"Right now there is a housing shortage and prices are escalating. We need to accelerate the supply of housing but we also need to do other things to help make housing more affordable," Anderson says.
The Real Estate Institute of New Zealand (REINZ) reports that the Auckland's median price from October 2014 to October 2015 went from $640,500 to $748,250. That is a rise of $107,750 or 16.8 per cent in just one year. This is one reason why all special housing areas (SHA) have a requirement for affordable homes.
It's a matter of fighting the battle on two fronts by allowing for urban sprawl while increasing rural housing density.
"We need infrastructure to serve growth whether it's motorways, public transport, community facilities, educational facilities, water or waste water."
Funding for this infrastructure is complicated. Developers pay for infrastructure that directly serves their development while the Government and council pay for bulk infrastructure projects such as parks and motorways.
Central government is working together with council and other parties to try to get an aligned strategic approach to transport initiatives from 2018 onwards.
But Sharon Zollner, senior economist at ANZ, says that it's all a bit too little too late.
"It's not happening as fast as it probably needs to to solve the house price inflation issue on its own. I think that horse has bolted to some extent," Zollner says.
It's a problem cities around the world are facing. The McKinsey Global Institute estimates that 330 million households are struggling with housing affordability issues.
The institute has identified four ways to reduce the costs of delivering affordable housing by 20 to 50 per cent:
1. Unlock land at the right location (the most important lever).
2. Reduce construction costs through value engineering and industrial approaches.
3. Increase operations and maintenance efficiency.
4. Reduce financing costs for buyers and developers.
Anderson has been looking at all these issues and is convinced the council is doing enough to ensure there is enough land supply and development capacity in Auckland.
"I think we've done really well. In 2012, we were below target and we're on target now because of special housing areas in particular ... There are different tools and levers and we are using all of the tools and levers at our disposal to impact on affordability," he says.
Anderson says that in the two years since 2012, the council has increased the amount of land supply by 1700 hectares. The targets on land supply include a minimum of five years' supply, an average of seven and a maximum of 10 years' supply. This is ready-to-go land that is zoned for development and has bulk infrastructure such as roading.
So you don't lose the right that you've got through your consent, you actually have to develop faster.
This land supply comes from rural land which is earmarked for urban development as well as special housing areas. The rural land areas are generally on the edge of the existing urban land areas. This allows the rural areas to connect to existing infrastructure such as roads, power, waste and water.
To speed development in the special housing areas, building consents under the housing legislation expire if there is no development within two years. This is as opposed to five years under the Resource Management Act.
Greenfields should have at least developed lots while existing urban areas should have poured foundations within the first two years.
Land bankers
Land banks are parcels of land which are unused including homes which are left vacant. The sites are often derelict and overgrown as the owner seeks higher investment gains without the need to develop the property.
Anderson says they are also looking at ways to incentivise people not to sit on land.
"It might be things like targeted rates because, of course, for a greenfield you have to put in infrastructure. That infrastructure has to be paid for in a fair and transparent way by different owners."
Targeted rates would mean higher rates for sites needing infrastructure. Landowners would be more incentivised to develop earlier. Anderson says this is just an option that they are investigating right now.
"There is a range of ways in which to try to encourage people to use their land. We are just trying to look at some of those now. It's just early days."
