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Collaborative approach needed to sustain Auckland’s urban growth

Auckland is stepping up to the challenge of staying on top of its surging growth.

Neil Prentice
Fri, 11 Sep 2015

Auckland is stepping up to the challenge of staying on top of its surging growth – with collaborative partnerships between the public and private sectors an important part of a new development model, according to a senior executive in the city’s real estate sector.

Bayleys Real Estate’s national director commercial, John Church, says the pressure that Auckland is currently under to develop more housing, and particularly affordable housing, to accommodate its rapidly expanding population has thrown up a number of associated challenges the super city is having to grapple with.

“People not only require a place to live, they also need places to work and shop and to be educated and entertained,” Mr Church said. 

“In recent years, it could be argued that, in the response to the urgent need for more housing stock, insufficient thought has been given to supporting infrastructure. We’re not talking roads and utility services here but ‘bigger picture’ community essentials such as sufficient land for employment generating activities, adequate and affordable shopping and for relaxation and recreation.

“In northwest Auckland, for example, there has been rapid housing growth in suburbs such as West Harbour, Hobsonville and Greenhithe, but the region has lacked a ‘heart’ – a major hub which its residents can identify with.”

Mr Church said that an attempt was being made to provide north-west Auckland with a ‘heart’ through the creation of the purpose-built Westgate Town Centre.

“It’s a collaboration between private developer NZ Retail Property Group (NZRPG) and the Auckland Council – with the council responsible for public facilities such as a bus station, library and recreation land, and NZRPG overseeing the development of retail and business premises and other commercial aspects of the project,” he said.

“The council is taking a similar approach with the Neil Group and Jomac in the development of more than 60 hectares of light industrial zoned land in the nearby Hobsonville corridor. It’s undoubtedly the way of the future.

“The council and developers need to be on the same wavelength and working together in a planned and coordinated manner if Auckland is to have any hope of delivering on the hype of becoming ‘the world’s most liveable city’.”

Mr Church said central government was also increasingly becoming part of the big picture – with the current government flexing its muscles over public concerns about Auckland’s housing crisis. 

“It is implementing a number of initiatives to increase housing supply and make more affordable houses available. At the same time, it is also exploring ways to reconfigure and improve social housing – what used to be called state housing – and reduce the Crown’s direct exposure to these assets,” he said.

“The model they are promoting would see a higher proportion of social housing supplied and owned by the private sector. This would pass the capital outlay of new development to the private sector, enable Housing NZ Corporation (HNZC) to release capital held in fixed social housing assets and remove the direct cost of maintenance.”

The government has looked to become more directly involved in the Auckland property market by establishing separate entities which have HNZC assets vested in them but are mandated to provide solutions to issues surrounding both social housing and increasing Auckland’s housing supply. 

The two main examples of this are:

  • Hobsonville Land Company (HLC) established to undertake the development of Hobsonville Point; and
  • the Tãmaki Redevelopment Company, established in 2012, with a mandate to regenerate the Tãmaki area around Glen Innes, Pt England and Panmure. 

HLC is also working with private sector master development companies such as Willis Bond & Co and a range of residential developers to deliver the project. 

The Tãmaki Redevelopment Company is the first urban development unit to be set up by the government. It is jointly owned with Auckland Council (41%). Indications are that the government is looking for significant private sector partners with equity and capacity for this project as well. 

Mr Church said of concern to Auckland Council – and the source of some friction with an impatient central government – was the need for large housing projects to be integrated with, and supported by, appropriate infrastructure, including sufficient provision for commercial development.

“It’s a model that will see the continuing emergence of multifaceted developers, such as Todd Property, Willis Bond, The Neil Group and NZRPG, able to turn their hand to a variety of projects – often with a mix of uses involved,” he said. 

“It’s also a model that will need trust and cooperation between local and central government and the development sector if we are to successfully manage Auckland’s future growth.”

Neil Prentice writes for Bayleys Real Estate

Neil Prentice
Fri, 11 Sep 2015
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Collaborative approach needed to sustain Auckland’s urban growth