Productivity Commission on housing affordability

The Productivity Commission has released its final report into housing affordability.

Their findings and include:

• Real house prices doubled between 2001 and 2007
• The house price to disposable income ration increased from 3 to 5.5 from 2001 to 2007
• 58% of renters can not afford to buy a house at the lower quartile price, assuming standard bank lending criteria
• Section prices in Auckland are on average 60% of the cost of a dwelling, compared to 40% elsewhere
• Land 2 kms inside Auckland’s urban limit costs 8.65 times as much as land 2kms outside

And recommendations include:

• Increasing land supply for new housing should include moderate-density development of brownfield sites and development of greenfield sites close to existing centres, local employment, and services.
• Auckland Council should show in its final Auckland Plan how it has considered and reconciled affordable housing alongside its other priorities.
• Bring significant tracts of greenfield and brownfield land to the market in Auckland – identify and assemble land that could be quickly released and made ready for development, signal land with future potential for urban development, and make a commitment to major offsite infrastructure capacity.
• Territorial Authorities to:
  -Take a less constrained approach to the identification, consenting, release, and development of land for housing in the inner city, suburbs, and city edge.
  – Adopt a strategy that allows for both intensification within existing urban boundaries and orderly expansion beyond them.
  -Develop strategies that promote adequate competition between developers for the right to develop land.
• The Department of Building and Housing publish, for each BCA, the total time taken between receiving applications and finally granting consents, and the number of occasions where each BCA has used the ‘stop the clock’ provision.
• The Department of Building and Housing audit the ‘stop the clock’ information from a sample of BCAs.

Now some of the usual suspects will say “No we can’t do it” because they think larger cities means more roads and more roads are of course evil. Now sure you can have that view, but be aware that the price of keeping to that view is that more and more low to middle income families will never get to own their own home, and will probably also end up paying more to rent than in the past.

For those who can afford to buy one, or even more than one house, then refusing to makes changes to reduce the cost of land and housing, will be great for the well off.