Downsizers in covenant bind
Land development rules are forcing people to build bigger homes than they need.
"We don't really have an affordable building crisis – we have an affordable land crisis."
Mike Fox, builder
Acouple wanting to downsize have found out just how hard it is to build a home for two. Alastair and Sharyn Kerr are nearing retirement and thought it was a time to get rid of their five-bedroom home of 15 years near Hamilton’s Lake Rotoroa. They looked at buying a section in a Glenview subdivision in order to start afresh.
The Kerrs want to build a threebedroom home that is small enough for them and visiting grandchildren, close to work and with space in the backyard for the garden.
But the brakes have been applied by land development rules – covenants – which set out what they can and can’t do with most sections available to buy.
Covenants detail the minimum floor area, type of cladding, roof design and even that grass should not grow long and unsightly.
‘‘It’s like me saying, ‘I’m getting older and I want a Toyota Corolla to do my shopping,’’’ Sharyn said.
‘‘And they are saying, ‘Sorry, you’ve got to have a Ford Transit van because that’s all you’re allowed.’’’
Covenants have long been a headache for people wanting to build. They are devised by the developers or between neighbours and registered on the land title.
Sharyn flips through a pile of house designs. A new four-bedroom house is not allowed in the Glenview subdivision because of its simple rectangular shape. Another fourbedroom, two bathroom, 160-squaremetre home is not big enough.
Developers say covenants maintain a high standard of work on their projects and the long-term value of a home. But a Wellington builder of 35 years, Mike Fox, said covenants are used to drive up sale prices.
‘‘They are often used by developers to make clients build bigger and brighter than they really want,’’ Fox said. ‘‘That’s to drive the value of the land up to the next stage.’’
Covenants are only a part of the problem. New Zealand has a growing population, a trades shortage, and a ‘‘confused regulatory system’’ that dripfeeds land, mostly to the high end of the market, Fox said. Low-deposit bank loans for new builds exacerbate the land shortage problem.
‘‘We’re forced into building on expensive land because of all of the council fees, regulations and all the rest of it. It costs a lot of money to produce land [to build on], so we don’t really have an affordable building crisis – we have an affordable land crisis.’’
But there is light at the end of the tunnel. Developers are recognising the market shift to smaller, more affordable homes.
The Cambridge Oaks development at Cambridge, to open on November 25, will see 205 new houses built for emptynesters who want to downsize.
Cambridge Oaks developer Freedom Lifestyle Villages marketing manager Paul Slatin said more than a million people in New Zealand will be 65 or older in the next 30 years and they’ll live longer than ever.
‘‘New Zealand has an aging population, with the tail end of our baby boomer bubble all over 50 and nearing our current retirement age. Not everyone will have the capital available to maintain their house and enjoy a decent lifestyle into their senior years, so the demand for affordable housing for this segment will continue to rise,’’ he said.
That will free up family homes for the next generation.
‘‘We have a strong ethical drive to provide affordable housing. But lifestyle villages like Cambridge Oaks require significant space that isn’t always available within city boundaries and certainly those urban land values affect the affordability quotient for residents.’’
Development manager at Hamilton’s Greenhill Estate Tony McLauchlan said covenants are a blunt tool and some developers are moving towards design guidelines instead.
He said it pays to talk to the developer to see if there is any wriggle room in the contract.