Affordable housing in Auckland

Author:
Auckland Council
Source:
Auckland Council
Publication date:
2018

A snapshot report about the need and initiatives to increase low cost housing, assisted rent and assisted home ownership.

This report defines affordable housing as “a home that a household could occupy for less than 30 percent of its income whether purchasing or renting”.

Housing affordability is particularly severe in Auckland right now. The high cost of homes means that managers, professionals and working families are swelling the rental market, and over three quarters of tenants can no longer afford to buy their first home. Māori, Pacific Island people, sole parents and retired renters are being forced into lower quality homes, overcrowded situations, the social housing waiting list and homelessness. There is a sharpening divide in the incomes and wealth of renters and home owners.

This has significant, long term consequences for Auckland and New Zealand. Housing investment is constraining investment in other economic activities and social housing and rental assistance are an increasing fiscal burden. Increasing numbers of households in poor quality, insecure and crowded rental homes reduces educational and health outcomes. Young people no longer feel they have a future in Auckland and indeed there are increasing numbers of older people who will not be able to support themselves into a home in retirement.

Multiple factors are causing the decline in housing affordability. Global financial trends, immigration and tax policy have contributed to a rapid increase in demand for homes. Meanwhile land use planning, infrastructure provision and consenting, construction sector productivity and capacity and bank lending criteria have constrained supply. This has led to rapid increase in house prices which has outstripped growth in Aucklanders’ incomes.

The Government and Auckland Council have range of broad brush initiatives to address some of these causes. The Government also targets considerable budget to social housing provided by Housing New Zealand and community housing providers. These policies are necessary but will not be sufficient to alleviate the housing stress experienced by the growing “intermediate housing market” – working renting households that can’t afford to buy a home but don’t qualify for eligible housing. More targeted policies and programmes common overseas are also required, to:

  • Increase the supply of lower cost homes
  • Assist households in the private rental market
  • Assist partial or progressive home ownership.

The policies are not costless and indeed the high cost of housing affects the size and effectiveness of public subsidies for affordable housing. The best affordable housing programmes comprise packages of regulatory and nonregulatory initiatives, delivered in partnership between different layers of government and the not-for-profit and private sectors.

Considered by the Auckland Council Planning Committee, 27 November 2018.

Prepared by the Community and Social Policy Team, Auckland Council November 2018.

Last updated: 2018-11-23

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