Auckland must think strategically about how the housing system can provide secure, healthy and affordable homes for all its people.
The housing system does not work for many Aucklanders. We currently have one of the least affordable housing markets in the world. Aucklanders, whether buying or renting, pay more for housing than most other New Zealanders.
Addressing these issues will require different ideas and approaches.
How we got to this point
Auckland's housing supply has not kept pace with increases in population or met demand for investment, creating the current housing crisis.
Over the last few decades Aucklanders have generally had high expectations of their housing in terms of size and type: large and free standing. This determined what was being built and affected the average cost of housing.
Today, speculation in the real estate market pits investors against first-home buyers.
Together these factors have underpinned price increases that have significantly outstripped wage and salary growth.
Auckland has the highest median house price in the country. It has nearly trebled over the past 15 years, and in the past five years it has increased by almost 30 per cent.
Auckland is today one of the world’s least affordable housing markets, and this has worsened substantially over time. The median house price is just over eleven times higher than the median household income. A median house price to income ratio of three is considered to be the threshold for affordability. In 2012, when the Auckland Plan was adopted, the ratio for Auckland was 6.7.
The result is that a growing number of Aucklanders cannot afford to buy a home and will therefore not benefit from the financial security that home ownership traditionally provides. This puts them at a significant disadvantage in both the short and long-term.
Rents have also outstripped wage and salary growth, straining the budgets of many families and households. This has resulted in increasing incidences of housing stress, and the numbers of people who find themselves homeless and without shelter have increased considerably.
House price and rent increases also mean some households find themselves in unsuitable accommodation. Some live far from jobs, schools and other facilities due to limited availability of affordable options.
This trade-off between the cost of housing and proximity to jobs and facilities is a driver of spatial inequalities and social exclusion in Auckland.
Changing the housing system
Auckland needs holistic thinking and action to ensure that we have a housing system that works for everyone. Local and central government, developers, builders, home-owners, investors, renters and non-government organisations all have a stake in the system and can all work towards smarter solutions.
The market has historically failed to supply the number and types of housing to meet Aucklanders' needs. Homes have also not been in the locations that support the development of a more sustainable city.
However, this has been changing in the past few years. We are now seeing record numbers of new dwellings consented and an increase in the number and proportion of multi-unit dwellings, such as apartments and townhouses.
There are many factors that affect how many homes we build, how quickly we build them, where we build them, what type of homes we build and what they cost.
Factors that influence the price and location of a home include:
- the way we regulate land supply
- what we charge for development
- the size and capacity of the building sector.
But other fundamentals of the system also have to be looked at. For example:
- how and where urban development is initiated and by whom
- productivity of the development and building sectors and their ability to innovate
- ability to increase construction activity in times of strong demand
- the cost of new infrastructure for development and who pays for this
- different tax treatment of property investment relative to other investment types
- building material costs and the limits on product choice
- how to ensure greater resilience of the supply chain for building materials
- property sales methods
- the financial sector's lending and ownership criteria
- how innovative building approaches become mainstream.
In addition, affordability interventions generally focus on the price of a home. There are other large household budget items that are often ignored, yet are part of ongoing living costs - being able to afford to live in a home once you have it is as important. For example, the urban form and where housing is located increases or minimises people's transport costs.
Demographic change and housing demands
Auckland’s population is changing significantly. It is becoming older and more diverse. This drives the demand for different housing solutions.
Auckland's and New Zealand's population is ageing. Over the next 30 years, a larger number of people will be aged 65 years and over. This group will also make up a larger proportion of Auckland's population than ever before.
The ability to find suitable and affordable housing in Auckland is not always straightforward for older people. The available housing stock often does not meet their needs and the costs of owner-occupied and private and social rental housing are increasing. Also, the overall quality of the housing stock is poor, particularly the quality of rental stock, which has both health and safety implications.
Auckland is also becoming more diverse. Asian, Māori and Pacific population groups are growing at a faster rate than the European population group.
Auckland’s Māori and Pacific populations are particularly youthful and are forecast to remain so for some time. They have culturally specific requirements and preferences in relation to housing, for example, a need for accommodating larger families and intergenerational family living.
The Māori and Pacific population groups experience significantly poorer housing outcomes than other groups.
For example, rates of homeownership among Māori and Pacific peoples have declined over the past 30 years. They significantly lag behind the home ownership rates of Europeans (which are also declining).
This undermines their housing security and ability to build inter-generational wealth. Māori and Pacific peoples are also more likely to be in rental housing of poor quality (affected by dampness and mould) contributing to poorer health outcomes.
Housing solutions that work for Māori and Pacific peoples must be delivered if they are to enjoy the security of tenure, social mobility and levels of wellbeing in line with other groups.
Auckland's places and spaces are where we live, work and play. Public places can be:
- parks, playgrounds and sports fields
- streets and roadways
- town centres with their squares, plazas and spaces between buildings.
These places are where we meet and interact with each other, relax, enjoy being in the open air, share our differences and celebrate successes.
They have a key role in Aucklanders' mental and physical health as they are places for activity and recreation. Public places where people can interact and connect have always been important and will continue to be vital to Auckland's success.
Public places are part of a holistic approach to wellbeing and can provide respite for those who feel isolated or experience stress or safety issues at home.
As Auckland's population grows we must provide sufficient public places that meet the needs of residents. The importance of open and green spaces also increases as people live in more compact urban environments. These spaces are an extension of our homes and the way we live, and their design must therefore be flexible to accommodate how people of all age groups will use them.
At its core, placemaking recognises that the elements of place such as buildings and spaces and the connections between them, and how people use and experience them are created collectively.
When we focus on place, we do things differently. Placemaking recognises that our places foster wellbeing and support the way we live. It is a process that puts community-based participation at its centre.
Good design influences what is possible in a space:
- Would you walk through here?
- Would you sit here?
- Would you enjoy yourself here?
- Would you bump into someone you know?
The quality of our public realm is critical to the successful evolution of our urban areas in particular.
Auckland's vision for the future is not only limited to what is measurable, such as the number of jobs and homes created, it also includes the quality of places that are created.
Getting placemaking right is crucial to the Auckland Plan 2050's quality compact growth model.
Public places reflect who we are and where we have come from. They are the destinations we travel to and they contribute to our sense of belonging.
How we will measure progress
We will track progress against a set of measures.
The measures for this outcome are:
- the number of new dwellings consented by location and type
- the number of new dwellings consented and completed
- housing costs as a percentage of household income
- resident satisfaction with the built environment at a neighbourhood level.
How we can implement the plan
Aucklanders have a shared responsibility for implementing the plan.