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Location affordability in New Zealand cities – is greenfield growth really affordable?

Several weeks ago I attended the annual New Zealand Association of Economists conference in Auckland. Geoff Cooper, Auckland Council’s Chief Economist, had organised several sessions on urban issues, and as a result there was a lot of excellent discussion of urban issues and Auckland’s housing market. You can see the full conference programme and some papers here.

At the conference, I presented some new research on housing and transport costs in New Zealand’s main urban areas. My working paper, enticingly entitled Location Affordability in New Zealand Cities: An Intra-Urban and Comparative Perspective, can be read in full here (pdf). Before I discuss the results, I’d like to thank my employer, MRCagney, for giving me the time and the data to write the paper, along with several of my colleagues for help with the analysis, and Geoff Cooper for suggesting the topic and providing helpful feedback along the way.

The aim of the paper was to provide broader and more meaningful estimates of location affordability that take into account all costs faced by households. In my view, widely-reported sources such as Massey University’s Home Affordability Report have too narrow a focus, looking only at house prices. However, a range of research has found that transport costs vary between different locations depending upon a range of factors such as urban form, availability of transport, and accessibility to jobs and services. And transport costs are pretty large for many households!

I used two methods to provide a more comprehensive estimate of location affordability in Auckland, Wellington, and Canterbury. First, I used Census 2013 data to estimate household housing, car ownership, and commute spending at a detailed area level within each of the three regions. This allowed me to estimate variations in affordability between areas within individual regions. Second, I used household budget survey data to get a sense of how New Zealand cities stack up against other New World cities.

My main findings were as follows:

  • First, rents (a proxy measure for housing costs) tended to fall with distance from the city centre. However, commute costs tended to rise with distance – meaning that outlying areas were less affordable for residents once all costs are included. This was consistent with previous work on location affordability in New Zealand and the United States.
  • Second, international comparisons suggest that Auckland and Wellington have relatively high housing costs and that this may be driving some of the affordability findings. While this finding lines up with previous research that’s focused on house prices alone, it’s important to note that the location affordability estimates suggest that a focus on greenfields growth alone may not save households money.
  • Third, while I didn’t identify any specific policy recommendations, I’d recommend that (a) policymakers should consider all location-related costs when attempting to address affordability for households and that (b) further research should focus on removing barriers to increasing the supply of dwellings in relatively accessible areas.

And now for some pictures.

These maps show two measures of location affordability within Auckland. The left-hand map shows estimated housing costs (i.e. rents) as a share of median household incomes at a detailed area level. Broadly speaking, this map shows that expected housing costs fall between 20% and 30% of household income in most of the city, although some areas are relatively less affordable.

The right-hand map, on the other hand, incorporates expected car ownership and commute costs. Overall location affordability is lower throughout the city. Expected housing and transport costs rise to 40-50% in areas of west and south Auckland, as well as the entire Whangaparoa Peninsula. The most affordable areas for their residents tend to be in Auckland’s inner isthmus suburbs.

Auckland map 1 Rent share Auckland map 2 HT share

(Click to enlarge)

I’ve also combined this data into a graph that presents location affordability by distance from Auckland’s city centre. The bottom (blue) line shows housing costs as a share of median household income, weighted across all area units within each 2-kilometre concentric circle radiating outwards from the city centre. It shows that, on average, households spend a similar share of their overall income on housing costs in both close-in and outlying suburbs.

The top (red) line shows that combined housing, car ownership, and commute costs increase as a share of household incomes with increasing distance from the city centre. On average, households that live further out of Auckland spend more on location-related costs, as lower lower rents are offset by added commute costs.

Auckland H_T distance chart

The results for Wellington and Christchurch were broadly similar – although with a few interesting differences related to their urban form and transport choices. However, as this is the Auckland Transport Blog, I’m going to suggest that you read the paper to see those results. It’s long, but it also presents a lot of new data on housing and transport costs in New Zealand.

Another angle on the Housing Accord

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.

Slide 10

Slide 11

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:

Slide 4

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.

Campbell Live’s great urban episode

On Monday night Campbell Live dedicated an entire show to urban issues.

The first segment looked at density in Seattle showing that done well it can be popular and not a blight on the landscape.

Campbell Live - Seattle

Next up was an interview with Janette Sadik-Khan

Campbell Live - JSK

And lastly a few vox-pops from what appears to be on Ponsonby Rd.

Campbell Live - city views

I do find it funny when people slam the central city but then say they haven’t been there for five years. Back then Wynyard Quarter didn’t exist, the shared spaces didn’t exist and places like Britomart weren’t as developed and neat as they are today. It’s easy to forget that they are only really new additions to our urban landscape.

All up it was a great show and I hope more mainstream media start looking at these issues.

Parking building to get makeover and apartments

It looks like we will be able to say goodbye to ugly – but unfortunately not the parking.

One of Auckland’s ugliest carparking buildings which its owner describes as “an eyesore” is to get a makeover and have apartments built on top.

Luke Manson of rich-list family developer Mansons TCLM, said the Auckland Council had granted resource consent for the project at 206 Victoria St West, opposite Victoria Park and next to the Victoria Park Markets.

Mansons will develop 39 two and three-bedroom 80sq m to 115sq m apartments, and instead of selling them, will rent them.

This is good because that carparking building really is horrid.

Victoria St carpark

However we won’t be able to say goodbye to it altogether, in fact there will be even more carparks (presumably for the apartments).

“We have named the development The Boutique,” he said. “At this stage it is too early to confirm rents, but we will be looking for long-term leases for each unit.”

The carpark has 200 spaces. Mansons will add an extra 30, but will disguise the building with an aluminium wrap.

“The car park, which is an eyesore, will be removed from view and beautified with screening and planting of trees,” Manson said.

Steel beams would be lifted on to the top of the existing building to create an extra three levels at one point and five levels at another point.

“Because the site is a gateway corner location, we are getting extra levels,” he said.

The Boutique

It’s good to get more development but it does look funny sticking apartments on a massive podium of parking (the same thing is happening in New Lynn too). Mansons push the fact that most of their recent buildings have been green star rated and I wonder if they’ll push that angle with this one too. It would be a bit hard though with the amount of parking on site.

Still I’d rather have parking in this building than having Auckland Transport suggest something stupid like putting a massive underground carpark under Victoria Park.

Developing Eden Park?

Should parts of Eden Park be developed? That’s a possibility the herald has uncovered.

The No 2 ground and cricket pitch at Eden Park will be replaced with residential and commercial buildings of up to nine storeys, according to documents obtained by the Weekend Herald.

The Eden Park Trust Board, weighed down with about $50 million of debt and struggling to pay for future repairs and capital works, is eyeing the No 2 ground as a financial saviour.

The idea is to follow the likes of the home of rugby at Twickenham in London, which have hotels and other operations within their grounds to generate extra income.

The Eden Park board has withheld the latest development plans while the Auckland Council stitches together a stadium strategy.

Part of the strategy involves moving domestic and test cricket to Western Springs, which would free up the No 2 ground for development.

And later on they provide more detail on what could happen

On the Walters Rd side of the No 2 ground, buildings will be no higher than four storeys, and a 40m buffer has been left between buildings and Reimers Rd. The buffer will be used to bus fans to and from the ground.

Site coverage varies from 35 per cent of the four-storey limit fronting Sandringham Rd to 75 per cent for the nine-storey limit against the West Stand.

The plans are outlined in a submission to Auckland Council’s draft Unitary Plan, a 30-year blueprint for the Super City. The submission is also understood to call for doubling the number of night games, holding concerts at Eden Park, and extending night-time hours to attract games such as State of Origin rugby league.

The submission follows an earlier proposal for a range of uses on the No 2 ground, including residential, accommodation, offices, takeaway foods and retail, which was rejected by the council. Said Dr Casey: “If Eden Park develop the No 2 ground, it will have incredible consequences for both residents and business.”

It’s an interesting suggestion. Eden Park is of course right next to the Kingsland station and after the CRL the area will have superb access to the city centre and beyond. In fact it would possibly be one of the best connected locations in Auckland. From a transport and land use point of view it couldn’t get much better.

Eden Park No 2

The biggest concern I would have is that if it was developed that new residents would then start complaining about the impact generated by being right next to a stadium.

Naturally some in the local community seem very against it.

Eden Park Residents’ Association president Mark Donnelly said the ground was already at the maximum level of activities and impacts that the local area could be expected to bear.

He called on the council to strongly support the status quo for the No 2 ground as open space.

Personally I think this is an idea worth exploring, what do you think

Next batch of special housing areas announced

Yesterday the council (and Nick Smith) announced the third and largest group of Special Housing Areas (SHAs) - the locations where the council will fast tract resource consents in a bid to get more dwellings built. In addition the SHAs also pick up the planning rules currently proposed in the Unitary Plan. Here’s the first part of the press release:

A third tranche of 41 Special Housing Areas (SHAs) that would yield 18,000 new homes across Auckland was today announced by Housing Minister Dr Nick Smith and Auckland Mayor Len Brown.

“The Auckland Housing Accord is continuing to gain momentum in enabling thousands more sections to be developed and thousands more homes to be built. The first tranche in October provided for 11 Special Housing Areas and 6000 homes, and the second a further 11 SHAs and 9500 homes. This third tranche brings the total to 63 Special Housing Areas and 33,500 homes and is the scale we need to address the section and house shortage in Auckland,” Dr Smith says.

“This latest batch of Special Housing Areas includes seven strategic areas that have been identified by the council as having good transport links and access to other infrastructure. These are larger areas where we don’t yet have developers with proposals, but where we are signalling to the market that we want to encourage growth,” Mr Brown says.

“In addition, many of the Special Housing Areas announced today are significantly larger than those in the first two tranches, and include 34 direct requests from private landowners or developers as well as extensions to three existing Special Housing Areas. I have every expectation of rapid development of these sites into new homes and sections.

“The housing market continues to be hugely challenging in Auckland, particularly for first-home buyers. However, through our partnership with central government we are making strong progress to deliver more housing choices sooner for Aucklanders.

“The work we are doing will help to bring forward more new affordable homes, but we also need to see further action on the cost of building materials, labour shortages and support for first-time buyers.”

The most interesting part of the announcement was that the council included seven “strategic” SHA’s which basically appear to apply to an area rather than a specific set of sites proposed by a developer which is what the rest of the SHA’s are/have been. The seven strategic SHAs are:

1. The Gt North Rd ridge

Up to 1,000 new dwellings over 18.9 ha

Grey Lynn Stragetic Area

2. Otahuhu Coast

Up to 1000 new dwellings over 635.9 ha

Otahuhu Coast Stragetic Area

3. Flat Bush

4470 dwellings over 490.5 ha

Flat Bush Stragetic Area

4. Northcote Rd

700 Dwellings over 62 ha

Northcote Stragetic Area

5. Albany

360 dwellings over 105 ha

Albany Stragetic Area

6. Takanini

1770 dwellings over 251.8 ha

Takanini Stragetic Area

7. New Lynn

1588 dwellings over 284.9 ha

New Lynn Stragetic Area

In addition are the individual site/developer SHAs are:

  • 8 - Akepiro Street, Mount Eden – 18 dwellings
  • 9 – Haverstock Road, Sandringham – 33 dwellings
  • 10 – St Marks Road, Remuera – 63 dwellings
  • 11 – Northcote Road, Takapuna – 263 dwellings (this is separate to the one above)
  • 12 – Albany Highway, Albany – 112 dwellings
  • 13 – Whenuapai Village, Whenuapai – 1500 dwellings
  • 14 – Walmsley Road, Mangere – 1500 dwellings
  • 15 – Oruarangi Road, Mangere – 520 dwellings
  • 16 – Hulme Place, Henderson – 56 dwellings
  • 17 – Wilsher Village, Henderson – 179 dwellings
  • 18 – Fred Taylor Drive, Massey – 1000 dwellings
  • 19 - Sandy Lane, Avondale – 28 dwellings
  • 20 – Glendale Road, Glen Eden – 12 dwellings
  • 21 – Crows Road, Swanson – 277 dwellings
  • 22 – Kohimarama Road, Kohimarama – 132 dwellings
  • 23 – Burns Lane, Kumeu – 247 dwellings
  • 24- Rautawhiri Road, Helensville – 60 dwellings
  • 25 – Asquith Avenue, Mt Albert – 10 dwellings
  • 26 – Waterview cluster – 172 dwellings
  • 27 – Mt Albert cluster – 31 dwellings
  • 28 – Pt Chevalier Road, Pt Chevalier – 30 dwellings
  • 29 – Jordan Avenue, Onehunga – 202 dwellings
  • 30 – Tuata Street, One Tree Hill – 46 dwellings
  • 31 – Meadowbank cluster – 36 dwellings
  • 32 – Orakei cluster – 115 dwellings
  • 33 – Mt Roskill cluster – 20 dwellings
  • 34 – Bristol Road, Mt Roskill – 10 dwellings
  • 35 – Bedford Street, Parnell – 132 dwellings
  • 36 – Surrey Crescent, Grey Lynn – 28 dwellings
  • 37 – Beach Haven cluster – 30 dwellings
  • 38 – Massey cluster – 102 dwellings
  • 39 – Coburg Street, Henderson – 24 dwellings
  • 40- Denver Avenue, Henderson – 22 dwellings
  • 41 – New Windsor cluster – 50 dwellings

The council is also extending three SHAs from the previous bunches being,

  • Orakei, Ngati Whatua – extra 75 dwellings
  • Wesley College – extra 50 dwellings
  • Alexander Crescent – extra 30 dwellings

They are all shown in the map below and you can get the detailed maps for them here.

Tranche 3 Map

What’s striking about these is that while few in number, there are some fairly large sprawly developments that the council is agreeing to rubber stamp that make up about 50% of all SHA’s approved in the latest group. Developments that in some cases have appear to have absolutely no amenity associated and will result in typical car based sprawl. A good example of this is #23 which is in Kumeu and as there is no developed land anywhere near the site so the only option to get anywhere will be with a car.

Burns Lane Kumeu SHA

In addition the other the development above there is already a heap of other planned developments in the North West including at Huapai, Westgate, Whenuapai and Hobsonville. All of these developments are going to put increasing pressure on an already congested SH16 corridor. This means there is a need for a Northwest busway now more than ever.

The really sad thing about all of this is the council has talked for so long about the need for a compact city but when it’s come time to actually put plans into action we once again have a SHA that has more greenfield development in it than brownfield (even if some of it is within previous urban boundaries). It sometimes seems like the council has simply ignored everything it has said and promised for the past 4 years in order to keep the government happy. In other words it seems more business as usual for Auckland.

One ingeresting announcement however is that the council will be holding a design competition in conjunction with Ockham Residential who has also built the Issac and Turing buildings amongst others.

“This competition will be open to an architect, or architectural practice that will compete to design and document a high-quality medium density residential housing development on the land. Architects will be offered the chance to propose medium density housing prototypes that illustrate the possibilities and advantages of urban living, in recognition of the excellent opportunity that the Accord offers to create more modern housing options in Auckland,” Mr Brown says.

The competition will open on 21 May with details soon to be posted on the NZIA website at www.nzia.co.nz.

Hopefully this will get both architects and developers interested in what kinds of quality urban developments can actually be built and spur them to do more.

Changing housing trends starting to be noticed

On Monday there were a series of interesting articles in the Herald on housing that have a lot in common with many of the things we say.

A general statement about the current urban trends

Although apartment living has been available to Aucklanders for many decades it is only relatively recently that it has become desirable.

Similar large cities around the world have long recognised the benefits large resident populations in high-rise apartments bring in rejuvenating previously run-down, and often abandoned, central suburbs.

While Auckland may struggle to recreate the cosmopolitan atmosphere of major cities such as New York, Paris and London, it is already moving in that direction. Developments such as the Wynyard Quarter, with its wide pedestrian boulevards and range of restaurants and entertainment areas, are helping to entice potential apartment dwellers downtown.

Pedestrians are being given more priority in the central city, and public transport facilities are improving, making the prospect of going without a car less scary than it would have been even a decade ago.

The vast majority of Aucklanders will continue to sprawl across the length and breadth of suburbia, but even in the outer suburbs population pressures will see the city growing not only outwards but also up.

I think that last point is quite important. Even with massive development in apartments or other types of intensified living the majority of people will still be in typical suburban homes. Intensification won’t change that but it will give those that want it more options.

On first home buyers

For first home buyers, the LVR and a heated property market have made the search for an affordable suburb difficult. But they shouldn’t despair. We’ve found the next generation of Ponsonbys and Grey Lynns. And guess what? Transport’s the key.

Ponsonby and Grey Lynn are beyond the reach of many first home buyers but there are plenty of affordable suburbs further afield. What’s made these outer suburbs – previously dismissed as either too far from the central city or too suburban to consider – more attractive propositions are improved bus, rail and motorway links.

Not everyone needs to travel into the CBD. In some cases new motorways will make it easier to live in, say, Swanson and work in South Auckland. The bus-only lanes on the Northern Motorway have made living somewhere such as Albany or Silverdale a realistic choice. Buses take less than half an hour to reach downtown, stopping infrequently and dropping passengers at the bottom of Queen St.

The upgrade of suburban rail and bus hubs such as Panmure, and the imminent introduction of new electric trains, further raises the appeal of nearby suburbs. And Queen St is no longer the preserve of a decent cup of coffee – hundreds of cafes have opened in the suburbs, helping to rejuvenate many suburban shopping centres.

I think that the current suite of transport projects – both road and rail – are going to have a massive impact on how we get around. Waterview is obviously the completion of the motorway network while on the PT side of things the transformation is probably even larger as we have the big three of electrification, new bus network and integrated ticketing/fares underway along with a lot of other, smaller stuff like a focus on improving the customer experience.

Of course from the same article clearly not everyone gets it with it quoting economist Rodney Dickens saying that instead of intensification we should be focusing on housing on the fringes so they can live and work locally.

“People living and working locally makes economic sense,” he says, although this is already happening to some degree in areas such as Silverdale in the North, and Takanini and Weymouth in the south.

That’s all very nice in theory but it misses a few key points. First is that there are actually very few jobs out on the fringes. In fact 49% of all jobs in the Auckland region are with the boundaries of  the old Auckland City Council area. Even if we put a lot of effort into growth of employment in the fringes there still wouldn’t be anywhere near as many jobs as there are residents in those areas so people commuting is not going to disappear. Going further it’s also important to think not just about the number of jobs in an area but the kind of jobs they are.

CBDs by their very name are central and therefore generally have a much wider catchment to choose staff from.  Businesses on the fringes limited to local employment – especially those that require specifically skilled staff will simply not have as many potential employees to choose from which can limit their businesses. That means the types of employment found on the fringes is likely to end up being quite a different to that found more centrally. As an example, I wonder how many jobs Rodney would be able to find as an economist in Silverdale, Takanini or Weymouth. This is issue is also exaggerated by the fact that even if one person manages to find a job locally, their partner may not be able to and therefore have to travel.

On Apartments and intensification

As Auckland’s population increases so the range of apartments spreads, and already there are large apartment projects in suburban areas such as Manukau, Ellerslie, New Lynn, Mt Wellington and parts of the North Shore.

Higher density living is provided for in the Auckland Council’s Unitary Plan, which provides for zones where terraced housing and apartments can be built. Controversial though these planning changes have been, it is difficult to escape the need for Auckland to start moving skywards instead of continuing to sprawl. Some of this future development has already taken place around railway and bus transport hubs. Once the apartments sprout up, along with them come retail and food outlets and amenities, creating new communities.

“Predictions a year ago that demand for central city apartments was increasing to the point where developers would have confidence to start building new projects, have proven correct, and several major new complexes are under construction.”

Property experts warn against making sweeping judgements about what, in fact, are a series of complex markets, each with their own dynamic. They are encouraged by the developments providing more up-market apartments in the city and its fringes. There could be as many as 3000 new apartments available on the market during the next 18 months, bringing the total number of apartments in the city and inner suburbs to more than 20,000. Of course the price of the new apartments will be much higher, with apartments in the new developments starting around $450,000.

Of course we’ve been tracking apartment developments in our Development Tracker for a while now and started doing so after seeing so many new proposals popping up all over the place. We have also seen developments starting much less than $450k although there has definitely been a noticeable amount of higher end apartments. It really seems that we’re missing decent middle of the range options. My guess is that over the next economic growth cycle we will see a huge amount of apartment (and more moderate intensification) developments occur.

And lastly on Affordability

The head of hometopia.co.nz, Stephen Hart, said people will still want to live close to town and consider apartment living but satellite suburbs were also being considered.

“The transport systems are likely to improve to these outlying suburbs and they can get a house and section we only dreamed about – we can’t even do that in Mt Wellington or Panmure now.”

He still thought places like Papakura and Whangaparaoa were too far for most city workers to consider. “Some people are doing it but it’s not a trend, in my opinion.”

The report’s writer, Tony Verdon, says the newly developed areas will not appeal to all younger buyers, many of whom would prefer to live closer to Auckland’s centre.

“But increased pressure on Auckland prices will force many to these newer developments on Auckland’s expanding urban fringe.”

So people are really wanting to be more central but are only really choosing to live further out because that’s the only options for them.

Of course this year could see a lot change. Interest rates are starting to rise and the impact being felt sooner due to more people having floating mortgages than in the past. Dwellings with good PT, walking and cycling options that allow people to reduce their transport costs are likely to do quite well compared to those for which the only option is to drive.

Housing Affordability and Transport costs

More apartments added to our Development Tracker

Some new additions to our development tracker.

City: Nicolas St Apartments – 60 Apartments

Another addition to the Hobson/Nelson cluster of apartments. This one seems to be on a site that has entrances from both Hobson St and Nicolas St. The development has two towers in it.

Nicolas St Apatments

While it’s called Nicolas St, this image is of the development from Hobson St.

City: Summit on Symonds – 45 apartments

What appears to be a conversion and extension of the existing building on the corner of K Rd and Symonds St. Like The Xanadu, this one appears to be targeting baby boomers. In the image below it also suggests that a separate building (the green one) will be built) as part of this.

Summit on Symonds

Mt Eden: Mt Eden Fiore – 120 apartments

This appears to be proposed for the large empty site currently used as a carpark on the Northern side of Enfield St next to the Horse & Trap

Fiore Mt Eden

Parnell: 28 York St – 12 Apartments

12 very expensive but also very large apartments in Parnell.

28 York St

Appetite for development growing

It seems there’s been a flurry of news about intensification and development over the last week or so. We’ve had Len Brown trying to kick start progress on the CRL at the same time as Precinct Properties redevelop the Downtown Shopping Centre, we’ve had the news that resource consent has been issued for a massive tower to go up on the long empty site that bounds Elliot St, Victoria St and Albert St and that will be right next to the proposed Aotea Station.

Now we’ve had news that the long fought over plans to build apartments on top of the Milford Shopping Centre. The Herald reports:

Milford Shopping Centre’s development boss has welcomed an Environment Court decision allowing apartment towers to rise around the property on Auckland’s North Shore up to 12 levels high.

Campbell Barbour, New Zealand Retail Property Group general manager, said he was still reviewing the decision but said he was satisfied with it. “It signals there’s an understanding that the site is appropriate for the buildings and for intensification so it’s a long way from where this all started – that it was not appropriate,” he said.

“It creates an opportunity for the development of apartment living on the Milford site which can reflect the superb locational attributes,” he said, adding that it also supported the view that good, taller buildings would help resolve the city’s housing supply crisis.

Auckland Council officials said the company had not got as much height as it had wanted but a good compromise had been reached.

The decision on the scheme allows the towers on land now used for carparking at the shopping hub.

I’ve always liked the general idea behind the proposed Milford development as it not only makes better use of the large area the mall covers but putting more people in to the area is bound to help other local amenities more viable and the area more liveable for others. The reduction in height from what the developers were initially wanting from ~17 storeys to 12 storeys doesn’t seem too bad and it sounds like the developer is ok with it so it is likely to go ahead. From memory the plan was only for the buildings in the middle to be high with others closer to the edge of the site lower.

This is one of the images the developers were showing on the website from before this announcement so the height obviously will need to come down by a few levels.

Milford Stage 3

Also in the Herald yesterday was this article about how the councils caving to a few very vocal scaremongers is going to have some potentially big impacts on the ability to build more affordable housing.

Community housing providers say the latest draft planning rules would make affordable housing impossible in 85 per cent of Auckland.

Auckland Community Housing Network chairman Peter Jeffries says Auckland councillors dealt “a disastrous blow” to young couples seeking their first house by caving in to an intense campaign by existing homeowners against high-density housing in almost all suburban areas.

The current proposed Unitary Plan, approved a month before last October’s council elections, imposes a minimum of at least 200sq m of land per dwelling in all except 15 per cent of the Auckland urban area – the 5 per cent zoned for terraced housing and apartments, and 10 per cent in a three-storey “mixed housing urban” zone around suburban centres and main transport routes.

Mr Jeffries said that at current Auckland land values of around $1000 a sq m, home-buyers anywhere else would face land costs of at least $200,000 plus building costs of up to $160,000 for a one-bedroom unit or $200,000 for two bedrooms.

“Affordability is thrown out the window,” he said.

Mr Jeffries’ Community of Refuge Trust recently built eight one-bedroom flats in two new two-storey houses on a 1000sq m site next to the commercial area in Otahuhu.

That worked out at 125sq m of land per dwelling including pocket gardens and a shared barbecue area. It cost only $240,000 a dwelling including the land, enabling the units to rent at only $250 a week.

The example used shows quite well the impact on house prices that intensification can have. Sure it isn’t the mythical quarter acre section but then not everyone wants that and what’s more not everyone has the time or money to be able to maintain a section that size. Further not everyone wants to have to spend huge amounts of money on transport from far flung suburbs.

This is one of the key reasons it’s so important to put a submission in for the Unitary Plan and the deadline being next Friday (I need to get on to mine).

Lastly there also been news that Precinct Properties are also the front runner to build the Innovation Precinct at Wynyard Quarter.

Listed landlord Precinct Properties has just announced a big lift in bottom-line profit and that it is in exclusive negotiations to develop an exclusive part of Auckland’s waterfront.

Precinct has just announced that it made $39.5 million net profit after tax in the six months to December 31, up 67 per cent on the previous $23.6 million.

But Scott Pritchard, Precinct chief executive, also said the company was now in talks to work on one of the country’s largest urban regeneration projects on 1.1ha of land where about 46,000 sq m of floors space could be developed.

Precinct’s involvement in the Wynyard Quarter had not previously been disclosed but Pritchard said the company was working with Auckland Tourism Events and Economic Development (ATEED) which has plans for a multi-building “innovation precinct”.

Precinct could become the development partner for the commercial offices within the quarter’s Innovation Precinct, he said.

The innovation precinct is just one part of a massive redevelopment Waterfront Auckland are currently working on with a neighbouring section also under negotiation that will include a number of apartments. They’re also working on a new hotel for the area.

Wynard Innovation Precinct map

Here’s some images of what the development could end up looking like (and if it does it would be a very very neat place).

Wynyard Central

Wynyard Central 2

Wynyard Central 3

Wynyard Central 4

Small can be good

Something strange seems to be happening at the Herald. Recently we have started to see an increasing number of stories that talk about the positives of apartments and higher density living which is completely opposite to the scaremongering we saw during the draft Unitary Plan debate last year. This one was in the herald yesterday – yes it’s the Herald on Sunday which is technically a different publication but we have seen it in the normal herald recently too.

Welcome to your new home. Step inside the flexible living space, which converts into an extra bedroom for guests and a home office during the week.

The two bedrooms also morph into multi-use spaces as needed – an office, a TV room, a studio or workroom. The walls are double insulated against the sound of the high-speed trains passing nearby, and the big, north-facing windows provide passive solar heating.

There’s no garage but you can hire a car just down the street and park your bike in the lock-up.

That aroma? Your neighbours are firing up a welcome barbecue down in the communal courtyard. Grab a lettuce from the rooftop garden for a salad and tuck in.

That’s one vision for how we could be living in 20 years. As demand grows for scarce city land, the population grows and property prices soar, it could well be a reality.

It’s not just a vision of our children’s future, either. It’s already the urban way of life in some parts of the world and has been for generations.

For some the idea of this won’t be appealing but for many others – like many in our younger generations – it’s an idea that doesn’t concern them and for many may even be desirable. in 2012 Patrick put together this wonderful post highlighting people who choose to live in an apartment.

Not everyone wants to live in apartments – and not everyone wants them next door, either. Submissions are open on Auckland Council’s proposed Unitary Plan, the planning document that replaces the region’s 13 existing district and regional plans. Much of the public reaction has been opposition to medium and high-density residential developments in the suburbs.

Generation Zero, a youth-led organisation focused on climate change, found itself aligned with the Property Council and developers in their support for more intensive housing. “The current housing stock doesn’t reflect the changing attitudes of young people in terms of what housing they want,” says spokesman Carlos Chambers.

“There’s certainly a willingness to take hits on things like having your own private garden or section.”

He says new housing models have benefits like healthier lifestyles, less traffic congestion, people walking more and feeling more connected to their communities.

One of the comments we frequently make when discussing density is that it is important not just to put lots of dwellings in but that access to amenities is key; otherwise it’s just amplifying the really negative aspects of the lower density development that is so common in the suburbs – especially those built after 1950. It’s a point picked up well in the next section.

Ingrained ideas may not be easy to shift. Auckland University professor of urban design Errol Haarhoff and lecturer in urban planning Lee Beattie studied developments in New Lynn, Onehunga and Albany. Residents felt they were a good place to live and raise children but half still aimed to one day live in a stand-alone house on a full section.

Haarhoff is sceptical of this aspiration, which he says would be unrealistic for many. “If you then went on to explain that if you had a house in Botany Downs or Orewa or one of those urban fringe subdivisions, your kids would no longer be able to walk to school, there would be no amenities, there wouldn’t even be a dairy within 5km, I imagine the response would be more considered.”

He says the key to creating quality apartment developments is thinking outside the home as much as in it: Where are the shops, parks, schools and cafes? Can you walk there?

“You’ve got to design viable neighbourhoods and communities,” he says. “You can go out there and build 3000 houses but you have to deliver the schools, shops, cafes and connections.”

Good examples of medium density housing exist, often in inner-city suburbs like Freemans Bay, Kingsland, Ponsonby and Mt Eden. The amenities in those neighbourhoods – cafes, shops and parks – help negate the need for more space at home. “The cafe downstairs in the apartment block is the extension of the living room,” he says.

“You go to my local park (in Grey Lynn) and it’s full of mums and dads playing with their kids, meeting each other. Those spaces are there to be used to create a sense of community instead of coming inside and closing the drawbridge. We’re going to reach a point where those big 200sq m houses on the edge of the city are going to start not finding a market.”

One part that did catch my attention was about the change in the size of dwellings over time.

Why, then, are Kiwis still so firmly attached to living big?

If you’re building a new house today, it is probably at least 50 per cent bigger than what your grandparents would have built.

On an international scale, New Zealand’s houses are huge, and keep getting bigger. The average floor area for a new build last year was 197sqm -in crowded Auckland it was 203sq m. Nationally, that’s up from 135sq min 1990 – equivalent to a couple of extra bedrooms.

The size of new-builds was steadily climbing until 2010, when a stutter in the property market saw a drop. In Auckland, it peaked at 217sq min 2010, then dipped to 209sqmin 2011 and to 203sqm last year.

That’s perhaps because the number of apartments built in the region took a steep upturn last year-from 616 in 2012 to 1059 in the year to November.

But even the apartments are roomy – the average size last year was 113sq m. Compare that to the 45sqm average dwelling size in Hong Kong, 76sqmin the UK, or 95sqmin Japan.

Bigger dwellings have been a trend in not just NZ but other countries too. Seeing how much I like charts, I thought I would show just how much the average dwelling size has changed the result is below.

Average Dwelling Size

The big dip in 02-08 period ties in with when larger numbers of apartments were being built. The graph below shows the size of Auckland houses and apartments compared to the rest of New Zealand. Due to some apartments averaging well above 100m² I assume the figures must be including the likes of terraced houses.

Average House Sizes

What I find most interesting is the average house size in Auckland was roughly identical compared to the rest of NZ from about 1999 through to mid-2004 before getting substantially larger just before the GFC. I’m guessing there are multiple reasons behind the trend and that one of those is due to a desire to get more out of the land which is generally more valuable in Auckland than other parts of New Zealand.

The data also includes information about subsections of Auckland based on the old council boundaries providing some very interesting information at a sub-regional level. The next graph shows the average dwelling size consented for the different areas of Auckland (I’m not sure why the North Shore is so spiky at times).

Auckland Dwelling Size

As would be expected, Auckland City saw the lowest sizes for some time which was primarily due to it being where the majority of apartments were built. As apartment construction dried up, the average size of houses increased.

The next graph shows the average house size. What I find interesting is how house sizes in the old Waitakere City Council area have been consistently lower than in the rest of Auckland while in the last 5 or so years the area with the largest homes being built has been on the North Shore.

Auckland House Size

Unfortunately while the data is available, it isn’t really possible to show apartments at this granularity clearly and the graph just looks like an even bigger mess of colours

It will be interesting to see where average house sizes go in the future.