02 Jun 2013

Eric Watson: In praise of life in high-intensity housing

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Written by: Eric Watson
Photo: Thinkstock
Published: The New Zealand Herald – 02 June 2013

The median house price has kept increasing because of the quarter-acre dream.

The median house price has kept increasing because of the quarter-acre dream.

An issue at the heart of Auckland Council’s draft unitary plan is whether the permitted density of housing should be raised in parts of the city.

For one thing, Auckland is seriously short of housing. Second, its population is projected by Statistics NZ to grow by half a million people over the next 20 years. Third, compared to other major cities, Auckland is “flat”. Population growth has been accommodated mainly by suburban sprawl.

This expansion cannot continue. Space on the Auckland isthmus is limited; we have an obligation to grow in an environmentally responsible way. This means building more housing near places of work and upgrading infrastructure, with an emphasis on public transport.

One thing that must change is the quarter-acre dream. Because of this aspiration and geographic constraints, the median house price in Auckland hit a record $562,000 in March. The average house grew by 35 per cent between 1991 and 2011.

I am sure Kiwis who want a house and section would change their minds if they had an adequate supply of good quality, higher-intensity housing to choose from.

“Higher-intensity housing” may not sound nice to Kiwis, which is why I use the term “multi-family housing”. Designed and constructed smartly, multi-family developments can be attractive dwellings.

We’re talking semi-detached, terraced and low- or mid-rise apartment buildings of high-tech materials and methods and with modern common amenities.

I know housing of this kind can be created through public-private partnerships of local authorities and developers with access to institutional financing.

A typical arrangement might involve a council granting a long-term lease on a council-owned property to a joint venture in which it is a partner. The developer-partner then works with the council to design, finance and build housing for qualifying tenants at below-market rents. The council can also enable tenants to accumulate equity in their homes.

It is possible to shape these partnerships to be 100 per cent self-funding. This means the councils do not have to contribute subsidies to enable below-market rents.

The UK already uses this approach. Housing of this kind is also ideally suited to retirees’ needs.

More than a third of Auckland’s population increase between now and 2031 will be 65 and older.

Surely we want tomorrow’s retirees to be able to downsize into decent accommodation near their grandkids?


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