Simply building more homes won’t solve housing issues

If New Zealand is ever to produce enough affordable housing to meet the needs of low and middle income earners we need to take action using positive planning and investment, new research shows.

Building Better Homes Towns and Cities National Science Challenge research, involving Professor Laurence Murphy in Auckland and Dr Bev James in Tauranga and Western Bay of Plenty, show the Special Housing Areas (SHA) legislation introduced in 2013 shows little evidence of having stimulated additional housing production, and has generated even less affordable housing.

With the agreement of the Minister of Housing and local councils, SHA have been established in some areas with very high housing costs. They allow developers to cut through existing planning regulations and were supposed to encourage the release of land by reducing consenting costs.

However, relatively few houses have been built in developments that were not already on the way. Some areas such as Hobsonville, for example, were being developed prior to being listed as a SHA.

Murphy’s research found that “while 35,000 consents were issued for SHA in Auckland, during this time, only a couple of thousand buildings were actually built. Our research shows speeding up the planning didn’t actually turn into more houses immediately.”

A similar situation was discovered by James in Tauranga with the 15 SHA in the Western Bay Of Plenty region not meeting a wide range of housing needs, including a rapidly growing retired population and a shortage of affordable rentals.

James’ research also reveals that the SHA legislation avoids defining what an affordable house actually is and does not require affordable housing is produced.

Similarly, Hobsonville is producing family houses that are mostly too expensive for low to middle income earners to afford.

“People think we will get affordable housing if we just build more houses. But actually the houses we are building are neither affordable nor targeted to meet the needs of those middle to low income earners, who make up a significant part of our economy.”

Relying on simply building more houses is not an effective pathway to generating affordable housing.

“To reduce their risks, developers want to keep prices high and so often land bank when prices are not rising. They do not build in a falling market,” Murphy added.

SPAs may provide some opportunities for increased housing supply but James has pointed out that these need to be combined with other initiatives.

“The new builds for transitional housing in Opal Drive, Papamoa East, for instance, is destined to supply nineteen, right-sized houses and has involved Government and community partnering with the Ministry of Social Development, Housing New Zealand and the Tauranga Community Housing Trust,” James said.