By Bernard Hickey
Auckland 2040, which opposed Auckland Council's proposal for 'up-zoning' of some suburban areas in the current Unitary Plan process, believes Auckland does not have a long term housing supply capacity problem.
Richard Burton, who chairs the collection of over 100 residents' groups who have repeatedly campaigned against the Council's plans to allow three storey apartment blocks in established suburban areas in the Eastern Suburbs and the North Shore, says the current short-term supply issues and high house prices are caused by the building industry, the collapse of finance companies and developers, and strong demand from non-resident buyers.
Burton told Interest.co.nz in a Double Shot interview Auckland 2040 preferred apartments be kept in town centres and that any intensification of established suburban areas be limited to multiple smaller single level dwellings on existing sections.
"You can keep the same bulk indication rules -- the same height, the same coverage and the same yards -- and put more dwellings in the same building envelope. That creates an environment where you have far more dwellings within an area, but without changing the bult form to as measurable an extent," Burton said.
"There's definitely a place for three or more storey apartment buildings, but those places tend to be around places of significant employment. Your town centres, some of your larger employment areas and perhaps along some of your arterial roads," he said.
Burton said Auckland 2040 had campaigned to relax the density rules in suburban areas, but opposed the Council's proposals for mixed suburban zoning that would allow three storey apartments. Burton and Auckland 2040 opposed the Council's 'out of scope' zoning proposals to the Independent Hearings Panel (IHP) for the Auckland Unitary Plan. See more in this February 24 article. The Council in late February voted to withdraw the proposals after opposition from residents' groups, but the IHP can still make its own recommendations for the Council for dense zoning. The Council will have to make a final decision in August, just a few weeks before the October 8 close of Council elections.
"But when you're starting to talk about suburban areas -- like the Eastern suburbs, out around Blockhouse Bay, all over Auckland there are areas of suburban housing -- you can significantly increase the number of dwellings within those areas without adding an extra storey simply by means of relaxing the density," Burton said.
He said this was not 'in-fill' housing, but denser forms of single level housing.
"I'm talking about taking an 800 square metre site with an old house on it. You take the house off. Under the current rules you could put two dwellings on it. Because you want to maximise the coverage, those dwellings will be large. What we're advocating is putting four or six units on the same site, but of a smaller size. That achieves two beneficial outcomes. One you get more dwellings per site. And secondly, because they are smaller, they are cheaper," he said.
"When you're talking about putting three or more storey apartments within the conventional suburban areas, that is where we have a problem. We believe there is no need for it. All of the surveys prove there is not a huge demand for apartments."
'Plenty of capacity'
Burton rejected the suggestion that the Auckland Unitary Plan did not have enough capacity to handle up to 600,000 extra residents expected to be living in Auckland by 2040, referring to modelling done by an Auckland Council submitter using the Auckland Council Development Capacity (ACDC) model created through the IHP process.
The results of the Council's modelling have been contested by others in the 'Topic 13' group advising the IHP on the Unitary Plan's economically feasible capacity. Housing NZ Corp has also argued the previous versions of the 'down-zoned' plan were not sufficient to meet housing demand.
"All of the modelling work done to date has said there is sufficient capacity within Auckland to accommodate the foreseeable growth. Insofar as Council's own evidence, which it has put up for the IHP, that evidence says there is sufficient capacity. There are different viewpoints that come from different points of view. That's something the IHP is going to have to sort out," Burton said, adding he took his cues from the Council's evidence.
Burton rejected the suggestion that Auckland 2040 simply opposed more intense development in the suburban areas of its supporters and were NIMBYs (Not In My Back Yard).
"We have consistently supported intensification that includes multi-storey apartments around town centres and other areas. We advocated the relaxation of the density provisions throughout the residential zones of Auckland. Those are two significant things that will assist with the supply of dwellings in Auckland," he said.
'Short-term shortage'
Burton said Auckland had a short term supply shortage and there needed to be a distinction made between this short-term issue, and the longer term capacity built into any Unitary Plan.
"The short term supply issue we have in Auckland, which is causing to a large degree the increase in the house prices, is a whole combination of events," he said.
"It's high net internal migration, it's significant numbers of offshore, non-resident investors purchasing houses in Auckland, it's the effects of the GFC, which knocked out most of the finance companies and most of the major developers, it's the implications of the Christchurch earthquake, which pulled a lot of trades people away from Auckland down to Christchurch, and then you start looking at the impact of monopolistic pricing of building materials."
Auckland's builders were also very small and not able to scale up.
"Capacity is the ability of the Unitary Plan to provide enough opportunities for dwellings to meet the foreseeable demand into the future. We are not talking about 600,000 people today or the next 10 years. We're talking about over the next 30 years," he said.
Burton also pointed to a lack of development of Special Housing Areas (SHAs) as a sign that demand for apartments was not as high as some suggested, or that there were major supply shortages.
"The SHAs are not developing furiously. Takapuna has not got a single development under way and the SHA has been there for two or more years. There is a heap of capacity there. There is a lot of greenfields which are still able to be developed. There is a lot of intensification able to be done within the existing urban areas. Zoning another 1,000ha of developable land will not suddenly increase the supply of land or the actual number of houses built," he said.
"The issue is there are some structural issues relating to the number of people who want to come to Auckland to buy a house, to the cost structure, to the shortage of developers to the shortage of trades -- all of those factors combine to make it unaffordable."
'Government's fault'
Burton said those young renters complaining about NIMBYs should instead direct their attention to the Government, which was generating the commentary about supply shortages.
"There are opportunities that are going to come out of the Unitary Plan. Take my 800 square metre example in a lesser value area -- not Mission Bay because they won't be able to afford Mission Bay -- you take 4 units or 6 units instead of two. Those units are going to be cheaper, they are going to be affordable. I have two daughters who want to buy houses. I'm telling them wait a bit," he said.
"The Unitary Plan is going to start affecting things significantly. There's going to be more supply of smaller dwellings, be they single houses, more likely to be duplexes or terrace houses. There will be more supply coming on stream quite quickly if the Unitary Plan produces as I believe it will. And in the Eastern Suburbs and on the North Shore. Specifically in those areas because they are wealthy areas. Land values are high and they can sustain higher sale prices. But the units built in those areas will be expensive because they come from expensive areas. You're not going to get cheap affordable houses in Mission Bay. You may get cheaper, more affordable houses in other parts of Auckland, which is just as good for first home buyers. Not every first home buyer can afford a house in Ponsonby."
30 Comments
the ak 2040 group reckons there is no long term housing problem. WOW.
"All of the surveys prove there is not a huge demand for apartments." In that case let them (the proponents of unitary plan) build some and we will soon find out if there is a demand for apartments in the suburbs. If Burton & Co is correct, they will have to stop after building a few as per Burtons suggestion there will be no demand for them, AND yes problem will be solved and confirmation will be in hand there is no housing shortage and we can throw away the unitary plan.
In my view, the unitary plan should have been in place long ago. Its is the only sensible solution. In fact, it does not go far enough.
If we are not careful and do not go up, we might end up like LA--spread all over the place, just as the 2040 group wants
Survey:
1. "would you rather live in a $1.8m house or a $600K apartment?"
2."would you rather have a $10K car or a $100k car"
Conclusion apartments and cars-worth-less-than-$100k should be banned as there's no demand for them.
If there's no demand for apartments they won't get built so upzoning shouldn't scare him (unless he's fibbing)
I'm not sure why these groups try and pretend their debate is anything other than 'I don't want more people living near me'.
Their arguments defy any form of logic. Its like saying that most people like full fat milk so we should impose limits on the amounts of other forms of milk that supermarkets can sell in case the market somehow doesn't supply what people want.
Like any property bubble, the concept of under supply always turns out to be an illusion in the long run.
The tide turns, people leave because it becomes too expensive, or greedy developers end up building too many houses with the thoughts of making a lot of $$$. Property investors realise their dream of capital gains to infinity and beyond are a myth and they start selling. Suddenly there's an excess of property available for purchase. Sometimes these events all happen at the same time and you end up with excess over supply. Gosh how did that happen? Why aren't houses selling at 50% over CV now? It's a loose loose situation (just for you ZS).
Dorklanders - are you sure you want to change the construct of the city that you NIMBY's love so much because of a government that is flooding the country with immigrants to prop up a deflating economy and Auckland housing bubble, only so they can retain power in the Beehive? It all sounds a little self centered to me, whatever way you look at it.
Would appreciate some figures covering land area within future urban zones. Hectares by the thousands coming online. There will be so much land to develop prices surely going to drop 20%. Oh, won't that bode perfectly well with minimum 20% deposit currently in place. Most will avoid negative equity but wont thank the reserve bank of course.
"I'm talking about taking an 800 square metre site with an old house on it. You take the house off. Under the current rules you could put two dwellings on it. Because you want to maximise the coverage, those dwellings will be large. What we're advocating is putting four or six units on the same site, but of a smaller size. That achieves two beneficial outcomes. One you get more dwellings per site. And secondly, because they are smaller, they are cheaper," he said.
I think this is a good idea....
Richard Burton is trying to confuse everyone with ++++ complications. His arguments are designed to appear intelligent, when in fact they are full of inconsistencies and nonsense.
He says he is not against one house been replaced by 4 to 6 units but he wants no increase in dwelling size. So one 200sqm house (including garaging) is meant to become six 33sqm units. Is that really going to solve a housing supply problem?
What is wrong with using the space between existing dwellings and above existing dwellings? That way hundreds of sqm of floor space could be created helping alleviate the housing shortage. If the existing property owners are ok with intensification -what is the problem?
Richard Burton and 2040 also has this strange dictatorial attitude to the free market. He talks about the density gradient of housing from town centres. This is true but this urban form is derived from market demand not bureaucratic dictate. If he thinks there is no demand for housing in the community areas he represents -then what is the problem -why does he want rules stopping the supply of what according to him non-existent demand?
Brendon... Is he really saying that..??? I thought he was being reasonably open with his idea..
(2 X200 sqm / 6 = 70 sqm units.... if 6 are bulit )
I agree with u ...use space between dwellings and above existing dwellings..
I went to Holland last yr ...visited a cousin who live in an upstairs unit.. ( kinda like terraced housing )...
Maybe a 1950s' age...
I thought it was really cool... Private ...functional... with good use of natural light...
Thats' what I envision... ( If I were a developer..thats' what I'd be trying to build )
ALSO... Amsterdam seems to preserve its cultural heritage in regards to City real estate.... I didn't see too many new buildings in the old districts..????
Houses seem to be smaller in Holland... ( the ones I went in were working middleclass places )
I think it is a good thing to try to maintain the "historic character" of parts of a city.????
Roelof I agree with the broad thrust of your argument, except the historic character bit. Cities are not museums. They need to evolve or they stagnate and die. I think historic character should only apply to 1% or less of existing housing.
Re Richard Burton yes he was trying to sound reasonable. But he was firmly wanting no increase in allowable residential built area for Auckland which is obviously suffering from a shortage in residential floor space. Does that really seem reasonable?
I think he is just trying to limit supply of new housing to jack up the price and he is trying to hide this fact behind BS arguments.
"There's definitely a place for three or more storey apartment buildings, but those places tend to be around places of significant employment"
Looks like we agree on something Richard - so they should zone everything within 5km of Auckland city, the biggest 'place of significant employment' in NZ, as high density?
That's a confusing comment. Do you think people who live in these satellite cities won't drive into Auckland city? Just like no one from Manukau or Henderson ever drives into Auckland city?
I do agree, it is totally impractical for everyone to drive into the city every day - hence why Auckland needs better public transport and for people to live closer to the city, not further.
The density gradients from urban centres to fringes is an observable fact for capitalist cities (communist cities had weird gradients based around bureaucratic dictate). The theory for it comes Bid rent theory or urban rent theory. https://en.wikipedia.org/wiki/Bid_rent_theory
This was originally an economic model for the supply of cities with agricultural produce taking into account transport costs. In periods of increased demand -there would be two sorts of supply response. There would be intensification -increased production from existing agricultural land and there would be extensification in that new agricultural land from further afield would be bought into production.
So conceptually there is an intensification and an extensification margin. The same idea applies to cities too.
I wrote an economic paper on the economics of the intensification margin for cities.
https://makingchristchurch.com/why-land-contiguity-is-causing-market-fa…
70% of Auckland's growth comes from intensification -it is important that this growth is made as responsive to demand as possible. Having complicated and ridiculous planning rules is stupid and in the end will be a cost on all of us.
In the above paper I conclude with a model of neighbourhood co-operation policy proposal which might aide intensification. The model went like so -10 neighbours might agree to allowing the creation of 30 terrace houses or 80 Eurobloc apartments on their adjoining properties in some sort of comprehensively designed package rather than individually infilling each section one by one which might allow say 20 houses to be built.
Using a model from agricultural communities which undertook a land reallocation process (see my article https://makingchristchurch.com/why-land-contiguity-is-causing-market-fa…) -the neighbours would still own a piece of land after reallocation and have some say on its future development. The neighbours would have some decision making control over -the external layout -within the agreed parameters, internal layout, the fittings, cladding?.... some neighbours might build jointly to reduce costs, while other neighbours might want the option of delaying building -this might depend on how the land is reconfigured.
The main benefit being the the way the land is reconfigured and the agreed upon rules (by the neighbours -not planners or 2040....) would allow each section to be intensified more than the standard NZ style infill option. So for instance the neighbours might be able to build 2 infill houses using existing rules, but a neighbourhood wide volunteer scheme might allow -3 large terrace houses, each with a garden. Or 6/8 smaller Eurobloc apartments -a typical NZ suburban section 15 m wide street front could be converted into 2 apartments per level -3 or 4 levels high -one flight of stairs -with optional elevator -probably needed for 4 stories -maybe not for 3 stories -space for communal courtyard or parking behind apartment. Euroblocks were also discussed in this article http://transportblog.co.nz/2015/09/09/guest-post-1-billion-fletchercrow…
Such a scheme would probably require some institutional support - in the form of providing guidance on -design, engineering, financial, planning rules..... something like an Urban Development Authority would be good option to promote this process.
The areas most likely to benefit from this sort of process are neighbourhoods which have increasing amenity value due to improved transport links, rising employment from a growing city..... combined with low value existing buildings -old, cold, mouldy, rundown.....
For Richard Burton and his supporters to say that Auckland doesn’t have a long-term housing supply problem is to ignore the over whelming evidence to the contrary. There have been numerous official reports, a government commission of inquiry and ongoing professional commentary from the planning, architecture, development and economic sectors all highlighting the well-established fact that restrictions on land development as advocated by Burton is the main cause of Auckland’s damaging high cost housing environment.
To go on and blame the building industry, developers, finance sector and finally non-resident buyers as the cause of ongoing house price increases is incredulous. His solution of denser forms of single level housing is what the city has been doing for the past 40 years and is clearly recognised as part of the ongoing problem the city faces.
Auckland 20/40 and its supporters have for a long time advocated for protectionist policies and against the sharing of the housing needs of a growing city. They will argue for development anywhere but in their neighbourhoods. Knowing that in doing so it will increase the value of their properties while putting a greater burden on other parts of the city.
Completely agree. I would also like to add is I don't know why the likes of Auckland Council give institutional recognition to 2040 which is an obvious protection racket representing a minority of Aucklanders when they give no recognition to groups representing renters and those without property who are in fact the majority.
Perhaps utilising the empty homes make reduce the shortage. What a joke
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11613…
Bank of England intervening to prevent a UK property bubble caused by easy borrowing terms for investors......familiar?
http://www.ft.com/cms/s/0/57981914-f588-11e5-96db-fc683b5e52db.html#axz…
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