District council determined to end affordability crisis

Three years ago the Queenstown Lakes District Council entered into an agreement with the Government allowing special housing areas (SHAs) when the median house price reached $664,000. Seven approved SHAs and almost 1750 consented homes later, the district

HISTORICALLY, there’s been a mindset in the Queenstown Lakes District that dealing with the area’s issues around housing affordability is not the council’s business.

That mindset is no more. Because, as Mayor Jim Boult says: ‘‘If we don’t fix it, who the hell is going to fix it?

‘‘If we don’t solve it, I think we’re going to destroy the heart of our community.’’

Housing Taskforce chairman John MacDonald agrees.

He believes anything which affects the community is, by default, the council’s business — and finding a way to help is now a behemoth task.

‘‘It’s safe to say we’ve probably fluffed around it way too long and relying on, or waiting for the market to solve the problem is not going to solve the problem . . . I think that’s loud and clear.

‘‘And it’s pretty reasonable to expect that property prices here, longterm, are just going to keep on escalating.

‘‘If they’re way outside the realms of possibility for most of the people we want to come and live and work here and be part of the community now, that just is going to get worse, it’s not going to get better.’’

Mr Boult announced the formation of the housing taskforce in April — a 20strong group of, collectively, some of the best and brightest in New Zealand, with a wide range of expertise.

It became clear to him during last year’s election campaign that housing affordability was the single biggest issue the district faced.

By that time the council’s accord with the Government, under which Special Housing Areas are being delivered, was entering its third year.

The SHA process, he said, was a ‘‘good one’’ — but far from perfect.

‘‘If you take the Bridesdale Farm example, yes, it created a whole lot of affordable sections, but unfortunately . . . a lot of them were bought by people who simply speculated, sold them on and, for a start, people were getting $100,000 more than they [paid] for sections.’’

In other areas, for example Shotover Country, ‘‘one of the most affordable parts of town’’ a person could buy a section for $350,000 and spend the same amount building a house on it.

‘‘[It’s a] $700,000 package, put it on the market tomorrow and you’re probably going to get $800,000 or $900,000.

‘‘I think the other thing that needs to be borne in mind here, is that while people have managed to get themselves into houses, they are putting themselves under enormous financial strain.’’

Housing Minister Nick Smith told Otago Daily Times sister paper Mountain Scene in July it might take another three or four years for SHAs to have the desired effect — that is, help satisfy the demand enough to lower house prices.

But, in a district where the average home now costs $1 million, how much worse can it get before it gets better — and what will the community look like by the time it does?

Mr Boult: ‘‘You make the exact point that worries me.

‘‘We’re not going to fix this problem overnight, but look, if we don’t push the boat out, we’ll never get to the other side.

‘‘It will get worse, but if we know we’ve got a fix in mind, we’ve just got to be singleminded and get it happening as fast as we can.’’

And, on the eve of releasing the taksforce’s report, both he and Mr MacDonald believe they have found ways to make a positive difference.

Progressing the proposals is now a matter of ‘‘supreme urgency’’, Mr Boult said.

‘‘I’m very confident there are a couple of things in there that will make a significant difference.

‘‘Particularly the idea of separating the land from the house — it’s a different mindset about understanding a house is a place to live, it’s not your retirement fund.’’

Mr MacDonald said there would also be a strong message in the report for the council.

A review of councilowned land would, he said, be done by the council — those areas deemed ‘‘surplus’’ would be discussed with the Queenstown Lakes Community Housing Trust.

‘‘I can tell you now that the taskforce has said in its report that council needs to look at behaving the same way it expects other people to behave around this,’’ Mr MacDonald said.

‘‘We’ve got a couple of ideas there, and one, some might say, may potentially even spur the market on — by enabling more people to get in, does it just drive the market?

‘‘But, equally, we’ve been incredibly wary we don’t want to do anything that tips the real estate market up, or into a nosedive, because there are hundreds of very indebted families in the district who can’t afford to lose their equity.’’

He agrees any fix requires a longterm commitment, from this council and all elected representatives in the future.

‘‘I just think we have to build a community asset here and the markets go up and down, we all know that, and when there’s a correction, if there is . . . we just need to stay on our plan and keep on going.

‘‘If the people we need to be the workforce — the people who make the town what it is and the people who make the community — if they can’t afford to be here, we actually have a massive problem.

‘‘The greatest risk is we lose a balanced community.

‘‘It’s no good if we just become like the Aspens of the world where the megarich hang out.’’

The taskforce report is expected to be released on Friday and will be presented to the Queenstown Lakes District Council at its full meeting in Queenstown on October 26.

We’re not going to fix this problem overnight, but look, if we don’t push the boat out, we’ll never get to the

other side.