Two years on, the three-year Auckland Housing Accord has just one shining success story, an extensive pipeline of houses planned but not yet built and some once-shimmering dreams that have turned out to be false hopes.

The single success story -- Weymouth -- accounts for almost half of the affordable homes consented, and almost all the houses actually built, in the 97 special housing areas set up by the accord.

Another 25 areas have at least some building permits for new homes under way, and most of the rest are at various stages of planning.

But other dreams have come to nothing. Some properties in special housing areas have simply been land-banked or on-sold without a single house being built.

Advertisement

The accord

Auckland's home-building industry has been spectacularly volatile, mainly because of erratic migration.

When net overseas migration into the region swung from a net outflow in 1999 to peak net inflows of over 20,000 a year in the two years after the September 2001 attack on New York's World Trade Centre, building consents for new homes also surged from 7300 in the year to September 2001 to peak at 12,500 two years later.

But then, as the Australian mining boom lured thousands of Kiwis across the Tasman, net migration into Auckland fell back below 6000 by 2005.

Consents for new homes fell too in every year from 2004 onwards, accentuated by the global financial crisis from 2008 and bottoming at just 3300 -- 74 per cent below their 2003 peak -- in the year to September 2009.

By September 2013 they had recovered only slightly to 5600 and a Government report estimated that new homes had fallen behind population growth by a cumulative 20,000 to 30,000.

The Auckland Housing Accord, which took effect from October 2013, aimed to lift home-building again by creating Special Housing Areas (SHAs) with fast-track consent processes.

Targets were set as combined totals of building consents for new homes and new residential sections: 9000 new homes and sections in the first year, 13,000 in year 2 and 17,000 in year 3; 39,000 all up.

READ MORE: 102 houses built out of target of 39,000

Developers using the fast-track provisions had to provide a portion of "affordable" housing: either 10 per cent of the homes priced below 75 per cent of the Auckland median house price ("relatively affordable", currently $578,250), or 5 per cent of the homes priced so that mortgage payments for a 30-year loan of 90 per cent of the property value at current two-year interest rates are below 30 per cent of the Auckland median household income ("retained affordable", currently $405,588).

Overall outcome

House-building has recovered in the past two years as Australia's mining boom has collapsed and net migration into Auckland has leapt from 7700 in the year to September 2013 to a record 28,400 in the latest September year. New homes consented rose from 5600 in the September 2013 year to 7400 a year later and 8700 in the latest year.

Including new sections as well, the accord's first-year target of 9000 was exceeded with 11,100 new homes and sections, but its second-year target of 13,000 looks unlikely to be met with only 8900 new homes and sections by June.

Overall, home-building has picked up much less than in the last migration boom despite the much bigger net migrant inflow this time.

Surprisingly, Auckland Council has not yet set up a system to record the numbers of new homes built under the accord's fast-track provisions. It knows of building consents for 2027 homes using the provisions in 26 SHAs, and it has found out that 102 homes have been built so far in two of them -- 91 in Weymouth and 11 in Northern Tamaki.

Developers are required to provide statutory declarations identifying homes sold below the "affordable" price limits. On this basis the council estimates that all 102 homes built so far, and 622 of the 2027 homes consented, are "affordable".

The Auckland City Council Administration building. Photo / Richard Robinson.
The Auckland City Council Administration building. Photo / Richard Robinson.

The council told the Herald in January that 350 homes had already been built in SHAs, so several hundred appear to have been built outside the accord's fast-track provisions. At Addison (Takanini) and Anselmi Ridge (Pukekohe), developer McConnell Property already had well-advanced plans and opted not to change them to fit into the new rules, and at Murphys Rd (Flat Bush), landowner Ivan Frisken opted out because rising land prices meant he could no longer meet the affordability requirements.

Council housing project director Ree Anderson says the SHAs have created a "pipeline" of about 50,000 homes to be built eventually, including about 5000 a year in each of the next three years.

The Herald has investigated progress in the first two tranches of SHAs, designated in October and December 2013.

Success at Weymouth

Special Housing Area still in the build process in the Waimahia Inlet in Weymouth, Auckland. Photo / Nick Reed
Special Housing Area still in the build process in the Waimahia Inlet in Weymouth, Auckland. Photo / Nick Reed

The project to develop 295 homes on a 16ha former farm for the Weymouth child welfare home, announced in the first month of the accord, had the huge advantage of a $29 million upfront grant from the now-defunct Social Housing Fund to a consortium of the Tamaki Collective of Auckland Maori tribes, the Maori Trustee, the NZ Housing Foundation and the Community of Refuge Trust (CORT).

Housing Foundation director Brian Donnelly says the grant will allow every home to come in under the "affordable" limits. About 200 are being "retained" by the foundation, the Maori Trustee, CORT and other social housing providers as rent-to-buy or long-term rentals, and 95 are being sold at prices currently advertised from $455,000 for three bedrooms and $520,000 for four bedrooms.

The Maori Trustee will retain about 63 homes through the Auckland and Onehunga Hostels Endowment Trust whose name it has changed to Te Tumu Kainga. It is taking all Maori families selected for rent-to-buy homes (about 50) and long-term rentals (12 or 13).

Homes under way

The council is aware of building consents being issued under fast-track rules in eight of the 21 other SHAs gazetted in 2013. Most of their 910 new homes are in Hobsonville (396) and Northern Tamaki (291).

Hobsonville includes two SHAs. One, being developed by Housing NZ subsidiary Hobsonville Land Company with private partners, covers the Catalina precinct, where infrastructure was completed in September ready for building to start this summer, and the marine precinct, where the council will decide on November 12 whether to use the land for housing or film studios. The other covers the Sunderland precinct, where Willis Bond is already selling townhouses priced at $940,000 to $1.1 million, and Scott Point, a farming area that was not part of the old Hobsonville air base. Abu Hoque of Harrison Grierson, representing the 38 Scott Point landowners, says a plan variation is still in progress and roading and drainage work will start late this year.

In Northern Tamaki (Glen Innes), Housing NZ and its partner Creating Communities have used the fast-track provisions to build 11 new homes, all for Housing NZ in Taniwha St, and to get building consents for 291 homes -- 35 "retained" for Housing NZ and 256 for private sale. Homes are being advertised by Creating Communities at $750,000 to $1.1 million.

The next-biggest projects under way are by Millwater developers WFH north of Silverdale, where 75 homes have been consented, and at Khyber Pass, where Ockham Residential is building a six-level, 57-unit block called Hypatia. Thirteen homes at Silverdale and six in Hypatia will be "affordable".

In Trent St, Avondale, the Housing Foundation has consents to build 33 units, of which 21 will be "retained" for its rent-to-buy scheme. This project also got one of the last social housing grants of $4.2 million, but Mr Donnelly says it has taken longer than expected to carve off part of the site for a reserve and complete earthworks.

"We hope to be building there in the next two months," he says.

Ngati Whatua is building 30 units in Orakei, all classed as "relatively affordable", and Neon Ltd has consents for 28 homes, of which three must be "relatively affordable", in the McWhirter Block at Westgate Drive, Massey.

The Addison, Anselmi Ridge and Murphys Rd SHAs, where developers have opted out of the fast-track provisions, were also designated in 2013. McConnell Property general manager Nigel Richards says about 200 homes have been built in the Addison SHA and 40 or 50 at Anselmi Ridge. At Murphys Rd, Mr Frisken is still doing earthworks and roads.

Still planned

Housing is still in various stages of planning in nine out of the other 10 original SHAs.

Perhaps most advanced is Lake Pupuke Drive in Takapuna, where Willis Bond has unveiled plans for 70 new apartments, including 16 for Housing NZ, to replace 11 state houses. Building is due to start in the first half of next year.

Another Housing NZ project to build 130 to 180 units on the site of 16 state houses in Clinker Place and Thom St, New Lynn, is to start next May, finishing by July 2017.

But plans by Todd Property and Cabra Developments for up to 2000 new homes in a 65ha block called the Huapai Triangle have been dogged by reported political rows over infrastructure funding. The council agreed in September to provide $9.9 million to upgrade local roads after developers cut the number of planned homes to 1200.

At another West Auckland site, 76 and 74B Royal Rd adjoining the McWhirter Block at Westgate, real estate agent James Law says property owner Yuan Jie has consent for a 100-unit subdivision but needs to build roads before applying for titles.

"The ... first new houses may be in 2017," he says.

In South Auckland, a "sustainable village" is planned by the Kokiri Te Rahuitanga Trust at 50 Alexander Cres, Otara. Trust chairwoman Zena Tamanui says there have been "hiccups in relationships with contractors" because the trust wants to keep the land and lease the homes to keep them affordable. She hopes to apply for a resource consent this month for the first five homes.

At nearby Flat Bush School Rd, the council's Panuku development arm has signed a private sector partner who is developing a master plan for the council-owned site.

At Hingaia, west of Papakura, a consultant says resource consents have been issued and earthworks have started, with home-building due to start next year.

At Paerata, Wesley College has announced plans for 4500 homes with a goal of "cutting dirt" by next October.

And at Belmont, west of Pukekohe, housing has been planned since 2006 but a consultant says it was delayed for four years when the new Super City created in 2010 "dropped the ball".

False hope

The final SHA promulgated in 2013 is a block of light industrial buildings bounded by Church St, Beachcroft Ave and George St in Onehunga. Rich-listers Peter and Rolf Masfen, who own part of the block, may have hoped to buy up other properties to build housing. However the Masfen properties are for sale in a tender closing on November 11.