Brian Rudman: House building targets remain elusive as ever

Finishing 7200 homes in 2016 out of 14,000 needed for growth alone shows Govt's inability to solve crisis. Illustration / Peter Bromhead

Nothing quite underlines the Government's on-going failure to solve Auckland's housing crisis as the latest Auckland Council figures admitting that only 7200 new houses were completed in 2016.

This is only half the 14,000 needed just to cope with annual population growth, let alone reduce the estimated 35,000 shortfall build up over recent years.

This is also well short of the 9500 new houses a year, Housing Minister Nick Smith, was claiming credit for this time last year, in a Budget press release.

Yesterday's desperate catch-up attempt by Social Housing Minister Amy Adams is a welcome gesture, but her grandly titled Crown Building Project will in effect only add 2,600 houses a year for the next ten, which is an underwhelming response to a full blown calamity.

And given this Government's track record of over-promising and under-delivering when it comes to Auckland housing, whether it actually happens, is another matter.

In March 2013, Smith stormed into town to sort Auckland Council out, after months of sniping from afar. On television he said Auckland's average house price of $618,000 was not affordable to the average Auckland family, "beavering away, trying to save that deposit for a home to see the price go up by $50,000 or $60,000" over the past year.

He invoked the spirit of early colonists coming out to New Zealand "to own their little bit of their country." He was "absolutely determined to ensure that ordinary, hard-working Kiwi families are able to reach that dream of owning." Getting all lyrical, he said it was more than a house, it was "a home ... a place to celebrate birthdays, anniversaries."

But four years on, the average Auckland house price has broken the $1 million ceiling and recently released Government figures reveal that as of mid-2015, buying a house remains unaffordable to 86 per cent of non-home owners in Aucklanders, rising to 96 per cent of those in South Auckland.

The only positive note to be grasped from these latest figures is that the 2016 grand total is up on the 6520 new houses built in 2015 and 5550 completed in 2014.

It's a far cry from the 39,000 new houses in three years, Dr Smith was boasting in March 2013 would be built as a result of the special housing accord he had forced on Auckland Council.

It would, he claimed, "urgently increase the supply and affordability of housing in Auckland." The negotiated targets were 9000 new houses in year one, 13,000 in year two and 17,000 in year three. Both parties committed "in good faith to achieve the agreed targets."

Hot on its heels came the creation of "special housing areas" to fast track planning and other regulatory "problems." In the end, 154 Special Housing Areas were designated with the potential to provide more than 56,000 homes.

Yet recent figures reveal that only 4,000 consents have been granted on these "fast track" sites and that only 1,000 houses have been built.

It seems that instead of being altruistic and flooding the market with affordable houses, many owners of SHA land, are sitting back, biding their time and watching the land value rapidly rise.

Earlier this month, economist Rodney Dickens of Strategic Risk Analysis calculated that since the 2013 accord, Auckland land prices have risen 52 per cent, house prices, 45 per cent and building costs by 36 per cent.

Prime Minister Bill English's response to the problem has been to abolish the housing minister title and rename Smith as minister responsible for Building and Construction. On RNZ he explained that "In the long run we need more houses ... [but] you can't just push a button and crank them up."

This is a far cry from Smith's claims in May 2013 after signing the Auckland Housing Accord he said "This Accord will deliver thousands of new homes for Auckland by streamlining the planning and consenting process and getting Government and Council working more closely together on housing development." He concluded by saying it set a three year target for "getting on and building ...39,000 houses."

He believed in the magic button, just failed spectacularly, to hook it up properly. There are plenty of others lining up to show the prime minister the way. The Productivity Commission has, for some years been advocating a partnership between government and private enterprise on large scale house building projects. The Ministry of Business, Innovation and Employment has advanced similar proposals.

And of course, in the wings is the Labour Party, with its Kiwibuild pledge to do just that, deliver 100,000 affordable houses nationwide in partnership with the private sector.