Govt to build more houses in Akld?

Auckland’s private housing market looks likely to be the beneficiary of a ramped up government building programme – if signals from the Finance Minister come to fruition.

Monday, October 10th 2016, 11:52AM

by Miriam Bell

Finance Minister Bill English

Finance Minister Bill English has told media the government will be increasing the number of houses it builds, in line with what was possible under the Unitary Plan.

He said the Unitary Plan created room for up to 69,000 houses on Housing New Zealand (HNZ) and which currently has 30,000 houses.

While that capacity allowed for the renewal of housing stock, it would also generate an extra 30,000 houses which could be sold on the private sector market, he said.

In the past, the government has been unwilling to commit to such an intervention in the private market.

However, it seems the scale of the controversy over Auckland’s shortage and lack of affordability might be prompting a government re-think in the run-up to next year’s election.

Housing is an issue the government is considered to be vulnerable on and both Labour and the Green Party have long been touting the need for big government-led affordable house building programmes.

The Finance Minister’s comments seem to have been foreshadowed by the government’s announcement, in September, that it would be redeveloping 300 existing HNZ properties into about 1200 new homes in Northcote.

Of the newly developed Northcote properties, HNZ homes will increase from 300 to 400, while a further 600-800 properties will be sold as a mix of affordable and market housing.

At the time, English said the development was the latest example of the government’s work to develop its own land to accelerate the supply of new houses into the Auckland market.

Building and Housing Minister Nick Smith said the Northcote development was the first of a number of large scale HNZ projects which will now be possible under the new Unitary Plan rules.

Meanwhile, Labour and Green spokespeople were keen on further government intervention in the housing market, but sceptical when it came to details.

Green Party co-leader Metiria Turei said English should release the details of the new houses he says will be built by the government, including how affordable they will be.

“When you look at what they did in places like Tamaki and Glen Innes, the government sold state homes and replaced them with townhouses that cost over $1 million to buy.

“English needs to explain how affordable these homes will actually be, and how he plans to stop property speculators snapping them up.

“Affordable means three to four times a household’s income and until the government accepts that, anything they do about housing affordability won’t have the substance to make an actual difference.”

However, any injection of additional supply into Auckland’s strapped market is generally welcomed.

Estimates of the city’s supply shortage vary from 20,000 to 50,000 and it is generally agreed that the city should be building around 13,000 – 14,000 dwellings per annum to keep pace with demand.

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