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Mayoral Housing Taskforce Report Prepared for the Mayor of Auckland

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Mayoral Housing Taskforce Report Prepared for the Mayor of Auckland Mayoral Housing Taskforce Report Prepared for the Mayor of Auckland June 2017 Mayoral Housing Mayoral Housing Taskforce Report Taskforce Report 1 Executive Summary Over the next 30 years, Auckland’s • identify barriers and constraints to population is expected to increase by building more homes in Auckland at a up to a million people. This growth is pace and scale which meets the demand an opportunity both for the city and created by population growth New Zealand as a whole, but it comes • identify options and make with challenges. recommendations to overcome those Auckland has to ensure an adequate supply barriers and constraints. of housing to meet this demand or face The primary focus of the Taskforce is growing housing shortages, continued on housing supply, rather than factors soaring house prices and a fall in home affecting housing demand, such as tax and ownership, growing unaffordability of rents, immigration policy. and increased homelessness. Improving housing affordability and choice would make Auckland more attractive 1.1 Housing supply is a to the workers and businesses needed to long-standing problem make New Zealand's biggest city more productive, vibrant and wealthier in the Auckland’s inability to build enough long run. Auckland's housing supply homes to keep up with demand is a long- challenge is also New Zealand's economic standing issue. growth opportunity. In the post-war boom from the 1950s to Things must be done differently than in the the 1970s, when New Zealand experienced past to meet this challenge. This means high population growth from migration and building new housing at a faster pace and people starting families, an average of over larger scale, providing a wider choice of eight homes were built per year for every affordable homes, ranging from traditional 1000 people. Since the 1980s, the build standalone homes to terraced homes and rate has only been around five homes a year midrise apartments, and ensuring a quality per 1000 people. built environment. This has contributed to house prices and In response to this challenge, Auckland rents that have risen faster than New Mayor Phil Goff established a Housing Zealanders’ incomes since the early 1990s. Taskforce to: This is not an irreversible problem, but addressing it will require us to take a different approach to urban development. 2 Prepared for the Mayor of Auckland | June 2017 Prepared for the Mayor of Auckland | June 2017 3 Mayoral Housing Mayoral Housing Taskforce Report Taskforce Report At present, New Zealand has a fractured and long-term impact on housing supply and dispersed building industry that is outcomes. Delivering these interventions vulnerable to losing skilled workers in a will require partnership and collaboration downturn and struggles to build enough between Auckland Council (and its wider high-quality houses in an upturn. A new and ‘family’ of organisations such as Auckland larger-scale way of planning, funding and Transport and Watercare), central building different types of developments, government, and the development sector. including through cyclical peaks and dips, An important message is that focusing on would make home building more efficient short-term interventions without addressing and housing more affordable. systemic challenges will not fully address Auckland’s housing supply challenges. 1.2 Building more homes will Tactical changes can help create the require systemic change platform for deeper policy changes, but they are not a substitute for more fundamental The Taskforce has identified three key areas change in a market that has not built where changes are needed in order to enough homes for several decades. deliver more homes in Auckland: • Remove impediments to the construction 1.3 Summary of key sector developing at scale, including recommendations identifying investors who can build through the dips to lift construction in The following three tables summarise the the peaks Taskforce’s key recommendations, divided between tactical and strategic interventions. • Unlock the availability of land with The tables represent the three key areas of appropriate zoning and infrastructure, change identified above, as: at the right price, to enable more development, faster • Key recommendations to build through the dips • Deliver efficient and certain planning, consenting, and risk management • Key recommendations to unlock to reduce costs, enable innovation in development opportunities construction and delivery, and create • Key recommendations to enable communities with high-quality built and efficiency and innovation in consenting urban form outcomes. and risk management Within each category, the taskforce has The tactical recommendations can generally identified a mix of ‘tactical’ interventions be implemented as an extension of current that can be done soon, without significant practices, but there are also eleven strategic legislative or policy change, and ‘systemic’ recommendations that would have a larger interventions that may take longer to deliver impact but which will be more challenging but which have the potential to have a large to put in place. 4 Prepared for the Mayor of Auckland | June 2017 Prepared for the Mayor of Auckland | June 2017 5 Mayoral Housing Mayoral Housing Taskforce Report Taskforce Report Key recommendations to build through the dips Recommendation Requirements for delivery Recommendation Requirements for delivery Strategic interventions Tactical interventions Investigate the potential for unintended consequences for residential Auckland Council to invite development from new bank regulations (which are intended to Treasury to progress a review, Establish, as soon as possible, a plan to scale up joint venture building Auckland Council to collaborate manage risks for financial stability but may affect the availability and with input from the Reserve programmes on publicly-owned land. with central government to cost of finance), and identify whether there is a need for a public or Bank, development and Identify the quantity of development required and delivery implement private response. financial sectors mechanisms, such as partnerships between the private sector and Panuku Development Auckland or HLC (formerly Hobsonville Land Company) with appropriate sharing of risk and reward, and make this Key recommendations to unlock development opportunities plan known in the market to provide certainty for home builders. Recommendation Requirements for delivery Encourage development partners that are undertaking large-scale Auckland Council to invite urban redevelopment to engage with communities early in the development partners to Tactical interventions process. Development can provide opportunities for both the respond existing community as well as the developer and new communities. Implement the Housing Infrastructure Fund (Case study 4), ensuring Auckland Council to implement Understanding and communicating these benefits can ensure that a financial structure that can enable it to be expanded through time, Housing Infrastructure Fund development proceeds more rapidly. Ensure that existing social enable participation of private capital, and remove the need for this following central government housing tenants are re-housed in the community. funding to be secured against the Council’s balance sheet. decision This would involve an appropriate equity underwrite and the ability Encourage the building industry to engage with the Building and Auckland Council to encourage to raise revenue streams, such as contributions from land owners Construction Industry Training Organisation’s (BCITO) skills badging central government to adopt a in the areas that benefit from new infrastructure, targeted ‘value trial scheme (due to start in second half of 2017), which aims to be ‘badging’ system should trialing capture’ rates in the same areas, and service charges, all of which will an alternative to multi-year apprenticeships. prove successful also improve incentives to develop serviced land. Encourage central government to scale up this scheme rapidly after the trial if it is deemed successful and there is demand for this Publish and regularly update information on the magnitude of the Auckland Council to progress, approach. funding gap for the Future Urban Land Supply Strategy, including with input from Watercare information on how this may affect timing of development, in and Auckland Transport and Optimise the points system for work visas to increase the preference Auckland Council to invite order to enable negotiation with developers and other parties for in discussion with central for skilled construction workers relative to other occupations when a response from central additional funding to progress development. government agencies and the there are major workforce shortages that cannot be fulfilled through government development sector local training. Implement at least one infrastructure scheme that is self-funded Auckland Council to progress Strategic interventions from some combination of land owner contributions, targeted in collaboration with Auckland ‘value capture’ rates, and service charges, in order to accelerate an Transport, Watercare, and/or Establish a credible long-term programme of housing development, Auckland Council to invite infrastructure project to enable housing delivery and internalise central government including a commitment to maintain a higher baseline of overall central government and major the costs of infrastructure with the party that benefits, i.e. the
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