Hardly has the ink dried on the new Unitary Plan and already there’s debate on whether the required target can be achieved.  To remind – the target is a cool 422,000 new homes to be built over the next 30 years.

It’s an understatement to describe this as a ‘stretch target’. It requires a building rate two and a half times greater than what we’ve actually managed over the past quarter century!  Perhaps no wonder that Tony Alexander, the BNZ Chief Economist, states in his NBR article (August 8) that our chances of achieving it are ‘minimal’.

So let’s get clear on a few things:

• It isn’t the Unitary Plan that will deliver the houses. The Unitary Plan simply creates the framework and enables the private and public sector players to build them.
• The Unitary Plan is just one part – albeit a very important one – in creating the momentum to build more houses.
• It is a colossal target – and given the increase in building required, there are lots of other things that need to come together to make it work. This, as a priority, includes increasing the capability and capacity of the industry.

But let’s try to imagine what Auckland will look like if we turn out to be chokers.  The alternative is a nightmare. Furthermore, it’s a nightmare that’s depressingly familiar – because  it’s what we are experiencing now but worse to the power of 10:  rampant house prices, people living in cars, more congestion, shortage of housing supply and people giving up on the idea of owning a home in Auckland. And the more we choke on getting it done, the worse the outcome is.

So, do we sit here and debate whether it can or can’t be done?  If we do, we run the risk of ending up paralysed.

That’s exactly what we can’t afford. Because we have to get there, the better question to be asking is ‘What do we have to do to achieve it?’.

One of the famous stories of last century is about the race to put a man on the moon.  John F Kennedy stated at the start of the 1960’s that America would have a man on the moon by the end of that decade.

NASA didn’t waste its energy debating whether it could or couldn’t be done.  Instead, the NASA team tackled it differently. Their process was to posit the assumption,  ‘Right, we’ve landed on the moon. Let’s now work backwards to figure out what we had to do to get here’.  And step by step they did.  And it worked.

The solution to Auckland’s housing needs the same belief, energy, embrace of innovation, and single-minded commitment.

So, let’s ask the question about what we need to do to hit the target.  And this to all the naysayers, critics and cynics:  You say we can’t do it. Yes we can. We must. Now what we need to do is to focus on the HOW.

 

Make an acronym of ‘Unitary Plan’ and you get ‘UP’. That’s apt and the adoption of the Plan will come to be seen as a key moment in the Auckland Story.

The Unitary Plan begins, promisingly, by asking the right question – what’s the requirement for housing based on measurable future demand? It posits the need by 2041 to accommodate an increase of somewhere between 700,000 and 1 million new residents. This means finding more than 400,000 new houses over the next 25 to 30 years.

It aims to achieve this additional capacity through a combination of intensification – 64% of the capacity to be found within existing urban areas, and expansion – 36% of the capacity to be provided in new urban areas, made possible by letting out the Rural-Urban Boundary by 30% over the period. So, a mix of upwards (and infill) and outwards.

There has also been a strong focus on the next seven years, given the mess Auckland currently faces on the housing supply front. The Plan makes provision for 131,000 dwellings to be found over the seven year period, to deal to our existing shortfall of 40,000 dwellings plus 13,000 per year for the next seven years.

The Plan represents a pivotal moment for Auckland not just because it asks the right questions but because it seems to supply a series of plausible answers. For the first time we actually have an integrated, consistent and long term strategy for our city. It’s a quantum improvement on the old jigsaw puzzle of individual plans for each of the individual councils that have been merged to form the Super City.

It’s goodbye to the Half Gallon, Quarter Acre Pavlova Paradise – though in truth, that’s been little more than an urban legend for many Aucklanders for some time now. In simplifying the residential zoning types to just six, the Plan prescribes a dramatic reduction of the area dedicated to the traditional one house on a section – by 22% on average across the city and by more than 42% in the central isthmus.

The area zoned Mixed Housing Suburban (allowing up to four houses of up to two storeys per section) increases by 5%. The Mixed Housing Urban category (where you can build up to four houses of up to three storeys without resource consent) increases dramatically, by nearly 48%. Town Houses and Apartments [THAB]  (four to six storeys), focused on intensification around town centres and transport hubs, grows by more than 25%.

Critics of the Plan have already spotted what they see as anomalies. Chief among them is the fact that the Plan seems to have given up on prescribing for affordable housing – there is no specific provision in it around affordability. However, the mechanism proposed to achieve affordable housing was complex and would have been formidably difficult to implement and monitor. In fact, it was a mechanism that could potentially have produced perverse outcomes, actually reducing the efficiency of the housing market.

But that doesn’t mean the Unitary Plan dodges the affordability dilemma. Instead, it is designed to procure affordability by:

• enabling a significant increase in development capacity to match demand
• permitting a much greater range of housing sizes and types
• supporting intensification in the centres and key public transport hubs
• not imposing undue implementation costs.

The old density provisions have also gone in the Unitary Plan, so no density requirements at all for the Mixed Housing Suburban/Urban and THAB zones. Note that this doesn’t mean you can build as many units as you want on a site. What it means is that you have to analyse each site individually to understand what you can do with it. Development controls on factors such as height, height in relation to boundary and building coverage all remain.

Much of the reasoning for the removal of the specific density provisions was that, inevitably, they lead to an inefficient use of land. They encourage maximising site development through building larger units. This, in turn, crowds out the potential for smaller dwellings to be built and has an impact on affordability, since the larger units are usually more expensive. No density limits should enable considerably greater housing capacity and housing choice.

The last of the apparent ‘anomalies’ I want to consider here relates to cultural heritage/mana whenua. On the face of it, the removal of specific cultural heritage/mana whenua provisions, like the removal of the affordability and density prescriptions, may seem to contradict the intention of the planners. However, as the Plan was refined and developed, this was an area identified as needing considerably more work. Some 3600 sites and places of value under mana whenua were identified by means of the New Zealand Archaeological Association database of sites, rather than by a searching consideration of mana whenua values or the degree of significance of those values case by case.

The Unitary Plan, therefore, recommends a two-tier approach to protection of sites that are special to mana whenua (similar to that which will apply in the interim for historic heritage buildings) – acknowledging there is further work to be done in developing a comprehensive schedule.

The interim approach is, rather than setting in stone a blanket designation and then putting home builders to the effort and cost of having it removed, a designation can be applied for relative to a particular building or site.

A lot of the Plan is mind-numbing in its jargon and complexity. At times it feels like a series of small steps for the planners – but it’s a giant leap for Auckland.

It won’t, of itself, create additional homes. But it provides land owners, developers and the suppliers of infrastructure – transport, water, wastewater, stormwater, electricity and telecommunications networks – with clear ground rules to be able to get on and deliver. And, above all, it clears away the accumulation of crap that has done so much to frustrate us in building with urgency to meet demand.

So, what next? The Councillors have now completed deliberations and voted on the Plan.  This is something where the Council has provided real leadership for our city rather than kneejerk or populist posturing.

The right decision is an overwhelming endorsement of the Unitary Plan. It’s one key step to empower Auckland to move, as it must, upwards, outwards and onwards. So much better than, downwards, inwards and backwards, don’t you think?

 

Faced with a crisis, we tend to focus on finding the ‘silver bullet’ to deal to it. Usually without success – silver bullets being as rare (but as often sighted) as the yeti!

The housing crisis in Auckland seems to be following just this pattern. There’s a lot of focus on looking for ‘silver bullet’ solutions or, alternatively, trying to blame someone – whether an individual, a political party or an organisation.

A lot of positions are being struck, often stridently because this is a crisis and the debate is understandably a fevered one. ‘It’s the demand side. No, it’s about supply. Immigration’s at the root of the crisis. No, it’s the investors. It’s the banks. It’s the planning limits placed on city growth …’

Complex problems aren’t usually susceptible to simple solutions. And Auckland’s housing issues are neither new nor simple. They’re not related to one policy, one party or one Council. We’ve encountered similar headlines often during past decades. They are not even unique to Auckland – many fast growing cities around the world are facing a similar set of problems.

What makes the Auckland housing crisis so complex and so hard to solve? You’d want to start your answer by considering that:

• Development of housing is a long term venture. It’s not easily reversible and, generally, has an economic life of at least 50 years. Small developments can take a couple of years, while large scale housing developments may take at least 10 years from start to finish.
• Long term decisions and long term commitments are required. Which means we have to ensure that all the parties, from policy makers to infrastructure providers, including developers, construction companies, key consultants and planners, are aligned in a common direction with common objectives.
• Think of development as being like a rubix cube – you need to manipulate everything into line to tease out a solution.

One of the big challenges facing us is that when you overlay the long term nature of development on the short term nature of local and central government, it’s difficult to achieve the consistency, commitment and direction required for everyone to ‘scale up’ (ie, build bigger developments to house more people) and commit to the levels required.

There is plenty of talk about getting the public and private sectors working well together so we can gain some traction. But talk is cheap. And though point scoring is a well understood aspect of the political process, it doesn’t get houses built.

We need a plan, one that is transparent and fully and openly communicated, so that we can all get a realistic grip on the complexity of the challenge we face.

We need to know how we are going to follow that plan. In other words, we must stipulate clear outcomes and we must have ‘performance indicators’ so we know that we’re on track.

We need to identify our priorities (since we can’t solve all our problems simultaneously). And we need to know what the ramifications of introducing a new policy are, so that ‘the Plan’ isn’t followed through in isolation, where it could create perverse outcomes.

Given that this is a crisis with a lot of moving parts, we’re probably not going to solve it if we’re driven by a short term concern about how a particular proposal will look ‘on the front page of the paper’. That’s too often how we make decisions in the public sector. But in this case we require real leadership and a long term focus.

Let’s start by trying to get an overall, coordinated plan involving the two tiers of government – central government and the Auckland Council.

The Government plays a key part in the housing space, first as the major policy and regulation setter and second as the largest owner of dwellings and land in Auckland. It is, therefore, the major player if enough houses are to be built to meet the need. Minister Steven Joyce told the Herald on July 21st that “around housing, one thing we’d definitely agree on is a comprehensive response – it involves the Reserve Bank, it involves councils and it involves the Government”.

The Auckland Council is a major influencer, in policy, consenting and via its own land holdings. It is the other key facilitator of residential development. It seems to be lifting its game in terms of how it tackles this vital role.

To make the big leap forward we need, the Government should be prepared to share the ‘comprehensive plan’ Mr Joyce referred to on July 21st. What’s the policy, what are the regulatory requirements, what are the planned outcomes in terms of delivery of houses?

Then the Auckland Council must overlay the details of its own planning – policy, consenting numbers and delivery of houses.

Until we can share this information, get it coordinated and initiate meaningful input from the wide range of developers and other players who will actually build the houses, we’re unlikely to obtain a real commitment to undertake the scale of building mandated by this crisis.

And, once we have a plan, we can measure progress, see what’s working (and what’s not), and continually look for improvement.

It may not look much like a silver bullet. But it’s the attack weapon we should be deploying to get ourselves out of the mess we’re in. So, can we just get moving?

Leonie Freeman

“Described as one of our leading property gurus, Leonie Freeman claims a unique record of experience in both the private and public sectors.”