Oscar Davie
Context:
Although the Capital’s housing shortage is no secret, some would argue the issue is overshadowed by Auckland’s well-established housing crisis. This article explores the current status of Wellington’s shortage, including recent developments over the past month that caused controversy amongst senior council officials. Wellington’s average housing price increased 1.7% in August to $639,533. With population growth substantially lower than Auckland, a lack of supply was blamed for this continuous price climb. New listings in Wellington dropped 7.9% in comparison with last August. Despite these unquestionable statistics, the Wellington City Council voted this month not to extend provision of Special Housing Areas to September 2019. In doing so, a variety of justifications were given. In supporting the purpose of this blog, we’ve aimed to present the facts without any bias but would love to engage with you through a hearty debate in the comment box.
The Decision:
A majority vote of 7-8 determined the discontinuation of Wellington’s eight special housing areas, leaving only the Arlington apartments in Mt Cook. Amongst those voting for continuation were Mayor Justin Lester – former director of the Property and Asset Management division at an international property firm Jones Lang LaSalle. It should be noted council planning staff also recommended the extension of SHAs through to 2019. Vote participants and their positions are detailed below.
Justifications for the discontinuation were broad, ranging from the disputed effectiveness of SHAs to the alleged need for other supply-side tactics for housing provision.
These justifications were met with both support and discontent, while some believed SHAs were yet to be proven effective, others argued these senior members were detached from affordability issues faced by financially stressed younger demographics.
Social Housing Boost:
Despite the discontinuation of SHAs in the region, Wellington is set for an increase in social housing provision. This follows an announcement by Housing and Urban Development Minister Phil Twyford that 6400 public houses would be ready for occupants by June 2022. This move attempts to alleviate the “severe shortage” declared by Stephanie McIntyre – the Wellington Downtown Community Ministry director. McIntyre cited unreasonably long wait periods for social housing and the region’s growing homelessness issue as direct consequences of this shortage.
Shown above is the recently upgraded Newtown Park Flats Complex – arguably Wellington’s most well-known cluster of social housing. The region’s social housing portfolio, particularly in central Wellington, is almost all high-density.
Where To From Here?
SHAs quickly became a contentious issue in the realm of providing affordable housing. Under the SHA housing accord, 10% of new developments had to be sold as affordable housing. Auckland councillor Chris Darby told Newsroom that Auckland’s SHAs, prior to replacement under the Unitary Plan, had failed to increase supply. This component was deemed too small by many and is often blamed for the perceived failure of SHAs. While the majority of Wellington’s councillors voted for discontinuation, Mayor Justin Lester voted in their favour on the basis that they’re a good “interim step” for housing affordability. Regardless of differing opinions, SHAs are effectively finished in Wellington.
KiwiBuild is gaining momentum in the region. A recent Stuff article this month discussed how the council is poised to sign a deal with Housing New Zealand (HNZ) that could see 300 additional dwellings (including KiwiBuild) in the council-owned Arlington site. The site accounts for 12% of the council’s entire housing portfolio. An eco-city in the northern suburb of Grenada has also been proposed by the council as part of a ‘civic wishlist’ to the government. This summarised housing proposals and requested KiwiBuild funding in achieving them. However, the proposed Petone-Grenada highway was a selling point for the eco-city. The highway would bypass the congested Ngauranga Gorge arterial but has since been de-prioritised in the government’s National Land Transport Plan which hinders the ‘eco city’ project and its viability.
The proposed highway is depicted below. The interchange with SH2 at Petone is shown. The NZTA website elaborates on this arterial project in greater detail.
It’s probable HNZ will take over developing Arlington sites one and three (shown in the aerial below).
Are you interested in housing affordability in the Wellington region? We’d love to hear your take on this problem in the comment box below this article. Conversely, if you want to understand the KiwiBuild vision to a greater extent we’d invite you to refer back to our article earlier this month and its specific focus on the scheme.