Af­ford­able homes slip away

Hamilton News - - NEWS - Tom Row­land

Hamil­ton City Coun­cil is be­ing forced to re­duce the sup­ply of af­ford­able homes to be built in Spe­cial Hous­ing Ar­eas (SHA), leav­ing pri­vate de­vel­op­ers with more power and cre­at­ing a tighter mar­ket for first-home buy­ers.

At an ex­tra­or­di­nary meet­ing on Tues­day, coun­cil­lors were told that four pro­posed SHAS, in­clud­ing more than 2000 homes in Ro­tokauri and Te Awa Lakes, were ex­pe­ri­enc­ing de­lays due to dif­fi­culty over pri­vate devel­oper agree­ments, and the Min­istry of Busi­ness, In­no­va­tion and Em­ploy­ment (MBIE) knock­ing back the city coun­cil’s af­ford­abil­ity cri­te­ria.

Coun­cil­lor Mark Bunting, who, be­fore Ki­wibuild was started, had asked for af­ford­able cri­te­ria to be added to SHAS, was con­cerned that leav­ing af­ford­abil­ity in the hands of de­vel­op­ers would mean they would go for the best pos­si­ble yield that they could on a hous­ing project.

“That is their job. It is like be­ing mad at scor­pi­ons be­cause they sting — that’s what they do,” Mr Bunting said.

In the spe­cial hous­ing agenda at Tues­day’s meet­ing, MBIE told the coun­cil it would be un­able to in­clude af­ford­abil­ity con­di­tions re­quir­ing homes to be sold to spe­cific buy­ers — in­clud­ing nei­ther the Govern­ment’s own Ki­wibuild scheme nor a trust that re­ceives gifted land as­sets from de­vel­op­ers — in the SHAS.

Orig­i­nally, the city coun­cil wanted 40 per cent of homes within a SHA to be af­ford­able — which was de­fined as homes priced un­der the Hamil­ton me­dian house price, to align with the Govern­ment’s Ki­wibuild scheme.

MBIE said that the cri­te­ria did not meet the stan­dard re­quired to con­tinue, and that it should ei­ther be re­moved al­to­gether, or be more spe­cific.

At the meet­ing the coun­cil unan­i­mously signed off an af­ford­abil­ity pol­icy say­ing “at least” 10 per cent of SHA homes must be must be sold at no more than 90 per cent of the av­er­age Hamil­ton house price, which would equate to a price of ap­prox­i­mately $500,000 at to­day’s prices.

“With the hous­ing mar­ket, the very premise of the SHA is flawed, that is to en­hance af­ford­abil­ity by pro­vid­ing more houses, now un­der nor­mal cir­cum­stances in your fifth form eco­nomic class that would be fine with the law of sup­ply and de­mand,” Mr Bunting said.

“This is the New Zealand hous­ing mar­ket how­ever, and that the­ory is flawed due to stronger mar­ket forces.”

Coun­cil­lor An­gela O’leary said the port­fo­lio of state hous­ing has been mis­man­aged, leav­ing coun­cil in this po­si­tion.

“This coun­cil has done ev­ery­thing pos­si­ble to try and ap­pease the leg­is­la­tion that has been forced upon us to try and get more homes built and more af­ford­able homes,” Ms O’leary said.

Coun­cil­lor Dave Macpher­son agreed both pre­vi­ous gov­ern­ments and coun­cils had put the city in more of a prob­lem, and that the price point was the best way to en­force af­ford­abil­ity cri­te­ria.

“It is much eas­ier for de­vel­op­ers, the pub­lic and for the coun­cil to un­der­stand,” Mr Macpher­son said.

“A $500,000 level may seem like a fairly ex­pen­sive start­ing level for some peo­ple, but it will free up other houses.”

Coun­cil­lor James Cas­son said the mar­ket was go­ing to drive the prices, and de­vel­op­ers would be go­ing for the best price.

“I haven’t got any con­fi­dence in what we are do­ing here be­cause I think you are go­ing to see a $500,000 box go for a lot more than that.

Mayor An­drew King said he was in sup­port of cen­tral Govern­ment’s ap­proach to hous­ing.

“This Govern­ment has a heart. They are try­ing to do what is right for hous­ing in what is a very com­plex mar­ket,” Mr King said.

This coun­cil has done ev­ery­thing pos­si­ble to try and ap­pease the leg­is­la­tion that has been forced upon us to try and get more homes built and more af­ford­able homes. Coun­cil­lor An­gela O’leary

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