Affordable housing comes at a cost

RICHARD BOOCK
Last updated 05:00 31/01/2013

Everyone has their own view on Auckland's so-called housing crisis. Depending on who you talk to, demand is either out-stripping supply, to the extent prices have soared beyond the reach of most first home buyers, or many of today's newbies simply have an inflated sense of entitlement; an unrealistic level of expectation. Instead of cutting their cloth to suit their circumstances, they're demanding the market reform itself for their benefit.

Sounds a bit glib this latter argument, I know. After all, there's not much the non-baby boomer generations can do these days without being accused of conceit by the blue rinsers. Concerns over university fees? Bludgers. Unemployment woes? Lazy buggers. Public transport? Dreamers. Same goes for housing. Prices too high? Ungrateful little whingers. I mean, we lived for three months in a septic tank. "A septic tank? Luxury".

Not surprisingly, with attention turning to the 2014 election, most of the main political parties have started jousting over the issue. Labour and National have argued about house-building projects; the Greens have proposed a rent-to-buy arrangement. The Greens and New Zealand First have attacked our lax foreign investment laws; claiming that (as in Australia) those without residency or citizenship should be disqualified from buying property.

And just on that, whatever you might think of the notion, it's hard to understand how John Key has managed to call it racist. It's not as if allowing solely New Zealand residents to purchase land or property discriminates against anyone based on race. It simply discriminates on the basis of residency. An Irishman, a Frenchman and a Chinaman walk into an auction? All can bid as long as they're Kiwi residents.

Problem is, no-one's really addressing the crux of the matter. All the initiatives suggested so far are designed to feed the beast rather than manage its behaviour. To serve it, rather than control it. Seems there's no doubt Auckland's housing market is blossoming; a recent study comparing incomes and property prices reckons it's now more affordable to buy a home in New York or Los Angeles. Not only that, the trend's getting worse.

Raises some issues, doesn't it? For starters the same survey found one of the key drivers of price escalation was urban containment policies. That is, the zoning rules that prevent sub-division and suburban spread; effectively ring fencing our metropolises and forcing prices up. We know this but seldom want to acknowledge it. On one hand we like to boast about our unspoilt countryside, on the other, we complain about city house prices escalating.

Could throw city heritage policies into this debate as well, although I wouldn't expect to win any friends for it. Still, we make choices about our cities, and those choices come at a cost. We try to preserve buildings and houses for aesthetics where much-needed intense accommodation is needed. We prevent our cities from expanding out of a concern for our rural spaces. Not saying it's wrong, just that it comes at a cost: rising city house prices.

One thing we do know about Auckland is that its population is growing. The Department of Statistics predicts that, if numbers continue to climb at their current rate, it won't be long until residential suburbs have population densities similar to that of the central city. We don't need a Nostradamus to tell us that buying a detached house in Auckland, rather than a flat or an apartment, will soon be a flight of fancy for most first home buyers.

So then - a growing Auckland population, a greater demand for homes than supply, and a ring-fenced city? Hardly seems surprising prices are on the march. Question is, though, what would we prefer? Strict city boundaries and increasingly expensive urban housing? Or more relaxed zoning regulations, less countryside and more affordable homes?

» Read more of Richard Boock in the Sunday Star Times.
» Follow Richard on Twitter: @richardboock.

- © Fairfax NZ News

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