Affordable housing enriches rather than devalues
Homeowners have long been prone to the suspicion that cheaper housing drags down the value of neighbouring properties.
But that’s not necessarily true, according to one study done in Queenstown, which is short of both affordable housing and rentals.
In a study commissioned by Community Housing Aotearoa, Sense Partners economist Shamubeel Eaqub found that affordable houses within ‘‘inclusionary’’ housing projects did not affect the values of other houses within a 150-metre radius.
And since many of the houses were owned by a community trust, they did not run the danger of being on-sold at a much higher price.
Eaqub’s study was specific to Queenstown, but he said the concept of ‘‘inclusionary zoning’’ – mixed housing developments with a small portion of cheaper housing – was taking off internationally.
‘‘It’s only a few properties within quite a few properties, so you’re not getting the kind of concentration that we might have seen with the other developments.’’
However, he stressed that the affordable housing he was talking about was new, and not like the state houses of old.
Nor was it a solution to the wider problem of falling home ownership.
‘‘It can only be a very marginal solution. But the reason why they use it internationally is because they know it’s very difficult to provide new housing stock for people at the bottom end of the income spectrum.
‘‘It is literally a very small step in the right direction. But you still have to do all the other things with social housing and community housing, that’s where the big gains are to be made.’’
One of the aspects Eaqub said he liked about ‘‘inclusionary zoning’’ over big swathes of social housing was that it provided ‘‘just a little bit of diversity in our communities which has been disappearing over time’’.
‘‘We’re building these cookiecutter, all the same kind of houses, and clustering like for like, and there is a problem with that where we’re not mixing with other people and we can’t see that our neighbours may be different to us.’’
Inclusionary housing can be found in Auckland and other centres through special housing areas (SHAs) and was pioneered at Hobsonville Point.
Developers of SHAs have to provide at least 10 per cent affordable housing and meet strict criteria when it comes to prices and the percentage of household income for servicing a mortgage.
Chris Aiken, chief executive of Hobsonville Land Company, said that when the 5000 homes planned at Hobsonville were completed, about 25 per cent would have affordability criteria attached to them.
But his company had taken the concept of a mixed community further, designing housing for different ages and life stages.
Overseas, inclusionary zones have sometimes encompassed social housing but Hobsonville does not because it was felt Housing New Zealand was doing that job ‘‘and in a very coherent manner’’.
Aiken said Hobsonville had gone on to become a high-value area, with house prices ranging from $1 million to $450,000-$550,000.
Through innovative land use, smaller houses and good design, he believed he could safely say inclusionary zoning had worked.
‘‘Why it doesn’t bring down the value of the whole site is you masterplan your developments and you apply design guidelines.’’
Auckland valuer Chris Seagar said affordable housing within SHAs appeared to have been well integrated into the wider development.
Buyers of affordable houses in these developments generally met a tight criteria and were usually able to cope with the financial commitment.
However, Roger Gordon, president of the New Zealand Institute of Valuers, said that broad-brush assumptions about house prices were extremely difficult to make.
‘‘The only way to get a reliable answer, would be to get a registered valuer to do an on-site visit to each property, and they would need to consider factors that are too numerous to briefly cover or list.
‘‘We haven’t conducted any research on this subject, and anecdotally I’d have to say it is very much a case-by-case basis because every location and property is different.’’