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Briefing Papers 10: The Housing We’d Choose

AUT’s Briefing Papers initiative has kindly allowed us to syndicate their recent series on housing. The tenth paper is written by Auckland Council social researcher Alison Reid:

Auckland is at a turning point in how it must think about and deliver housing solutions. According to Statistics New Zealand’s medium projections, Auckland’s population is anticipated to grow by a further 517,000 people in the next 20 years. This growth will be driven by natural increase (births minus deaths) as well as net in-migration from other parts of New Zealand and overseas, and will drive the demand for an increasing number of dwellings. Further to this, increasing diversity in household structure and size, an ageing population, and increasing divergence of the ability to afford the costs of housing will drive demand for a variety of appropriate and affordable housing solutions. All of this is occurring in a broader context of a desire to curb urban sprawl and realise the efficiencies of a ‘compact city’ approach.

The issue of enabling and encouraging supply-side factors to meet this demand is a priority for Auckland Council, and for central government. The Auckland Plan includes a priority to ‘increase housing choice to meet diverse preferences and needs’. The Plan also proposes an urban form for Auckland of a ‘quality compact city’ with up to 70% of growth occurring within the 2012 Metropolitan Urban Limit (MUL) over 30 years, but with flexibility for up to 40% outside the MUL. This emphasis on future ‘intensification’ within the urban area is reflected in the bold new vision of the Proposed Auckland Unitary Plan, with its provisions for a range of building heights and density within the existing urban area.

Much of Auckland’s future housing stock already exists, and it is predominantly detached dwellings – 75% of dwellings at the 2013 census were stand-alone. This city has a long tradition of building, owning and living in stand-alone houses. It’s what we are used to. A dominant narrative continues to perpetuate that households prefer stand-alone dwellings and that the market is delivering what people want.

But when was the last time we checked that out? To what extent is the new housing coming on-line meeting the current and future needs of Aucklanders? To what extent is the dream of owning a ‘quarter-acre pavlova paradise’ still relevant?

These questions were at the heart of The Housing We’d Choose study, recently completed by Market Economics and Research First on behalf of Auckland Council. The study adds an important contribution to our understanding of the demand side of the housing equation. It is based on work previously undertaken in Australia, and included a sophisticated choice exercise in which respondents had to choose from a discrete set of housing types and sizes, within their own financial constraints. It also asked Aucklanders what was important to them when thinking about choosing a place to live. The central aim was to explore what Auckland households would choose to live in, if a wider range of options was available.

In sum, the research found that households would choose a much broader range of housing types and sizes across Auckland, if it was available. They would trade-off housing type and location for adequate size (large or small) and price. Furthermore, there is a ‘mis-match’ in several parts of Auckland between the types of housing that people said they would choose and new housing that is coming on line.

The quarter acre pavlova paradise dream is not dead yet, but it’s not universal. The Housing We’d Choose study found there remains a general underlying preference for stand-alone houses, and a deep connection to owning a piece of land for many, particularly among households with children. Over half (52%) chose detached options, if they could afford them. Over half rated a stand-alone house as being ‘very important’ when they were thinking about choosing a place to live, and quite a few of those who chose a townhouse /unit or apartment, particularly those in buildings that were ‘low rise’ (up to four stories), made a comment along the lines that they would actually have preferred a stand-alone dwelling.

But while the majority of households will still demand stand-alone detached housing, this demand is more than satisfied by the existing stock of housing. The real gap in the market is higher density attached dwellings and apartments within the high amenity established suburbs. A quarter (25%) of respondents chose an attached unit or townhouse, 15% chose an apartment in a building up to four storeys, and 8% chose an apartment in a building five storeys or higher. Many indicated they were very happy with that choice – particularly older people living in couples-only situations or on their own.

The research shows that people would choose different housing types across Auckland than currently exist, particularly in the areas away from the city centre. When we compared what people said they would choose with what’s coming on line (using Statistics New Zealand building consent data from January 2013 to March 2015) we found that there was a general over-supply of stand-alone dwellings, particularly in south Auckland and on the isthmus, and a corresponding under-supply of attached options in all sectors outside of the city center. The north shore coastal area was the only sector to show a general under-supply of all housing types coming on line.

The research also reminded us of an important corollary to any emphasis on the types of housing that Auckland households would choose – that is, the cultural shift that faces Auckland as we embrace a future of living in new housing formations and in closer quarters. As Auckland’s population continues to diversify ethnically, culturally, and across age and socio-economic lines, new neighbourhoods are being delivered, old neighbourhoods are facing real change, and people are being asked to live closer together than they have before. It was apparent through participants’ comments in the focus groups and in the surveys that people want to feel safe and they want their kids to be safe. They want a sense of privacy from the outside world, and for many that meant not being able to be seen by others inside their own home. For many this was not something that living closer together in more intensified housing styles could offer.

Much of this can be mitigated by quality design and build, continuing to learn from overseas examples and what has worked in the past, as well as efforts to increase a sense of neighbourliness, tolerance and community spirit.

The full title of this study is The Housing We’d Choose: A study into housing preferences, choices and trade-offs in Auckland. It was commissioned by the Research and Evaluation Unit (RIMU) within Auckland Council and is a component of Auckland Council’s 12 point Housing Action Plan. The findings will be used to inform a range of housing policy responses and discussion. The full report can be found on the Knowledge Auckland website.

20 comments to Briefing Papers 10: The Housing We’d Choose

  • Bruce

    There certainly is a need for “condo” style housing of around 100sqm that is large enough for people to live comfortably in in the fringe suburbs (close to the city/Rapid Networks) for those that can’t afford the detached house but don’t want to be crammed into a 50-60sqm apartment. If built properly they should be similar in price but with the extra space a lot of people prefer. These are typically most economically built at 5-6 levels with a basement carpark.

  • Early Commuter

    “if it were available”

    Surely the minimum required for publication is at least a basic grasp of English grammar?

  • I am not sure it IS the housing we would CHOOSE. I think it is the housing we are forced to compromise on by the current market and growth of our city (not that growth is a bad thing, when accounted for well). The study does show what is important to us (note to all sellers), and then how we would compromise on all of those things given our financial constraints (in a roundabout way), lifestyle choices and life stages. Useful yes, but ‘choice’ is inaccurate, especially for the second survey that was conducted.

    The bigger question is, with the horrendous quality of new stand alone housing that is being delivered across our city now, do we have any confidence that we can build adjoined housing well? Build quality is an issue in our city, but when that impacts a group of people not connected by anything but a ‘hello’ across the hall and one big problem….who becomes responsible?

    • Sailor Boy

      I don’t see how you see this forced compromise as a criticism of this paper. We live in a large city where it is geometrically impossible for us to all live in large houses and drive a short distance to work free from congestion; of course it’s a compromise for some but it is like the compromise you have to strike between drinking alcohol, eating sugar and getting diabetes in that it is unavoidable. About half of all people in New Zealand choose diabetes, and about half would choose attached housing, for some reason we prevent one and not the other even though diabetes is more expensive and attached housing is far cheaper!!

      • Peter Nunns

        I think there’s a more subtle point here. The Housing We’d Choose report asks people how they’d resolve housing trade-offs in the context of current market prices for different types of dwellings. But you could ask: why should we take current prices as given?

        This is especially important when considering how regulations can influence the relative cost of different dwelling types. For example, Grimes and Mitchell (2015) conclude that Auckland’s preexisting planning rules raise the cost of apartments more than they raise the cost of standalone houses. (Some of these rules will change under the Unitary Plan.) So perhaps relying on current prices will overstate people’s preference for standalone houses.

        A related point, which Liz is getting at, is that the market may not be able to deliver some desirable housing attributes that people can get in other markets. This could be due to (e.g.) a lack of appropriate skilled construction labour or high materials costs. Once again, you could imagine these market factors changing and resulting in people making different choices.

        All that being said, the study’s still really useful as it does give an indication of how people make choices within the context of current constraints.

        • wsomc

          Another question is where do we find most apartments? My impression is that expensive areas are usually almost exclusively freestanding houses. If apartments are easier to develop in cheaper areas, then that correlation will also distort the average price of an apartment.

        • Thanks for my afternoon reading Peter….

          Yes, I agree thoroughly Sailor Boy – we need more intensified housing – my own housing search alone has been enough for me to know this. I am not specifically criticising the paper directly (I would also discuss diet and causation of diabetes but I am pretty sure that isn’t the topic here) Thank you also for the definition of the word ‘choice’ Nick R. I too considered Palais de Versailles but just sooo many staff.

          Maybe our impressions of the study’s title are part of the problem. As I believe you have confirmed for me, I don’t think it is as simple as ‘The Housing We’d Choose’.

          • Peter Nunns

            If you take a look at the report, you’ll find that roughly 25% of the people they initially contacted were dropped from the study because they didn’t have enough money to afford to buy _or_ rent any type of new dwelling anywhere. (Some of these people could obviously still afford to share accommodation or buy/rent older dwellings.)

            Frankly, this was one of the most interesting findings: one in four Aucklanders have severely circumscribed choices about housing (or no choices in some cases) under current prices / housing supply.

            The fact that we’re discussing choices while forgetting that fact seems like an example of what Jarrett Walker calls “rhetorical annihilation”: http://www.humantransit.org/2015/08/the-rhetoric-of-annihilation-in-the-social-sciences.html

        • I had a whole section in my very first comment about the percentage of people dropped from the study because they could not afford to purchase or rent one of the 16 (new) properties offered to them as a choice….

    • “Choice” isn’t about what you might want in some fantasy world with no trade offs or consequences, its about choosing the right option given the circumstances. Choice is a response to the realities of affordability, quality, location, etc.

      Sure my dream might be to live in the Palais de Versailles, but my choice certainly isn’t (I’d be bankrupt in the first day!).

    • wsomc

      Adjoined housing doesn’t necessarily mean any shared structure. A row of terraced houses is often built as a row of independent structures, each with their own supporting walls on both sides. You can imagine it as freestanding houses, just without the open space between the side walls. There are no common structures involved anywhere. Every owner is responsible for his own house.

  • In Europe in any somewhat expensive area nearby cities you see a lot of terraced housing. Typically on on lots of maybe 200 to 300m², depending on the spacing between streets. That’s 2 to 3 times the density you currently find in our fringe, and that’s for houses with a backyard, not apartments or condo’s.

    Meanwhile we hold on to our zoning which requires detached housing and a 600m² minimum land area in most of the fringes. I wouldn’t be surprised if most houses in those areas actually are on smaller plots. It’s also worth noting this type of zoning is relatively uncommon elsewhere in the city.

  • Lindsey

    Yes, my sweetie and I will be looking for a 2br apartment next year when I retire. We don’t need to rattle around in the 3br bungalow I bought in 1981 and I don’t want to spend my retirement worrying about rates, maintenance and gardening. We want lock up and leave with good views. We are not bothered about knowing our neighbours – we don’t know them now. We will probably rent rather than buy for some time as we want to do some extended travel and don’t want to leave a place empty. We want public transport choices and proximity to the CBD for theatres, library etc. We know quite a few of our contemporaries who are looking for much the same thing.

    • Interesting. I have been thinking quite a lot as we are daily getting news of two contrasting behaviours by older dwellers: Either it’s Graham Henry moving to a downtown apartment or people selling up and moving to Tauranga or Napier or similar.

      It seems to me we are witnessing a big shakeout that will be good for everyone. Those who dislike the big city are grabbing their chance to cash in their chips from thew AKL property casino and head for the hills, and others, like Lindsay above, are taking the new opportunity to downsize in the city; doubling down on a more urban solution.

      Actually both groups are doing the same thing; they are leaving the AKL suburbs for a life with lower dwelling costs. And probably lower transport costs too [except in those cases where the provincial movers are planning on commuting back to AKL].

      Furthermore it is choice operating, so through individual selection AKL will increase its proportion of urbanophiles while losing those that dislike the more city-like direction it is developing in. Win-win.

      Nostalgic for small town AKL; move to an actual small town. Loving the new more urbane AKL; downsize to be able to enjoy more of it.

      • Linz

        Just to clarify – I’m not the Lindsey above (different spelling).

        But I agree with Lindsey

        Cheers
        Lindsay with an “a”

      • Early Commuter

        Why should those who have lived in Auckland for 100-150 years have to “head for the hills”, though?

        In most places, it’s bad manners for newcomers to impose on the existing population. You don’t walk into a quiet bar and change the station if people are watching something.

        I will also point out the incredibly passive language you choose “it is developing in.” Cities don’t develop; they are developed. Better policy choices could be made to change the direction and speed of travel.

  • Matthew W

    It is difficult to understand on what basis stand alone houses are being over supplied. Their price is currently rising strongly despite the increase in supply.

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