Hon Maryan Street
Minister for Housing
12 February, 2008 Media Statement
Embargoed until 3pm
Action plan to increase affordable housing
The government is working on a comprehensive plan of action to help families into home ownership by boosting the supply
of affordable houses, Housing Minister Maryan Street said today.
“A package of initiatives was announced by Prime Minister Helen Clark in her annual address to Parliament today and
marks the beginning of a bold new direction in housing policy in New Zealand,” Maryan Street said.
“House prices are beginning to stabilise, but have nevertheless risen sharply in recent years in New Zealand and in
other comparable countries. While this is in some ways a positive reflection of a buoyant economy, the government
recognises how hard it is right now for families to buy their first home.
“The Labour-led government is determined to increase housing choices and to reduce cost pressures so more people can
realise the Kiwi dream of home ownership. This is best achieved by building greater numbers of modest homes for first
home-buyers, which will also help keep prices down more generally.
“Firstly the government plans to develop large scale housing developments involving partnerships between central,
regional, and local government, and the private sector, to increase the amount of affordable housing being built. Urban
Development Agencies (UDAs) have been set up overseas to develop master-plans for similar large scale projects and we
are examining whether these would be appropriate here.
“Regional UDAs in Australia have been used to coordinate faster urban development of large, strategic sites with roles
including: land acquisition and amalgamation; fast-tracking regulatory approvals; specification of design, quality
standards and affordable housing requirements.”
In the future large housing projects, such as those underway in Hobsonville and Tamaki, could be overseen by such an
agency, Maryan Street said.
“A review of public land holdings, beginning in Auckland, will also be undertaken to see what new land might be made
available for significant housing developments involving a mix of public and private provision.”
“Secondly we will support the development of the not-for-profit sector to provide more affordable rental and
owner-occupied houses for lower-middle income families or individuals in high cost areas.
“The existing not-for-profit sector is small in scale and caters almost exclusively for those in rental homes with the
highest housing needs.
“The change could result in local authorities, iwi and others already working in the not-for-profit sector expanding
their role. It could also see the establishment of new dedicated housing entities such as the successful housing
associations in the United Kingdom.
“It will take time to increase the numbers of affordable houses through these initiatives, so in the meantime we are
launching a shared equity scheme in July for people in high cost areas,” Maryan Street said.
“This involves the government taking an equity share in a home, bridging the gap
between a family’s income and the price of a modest house which would otherwise be unaffordable.The scheme will be
targeted at the purchase of newly built homes to avoid increasing competition for existing ones.
“The government is also going to re-evaluate some of the regulatory costs which, while not the largest drivers of house
price rises, have contributed to them. The government will, for example, look at how to simplify the design and building
consent costs for starter homes.”
The Affordable Housing: Enabling Territorial Authorities Bill now before Parliament is yet another tool which should
soon be available to increase the affordable housing supply in some areas, Maryan Street said.
ENDS
Embargoed until 3pm
Housing Affordability: New Solutions
Question and Answers
12 February, 2008
Why is the Government facilitating large-scale urban housing projects?
To substantially increase the supply of affordable housing New Zealand needs to develop large scale urban housing
projects which incorporate realistic numbers of affordable homes. The private sector and central, regional and local
government need to work in partnership to deliver these projects.
What are Urban Development Agencies?
In other countries Urban Development Agencies oversee the planning of intensive and new developments, with the private
sector carrying out the developments. They undertake specific development projects that are of a scale and complexity
that would not occur in the private sector alone.
Where are Urban Development Agencies in use?
Urban Development Agencies have been established in most states in Australia and have been able to demonstrate
commercially viable and sustainable housing development, high-quality design, and urban regeneration. Some have also
facilitated the provision of affordable housing, community facilities and services, and initiated redevelopment in
strategic places where there was little market interest.
What is the Hobsonville project?
On the site of the former Hobsonville air base there is a project to develop an integrated urban community.
The Hobsonville project will deliver more than 3,000 new homes, five hundred (or up to 15% of total development) of
which will be available for first home buyers on moderate incomes. A further five hundred (or up to 15% of total
development) will be state rentals, the remainder will be available for other market buyers. The plan is for house
construction to be underway in 2009, following earthworks and infrastructure work this year.
The Hobsonville project will set a new benchmark for sustainable urban development. It will build a community that is
available to people from all sectors of society and include schools, employment, heritage areas and reserves.
Why is the Government planning to work with the not-for-profit sector?
Not-for-profit housing providers can provide housing at a lower cost than for-profit providers, and in many cases, they
may leverage other resources (and property development opportunities) without being wholly reliant on government
funding.
Where is not-for-profit housing being developed?
Some housing associations in the United Kingdom now provide the full range of housing options – rentals (medium and long
term), shared ownership and full ownership. In Australia the Queensland government and Brisbane City Council have
provided funding to set up the Brisbane Housing Company, which is forecast to have a stock of 781 units this year to
cater for particular groups of people.
How long will it take to develop the not-for-profit sector?
Development of the not-for-profit housing sector in New Zealand is a medium to long term strategy to increase the supply
of affordable housing. This may involve a small number of relatively large providers in main urban areas to provide at
first affordable rentals and then provide a pathway into home ownership.
The next step is for the government to consider how it can best encourage the growth of not-for-profit providers and
talk to the existing sector and potential providers about their ideas and what might be possible.
What immediate steps will increase the supply of affordable housing?
Increasing the supply of affordable housing will take time. So in the short-term, there are a range of more immediate
steps we can undertake.
1. Review of public land holdings
We will carry out a review of public land holdings, starting in Auckland, to see what land might be available to
contribute to these kinds of projects.
2. Information on land availability
While there is significant land zoned for housing in our major urban areas there is little information regarding
timeframes in which it is likely to be available for development. The Department of Building and Housing will further
investigate to provide policy-makers with more detailed information.
3. Tackling regulatory costs
We are also going to tackle some of the regulatory costs that have added to the cost of building a house. While these
are not the largest drivers of house prices, we are committed to ensuring that housing is produced as efficiently and
cost-effectively as possible without compromising on quality.
We will start by looking at how to simplify the design and building consenting process for starter homes. Starter homes
are modest-sized houses with designs that can be built using simple construction methods and have basic fittings in
rooms such as the kitchen and bathroom.
4. Shared equity
In July this year we are launching a shared equity scheme targeted at new builds to help people in high cost areas to
get onto the home ownership ladder. Focusing this scheme on new builds will avoid adding to competition for existing
houses.
5. Affordable housing: Enabling Territorial Authorities Bill
We will progress the legislation before Parliament now which gives local government the power to require affordable
housing as part of a development. (Councils that choose to use these new powers may also decide to assign the
developer’s affordable housing contribution to a not-for-profit provider to manage.)