Housing Affordability
On 25 March, Building and Construction Minister Shane Jones sent out three media releases. The first outlined how the Government would “slash red tape” in the building industry and provide a simpler, more flexible consents process for starter homes. The second told of a proposed nationwide design competition in a bid to get ideas on the best types of affordable starter homes, and the third talked about “multiple use” consents which would, potentially, provide a ‘fast track’ approach for big property developers and large volume builders.
Housing affordability, as you will undoubtedly know, is a major issue for New Zealanders. Every newspaper and media outlet in the country is running stories about the inability of young couples and families to buy a home. The rising interest rates and downturn in the housing market are fuelling it even further. Buying a home used to be a rite of passage for young Kiwis and their families. Unfortunately those days seem to be long gone.
The Minister’s initiatives are therefore very welcome. I have often talked about the extra burden and costs placed on Local Government by the excessive red tape enforced on us by various Acts of Parliament, including the Building Act. Unravelling that red tape is the best thing Government can do. I am sure the Minister’s announcement will be a breath of fresh air to many in the building industry. It should see an expanded schedule of excluded work that will translate into reduced building costs for the home owner. A recent news article in the Sunday Star Times summed it up nicely – “Remodelling your kitchen: $12,000. New bathroom: $9000. Being able to move your toilet without paying thousands in consent fees: priceless.”
But it will also save local authorities time and money. Reducing the number of projects that require a Project Information Memorandum (PIM) will reduce costs and time spent by local authorities producing a document that has little value in many situations other than meeting the requirements of the Act.
But this only solves one part of the problem. Housing affordability is a complex issue. Increasing supply is only one part of the equation. Demand is also a very significant factor. In Wellington we have large areas of land available in northern suburbs with high demand, but supply is tightly controlled by a few landowners who are not providing an affordable product. Land supply for Greenfield growth however is a lesser proportion of future growth in Wellington. We anticipate over 60 percent of future growth will be within existing urban areas which means we have to be very smart about where and how we manage growth in these areas. Providing affordable housing in these areas will continue to be a challenge, but its not an issue we can afford to ignore.
Kerry Prendergast
Vice President LGNZ
Mayor of Wellington
