Housing costs are expected to increase as a shortfall gets worse in Tauranga and the Western Bay. Photo / NZME
The Western Bay’s average weekly rent could balloon to nearly $1000 within 10 years, according to a report highlighting the area’s housing woes.
A SmartGrowth Housing and Business Capacity Assessment released yesterday identified key challenges and what more needed to be done to meet the needs of the region’s rapidly growing population.
The report captured local housing capacity, business capacity and SmartGrowth’s planning response.
SmartGrowth is a collaboration between Bay of Plenty Regional, Tauranga City and Western Bay of Plenty District councils, tāngata whenua and central government that sets the strategic vision and direction for the growth and development of the sub-region.
It was estimated that between 37,000 and 43,000 new homes would need to be built to keep up with the demand of the population growth - a growth that was expected to reach 282,900 people in the next 30 years.
The report also included anticipated increased housing costs, with Tauranga median house prices rising to $1.612 million and weekly rent rising to $998 by 2032.
“Housing has become increasingly unaffordable for many,” the report stated.
“Greater demand for housing is making houses cost more to own and rent, placing greater strain on social housing or meaning some people can’t afford to live in Tauranga. Housing affordability is key to ensuring we have diverse and connected communities made up of people from all age groups.”
As of July 2022, there were 61,550 homes in Tauranga and 24,260 in the Western Bay.
Projections suggested these numbers would grow to 73,050 in Tauranga and 28,870 in the Western Bay by 2032 and to 90,520 in Tauranga and 31,970 in the Western Bay by 2052.
By comparison, a housing shortfall was expected to reach 5550 in the short term, 13,780 in the medium term, and potentially 23,660 in the long term, totalling 42,990 if a 15 per cent competitiveness margin was applied.
Such margins are aimed at allowing for factors such as growth being higher than anticipated, increasing competition between developers to create more efficient land and house markets and therefore lower prices, and also some land not being developed as initially planned. Without the margin, the total was projected to be 36,690.
The shortfall was believed to have been caused by a range of factors including funding and delivery of infrastructure and the need to balance growth needs against national priorities such as the protection of highly productive land, fresh water and wetlands, and the management of natural hazard risks.
Key growth areas such as Te Tumu and Tauriko West hindered by a lack or delay of necessary infrastructure was believed to have contributed to the existing shortfall.
The report also stated homeownership rates were expected to drop in the future due to “Tauranga city having the worst housing affordability in the country relative to incomes”.
“The waiting list for public housing has grown 307 per cent since 2017. There are significant financial pressures on those who are currently priced out of the housing market and are under-served by the wider housing system.”
Tauranga Rentals owner Dan Lusby said people were already struggling to pay standard rent.
“We are getting a bit more arrears coming from some of our tenants where they are obviously struggling.
“It’s definitely getting harder for people at the moment. It’s more and more and it’s obviously not by choice.”
Lusby said it was hard for people to get a property and many were “staying put for as long as they can” despite struggling to afford it.
”They are forced into a rock and a hard place of high rents or struggling to find somewhere else [they can afford].”
Trade Me rental index shows the latest median rent for Bay of Plenty has reached new records of $640.
Lusby said he believed more housing was crucial, particularly appropriate social housing.
In a statement, SmartGrowth Leadership Group interest chairwoman Anne Tolley said there were still opportunities despite the insufficient housing projections.
A sub-regional Housing Systems Plan was being developed, with a focus to provide the right housing and infrastructure in the short term. This was expected to ensure key parties worked together towards that goal.
Councils were also “actively responding to rezone land in the right locations” to provide the necessary infrastructure to support growth and enable more development, she said.
SmartGrowth also sought help from Environment Minister David Parker seeking government support to “support to provide major transport infrastructure to enable growth”.
This followed a separate letter to the minister in September 2022 when Tauranga City Council was unable to meet its government housing obligations and also asked for help.
Tolley, also Tauranga City Council’s commission chairwoman, said in the statement affordability and providing the right housing for our communities remained a key issue but “making additional land available for housing will not resolve this situation on its own”.
“Changes to council District Plans in 2023 to enable more housing in existing urban areas will support efforts to increase supply, and so will spatial planning projects that are taking place in areas such as Ōtūmoetai, Mount Maunganui and Te Puke. Finding pathways to better enable housing on Māori land is also a high priority.”
Despite this, the sub-region needed the right infrastructure and land development “to deliver the housing and employment our growing communities will need”.
“We know we need to plan for our future needs and the needs of our future neighbours,” Tolley said.
“The Western Bay of Plenty is a great place to live, work and play – and we are focused on making plans that support people to live the life they want to here now, and into the future too.”