"NZ Governments Housing Affordability Package Pathetic”
says Demographia

HonMaryan Street, New ZealandHousing Minister today released details of the Affordable Housing Territorial Authorities Enabling Bill, intending to give Local Authorities powers forcing home builders to include a percentage of smaller, poorer quality affordable houses within developments, so long as the exterior appearance looks similar to other more expensive houses.

The Ministers officials are of the opinion (with no evidence or details provided) that this will create around 1000 affordable housing units per year. An “affordable example” of $350,000 is suggested within a development where the balance of the housing averages $450,000.

“This pathetic initiative by Maryan Street, New Zealand’s new Housing Minister, is by far the worst I have seen by any politician in the western world in recent years” said Hugh Pavletich, co author of the Annual Demographia International Housing Affordability Survey , adding “She has obviously deliberately chosen to ignore all the reputable national and international research on this issue”.

International research clearly illustrates that these types of interventions drive up the cost of housing and severely suppress the numbers of new houses built. For example - the San Francisco Bay area (with a population of 7.2 million people) has put in place on average 278 affordable units a year since 1973. California’s build rate at 3 units per 1000 population per year is currently half New Zealand’s at 6 per 1000 population. (Refer further information below).

The Ministers states that she was influenced by British examples as well. British housing is currently in serious crisis and is regarded as the worst standard housing in the western world. On a population basis, the British are putting in place half the new houses New Zealand is. On average, the new British houses are one third the size of the new New Zealand ones at 76 square metres.

“Obviously Maryan Street is aiming to put half our residential builders out of work, send them to Australia and deny even more young New Zealanders their right to the opportunity of affordable housing” Mr Pavletich said, adding “What this means is driving down our housing construction from around 24,000 units a year towards 12,000 a year mark – just when we desperately need even more affordable housing – of between $140,000 to $180,000 on our urban fringes.

Demographia research has concluded that the focus must be on firstly, setting performance standards for Local Government, secondly releasing fringe land and thirdly, appropriately financing infrastructure.

“This could have been an opportunity for New Zealand to widen its “affordability advantage” over Australia, to encourage more young New Zealanders to stay near family and make their futures in this country. Sadly, Ms Street and the Labour Government have failed them” said Mr Pavletich.

Hugh Pavletich
Co author – Annual Demographia International Housing Affordability Survey
www.demographia.com

Further information……….

(1) 2007 3rd Edition Annual Demographia International Housing Affordability Survey
(2) The Top 10 myths of housing and urban planning policy Refer Myth 9 - RDC Australia publication
(3) Sydney & Dallas Fort Worth Fringe Starter Housing Cost Comparison - Demographia
(4) Do Affordable Housing Mandates Work? - Reason Foundation (pdf)
(5) The Southern California Inclusionary Zoning Experience
(6) Hugh Pavletich / Resource Management Law Assn of NZ Communications
(7) Demographia Submission - NZ Parl Commerce Committee Housing Inquiry
(8) CHRANZ Research Feb 2006 - Land Supply Key Problem (ignored by Housing Minister Maryan Street)
(9) John Key, NZ National Party Leader August speech to Contractors
(10) NZ Herald report August - "Key promises more affordable homes"
(11) Hugh Pavletich Response to John Key August Speeches

ENDS

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