Auckland Council rejects Affordable Housing provisions in Unitary Plan

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The debate on Auckland’s Unitary Plan is now under way.  Much of the Unitary Plan recommendations are being accepted by the Council without dissent but there are some controversial proposals.

One of them involved a rear guard action by the Mayor and progressive Councillors to retain provisions relating to affordable housing.  The original notified plan included proposals to require all residential developments of more than 15 dwellings to include provision for “retained affordable housing” of at least 10 per cent of the units.  Qualifying units were dwellings to be sold or rented at a rate such that households on 80 to 120 per cent of the median household income for Auckland would spend no more than 30 per cent of their gross income on rent or mortgage repayments.

There were to be controls on future transfers of these dwellings and purchasers or tenants would be required to demonstrate their eligibility to meet the affordability requirements.

During the hearing Council modified its position to a mixed mandatory / bonus-based approach. Future plan changes (such as rezoning future urban land to a live urban zoning) were to incorporate a mandatory requirement of 10% of dwellings to be affordable. For development of already zoned land a selected range of bonuses were identified, mostly relating to additional height. Affordable housing was required to be provided if those bonuses were taken up.

The income-related housing was to have a retention mechanism to control future sale prices. This could include purchase of the dwelling by a Community Housing Provider. Certain types of residential developments, including social housing and retirement villages, were to be exempt from the requirement.

At first blush the proposals appear to be radical but when you consider that a sophisticated economy such as Germany has a form of regulated rent and house price control they are not unique.

And Special Housing Areas have a similar requirement to that which was proposed.  You would think that they ought to see how this provision is working out before removing the requirement.

The Panel recommended removal of these provisions on the basis that the market should rule.  It thought these  provisions would be likely to “reduce the efficiency of the housing market due to effectively being a tax on the supply of dwellings and be redistributional in their effect, and that this is not an appropriate method under the RMA.”

The rationale sums up neoliberalism well.  The neoliberal view is that Public authorities should never do anything about anything because the market will adjust and negate the effect of the intervention.

Auckland Council Staff agreed with the Panel’s recommendations and its rationale.  They thought that the Panel’s recommended zoning would enable a significant uplift in potential capacity and an increase in housing types.  They believed that this has the potential to make a far greater difference to the supply of more affordable dwellings that the Retained Affordable housing provisions.

I disagree with the rationale.  The problem is that acute that all techniques should be tried rather than relying on only what is perceived to be the most efficient.  And besides the effect of increased density may not be felt for years whereas the houses are needed now.

The debate and vote on the issue is described by the Herald in these terms:

Auckland Mayor Len Brown has gone down “fighting like a shark” to keep provisions for affordable housing in the new blueprint for Auckland.

In an emotional plea yesterday, Brown urged colleagues to reinstate an originally proposed requirement for 10 per cent of homes in developments of more than 15 new dwellings to be affordable.

“Aucklanders are looking at us to make one or two clear directions here in the limited way we can,” the mayor said.

But like many provisions in the blueprint, or Unitary Plan, councillors were divided on the issue. Brown’s deputy, Penny Hulse, choked on her words at one point.

“To have to vote on something I fundamentally believe in … that can be construed as not supporting affordability in this city is the hardest thing that I will need to do. On the other hand, I do not believe in populist politics … and I don’t believe in making promises to people we can’t deliver on.”

Hulse voted with 12 other councillors to delete the provision for affordable housing. Brown and six councillors supported affordable measures.

Waitakere Councillor Linda Cooper also voted against the provision.

I have a lot of respect for Penny Hulse.  On issues such as Auckland Council being a living wage employer, the Ports of Auckland industrial dispute, the City Rail Link and on the TPPA I would have voted the same way as her although I disagree with her stand on offshore oil drilling, the ports expansion and the Paturoa Kauri.

But on this issue I think the problem is that great that Auckland Council should be using every technique it has to provide affordable housing.

If it is good enough for the Government to prescribe that special housing areas should have a fixed proportion of affordable houses then it should have been good enough for Auckland Council to have done the same.

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