8 July 2015

Housing supply in Auckland will not be a 2017 election issue simply because a lot of the issues highlighted and debated over the past few years will be well addressed or advanced by then.

This view may not be welcomed by Opposition housing spokespeople who are trying to set the political agenda ahead of the next general election.

However one of the big things that's making a major difference are the Special Housing Areas (SHAs) that effectively bypass normal council processes and allow for the fast-tracking of consents and construction.

Since the housing accord legislation was passed in October 2013, 86 SHAs have now been approved in Auckland, with more on the way as the council and developers continue to consider more locations as suitable for SHAs.

Despite the badgering from some on the Opposition that not enough is happening fast enough, we've recently seen some real action with a doubling in the annualised number of new building consents issued in Auckland since 2011.

The next earthworks season starts on October 1 and I predict it to be the busiest in terms of actual sections created, with many dwellings under the SHAs required to be affordable.

Apartment units are making up a large proportion of new building consents - something we haven't seen for since 2007.  When you see all the proposed developments now being presold in the weekly property pages it is clearly evident that apartment and terrace housing is back in demand.
The Auckland Housing Accord set a target of 39,000 new sections and dwellings consented over three years. Around the mid-point at March 31, 2015, 16,734 sections and dwellings had been consented, with officials confident the three-year target will be reached.

The Housing Accords & Special Housing Areas Act 2013 was always going to take a year or two to deliver some tangible results given the fact that the subdivisions still needed to be designed and approved, the bulk infrastructure provided, and the houses consented and built. However we're away now and over the next 18 months we will see bricks and mortar sprouting like grass.

Given the huge amount of housing supply coming on stream over the coming two years, any political push to make Auckland's housing crisis an election year issue in 2017 will probably be a failure.

The current Government hasn't necessarily got all the answers and at times the Auckland Council has not handled the issue perfectly, but with SHA and apartment construction now starting, the Auckland housing problem is been addressed. The more recent decision to open up of surplus government and Auckland Council-owned land for housing will also help.

So too will Auckland Council's new Development Auckland CCO agency which from September which will help co-ordinate and drive large urban development projects through master-planning in areas best suited for growth then presenting investment propositions for the private sector to take up.

Auckland Council bureaucrats are committed to rolling out their Future Urban land zonings in outer North, West and South Auckland to deliver more residential land over the coming decades to hopefully maintain steady supply of homes as Auckland grows.

From the middle of next year, the Independent Hearings Panel currently assessing the Proposed Auckland Unitary Plan will most likely take a more liberal approach to intensification within Auckland's fringe city suburbs.  This will make current residents a bit nervous, but it will definitely add to the supply of homes around the city fringe.

Losing the Northland by-election does have an impact on the Government's legislative abilities, however Housing Minister Nick Smith seems committed to rolling out the second phase of the Resource Management Act Reforms to address the remaining issues affecting housing affordability and supply.

As well attacking land supply issues, other things the Government is doing, such as removing tariffs on building materials and constraining development contributions, are no silver bullet but will help a bit to the reduce on the ongoing escalation of building costs.

The Reserve Bank's changes to its loan-to-value ratio (LVR) policy which directly targets investor activity in Auckland will keep some heat from building in the market. As well, the Government's new 'bright line' test to better ensure property speculators who sell within two years pay income tax on their gains will help to slow down the 'quick flicks'.

When you stand back and consider these collective measures from the Government, Auckland Council, the IRD and the Reserve Bank taking effect and delivering results over the next two years, it's very hard to believe that ongoing talk of a Auckland housing crisis is credibly going to resonate with voters come 2017.