By Greg Ninness
The Government’s plans to build up to 4000 homes in the Auckland suburb of Mt Albert will not just test its KiwiBuild policy, it will also be a major test for Auckland Council’s Unitary Plan with its emphasis on densification.
Certainly, the plan announced on Sunday to build 3000-4000 homes on land that is currently part of the Unitec campus at Mt Albert marks a major turning point in the Government’s KiwiBuild policy, which aims to build an average of 10,000 affordable homes a year over the next 10 years, with half of them in Auckland.
Up until now KiwiBuild has been all posture and policy.
But with the announcement of the first project we will start to see some tangible results by which we will be able to measure the success or otherwise of that policy.
As it gets underway over the next few months it will be interesting to see who the Government’s development partners in the project will be, the type of housing they intend to provide, and the price points they expect to achieve.
And once the bulldozers move in, we will be able to measure how quickly the construction proceeds, from the formation of roads and installation of utilities to building the homes themselves.
And there will be a great deal of interest in the finished product, particularly if it involves prefabricated building methods which are expected to play a major role in KiwiBuild.
There is likely to be enormous public interest in display homes as the first part of the project is completed.
There is an expectation that this could be the future of affordable housing in Auckland, so people will want to see what the future looks like.
If they like what they see, projects like this could become the norm.
But if it proves to be a hard sell, it could stop plans for similar developments dead in their tracks.
So there’s a lot at stake, and the Government really needs to get it right if it wants people to have confidence in its ability to fix the housing mess it inherited from the previous National Government.
Pressure goes on social services
But the project will also be a test of Auckland Council’s Unitary Plan, with its emphasis on densification.
There is no doubt that densification is already happening in Auckland, but so far it has mainly been piecemeal – an apartment block here, a terraced housing project there.
But up to 4000 new homes this close to the CBD is another matter.
That will put substantial pressure on local social services in the area such as schools as well as utilities such as water, sewerage, drainage, telephone and internet services, and particularly transport.
How well these cope with an influx of, say, 10,000 or more people into what is a fairly confined space will be a critical test of Auckland’s ability to cope with densification.
As will Auckland’s Council’s ability to manage further commercial and residential redevelopment spawned as a result of the Unitec project.
For example, the influx of people it brings into the area could encourage more commercial development around the retail strips at both Mt Albert and nearby Point Chevalier.
If the project is successful and people like the housing it provides, that may also encourage more residential and commercial densification along major transport routes such as New North Road and Great North Road, which run nearby.
Will all of this provide the vibrant, diverse and functioning communities that everyone seems to want?
Or will they turn out to be the congested, ugly spaces that some fear?
At both the local and national government level we have heard the talk.
Now they will be put to the test and we will get to see how well they can walk the walk.
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162 Comments
Let add another 4,000 families onto the congested roads of AKL.
All tax payer's money is spent by this government for the benefit of only 3,000 to 4,000 families in AKL.
The scope, scale and vision of this government to define and solve any NZ's problem is just ...
Auckland is relatively small, and has a very low population density on an international scale. Look at Melbourne - arguably less congestion on the roads, but an excellent public transport system. This can be done well, the only question is whether or not it will be.
Melbourne is relatively flat, with cycle lanes, trams, buses, rail. Auckland lost the plot years ago ripping out trams and is car centric. Its going to get a lot worse before it gets better, that's why I moved out. Finding a park on most days is just to hard.
However when I do visit I use the trains and ferries which are excellent.
That's completely wrong.
If you think about the earlier NZ governments' efforts in housing, their boosting of the overall supply of NZ housing actually made home ownership far more accessible to average Kiwis than it would otherwise have been - not only for those directly benefiting, but also indirectly.
Supply and demand.
As for local congestion, there ain't many sites better located than this. You've got huge reduction in traffic / spare capacity on carrington rd since waterview opened. You've got SH20 and SH16 right there. You've got local shops at Mt Albert and Pt Chev in walking distance from much of the site. You've got Pak N Save and Coundown about a k away. You've got Mt Albert train station walkable from the Northern parts, future Pt Chev Light Rail station at the south schedule to open within 5 years or so of this completing. Mt Albert to CBD is 20 mins on peak after the CRL opens. You've got bus lanes all the way into the city on Gt North Rd, and finally you've got the waterview shared path on site and linking into the Northwestern Cycleway.
as a taxpayer, I am happy to see a few thousand families escape the clutches of greedy landlords for a life. BTW, property investors don't pay tax, instead they dodge the income tax with negative gearing and escape capital gain tax... well, we don't have one. Why is it taking so long to introduce additional taxes on this non-productive speculation business called property investment?
Rick
It’s actually far worse than just 9 years of vested interest
Labour under Clark also used rising house prices as a default working e Con omy.
Also the rating system is ridiculous and a prime reason Auckland is $6Billion in debt with only 1.5million pop.
Compare that to say Toronto with over 5 Million pop & $7Billion debt
To give kiwis an idea Toronto is like NYC but clean & tidy .
I pay property tax each year at 1.3% of assessed property value which is far more than $1.5Million homes will pay in rates in Auckland. This situation of under taxation of expensive Auckland property has gone on for decades and has a lot to do with why people can mortgage themselves heavily and still manage to reside in a expensive piece of real estate. Good Luck with that $6Billion debt Auckland
I see the uninformed, possibly just out of university spreading across MSM comment section and now interest.co.nz like a virus... property investors don't pay tax? Do they not pay tax on rental income? Dodge income tax with negative gearing? Do you realise they are only getting back ~30% of their losses which means they are losing money as they have to stump up the other ~70% from their own pocket? Escape capital gains tax? Have you heard of the bright line test? Severe negative gearing means they are looking for capital gains so unless they can sustain losses for more than 2 years (soon to be 5) they will have to pay tax. The funny thing is the children of the property investors you so hate will be the ones buying the 3000~4000 homes as they can stump up with the deposit with ease and you will be the one increasing the wealth of the family with your tax money :) Your taxes are also funding the tertiary education of the landlord's children as well ;)
Stev-O...you sound very bitter,did you not have a good accountant like the rest of the specuvestors?
Our taxes are funding everyones children in tertiary education...
Good news on the tax front though...with no capital gains likely in the next few years,your tax obligations shouldn't be too onerous.
The good news is the homes are to be balloted,so it will be open to many and there are going to be systems in place so they can't be 'flicked' :
"KiwiBuild homes will only be sold to first home buyers. To avoid buyers reaping windfall gains, a condition of sale will require them to hand back any capital gain if sold on within 5 years..."
Do you realise they are only getting back ~30% of their losses which means they are losing money as they have to stump up the other ~70% from their own pocket?
Steve-O I run a business, if I run it at a loss I lose the whole 100% . I dont have another income stream to claim the loss against. I dont run it at a loss because that is just stupid. I didnt go into business to lose money on purpose.
Capital gains is all about intent irrespective of bright lines. If you run your specuvestor "business" at a loss, then you are obviously reliant on CG's, so you get to pay tax no matter how long you hang it out for.
The Govt would have been better to direct all the money into infrastructure, with priority going to massive rail development and improved roading. Rail is the preferred option for public transport but you cannot ignore roading. This would encourage developers with the money and know how to build high density multi storey dwellings along the main arterial and rail links. Potentially taking the pressure off the housing market. Far more bang for our buck IMO.
... it is a terrible shame , a tragedy of epic proportions , that Phil " the Tool Man " Twyford wasn't in charge during the rebuild of Christchurch ...
At 4000 houses per 28 hectares , he'd have shrunken the 380 000 population of the garden city from 1426 sq km .... to just 11 sq km ....
... cowabunga Batman ... a spare 1415 sq km ... imagine how many more A2 farms we could set up on that ... or my genetically modified T2 milking cows , the turmeric milkers ...
Of course ... as Twyford must know , the land area for each dwelling is just 45 sq metres ( 63 % efficiency ) ... if you're gonna squeeze 4000 dwellings onto just 28 ha.
Good points in the article, Greg.
If the Unholy Trinity of Gubmint, AC and Developers manage to foobar this showpiece, KB is goneburger. As it's a physical build, not a hard-to-measure social waffle-fest, the results or lack of them cannot be easily cleansed by the PR spin-cycle.
OTOH, if it's less than a hard-to-sell slum, full of ex-gang-bangers and their associates, then there's some hope and the next iteration can be more selective aboot Which Poor People get let in and under what T&C's.
But, given the design/tendering/planning stage is still to occur, my prediction is that it'll be Christmas 2018 before the first sod is turned, March 2020 before the first hoose is occupied and, by sheer coincidence and assuming no foo beyond all recognition - it will all come together JIT for the next Election.....
Well put :
" OTOH, if it's less than a hard-to-sell slum, full of ex-gang-bangers and their associates, then there's some hope and the next iteration can be more selective about Which Poor People get let in and under what T&C's. "
That is the big white elephant in the room that could break the back of any project and renders nice development unsellable ... in addition to being a taboo subject for most to discuss ...!
Drugs,crime & gangs are not restricted to the the lower socio economic districts only...
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=3006432
A project this large will take time to complete and sign off will probably happen on a building by building basis. There isn't going to be an instant 3-4k of houses.
Fears about transport are more of an Auckland issue with too much dependence on cars. Maybe having public transport that isn't completely backwards would be an idea.
The real test of this project will be completion time ...as planned, it will be in 5 years ( if all went well on time and budget, which is never the case in NZ) ..
the other real test is the time it will take the Council and its services to catch up with developers and complete roads and utilities ( in years) ....
It is a great project in my view, but I suspect it will end well in the hands of a socialist lefty CoL .. and the stiff ACC ..... but time will tell .
There is very little chance to see the first buildings going up by the end of their term, we shall hear this drum pounding every day going forward .... so we are not holding our breath , and neither should the FHBs !
I wonder what happened to the Northcote rebuilding project announced last year to clear the old HNZ trash and build 300 new houses in Northcote on the Shore?
Has it stopped?
The Northcote Development, the first Auckland Housing Programme project to kick off, has already started. The masterplan includes 400 new Housing New Zealand homes (replacing 378 existing units) and 800 additional new market and affordable homes.
The development project is expected to take six years and is being managed by HLC, applying expertise gained from Hobsonville Point.
https://www.hnzc.co.nz/housing-developments-and-programmes/auckland-hou…
The plans show a lot of townhouses, or they may potentially be apartments. The only information that's been linked is resource consent drawings. There still needs to be building consent drawings and the building consent application made. The real information will be in that documentation.
Not all FHB necessarily need a landed house. Most of the FHB (I'm one of those) who are worried about not being able to buy a property will settle for apartment and a smaller unit at an affordable price. Because at the end of the day not all FHB dreams of big houses, some people just want a small and livable home.
You'll be surprised how many people think the same way as I am.
..Ive seen 5 up on a 50cc scooter in Vietnam. You just need to realign your expectations with our immigration policy.
This is the glorious self appointed Knights legacy and these will soon be the the good old days as congestion, housing and crumbling infrastructue gets worse and worse and worse. I have yet to hear any solution to Awklands decline that stacks up. Just bluff bluster and pretend
Well with a train station, major bus routes and light rail (when built) all within a short walk, this are doesn't have poor infrastructure.
And the reason Auckland has such poor infrastructure is due to low density. Only higher density will enable better infrastructure to be cost effective.
You have to realise that this is where monolithic clad houses were actually ahead of their time and very green in their design...the moisture was absorbed by the walls to be slowly released into the atmosphere over time,the green being the colour of the mould & slime that subsequently formed...
For anyone that did a bit of travelling into worldwide into civilised countries will understand what good infrastructure is. Auckland is a 'supercity' for people arriving from for example Nadi but not from big metropolises or Europe.
I do not think it is that simple. you have water around, rocks and volcanoes everywhere and waitakeres.
There was no planning in Auckland and the growth is not natural therefore - infrastructure problems. Not only roads - waste water lines is even bigger issue.
They are not going to demolish hundreds for houses to build extra motorway....i do not think so.
MFD, there is no way that this development is going to get started if they plan to build 4000 units, for FHBs, state units and houses for the general public.
They are deluded with that no. And also the roads are not designed for that no. Of extra people.
Watch this space for the backdown and retrenchment Of no.s!!!
Lets assume 4,000 units each have 2.5 occupants, so 10,000 people in 29 hectares = a population density of about 35,000 people per square kilometer. The population density of the entire city of Paris is about 22,000, including commercial, industrial areas etc. in a city famous for its lack of tall buildings. Do you really think that 35,000 people/km2 in a small concentrated area is unachievable?
BS, you'd be on "Team Stir up as much Sh*t as you Can", and you will be gloating. This government has run into a situation far and beyond what we/they thought they could be facing and all we get from the disgruntled Nats is disruption. Buggar them, there is a job to be done, it is difficult, and crap is coming at the govt from every quarter imaginable, people who have been denied for years (nurses etc) and everything else that has been bottled up for years, now the top won't hold it down any more. Practically, everything you are seeing is the culmination of 9 years of terrible neglect and mismanagement. It is a sorry situation, but it is not of the present govt's making.
Labour are in power. They can spend and tax as much as they want/dare to ‘fix’ all of these. Their strap line was ‘We can do better’. Well stop the friggin harping on about the situation and fix it. It’s all about priorities. If you think Health is underfunded then fund it. Give the nurses 20% if you want. However, you will be judged on the consequences as much if not more than you choose to judge the previous government on the choices they made.
Whatever, if enough taxes have not been collected in the past, then there is clear what has to be done in the future, it will hurt more than it will have if it was being done over the last 9 years. You can duck and dive all you like, but the mess has been left by the Nats. The nurses and more probably deserve/need as much as 20%, what a pity they hadn't been keeping up in the past because it HAS to be fixed.
The reality as I’m sure you realise is that all parties are hamstrung by the desire to be re-elected. No matter how much the Left harp on about underfunding this or that they realise that voters don’t want to personally pay for it so make noise and do little. Those of us on the Right are sitting back waiting for Labour to do something bold so we can pull it apart and make mountains out of mole hills. That’s what oppositions do. We will never convince died in the wool lefties to change. We need the swing voters to move. That’s all.
Pretty much in a nutshell, however, there should be somethings that are sacrosanct - housing the population, keeping them healthy, keeping them safe, keeping them educated. Those things should be bipartisan (tri-partisan? How ever many parties we have involved with different viewpoints) and agreed upon that they cost money, fiddle around with everything else by all means, but make sure the fundamentals and foundations for national happiness and growth is maintained.
That acts as if messaging and ideology sold to the masses doesn't have a role to play. Of course it does. The mantra of tax cuts over all while papering over structural deficits in funding of services has its effect on the hoi polloi - witness the whining last election time around possible tax cuts vs. bringing per capita funding of service back up to where it had been.
People are affected by the philosophy sold to them. This is precisely why we have people who received the benefits of social democracy when they were younger now ranting and railing against it and maintaining they've never received such benefits and ungrateful young whippersnappers should stand on their own two feet just like they did.
Health Minister David Clark said he was demanding answers from the DHB because he was only told one building had serious mould, but the issue was much larger than that.
There were "serious" cladding issues in four buildings, and asbestos and seismic issues and deferred maintenance in other buildings.
"And some of our buildings have all of those problems together, so we've got lots of problems."
The DHB has been aware of some of the issues for about four to six years, but was hesitant to ask for any funding to fix them.
In a letter titled 'Living within your means' and dated 27 October, 2016, former Health Minister Jonathan Coleman wrote to the DHB: "I am pleased to see that your dhb is planning a surplus for 16/17 and the following three years."
When asked if the DHB was not doing the work required because Dr Coleman wanted it to stay in surplus, Dr Johnson replied "yes".
Realistically, there's a massive difference between "voters don't want to pay for services" and hiding the issues, sweeping them under the carpet so that voters think things are going along okay. Actual management of services and honest communication of issues within them matter.
When it gets to the point the Minister of Police is publicly calling out her own PM to force him to give adequate funding, you know it's bad: http://www.newshub.co.nz/home/politics/2016/12/judith-collins-english-r…
Which version of reality do you communicate? Every single Government service is underfunded in someone's view, usually brought about by personal interaction e.g. Police, Health, Education. Your view on core services differs to mine. That's what we all get to vote on. Again, if the party in power believes something is underfunded, fix it and face the electorate. If enough voters share the sentiment then the Party will be re-elected.
Health Minister David Clark said he was demanding answers from the DHB because he was only told one building had serious mould, but the issue was much larger than that.
There were "serious" cladding issues in four buildings, and asbestos and seismic issues and deferred maintenance in other buildings.
"And some of our buildings have all of those problems together, so we've got lots of problems."
The DHB has been aware of some of the issues for about four to six years, but was hesitant to ask for any funding to fix them.
In a letter titled 'Living within your means' and dated 27 October, 2016, former Health Minister Jonathan Coleman wrote to the DHB: "I am pleased to see that your dhb is planning a surplus for 16/17 and the following three years."
When asked if the DHB was not doing the work required because Dr Coleman wanted it to stay in surplus, Dr Johnson replied "yes".
Why not expose these things and let the electorate decide whether cladding, seismic issues, asbestos and deferred maintenance are basics for hospitals - or whether they're luxuries? Why hide it?
In your opinion, are hospital buildings in such a condition adequate or should they be in better condition? Or are these adequate for the plebs while we with private insurance should expect better?
"That's just a different version of reality" seems a bit of an odd tack to take.
And also stop feathering your own nest by underfunding things to support your own vested interests, surprised/not surprised, thanks Dr Death - https://www.stuff.co.nz/auckland/local-news/north-shore-times/102550063…
TM2...if anyone is seeming more stressed each day it is you....have you slept in the last week,are you on crack?
I am serious,I am concerned for your mental health,is there someone you can talk to outside this forum,I don't think it is doing you any good in here.Take a walk in the real worl,watch the autumn leaves,breath some fresh air...the cyber world is taking its toll on you...take care buddy.
It's a derogatory term for the current Govt, Coalition of Losers, because National have a right to rule, and the election was stolen from them, and it's not fair, and Taxinda and stuff.
The witty folk on here seem to forget that every Govt formed, certainly under MMP, has been a coalition of losers - no single party has ever "won". The last CoL were fine though as they were formed under National, but double standards/hypocrisy, mean this current Govt. is illegitimate, according to the NZ tea party.
4000 dwellings over 5 years which means 800 dwellings a year. That means the government needs to have one of these announcements a month if wants to build 10,000+ dwellings a year. And of course not crowd out the private sector. Be interesting to see next month's announcement.
You are right and it must be Uni of Auckland's turn next. They have oodles of very valuable land in CBD and Epsom for example. The handful of decent academics can move to Albany's Massey campus and the students to other universities - that would not only free up valuable land for kiwibuild but also reduce Auckland's population massively. Just leaving our world famous PTE's in place and they have almost no land and their students are usually away picking fruit.
Quoting from NZ Stats report last year ""Auckland has the most rapid growth, with 28,900 more people arriving in the region than leaving to take the population to 1.66 million - an overall rise of 2.6 percent."". So 289,000 for ten years or more if it is proportional growth. It does sound as if they really do need a repeat every three months. Where will the next one be? And the one after than? There is a real risk all Auckland's open spaces will disappear.
Of course you are right. Given friendlier consenting and financing there would be far more house building - who wouldn't want to invest in knocking down their stand alone house and replacing it with a terrace or an apartment block - potential profit - it is just the bureaucratic pain and delay that stops it. And we are all forgetting houses get old and need replacing. My gripe is about why Auckland is growing too fast - and that is in the hands of the government and their advisers who seem to say all immigration is good for us despite 70 years of experience proving otherwise.
The current government only have to build one house in Auckland to do more than the National government did in the previous 9 years. What is refreshing is the fact that we now have a government which admits there is a housing problem in New Zealand and not just in Auckland. They will have their knockers and of many of them will be National supporters who are holding investment properties and who know that we have a government with a mindset that will at the very least slow down housing inflation if not peg it back a bit.
Mike Hosking and myself do see things mostly the same.
Reason being is that we are intelligent and like to,question when there is BS being put forward by this incompetent inexperienced lot that have no business intelligent or life skills.
Some of you are so easily sucked in and haven’t got the ability to do the no.s and see that it is impossible.
TM2,
If your intelligence matches your grasp of the English language,then your IQ would be sub 100. Your final sentence is truly dreadful and is literally,nonsensical.
Burns once wrote; "O,wad someone the gift tae gie us,to see ourselves as ithers see us". if you were given that gift,you would be pretty unhappy.
" Mike Hosking and myself do see things mostly the same " ............ hmmmmm ....
... I was at the hairdressers last week , and the young stylist said to me " I can see that you and Donald Trump are of one mind , regarding coiffure " ....
I'm beginning to feel that I ought to have been offended .... not chuffed ...
Rest your Jimmies TM2, I will come to your rescue with my trusty calculator. 29 hectares is 290,000m2. Lets say the average home size is 100m2 and they are building on average 3 storeys between townhouses and apartments. Which means an average footprint of 33m2 per dwelling.
4000x33 = 132,000m2. So well less than half the land covered in buildings. Also note that many of these buildings will be built in blocks. Have a look at the density of the subdivision way up in Millwater https://goo.gl/maps/5xRvk3xZFiJ2 That should give you some idea of how it will work but I'd imagine even more dense because of how central it is.
Ocelot, so you are talking 66m2 for each dwelling as the bottom storey would need to be garaging.
Therefore no standalone houses, or property for private sale.
There would be no,outdoor living available as there would be no room for decks.
66m2 of living would give you no way to have children living there as as small as an over 60s unit which is designed for one or two oldies.
Jacinda said alsothat she was planning a new school plus retail etc in the subdivision. Yeah right plenty of room.
With your workings there would be no way of doing that and wouldn’t comply with outdoor living space, sunshine hours etc. etc.
Delusional!
Let’s just wait and see now and I will guarantee that “The Man”:is right.
See below some Hobby ville options,many with no garaging,just a space...
http://www.jalcon.co.nz/homes-sale/hobsonville/apartments/sunderland-cr…
http://www.jalcon.co.nz/homes-sale/hobsonville/apartments/rifle-range-p…
http://www.jalcon.co.nz/homes-sale/hobsonville/apartments/rifle-range-p…
Search for 3 bedroom houses for sale Woodseer st London E1. I lived there 25 years ago (paid 70k UKP in 1990 and sold 13 years later for triple that). Lovely place to live; most homes had kids; very cheap build but easy to live in despite size: 2 storey terrace with bottom floor 36sm and top floor 34sm (that is 34sm for 3 bedrooms and a bathroom!). So it can be done and it can work - meaning being pleasant to live in - trading space for being close to the centre. BTW I checked it last night to find out those sizes and they are selling from 800k to 1m UKP - until I saw those prices I thought Auckland prices were crazy. [Roughly double for NZ$ prices].
Who gives a flying ---- whether it is 4000 homes or 400 homes. It is the mindset that counts and Labour has the mindset to make life a bit easier for those who are about to get on the property ladder or who have been trying for some time to get on it. We are a low wage economy and it is hard for people who do not have family help available to put together a deposit for their first home and not just in Auckland. As Don Brash recently said live on TV3 the main reason National lost the election was because they dropped the ball on house prices. I think it went further than that. National does not give a stuff about the little fellows as generally they are not the people who vote for them. At least Labour is trying to put things right. They just need to build one house in Auckland and life will be better than under National.
Who gives a flying ---- whether it is 4000 homes or 400 homes.
I would suggest that to 3600 potential homebuyers the difference is quite significant.
It is the mindset that counts and Labour has the mindset to make life a bit easier
So it doesn't matter whether what they do is at all effective, as long as they meant well?
They just need to build one house in Auckland and life will be better than under National.
No matter what it costs? No matter where the money is diverted from? No matter how many houses are consequently not built by private developers, life will still be better?
quite right - it does not matter that the minister ( pick one of several in the last few weeks) has misled the house/country ( thats political speak for lied) they still have my support and no sanctions will be forthcoming!
Even Phil T admits that the whole development - planned and conceived a few years ago - with far fewer houses - will only deliver about 500 affordable homes ( thats the Kiwi build aspect) at 600K ish
translated for people - maybe 350 homes at 675K ( subsidised by the taxpayer - in about 5 years time!)
Questions i do give a flying for are
How much did the taxpayer just pay for the land ?
when will the project start ?
When will the homes be built ?
the exact number of Kiwi build Homes made available at affordable prices?
What additional subsidy will be made by taxpayers to fund these homes at clearly well below market value ?
When the houses are sold - will their lucky lottery winners - be made to repay this subsidy - or is it simplly a $250K handout to a lucky few!
Labour/NZF are only an inch better than National. I've seen no real change to:
* The thousands of fake and often misogynistic students coming in every year. I calculated they should be around 52,000 if they want to get to 30k net - which is still heaps when you consider the gross numbers of kiwis leaving and being replaced by people from different cultures. If you're going to let in hoards of people at least take the skilled South Africans who are getting murdered and tortured every day.
* The fake entirely optional capital gains tax
* The landlord subsidy known as the accommodation supplement.
* Land bankers sitting on empty paddocks.
* Incentives which encourage low income families to have many kids and smart workers to have no kids.
* BRANZ and dumb council workers preventing people from building warm and airtight houses inline with international quality.
* Body corporate laws, land covenants and zoning rules leading to lots of tic-tac single story houses packed into 300m2 sections.
Good riddance to National but I think Labour/NZF can do better.
There are a couple of issues that they seemed to have over looked.
They are buying the land at its present over inflated today price, ie it is still a restrictive land market, which also has already has factored in the ability for it to be high density. They are paying top dollar for this land, and therefore it does not matter whether they build apartments, townhouses or stand alone, they will always be far dearer than they need to be than if Labour had first removed the urban growth boundaries.
The density is not an issue if that is what people really want, but it becomes the only option if you pay too much for the land at the beginning and can only make it work by cramming people on. If they had a true non restrictive market then anything they build, would be selling for a lot less.
Secondly, the fact they are selling some at a subsidized price, means that other houses within the department have to be sold for more, or the Govt. will have to subsidize the shortfall. IE some one has to pay the difference.
And assuming that they will add supply to meet demand, over time, as they are promising, then prices will fall/stall market wide, making non subsidized owners vulnerable.
There is plenty of research that shows that the first 10% of cohorts above the subsidy cut off line, ie those that just miss out in qualifying, are always worse of than those than managed to qualify. Of course you can keep making it easier for people to qualify, but you are always left with those that just miss out and therefore are worse off.
Labour are already not going to means test FHB, and second chancers (what's the definition of that) so they are starting on the path of subsidizing everyone. You could take it to its logical conclusion and subsidize all housing, but some of you might see a there is one slight problem with that........
The key is to develop a model that allows more affordable housing for all, without the need for Govt, subsidy.
Other jurisdictions do it, Labour needs to first implement opening up the urban boundaries, and I don't mean by giving the power to an urban authority quango.
One of the first actions to making things cheaper, is not to add non-value added costs into the equation to begin with.
By paying too much for the land, the outcome of this as a truly affordable housing development model, ie without subsidization, has already failed the first test.
It appears to me there is always an amount of subsidization going on,perhaps the money below is better spent putting people into their own houses...1.2 Billion per year in 2015/2016...if that was put into a building programme,we could build a few houses and get people on the ladder...see extracts from a treasury report on increasing the AS below:
Treasury Report: Impact of Accommodation Supplement Increases on
the Housing Market
Purpose of Report
1. This report outlines the likely impact of increasing Accommodation Supplement (AS)
payments on the housing market, responding to your request for advice on the topic.
The report focusses on impacts on the rental housing market. However, the flowthrough
to house prices is also briefly discussed.
Analysis
Accommodation Supplement
2. The AS is a weekly payment to low-income tenants, boarders and homeowners in the
private rental market. The payment is calculated based on incomes, family type,
location and housing costs. In 2015/2016 $1.2 billion in payments was made to around 290,000 recipients.
Potential impact of increased housing demand on prices
6. An increase in the AS may result in increased housing demand, which can impact the
housing market in five ways:
• AS recipients may have a higher willingness to pay for housing, leading to higher
rents.
• Renters of similar dwellings as AS recipients, but who are not receiving the
supplement paying higher rents, face increased competition from AS recipients.
• Renters of more expensive houses pay slightly higher rents, as a price premium compared to less desirable houses is maintained,
• House prices increase as their Net Present Value (taking into account the
increased income stream from rentals) increases making rental housing a more
attractive and ‘bankable’ investment. These increases in value may perpetuate
any sentiment of further increases in capital values.
• Substitution on the margin of properties from homeownership to rentals,
increasing the supply of rental housing.
http://www.treasury.govt.nz/downloads/pdfs/b17-info/b17-3664879.pdf
This is why both National and Labour are socialist and - unfortunately - have been wont to pump up housing costs. This and the first home buyers' grant are both terrible ideas that only go into investors' and landlords' pockets and serve to distort the market. (Not to mention, Working for Families also subsidising company wages and the rental floor.)
Yes and that is part of the problem.
Subsidization always gets capitalized back into the price, and more specifically the price of land. In effect, the subsidization ia a cash free gift to the land owner. Same with rental supplements, home loan starts, giving access to Kiwisaver and any other back end inducement where the land is restricted as it is in NZ.
The home owner thinks they are getting say a 20% helping hand, but in reality they are paying 50% more than they need to.
The jurisdictions that don't have subsidization, amongst other things, have far more affordable housing.
Good points Dale. Like you I don't have a problem with density. There are perfectly functional places around the world with much higher density. The Walled of Shibam is only 3 hectares in size but houses about 7000 people. The city even in pre-industrial times had special features ensuring comfort, such as temps being a constant 20-21 degrees temp. Density can be luxury -don't believe the nonsense that density automatically means slums. http://www.hiddenarchitecture.net/2016/01/shibam.html
The problem is, as you say Dale, that land prices are excessive due to monopoly pricing -because there is excessive restrictions on building up and out. This causes all types of housing -high density/low density -to be more expensive to construct than it should be. We all know that the major problem in house prices in Auckland is inflated land prices. Measures need to be taken to remove those restrictions.
Dale I have written a article on developer contributions, inclusionary zoning and council fees. I see them as taxes on urban development. https://medium.com/land-buildings-identity-and-values/developer-contrib…
Your comments on dc's, iz's and council fees are correct and again fail into the category of when a monopoly is allowed on a service or product then the cost goes up and value goes down.
In the jurisdictions that also have non restrictive boundaries they also allow competition of supply for the other infrastructure. Result being more affordable sections/houses and other amenities.
Agree Dale. That disappointed me. They're in the unique position of having the power to fix the root problems that make building expensive such as un-taxed land and protectionist building standards. They even have the Public Works Act.
They're not going to improve living standards for the next generation doing things the NZ way. The result will be smaller and smaller, crappy tic-tac housing. The plebs will never get a slice of the pie, just a bite.
Dale, as the Uni has audited public accounts, we should all be able to winkle out just what the total transfer price was, in the fullness of time.
It will, as you so rightly point out, be a severely inflated price cf rural land, but hey, that's par for the course when there's a MUL or RUB or whatever term-du-jour the PR machine has invented to obfuscate its real import. The Productivity Commish, in its Housing Affordability report, noted the differentlial at 8-10 times, and that was a few moons ago.
And a 2013 research paper here notes that "This suggests that the impact of the MUL on housing affordability is most pronounced for those at the lower end of the housing market."
Unexpectedly!
Yes it will be interesting to see what it is valued at and what they paid for it.
They have already admitted that they are paying full market value by saying 'affordable' starts at $600,000.
I understand that they are going for the easy numbers, to get some quick hits, but it is about affordable numbers, not just numbers per se.
But the more they literally buy into the inflated market, the less likely they will be able to build truly affordable housing.
As some have already said this is beyond party politics. However, realistically Labour campaigned on targeted delivery. As Gordon basically said National lost an election that was theirs to lose. Coalition now has the opportunity, challenging as it may be to do something, that actually is not that difficult. Unfortunately we have all to a degree accepted that we are faced with a crisis and we sadly, over many years, have become cynically accustomed to a profoundly low ebb of expectation as to what our political masters can achieve. In fact, their warrant, short of trying to win an election every three years, gives them generous scope to put into place what needs to be and can be done. There is sufficient depth in this current coalition to achieve in spite of their somewhat unexpected path to high office. The jury is still out and maybe some of us are a little premature in our conclusions. However as I’ve stated many times this government will absolutely have to, in respect of genuinely chasing its vision, rewrite the rule book on pragmatism and expediency but in doing so refrain from such practice merely as an end to holding onto power.
Before common taters get too carried away by the 'we', 'us' and other collective terms in relation to housing, be it noted that Christchurch and some other pleasant urban centres do not suffer from the Awkland disease of wildly over-inflated land prices foobarring everything on top.
In the immortal words of the silver screen:
Lone Ranger: "We're in a heap of trouble, Tonto!"
Tonto: "Uhh...who do you mean - 'we'?"
Due to elderly parents needing care I am somewhat “stuck” in Auckland – they are my mom and dad after all.
It rankles that cheerleaders of the previous administration now admonish and decry every effort to sort out this mess – maybe I’ve missed it – but I haven’t seen a lot of positive alternatives put forward.
Equally, while the capital gains ran free and new consumers hit the stores I don’t recall much hand-wringing over what plans to lay in store when the day of reckoning came knocking on the door.
So there you go Mike and associated fan-boys on this site – what are the answers to this mess which was previously so enthusiastically embraced.
Yes, I noticed it too. The 'right' side of things appears to have no encouragement towards this and other housing developments proposed by the coalition. It makes one wonder whether a) they think it's a bad idea because it comes from the coalition, or b) they think they might have something to lose regarding their property values. I suggest that the squeals from among certain of those over-interested in property indicate that the coalition is generally making the right moves on this, even if there are details to be ironed out.
Hope your parents are okay; I may be facing the same situation sometime in the next decade or so.
It seems they're simply going full Tea Party. Keeping track of whether they're in favour of something ("National was going to do this anyway, nah really") or against it ("Can't be done, it'll be 'orrible and nasty") or simply mewing and shouting at clouds (or "Communists!", "Taxinda!") is quite some task.
Heck, as someone who until very recently voted National it's a bit concerning, really. I do want to see National become a party with some integrity and vision for NZ again, not just a party of negativity with the ability only to kick cans down the road for others to pick up.
Yes – I have voted all over the place in the past – depending on the situation and circumstances of the times.
I’ve always taken the vote seriously, I respect our democracy and the need for a strong opposition – no matter who occupies that position at the time.
Right now I simply want an administration that address some of the nonsense that is going on in terms of “mass migration”, the “education export” permanent residency industry and so called “business” permanent residency.
I don’t recall voting for this – or having the option – it was simply foisted upon us.
If you take on the vested interests you are called racist (that was when I politely proposed a quota by country which would have hit my own country of origin first) which I find a bit rich when they are pakeha white and my family is visibly multi-ethnic. The INZ are reluctant to produce any stats (this year they removed their R1 residency database from their website) because they prove inconvenient facts. For example 40 Chinese 'investors' to every 1 Indian investor - hard to explain when in UK and USA it is Indians who are the better creators of new businesses and employ more diverse staff.
3 days ago on TVNZ1 head of Immigration NZ conceded there are 10,000 overstayers currently enjoying the fruits of NZ, health, education, roads, pure clean green
INZ does not have the will, or the inclination, or the desire to do anything about it because of lack of funding or it would be seen as racist
https://www.tvnz.co.nz/one-news/new-zealand/most-read-story-over-10-000…
Without identification they will not get health and education.
The overstayers may be visitors. The PI aunt who came for a visit and decided they liked NZ and chose to stay. There will also be visitors who go into hiding for criminal purposes. And there will be more of those Malayan builders who get instant entry as visitors. So many types of overstayer. Lets ignore the very short term ones who lost their passport or fell ill (I know one of those and he wasn't happy being away from his girlfriend in his country of origin.)
INZ could clear plenty by matching IRD details with Visa - when work visa expires and IRD activity continues it should prompt concern. They do it in Australia but in NZ they claim it is a breach of privacy to access IRD data!
But don't think they do nothing - no they make racist delay part of their system. I sponsored a PI man to come to NZ to attend the birth of his child to his NZ wife. He asked for a visitors visa because he couldn't stay in NZ because of an important commitment in country of origin - his intention being to visit for the birth stay a couple of months, return home and then a few months later apply for a working visa in the partnership category. Ought to be simple! NZ couldn't lose because for a PI you have to be sponsored and I committed out $1m house as a guarantee. So INZ played games - they left the application for 2 months, then well after the birth and with prodding from the high comm they found the application and refused it as 'we think he will overstay". BTW the INZ website says 25 days processing time - they lie.
So there are 10,000 overstayers while upright Pacific Islanders are treated like dirt.
That was only one story, I have the friend who tried to get his mother-in-law here for an eye operation - totally solid finances - delays, cancelled flights, etc. Or the girl who had entrance to study in NZ but the visa was issued for 2 days only and she wasn't informed until the two days had passed! Lost flights, lost study fees. Or the Jehovah witnesses who visit regularly and never do anything wrong but still experience delays causing flights to be rebooked.
The INZ bureaucracy is evil and probably racist but it is lucky (a) PI's do not complain because they reckon they will be victimised next time and (b) race relations law excluded INZ!
AKL transportation is a disgrace. Every person in the city seems to own a cheap car. Look at the number of cars parked around houses. One for each person living there, the place is just littered with cars as far as the eye can see. In Sydney 90% of people who live within 10kms of the city do not even own a car. We have lived in SYD 10 years and never owned a car there is no need for it. Try doing that in AKL, the place is a dogs breakfast and its going to get far far worse before it gets better.
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