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Set in the upper reaches of the Waitemata near the Greenhithe Bridge and across the water from the North Shore suburb of Beach Haven, is the mangrove-fringed Hobsonville Air Base.
The 167ha site is an urban designer's dream. If all goes to plan the area will house about 8000 residents in 3000 homes - 85 per cent of which will be privately owned, including 15 per cent affordable housing. The other 15 per cent, about 500 homes, will be state house rentals.
The vision is a mixed community - an egalitarian utopia where state-house tenants happily rub shoulders with the well-to-do, many of whom will snap up newly created prime waterfront locations and the stunning 1930s Arts and Crafts style houses at present occupied by Air Force officers and each valued at about $1.2 million. And there's the base commander's house, the stately Mills House built of Californian redwood in colonial Georgian style. So while the rich will still have the best houses and the harbour views, they'll also be in close proximity to low-income residents.
Hobsonville is one possible answer to the problem of affordable housing in Auckland.
Everyone has a theory as to why house prices have gone mad in this city. Not enough land. Too many immigrants. Too many speculators. Costly planning and resource management restrictions. Expats buying boltholes in Devonport.
But while all of these reasons are probably true, the social consequence of rampant property inflation is that home ownership levels are falling. Property consultants DTZ predict that by 2016 only 58.3 per cent of Aucklanders will own a house, down from 72 per cent in 1991.
It's a trend that will see more people renting in a city with not enough rental housing. DTZ estimates that an additional 5600 rental units will be required every year for the next 10 years in the Auckland region.
What's to be done? The Government has a raft of ideas under consideration, but perhaps the most radical is a proposed Housing Affordability Act which would give councils the power to inveigle, or maybe force, developers to build affordable housing.
"I want to give councils a basket of options and they can choose whether they use a stick or a carrot," says Housing Minister Chris Carter. "I want councils to have the option of saying, 'We do have an affordability issue and these are some of the tools we can use to address that'."
Carter's carrots include things like allowing greater building densities or heights if developers include affordable houses in their schemes. Or fast-tracking developments that have an affordable component.
Sticks include extracting levies if developers don't want to build that type of housing. The idea is modelled on the Affordable Housing Bill passed in South Australia which sets a target of 15 per cent affordable housing - including 5 per cent high-needs housing - in new developments.
The Resource Management Act and other statutes don't at present give councils the power to force developers to build for the lower end of the market.
Carter says he's open-minded as to whether the proposed legislation here should require them to do so. "I want to talk to local government to see which path they want to go down - whether we make it a requirement in certain regions of the country or whether we allow councils to make that decision."
But while legislation may be needed to kick-start developers, the Government also wants to lead by its Hobsonville example.
Reactions to the mixed community plan have been a combination of "there goes the neighbourhood," reflecting concerns about an increase in vandalism and graffiti; and predictions that such a scheme will lower the value of surrounding housing, indicating it's a waste to put state housing on such valuable land.
But some also recognise benefits - such as having workers near the fledgling boatbuilding industry developing in and around the former Air Force hangers.
"A community that's in balance is one that has all walks of life and it also caters for their broader needs - whether it's recreational, residential and also their work requirements," says Sean Bignell, chief executive of the Hobsonville Land Company, a Housing New Zealand subsidiary that will oversee the 10-year project.
He sees the Government's involvement as long-term stewardship, "looking at how people are going to live in the future".
While it's difficult to nail down exactly what affordable housing looks like, one definition is that house mortgage payments should take only a third of household income. The Hobsonville affordable homes would be available for essential workers such as young teachers, health workers and tradespeople, and would be provided by home ownership schemes. That includes third-sector partnerships such as charitable trusts wanting to build low-cost homes.
Another option is government assistance through shared equity schemes where the ownership and capital value of the home is shared between government and first-time buyers - with some sort of covenant stopping first-time buyers making quick capital gains by immediately reselling.
Then there's deposit assistance through the KiwiSaver work-based savings scheme and the Government's Welcome Home Loans.
Bignell is quick to point out that affordability also comes through the sustainable aspects of the project such as designing for public transport use - ferry and bus - thereby making car ownership costs a choice, not a necessity. Jobs and schools on site also reduce or avoid transport costs. And designing energy efficiency and water conservation into the fabric of the home helps reduce household spending.
The Hobsonville experiment also aims to influence the cost of building materials - not just through economies of scale and bulk buying, but also in promoting choice in the supply chain. That is particularly relevant for sustainability products such as solar hot-water heating and double glazing for which there is not a wide range of suppliers here. Demand for low-cost housing would help, too, in providing more choice in the pre-fabrication and pre-built market.
But while affordable housing may sound good, it can also look cheap - the most notable example being the "shoebox" apartments built in Auckland's CBD during the early 2000s. While the tiny apartments were castigated for their poor design and poor features, they do spotlight two inescapable facts of cheap housing. To be affordable such houses have to be of higher density to make more efficient use of expensive land, and of a smaller floor area to keep building costs down.
Housing NZ's "brownfields" urban renewal at Talbot Park in Glen Innes shows how it's done. There are no large walk-in wardrobes, no large laundries, the bathrooms and kitchens are adequate with utilitarian tapware, the floor coverings are bulk-buy, and double bedrooms are tight. Detached houses range in cost from $1400 to $1600 a square metre compared with $2000 to $3000 in the private sector. And a two-bedroom prefabricated three-storey apartment in a block of six costs $210,000.
Not everyone agrees this sort of intensive development is necessary, let alone desirable. "It's an unknown experiment that they've embarked on," says Sue Henry of the Housing Lobby. "You will end up with gated communities and ghettos." She argues that Housing NZ and councils have not taken the social dimensions of growth into account and that the Auckland Regional Council's growth strategy is itself responsible for making housing unaffordable for many.
"Drawing up metropolitan urban limits and cramming everybody into a confined space - of course it's going to drive up demand and values." Her solution is to scrap the regional growth strategy and replace it with a national resettlement strategy in which immigrants would populate "the hundreds of abandoned towns around the country that have infrastructures".
Although Henry is not opposed to mixed communities on greenfield sites she is opposed to urban renewal of state housing in brownfield areas like Tamaki, where Housing NZ's plans for 3000 new dwellings means removing older homes to make way for higher density. "The only way you can do that is to uproot and disenfranchise long-term existing residents," says Henry.
The Tamaki plan envisages 600 additional state homes, 500 homes for first-home buyers, 500 affordable homes for modest-income families, 400 homes for the third sector, and 1000 homes for the open market.
The shortage of land is the likely key factor behind Auckland's escalating house prices. Last week's report by Motu Economic and Public Policy Research found roadblocks to implementing intensification. Ownership of sites within the metropolitan area is fragmented, making it difficult for developers to buy a sizeable block to make medium or high-density development feasible. Under existing legislation, owners cannot be forced to sell to allow the amalgamation of sites necessary for intensive development.
Proposals to introduce legislation to force "holdout" owners living in "growth corridors" to sell are likely to be met with stiff opposition. Property rights are sacrosanct in Auckland.
Freeing-up land on the fringe of metropolitan urban limits - the city's boundary - has problems too. The Motu report says that's because ownership of greenfields land within the urban limit is seen as concentrated in the hands of a few land-bankers.
Professor Bob Hargreaves, of Massey University's Property Foundation, says the land-bankers' behaviour is understandable. "They're acting quite rationally when they're land-banking and holding on to land and dripfeeding it on to the market."
He says the soft option is to pull up the boundary fence and let the city limits push out. The downside is that a more sprawled-out Auckland results in increased infrastructure, transport and social costs.
There's also the question of whether the land at the fringes would be released fast enough to be bring land inflation down. The Motu report suggests a novel "big bang" approach to quickly releasing land for residential purposes through a zoning rights council auction. The theory is that with more land available all at once, prices should come down. Landowners on the fringe might bid against each other for the right to have land rezoned residential with the option to sell their land for development at a pre-set future price, for a limited period.
Given the scale of Auckland's housing issues - particularly those associated with land costs and the difficulty of obtaining land - the Motu report suggests it is likely that both expansion and intensification will be required. "More land will need to be made available (in a big-bang fashion) and an overhaul of council processes will be required."
The site at Hobsonville is proof of some of the problems ahead. It's going through a lengthy plan change process to bring the area within the metropolitan urban limits.
Then a detailed plan has to be drawn up complying with the prescriptive plan change requirements. The result is that the earliest start date for any building is 2009 - making affordable housing a very slow road.
Could anything else be done? Hargreaves says the immediate answer to providing affordable housing - increasing the available housing stock - is very much in the Government's court. He suggests selling 10 per cent of existing state houses and immediately using the proceeds to build more medium-density state houses in brownfield sites.
"That would increase the stock of housing. We're building about 25,000 new houses each year in New Zealand. If this scheme got to action there would be another 6000 to 7000 houses. Increasing the supply up to about a quarter would have some effect at the lower end where the private sector and the developers don't want to be."
Such a selloff plan meets some philosophical resistance from the Government which is committed to replenishing state housing following the sale of about 13,000 state houses during nine years of National Government tenure since the early 90s. Since 2000 the Labour Government has built 5000 state houses at the rate of 800 a year.
The Government is also quick to point out that most state housing tenants couldn't afford to buy their house and the entire state-housing portfolio accounts for only 5 per cent of the property market.
"Whatever central Government does with Crown land to assist with the supply of affordable housing, we are talking about at most a few thousand affordable homes over a decade," Carter says.
But Hargreaves says that's using statistics the wrong way. "It's true there are about 1.4 million houses in New Zealand, but I'm talking about the ones that trade. They're the ones that affect the prices. Every year something like 100,000 houses trade. Add more to the pool that trade and that's got to have a bit of an effect on prices - according to when I took economics anyway."
