Homes 'uneconomical', says architect

16:00, Feb 11 2013
Nigel Hosken
SPEAKING OUT: Architect Nigel Hosken says Auckland Council needs to speed up its processes.

It is simply uneconomical for housing developers to build affordable homes, a Te Atatu Peninsula architect says.

Nigel Hosken identifies increasing land prices, the time it takes to re-zone land and the soaring cost of compulsory contributions to Auckland Council as keys to the housing crisis.

Mr Hosken says the profit margins developers make are decreasing and the only way to make a subdivision financially viable is to put more expensive houses on the land.

"One of the big problems is that it takes two to four years to get land re-zoned so it can then be subdivided."

During this time a developer will have an agreement with the land owner to buy it and from the time the rezoning application is put forward and until it is approved the land owner is paid a holding charge, Mr Hosken says.

"The longer it takes, the more you pay. We can help this housing problem by speeding everything up."


Mr Hosken says the cost of development contributions has increased from around $25,000 per house to $32,000, which eats into the profit margins.

Council spokeswoman Angela Jones says development contributions are about 8 per cent of the development cost.

"The alternative funding source is rates.

"Auckland Council does not believe that general ratepayers should be required to pay for assets that they don't directly benefit from," Ms Jones says.

Last July the council introduced an integrated Auckland-wide policy replacing the seven former councils' policies.

Ms Jones says the fees are generally cheaper than the fees that applied under previous councils.

From December 2011 to December 2012 the median house price in Waitakere has gone from $418,500 to $442,000 and section prices have gone from $255,400 to $279,000, according to the Real Estate Institute of New Zealand.

Auckland-wide, median house prices have risen from $484,375 to $535,000 and section prices have jumped from $270,000 to $327,500.

Last year there were 4582 consents issued for new Auckland dwellings - 554 of them in Waitakere.

Deputy mayor Penny Hulse says about 13,000 new dwellings need to be built each year to keep up with population growth.

"The Auckland Plan envisages that up to 70 per cent of new dwellings will be built within the current city boundary, while up to 40 per cent will be allowed in new greenfields land."

Ms Hulse says the council is putting in place an upfront consultation process and working with the government to consider ways to implement the unitary plan in a timely fashion.

"That will speed up development and economic growth as well as protect our heritage and the environment," she says.

The number of consents issued for new and existing dwellings throughout Auckland in 2012 was 10,438 out of 14,237 applications.

In West Auckland 975 were issued out of 1660 applications.

Mr Hosken does not support the housing plans of the Labour or Green parties because he believes the Government should not be funding housing for some people while others have to finance their houses on their own.

"The regulations have gotten much more stringent. In the 1980s when I first started out as an architect house plans were four pages long; now they are about 18.

"It costs $1000 per page so that's more than four times what it used to be.

"The way a developer can keep costs down is by building multiple houses with each set of plans. That way you don't have to do it for each one," he says.

$418,500 to $442,000  Overall median house prices

$750,000 The most expensive area in the Waitakeres

$385,000 The cheapest area in Glen Eden

$255,400 to $279,000 Section prices

Western Leader