Showing posts with label housing policy. Show all posts
Showing posts with label housing policy. Show all posts

Wednesday, June 19, 2013

At Last Some Action on Housing – Getting Past Planning Paralysis

Daylight through the gloom
Even as the public begins to react against the over-simplistic approach to urban growth underlying the over-complicated draft Auckland Unitary Plan, there is a little light on the horizon.  The Tamaki Redevelopment Company, a joint venture between Auckland City and central government, has put together a plan to add up to 6000 new homes to an existing 5,050 in a special housing area under the Housing Accord signed last month.

Hopefully this urban regeneration project will be more than just a gentrification exercise. I suspect that government participation will ensure that the need for continuity among current residents including tenants of state housing, will be met.  Ideally, the plan will enable the low income households that currently occupy much of the area to stay and first time buyers to purchase there, in a neighbourhood of quality amenities and services, and sound, affordable, new homes.

Central government taking the lead
It is ironical that this good news story should be accompanied by news of continuing resistance to collaboration by the Council.  It has been so myopic in pursuing the grail of consolidating growth and in its reluctance to explore alternatives for an expanding city that it has created a complex web of policies that many of its diverse residents will struggle to come to grips with, or welcome. 

Given this track record, it was inevitable that the council should emerge as the junior partner in this arrangement. 

It’s no good wringing political hands over a threat to autonomy. The Council’s own failure to advance Aucklanders’ housing hopes with any urgency left central government to take the decisive stand. 

A threat to local autonomy?
A loss of autonomy may simply be the price we are paying for the council confusing its priorities – putting process ahead of form, and principle ahead of practice.  It had known about the housing supply and affordability issue that threatens to undermine Auckland’s growth for some time –it’s the core problem it inherited from the eight councils that came together on its formation. 

Despite all the good intentions, the new council continued simply to pay lip service to the issue.  It preferred to pick up and promote the old Auckland Regional Council shibboleth, trying to change the way Aucklanders live by shifting the emphasis of development to consolidation and centralisation. 

Sharing responsibility
A loss of local autonomy may, however, be more apparent than real.  The Government has had a long-standing role in the provision of social housing in New Zealand.  It also has the resources and clout to make things happen.  So it makes sense for it to take the lead. 

By contrast, with the jettisoning of social housing by councils their role has been confined to one of regulation to mediating what’s done rather than doing it.  That’s the model Auckland was following in its planning.  Unfortunately, it’s mediation looked like exacerbating rather than resolving the housing issue.

Through the Tamaki initiative, the council can once more become a contributor and not simply a gatekeeper in the housing sector, playing a direct role in shifting the city up a gear.

Collaboration: the way ahead?
The Government had hoped that combining councils struggling to collaborate would lead to more decisive and better directed policy in Auckland.  In practice, the one council model so far seems no more enlightened than the eight councils it replaced. 

At least when we had alternative local councils within the wider metropolitan area we could see where the strengths and weaknesses of their various policies lay and rely on differences and debate among them to lift transparency and engagement.  Consequently, we got policy diversity to match our social diversity, rather than a single (and singular) plan and policies over-ambitiously intended to reconcile the variety of needs of different communities in a comprehensive set of rules. 

Under the new model, the search for super policies is beginning to look a little too lofty, and fraught.  And if the council is not prepared to work much more closely with local boards to resolve local issues in practice rather than in principle, then collaboration has to be taken to a whole new level, with central government.

It is positive, then, that the Tamaki project looks set to be delivered by collaboration at two levels: between central and local government in planning, processing, land consolidation, and development initiatives to get the project off the ground; and between the public and private sectors (including social and commercial providers of housing) to put it all in place.

A better council, putting citizens’ needs up front
At least now we have some action, and an opportunity to learn from it.  We can put the Housing Accord to the test, and put the commitment and capacity of a range of agencies together towards achieving a common goal – a better Auckland for more Aucklanders. Through it we can put people back into politicians’ visions and planners’ pictures.

But Auckland Council will have learnt nothing if it continues to dictate terms to communities, to ride roughshod over the concerns of current citizens and the needs of future ones in pursuit of a single vision that doesn’t fit our city.

By participation in the Tamaki initiative, the council should be strengthened to pursue more such initiatives in other localities, to achieve better balance between principle and practice, and step up actions and delivery relative to promises.

Friday, July 1, 2011

What happens when there are not enough houses?

Closing CHRANZ
Yesterday the Centre for Housing Research Aotearoa New Zealand (CHRANZ) closed. This public agency funded independent and contestable research into New Zealand’s housing markets.

The Centre commissioned some important research, developing tools for analysing housing markets; looking at housing supply and demand, and their impact on prices; identifying the needs of different groups; examining regional markets; and most importantly documenting changing trends in affordability, ownership, and the disturbing emergence of the intermediate housing market.

But this posting is not a wake for CHRANZ.  Fortunately it has created an important knowledge base that enables us to understand the challenges we face, and which will be relevant for some time to come.[1]

It’s ironic, though, that its closure takes place at a time when there are more questions over housing than ever, more challenges and more uncertainties.

Housing – the perfect storm?
Rebuilding Christchurch The earthquakes in Christchurch throw up huge questions over how and where many residents will be housed, and even more questions over just what will happen to the city’s population in the medium term, and its projected demand for housing.

Since writing the first version of this post I have been reminded of the leaky homes saga - a housing crisis all of its own.  The New Zealand Herald today reported that many owners of monolithic cladding homes which are not damaged or have been certified as watertight will be in for a shock when new valuations are received: the market is downgrading them on apperances alone. That in itself is enough to slow the market down as equity diminishes and the rungs in the housing ladder get just that much further apart for a large number of owners.

Much worse though is the continuing prospect of major repairs or even demolition for those that do have leaky homes.  The 2009 "consensus forecast" was 42,000 homes leaking then or that would do so in the future. (The figure could be a lot higher).  That's a lot of people stalled in the housing market, a significant number of whom presumaly need new homes.

Housing affordability has become a persistent problem, nowhere more than in Auckland. This is manifest in measures of housing stress, falling affordability, and a rapidly growing rental. [2]

Rapid growth in rental demand (up 56% between 1996 and 2006) is happening in a country with no strong culture of renting (except in social housing), with poorly defined tenant/landlord rights for long-term tenancies, and a weak supply sector.  Rentals used to be based on ageing detached housing stock.  In the past decade small apartments proliferated.  In both cases, though, landlords are mainly small scale investors, individuals, family trusts, and the like.  A string of failures among developers and financiers has now scared them away, highlighting a major institutional market gap.
The Intermediate Rental Market (households with at least one income earner that cannot afford to purchase housing even in the lower price quartile) has exploded. This group grew by two thirds and accounted for all national growth in rental demand from1996 to 2006:

Growth of the Rental Market and  the Emergence of the intermediate Market 1996-2006


Source: DTZ New Zealand (2008) The Intermediate housing Market in New Zealand CHRANZ, p7)
Falling home ownership raises social and economic uncertainties over: household consumption behaviour; family formation and fertility; marriage dissolution; household mobility; quality of schooling received; stability of labour markets; inter-generational equity; crowding and public health; the emigration of skilled people; and so forth.  The tight rental market  where stock is low and rents are high - in Auckland especially - exacerbates these issues.

Housing starts have fallen dramatically since 2006, shrinking supply and sustaining high prices. We can see this by comparing annual dwelling consents issued between 2001 and 2006 with those issued since. Nowhere is the fall more pronounced than in Auckland:

Annual Average Dwelling Consents Issued:
The most obvious consequence of this collapse in house building is that we cannot begin to meet demand for new housing called for by our population growth, with new houses falling well behind our projected needs.  The first column in  the diagram below shows the level of house building between 2001 and 2006.  The second column shows projected housing from 2006 to 2016 (most forecasts agree on these sorts of figures).  The third column shows what we got over the the last four years - already well behind the projections.
Actual and Projected Housing Demand, 2006-2010


Source: Building Research Association of New Zealand (2007), Changing Housing Need Report 183,

And help isn’t obviously on the way. Over the three years to March 2011 construction employment shrank by 15,800 nationally or 12% (Quarterly Labour Market Indicators, Statistics New Zealand), confirming that the sector is hollowing out. According to the Statistics New zealand Business Directory, Auckland lost 4,820 employees from construction over just two years ending February 2010, 13% shrinkage.

Recent migration offers no consolation. Among people coming and going who nominated their occupations, New Zealand only gained in the professional category in 2010.  It lost out on people in the trades, technical vocations, machinery operations, and labouring. It looks like we've got more people to think, plan, regulate, and litigate, and a few less doing things.

Occupational Composition of Net International Migration, 2010



Source: Statistics New Zealand
A quick intro to the agencies
CHRANZ' role was to help us understand these issues, and explore solutions.

Other agencies continue to be responsible for devising and delivering housing policy solutions. The Department of Building and Housing is responsible for the regulation and standards required to protect home buyers or renters. The Department also monitors the housing sector and the building industry, and undertakes monitoring and policy research.

Housing Corporation New Zealand is a crown entity responsible for social housing.  It manages 66,000 rental properties and also works with third sector providers. These are the community based organisations, such as the Cooperative Housing Centre of Aotearoa New Zealand, that work to get low income households into their own homes.

The Department of the Prime Minister and Cabinet has also got involved, preparing a report on the price of housing in 2008, and continues to monitor things. Now the Productivity Commission is also looking closely at housing, showing that government is taking the current state of affairs seriously.

The Building Research Association of New Zealand (BRANZ) represents the building industry and promotes good practice. Its research tends to focus on materials, building systems, standards, and the like, although it has delved into projecting future demand.
Of course, local councils have the most immediate impact on and prime responsibility for housing supply and affordability through their capacity to zone and release greenfield and brownfield sites, how they regulate it, the infrastructure services they provide, and the charges – including development levies – they apply to do so.

So how do we weather the storm?
How these agencies work together and adapt their programmes to focus on a real, pressing, and complex need is the outstanding question in today’s housing policy environment. Getting across multiple agencies and creating the conditions for them, the third sector, and the private housing suppliers to work towards the common aim of increased, affordable housing of an appropriate standard is a major challenge that the country faces.

The Canterbury earthquakes may be the game changer. They could demonstrate just how we might respond to a housing crisis through a statutory body set up to drive recovery (the Canterbury Earthquake Recovery Authority) and a commitment to training the people required to resource rebuilding.
This is important because, while they may not be as spectacular, visible, or traumatic, there are housing crises elsewhere in New Zealand.

Moving forward
CHRANZ has set out the parameters of the housing problems facing us: now may be the time for those left standing to progress the solutions - with urgency. 

This will involve a range of parties working purposefully together to provide practical and realistic solutions.  Among other things, the private and public sector and central and local government may have to really collaborate towards a common end.  And councils need to think seriously about what the part have to play to avert the crisis.  It may just be time to shift their plans for housing to focus on people's needs and the constraints they face.

If they do not get on with it we may be left with just three possibilities.

One is that we will be landed with powerful housing authorities in different parts of the country tasked with circumventing existing barriers to solve the problem.  Crises may justify centralising power.

Another is that frustrated demand might just disappear, melting with the departure of growing numbers of young people (and others) from New Zealand, and fewer arrivals from elsewhere.  This does nothing for the economy as a whole and might further reduce the capacity to resource the housing supply sector.

The third? A deepening housing crisis, with all the personal, social, and economic dislocation that can bring.








[1]           I have to declare an interest here, having been involved in one of the last pieces of research commissioned by CHRANZ – but not yet published.
[2]        DTZ New Zealand, 2007, The Role of Home Ownership and the Role of the Private Rental Market in the Auckland Region, CHRANZ, Pp81-91.