More Auckland special housing areas

Property

Govt announces another 11 special housing areas to potentially produce a further 9500 houses in Auckland

16th Dec 13, 3:55pm by David Hargreaves

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Housing Minister Nick Smith and Auckland Mayor Len Brown have unveiled the second batch of 11 "special housing areas" (SHAs) for the region, offering a potential of 9500 new homes.

Added to the earlier announced SHAs (with a potential of up to 6000 homes/sections), it means that 15,500 potential new housing developments have been identified. A further major announcement of SHAs is expected by March of next year.

Under the terms of the Auckland Housing Accord approved between the Government and the Auckland Council, a total of 39,000 new homes are targeted over the next three years.

This is in response to a shortage of houses earlier identified by the council as potentially being as many as 30,000 - although that estimate was made before new census figures showing that the Auckland population has not grown as much as earlier estimated in the past seven years.

Smith said that "real momentum" was being built towards increasing the supply of housing in Auckland.

Brown said evidence was being seen of the progress possible when Government and the Auckland Council worked together to "solve Auckland’s housing challenges".

The "second tranche" of SHAs included high quality-urban developments, as well as new greenfields projects, "that offer the kind of affordable housing choices Aucklanders need", Brown said.

The locations for the 11 Special Housing Areas are:

Belmont, Pukekohe, 720+ homes, 90 hectares
Clinker Place and Thom Street, New Lynn, 780+ homes, 13.7 hectares
George Terrace, Onehunga, 50+ homes, 2.4 hectares
Hingaia, 2500 homes+, 478 hectares
Khyber Pass Road, Newmarket, 50+ homes, 0.4 hectares
Lake Pupuke Drive, Takapuna, 70+ homes, 0.7 hectares
Northern Tāmaki, Tāmaki, 1800+ homes, 204 hectares
Royal Road, Massey, 108+ homes, 10.3 hectares
Scott Point, Hobsonville, 2592+ homes, 283 hectares
Silverdale, 876 homes, 91 hectares
Trent Street, Avondale, 29 homes, 0.9 hectares

Click here for the full detail as per Auckland Council's website on each of the SHAs and also for a link to the maps of each area on the council website.

Smith said the second batch of SHAs included many larger developments as well as more urban intensification projects.

"The proposal for Scott Point brings the remainder of Hobsonville Peninsula into a Special Housing Area and the SHA for Northern Tāmaki will enable the Tāmaki regeneration project to take shape," he said.

From this Friday applications for subdivisions will be able to be considered by the Auckland Council under the fast-tracked law, which requires approvals within six months for greenfield developments (compared with the current average of three years) and three months for brownfield developments (compared to the current average of one year).

"There is a power of work to be done to bring these thousands of new homes to market," Smith said.

"The subdivisions and houses will need to be designed, consented, and built. The big gain with the declaration of these special housing areas is that the land zoning that would have historically taken years has been done in a few weeks.

"Alongside freeing up land supply, the Government is passing a law to rein in council development charges, proposing to introduce more transparency and competition into the building materials market, investing in skills and productivity in the construction sector, and supporting first home buyers by expanding the Welcome Home Loans and KiwiSaver First Home Deposit Subsidy schemes.

"I am encouraged by the significant increase in new house construction in Auckland through 2013 but this will need to be stepped up further in 2014. The Government and Auckland Council are working much more closely together to facilitate this growth. My ambition is to deliver a third significant batch of Special Housing Areas around March next year," Smith said.

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24 Comments

by Zoltuger | 16th Dec 13, 4:32pm 1387164740

Great to see generous allowances for first home buyers - 10% of homes must be at 75% of the Auckland regional median house price for September, which is about $430k.

by bob | 17th Dec 13, 10:58am 1387231122

Talking to developers who are actually trying to use the SHA's this means that the other 90% of houses subsidise the 10%. Overall there is no difference to average price - just that 10% of people get their house cheaper because everyone else pays more.

The other way they look at doing it is by making 10% really small so they do pay for themselves. But then there's rules to make sure they are expensive so...

by Zoltuger | 18th Dec 13, 10:49am 1387316971

Annnoyingly two of the housing areas I was keen on (Avondale and New Lynn) are both being developed for/by Housing NZ.

Not making anything easy for FHBs are they?

by Chairman Moa | 16th Dec 13, 5:13pm 1387167218

But the bottle neck is still with the council approving consents, and at a cost of a luxury German car for each house to be built !

by Computer | 16th Dec 13, 11:46pm 1387190788

People seem very quick to point the finger at council consent process and cost as the root of the problem - not defending the councils but is this *really* all that's holding us back?

I'd ask whether there is the ability (or appetite) in the developer community to undertake say, 10x the current release rate of sections given a) how much they would have to scale up their operation, b) what that might do to the value of their existing subdivisions, and c) what that might do to their long term plans. How will this be addressed, and if it is, where are the army of builders that would be needed to delivery houses at an increased rate?

by steven | 17th Dec 13, 7:39am 1387219140

You are correct IMHO.

but what we have are lots of Act and Libertarain types who just know, know I tell you that its Govn.

Even if we took sections that are $100k on a $400k house and made them $5k by the council buying rural land at a rural price, sub-dividing and re-zoning enmass all the other fat margins remain.

The developer expects 100% clear profit....buildings supplies, fat profit, builder, fat profit...

Then of course its the cost of supplying the infrastructure its way too high as well, (funny thing that can be quantity surveyed) so lets have MUDS, which instead of mortgage debt is bond debt, its still debt, still has to be financed, still a risk.

So sure lets reduce the cost of a property with a MUD, say its $50k less on a house so your mortage is $50k less but now you pay the MUD costs which are about the same and given the expectation of CPI etc I bet its no cheaper and probably worse.

So we've reduced the price of a house? na, the above parasites will just extra ticket clip and they know they deserve it.

If you really wanted cost reductions it has to be at scale and competitive tender I cant see anyone but Govn doing that and no govn will go there.

Its going to be really interesting when this price bubble pops and then no one will be building.

regards

by David Chaston | 17th Dec 13, 11:36am 1387233368

If it really is as easy to make "100% clear profits" as you think, you should jump in and offer a sensible deal to home buyers. After all, if you are making a reasonable margin, the 'parasites' wouldn't be able to compete with you.

There is nothing to stop anyone jumping in to the house building market to offer 'better deals'. You seem to have real knowledge on how the system is being gamed so you will be in an ideal position to avoid building in all those costs.

Would love to see how you start by buying rural land for houses at $5K per section. Let me know how you get on with that.

by Brendon | 18th Dec 13, 2:10pm 1387329009

Hugh and DC some of Stevens figures might be rubbish. But 90+% of NZ's land is around $50,000 a hectare -being farms and lifestyle blocks. You can easily fit 10 houses a hectare even when allowing for roads, parks etc. So the raw land cost of a residential section is about $5000.

How we get from that to a completed residential section price of $200K+ shows someone is doubling there money, it can't just be the development cost of installing the three waters and a few roads. Maybe that costs $50 to $100K but it certainly isn't $200K for a few pipes and some tens of metres of road. It is either local government, the original landowner or the developers or all three who are doubling their money.

The problem is that there is so little competition. LG zoning prevents other land owners and new developers undercutting those that are doubling their money.

by Your Landlord | 17th Dec 13, 12:04pm 1387235083

steven, you appear to want something (a house) for almost nothing and expect someone else to pay for it.

Your theories are founded in la la land.

regards

by waymad | 16th Dec 13, 8:52pm 1387180346

I had suggested to DIA., at the time of the DC review, that a use-of-money metric should be legislated for (by regulation, in place by lunchtime tomorrow if need be) and applied to Council operations in the consents racket.

Simply put, it would apply IRD's current UoM rate to a declared capital committed on any building or development project.

Then, be reported upon to Gubmint and out on the InterWebs to the wide world (suitably statisticified to obfuscate individual projects)

That would crystallize and make available to all and sundry, some measure of the economic damage these Council maroons do in pursuing a leisurely and rule-bound process for all consents.

Because, after all, if X capital is tied up, at a Y rate of Interest, somewhere along the line someone is eating X * Y% opportunity cost if not outright expense.

And as things stand at present, 'someone' doesn't include the Clueless Councils.

by kin | 17th Dec 13, 8:28am 1387222085

Look like the UK Labour got the Kiwi disease too...."Built 200,000 houses !!! " and sure enough their polling rate went up .....Let's see what the Tory will counteroffer....

Meanwhile back in Kiwiland, National seem to have pushed the panic button at last...

Seems like we are going to see houses growing like mushrooms after a summer rain !!!

But the "proof of the pudding is in the eating", if house prices do not come down by middle of 2014....National might just press the Nuclear button.....or risk losing the election ??

My prediction that house prices will be the BIGGEST election issue seems to be getting traction.

by kin | 17th Dec 13, 11:51am 1387234310

Yes Hugh, it was politics and politicians that got us all into this place...RUB, MUL etc etc all all those political correct BS......so it is only politics and politicians that can get us out of this housing sh... that we are in....

Glad the CB Poll really gave those politicians a good scare of losing their crown and make them do some real work for once.

I look forward to the day NZ gets housing at 3.0 times median income. If western developed economies has not got into this housing madness, we would be in better healthier and happier society.

by kiwimm | 17th Dec 13, 9:39am 1387226382

Why push more people out to Silverdale and Pukekohe and give them a 1-hour rushhour commute? Look at the map, you could fit another North Shore in the gap between Albany and Silverdale. Traffic problems? Then extend the very popular dedicated bus lanes.

by Happy123 | 17th Dec 13, 10:44am 1387230288

Chuck 40,000 homes on Waiheke, right by a new ferry terminal, problem solved.

by Happy123 | 17th Dec 13, 10:48am 1387230488

Hold on, Lake Pupuke Drive, Takapuna, 70+ homes, 0.7 hectares... are they building over Taharoto Park? ? ? What's next, houses in the domain...

by bob | 17th Dec 13, 11:07am 1387231671

And what site is 50+ homes on 4000sqm of Khyber Pass Road, Newmarket? and why only do 50 homes on 4000sqm in that location right by train, Newmarket etc?

by Happy123 | 17th Dec 13, 11:26am 1387232807

Must be apartments. And yes, why not build 500, going 60 stories up? ? ?

Northern Tāmaki, Tāmaki, 1800+ homes, 204 hectares.... 204 hectares ! ! ! That again must be one of the parks.

by David Chaston | 17th Dec 13, 11:40am 1387233652

The maps that accompanied the announcement are very detailed - and way too large for us to embed on this website.

You can find them here.

They are in significant detail, right down to lot size/location and how they fit the Urban Plan.

by bob | 17th Dec 13, 1:31pm 1387240277

Interesting thanks.

One issue with the SHA's is they need to comply with the Unitary Plan provisions. So the Newmarket site loses development potential. That's why they can only get 50 units (why would a developer chose to do it as an SHA when it's a better development now, with consent under existing rules?).

Under the existing rules (PM196) you can do 21m height and 5 levels. Under Unitary Plan rules it will be 16.5m and 4 levels plus setbacks etc. Under existing Plan there's 80 units going on smaller similar zoned sites nearby.

Why having finally gotten Newmarket density up under PM196 are they taking it out again under the Unitary Plan? The UP is supposed to intensify city. This is so stupid (and probably adds 80K+ to cost of every unit once; land, scale of economy on plant, development, margins, fees and levies, subsidy for 'affordable' units plus GST is added)

by bob | 17th Dec 13, 1:43pm 1387240990

How come the Newmarket site is listed at 0.4ha (4000 sqm) on the Beehive site, whereas according to Alggi these sites add up to 2634 sqm?

by bob | 18th Dec 13, 10:16am 1387314995

Newmarket, 246 Khyber Pass Rd, 4 & 6 Huntley Avenue, 50+ homes, 0.4ha (Ockham Investments Holdings Ltd)"

These guys do some good development, presumably knowwhat they're doing.

by Happy123 | 17th Dec 13, 2:25pm 1387243523

Thanks. Looks like they're just re-zoning existing residential in both those areas.

by kin | 17th Dec 13, 1:28pm 1387240088

A Very good presentation on the harm high house prices does to the economy and society

http://www.bloomberg.com/video/rent-s-too-high-why-millions-can-t-afford-housing-JuEGm06fSiis71_YI08b1Q.html

by Brendon | 18th Dec 13, 10:47am 1387316833

I think we will find you have to massively increase the residential zoned land (including densification options in the Unitary Plan) to get a small increase homes consented. You cannot assume just because something is zoned residential it will be built on. Land bankers can make more money by not building and waiting for the land value to appreciate. Money for doing nothing.

Really the housing accord is backwards. Local councils should be forced to accept people have a 'right to build' in large swathes of area. Especially in close proximaty to public amentities. Councils should go from gatekeepers to facilitators.

Here on the Canterbury plains we have the stupid situation of having good rural schools with growing rolls surrounded by lifestyle blocks but not zoned residential. Many of those lifestyle blocks have been sold in 10+ 4hectare blocks -they are really lifestyle block subdisions i.e.. ultra low density housing. This is just stupid. What if their was a rule that you have a right to build a home on a residential sized plot (0.1 hectare), if your land is within walking distance (say 1.5km) of a school. And create proper villages with the school as the centre.