Matthew Bai & Malcolm McCracken
On Monday the first houses of the Kiwibuild programme were unveiled in Papakura, with families who purchased these ‘affordable’ homes set to move in before Christmas. The first 18 houses feature a mix of 12 three-bedroom homes priced at $579,000 and six four-bedroom homes priced at $649,000. The remaining 12 Kiwibuild houses in the development will be finished by the end of 2018. The houses are all single level homes on smaller sections. While the density is greater than historical developments, we question whether these first houses are aligned with the vision of Kiwibuild, or whether they serve the more strategic purpose of demonstrating progress.
The first 18 houses completed are part of the McLennan Development in Papakura, which was originally a Housing New Zealand led project. This fits under the section of the Kiwibuild Work Programme of identifying and leveraging opportunities to deliver KiwiBuild homes through existing Government-led housing initiatives, as shown below. Essentially the homes were likely to be built eventually but were fast-tracked through the Kiwibuild Programme.
Although these houses are affordable, they are inconsistent with certain targets of the programme which intends to focus development of higher density typologies including terraced houses and apartment buildings. These should ideally be located within close proximity to the Rapid Transit Network (RTN). Such a model is known as Transit Oriented Development or TOD. While major developments like the UNITEC site in Mt Albert are in line with this vision, these first 18 homes fail to conform to the model. Liberation Road is a 12 minute walk from the nearest bus stop and more than 30 minutes to either Takanini or Papakura Train Stations. In the future, bus routes will likely get closer as the area to the west of the Papakura Military Base is developed. The NZTA and Auckland Transport have identified the reconstruction of Tironui Train Station as a future project to support the development of the Walters Road area. It would be a 12 minute walk from these Kiwibuild homes, improving accessibility. However, without specific timeframes provided, there could be a significant lag time between the completion of the homes and the opening of the station.
The prices for Kiwibuild homes in the Auckland region has been set to $500K for one bedroom units, $600K for two bedroom units, and $650K for three bedroom units. At a price of $579K for three bedroom homes, the first 12 Kiwibuild properties come in at well under the price cap. This is positive for first home buyers who might not otherwise have been able to afford a home under normal market conditions. However, the political interests associated with the first batch of homes should be noted. As the Government is under pressure to deliver tangible results, we do not see the $579K price tag as being representative of future pricing, and we expect future developments to fall closer in line with the indicative pricing scheme.
Additionally, the Government has shown a willingness to adapt pricing to suit market realities, as has been the case recently with Queenstown’s affordable homes. Due to cost increases, price caps have been increased to $650K from a previous $550K.
It would not be unprecedented to see a further increase above $650K due to construction cost escalations in the Auckland Region.
In terms of land use, the goal of Kiwibuild has been to deliver well designed, efficient and transit oriented developments that reduce the need for long commute times. In Auckland, the Council has developed Auckland Unitary Plan, which zoned the McLennan Subdivision as Mixed Housing Urban. This is a medium- high intensity zone, allowing buildings up to 11 meters tall and 45% site coverage. The zoning regulations do not stipulate typology, meaning attached dwellings, and even low rise apartment buildings fall within allowable activities.
Examples of MHU provisions being fully utilized include 8 Gray Avenue in Mangere East (43 sqm land/unit density), and 4 Koa Street in Meadowbank (45 sqm land/unit density). Both designs result in high quality and efficient land uses, consistent with the objectives of MHU.
This development does not fully utilize the provisions of MHU, as it consists of single level, detached dwellings. While such typologies might be typical of the Single House Zone, higher levels of density can be expected in MHU. Underutilization of land is problematic as it increases the need to release additional greenfields areas. This contributes to increased travel distances, urban sprawl, and environmental degradation, among other issues. It should be noted, that this development may have been consented prior to the introduction of Auckland Unitary Plan in late 2016. In such an event, the land may have simply been arbitrarily zoned as MHU without much consideration for outstanding Resource Consents. The fast tracking of the Liberation Road houses has meant they don’t fully utilize the zoning. Meanwhile Minister Twyford is proposing an Urban Development Agency (UDA), to allow increased density in areas along transit routes. The first Kiwibuild homes go completely against the this of the model.
The newly announced Urban Development Authority (UDA) is set to override Auckland’s Unitary Plan in 12-15 selected areas. Such a move will shift planning and consenting powers directly to the control of Central Government, who are also undertaking Kiwibuild. While specific details have yet to be announced, we expect there to be a high degree of overlap between the activities of the UDA and Kiwibuild. A mutually beneficial arrangement would involve the UDA pushing through consenting on behalf of Kiwibuild development partners, resulting in faster turnaround times and possibly higher utilization of strategic sites. A potential downside towards such an alliance could be reduced opportunities for notification or public participation in decision making.
It is positive to see the first steps being taken to address a long standing and structural issue in New Zealand’s supply of housing. Kiwibuild shows the potential to fast track housing through underwriting the costs of other Government led housing projects, in addition to helping private development partners secure financing for their projects. Although this development does not align with urban planning best practice, we are hopeful that future Kiwibuild projects will.