Tools for local delivery – inclusionary zoning key to affordable housing in Queenstown

Under the Queenstown Lakes planning process, a developer who applies to rezone a rural area to an urban zone must allocate 5% of the land to the Trust.

Speaking at the CHA-IMPACT 2017 Conference at Te Papa in Wellington, Julie Scott says the Trust operates three programmes, has net assets of over $15 million, and an interest in $28 million of property. The 5% allocation is the source of most of the Trust’s assets, which are “building an enduring asset for the wider community”.

Since setting up in 2007, the Trust has had 1138 households register interest in their housing services.

Suffolk street development Queenstown Lakes Community Housing Trust

“We’ve been able to work with 150 of them so far,” says Julie. “Around 430 remain on the waiting list, and the number increases by 20–30 a month. It’s thanks to inclusionary zoning – a legacy of our forward-looking Council – that we’ve been able to do this.”

Inclusionary zoning has also enabled the Trust to leverage grants from Government and Council.

Julie believes that local authorities can support the delivery of social and affordable housing in their communities in many ways. Inclusionary zoning works well in Queenstown and could work well in other communities, as could partnerships with local community housing providers using council land.

A recent piece of research by Sense Partners found that there is no significant impact on house prices where inclusionary zoning was used to deliver affordable homes in local neighbourhoods. Some opposed to including affordable housing in new developments have often argued it brings down the price of the rest of the neighbourhood. This analysis of the actual experience in Queenstown and international evidence demonstrates this is not the case.

Di Anorpong of MBIE says the tool to help understand the extent of local demand for affordable housing at a local authority level is the National Policy Statement (NPS) on Urban Development Capacity.

“The NPS is an opportunity for councils to take a whole-of-city rather than a whole-of-council approach to establishing housing use and demand at a local level.”

The NPS was made operative in December 2016 and is now a permanent, long term feature of local authority planning. Monitoring of local housing markets are expected every quarter from June 1 in medium and high growth areas. Three yearly development capacity assessments are required to determine if housing supply is matching housing demand, with responsive planning a requirement where there is a mismatch.

One of the measures councils are required to measure against under the NPS is affordability. The new Housing Affordability Measurement (HAM) is a tool to help with this.

HAM is a tier-one official statistic introduced by the Ministry of Business, Innovation and Employment (MBIE) in May 2017 to allow the market to be monitored at a more detailed level. It measures how much money households have left each week after meeting housing costs and sets the benchmark at 2013 census figures.

These measurements can be broken down by city and district council level and also ward-level information for Auckland.

There are two very good things about this measure. Firstly, we now have a consistent measure of the changes in housing affordability for both renters and entry level homeowners providing a constantly reported statistic going forward. Secondly, it uses a residual income approach, meaning that it measures affordability of housing by making sure that a household has enough money left over after housing costs to pay for the essentials of living.

Local authorities around New Zealand are aware of the many citizens in their communities experiencing housing stress. Queenstown Lakes District Council have been active in addressing the stress in their community by using inclusionary zoning alongside a local community housing trust to support the development of affordable homes. With the introduction of the NPS on Urban Development Capacity there is now a requirement for local government planning and monitoring to include housing affordability. Local authorities would do well to look to inclusionary zoning as an effective tool to deliver affordable housing in their area.