30 Sep 2015

Plan to solve Auckland housing crisis

4:05 pm on 30 September 2015

A new report is urging Auckland Council and the government to agree on a goal to sharply improve housing affordability over the next fifteen years.

The work, by council chief economist Chris Parker, said the biggest gains could come from more efficient construction and higher density housing.

Mr Parker said the median price of an Auckland house was now 10 years' of median household income and the aim should be to halve that.

Chris Parker

Chris Parker Photo: RNZ/ Todd Niall

Mr Parker recommended the council did not push for restrictions on overseas investors buying existing homes, but should encourage them to build new housing developments.

His 100-page independent assessment of housing policy ideas had been commissioned by the mayor and deputy mayor, but does not bind the council.

Mr Parker said a package of five policy areas could achieve the target, those include more efficient construction, more land supply and higher density housing.

The report argued that a 25 percent improvement in construction efficiency is possible in the next 15 years, which could slice $100,000 off the price of building a 200 square metre home.

The economist believed more higher density housing, especially with a 10km radius of the city centre would help lower costs.

"At the moment it's very suburban and I'm not arguing it should all be urbanised, but if we can try and allow more redevelopment along key transport routes, and within walking, running and cycling distance of key town centres, that'd be the key," he said.

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The report highlights five policy areas on which to focus. Photo: RNZ/ Todd Niall

Density will rise under proposals soon to be aired before an independent panel considering the city's development blueprint, the proposed Unitary Plan. Debate has continued on whether the proposals go far enough.

The report recommended the council keep a low profile on a range of policies which are the government's responsibility, including capital gains tax, immigration and Reserve Bank moves.

It suggested building larger scale developments would help make the industry more efficient and that Housing New Zealand was best-placed to do this.

Mr Parker also believed the government could support new technology such as factory-built housing.

An idea borrowed from Sweden would also allow small dwellings of up 25 square metres, to be built without resource consent on existing properties, for less than $100,000.

Deputy mayor Penny Hulse who leads the council's work on housing, described the report's affordability target, and the idea of an agreement with the government as "practical and doable".

"Our challenge from here is now to have the conversation at an inter-sector, cross-government level, so that we drive a joined-up approach to reduce the cost of housing in Auckland, and that we make affordable housing our number one goal," said Ms Hulse.

Auckland Council will consider the report's proposals in about a fortnight.

You can read the full report here.

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