"Houses and land values have risen substantially more at the northern end of the motorway over the last five years than even in Wellington, which has been among the best-performing regions in New Zealand over the last five years."
Hickey quotes a July 2020 observation by Tommy's Real Estate sales director Nikki Cruikshank about the "terrific growth with the anticipation of Transmission Gully ... appealing across all age groups whereas previously it was known for being more of retirement destination ... A lot of young people are happy to make their lives up the coast, and because of the more affordable prices, compared to the city, we have seen large numbers of first-home buyers looking to establish themselves."
Hickey said the time saving and increased possibility of commuting saw prices double on the Kāpiti Coast over the last five years while residential prices rose 155 per cent in Horowhenua. Both faster than the 72.7 per cent experienced by Wellington City.
"House and land values rose by a combined $10.3 billion for Kāpiti and Horowhenua to $30.6b in their last three-year ratings valuation cycles to 2020 and 2019 respectively ... Their combined land values rose over those three year periods by $7.8b or 80.4 per cent to $17.5b, consisting of rises of $5.4b for Kāpiti and $2.4b for Horowhenua."
Comparatively Kāpiti/Horowhenua outperformed the national rise over that same period by $2b with Transmission Gully being the major reason.
Hickey then puts the moral knife in.
"These unearned capital gains over the last three to five years are of course yet to be taxed, and then only partially and lightly through the 10-year bright-line tax on rental property owners. Owner-occupiers and landowners who hold on long enough won't have to pay tax."
Hickey refers to the lack of political will by both Labour and National to introduce capital gains taxes, citing the examples of many cities worldwide using such taxes directly to pay for projects through special land value-capture uplift rates.
"This tax would be imposed by a council on the landowner benefiting from the publicly funded infrastructure such as road or railway to pay for the infrastructure."
To that first world teased out by Hickey let's add the second world uncovered by council's recent Housing and Social Needs Assessment.
We have always known Kāpiti had a struggling underclass. The data reveals that between 2001 to 2021 the lower quartile house prices increased 435 per cent and over that same period the median household income increased by only 112 per cent.
The assessment notes that to service a mortgage at the lower quartile house price, the median household would need a thumping 58 per cent of its income (that's up from 33 per cent in 2001). This is worse than both Porirua and Horowhenua which are held up as cases that need greater central government support.
Let's look at the plight of renters. The percentage unable to affordably buy a house had increased to 95 per cent across the district. At the lower quartile house price of $696,000 about 88 per cent of renters are not able to affordably purchase a house. Most low-income renters are in Ōtaki and central Paraparaumu.
The assessment also shows that 85 per cent of new houses were for standalone dwellings mostly targeting people shifting into the area rather than local residents.
While we celebrate the positive lift Transmission Gully gives to the propertied class let's not forget those others.
