The results for the first full year of the Housing Accord between the government and Auckland Council have just been released.
It’s a politically charged topic – witness the government talking it up (“First year Auckland Housing Accord target exceeded“), and Phil Twyford from Labour rather unfairly talking it down (“Fourth housing report confirms failure“).
The Housing Accord is ultimately about increasing the number of new homes being built in Auckland. It’s open to debate how much success it’s had in its first year, but it’s also laid the groundwork for future growth.
The story so far – by the numbers
Overall, “11,060 new sections and dwellings have been achieved in the first year – more than 20 per cent above the target of 9000”. That’s perhaps a little exaggerated, as we’re actually talking about consents or approvals for those new sections and dwellings – they haven’t necessarily been built. And, as I’ve pointed out previously, the target is actually lower than the 9,975 sections and dwellings achieved in the year before the Accord came into effect.
Still, 11,060 sections and dwellings is a lift. It’s not enough of a lift (the targets for year 2 and 3 are 13,000 and 17,000 respectively, so lifting by 4,000 a year), and there’s probably some double counting compared to the previous year,* but it’s a start.
A lot of the attention has focused on Special Housing Areas, but these haven’t really translated into consents yet. That will take a bit longer, partly because it hasn’t been long since most of them were approved, and partly because they often have to go through an extra stage – getting rezoned via a plan change, before they can be subdivided. I imagine they’ll make a much bigger difference to the numbers in year two.
Behind the rhetoric, what we’re actually left with is an increase in planned construction activity (subdivision consents to create new sections, and building consents to create new homes), much of which is simply due to a recovering construction sector. And we’re still not building enough homes, especially with migration running at record levels.
I’ve shown the number of annualised building consents in Auckland below – note the very low figures in 2009-2011, and the upturn which has been underway since then.
The story so far – making the process easier
That’s not to say the Accord has been a failure. The remarks I’ve heard from people across the property industry have been quite positive. I went to the Property Council’s Residential Development Summit last month, and the Accord was given a thumbs up by a range of people. Developers are keen on the “one stop shop” where stakeholders such as Auckland Transport, NZTA, Watercare and the council consents team are all available to talk through the issues, and the consent process has been streamlined. Perhaps these are things that the council should have gotten going itself anyway, but maybe it needed a nudge from the government.
Planning applications are made under the Proposed Unitary Plan rules, and that was only possible with a law change from government. We’ve been a bit annoyed about the relative lack of “intensification” Special Housing Areas, compared to the “greenfields” ones. However, the council did say in its Auckland Plan that it wanted to have a ready supply of land for housing, and the SHAs are needed to create that supply. Besides, the Unitary Plan rules often aren’t much better than the existing rules when you’re trying to create apartments than terraces – which we’ve also criticised – so many developers wouldn’t bother.
The next step
It’s going to be tricky to ramp up construction fast enough to meet the Accord’s year 2 and 3 goals, and to actually convert the consents into built homes. An article last month suggested that building consents are unlikely to come close to the targets, based on forecasting work done for the MBIE, and that the targets might be revised downwards.
* More on the double counting, since I haven’t seen this discussed elsewhere. Within the year, the report doesn’t double count, so a piece of land gets counted when it is given subdivision consent but isn’t counted again when it’s given building consent. However, some of the building consents granted in this last year will have been given subdivision consent the year before the accord, so it’s not possible to compare the 9,975 to the 11,060.
The MBIE will address this for years 2 and 3, i.e. they won’t double count between the years of the accord.
Looking at just building consents, though, it is possible to compare the numbers over time. Those consents have risen 30% in the last year, which is pretty substantial – from 5,648 to 7,366.