Thames-Coromandel Has a Housing Affordability Crisis

Housing in the Thames Coromandel District is just as unaffordable as it is in Auckland.  Auckland is the 5th least affordable place for housing in the world.  By any measure that makes Thames Coromandel housing unaffordability a major crisis.

Housing affordability is measured by dividing the average current house price by the average annual earnings for the District.  This gives a ratio – the higher the ratio the more unaffordable housing is.  The ratio for Thames-Coromandel is 12.2.  For Auckland it is 12.5, and for New Zealand as a whole it’s 8.8.  Internationally a ratio over 3.0 is deemed to be not affordable.

housing_affordability_compare

Auckland’s average house prices are substantially higher than here, but so too are their average incomes. Thames-Coromandel incomes are close to the lowest in New Zealand while house prices are relatively high.  This accounts for local affordability being as bad as it is in Auckland.house-burden-sept-8-breakout 

Some denialists will try to wish away the problem by saying our District is unique –more “rich” senior citizens or high paid “professionals” with holiday homes in Pauanui which skews the figures.  Yet Kapiti Coast, for example, has similar numbers of retirees/professionals but has much more affordable housing than we do.

Thames-Coromandel District Council will have no choice but to face up to this problem. Why?  Because belatedly, Central Government has recognized that housing affordability is a crisis issue.  A National Policy Statement (NPA) on housing makes the provision of sufficient housing supply a matter of “national significance” under the Resource Management Act. 

This NPA now requires all local authorities, including TCDC to provide – 

“for a greater supply of houses, so prices rise more slowly and houses are more affordable”Also Councils must “monitor and respond to housing affordability, building consent and land value data.”

How should the Council respond to this challenge?

Start by putting affordable and social housing on an urgent agenda.  Wellington City has already set up a multi-interest Task Force to come up with solutions before April 2017.

Some of the options Wellington will consider include:-

  • a $5000 rates rebate for building first homes,
  • a new model to help deliver affordable housing, and expanding the stock of social housing
  • partnering with developers to build more apartments

Council should also seek funding for affordable housing from the New Zealand Superfund.  Chief Executive Adrian Orr recently told TVNZ’s Q&A program that the Fund :

“is keen to be an active investor….. including providing capital to help build affordable housing ….  so entry houses”.  “We really need access – good access to land, good access to the capability.  We’ve got the capital and we are open for business”

For Mayor Goudie and the new Council – here is a fantastic opportunity to show leadership and enterprise. Helping to provide affordable housing will do vastly more to retain young families, and to raise the quality of life of their constituents than any other project.

 

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