Land-bankers fail to build affordable housing

The Labour Party aims to offer houses in the $500-600,000 range making the first step on the ladder more attainable

Affordability requirements in up to half of Auckland's special housing areas look set to lapse because developers have not even applied for consents ahead of the areas disappearing next month.

The revelations have sparked claims of land-banking, and at least one developer is seeking legal advice on whether the affordable housing rules will still stick after that date.

Auckland Council data supplied to the Herald under the Official Information Act shows developers had applied for building consents in only 57 of the 154 special housing areas (SHAs) by August 5.

The special areas, which gave fast-track consents in exchange for requiring that at least 10 per cent of new housing was "affordable", will be disestablished on September 16 after the city's new Unitary Plan comes into force.

They aim to boost housing supply and stem house price inflation that has seen the average home's value soar to nearly $1 million.

Labour Party leader Andrew Little said he was "stunned" little more than a third of the areas had even got to the consenting stage.

"It just looks like the special housing area policy has been used to help build land banks," he said.

But Housing Minister Nick Smith, who set up the policy in a three-year "housing accord" signed with Mayor Len Brown in May 2013, said the areas were never expected to create the long-term expected yield of 62,200 new homes overnight.

"I understand more than 1300 homes that would not otherwise have been built were built thanks to that mechanism," he said.

The data shows 1268 homes were completed by May 31 in just 24 of the 154 SHAs. No homes were completed in the other 130 areas.

Moreover, almost half of the developers of the Weymouth housing project have pulled off a feat that no other Auckland developer can boast of - every single house sold so far is officially "affordable".

Project manager Greg Freeman says 67 of the 170 homes completed so far on what was once the farm of the Weymouth children's home have sold on the open market for under $535,000, well below the official "affordable" limit of $578,250 or 75 per cent of the Auckland median house price.

The other 103 homes have been retained as long-term social rentals (28), rent-to-buy (36) and shared-equity homes (39) where the developers - the Tamaki Collective representing Auckland iwi, the Maori Trustee, the NZ Housing Foundation and CORT Community Housing Community of Refuge Trust - and other social agencies still at least part-own the homes.

Within five years, rent-to-buy tenants such as Melissa Moore and her partner Watene Atama are expected to join the shared equity schemes and become part-owners of their homes. Perhaps 10 years after joining the schemes, the part-owners are expected to be able to buy out the developers and own their own homes with their own mortgages.

Atama, a mechanical engineer, and Moore, who works part-time for a Manurewa waste reduction project, said they could never have got on to the home ownership ladder if they hadn't got into their Housing Foundation home.

"We were paying $560 or $580 a week rent in a really crappy, damp, cold house," she said.

With four children, aged from 10 to 3-year-old twins Maia and Max, they had built up debts which they have to pay off before they can take the next step towards part-owning their home. But that is much easier in their brand new four-bedroom home where the rent has only just gone up from $400 to $412 a week.

"We are paying off our debts," Moore said.

"We also have to put aside $20 a week for a deposit."

The Housing Foundation, established by philanthropist Sir Stephen Tindall, will chip in 25 per cent of any increased value of the house from the time the family moved in a year ago until they become part-owners. The value has risen from $462,000 to $550,000, so on paper the family already has $22,000 towards that deposit.

Moore also chairs the Waimahia Inlet Residents' Association and organises events such as sausage sizzles for residents to get to know each other.

"We live super-close," she said.

"I pretty much know quite a lot of the people that live here."