Editorial: Reforms may keep housing dreams alive

Concerns about home affordability in Tauranga have been in the news this week.

We reported that Tauranga-Western Bay was the most unaffordable place to live in New Zealand after Auckland, according to a new report.

In the latest Demographia International Housing Affordability Survey, Tauranga had a "severely unaffordable" median multiple score of 6.8, which measures the ratio of median incomes to median house prices.

Auckland's score was 8.2.

While house prices are rising, it appears the availability and expense of land in the area combined with lower income levels are contributing to the problem.

Survey co-author Hugh Pavletich, of Performance Urban Planning in Christchurch, said house prices in Tauranga were "grossly expensive".

"Housing shouldn't exceed more than three times household income. It's an extremely serious situation in Tauranga."

The index used in the report has been described as "crude measurement" - that the use of medians in the index skewed the ratings as the city's multi-million dollar homes were not representative of Tauranga's usual housing stock.

However, Tauranga mayor Stuart Crosby said it did highlight the issue of incomes versus house prices in Tauranga. Mr Crosby has expressed concern about income levels in the region before.

This point was also raised by a number of business leaders, including Carrus Group chairman Paul Adams and Classic Builders director Peter Cooney.

Mr Cooney said rural land was expensive to purchase for development because, if it was any good, it was being used for horticulture or kiwifruit.

While Mr Adams believes until the Resource Management Act, the Building Act and the ever-increasing council fee structure against land developers and builders are addressed, the region cannot truly tackle the cost of housing.

"All of those things add up to a cost of $50,000 per average house in the Bay that can be reduced," he said.

Thankfully, the Government appears to be taking steps to address the issue.

Environment Minister Nick Smith has announced reforms to the Resource Management Act to cut delays and red tape around construction. Dr Smith produced a commissioned study based on the perceptions of developers, who estimated that regulations under the RMA were adding $15,000 to the cost of each house in a subdivision and $30,000 to an apartment.

He says the changes will make houses more affordable by increasing supply - this will be welcome news for those struggling to save for a home.

As long as the reforms manage to balance the need for development with environmental concerns, the suggested changes appear to be a pragmatic response to a growing problem.

The dream of owning your own home is part of New Zealand culture - it would be unfair if home ownership became impossible for many.