I blogged earlier on why I believe Auckland Council made a bad decision in excluding affordable housing provisions from the Unitary Plan. Council had originally proposed that all residential developments of more than 15 dwellings should 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 Auckland’s median household income would spend no more than 30 per cent of their gross income on rent or mortgage repayments.

The Independent Hearings Panel decided to remove the provisions because the provisions would reduce the efficiency of the housing market due to effectively being a tax on the supply of dwellings and be redistributional in their effect. The IHP thought that this was not an appropriate method under the RMA. Clearly only neoliberal methods are appropriate in the panel’s view.

Auckland Council staff supported the panel’s recommendation. There was a rearguard effort by Mayor Len Brown and some of the progressive councillors to put the provisions back into the plan but this proposal was voted down.

Both West Auckland councillors voted against reintroduction of these affordable housing provisions in the plan.  If I had a vote I would have voted for retention of the provisions.  The housing crisis is that bad that all possible tools need to be available.

During the debate Councillor John Watson asked a very good question. The Special Housing legislation required affordable housing as part of larger developments. What would happen if the Unitary Plan provisions were removed?

Under the Housing Accords and Special Housing Areas Act successful applications were given early use of the Unitary Plan provisions and accelerated processing with limited notification requirements. But they were required to provide affordable housing.

It appears that developers are now responding to the removal of affordable housing provisions by not taking up SHA development rights and instead using the Unitary Plan to process their applications. Every time this happens less affordable housing will be built.

From the Herald:

Property developers are quitting planned Auckland building projects which would have locked them into building affordable homes as Auckland’s average house price prepares to hit the $1 million mark.

Housing Minister Nick Smith told the Herald on Sunday that landowners in five Special Housing Areas (SHAs) had decided not to proceed under the previous fast-track process, which would have required 10 per cent of housing to be affordable.

The developers have instead opted to use provisions under the newly approved Unitary Plan which does not have the same affordable housing rule.

“There are five that have decided not to proceed with their SHA because they have effectively got a better deal through the unitary plan planning process,” Smith said

This may not be the end of the withdrawals. There are a total of 154 declared SHAs. 88 have applied for consents or plan changes but have not yet commenced work. There is nothing stopping them from abandoning these applications and applying under the normal process.

And there are a further 25 where applications for resource consent have not yet been made. They only have until September 16, 2016 to get their applications on. Otherwise they will lose their SHA status.

The problems have caused Nick Smith to write to these developers urging them to take up their rights. The letter predates the Council decision to exclude affordable housing from the Unitary Plan.

As Auckland’s average house price approaches the million dollar mark and the number of homeless tops 40,000 every available technique needs to be utilised to address this most pressing of problems.  Auckland Council should have kept the affordable housing provisions in the Unitary Plan.