The Housing Accord between the government and Auckland Council, and the Special Housing Areas being created as part of that accord, have been getting quite a bit of press recently. A third tranche of SHAs was approved in May, and another will come through in a few months. The MBIE have released their second monitoring report on how the Housing Accord is going. There’s some excellent analysis in there, and it’s well worth having a read. I’ll start with a couple of MBIE slides showing where new dwellings and sections are being consented.
The MBIE report also mentions that the Proposed Unitary Plan is adding 10,600 hectares of land to Auckland’s urban limits, or “nearly 20% more than the extent of the current metropolitan area”. Incidentally, that’s not far off the 25% expansion NZIER recommended in a recent report, which Stu wrote about here, making that report even more of a non-event.
The Housing Accord is all about targets, and is aimed at helping Auckland deliver more new homes over the next few years. Slide 4 shows the targets over the first three years of the Accord:
When the Housing Accord was announced with gusto last May, I got the impression that the targets were to be based on building consents only, and “year one” of the Accord looked like being the year to June 2014. Building consents are an excellent (and timely, and readily available) near-term indicator of housing activity, so it made sense to focus on those, and most of the media coverage at the time focused on them. Subdivision consents didn’t get much of a mention. However, looking back now, it seems like I got the wrong impression, and no doubt others did as well: looking at the draft Housing Accord, the targets were actually based on “new subdivision consents in greenfield [i.e. new] areas and building consents issued in brownfield [i.e. already urbanised] areas”.
By the time the accord was actually signed, these targets were softened quite substantially. The government and council agreed to include both sections and building consents across the Auckland region (but not “double counting” the two for the same site, of course). It was also the start of October 2014 when they signed it, so the year 1, 2 and 3 targets actually begin from then instead.
Using subdivision consents as well as building consents makes a pretty big difference to the way the targets work. In fact, the MBIE’s first monitoring report shows that in the year to September 2013 – before the accord was even signed – there were 9,975 new dwellings consented and sections created. The accord is about trying to increase the number of homes that get built, and yet the “Year 0” baseline was higher than the “Year 1” target! This baseline figure doesn’t appear in the second monitoring report, but I’d suggest to the MBIE that it’d be useful to add it back in – it’s good to have a figure to compare to, even if it makes the Year 1 progress look a little weak.
The latest report from MBIE indicates that, at the current rate, the “Year 1 target of 9,000 dwellings and sections is likely to be exceeded by almost 1,300”, i.e. the city will manage to get to 10,300 consents and sections. Again, this is a pretty minor increase on last year – less than 3%, for all the hoopla surrounding this issue! So, there isn’t a lot of aspiration in the Year 1 target, but no doubt it will give the government a chance to pat itself on the back for achieving these targets in time for the election.
Of course, it’s possible that Auckland will improve a bit on the current rate, with a recovering construction sector, households being more confident, Special Housing Areas possibly starting to kick in, and so on. But we’re hardly going to blow the target, or even last year’s figures, out of the water. And that means we’re still quite a way off being able to provide new homes fast enough for Auckland’s growth.