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  • Bill to stimulate cheaper housing introduced

    Bill to stimulate cheaper housing introduced
    New 6:05PM Tuesday December 04, 2007

    The Government has introduced a bill to give local councils the power to ensure developers provide cheap housing in their developments.

    Housing Minister Maryan Street said The Affordable Housing: Enabling Territorial Authorities Bill aimed to stimulate provision of more affordable housing for first-home buyers and modest-income families in the rental market.

    It would give councils flexibility to promote a wider variety of house sizes, ownership models and costs and was based on schemes used in the United Kingdom and the United States.

    "It seeks to balance the need for continued housing development, with the need to address affordable housing issues. It provides developers with a consistent and predictable legislative framework, while still allowing scope for flexibility and negotiation," she said.

    Ms Street said that over the past 15 years, the size of new homes has increased by 50 per cent.

    Rising prices had seen the home ownership rate fall from 74 per cent to 67 per cent between 1991 and 2006. It that trend continued the rate would fall to about 62 per cent by 2016.

    The bill would:

    * prevent the use of title covenants which are used to exclude social or affordable housing from developments;

    * enable councils - after they proved affordable housing was needed - to require developers to either: include affordable housing in their developments, make payments towards the cost of providing affordable housing elsewhere, or provide land for the construction of affordable housing;

    * allow councils to offer incentives, such as waiving development contributions, or permitting greater densities, in order to build affordable housing;

    * allow councils to decide how to administer properties obtained for affordable housing through negotiations with developers. Options included retaining properties, vesting in a housing trust, entering into shared equity arrangements with first-homeowners, or selling properties on the open market with deed restrictions to ensure the housing remains affordable over the longer term.

    - NZPA

    http://www.nzherald.co.nz/section/3/...ectid=10480290
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    All this would do is lower the value to larger homes and lower the values of existing homes in the surrounding established neighborhoods. Dumb, dumb, dumb.

    Governments should never dictate cost or fix market prices -- at least not in a free market economy. But, then this is New Zealand!
    Last edited by exnzpat; 04-12-2007, 07:16 PM.
    Erewhon is still erehwon, I don’t see it changing anytime soon.

    http://exnzpat.blogspot.com/

    Comment


    • #3
      Affordable-housing bill 'perverse'
      5:00AM Wednesday December 05, 2007
      By Claire Trevett

      The bill could allow 1000 cheaper homes a year.

      The Property Council says the Government's solution to boost cheap houses for first-home buyers would push up the prices of other houses as developers try to offset cuts in their profits.

      Housing Minister Maryan Street introduced the bill, which would allow councils to require developers to include cheap housing in a project, or pay money or land to the council for use on affordable housing elsewhere.

      The Affordable Housing: Enabling Territorial Authorities Bill is aimed at areas where first-time home buyers were struggling, such as Auckland and Queenstown.

      It was estimated to result in about 1000 cheaper homes a year, which could be bought by or allocated to only first-time buyers on low to moderate incomes.

      Any house designated an affordable home under a plan must also remain "affordable", with measures taken to ensure it was on-sold either to others on low incomes or the council.

      Connal Townsend, the chief executive of the Property Council, said it meant other homebuyers would pay the price as developers put up the cost of mid- and upper-range homes to compensate for profits lost in developing the cheaper homes for first-time buyers.

      "If a developer was doing 12 houses and one had to be sold cheap, the developer will take a cut in profit. They will recoup that by increasing the price of the other houses so most houses will go up in price, and that is perverse."

      The bill provides for "incentives" to partially offset the cost to developers, which could include a waiver of development contributions, a rates rebate, or allowing more houses to be built on a property than would otherwise be permitted.

      Mr Townsend said the incentives were a good idea, but the bill did not address the main reason for the housing shortage in Auckland, which was the price and supply of land for housing.

      Auckland Mayor John Banks said he had not yet been briefed on the bill but although the council supported affordable housing, it was not a core job of the council to provide or subsidise it.

      "We are not in the business of taking instructions from the Government."

      Councillor Cathy Casey welcomed it, saying it was what the old city council had asked for and fitted well with the pilot shared-equity scheme run by Auckland City and the non-profit NZ Housing Foundation.

      Although Mr Banks had wanted the scheme ditched, Ms Casey said it was under contract signed before Mr Banks' election and would continue.

      Manukau Mayor Len Brown also welcomed the bill, saying up to 4000 new houses were built in Manukau every year and it would help ensure they catered for a wide range of people.

      But he was concerned councils would have to bear the costs of it, including making an initial assessment of housing needs, followed by public consultation and development of a plan, the costs of negotiation and "financial incentives" for developers, and monitoring and reviewing the policy.

      Ms Street said although many homes were built every year, very few were designed for first-time buyers or those on modest incomes. Home ownership was part of the national identity.

      "The Government has a responsibility to do what it can to maintain this tradition and to ensure an evenness of opportunity between generations."

      National housing spokesman Phil Heatley said housing affordability was a priority for National, but the bill did not solve the major problems of land supply, high mortgage interest rates, and compliance costs driving up building prices.

      "National is yet to decide whether to support the bill, but I'm convinced desperate young house hunters will be disappointed."

      * THE PROPOSAL

      Allows local councils in areas where there is a shortage of cheap housing to form an affordable housing plan, after public consultation.

      Homes built under an affordable housing plan can be sold or allocated only to people who meet certain criteria.

      These include earning a low to moderate income, owning no other properties, and being able to afford the housing costs as well as basic living costs.

      http://www.nzherald.co.nz/section/8/...ectid=10480369
      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

      Comment


      • #4
        what actually is 'affordable home'? Other than the obvious of being cheaper how do you make a home cheaper? Do you make it smaller or shonky, use cheaper materials, make it a little box?

        There seems to be an opportunity here - buy up the cheaper 'affordable" homes and do them up. After all the cost of the section is a very significant part of the total cost and that doesn't change even if it only has a tin shed on it.

        I just can't get my head around this!

        Comment


        • #5
          Cheaper doesn't have to mean crappy

          You make the house smaller, for starters. And you leave out the fancy stuff like cedar garage doors, verandas addressing the street, multi-level rooflines, feature landscaping, floor-to-soffit windows, feature chimneys etc. And, gosh, maybe you only have one bathroom.

          Earlier this year, we went looking at sections in new developments in Christchurch and were pretty stunned at the covenants. For example, one had a list of 10 expense-adding features from which you had to pick 4, and then a second list of 10 more and you had to pick 2, and the minimum house size on 601-700m2 was 185m2 (including garage), and they wouldn't let you use zincalume roofing.

          So if a young couple with one kid wanted, say, a fairly plain 120m2 house with a single garage, on about 650m2 of land, they weren't moving to that development.

          Comment


          • #6
            But of course the developer is still going to make the full margin and the house will be sold for its full market value. If the council waves their fees etc all it does is move the cost onto other home builders. No one wins out of this (apart for the developer who carrys on business as usual).

            Gerrard

            Comment


            • #7
              You make the house smaller, for starters. And you leave out the fancy stuff like cedar garage doors, verandas addressing the street, multi-level rooflines, feature landscaping, floor-to-soffit windows, feature chimneys etc. And, gosh, maybe you only have one bathroom.
              Oh, you mean like the Hardi-Plank boxes that sell for $300,000+ in Glen Eden now. Sooooo affordable!

              For a good explanation of why housing is 'unaffordable', I recommend the articles pointed to by this post:

              http://www.propertytalk.com/forum/sh...62&postcount=3
              DFTBA

              Comment


              • #8
                So much for the free market economy.

                Where is it written that firsthome owners have "the right"to be able to afford to live in new subdivisions of quality homes. What happened to the kiwi way of working your way up the ladder.

                This is absolute nonsense.
                We are now more socialist than Russia.

                Comment


                • #9
                  Won't work, just make it more expensive for developers. Which will flow-on into the existing housing stock. Best thing is for the gummint to stay well away.

                  Comment


                  • #10
                    You must build them greener and have the paper work to prove it, you must build them stronger and have to personally guarantee it for the rest of your life, you must spend four times longer on all the Bull**** paper work, you must build them safer and if you cut your finger quess what? MORE PAPER WORK!!!!! Oh and by the way can you make them affordable too. Developers will simply not build if they can't make money.

                    Comment


                    • #11
                      More houses needed to make property affordable - developer

                      More houses needed to make property affordable - developer
                      1:20PM Thursday December 06, 2007

                      A property developer says the housing affordability crisis in New Zealand could be solved by building a large number of high-quality houses.

                      The Wellington Company managing director Ian Cassels told Parliament's commerce select committee inquiry into housing affordability today that house prices were far too high and it was "intolerable".

                      "New Zealand appears to me to be rapidly turning into an old man's club, each of us clutching our recently arrived private capital gains as the youth slowly gets burnt off the back of the property train."

                      He said New Zealand needed "repetition", which meant building a lot of houses that were high quality - had good insulation and were built with permanent material.

                      Mr Cassels said this could keep the price of houses down.

                      He said New Zealanders did not have a long term view of houses, which meant there were not enough high-quality houses - " we are still scared someone might come along and turn the lights off".

                      He said someone needed to produce up to 5000-10,000 houses fairly quickly - with support from national and local government, so that fees did not exist and the process was simple.

                      Mr Cassels said in some cases the land would be leased on "reasonably favourable rates".

                      He said his company was looking at building two-bedroom houses with a "floating room" - a study, or a spare room for grandma.

                      He said they would not all be in one neighbourhood but spread out in groups of 10.

                      Mr Cassels said the objection could be that they would all look the same, but he said "people loved their Volkswagens and Morris Minors".

                      "If a first house was high quality and recognised as a 'classic' - if it was warm, cheap to run and close to the city - wouldn't we have succeeded?"

                      The committee also heard from Grant Morris, a senior law lecturer at Victoria University.

                      He said the problem was a "generational issue".

                      Dr Morris said people under 35, who were most affected by the housing crisis, did not have an active voice in the issue.

                      When the select committee has completed its inquiry findings it will present a report to Parliament.

                      This week the Government introduced a bill to give local councils the power to ensure developers provided cheap housing in their developments.

                      - NZPA

                      http://www.nzherald.co.nz/section/1/...ectid=10480772
                      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

                      Comment


                      • #12
                        He said someone needed to produce up to 5000-10,000 houses fairly quickly - with support from national and local government, so that fees did not exist and the process was simple.
                        There is no quick fix but I think this would work in the mid to long term combined with a tighter credit market and lower net migration. In five yeas time things would have balanced out. And I mean just the above quote not all the other bull$%*& the bill has mentioned. In a market economy the producer of the item or goods needs to freely supply the market with a quality product in a competitive environment. We don't have a free market in New Zealand. It's mixed economy at best.

                        We have:

                        -A government buying it's own housing stock at healthy purchase prices.

                        -The resource management act..... say no more.

                        -Socialist minded local body councils that think all developers are evil capitalists.

                        -An uncompetitive property development market.

                        -Highly taxed upper income brackets putting money into housing for tax reasons.

                        -Babyboomers investing for retirement.

                        Combine all the above with easy credit, above average net migration and a tight labor market then the problem is amplified.

                        Low net migrating and tighter credit has helped slow the market down. The tight labor pool is a real problem causing inflation in wages, especially tradesmen.
                        No price is too high to pay for the privilege of owning yourself. - Friedrich Nietzsche

                        Comment


                        • #13
                          Originally posted by One View Post
                          You make the house smaller, for starters. And you leave out the fancy stuff like cedar garage doors, verandas addressing the street, multi-level rooflines, feature landscaping, floor-to-soffit windows, feature chimneys etc. And, gosh, maybe you only have one bathroom.

                          Earlier this year, we went looking at sections in new developments in Christchurch and were pretty stunned at the covenants. For example, one had a list of 10 expense-adding features from which you had to pick 4, and then a second list of 10 more and you had to pick 2, and the minimum house size on 601-700m2 was 185m2 (including garage), and they wouldn't let you use zincalume roofing.

                          So if a young couple with one kid wanted, say, a fairly plain 120m2 house with a single garage, on about 650m2 of land, they weren't moving to that development.
                          Make them smaller - fine
                          Put them on a 650m2 section - generally they are this size or smaller now and still cost $200k in Hamilton.
                          To maximise the investment you can't afford to spend $150k on a house and add $200k for a section then try to sell for $350k+ (and that would be no profit.
                          Not that many years ago (~3-4) I purchased a 750m2 section for $80k - now it is $220k so the house is worth $150k more straight off.

                          Supply me with cheaper sections and I would build cheaper houses.

                          Comment


                          • #14
                            I agree with the Wellington Company director. The State houses built in the 1930s, and 40s are highly regarded by builders today for their excellent workmanship and low upkeep. Their main downside is a lack of insulation.

                            A small simple design with excellent insulation and quality materials that builders can crank out at high speed can make a national asset. In 70 years these little 'VeeDubs' will be collectors items.

                            Comment


                            • #15
                              Originally posted by manic_mansions View Post
                              I agree with the Wellington Company director. The State houses built in the 1930s, and 40s are highly regarded by builders today for their excellent workmanship and low upkeep. Their main downside is a lack of insulation.

                              A small simple design with excellent insulation and quality materials that builders can crank out at high speed can make a national asset. In 70 years these little 'VeeDubs' will be collectors items.
                              The problem appears to be the quality materials - the old state houses were actually constructed of WOOD or brick and wood! We have 2 ex-states on of each - and the builders just LOVE working on them - you take out several walls and the place doesnt fall apart.
                              When we get back to NZ we would like a fairy new townhouse or similar on a small section - I doubt that we will be able to find it though - because I dont want 2 bathrooms a separate laundry and 3 beds !
                              Lis:

                              Helping NZ authors get their books published

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