very well - Vinegar Lane. Problem is there's few places it can be done.
Bob, the developers have decided - that is why nothing of this type is being built, despite land being available at acceptable prices in the mixed use zones.
Land in Eden Terrrace is on the market in the $1500-1800/m2 range and sitting there unsold.
Developers aren't building those units, because no one particularly wants then (consequently the cost to build is higher than the market value) and little easy finance is available, so it's only cashed up or well established developers who are entering the market.
Personally, I could easily develop some apartments on land in the Auckland Central mixed use zone, but I'm not going to, because unless it's in a top location and a high end product at a low price, there is about zero chance of actually selling the damn things.
I'm sick of developers who think that it's their right to knock up cheap rubbish, then file for bankruptcy when they find they can't sell them, losing elderly investors in finance companies millions of dollars, flooding the market with poorly built ghettos and achieving very little in the way of making NZ a better place.
If it is so profitable to build and sell these types of units, then why are you not picking up every $1500/m2 site and knocking up as many units as you can while land prices are low??
The answer is simply - no one really wants those units.
certainly no one wants the units at the prices they need to sell for to give the developer sufficient profit
given land, building ,regulatory costs etc in many of those mixed use zones once you've added in developers proft margin you'd be looking at 2 bed 80 sq m apartments needing to sell for over 600-700K. There's just a very limited market for that, especially when those zones are still pretty ratty, lack amenity and retain some quite noxious land uses, and also when you consider that 700K can buy you a quite nice 3 bedroom house in a middle ring suburb
If, magically, those units could sell for say 400K then I'm sure they would be very popular!!!!
400k 2 beds would sell fine - but your right, can't be done very easily.
50K of GST, 25k development tax to start with and there's not much Mixed Use left that isn't also in a PM 196 or similar overlay requiring things like 20% of apartments to be 90sqm plus decks.
Land cost is not that big a deal.
The few suburban apartment buildings that have come to the market recently seem to have sold fine. As well as Vinegar Lane there's Isaac in Grey Lynn which has had enough presale to start construction (in spite of buying off plans not being popular nowadays). There's the Beca office conversion in Vincent Street again presumably presold enough to construct. Then there's one in Balfour that developer is building in spec - no presales even if you wanted one.
Developers are quite happy to develop this type of property - in the rare places the zoning allows.
There are always mugs buying off-plan, but take a look at the second hand market.
http://www.realestate.co.nz/1669221
Yes it's leasehold land, but it's not even the price of a decent car.
http://www.realestate.co.nz/1153406
On the market so long, you probably need to pay an agent just to list them now!
Detached houses in the $500-700k range in the central suburbs is what everyone wants, even if it is only a pocket hankerchief of land.
Developers only stopped building apartments in 2006 'cos of the new minimum size and outlook rules plus increased Council development tax. This all made a new apartment way more expensive than existing ones on market. Some council officers are realising that rules making apartments too expensive to sell prevent them being built and are allowing leeway.
If Hulse wants the unitary plan to encourage development the draft will need work. Currently it has rules only allowing increased density as a Disc. activity on a site that has:
· minimum road frontage of 20m; · minimum net site area of 1500m2 There's very few sites that meet this criteria and amalgamation (which Council expect) won't happen.
The suburbs are completely safe.
Bob
You keep dragging out the simplistic line that the minimum apartment size plan change stuffed apartments.
As someone who has worked in the development industry the last 15 years, including quite alot in Auckland's CBD, I can tell you and others that is simply not true.
Whilst this plan change was a factor, and I agree it did not help, there were lots of other factors that killed apartment development:
- collapse of finance companies and mezzanine finance
- excessive supply in the CBD of small apartments
- natural slowdown in international student number growth
- excessive escalation of land prices
- increased construction material costs
Also, Deputy Mayor Hulse seems like a lovely lady but she has no frigging idea. The time is NOT good for building apartments, mainly because the issues outlined above still exist. Who is informing these pollies?
The only way Auckland will get widespread intensification is if local and central govt gets back into building, which is all very well if it can be funded.
Bob, I agree with you on the draft Unitary Plan rules. Whilst sites greater than 1500 sq m might on average lead to better quality of development, which is why I imagine Council are looking at that requirement, as you say it will be really hard to get a lot of amalgamation, given you need two or three property owners in a row who are all willing to sell. As you say, the suburbs will be safe if this requirement finds its way into the final Unitary Plan.
The line is that planning rules have a signifigant effect on housing price. Minimum apartment sizes are an example of this:
If you have a 70sqm apartment saving 20% on construction cost at $2k/sqm will save 28K, if you go back to pre 2006 development tax you might save 25K, if the land cost halves you might save 20K. Say, hypothetically, you have taken a group of senior council staff through an apartment that is 60sqm and they have agreed that it's actually perfectly livable then you have saved 7k-8k/sqm - 70k or 80k. That is the biggest saving and by far the easiest to make (just change a rule in the plan).
Kepp in mind that you don't have to live there. if you want a 70sqm apartment you can pay the extra 70K, if you want a freestanding house you can buy it. But why should the person that can't afford it have to miss out on housing?
PS - never admit that you are knowledgable about the development industry because with interest.co.nz logic that means you're an expert and experts have vested interests so can't be trusted - the more ignorant you are on a subject the more untainted and thus more able to make credible comments.
Perhaps you should ask apartment owners in Wellington about their new Insurance Levies as a result of the Christchurch earthquakes. It aint pretty. Bottom line, pay up or your Body Corporate will place you in a Mortgagee sale.
With your own house you can control when you do repairs and with an apartment you better hope that none the apartments in your block leak as costs will escalate and your resale value will take a hit.
ESSENTIAL READING
In a just world these pieces should be on the fornt page of the Herald:
http://cities-matter.blogspot.com.au/
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