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Housing Minister Nick Smith to meet with Auckland Council as he aims to 'take the heat out of the Auckland housing market'

Posted in Property

Housing Minister Nick Smith says he'll be meeting with the Auckland Council next Monday as he strives to "take the heat out of the Auckland housing market."

Speaking on Radio New Zealand today Smith said the Government was concerned about how expensive housing in Auckland had become. He also noted Auckland Council's Unitary Plan, its blueprint for the city's development over the next 30 years, wouldn't come into effect for two or three years. He said Monday's talks with Mayor Len Brown and Deputy Mayor Penny Hulse would be about the period until the Unitary Plan is operating.

"One of the real concerns for government is how expensive housing in Auckland has become," Smith told Radio NZ. "The average figures have homes over NZ$620,000. If we look at measures of housing affordability, Auckland is way out over the top with a ratio of median income to housing price now of over seven. We have projections that house prices that grew over 10% last year may well do again and the IMF indeed this week were raising concerns about that."

The latest data from Quotable Value shows the average value of residential property in the Auckland area, as of February, was NZ$618,425, up 10.4% year-on-year. The national average was NZ$428,692, which was up 6.3%.

Radio NZ reported "insiders within the Auckland Council" believe the Government is preparing to sideline them and impose its own plan for Auckland's future.

Earlier this month Smith told Radio NZ that Auckland's metropolitan urban limit was a stranglehold that needs to be broken if houses are to be made affordable for families in the city. And last week he said the number of new sections available to be built on in Auckland was just 1,900. Furthermore land ready to be subdivided had a capacity of 14,500 sections, compared with the Auckland Council’s development strategy target of seven years supply of 32,550 sections. And land in the pipeline for subdivision had a capacity of 54,500 sections, with the Council’s development strategy target being 20 years supply of 103,500 sections.

Smith said Auckland Council therefore needed to double land supply to meet its own targets.

'Random rezoning in complete isolation'

 Auckland Council released its draft Unitary Plan last Friday with Hulse telling interest.co.nz the Council wants to make greenfields land available in a planned way over 30 years to avoid a repeat of the urban sprawl of the 1970s. Speaking to Radio NZ today Hulse said any ministerial rezoning of "random pieces of land" outside Auckland Council's incoming rural urban boundary would happen in "complete isolation from well planned
infrastructure development."

However Smith said there was "a pretty strong consensus" that the current legal metropolitan urban limit was a major constraint on new land being available.

"The figures that we've now been able to get agreement between council and government on show that we have a fraction of the number of sections needed over the intervening years. So that's where we need to have our further dialogue," said Smith.

"My intention is to ensure that as the council works through that (Unitary) plan, there is sufficient land to try and take the heat out of the Auckland housing market that has such an adverse effect that goes beyond Auckland to the broader New Zealand economy, which is the source of comments we've seen from the Reserve Bank Governor."

'Unitary Plan a big improvement' but 'there's no line on a map'

Smith added that the draft Unitary Plan was a big improvement on Auckland's current metropolitan urban limit.

"Where I think there are questions which I want to work through, and not over National Radio, but in direct dialogue with the Auckland Council, is that we have half the number of sections that we had a decade ago, we
have had the section price become very expensive, what are things and tools that we might use in the interim to try and free up additional land?"

He also said the draft Unitary Plan featured no "line on a map" signifying exactly where the rural-urban boundary is.

"So when you ask the question 'is the rural urban boundary in the right place', to be able to satisfy myself that Auckland's housing issues will be addressed, (it's) difficult to determine that when there is currently no line on a map as to where it's planned to grow to over the next three decades. And that's why we need further discussion," Smith said.

Last Friday Hulse told interest.co.nz that in terms of Auckland's fringes, the Unitary Plan included "a satellite town" in Pukekohe, Warkworth growing a bit, plus some development in Silverdale, Kumeu/Huapai, and Franklin. However, the Council was opposed to the "random release of land" without proper planning.

In his speech at the launch of the Unitary Plan, Brown said if the Government wants to make more land available to Aucklanders more quickly, then it ought to allow the Unitary Plan to take effect on notification. Brown said that would bring the new rural-urban boundary into effect much more quickly and address the issue the Government says is central to housing affordability.

However, Minister for the Environment Amy Adams said the Government had rejected the Council's request for the plan to be granted immediate legal effect.

"The Government rejected this request as it considered it did not provide adequate recourse for Aucklanders to seek full and impartial review of the council plan," Adams said.

"Furthermore, even if the request had been granted, contentious aspects of the plan would still likely have been the subject of numerous appeals, meaning they would be unlikely to provide the immediate effect sought."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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49 Comments

Go Nick Go.......   Kick Len

Go Nick Go.......
 
Kick Len Brown where it hurts...and give your eraser a real good rub at the Auckland Council pencil line on the map.....erase the MUL line and free up land for houses to be built where people wants and needs.
Len Brown and Penny Hulse should be told to either get their act to free up housing land for affordable houses or get out of the way. Their silly excuse of infracture constrain is lame and pathetic.
It's a disgrace people has to live in containers in South Auckland because they just cannot afford reasonable rentals for their families...who knows you might just earn the gratitute of South Aucklanders and shift their vote banks from Labour to National next year !!

If Nick Smith has his way the

If Nick Smith has his way the only housing choice allowed will be this:
 
http://andrewanddave.com/andrewjwhartonsblog/wp-content/uploads/2011/01/...
 
and it won't be cheap to build or live in:
 
http://www.cnt.org/news/2012/10/17/the-growing-costs-of-place/
 
 

Everything is not black or

Everything is not black or white. Or sprawl or urban slums.
 
Yes, the housing on the exterior of Auckland will tend to be bigger houses on bigger sections. Look at any city and this is the case - there is a trade-off  between house size and convenience. To put it another way, you move to the suburbs if you want a bigger house/garden.
 
Those areas closer to the centre will densify. Just look at the Devonport peninsula. Most of the original plots now have three houses on them.
 
I don't have a problem with either of these provided enough sections are made available to meet demand. So Len can ringfence us as long as 13,000 sections are made available each year within the boundary. This clearly is not going to happen under the current council plans and policies.
 
So you have two options, get the council to change all of its zoning and charges or make more land available where it is cheaper.

The post is not about weather

The post is not about weather or not the UP will allow 13,000 sections. It's about affordable housing and Nick Smith's attitude that sprawl will provide affordable housing which is the exact opposite of what the DBH report he refers to says.

The Government rejected

The Government rejected this [Unitary Plan] request as it considered it did not provide adequate recourse for Aucklanders to seek full and impartial review of the council plan," Adams said.
Hmm interesting perspective as to the alternative of someone in government being appointed for 2 months for housing with his own silver bullet. 
Surely the Unitary plan is the most thought-out piece of forward thinking for AKL growth due to the amount of work gone into this.

Nick, just promise Len his

Nick, just promise Len his Lexus LS600h for a mayor official limo and he will listen to you.  it was on the wish list ..

I think government vehicles

I think government vehicles are BMW 7 series vehicles.

Am not sure I know the

Am not sure I know the optimal outcome, but in terms of government/ council dynamics the current contradictory positions seem in force.
Smith wants to ride roughshod over any planning or Auckland consultation by allowing building of anything anywhere. But his colleague defends not approving  the unitary plan inside 3 years because doing so wouldn't allow consultation with Aucklanders. Those dots do not seem to connect. And I sneakingly suspect his colleague's agnda is in fact different to the stated aim.
The Council want to allow extra building in defined areas and to defined standards, and would like to get on with that promptly. Whether their plans are sensible or will bring enough quantity is hard to determine.
Simplistically the Council approach seems the more robust one; even if one suspects they are more bureaucratic than they need to be or should be.
So fasttraking the unitary plan makes sense if that will allow early action; if then it is clear the rural urban boundary needs to be shifted, that can be done later. 

Absolutely - it's bizarre. If

Absolutely - it's bizarre. If he really wanted affordable housing he'd allow the Unitary Plan to be operative ASAP. Sprawl housing is not affordable housing. 

Totally agree

Totally agree again. 
Smith's approach doesn't seem to leverage the work already done and there's a perfect opportunity to work together with the council for the best outcome - which would benefit everyone.  

Yes, I noticed the

Yes, I noticed the contradictory positions between Nick and Amy as well.  The point about just "busting" the MUL - who pays then to get services to all these new subdivision proposals that might pop up randomly on various pockets of land on the periphery? 
 
Auckland ratepayers, of course. 
 
I worry this has nothing to do with affordable housing - just another transfer of wealth from the many to the few.
 
 

First thing Nick needs to do

First thing Nick needs to do is make it quick and easy to get planning permission with the council to build houses quickly, none of this 2 years waiting list.  Needs to be approved or not approved in 2-3 weeks max. Second thing Nick needs to do is the get council planning building compliance costs down to dirt cheap levels.  Then we need to go back to the governments and talk to buidling contractors and material suppliers locally to make more competition in the market and also overseas to drive down building costs and materials by at least 25-30%.  Then we need to advise the public that an under supply of housing does not mean a one way bet for elevated house prices.  Hong Kong has had a housing shortage in the past and prices fell by 40%.  Other factors can effect prices, so don't be tricked by media hype and falling into a trap.

First thing Nick Smith should

First thing Nick Smith should do is resign and let someone with even a passing knowledge of the issues replace him.

That 40% drop in a market

That 40% drop in a market shortage must be when the bird flu pandemic and SARS Flu pandemic that threatened to kill off 40% of Hong Kong population. Ooops only the birds died.
Or was it when the British abandoned their Hong Kong colony and residents panicked thinking that they had to hand over their keys to the communist giant and started buying Howick which was then renamed Chowick?

http://www.dbh.govt.nz/UserFi

http://www.dbh.govt.nz/UserFiles/File/Publications/Sector/pdf/residentia...
 
Their own report clearly states that sprawl housing does not provide affordable housing. It clearly states that higher density housing (as proposed in the Unitary Plan) does.
 
If he wants affordable housing he should make Unitary Plan operative ASAP. If he wants sprawl he should explain what his actual motivations are - because it certainly isn't to get affordable housing.

The problem that has not been

The problem that has not been factored in by Auckland Council is the Earthquake strenthening that is going to be required in a 6 to 18 level building. That cost alone and the insurance is going to make that project very expensive to undertake. You need a high risk developer that is prepared to lose a lot of money to see the dream of a high rise structure built and be prepared to go broke building it, to be able to say I built that as a legacy.

??? Earthquake strengthening

??? Earthquake strengthening only affects existing buildings - needs to be done regardless if you get an unfavourable assesment.  It is nothing to do with new builds or the Unitary Plan.

Go Nick Go. I agree the

Go Nick Go. I agree the growth needs to be outside of Auckland for affordable housing. Just rezone 100acres of farmland south ie say Huntly and build a new city to house 150,000 people. By the time everyone agrees that would be say 2 years under emergency, it takes about two years to build and a year to plan so that makes it 5 years. Auckland growth rate at 30k a year  and that makes 150,000 people to plan for. There is too many people for the Auckland Unitary plan to work. Too much of the land is in the hands of separate private owners. Tiny little plots and reliance that they would be profit motivated to build is plain ridiculous. I was all excited and said to my partner...wow...lets build and she says what? you mad...I want my rose garden and feijoa trees....and there goes my money making out the window.
Therefore we need a new city and run a reliable rail link into Auckland central. Nothing less is going to work.

Are you, like Nick Smith,

Are you, like Nick Smith, unable to understand basic bullet points in a DBH report?
 
 

"Higher density dwelling types cost less:

 

In 2012, 80% of new apartments, town houses, flats and studios cost less than $250,000 to build, compared to 19% of new stand-alone houses."
 
http://www.dbh.govt.nz/UserFiles/File/Publications/Sector/pdf/residentia...
 
 

Yes affordable housing but at

Yes affordable housing but at what cost? Pidgeon holes for people to live in? And damage to our traditional villa type neigbourhoods? I love those villas, they actually give Auckland some character. I would love to push upwards my old villa and do up the downstairs, keeping in the traditional features but I think there is still a height to boundary restriction for smaller sites which means I have to put something at the back and ruin the garden.
Personally I will make a lot of money out of this Unitary Plan but it is not always about making money...ok ok....making paper profits ie unrealised capital gains.

Bob, Can I build a unit

Bob, Can I build a unit downstairs under my 100 year old villa if it is zoned mixed residential and I have a land area of 695sqm? Or is there still a height to boundary restriction on smaller sites?

Yes. in the Mixed res and

Yes. in the Mixed res and Single house zone you would be able to do another flat with it's own kitchen. It has to be over 30sqm on same title and within existing bulk so no one can tell it is there. It doesn't need a carpark.
 
This rule is so sensible - it provides potential for 10's of thousands of additional rental dwellings in desirable areas, with no visual effect, that suits the demographic trend. 
 
The HIRTB rule appears to be raised by 500mm, other than old Res 1 (which was higher)?
 

Bob, Sorry, I am still not

Bob, Sorry, I am still not too clear, so I can push up my existing villa by 3m and have a unit downstairs and not have to worry about blocking my neighbours sunlight? Because it is really frustrating under the current rules, I have enough density to build a second site but have not done it because even though 8metres is allowed under Res 6a but I cannot push up to the limit of 8m because I am limited by the height to boundary ie shadowing my neighbours property.

No you can't push it up

No you can't push it up through the height indicator. Yes you can do a unit if it's within the bulk that's allowed.
 
The new HIRTB is 500mm higher. If you are in Mixed Housing site coverage, 50%/40% landscaped still and density 1/300. Living courts are less than the previous 100sqm. If you are in Single House it's much the same rules, just extra HIRTB.
 
I see you are currently Res 6A 695sqm - no second unit or granny flat allowed (1/375sqm density only).

Two different properties. One

Two different properties. One in Mt Eden and one in Otahuhu. Both traditional villas. Both are proposed mixed housing. The mixed housing then just means infill housing. I would do an infill in Otahuhu but I would not do that in Mt Eden. I would be more inclined to preserve the look of the area and would prefer to push up. 500mm is not a lot of difference. which equates to no building in my Mt Eden property. I do not expect too many to build given that the option would be infill. Preference would be to have that garden.

Look at the Plan - there is

Look at the Plan - there is no way to make 'pigeon holes' or 'slums' or 'shoebox' apartments in it - for the first time there's a 2.7 minimum stud in apartments rule. There is no way to damage traditional villa areas - there is a blanket pre 1944 Discretionary rule. Even if it has an underlying zoning of a higher density the pre 44 rule overlay is more restrictive.

Was flicking through the

Was flicking through the print version of yesterday's NZ Herald while getting a coffee this morning. Someone took out a full page ad/rant against the obsession of local and national government with immigration derived growth in Auckland and its repercussions. Asking for support. Not sure if the intention is a pressure group or new political party. 

I saw that, Emmett so and so,

I saw that, Emmett so and so, was a very interesting ad, he is obviously very angry with the issue.

His basic premise is sound

His basic premise is sound but ego driven local and national politicians are willfully blind to reducing demand as well as increasing supply. Excessive immigration is easy to fix. No laws to change. Would be popular. Cabinet could do it in 24 hours with immediate effect. There is simply no compelling rationale for a much bigger Auckland except if you want more ethnic restaurants, overcrowding and higher property prices.

"the Council wants to make

"the Council wants to make greenfields land available in a planned way over 30 years to avoid a repeat of the urban sprawl of the 1970s."
If I remember correctly the 1970s was when I along with other baby boomers required housing as we had kids.
A house with a section, garden, bbq, garage, sheds, kids paddling pool and all the other stuff that comes with family and kids 
Is this the urban sprawl  they don't want. 
 
Let' s have less parrot talk, slogans and cut and paste dogma and face the reality they want people not to have a section, garage, garden sheds, kids paddling pool and all the other stuff that comes with family and kids.
 
Welcome to Auckland you lovely battery hens we have the housing just for you

Have you even looked at the

Have you even looked at the plan? "A house with a section, garden, bbq, garage, sheds, kids paddling pool and all the other stuff that comes with family and kids " is called the Single House Zone. There's a lot of it. It just costs more and not everyone wants it 'cos not everyone is you in 1975.
 
If you want to live in a provincial town there's plenty to chose from. Provincial town planning in a city leads to unaffordable housing and traffic chaos. The Unitary Plan starts to address this.

Q: Will the plan lead to

Q: Will the plan lead to 13,000 (or preferably more to backfill for the last decade) housing units to be built?
 
I'm thinking no. Even if it is a step in the right direction, it is far too small a step.

440,000 existing dwellings.

440,000 existing dwellings. That's only 3% of them taking the oppourtunities afforded by the new rules.

Good on you Nick Smith. Man

Good on you Nick Smith. Man of edicts, No substance with follow through. Will the Govt provide the Billion dollar high speed transport rail network needed to access new housing sprawl or just allow another hour added to travel times, infrastructure new water and sewage plants to support also provided.  Do people realy think Auckland City Councils is at fault here? Why should everyone need to move to Auckland for work and industry, Why not spread the economy around to other centers with plenty of space.  More housing stock & lower rents = property investment. Labour must take the blame for rent increase as investors rethink with Capital Gains Tax advised. CGT and no deprecation = No investment in housing stock = current shortage. Are kiwis financialy illiterate.

nick smith lost it before he

nick smith lost it before he was dumped...I still think he has lost it, there is something wrong with the guy

The Unitary Plan will provide

The Unitary Plan will provide tens of thousands of sections - 300m2 sites permitted, height to boundary increased, homes can contain a self contained unit of min size 30m2 in any zone and no parking required for that unit. In addition thousands of apartments and terrace houses up to 4 storeys could be built in the higher density zones near transport corridors.
Best thing government can do is fast track the Unitary Plan effective from January 1st 2014 - forget consultation - the plan is perfect as is.
Nobody wants more urban sprawl unless you are a land banker on the periphery.
Expect a severe backlash against govt if they fail to fast track the UP as the people want more land, housing affordability etc and they want it now - not in three years time!

In theory it looks good but

In theory it looks good but the problems would be
1. height to boundary, I would love to be able to push up for an additional unit as I want to retain the garden in the back but pushing up means that I would be blocking my neighbours sunlight. Are the new Unitary plan rules going to ignore the shading to my neighbours property? Not much point being able to build but cannot build? Is this only going to encourage haphazard infill housing?
2. Infill housing destroys traditional villa suburbs, my preference would be to push up and retain the character of the area and retain the backyard. Now if there is a preservation issue with old villas, it is going to prevent me from pushing up?
3. Architect drawings $3k, Topographical drawings $3k, Valuations $2k, Drainage and sewerage design and contributions can be as much as $30k Resource consent $4k, Title and boundary survey $4k. Total $46k required before you can even start building. Who has spare $46k to even start??

Under current rules you have

Under current rules you have 243sqm of site coverage available, which you could easy use 1.5 times = 364.5sqm. That's easily 2 houses, but you are not allowed to do 2 houses, or have a granny flat because your site is under 750sqm.
 
Under Unitary Plan Mixed Housing rules you get 347.5sqm of site coverage (which used say 1.5 times is 521sqm of house) to be balanced with keeping the 40% permeable. You get another .5m of HIRTB to fit it in. You are allowed to do 2 houses. You are allowed to do granny flat on same title. If you can't do that within the new bulk allowed you need to fire your designers. Most of that $46K is absolutely needed - you can't expect to build a house without a design. $46K would be a sensationaly cheap site in your area - you could do an affordable house.

What is so bad about urban

What is so bad about urban sprawl?

  News Flash       News

 
News Flash       News Flash       News Flash

  • ¾ of properties not selling under hammer.
  • Price correction coming very soon.
  • Negotiate a fair and reasonable deal from now on. No need to panic buy.
  • Only a few hotspots still getting silly prices.
  • Rest of market falling flat and wheels falling off.
  • No shortage of stock in Auckland 11660 properties for sale at present
  • Politicians don’t have finger on pulse.100 years of building in the southeast to Bombays and northwest Waimauku to Orewa.
  • Major shortage of funding for new builds. Banks won’t fund this manipulating and controlling market.
  • Doing the same with farming major, major crash coming here very soon.
  • Bankers and Real-estate industry are the only people talking it up.
  • Bankers trying to protect their future losses by getting power to steal money off clients when it all goes wrong
  • Creative accounting of sales numbers by real-estate industry.
  • Keep your hands in front pocket and money in back pocket
  • Follow the trend STOP BIDDING AND BUYING AT AUCTION other wise this will cost you up to $440000 over the term of your 20-year mortgage.
  • Buyers have power to take control back don’t be pushed into corners by bankers and real-estate industry.
  • Take action on all of this now.

Cripes!!!,  this is a recipe

Cripes!!!,  this is a recipe for bank failure - RBNZ better hose down the ignition of these realistic ingredients.

Bankers trying to protect

Bankers trying to protect their future losses by getting power to steal money off clients when it all goes wrong
The key bullet for right now, IMO. That they are behind this says chances of something untoward is growing with every uptick in this market. Ultimately, I can't see anything truly dramatic until Fed stops pumping. But when that happens, watch out below... Every trade put on since '09 will be closed out to protect profits, while the market will start to price in the unwinding of the trillions in sh*t lying on the Fed balance sheet. Holy moly. Scary and exciting.

Is that from back of your

Is that from back of your Weet Bix box?

    Stephen All ready

 
 
Stephen
All ready happening with Cyprus.
Bankers would have to be slowest learners in the world. What happen 4 years ago they have forgotten?
Just watch them fall from now on.Can only print monery for so long.