Plans unveiled for 'affordable' $500k homes

Is a $500,000 house an affordable home?

Last updated 13:01 04/02/2014
Nick Smith and Gerry Brownlee
Dean Kozanic

AFFORDABLE HOUSING? Ministers Nick Smith and Gerry Brownlee announce plans to develop low-cost housing on NZ Transport Agency-owned land bounded by Carrs, Awatea and Wigram roads.

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A plan to build about 275 "affordable" homes on an 11.5-hectare site in Hornby will help fill a gap in the Christchurch housing market, Housing Minister Nick Smith says.

Smith and Earthquake Recovery Minister Gerry Brownlee yesterday announced plans to develop mixed-model housing on NZ Transport Agency-owned land bounded by Carrs, Awatea and Wigram roads.

It was expected the houses would sell for between $350,000 and $500,000, which drew criticism from Opposition MPs.

The Real Estate Institute said last month the median price of homes sold in Canterbury in December was $395,000 - up 12.5 per cent from a year earlier. In Christchurch city it was $420,000, up from $379,000 a year earlier.

Potential partners have been asked to submit proposals by March 5 and Smith hoped construction would begin this year.

The $350,000 to $500,000 price range was the "gap" in the Christchurch market, he said.

Waimakariri and Selwyn districts were catering for that demand but "it's really important for Christchurch that it's got houses in that affordable range".

The Invitation to Participate document asks for a plan that "enables entry into home ownership, provides affordable rental properties, has integrated community facilities and includes an element of community housing".

A proportion would be available for community housing providers, some sold at "affordable price points" and others at typical market rates.

The project must be delivered at "low or no cost" to the Government because no funding has been allocated to the project, the document says.

Smith said the Christchurch housing market was "under real pressure" because of the loss of 15,000 houses since the earthquakes and the demand for housing from the rebuild workforce.

The mixed model was preferred because "very intense" state housing was "not the right way for the future".

Maintaining affordability required smart design and flexibility over section size, which the Weymouth and Tamaki projects in Auckland proved could be done, Smith said.

"If the Government wanted to be crude and commercial, they'd just put this block of land out for bid and not try and influence the housing market."

The Hornby development, which was bisected by the new Southern Motorway, was "surprisingly close" to the central city and had good transport links, Smith said.

"It has the potential to be a lovely new suburb," he said.

Council housing committee chairman Cr Glenn Livingstone said any solution to the city's housing issues "has to be good".

The suggested price tag for the properties was on the "outer edge of affordability".

"The overall challenge is to get that price down," he said.

Green MP Eugenie Sage said the Government was "thinking too small-scale".

"It's good that National is finally doing something on the ground in Christchurch towards 'affordable housing', though the likely price tags mean [the houses] may still be out of reach of many," she said.

Labour housing spokesman Phil Twyford said the Hornby project concentrated low-cost housing in one development, while allowing a "massive sprawl of expensive housing elsewhere".

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- © Fairfax NZ News

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