Jackson exposes property industry cynicism
The stoush between the Wellington mayor and a movie industrialist (NZ Herald, April 21) encapsulates what is wrong with the property industry. In response to Sir Peter Jackson’s criticism of the style, taste and transparency of a proposed development on a former seaplane air force base, the mayor’s defence seemed to be only that there was a housing crisis.
The mayor’s “something has to be done” spin can equally apply to Auckland. In the past 20 years, while Jackson built a success-driven sustainable industry with an acute attention to detail, the property industry has under-delivered and over-charged, often relying on kneejerk hysteria and dirty deals to flick off cheap and nasty buildings.
In the 90s, Wellington Council tried to “open up” the waterfront by proposing a wall of apartments blocking views to it. Several new buildings on reclaimed land then suffered severe earthquake damage.
In the haste to approve new building methods, the leaky home debacle emerged. Ratepayers are still sharing the cost of liability. The cost of building compliance has since soared.
A perfect storm found its energy in the late 90s. Property was perceived differently. Many “mum and dad” investors, disillusioned with shares following the 1987 crash, Asian financial crisis, and the dotcom bubble, realised their holiday homes were worth big bucks. Baby boomers planning for their retirement invested in “bricks and mortar”.
The ideology of local and central government didn’t help. Why build a stadium for 50,000 when you can build one half the size and charge twice the price for tickets? Why build infrastructure or state houses when you can sell them off and then rent them back at inflated prices?
Following the America’s Cup-victory hysteria, surplus military land was flicked off to build “super-yacht job factories”, which only turned out to be property developments in disguise. Developers bought farms on the urban fringe and then “lobbied” for the council to rezone.
An increasing proportion of housing became investment property and, for whatever reason, unoccupied. Housing supply couldn’t keep up with demand and our housing market caught the eye of foreigners.
Auctions became a cat-and-mouse game between first-home buyers and investors. Unless baby boomers chipped in to help their kids, first-home owners didn’t seem to stand a chance of getting on the property ladder.
The media coverage fuelled the storm. TV hosts asked real estate agents disguised as “property experts” live on air whether “now is a good time to buy”. Home improvement shows saturated our screens.
Now, developers’ inconsiderate, distasteful and intensified proposals are rubber-stamped by council planners. Neighbours aren’t notified of potential nuisance. Politicians bleat about the need for housing at, apparently, any cost.
The more complicated a district plan, the more spent on planners and landscape architects, the costlier a consenting process, the more intense and distasteful a development can become.
Alternatively, some developers go allin with master-planned, highly intensive projects, relying on the reputations of architects and brands to get through the consenting gauntlet. The consenting process, however, often fails to take into account that an architect’s designs lack “amenity”, are “post-Soviet”, or just plain ugly.
Many should now question where the value lies in their home. Strip away the costs of council compliance, the design costs, the freight, the inflated cost of materials, the scaffolding and temporary fencing, the cost overruns of construction, the financial contributions the developer paid to the council, and the added luxuries to the house that don’t add any value. How much is your home really worth?
Is its value derived primarily because it is a house? Is it the land? What about when the new developments are completed nearby? What about when there is a downturn? Will the property be worth less than the mortgage?
The proposed development at Shelly Bay in Wellington is a former air force base, much like the former Hobsonville air force base that was sold to super-yacht builders/developers 20 years ago. Can you see Jackson’s point? Does Wellington want its own version of Hobsonville Point for the sake of fulfilling some contrived need?