Crown building project announced for Auckland

Under the umbrella of their Crown Building Project, the Government will take down 8300 old HNZC homes in Auckland and replace them with 34,000 new purpose-built homes.

Of this number 13,540 will be new social housing and 20,600 will be affordable and market homes.This takes us to 34,000 newly built houses on Crown land over the next decade.Phase one of the Auckland Housing Programme, which covers the next four years, will cost $2.23 billion and will be funded through Housing NZ’s balance sheet and new borrowing of $1.1 billion that the Government has approved as part of the business case.

Phase two in the latter years will be funded through the market housing development part of the programme and rental returns.

Ministers have also agreed that Housing New Zealand will retain dividends and proceeds from state house transfers, to help fund the building programme.

Scott Figenshow talked to Checkpoint on this here.

The NZ Herald reported on May 16 that the Minister classed affordable those homes costing less than $650,000 but was unable to divulge the exact percentage of these that would be built.

Taking into account the 8,275 that will be demolished to make way for these new builds; this would see a net gain to the Auckland market of 25,936, of which Amy Adams estimated between 5,000 to 6,000 would be social housing.

However, these figures short of what is likely to be needed as population growth and net migration put greater pressure on the housing market.

Auckland has an estimated shortage of around 35,000 homes, while latest figures on the Ministry of Social Development website shows 2,015 families were on a waiting list for a new property in the March 2017 quarter. An additional 1,289 were waiting to be transferred from an unsuitable property.

In Bryce Edwards political roundup he cites the most insightful critique of the announcement in the Dominion Post editorial of 17 May, National changes tack over the housing crisis. Looking at the figure of 26,000 additional new houses, the newspaper says: “This is not a sumptuous number in a city where house prices have exploded and where thousands of young people have given up hope of buying a house and where homelessness is a serious issue. And partly a modest policy is inevitable when National still can’t bring itself to mention the ‘crisis’ word. Even the supposedly ‘new broom’ minister Amy Adams is still talking coyly about the city’s housing ‘challenges’.”

The editorial could see the significance of the announcement, but was sceptical about the motives: “Housing is the area where National is most vulnerable, and yesterday’s announcement is a recognition of this fact. It also represents a softening of National’s ideological objections to state house-building and in particular to Housing New Zealand’s ability to competently manage a new building programme. If this represents a new and more pragmatic approach to the housing crisis it is welcome. If it is merely the Government doing the least it possibly can to manage the crisis and give the appearance of action, it’s not.”

Bryce Edwards says the main challenge to National’s new policy is that it’s simply not up to the scale of the housing problem in Auckland.