Government Tinkers While Auckland Burns

 

Yesterday the Government decided to announce that it was going to build some homes to try to tackle the housing crisis.

Here is the presser from Minister Amy Adams:

Govt to build 34,000 new houses for Auckland

The Government today has announced a Crown land and building programme that will see tens of thousands of new houses built in Auckland over the next decade.

Social Housing Minister Amy Adams announced that the Government’s Crown Building Project will replace 8300 old, rundown houses in Auckland with 34,000 brand new purpose-built houses over 10 years. 24,300 of these will be built by Housing New Zealand through their Auckland Housing Programme.

Over the next ten years, the Crown Building Project will deliver around:

• 13,500 newly built social houses
• 20,600 new affordable and market homes.

 

“This is a significant undertaking for the Government, for taxpayers, and for our Social Housing reforms. It’s the equivalent of three and a half new houses on every street across Auckland,” Ms Adams says.

“These houses will be for our most vulnerable families, for first-home buyers, and for the wider market. We are building more social houses for Aucklanders and helping provide a pathway into independent, affordable housing.

“The Crown Building Project is the Government making the most out of the available residential land it owns to meet Auckland’s social housing needs.

“These 34,000 new houses are a substantial redevelopment and construction programme on a scale not seen since the 1950s.

Phase one of the Auckland Housing Programme, which covers the next four years, will cost $2.23 billion and will be funded through Housing NZ’s balance sheet and new borrowing of $1.1 billion that the Government has approved as part of the business case. Phase two in the latter years will be funded through the market housing development part of the programme and rental returns.

Ministers have also agreed that Housing New Zealand will retain dividends and proceeds from state house transfers, to help fund the building programme.

“Our plan to build 34,000 new homes over the next ten years has been carefully scoped and designed, is fully funded, and builders are on site getting on with the programme already.”

—ends—

 

And this in regards to the New North Road, Mt Albert site:

New North Road construction underway

The construction of 100 new homes on land formerly set aside by NZTA for roading can now begin, Social Housing Minister Amy Adams announced today at the sod-turning in New North Road Mt Albert.

In October 2016 the Government signed an agreement with Marutūāhu Rōpū and Ockham Residential Limited for the development as part of the move to repurpose vacant land for new houses in Auckland.

“The Crown Land Programme is a smart and innovative programme. People may not live where past planners thought they would – we can, and we must, cast our eye over under-utilised land which Crown agencies are holding,” Ms Adams says.

“New North Road is handy to Auckland’s CBD and the Waterview connection due for completion next month, and it is close to the city-linked cycleway.

“The Crown Land development sites have advantages not seen in a purely commercial housing development. The initiative offers a Government commitment that 20 per cent of the homes across the programme are available for social housing and a further 20 per cent priced as affordable – defined as no more than the KiwiSaver HomeStart cap.

“In this instance, 50 per cent of the homes in New North Road will be priced in the affordable range for Auckland.

“MBIE has acquired four sites in Auckland, has five others in the pipeline, with further opportunities identified. Together they will deliver around 2700 homes.”

The 100 houses on New North Road is part of the Government’s Crown Building Project which will replace 8300 old, rundown houses in Auckland with 34,000 brand new purpose-built houses over 10 years. 24,000 of these will be done by Housing New Zealand through their new Auckland Housing Programme.

—ends—

Ironically that development is close to Avondale and Mt Albert Rail Stations on the Western Line but with this Government’s aversion to rail I am not surprised it was never mentioned.

 

Anyhow 34,000 homes sounds good right?

Nope as these Tweets show:

 

 

And this is with the Private Sector

 

The net build (that is new additions that were not already announced or replacement of existing stock) is 14,000 new homes over ten years or 1,400 homes a year.

The Auckland Unitary Plan has set down 422,000 new homes over thirty years to keep pace with current population growth as per the Auckland Plan. Over that thirty years it means 14,666 homes (or there about) need to be built. 1,400/14,666 does not even hit 10% of the required build on a nominal yearly basis while 26,000 (34,000 – 8,000 existing to be replaced) would not even be two years worth of supply if the Government went 100% all out to meet the 14,666/year.

 

 

There is a difference in taking a step in the right direction and effectively doing this:

If the Government was ramping up from that 10% to 50% of the 14,666/year total build within 5 years then sustaining that 50% of the 14,666/year housing build through the next five years after that (so a ten-year program covering the first ten years of the Unitary Plan (and also when the Unitary Plan is due for a review after year ten)) then that is a step in the right direction. Otherwise the clip above describes the Government’s response rather adequately.

As for $650,000 for an affordable house? Not even close. Using the total household income minus yearly transport costs multiplied by three to work out what an affordable home you get this:

$58k mean wage x 2 = $116,000

$116,000 – $8,000 in transport (let this be a lesson in why HOP is cheaper at $1,444/year) = $108,000 available income

$108,000 x 3 = $324,000

An affordable home for a family of four to five is $324,000 or just under 50% what the Government says is affordable.

 

Conclusion?

Not a lot from this Government