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Affordable housing fail – we can’t rely on the private sector

Written By: - Date published: 9:20 am, August 17th, 2016 - 55 comments
Categories: housing, national, useless - Tags: , , ,

To the complete surprise of absolutely no one:

Land-bankers fail to build affordable housing

Affordability requirements in up to half of Auckland’s special housing areas look set to lapse because developers have not even applied for consents ahead of the areas disappearing next month.

The revelations have sparked claims of land-banking, and at least one developer is seeking legal advice on whether the affordable housing rules will still stick after that date.

The special areas, which gave fast-track consents in exchange for requiring that at least 10 per cent of new housing was “affordable”, will be disestablished on September 16 after the city’s new Unitary Plan comes into force.

They aim to boost housing supply and stem house price inflation that has seen the average home’s value soar to nearly $1 million.

Labour Party leader Andrew Little said he was “stunned” little more than a third of the areas had even got to the consenting stage.

“It just looks like the special housing area policy has been used to help build land banks,” he said. …

Another National failure.

Private sector developers want to make money, which means selling expensive units. There is no incentive for them to build “affordable” housing. If we want to house our people it is up to the government to build some bloody houses.

build-some-bloody-houses

55 comments on “Affordable housing fail – we can’t rely on the private sector ”

  1. Righty right 1

    No no no no it’s impossible to build affordable houses and it must not happen
    House prices are critical to the economy the status quo must be maintained at all cost
    The are so many people who depend on houseing to support there debt level many change would be a disaster we must not allow labour to build any houses state kiwi build none greed is good greed must continue more more more me me me

    • spikeyboy 1.1

      John Key is not an Nzer. He is a traitor and he works for US imperialism. The empire has always demanded that local capabilities are made to wither and die. The huge investment in housing ensures that not much is left to build local capability. This will please the traitors masters and he will not be looking to do anything any time soon to change this

  2. save nz 2

    Hello, the issue has never been about land. NZ has plenty of it. It is the building of the houses that pose all the risks and costs, so therefore people don’t get that far. The RMA was a red herring to destroy the tiny amount of environmental protection we still have and divert from government social policies.

    Having fast track resource consenting actually makes the building side more risky as people get their resource consent through but all the problems were never revealed and solutions solved in the haste to grant it. Then more money needs to be spent, more time, and ultimately creates buildings that people don’t want.

    I personally know people who made millions out of the SHA in John Key’s electorate of Kumeu. They actually were not developers at all. Just sold it on when it’s value soared after the SHA was pushed in.

    The unitary plan will be another failure. There is absolutely zero incentive to provide affordable housing in NZ – why would you when you are looking to make a profit?

    Not only that, it has made things the same or even harder for people that do want to build an affordable house, a homeowner that just wants to create a single home for their family on a budget. Nothing for them in any of this.

    Nothing for solar or climate change or self sufficiency.

    Look around and you will see in Auckland the houses being built are large, for immigrants with some cash, gobbling resources. Not for Kiwis on local wages.

    One of the biggest problems for the poor is the lack of efficient and affordable public transport in NZ, which cuts off large amount of options for them for housing and work (probably 40% of Auckland is served extremely poorly by public transport).

    The politicians are completely out of touch on all the housing supply issues. And the left have been involved in a National charge which is environmentally destructive, socially is destructive (smaller homes being demolished for more expensive homes to be built) and also losing the hearts and minds of voters by fooled by Nat Lite or ‘on paper’ solutions.

    Give me Sue Bradford any day. If you are actually poor, you need someone who actually gives you help that is real, such as giving you money you are entitled to on your benefit. The current housing policy solutions are flawed and time consuming. In the short term they will make more problems and long term will fail to deliver.

    But everyone can pat themselves on the back for a cluster fuck of nothing.

    • Molly 2.1

      savenz, pretty much agree with all you have written.

      Was involved with a community project during the amalgamation and the first few years of the Unitary Plan, but in the end no progressive movement regarding communities and planning seems to have resulted.

      (When the SHA’s were proposed – Len Brown & Auckland Council – should have drawn the line in the sand, and let the brouhaha take place in full view of the media. The process seems to have been appropriated by the usual voices now.)

  3. dv 3

    AND Fletchers made PROFIT of 462 million this year.

  4. RedLogix 4

    I picked this one more or less at random. It’s at the top of the market when I search on this suburb that’s close to where we are. From experience I can assure you this blurb is accurate.

    As new 3 bedroom, plus study, 2 bathroom, 2 living with country outlook and only 4.5km from federation uni and close to all amenities.

    This stunning and unique home has 3 good sized bedroom’s plus study, master with ensuite and walk in robe and 2 other bedrooms with BIR. The stylish boutique kitchen has stainless steel appliances, large fridge cavity and huge walk in pantry and overlooks the open plan living and dining areas. With a separate living area ideal for a kids play room or parents retreat. The bright laundry has ample cupboard space for storage, a modern family bathroom, double garage with direct access to the home, central heating throughout, beautiful polished floating floors and enclosed rear yard is all sure to impress on inspection. Set in a peaceful quite court overlooking park lands and walking trails, also walking distance to high school, primary school, shopping centre and only 4.5km from Ballarat Fed Uni. An inspection is a must.

    $345.000 – $365,000

    http://www.domain.com.au/5-parkhaven-court-mount-clear-vic-3350-2012875185

    The same property anywhere near Auckland would be three times the price at least. The per metre building cost in NZ would be double.

    NZ is being ripped off. Period.

    • save nz 4.1

      +1 Redlogic.

      Yep, in spite of SHA, unitary plan, hand wringing for 3 years, more insulation, the highest level of immigration we have ever had in NZ for ‘skilled’ migrants like Chefs, we have a lot more new people needing houses in NZ, but no affordable houses built…. in fact affordable houses are being demolished at a fast rate, Hmmm

      wonder why homelessness is increasing?

      • Chooky 4.1.1

        +100 save nz…you state the crux of the problem…and it is a manufactured one

        …who is benefiting from this?

        ….time for ‘open the books’ on politicians’ finances and hidden trust accounts and family member accounts and businesses?

    • whispering kate 4.2

      Redlogix I agree, I have a close relative who has a beautiful 2 living 2 bath, 4 bedroomed townhouse in a great area in Baltimore Maryland, she is 10 min walk to down town where she works, has a park at the end of the street which has free tennis courts, free weekly concerts and free yoga in the park sessions. Their home is absolutely lovely and top notch, expensive fixtures and fittings, lovely hard wood floors and stairs, double glazed, proper plaster ceilings and a kitchen like a concord flightdeck. It has a fabulous roof garden and it also has car parking. It is in an area equivalent to any expensive inner city suburb in AK and she and her partner paid $425,000US last year – as you said we are being ripped off, what suckers we are.

    • vto 4.3

      “NZ is being ripped off. Period”

      Yep

      Building sector cartels.

      Fletchers

      Fletchers

      Fletchers

    • Philj 4.4

      Whatever happened to the enquiry into the cost of building materials? Amongst other things the profit on the materials is what is driving the megas and Placemaker stores nationwide. They are in full view and they are pretty well protected by the vested interests in this country.

    • Philj 4.5

      Whatever happened to the enquiry into the cost of building materials? Amongst other things the profit on the materials is what is driving the megas and Placemaker stores nationwide. They are in full view and they are pretty well protected by the vested interests in this country.

  5. mickysavage 5

    This shows why Auckland Council’s decision to not include affordable housing provisions in the Unitary Plan was such a mistake. The developers now have the option to see what they can get under the UP rather than have to comply with the affordable housing provisions in the SHAs.

    If the affordable housing proovisions had been kept in this probably would not be happening.

    • save nz 5.1

      The unitary plan and SHA were never about creating affordable Housing!!!! It has just spiked the cost of housing and speculation. People making all that money, are building huge mansions taking up builders and resources. The poor can’t get a builder in, with all the McMansions going up. Lots of happy developers and people voting National. Lot’s of National voters moving into their new McMansions. It’s far right strategy in motion.

      Land and planning do not create buildings. Having cheap labour does not create buildings. Having cheap substandard materials does not create buildings. Having councils with poor staff and questionable ethics does not create buildings. Having the Rebstocks of the world in charge of commerce commission and infrastructure firms does not create buildings.

      Golden homes used to change $1000 per square meter, now I see in Kumeu similar housing companies are building homes for 1 million dollars on house and land packages. The former affordable house building companies now charge unaffordable house prices… partly because the houses they build are larger and therefore more expensive.

    • Sabine 5.2

      sorry mate is ‘mistake’ is too polite a world for the guys at the council that just threw everyone who works for a living and does not yet own property in the City under the bus.

      The election turn out for Auckland this year will be worse then last time around. As for 4/5ths of the town there is absolutely no reason to vote.

    • Chooky 5.3

      +100 Micky savage…it is morally incomprehensible…and they also have the nerve to get rid of Maori land protections

      ‘Auckland Council plans to cull 1373 protected Mana Whenua sites’

      http://www.stuff.co.nz/auckland/73908757/Auckland-Council-plans-to-cull-1373-protected-Mana-Whenua-sites

      “Auckland Council plans to remove 1373 Mana Whenua sites from its Unitary Plan in an effort to speed up developments as the pressure increases to build more houses to cope with booming demand….

      ..it is theft…where is the Nact supporting Maori Party jumping up and down?

      (remember Bastion Point?)

      • Leftie 5.3.1

        Heaps of plus 1’s Chooky.

      • save nz 5.3.2

        They got rid of Mana Whenua sites, they got rid of affordable quotients for housing , they undermine historic character and trees, please tell me why the Greens and Labour seem to support the unitary plan???

        The unitary plan is to make the rich richer and the home owners and people who actually care about the city (not just making a profit) disenfranchised and powerless in the process…

        • Chooky 5.3.2.1

          so much for Council amalgamations and Super cities = no accountability to the people

          …and yes where are the Greens and Labour?!!!

  6. Draco T Bastard 6

    “It just looks like the special housing area policy has been used to help build land banks,” he said.

    National puts aside some areas for housing, gives it to developers and then the developers use it for super profits…

    I’d say that it’s working exactly as planned then.

    • indiana 6.1

      pretty smart really…super profits lead to higher tax takes, as only profits are taxed not revenue. Unless you are suggesting that these developers are not declaring their profits and going untaxed?

      • Draco T Bastard 6.1.1

        No, it’s really stupid as it undermines and eventually destroys society – as capitalism has been doing for thousands of years.

      • McFlock 6.1.2

        lol

        banking land for a period and giving it away so you can recoup 30% of the developed profit is “smart”?
        Why not just do it yourself, now, and take 100% of the profit?

        Silly tory needs to think.

      • framu 6.1.3

        “Unless you are suggesting that these developers are not declaring their profits and going untaxed?”

        you do know what accountants are for dont you?

    • Leftie 6.2

      yep Draco T Bastard.

  7. AmaKiwi 7

    In any other competitive market “affordable” would be defined as what the buyers are able to pay, NOT the prices sellers can force the government to support.

    On the Texas/Mexico border converted containers have been made into functional homes for $7,000 NZD per unit (less land cost). Each has a kitchen, bath (shower, not tub), and 2 sleeping rooms. Clean, dry, safe, insulated, good window light.

    Cut the sh#t. Demand shelters real people can afford, not what the construction monopoly wants to make a killing on.

    P.S. Surprise! Surprise! They are being built by a not-for-profit charity. I’d roll up my sleeves and help them here.

    • save nz 7.1

      Good job getting Auckland council to consent it though Ama Kiwi. Any sign of DIY affordable housing they go crazy and start litigation. Even if you did try to consent the containers you would find that it costs $30k development contributions, $12,000 to connect to water, $15,000 consent fees, $40,000 to connect to power, etc etc the list goes on…

      • AmaKiwi 7.1.1

        save nz

        +1

        Thank you. As you intimate, our “system” has no intention of serving the “customers.”

        • save nz 7.1.1.1

          The message from National and Auckland council is Fuck off, poor people. If you can’t afford Auckland, don’t live here. We want National voters here in Auckland. Lets makes our friends richer by pretending to change housing zoning for poor people… Ha ha, we just made millions, but aren’t going to build any houses for the poor, we’re building million dollar houses and selling off state houses.

          I just can’t believe why so many people fall for it…or can’t get a clear message out there about what is happening.

  8. Adrian 8

    “Labour leader Andrew Little agreed house prices in Auckland should cost in the “ballpark” of $500,000 as an affordable level under the party’s new policy.”
    http://www.stuff.co.nz/national/politics/81758324/Auckland-houses-could-cost-ballpark-of-500k-under-Labour-housing-package….

    Average wage for experienced cleaner in New Zealand $32,000
    http://www.payscale.com/research/NZ/Job=Cleaner/Hourly_Rate

    Average rent for 3 bedroom house in South Auckland $450.00-$500 p/w
    http://www.enz.org/house-rents-auckland-south.html

    So assuming there is another part time wage coming into this house hold, lets say this family is earning $50.000 p/y or about $960 p/w, already they are paying about half that on rent, after all other fixed costs, they would obviously never be in the position to come anywhere near buying an ‘affordable’ house at $500.000, simply that is never going to happen.
    In other words, according to Key’s and Little’s own housing policies, people working on minimum wages, even long term experienced workers on minimum wages, will never be able to buy their own house is most major cities in NZ, effectively making them rent slaves for their lives.

    Labour is not working for working people and the poor, and must do better.
    New Zealand Labour must turn Left.

    • BM 8.1

      Unless you get the cost of the land down to under 100k per section then you won’t get anything cheaper than half a million in Auckland.

      • dv 8.1.1

        Interesting.
        In TAKAKA a new build on a $100 section is about $300k for basic house (Incl land)

      • AmaKiwi 8.1.2

        BM, the troll.

        “Unless you get the cost of the land down to under 100k per section . . . ”

        There are two 18 hole “private” golf courses within 15 min. of my house. They pay pepper corn rents and no rates. Membership is “private” but the land is owned by you and me.

        Cut them to half. Use half for LOW cost apartments and town houses ($150,000 – $200,000) and the other half for public parks. If it’s public land, use it for the benefit of the wider public.

        • Molly 8.1.2.1

          I’d think really carefully about getting rid of the green spaces. By all means get rid of the current “tenants” – but considered planning would give us public commons land that mitigated the effect of higher density housing.

          At present our parks in lower socio-economic areas are often sports parks, empty of life and community when games are not on, and only vital during the weekends with a transitory community of home players and visitors.

          Auckland – along with higher density housing – needs community owned and designed public spaces. Not consultant planned and contractor implemented.

          If re-appropriated golf courses are to be used – then council should allow – even better – help implement – development design that showcases affordability, community and environment.

    • Righty right 8.2

      That’s why we headed for a crash the disconnect to actual income levels is beyond any reason even 500000 isn’t affordable
      I don’t think anything can stop a melt down

  9. save nz 9

    The first thing the councils need to do is to start putting the cost of contributions based on size of dwelling rather than $ amount that the building consents cost. Then they should have very cheap or free costs for affordable dwellings. It should be free to put on solar and so forth and options NOT to connect to the grid as part of the building package. That way people can avoid water, power and other costly monopoly connections.

    There should be free and quick consents for plans that could be designed by architects like state houses for mass dwellings that are designed for affordable family living.

    • Molly 9.1

      Valued today for their high-quality materials, the Sears and Aladdin et al kitset homes in America were self-builds for many.

      These houses were precut – all labelled and ranged from small to huge.

      Advances in technology in building, has not increased the choice available.

      It has made the requirement for “experts” entrenched.

  10. b waghorn 10

    I assume the labour mayoral candidate for auckland is in full support of labours ‘Kiwi Build’

  11. When you don’t have enough houses, you darn well stop all immergation.

    • save nz 11.1

      ditto TheBlackKitten, stop lazy immigration when as well as not enough houses, you don’t have enough jobs either or enough public transport.

  12. Instauration 12

    Large property developers – those with the capacity to secure the large and newly provisioned parcels of residential space – will never deliberatey deliver finished dwellings to a scale that will depress prices to an affordable level.
    Think OPEC – supply is managed to ensure optimal price of the resource.
    The relevant resource here is finished dwellings – that people can use.
    The raw material – land (like OPEC’s oil), will otherwise be stockpiled to ensure maximum return.
    Unless there are clever and politically astute conditions (to kill land banking) imposed upon the provision of the newly released raw material – say with land, “Build and provision within 24 months – or face a substantive developer tax on any subsequent sale”
    Then we will see either;
    1: A scale in the provision of dwellings that induces “oversupply”
    2: A negative influence on the price offered for development land.

    Either outcome is good.

    Else excessive profit for Fletcher and ilk and failure of affordable living will be manifest,

    • Molly 12.1

      “Large property developers – those with the capacity to secure the large and newly provisioned parcels of residential space – will never deliberatey deliver finished dwellings to a scale that will depress prices to an affordable level.”

      QFT.

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