UPWARDS OF 500 “LOW COST” HOUSING TO BE BUILT – IN PAPAKURA
We all know housing affordability in Auckland sucks with the Demographia Affordability rating being around 5.3 or “severely unaffordable (affordable is at 3.0 meaning the total cost of a home purchase should not exceed three times the total annual income of the household living in it. Currently Rebekka and I sit around the 3.52 mark). All sorts of measures are trying to be taken to allow the average person to at least being able to afford their very own house to live in. In this particular case Housing New Zealand has put out a tender to the private sector for the construction of upwards of 500 new homes that are: state houses, social housing and full private houses. The NZ Herald explains:
Well since then the roads were laid and the asbestos removed but nothing else. And then this happens:
Housing NZ sells off ‘social’ land
5:00 AM Thursday Apr 9, 2015 Simon Collins
Papakura ‘low-cost’ housing site has more than doubled in value — first 50 houses will be sold at market prices.
Pre-designed houses intended for the Walters Rd Housing NZ site, now on the market (Source: Herald Article).
A big state-owned site in Auckland once earmarked for social and affordable housing is being carved up for sale – and the first 50 houses will be sold privately at market rates.
The 24ha site formerly part of the Papakura army camp, between Walters Rd and McLennan Park, was bought by Housing NZ in June 2004 for $10.7 million. Its rating valuation has more than doubled to $23.4 million because of Auckland’s desperate housing shortage, but no houses have yet been built.
In October 2012, the agency unveiled plans to build 450 to 500 homes, including 10 per cent state houses, 20 per cent other social housing and 70 per cent for private sale at prices likely to be “in the high 200s to the high 300s” – which would have made it Auckland’s biggest low-cost housing development for 25 years.
Instead, real estate agent Barfoot & Thompson yesterday advertised seven “super lots” of up to 16 sites each for sale by expressions of interest, with pre-designed two-, three- and four-bedroom houses designed by Studio of Pacific Architecture.
Housing NZ general manager of asset development Leonie Freeman said the release of 50 sites on 2ha would all be for private sale at prices that “will reflect the current market at the time of sale”.
Community Housing Aotearoa, whose Auckland members met yesterday, said none of its members appeared to have been consulted about any remaining plans for social housing in the development.
“It was both a surprise and a disappointment that nobody had been contacted or was aware that this was happening now,” said the group’s director Scott Figenshow.
Labour housing spokesman Phil Twyford said it was “extremely disappointing” the Government had not built any houses on the land in 11 years.
“Inexplicably, they seem to have dialled back their ambition to include significant numbers of affordable and state or social housing in the development,” he said.
Market rates using Addison (which is next door) as the example means $480,000 for something basic and $600,000 + for a 5 bedroom place. Something not quite in the 200 and 300’s previously offered. That said there are existing places on Porchester, Arimu and Old Wairoa Roads going for $350-$450,000 that are pretty solid (ex army) and might require you not to be a lazy bum (that is not walking expecting everything to be picture postcard perfect on get go) and do some “freshening up” (landscaping or paint to your tasting).
Still I am pondering this situation with that development being a failure on Government’s behalf in providing some housing to boost the supply chain (it is needed).
That said would a Labour Government have gotten those houses built via Housing NZ themselves?
2 thoughts on “Papakura Social Housing Development No More”
I hope they will realize these housing projects. I think they are quite harmonious and practical.
Hi Ben
This land is being stripped of its value, just like they have done at Hobsonville (the Govt. got approx. $1.4 million a ha). Remembering that most of the non-value cost increase is in the value of the land. By taking the money at what the market will bear NOW, they are removing themselves from the risk when the bubble bursts, but in effect are passing that risk onto the end purchaser, many of which will be first home buyers.
With the Govt. doing this they will be able to use some of this supper profit to subsidize social housing for some.
This is an old developers trick, in that rather than sell your product cheap and give a discount which comes of the front end of the price, ie the price you see on the front page of the agreement which is used for valuation purposes, you sell at the full face value (and thereby keep the price up), but you give a rebate which comes of the back end (say at settlement) and this rebated figure is never known to the general public and is not used by the valuers to determine value.
in short the Govt. are deliberately holding the house prices up to support the market ie keeps banking system stable and enrich the Govt. coffers.
But the fact they are splitting the parcel into blocks so developers will compete is a development error. Note it sounds like they cannot find any big developer to take the risk, so wlll find it easier to sell it to smaller less experienced developers, I call them ‘canary’ developers as in ‘canary’s in the coal mine’, in that when you see these type of developers get involved, then that is the fist warning of trouble on the way, and then secondly when you see them starting to go belly up, then we are already in trouble, but its full effects take about 12 months to roll through.
Talking Southern Auckland 
I hope they will realize these housing projects. I think they are quite harmonious and practical.
Hi Ben
This land is being stripped of its value, just like they have done at Hobsonville (the Govt. got approx. $1.4 million a ha). Remembering that most of the non-value cost increase is in the value of the land. By taking the money at what the market will bear NOW, they are removing themselves from the risk when the bubble bursts, but in effect are passing that risk onto the end purchaser, many of which will be first home buyers.
With the Govt. doing this they will be able to use some of this supper profit to subsidize social housing for some.
This is an old developers trick, in that rather than sell your product cheap and give a discount which comes of the front end of the price, ie the price you see on the front page of the agreement which is used for valuation purposes, you sell at the full face value (and thereby keep the price up), but you give a rebate which comes of the back end (say at settlement) and this rebated figure is never known to the general public and is not used by the valuers to determine value.
in short the Govt. are deliberately holding the house prices up to support the market ie keeps banking system stable and enrich the Govt. coffers.
But the fact they are splitting the parcel into blocks so developers will compete is a development error. Note it sounds like they cannot find any big developer to take the risk, so wlll find it easier to sell it to smaller less experienced developers, I call them ‘canary’ developers as in ‘canary’s in the coal mine’, in that when you see these type of developers get involved, then that is the fist warning of trouble on the way, and then secondly when you see them starting to go belly up, then we are already in trouble, but its full effects take about 12 months to roll through.