Amy Adams defends National’s Auckland housing policy as critics say numbers fall far short of city’s shortage and question infrastructure capacity to handle population growth

Reaction to National’s Auckland housing announcement flowed thick and fast from political opponents pointing to housing shortfall figures, and industry bodies concerned about whether the building programme would be matched by infrastructure growth.

Labour, the Greens and New Zealand First attacked the announcement as a cynical move in an election year, arguing the numbers would go nowhere near to addressing Auckland’s housing shortage.

Meanwhile, Infrastructure New Zealand stood out with its questions about whether Auckland infrastructure could be expanded to cope with the effective building of a new city between the size of Palmerston North and Dunedin.

The government Minister responsible for the building plans, Amy Adams, on Tuesday defended the numbers, saying they represented a fully costed programme that was able to be delivered in the face of construction industry and infrastructure constraints. The government could only go as fast as planning and zoning procedures allowed, she said.

“The balance we’ve got to, is the right blend for now, and also…is what we’re confident of being able to capably deliver over that time period.” There was still some extra space for development on further Crown land, she said.

The figures:

Adams on Tuesday announced a headline 34,000 new homes would be built on Crown land in Auckland over the next ten years.

The net increase in housing on Crown land will be slightly below 27,000, as 8,300 state houses will first be demolished to make way for the new builds.

To cover those demolished state homes, the plan will see 13,500 social housing units built. That leaves 20,600 other units to be sold after being built. Some will be in the ‘affordable’ category priced below $650,000 with covenants on who can buy them and how they might be on-sold, and others at ‘market price’ with fewer restrictions.

But even a number of those houses are already in the pipeline through social housing plans and the Tamaki and Hobsonville developments. The bulk of “new places” will be 11,500 social houses and 12,800 ‘affordable’ and ‘market’ houses.

There was also an interesting development on the front of how many houses are able to be built on Crown land in Auckland.

In February, Prime Minister Bill English said the stock of 27,000 could be expanded to 69,000 – or slightly more – due to the new Auckland Unitary Plan. By Tuesday, Amy Adams was telling media that this was a “theoretical” limit, and the number had also dropped to 60,000.

Infrastructure concerns

Infrastructure New Zealand said the headline news of 34,000 extra homes over ten years should be applauded. However, CEO Stephen Selwood said “a step change in infrastructure funding and investment will be required to ensure Auckland networks can accommodate this growth.”

"Auckland is in immediate need of housing and today’s announcement is a serious commitment to addressing prolonged under supply. Last year only around 7,000 homes were built in the region, so an extra 3,500 per annum over the next decade is substantial,” Selwood said.

"The construction of 13,500 social housing units where 8,300 currently stand represents a major increase in housing for those in chronic need. The other 20,000 the Government intends to build will be targeted at the more affordable end of the spectrum, which has for many years been under-supplied,” he said.

While this was good news, Auckland’s infrastructure networks would not be able to accommodate this development by continuing business as usual.

"A 34,500 home development is a city of 100,000 people – that’s somewhere between a Palmerston North and a Dunedin. A vast service network underpins this much housing; Palmerston North City alone has over 550km of roads, 1,000km of water pipes and 30 schools,” Selwood said.

"The Government estimates that 34,500 homes is equivalent to three and a half houses on every street in Auckland. Typically, that means an additional seven cars in every street. Already Auckland’s transport networks are bursting at the seams and all projections are that congestion will get much worse.”

It was not clear how the Auckland Council will meet its growth obligations, he said. "A 2015 study by the Centre for International Economics on the cost of residential infrastructure estimated that a new home built on redeveloped land costs the Auckland Council on average $30,000. This figure excludes big city-shaping investments like the City Rail Link.

"The Government’s announcement today adds a $1 billion bill to a council which is already at the limit of what it can borrow. If new development triggers the need for regional scale infrastructure like light rail or a new busway, the cost to the Auckland Council will easily be two, three or four times this figure.”

'Election year fudge'

The Labour Party said National’s “last minute announcement” won’t do enough to stem Auckland’s housing woes. The Government had long rubbished the idea of building houses, Andrew Little said. “Time and again it’s failed to deliver any significant increase in housing supply.”

“Amy Adams has fudged the figures. How many of these houses will actually be affordable? What does ‘affordable’ mean? How will that give hope to first home buyers when speculators can buy these houses too?”

“It’s just more smoke and mirrors from a Government that’s failed miserably. It’s a mish-mash of old and new housing programmes. Many of these houses have already been announced,” Little said. “Auckland currently has a shortfall of 40,000 houses and growing. This plan won’t address the shortfall, let alone build the extra houses needed to keep up with demand.

“National has had its chance. It’s time for a fresh approach. Labour will build 50,000 houses in Auckland people can afford to buy and we’ll increase the supply of state houses; we’ll crack down on speculators; and we’ll invest in warm, dry homes,” Little said.

'Too little too late'

The Green Party said the announcement was too little too late. Co-leader James Shaw also jumped on the fact that the announcement only allowed for half the building that the government had said was possible on Crown land in Auckland, after the council passed its recent Unitary Plan.

“Auckland is already 40,000 homes short and needs 15,000 more a year just to keep up with population growth. National’s new policy to build an additional 26,000 homes over the next decade just isn’t enough to fix the problem,” Shaw said.

“It’s taken until election year for National to figure out that they can build houses, but this is only about half what the Unitary Plan allows Housing New Zealand to build if the government was more ambitious,” he said.

“National has missed an opportunity to really prioritise getting every Aucklander into a warm, dry home of their own,” Shaw said. The headline figure was nowhere near that required.

“The Greens in Government will build tens of thousands more homes than National, and we’ll make many of them available for low income families to purchase over time with a rent-to-buy programme,” Shaw said.

“The homes we build will actually be affordable, not National’s definition of affordable which actually isn’t for most people.”

‘The election bells chime’

New Zealand First leader Winston Peters argued Auckland required at least 140,000 homes within the next 10 years.

“So demolishing 8300 houses, only 40 years old, and building 34,000 over 10 years is simply not taking the demand for housing in Auckland seriously,” he said.

“The former PM was gloating before being elected nearly a decade ago that there was a housing crisis. Why did he and his colleagues, including the current PM, then fall asleep. Now they are planning for the next decade. Give the people a break.

“National has had nine years to build desperately needed homes, and hasn’t. The best they can do is bring out a plan for the next 10 years,” Peters said.

“Now out of its slumber as the election bells chime, National is coming up with too little, and it’s way too late for the people of New Zealand.”

Answer to infrastructure shortfall

Infrastructure NZ’s Selwood provided some “obvious steps” to addressing Auckland’s infrastructure challenge:

  • Prioritise housing development next to train and busway stations
  • Invest in traffic light optimisation and intelligent traffic management systems
  • Rapidly develop park and ride facilities
  • Streamline planning consents for power, water, telecommunications and social infrastructure that support the developments
  • Recycle capital tied up in existing assets into new infrastructure
  • Enable urban development agencies to rezone, acquire and aggregate land and use the increased value to fund infrastructure
  • Expand private investment in infrastructure through PPPs and large scale development opportunities
  • Introduce road pricing sooner rather than later to both manage demand and generate revenue to pay for transport infrastructure

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44 Comments

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14

Election not too far away.

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26

Assuming National will be successful in building nett 27000 extra house over next 10 years that means appox 2700 house per year and with net migration of 70000, Can they tell, how does it help. Saying too little too late is an under statement. Labour is correct in saying Election Year Fudge.

Does it not proves that supply will always be an issue and now that National has accepted that it is a crisis (being election year) should they not accept that supply by itself is and will never solve the problem unless it is tackled together with DEMAND.

What is it that national is trying to protect or hide by not talking about demand side.

Funny, no experts take on national on this and fall for the national supply ploy By not questioning national over it they feel that they are able to get away with their ploy but reality is otherwise even though media is meek many a time but in today's time - truth cannot be supressed

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I don't know if National have accepted that there is a "crisis"...they will still be calling it a "slight issue" when houses are 20x the average household income because that would suit them and their portfolios just fine!

Absolutely have to tackle demand, its at least half of the problem and our roads are already stretched beyond useful capacity

"Sign of our success" is the accepted nomenclature, I'll have you know.

If they hadn't accepted that there was a crisis, they wouldn't be doing this.
But if they are doing this, why don't they put it out to tender overseas, as we don't have enough builders in NZ as it is. That is why builders are earning more than some people with degrees with decades of experience. Also we must be able to buy materials cheaper. They can build houses far cheaper overseas, and materials are far cheaper overseas too.

You don't understand! That 27,000 figure is just the number to be built on Crown Land. There'll be tens of thousands of additional ones built on Non-Crown Land. That will require immigration to be ramped up even faster and further to provide the skilled workers needed to do the job, thereby enhancing the National Economic Figures even more. Job well done National! ( again, (sarc/off))

No one expects the government to build all housing. But the 7,000 being built by the public sector and the planed 2,700 still gives less than 10,000. With a net inflow of roughly 50000 people we need at least 15,000 per year just to keep up with population growth, that is before you address the current shortage in housing supply and start to bring market prices down.

We may need more skilled tradespeople from overseas to help build homes but we cant rely upon it we need to drastically ramp up training of people in these key areas so that we are not reliant on overseas labour.
To assist in making homes affordable we need to cut immigration to only those that have skills we need.

... if we cut immigration to only those that have skills we need , who's going to drive the courier van for just $ 15.25 / hr , which brings my books from Amazon to me ? ... ( sarcasm button switched to fully ON ) ...

Make that a contract rate of possibly negative pay (once the van is factored in) for our new Indian friend.

God this site is boring these days - I remember when there was interesting debate, not a bland overseer and press release cut-and-pastes.

What the fuck, just kick me off again mofos.

How is all this going to be funded and by whom, and when?

National have a brains trust called the National Infrastructure Unit (how appropriate) who put out 5yrly publications - last one in 2015.

I struggle to believe that "brains trust" has any members.

National Infrastructure Unit sounds more like an oxymoron given National's track record.

... it could be a spelling mistake , and the " Gnats Brains Trust " is in fact a " Brains Truss " ...

A small hammock-like device , to let your brain swing luxuriously in whilst you're in office , 'cos you've got no further use for it for the next 3 years ...

Classic Gummy Bear

Brains Truss: defined as a small hammock-like device purposely designed for elected politicians, to let their brain swing luxuriously in whilst in office , 'cos they've got no further use for it for the next 3 years ...

Someone needs to get one of those free hearing tests. Everyone knows its a "National Infrastructure Eunuch".

Sounds like a case of dislocated underpants to me.

70,000 people will not need 70,000 houses.........Labour often get confused when it comes to basic maths.

At least the government is now finally acknowledging they have to be a key figure in addressing structural housing issues as opposed to JK and co refusing to even admit there were problems. The private sector was never going to 'sort it out themselves' and now we see some progress, if not yet adequate.

JK more than admitted there was a problem. He screamed housing crises. This was in 2007 while in opposition. Then he got into power and our house building rates massively slumped with the GFC yet suddenly there was no crises?

Crisis: noun "a sign of our success".

Not Particularly Concise Dictionary of Keyisms

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21

have to agree with infrastructure, who is going to pay to upgrade the water, sewer pipes or do we make all the new houses build water and septic tanks, or just flow into the harbor in heavy rains.
then what about congestion, how do you widen existing roads without knocking houses down, same with new rail or light rail
this is a half cooked up plan to cover 9 years of a failed immigration scheme that was supposed to boost NZ

It's hard to tell from this report whether Infrastructure NZ have netted out what will be the government's compulsory contribution to infrastructure.

This contribution will come in two parts.

If they carve up some empty land into lots of sections then, as the developers, the government will have to put in the local streets and footpaths, local pipes, any stormwater retention ponds or other infrastructure specified by AC as part of their resource consent to subdivide. They may also have to hand over some land for use as a neighbourhood park.

Any development that results in more dwellings than currently exist will attract a combination of financial contributions and development contributions all of which will be used to pay for infrastructure improvements outside the actual boundaries of the development.

So, like every other developer, the government will have to put a lot of money into building and funding core infrastructure. What won't work smoothly is that a lot of current, functional infrastructure needs to be junked and replaced with better stuff - especially transport. AC will struggle to legally fund much of that work from development contributions. As you say, the government are utterly silent on improving transport. And, what is left totally unfunded is extensions to social infrastructure: libraries, sportsgrounds, aquatic centres etc.

This is a piecemeal proposal. Since the abolition of the Ministry of Works and Development no-one has had any vision at all about how our cities should be shaped. So we lurch from one crisis to another with both government and Auckland Council pointing fingers at each other but nothing getting done.

This proposal doesn't improve matters at all.

Government entities dont pay local body rates right? Does this extend to development contributions?

Good question.

First off govt pays partial rates. Mostly they pay water rates (includes sewer and stormwater) on properties like schools. But they don't pay roading rates. Since they pour lots of tax money back into local roading via the Financial Assistance for Roading programme that's kind of fair.

They don't contribute at all to social infrastructure (parks, libraries etc).

The Building Act and the RMA bind the Crown meaning that they must get consents for building work, subdivision, earthmoving, construction over rivers etc. As such they should also be obliged to pay any fees and charges levied under those Acts.

Having said that Nick Smith has a history of trying (unsuccessfully) to pull swifties and avoid legal obligations. There is no reason why history shouldn't repeat under the new management.

@Donald Ellis
"They may also have to hand over some land for use as a neighbourhood park."

havent u heard. They are building on public reserves. see saveOurReserves.org.nz for more.

And neighbourhood parks are those desultory affairs with one swing, a slide and a handful of vandalised saplings on a piece of dirt about the size of two house sections. Not much of a swap....

yea they'll eventually probably say them desultory affairs are under utilised, and would be better of as houses! and would help solve a housing crisis.

You don't need to widen existing roads, just use them better. Light rail on Dominion road for example uses the space currently allocated to bus lanes and parking, but can carry many times more people (probably more than any Auckland motorway). Plenty of other cities manage with more people than Auckland.

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National logic :

Supply is the only problem (as per them demand plays no role in ecenomic) and to help supply, to build more houses need more people so increase immigration from 70000 to ..............

Who cares if infrastructure in NZ does not support. Who cares for NZ as a country as long as people who matter and vote for us are happy. As far as average Kiwi is concerned can be bribed and fooled, done it in past last 3 election and will manipulate together with media and PR.

I presume the strong reaction to Natz 'housing plan' is UTTER DERISION

They are off and racing - A nice day for the races

Reminds me of Spike Jones version of "William Tell Overture"

https://www.youtube.com/watch?v=UXRj9lSnJnI

Winnie makes a good point about questioning the wisdom of demolishing perfectly good 40 yr old houses. Why not just move them on site to be a bit more condensed. They will not have concrete pad foundations.

Subdiving one section into 2 or 3 will not supply enough housing. If you redevelop large blocks of land you should be able to sensitively increase density ten fold.

good point but they are not doing 10 fold they are doing 4/5 fold (8K to 34K)

Yes, as most commentators point out, nationals plan does not do enough.

Replace all housing new zealand land with low rise euro blocs and you could meet the next five years of demand without even touching greenfields.

This is another pie in the sky response to fool people into believing they will do something. At this rate there will always be a deficit of housing in Auckland. There is no detail about how they will manage supplies to build these houses. I am surprised no one is talking about opening the market to new players to reduce cost. In places like the US and Europe framing for houses come in wooden/steel kitsets, they need to be quality certified and can be put up on the site in 2 days. It is not labor intensive and will benefit local unemployed youth who can be trained as apprentices to do that job and will put them on the path to employment. If those can be imported it will reduce the time for building on the site and will disrupt local supplies who are price gouging over 30-40% compared to other countries where supply is far cheaper. If cement orders take 6 months, why not consider importing that too, make sure it is quality checked. In 2006 an affordable 3 bedroom house was 350,000 now it is 650,000 upwards how is that affordable for a 1-2 bedroom shoebox as advised by the minister yesterday. Only releasing new land is not going to solve the problem, they need to address the supply issue too, create some competition in that sector and see how quickly prices will come down. Look at what happened when competition was introduced to airlines, telecom, banking etc. NZ companies need to change their mindset, they are used to wacking 200%+ margins on everything, the building industry has done that with the blessings of the councils and government. I am ashamed we elected these people into those positions. It is time for a collective push to ask for better service, prices, infrastructure etc after all we pay taxes and should not settle for substandard outcomes. National does not get my vote this time, they have failed the people of NZ in a huge way. Its time we start thinking about what is best to all of NZ when voting for local and central government and forget about how it impacts our back pockets. We need to vote for change, do our bit to bring about equality and improve standards for everyone. That will set us back on the road to a prosperous NZ as we were many years ago, make every vote count in September.

Irrespective,of,how,many houses are built in Auckland over the next decade, can Auckland really accommodate the increased population.
The infrastructure from what Imhave heard and read is having great difficulty already.
Are there enough schools being built?
Who in their right mind wants to put up with the traffic each and every day and the crime that will go hand in hand with the increase???
Certainly not me!
Christchurch has got it over Auckland in the liveability stakes easily, and far more affordable!

you are correct on all those points, and the new crazy suggestion is to build mutli level schools with no grounds, so no outdoor exercise for city kids, as a kiwi i cant fathom how bad an idea this is , but i guess for our new kiwis its what they are used to.

maybe that might be the next thing to force families out of auckland to other areas a good school with sporting facilities onsite
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11854618

They will be next to parks that will act as their grounds. Can't see its really a big deal...

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Why dont we just turn the "Open for business" light off at the airport borders until we get our infrastructure sorted out.

It dosnt make sense to import immigrants to build houses for immigrants due to the overcrowding because of the immigrants.

Umm it means the local building companies get subsidised workers with the social costs of those workers families – being pushed into the social system ie schools, hospitals etc

Where have we heard – privatise the profits, socialise the costs..... before.

Perhaps we should build one of these “special housing areas” in parnell next to the formal pms place - heaven forbid . (maybe his local golf range could come in handy after all)

Hi GS
A very good summary of the situation and the solutions.

A new release just out from Labour:

National’s fudge of a housing plan will make Auckland even more of a speculators’ paradise, says Leader of the Opposition Andrew Little.

“National’s housing announcement is a shambles with Amy Adams unable to say how many house will be affordable or what ‘affordable’ actually means. It’s bumbling of Nick Smith proportions. No wonder Adams was trying to hide the truth, given the eventual admission that just one in five houses will be affordable and those houses will cost $650,000.

“No wonder National waited until the Prime Minister was out of the country before they announced this.

“By National’s own admission, four out five houses they want built over the next decade will be unaffordable and open for speculators to buy. We already have the lowest homeownership in 66 years – why is National prioritising the interests of speculators over families who want a place of their own?

“While as many as 17,000 unaffordable homes will be built on publicly-owned land under National’s plan, only 4,000 ‘affordable’ houses will be built over a decade.

“National plans just one new ‘affordable’ house a day while Auckland’s population is growing by over 100 a day. This is a recipe for higher house prices and rents, lower homeownership, more overcrowding, and more profits for speculators.

“After nine years of failed policies from National, it’s time for Labour’s fresh thinking on housing. National is on the side of the speculators; Labour is standing up for families and first homebuyers.

“Labour will build 50,000 houses people can afford to buy in Auckland, as part of our plan for 100,000 KiwiBuild homes nationwide. These will be genuinely affordable – under $500,000 for apartments and terraced homes, under $600,000 for stand-alones. Along with KiwiBuild, Labour will build thousands more state houses for families in need.

“Labour’s three point plan to crack down on speculators will ban overseas speculators from buying our homes, make speculators who flip houses within five years pay tax, and close the loophole that lets speculators avoid $150m of tax each year.

“Unlike National, we have a credible plan, not one stitched together from previous announcements and rehashed four months out from the election,” says Andrew Little.

So "how many 'house' will be affordable...?" Alex am assuming you just did a cut and paste and Labour have some serious 'issue' with their English language skills?

lol, Mr. Little is getting really hysterical ... Labour rubbishes everything that is not theirs ... calm wisdom and real solutions is giving way to desperation --
tit for tat ... what a circus !! So now they define everyone buying a house in an auction a speculator ? No wonder ... they dont know any other method of control other than "social fixed prices" and trade tariffs .... they always have great issue with Free Market and cannot accept that !! the social - Tax , collect and control is the ideology that they cannot part away from...and that reflects in almost all of their policies.

this whole debate is just becoming so disgusting !!

I bet that if National or anyone who comes up with exactly the same plan as theirs ( God Forbid) they they will still moan and rubbish it ...

I think you've well described National's response to Labour's suggestion of a CGT last election time.