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NZ Tale of two cities bizarrely alike

Property Here - Monday, May 06, 2013

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Auckland mayor promotes Vancouver's urban density but it's also striving to become an affordable city.
Vancouver has the highest housing prices in Canada, with foreign investment blamed for helping to drive up prices. Photo / Supplied
Vancouver has the highest housing prices in Canada, with foreign investment blamed for helping to drive up prices. Photo / Supplied

Mayor Len Brown is encouraging us to study Vancouver's experience of urban intensification, which is, he says, a model of "urban density done well".

One problem Mr Brown's Canadian showcase does share with Auckland, though, is the burning problem of housing affordability.

Reading the October 2012 report from the Vancouver Mayor's Task Force on Housing Affordability (Bold Ideas Towards an Affordable City), had me checking which city was involved, so similar was the scenario.

"Vancouver has the highest housing prices in Canada, and the vast majority of households ... have incomes well below those required to purchase even a modest condo. Nearly 40 per cent of Vancouver households spend more than 30 per cent of their income on housing ..."

It's not just the ailment either. The blame game has a very Auckland flavour.

From a survey of local residents, "the single biggest issue raised regarding affordable accommodation in Vancouver was the perceived negative influence of foreign investment driving up prices. Concerns were also expressed that developers prioritised profit in their provisions and have created a glut of condos and luxury housing when more modest housing was the priority."

All of which makes the solutions, arrived at by the task force of architects, builders, non-profit association representatives, apartment owners, developers and others involved in the housing sector, worth following up in the Auckland context.

One key point is that leaving it to the market to come up with a fair solution won't work. Agreeing that "lower development costs only translate into lower prices and rents when there is sufficient supply and competition in the marketplace," the authors admit that "reducing development costs will not necessarily translate directly into lower house prices and rents without specific mechanisms to ensure those savings are passed on to purchasers and renters".

In other words, it needs a carrot and stick approach by the city and Government, to encourage the building of affordable housing - both for rental and for sale. The report adds that increasing rental stock would achieve both immediate and long-term affordability. "Here, the city can take steps to lock in affordability for the long term, using both financial and regulatory tools."

It concludes the best opportunity to increase the supply of affordable housing is by creating new complete communities on large sites. This can be achieved by partnerships between the private sector, non-profit groups and the city. It says the city's existing requirement that developers set aside 20 per cent of land for affordable housing is dependent on senior government funding, "which often has not materialised."

The solution is that developers of new neighbourhoods be required to provide rental or affordable ownership units in a mix that better matches the broad needs of the community, particularly low and moderate income households.

It's hardly a revolutionary idea. This was exactly the plan for the model Hobsonville Point development until 2008, when new Prime Minister and local MP, John Key, killed off the state rental component as "economic vandalism." Mr Brown and his councillors had a perfect chance to reinstate affordable housing to the area last week, when considering the future of the failed, 20ha council-owned superyacht zone in the middle of the development. But they rejected councillor Cathy Casey's plea to abandon the superyacht dream and rezone the land for housing, instead delaying any change for at least three years.

The Vancouver task force says such city-owned land is just where affordable housing should be targeted. "The city's considerable land assets are a critical component in addressing the affordability challenge ... The city should lease land at a nominal fee to facilitate the creation of new social housing and new affordable rental housing. City-owned land should be brought forward to test the level of affordability that can be created by the non-profit and private sectors working together using City sites." Apart from the Hobsonville Point land, the wide expanses of city-owned Wynyard Quarter would seem an ideal site for such a trial on this side of the Pacific.

The task force calls on the city to be proactive, creating a city-owned housing entity "to facilitate development of social and affordable housing."

Vancouver also held an international contest, seeking creative solutions to providing affordable housing in a city with high -priced land. The winning entrants was "Thin Streets," a proposal to build homes down the middle of wide, but under-used, city streets. One has to concede that might be a step too far in liveable Auckland - especially if caraholic Maurice Williamson becomes mayor.