The Productivity Commission has produced its draft report on the housing industry and it is an interesting, if exhausting, read. Many issues are canvassed. Today I will deal with Auckland Council's fetish for high-density housing.

Mayor Len Brown wants to build a "liveable city". By this he means high-density developments in the CBD and its environs, and to this end he has mandated that 75 per cent of the 400,000 new houses Auckland needs by 2040 will come from areas already zoned for housing.

If you want to know what this looks like, go to The Strand in Parnell and walk though the soulless uniform constructions of slums-in-waiting - and these are upmarket versions of the vision Mayor Brown has. There is no shortage of high-storey buildings in the city inhabited by sex workers, urban poor and students working furiously to get a job paying enough to allow them to live in a Mt Eden house.

Most people do not want to live in high-density housing. The first thing migrants from nations like Taiwan do is rush to Dannemora and buy the largest block of land and build the most ostentatious house their capital will allow.


The desire to live in a house with a garden and room to bury the kids' pet goldfish is universal. The commission details research confirming this preference and references studies that show constraining land in the way proposed by the council results in rationing by income of important attributes such as the location, quality and size of houses. Given Auckland's uneven ethnic distribution of income, that poses some ugly challenges.

The commission's Australian counterpart found that similar policies in Sydney created high-density housing but also drove young people out of the state and reduced the level of home ownership.

If you hold back greenfield development, those few sections that come to market fetch high prices and developers will build expensive houses on them while cheap high-density units will be crammed into the infill spaces available.

This leaves precious little affordable housing stock in the middle market.

The commission looked at studies that showed the land cost of a medium dwelling in Auckland was a crippling 60 per cent. This compared with 10 per cent in Adelaide and 25 per cent in Sydney. By contrast, the Auckland draft plan quoted no sources for its estimate of 15 per cent.

Equally farcical is the plan for another 3400 houses in Onehunga's town centre. I'm not sure if any councillors have been to Onehunga, but its town centre will not improve with 3400 more houses. But there is a lot of excellent land currently feeding sheep that could provide quality, affordable housing for Aucklanders.