We have nothing to fear on something that is already done in Auckland
A Herald article on low rise medium density housing yesterday was an interesting one. One it was written by our old mate Bernard Orsman who single-handedly went the other way to other media and demonise anyone and anything wanting medium density housing across urban Auckland. Second there was subtle undertones that Government is starting to follow through on its intervention threats, something I have mentioned before.
From the Herald:
Home Truths: Low-rise city our best shot, say supporters
The Herald’s Home Truths series examines the causes of our growing housing unaffordability crisis and explores possible solutions. Follow the full series here.
Remuera home owners may not like it, says Peter Jeffries, but three-storey apartments in the suburbs offer the last real chance at housing affordability in Auckland.
The chief executive of CORT community housing is a vocal supporter of the compact city model in Auckland Council’s Unitary Plan, a new planning rulebook that will define the shape of Auckland’s future for decades to come.
The plan decides what can be built and where – and it has sparked a generational and politically divisive debate about housing density and height in traditional suburbs.
So far there is support for intensification in town centres, along main arterial routes and close to transport hubs, but the idea of low-rise apartments with no density controls in the suburbs has prompted a public backlash.
The council did itself no favours with a proposal to rezone about 30,000 properties in a late change to its submission on the proposed Unitary Plan without informing homeowners.
The proposal – which would have had to come back to the council from an independent hearings panel in July for a final decision – was rejected by a majority of councillors, after a long, often emotional debate in which young supporters of change accused their older opponents of selfishly protecting their own interests.
Jeffries argues that the problem will not go away. Auckland is going to grow by 75 per cent over the next 30 years, he says, and suburbs like Remuera have to share the burden of growth.
He estimates three-storey apartments can be built relatively cheaply for $7500 to $8000sq m or $375,000 for a one-bedroom, and $490,000 for a 65sq m two-bedroom apartment.
This is because low-rise apartments are cheaper than high-rise apartments, which have higher construction costs for facilities like lifts.
Jeffries says the real bite of the Auckland housing crisis is not the effect on the 44 per cent of property owners but the 56 per cent of renters.
As soon as you throttle supply, he says, you push up house prices and that pushes up rents for people not on the property ladder, “and now less likely to get on the property ladder”.
Architect David Gibbs is another advocate of the compact city model, but admits the council has done a poor job of selling the concept, benefits and explaining the higher costs of sprawl.
“It is the only real choice in terms of addressing affordability,” says Gibbs.
Greenfield land on the edge of the city can be affordable, he says, but providing infrastructure can be up to eight times the cost of inner-city land.
Gibbs says a really great Auckland could be built on 300sq m detached and 170-180sq m terraced house sites. There need not be a fixation on apartments, which will eventually account for about 6 per cent of housing, he says.
…..Apartment buyers also had to factor in body corporate costs and required higher deposits by the banks making it harder for first- home buyers, she said.
Other critics have pointed the finger at council red tape. A research paper by Arthur Grimes and Ian Mitchell – controversially seized on by Housing Minister Nick Smith last year – calculated that regulation and resource consent added between $105,000 and $180,000 to the cost of an apartment unit, compared to between $32,500 and $60,000 to the cost of a house.
In their study, which was based on interviews with property developers, Grimes and Mitchell estimated building height limits added an additional $18,000 to $32,000 to the development costs of an apartment unit, the requirement for a balcony an extra $40,000 to $70,000, floor-to-ceiling height controls an additional $21,000 to $36,000 and $6000 to $15,000 a unit to conform to the Auckland Council’s desired mix of apartments.
The paper criticised Auckland’s apartment requirements and resource consent process. It argued that the increase in the floor-to-ceiling height requirement – from 2.4m to 2.55m or 2.7m – “makes it difficult to develop affordable apartments” although it did not impact on developments in the mid- to upper-price level.
Another big initiative designed to increase the number of houses and trim prices is the housing accord between Auckland Council and the Government, signed in 2013, with a target of 39,000 new sections and houses consented over three years.
Across the region, 27,708 of the targeted 39,000 consents had been achieved at the end of March.
But more than two years into the accord, only about 700 houses have been completed under its “fast-track” rules.
Mayor Len Brown says obviously more need to be built, but the latest tranche of special housing areas brings the total to 154 with potential for 56,000 new homes.
Appetites strong for chic apartment living
Among the fashion boutiques, cafes and restaurants on Ponsonby Rd, a new storefront selling apartments off the plans gives an indication of the state of the central city market.
The apartments are mostly city fringe, architecturally designed with artist impressions of modern furniture, fittings and open views.
Prices start at $469,000 for a two-bedroom apartment at Alto Sugartree in Union St to $1.375 million for a similar size at Western Park on Hopetoun St, just off Ponsonby Rd.
Craig Watkins, director of Apartmint, says buyers are a mix of older people looking to downsize their villa, investors and young people wanting the hustle and bustle of city life.
A few are first-home buyers.
Mr Watkins says typical building costs are about $10,000/sq m or $500,000 for a studio/one-bedroom apartment and about $800,000 for a two-bedroom apartment. A carpark costs a further $50,000.
Demand for high-quality, city fringe apartments and townhouses is strong, says Mr Watkins, whose sales staff have sold 12 of 16 townhouses at a new development in Kingsland in six weeks.
The two-bedroom townhouses, 150m from the railway station, have each sold for between $800,000 and $1,050,000.
Mr Watkins, whose job it is to find sites and work with developers, says there is no shortage of prime corner sites that capture light and sun.
The 30-year veteran in the property market also has an interest in providing affordable housing, saying Apartmint is close to releasing a 52-apartment development in Morningside where prices start at $437,000 for a 46sq m studio, $500,000 for a one-bedroom apartment and $730,000 for three bedrooms.
$500,000 – building costs for a studio/one-bedroom apartment on the city fringe
$800,000 – building costs for a two-bedroom apartment on the city fringe
$50,000 – extra for a car parking space
Why the Isthmus, North Shore and Councillor Denise Krum are struggling with three storey residential accommodation when it is already prevalent I am struggling to find logic to (there is none). But a wide expanse of Mixed Housing Urban Zone (allows three storey terraced housing and low-rise apartments) would indeed go a very long way on dealing with housing shortfalls on the Isthmus and in the immediate surrounds of the Metropolitan Centres.
I live in a Mixed Housing Urban Zone that surrounds the Papakura Metropolitan Centre and it not frightening us nor the residents in the area. At the moment we are detached single housing but we all expect through time for the low rise medium density building topologies to come through.
As for Government intervention we need to look at the Budget when it comes out in four weeks time and handed down by Finance Minister Bill English. English has been sending subtle and more overt hints through the course of this year that Government will intervene on the Unitary Plan to deliver more intensified housing (along Housing New Zealand’s wishes) if the Council fails to do so in August.
For the English hints see: English Signals More Intervention of Housing in Auckland #UnitaryPlan
As for affordability? If you have $550,000 or less your choices were limited to two areas in Auckland:
- City Centre
- South Auckland except Mangere and even then with the South you start to struggle