Wednesday, 8 April 2015

Council Housing Strategy a Failure

Guest post by Stephen Berry

Len Brown’s admission that only 170 homes have been built in Special Housing Areas since he was elected Mayor proves the Council’s housing strategy is a total failure.

Unprecedented sales activity in March has seen Auckland’s residential housing market establish new records for prices and sales numbers. The average house price is even more expensive than in Sydney, with the gap widening as a stronger Kiwi dollar heads towards parity.

Auckland houses are still the second-most overpriced in the world. Over thirty suburbs in Auckland now have a median house value of over one-million dollars. Building 170 homes on still-overpriced land will not make one iota of difference to this damning statistic. A different approach must be taken and it cannot be one that is led or co-ordinated by Council.

But that doesn’t mean it wouldn’t help if they got out of the way.

The most powerful step Council could take to arrest the housing bubble is to abolish their Metropolitan Urban Limit. Land values two kilometres inside the limit are seven times the values of land two kilometres outside of the limit. It doesn’t take an economist to see what is causing the problem.

Equally damning is the average cost of obtaining consent to develop a site in one of the politically-driven Special Housing Areas. The Mayor has revealed it costs an average of $33,000 to obtain consent to build, not including the cost of inevitable delays. When it is cheaper to buy a new car than to deal with Council bureaucrats, you know something is seriously wrong.

The Special Housing Area are not making housing affordable; instead they are simply Affordable Housing Theatre.

The Council isn’t leading a housing strategy; it’s preventing one.

Stephen Berry was the Affordable Auckland candidate for Mayor in 2013, coming in third.
He will be hosting an exploratory committee at Tasca Café, Newmarket this Saturday, April 11, at 4pm to examine what role Affordable Auckland will have in the 2016 local body elections.

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