New housing report confounds dense-city advocates

A new affordable housing report is anathema to the wave of propaganda for compact cities.

Proponents of denser cities will dismiss it out of hand because of the Business Roundtable associations of one of the co-authors, Michael Bassett.

But they shouldn’t.

Nor should they dismiss the research qualifications of the other co-author, Luke Malpass, a former Otago-educated and more recently Sydney-based columnist for the Australian Financial Review.

The Priced Out report is a well-balanced summary of the history and causes of unaffordable housing, and the economic consequences.

It highlights evidence that is uncomfortable for compact-city advocates to acknowledge.

One of the common complaints about building more standalone houses on suburban sections is that New Zealand will run out of land and that it destroys productive farmland.

The report says both claims run contrary to fact.

“According to Landcare, less than 1% of New Zealand is built upon, and this includes landfill and motorways. Even if New Zealand were to double its built footprint, less than 2% of the country would be built on.

“Some comparative figures for national built-up areas are: 9% in the United Kingdom, 9% in Denmark, 15% in the Netherlands and 5.2% in the United States.

“Seen in this light, the amount of land used in New Zealand for housing is astonishingly small, and would still be so even with continued population growth.”

The authors discuss the artificial inflation of land prices through greenbelt urban limits and how it favours older homeowners with equity. Land inside Auckland’s metropolitan urban limit is now nine times more expensive than the land outside the arbitrary line.

Patterns have changed

But they also note changed patterns in building houses and buying them.

Young homeowners these days tend to buy a completed product. Their expectations are higher.

In 1977, an average-sized house was about 90sq m to 100sq m compared to today’s 250sq m, which includes features like garages that buyers in an earlier era might have added as household budgets allowed.

It was also during the 1970s that house building in New Zealand took on a more important aspect of the national economy, thanks to government policies encouraging building.

The number of new houses dropped from a record 34,400 in 1974 to 24,200 in 1978. Although the economy improved in the 1990s and early 2000s, housing completions have seldom reached the same rate and are now estimated at about half the 1974 level.

The authors say that of all the reasons for the current shortage of affordable housing, the negative attitudes of local authorities stand out.

“These attitudes are determined partly by planners and officials and partly by political pressures. Nearly everywhere, local authority officials and councillors own their own homes.

“They are already on the housing ladder and represent the comfortable, seldom the needy. Nor do planners, officials or councillors consider the extent to which their lengthy delays over consents affects economic activity.

“Councils talk about the importance of job growth in their areas, but are slow to remove the barriers they themselves have created. And as prices of existing houses rise steadily, delays in new house building only help existing homeowners.”

The report also concludes that affordable housing is also a way of overcoming the heavy dependence of housing to the economy.

“Changing the face of the housing market will require political will and perseverance... We should remember that individuals can get wealthy off housing, but the country cannot.”

c.hutch@clear.net.nz