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Housing affordability not a single number

12 February 2018

“Housing affordability not a single number,” says Wellington City Councillor

Wellington City Councillor and Housing Portfolio leader Brian Dawson says a single number for housing affordability is not the right approach.

A media report today stated $650,000 as the figure for what makes a house “affordable” in Auckland city.

Cr Dawson says: “I think the problem is people are confusing affordable with ‘cheaper than average’. A $50 steak might be considered cheap if everywhere else is charging $75, but it doesn’t make it any more affordable for someone whose budget is maxed out at $30”.

“In Wellington, we’re developing a more nuanced model that starts with the total household income and looks at what they can actually afford given their earnings. That number will be different depending on which population group you are looking at.”

The Wellington Housing Affordability Measure (WHAM) is being developed by Wellington City Council as part of its draft Housing Strategy, which was approved in December 2017.

“The purpose of the WHAM is to understand what housing is affordable to specific population groups. It recognises that affordability varies significantly across different household groups, and helps to answer the question ‘who is this affordable for?‘,” says the Council’s housing development manager, John McDonald.

“Instead of the starting point being what the average home costs, we are starting with what a basket of goods looks like for various groups of people, and what they should be reasonably paying for housing, given their other expenses,” says McDonald.

“This lets us drill down much deeper into addressing actual problems with the city, rather than a single figure.”

Cr Dawson says the wider housing report released today by the Government – A Stocktake of New Zealand’s Housing – adds to the argument that there is a sense of urgency with housing.

“It shows that the whole bottom half of the continuum is a challenge to say the least.”

Wellington Mayor Justin Lester, whose Mayoral Housing Taskforce kicked off the in-depth work on addressing the city’s housing issues, says “all signs point to the solution being supply, supply, supply”.

The Wellington Housing Affordability Measure and wider Housing Strategy will be part of the Council's upcoming Long Term Plan deliberations.


ENDS

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