Last week the Government announced it had reached a housing accord with the Auckland Council in a bid to get more houses built and ease issues over housing affordability.
The legislation, to be introduced to Parliament as part of Budget 2013, will enable Special Housing Areas to be created by the Auckland Council with approval of Government. In these areas it will be possible to override restrictions on housing put in place by Auckland’s eight predecessor Councils, like the Metropolitan Urban Limit.
Qualifying developments in these Special Housing Areas will be able to be streamlined, providing they are consistent with Auckland’s Unitary Plan, once it is notified, expected in September this year. New greenfield developments of more than 50 dwellings will be able to be approved in six months as compared to the current average of three years and brownfield developments in three months as compared to the current average of one year. The streamlined process will not be available for high rise developments that will need to be considered under existing rules until the Unitary Plan has been finalised in 2016.
“This is a three year agreement to address these housing supply issues in the interim until Auckland Council’s Unitary Plan becomes fully operative and the Government’s Resource Management Act reforms for planning processes take effect.
“The Government respects in this Accord that it is for Auckland to decide where and how it wishes to grow. The Government is giving new powers for council to get some pace around new housing development and is agreeing on aspirational targets to ensure Auckland’s housing supply and affordability issues are addressed.
Overall the accord seemed straight forward enough and fairly sensible. At a high level the council would decide on a number of Special Housing Areas. Qualifying developments within these areas are able to use a fast tracked process to get consent and would have to comply with the rules in the Unitary Plan when it is formally notified later this year.
To me the accord seemed fairly positive as it would make it quite easy for medium density developments – the kind that will likely be the majority of intensification that occurs – to happen in any brownfield areas selected. This was especially the case as a site only needs capacity for 5 dwellings to qualify. There was one issue though, while the council would be able to select the special housing areas, the government had to approve them. That leaves the question of what happened if the council and government couldn’t agree on where the special housing areas should be.
Today it seems we have our answer. Along with the budget, the government has introduced the legislation to enable the special housing areas to be designated. Nick Smith has also issued a press release about it which includes this.
“If an accord cannot be reached in an area of severe housing unaffordability, the Government can intervene by establishing special housing areas and issuing consents for developments.”
Budget 2013 includes $7.2 million over four years to help the Ministry of Business, Innovation and Employment fund the initiative.
The legislation will go through its first reading as part of Budget 2013 before being sent to a select committee for a shortened six-week timetable for urgent consideration and progress.
“This legislation is an immediate and short-term response to housing pressures in areas facing severe housing affordability problems,” Dr Smith says.
“This provides time for the Government’s substantive changes to resource management reforms and the subsequent council planning processes to bear fruit and address these land and housing supply issues in the longer term.”
In other words, if the council and government can’t come to an agreement on the locations for the special housing areas, the government will simply override the council and do what they want. It makes a complete mockery of the announcement that the government and council made last week. It turns out that this is not a case of both sides compromising but one of the government twisting the councils arm behind its back to get their way while also forcing the council to smile at the camera and pretend everything is good.
Len Brown has obviously also been surprised by this as he has already come out with the statement below.
Auckland Mayor Len Brown has welcomed the introduction of legislation for housing accords, but says he will be seeking clarification on a number of points to ensure the final legislation is consistent with the draft Auckland Housing Accord.
“There are clauses in the bill introduced today that appear to be inconsistent with the Auckland Housing Accord,” says Len Brown.
“My expectation is that the Select Committee process will provide an opportunity to clear up these inconsistencies.
“Clearly, in relation to the accord, the point of the legislation is to give effect to the agreements we reached.
“The accord still needs to be considered and agreed by the Auckland Council’s Governing Body. Before we can do this we need to be certain that the legislation is consistent with the agreements in the accord.
Len Brown said he would be writing to Housing Minister Nick Smith to raise questions about the consistency of the accord and the current bill.
The Housing Accord is an agreement between Auckland Mayor Len Brown and the Minister of Housing aimed at tackling issues of housing affordability and supply in Auckland.
It is subject to agreement by Auckland Council.
The streamlined consenting process outlined in the accord can only take effect once the council’s draft Unitary Plan is adopted for notification – expected to be September this year.
It would also be interesting to see how the government determine housing unaffordability, my guess would be the flawed Demographia study as it is something that the government have pointed to in the past.
Back in March and just before the council released the Unitary Plan, Nick Smith hit headlines by saying that he was going to smash Aucklands Metropolitan Urban Limit in a bid to make housing more affordable but it appeared he was primarily focused on enabling the city to sprawl faster. Over the ensuring weeks a lot of claims and counter claims flying between the council and the government over the best solution. The government seemed to just want the current urban limits removed and for the development process to start. The council suggested that the fastest way for that to happen was actually through implementing the Unitary Plan sooner as that is intended to open up new land and that elements within it would result in better overall developments.
Eventually both parties decided to take the arguing behind closed doors to try and work things out. Today both parties have announced that they have come to an agreement over the issue in the form of the Auckland Housing Accord. Here is the governments take on it.
An Auckland Housing Accord has been agreed today by Housing Minister Dr Nick Smith and Auckland Mayor Len Brown to urgently increase the supply and affordability of housing in Auckland.
“This Accord will help deliver thousands of new homes for Auckland by streamlining the planning and consenting process and getting Government and Council working more closely together on housing development,” Dr Smith said.
“This balanced and pragmatic agreement addresses the economic risks to New Zealand’s economy of an over-heated and supply constrained Auckland housing market. It is good news for Auckland families wanting access to more affordable houses to buy and rent.”
The legislation, to be introduced to Parliament as part of Budget 2013, will enable Special Housing Areas to be created by the Auckland Council with approval of Government. In these areas it will be possible to override restrictions on housing put in place by Auckland’s eight predecessor Councils, like the Metropolitan Urban Limit.
Qualifying developments in these Special Housing Areas will be able to be streamlined, providing they are consistent with Auckland’s Unitary Plan, once it is notified, expected in September this year. New greenfield developments of more than 50 dwellings will be able to be approved in six months as compared to the current average of three years and brownfield developments in three months as compared to the current average of one year. The streamlined process will not be available for high rise developments that will need to be considered under existing rules until the Unitary Plan has been finalised in 2016.
“This is a three year agreement to address these housing supply issues in the interim until Auckland Council’s Unitary Plan becomes fully operative and the Government’s Resource Management Act reforms for planning processes take effect.
“The Government respects in this Accord that it is for Auckland to decide where and how it wishes to grow. The Government is giving new powers for council to get some pace around new housing development and is agreeing on aspirational targets to ensure Auckland’s housing supply and affordability issues are addressed.
“The Accord sets a target of 9,000 additional residential houses being consented for in Year 1, 13,000 in Year 2, and 17,000 in Year 3. This is a huge boost on the average 3,600 homes that have been consented each year over the past four years and the 7,400 a year over the past 20 years.
“The Accord is a sensible solution to the problem of ensuring a robust process for submissions and hearings on Auckland’s 30 year Unitary Plan, while ensuring progress is made now on Auckland’s housing supply and affordability issues. It is about getting on and building the least contentious 39,000 houses of the 400,000 identified in the draft Unitary Plan.
“This agreement will also enable the Government and Council to make progress on other housing issues. There is a commitment to an inquiry into building material and construction costs, a better coordination on delivering core infrastructure to support new housing and a feasibility study on the development of New Zealand’s first online building consent process in Auckland. There are also significant developments at Tāmaki, Hobsonville, Papakura and Weymouth and across Housing New Zealand’s Auckland housing stock to improve the quality and quantity of Auckland homes.
“This Accord is the product of six weeks of intense discussions with Auckland Mayor Len Brown, his deputy Penny Hulse, and many council and government officials. I wish to publicly thank them for their willingness to engage and to help find this constructive way forward.”
The Auckland Housing Accord is subject to agreement by the Auckland Council and legislation being passed by Parliament. The Accord and legislation will expire when the new Auckland Unitary Plan becomes fully operative, expected in 2016.
At first glance it seems like a fairly decent comprise solution however as always, the devil is in the detail. The way I read things, the council will nominate a series of greenfield and brownfield special housing areas in which the less controversial elements of the unitary plan will take effect straight away. That means that for the rest of Auckland, the unitary plan won’t come into effect until it has been through the Board of Inquiry process set out by Amy Adams earlier this year (or late last year). Allowing the council to decide on the areas that will be subject to this seems like a good idea.
The area of the announcement that most caught my attention was the comments that the streamlined processes will not apply to high rise developments, after all, just what is deemed high rise? The factsheet provided goes someway to answering that.
Overall the accord seems like a decent compromise between the government and council, it will however be interesting to see what areas get selected as special housing zones. Here is the accord itself, the factsheet and the Q&As that go with it.
Also here is Len Browns take on it with the most interesting part being that he suggests that in return for faster consenting in these special housing areas, including affordable housing components in them will likely be a council requirement.
There have been quite a few battles in parliament between Housing Minister Nick Smith and Labour’s housing and Auckland issues spokesperson Phil Twyford over the past couple of weeks on the issue of urban limits, land supply and affordable housing. Here’s today’s stoush (transcript here):
One thing that keeps confusing me in this argument is why everyone seems to be focusing so much on opening up additional land for rezoning to urban uses (effectively the “busting the urban limits”) when it seems like the real problem is that existing land zoned for urban development and serviced with main roads and bulk water/wastewater simply isn’t getting to the next stage of being subdivided up and put on the market.
This is the difference between the 15,000 units worth of land that’s ‘ready to go’ in the sense of council having done everything in its power to rezone, provide main roads and bulk infrastructure – and the 2,000 subdivided sections which are ‘ready to go’ in the sense that someone could build a house on them tomorrow. In Flat Bush, the two sit side by side:So not only is ‘busting the urban limits’ completely stupid in that it sets up an urban form nearly impossible to service with infrastructure (because the powers to be just never know where future development might occur), it also seems like such a policy would make absolutely no difference to what’s holding back the delivery of sections on the market which are ready to build on. That seems to be a problem largely caused by the development industry – whether wilfully (in the form of land-banking) or just because the owners can’t get themselves into a position to do this work.
The question of how many available sections there are in Auckland for development has yet again raised its head in the last couple of days, with much debate over whether there are 15,000 or 2,000 or some number in between of sections available to build houses on. This from yesterday’s NZ Herald:
Auckland has 2000 new sections ready to build houses on, says Mayor Len Brown, who last month claimed there was enough land for 15,000 homes.
As debate grows about housing and land supply in Auckland, Mr Brown is no longer claiming the city has enough new land to build 15,000 houses “right now”.
Instead, he is saying there is capacity for 15,000 homes on ready-to-go greenfield land in areas such as Flat Bush, Takanini and Hobsonville, but only 2000 sections have reached the building stage.
“The remainder require subdivision and internal servicing by private sector developers to create sections,” Mr Brown said.
Much of the debate seems to be around semantics – what constitutes ‘ready to go’ land? What is the role of Council in delivering land to that point? What is greenfield land?
Clearly there’s a process that developers go through to turn what starts out as countryside into urbanised housing. I’m not really an expert but it seems like it probably goes along these lines:
Land is highlighted as suitable for future urban growth (i.e. placed inside the urban growth boundary). Usually this land seems to get a ‘future urban’ zone or something similar to prevent further subdivision that would make it difficult for that land to be comprehensively redeveloped in the future.
Structure planning occurs to highlights where roads, parks, schools and other facilities should go as well as which areas should be zoned for what activities/intensities in the future.
Rezoning occurs to enable redevelopment. Bulk infrastructure (water mains, arterial roads etc.) is provided.
Land is subdivided down to section sizes and internal roads and pipes, electricity and phone lines are provided to each site.
House is built and then occupied.
At some point (between steps three and four it would seem) the job of council is done. The main roads have been built, the land has been rezoned, the bulk water supply, wastewater pipes and so forth have been put in. Unless the Council is fulfilling the role of land developer, which in some cases they might well be (like Flat Bush town centre, which I think the Council owns) then it’s hard to lay too much blame at Council for not forcing developers into the final processes of subdividing and building on their land. Ironically one of the biggest greenfield developments on the go at the moment is at Hobsonville – where the government is effectively ‘the developer’. Maybe they need to tell themselves to hurry up and develop that land a bit quicker?
So it seems to me as though something is clearly going wrong between the ‘rezoning’ step and the actual land subdivision step – the difference between the 15,000 figure (which is quite a lot of capacity) and the 2,000 figure (which really isn’t that much). Some developers are sitting on land that has been rezoned and has been provided with bulk infrastructure yet for some reason they’re not subdividing it down to urban sized lots and either building the houses themselves or getting someone else to build the houses. It would be really great to get a better understanding of what’s needed in that process and what’s going wrong at the moment.
Of course Housing Minister Nick Smith’s proposal to get rid of the urban limits doesn’t do anything about resolving the issues that are clearly holding back the supply of sections in current greenfield areas. It’s way back at step one – vastly increasing the amount of land highlighted as potentially suitable for future urban development. Not too dissimilar from seems to already be happening actually.
Dr Smith vowed to break the “stranglehold” of the council’s policy of containing urban sprawl – a policy he says is “killing the dreams of Aucklanders” by driving up house prices.
The minister wants to open up more land outside the existing metropolitan urban limit to peg back land prices which, he said, were the biggest factor putting home ownership out of reach of many.
Mr Brown hit back, saying Dr Smith was advocating a flawed Los Angeles model of “suburban sprawl” going back to the 1940s and 1950s.
The mayor said the new unitary plan – a draft is being released on Friday – provided for a balanced approach of intensification of existing land and releasing new land to house a further million people in Auckland over the next 30 years.
Ironically of course the government’s process for the Auckland Unitary Plan means that no new greenfield land highlighted in the Plan will actually become rezoned for development (i.e. step three) until quite a few years from now – as pointed out by Phil Twyford in parliament today and by Brian Rudman in the NZ Herald last week.
The governments new housing minister, Nick Smith has hit headlines this morning saying that he is going to smash Auckland’s Metropolitan Urban Limit (MUL) in a bid to make housing more affordable. But the more you look into his statements, the more it appears that he has arrived at his position purely based on ideology rather than facts.
New Housing Minister Nick Smith is vowing to break the “stranglehold” of Auckland Council’s policy of containing urban sprawl – a policy he says is “killing the dreams of Aucklanders” by driving up house prices.
In his first major interview on how he plans to tackle the housing affordability issue handed to him in January’s Cabinet reshuffle, he said his focus would be on opening up land supply because land prices were the biggest factor putting home ownership out of reach of many Aucklanders.
“There’s no question in my mind that we have to break through the stranglehold that the existing legal metropolitan urban limit has on land supply,” he said.
But Auckland Mayor Len Brown hit back last night, saying Dr Smith was advocating a flawed Los Angeles model of “suburban sprawl and unbridled land availability”.
“I’m pretty disappointed in the minister’s positioning, and I am disappointed because it reflects a philosophy or view of city development, and particularly development of our city, that goes back to the forties and fifties,” he said.
Nick is using some fairly emotive language here and what’s more, it seems to ignore the work that has been going on about this issue. For starters by being so focused on only one aspect of the issue, land supply, he seems to be ignoring all of the other factors that go into the price of housing. He also seems to ignore another key factor in mix, demand. The reality is that Auckland’s population is growing, and growing faster than the rest of the country combined, more people flooding into the city is always going to put more pressure on house prices.
Projected Population Growth
And on that subject, these days more and more people are wanting to live in the suburbs closer to the city, the very places where we can’t create more land, not flung out to the outskirts of town. This is especially the case for young people who don’t share the utopian vision of the house in the suburbs that our parents, or even grandparents were sold on in the post war years. The article continues:
“When we are looking at growth in Auckland of 2 per cent a year, we are going to need sections at the rate of 12,000 a year,” he said. “The metropolitan urban limit is a stranglehold on land that is killing the dreams of Aucklanders wanting to own their home and we have to work with the council to find the tools to increase that land supply and bring section prices back.”
He said the council’s plan to contain 60 to 70 per cent of new housing within the current built-up area would fail due to “community angst over intensification” and economic reality that squeezing two houses on to one existing quarter-acre section could knock $200,000 off the value of the existing house.
First of all, we don’t need 12,000 sections a year, we need need 12,000 dwellings, the two are not the same thing. He is also kidding himself if he thinks that we are building quarter acre sections. In fact it would be interesting to find out when the last subdivision was built that contained quarter acre sections. A quarter acre is ~1000 sq meters yet most recent housing developments tend to have sections less than half that size. In fact many of the houses going in at Hobsonville are on sections of less than 300 sq meters. So If you look at the current development patterns, we have already moved away from the quarter acre paradise that people claim when opposing intensification. Speaking of which, any GIS wizards out there able to work out just what the average section size is in Auckland?
Further his comments about infill housing miss some key details. Yes the value of the existing section will drop but overall both pieces of land will have a higher value. Also he seems to be suggesting that someone who owns a quarter acre of land isn’t capable of making a decision on whether they want to subdivide their land and along with the trade off’s that entails. After all no one is proposing that the council is going to go in and force people to split their land up. I also don’t agree with the suggestion that there will be a lot of community angst, yes there will be some in specific cases but by in large, most of the intensification that will occur over the next 30 years will be medium density developments, that is town houses, terraced houses and low rise apartments.
But Mr Brown said Aucklanders had already agreed on the city’s “compact footprint” through developing the first Auckland Plan, and Dr Smith should stop debating it.
He said the plan was based on “a model that is developing truly internationally competitive cities with strong economic bases to them and that give rise to outstanding transport operations within a more compact framework”.
“Have a look at Melbourne,” he said. “Have a look at Hong Kong. Have a look at London. All of those cities, by and large, are operating off what is regarded as best practice.”
As Len says in this bit, there has already been plenty of debate around housing and by in large, I think that most of the community do agree that Auckland should get denser. When I attended a discussion group about the Unitary Plan late last year, I was quite surprised by the discussion around this topic and how much everyone, of all ages and backgrounds agreed with the direction we are heading. This leads me to believe that the majority of those complaining about increased density are very much a vocal minority.
I do have to disagree with Len’s example cities though, Melbourne is more sprawling, with a lower population density than we have. Hong Kong is the complete opposite and not exactly the example we are planning to follow either. What we need is somewhere in between. I also think we need to be talking more about the advantages of having higher densities in Auckland, particularly the additional amenities that it enables, like having more local shops, cafes, dairies or better parks etc.
Both Nick Smith a Len Brown were also on Radio New Zealand this morning talking about this topic.
Nick brings up another issue that needs to be addressed. The Unitary Plan which gets released for discussion next week proposes to remove the MUL and open up more land. Yet recent announcements from the government will likely prevent those changes from coming into effect for a number of years. Something also picked up by reporter Todd Niall in this report:
Overall it seems to me that that Nick Smith has come into this debate with a massive agenda focused solely on removing the urban limit rather than looking at the whole picture. He appears to be planning on using his powers of government to get enact his ideological agenda. As Steve C said this morning “it’s interesting how the democratic process imposed on local government, i.e. consult, consult, consult, differs from the deomocratic process for central government, i.e. we’re elected and we’ll do what we want”
It seems timely to talk a bit about carbon dioxide emissions, as the government is currently undertaking consultation on what New Zealand’s 2020 target should be in terms of reducing our CO2 emissions when compared to 1990 levels. There has been a big push for a dramatic 40% reduction target, as that is what is considered necessary to avoid the worst effects of climate change, although it is likely the government is going to end up on something a bit more modest. While having a more modest target would be a disappointment, I think in some ways a more critical question is “how are we going to achieve any reduction?”
Since 1990 New Zealand’s gross CO2 emissions (that is, everything we pump out) have increased quite significantly. However, due to a lot of tree planting in the 1990s our net emissions (gross emissions minus the amount of CO2 trees can suck out of the atmosphere) is about level. However, to actually decrease our net emissions by anything substantial in the longer-term, it will be necessary to reduce our gross emissions. And this is where things get tricky. New Zealand’s CO2 emissions largely come from three sources: agriculture, power generation and transport. It is notoriously difficult to reduce CO2 emissions from agriculture without reducing food production – certainly something we wouldn’t want in a world with a growing population. Steps will have to be taken to find ways to reduce agricultural emissions, but they are a while away yet. Regarding power generation, while we can certainly do more to reduce these emissions by investing in renewable energy generation and taking pressure off our backup coal and gas stations, we actually do pretty well when comparing with other countries internationally. This means that our ability to significantly reduce emissions from power generation are somewhat limited (as already 70% or so of our electricity is renewably generated).
Which leaves transport. Over the past 18 years emissions from transport have gone horribly in the wrong direction. According to the Ministry of Economic Development:
“Emissions from national transport continue to account for the largest share of total energy emissions. National transport emissions have grown by 64% since 1990 at an average growth rate of 2.8% per annum, although this has slowed in recent years. Emissions from road transport account for the largest share of national transport emissions at 90%. This represents 38% of the total energy carbon dioxide equivalent emissions for New Zealand.”
So transport is a significant problem. But short of completely overhauling our entire transport system, what can we actually do about this? Well, trends in the last year provide some interesting insights into that:
Road transport emissions, however, dropped in 2008 for the first time since the energy greenhouse gas emissions series began. This is likely to be due to high petrol and diesel prices in 2008 and the beginning of the global recession.
While obviously we don’t want to encourage recessions as ways in which to reduce transport-sector CO2 emissions, the telling aspect is that to reduce our emissions we need to get cars off the road, and that pricing (in the form of higher fuel prices) is a way in which to achieve this. Now obviously it would be enormously unfair to simply price people off the road without providing them with alternatives – which is why it is so essential for public transport to be heavily invested in over the next few years in particular. We will end up with some sort of emissions trading scheme to provide incentives to reduce our emissions and encourage planting forestry. This scheme will add to the price of petrol, potentially quite significantly in the longer term. Therefore, we need to provide people with effective alternatives to driving so that we can reduce our transport sector emissions without having enormous social inequity outcomes of people simply not being able to afford to undertake their daily activities.
Of course this goes against absolutely everything Steven Joyce has said about transport since he became the Minister. I wonder if he ever does talk to Nick Smith, the Minister for Climate Change Issues?
One particularly interesting aspect of the transport sector emissions is the significant contribution that diesel makes – even though the number of petrol cars on the road is hugely greater than the number of trucks. This is evident in the picture below:
Just one more reason to focus on shifting freight to rail, which is far more efficient, rather than allowing even bigger trucks on our roads.
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