Housing Minister Phil Twyford talks about the results of a stocktake on housing he commissioned with the report’s authors: Alan Johnson of the Salvation Army, Otago Public Health Professor Philippa Howden-Chapman and economist Shamubeel Eaqub.
With a job title that includes housing, urban development and transport, new minister Phil Twyford is clear about his brief.
"It transcends talk about traffic. It's how we manage a city's growth," he says, from his car on the way to the airport after a presentation with the Employers and Manufacturers Association in Auckland. He's doing a lot of selling his idea to groups from The Salvation Army to the Auckland Housing Summit.
"It's a splendid idea to build housing around transport hubs. And our new urban design authority will cut though the red tape to make development happen."
Every pundit for the last five years has a view on why the housing prices and supply got so out of whack, not just in Auckland, but also in other growing cities around the country. Despite his transport hat, Twyford is firmly of the 'bob-each-way' school of development that Auckland should be allowed to grow both up and out.
"We really need to intensify. On the fringes, it's expensive to build the infrastructure — and people want to be close to the jobs. Given the housing choices and the lifestyle choices, a young family wants an affordable place that's not three-quarters of an hour drive on the motorway. They don't want to spend the weekends on mowing and gardens."
He echoes the vision of urbanists around the world, of apartment or terrace housing that is part of a walkable community, five minutes from transport hub with frequent service, density done well, high-quality builds.
The market has failed to deliver a better choice and mix of housing.
And concurs that the conversation often doesn't include what's known as the missing middle, the bit between multi-storey apartment blocks and spreading single family homes.
"The market has failed to deliver a better choice and mix of housing," he says.
"The Auckland unitary plan is significant in freeing up height and density rules, especially around stations or town hubs, to encourage density there, right around the city. Two or three storeys. Yes, we look after the heritage and beautiful garden suburbs, but three-storey walk-ups, town houses and terraces will deliver the human scale."
The tangle comes with the high price of urban land. Without going into specifics, Twyford insists there are things that can bring down the price of urban land, free up density and height so that buildings can go up and allow spread without the cost of infrastructure.
He says that infrastructure today adds $50,000-$60,000 to the cost of the new build; but doesn't say how the cost to councils (which can be over $100,000 each property) can be spread, or the mechanisms to discourage builds where infrastructure is uneconomic.
He does, however, see that central government can help councils find the money to build the infrastructure.
"One of the big obstacles, the block to growth is the lack of finance [to councils] to provide infrastructure. The status quo is a council that is strapped for cash, at its borrowing limits.
Housing and Urban Development Minister Phil Twyford with Claire Peng and Jacob Henry of Housing NZ. Photo / Jason Oxenham
Central government occasionally writes a big cheque for infrastructure, but how do you finance the growth? The last government set up Crown Infrastructure Partners.
We're looking at how to extend that, tap into long-term debt finance, for example selling bonds, or debt serviced by the developers that benefit, such as a targeted rate. That could unleash the ability of the city to grow."
Once land is sorted, the issue then turns to buildings to put on it. In December, the minister announced the launch of KiwiBuild to deliver 100,000 affordable houses over the next 10 years, boosting residential construction investment by 10 per cent, or $5.4 billion, by 2022.
When legislation is passed, this programme will be picked up by the new urban authority, called the Housing Commission, but work is already under way.
To get a grip on the size of the problem, Twyford commissioned an independent stocktake of the housing sector by Alan Johnson of The Salvation Army, Otago public health professor Philippa Howden-Chapman and economist Shamubeel Eaqub.
The sobering conclusion, supported by extensive data gathering, confirmed the crisis may be worse than thought across the whole sector from home ownership and market renting, to state housing and homelessness, and the social and health costs of substandard housing. Talk continues.
Twyford is part of an Auckland crisis working group along with Deputy Mayor Bill Cashmore, iwi, NGOs and housing industry people.
In March alone, the amalgamation of housing organisations, Community Housing Aotearoa (CHA), lists four talkfests from groups as diverse as the Property Council to the NZ Coalition to End Homelessness.
CHABRANZ, research company Beacon and The Policy Observatory have a workshop on delivering good medium-density community housing, while the pre-fab sector has a design CoLab to raise productivity in construction methods.
One of the 11 National Science Challenges, Building Better Homes Towns and Cities, released a study in December — lost in the Christmas rush — outlining how partitioning existing single-family homes, or adding granny flats (known as Accessory Dwelling Units, ADUs) had the potential to release some 180,000 additional dwellings. BRANZ is digging into build-to-rent programmes.
Twyford is confident he can build the capacity to build the buildings, in an industry that is already at capacity, through a mix of training up young New Zealanders to work in the construction and related trades, introducing training incentives (such as free fees for apprentices) and tweaking skilled immigration settings to bring in workers.
Mostly, though, he's pinning the big growth — 10,000 homes a year by the third year — on de-risking development.
By guaranteeing developers that the Government will buy apartments and terraced houses that meet the KiwiBuild criteria, they'll have the capital (and their banks will have the confidence) to build at the affordable end of the market.
Procuring volume means KiwiBuild can also drive down the price of building materials, some of the priciest in the world. And, most of all, Twyford is a fan of improved productivity through pre-fabrication.
Housing and Urban Development Minister Phil Twyford, (right), visits a Housing New Zealand construction site on Hill Crescent in New Lynn, Auckland. Photo / Jason Oxenham
"We'll contract the work to companies using off-site to pre-build panels. Only a handful have the capacity now, but they'll scale up and grow," he says. "How? Through multi-year contracts to deliver hundreds and thousands [of dwellings] in a factory. Financing that quantity means firms can invest in the plant with certainty."
Where that pre-fab capacity is at won't be known until late March, says Pamela Bell, who heads the New Zealand industry association PrefabNZ, as the sector of some 40 manufacturers is yet to complete a capacity and capability audit.
Whether companies could ramp up quickly enough is another matter, she says. Compared to the traditional sticks and nails sector, pre-fabricators can quickly add another shift or a second manufacturing facility, but the sector needs a boost to double in three years to deliver the thousands of houses.
Bell speculates that perhaps disruptive off-shore investment, or non-housing investors such as big insurance or pension funds could invest in build-to-rent, bringing with it professional managers instead of mum and dad landlords.
She says smoothing the until-now boom-and-bust cycle would mean manufacturers could be confident in demand holding enough for them to invest confidently.
There's room to squeeze in more housing on existing property, too, according to Kay Saville-Smith whose study on accessory dwelling units (ADUs or granny flats) found ways to slip in some 46,000 homes in Auckland alone.
But she says that with central government "blowing hot and cold" on housing, it's become councils' problem and many don't have the capacity in their planning, zoning and district plan regimes to address it.
"We keep saying how we want affordable, flexibility, good towns. But we never do it," Saville-Smith says. "We can't do a standardised product [prefab] if every local authority has a different view. This is a national discussion."
Short term, Twyford expects to tap vacant crown land for housing (as was done for the Special Housing Area in Moire Rd, Massey, in mid-2016).
He envisages 12 to 15 large scale master planned developments on the scale of Hobsonville — but bringing back the affordable housing requirements abandoned by the last government — citing work already under way by Panuku Auckland Development. That is not waiting for the government's urban development agency.
He is inspired by cities such as Hong Kong where the transport authority builds housing above the transport hubs, or Perth which used transport to drive the development of that city.
"We can take a much more joined-up approach, I'm determined to make that happen. We can optimise development around the stations, have housing along the rapid light rail to the airport," Twyford says. "In a few decades it'll be, 'don't build if it's not on a transit hub'.
"Urban development is not simple. Everybody realises we have to build more and better, but we have to take the community along with us. It's one of the challenges, but it's important if we want to do big development.
"Otherwise you lose the social licence to do this. It's not about gentrification, pushing property prices up or driving people to the edges. It's about building stronger communities."
