Housing affordability

A report released in April 2012 on housing affordability in New Zealand identified a range of factors the Commission says are getting in the way of affordable housing for Kiwis.

Commission Chair Murray Sherwin says “It is fundamental to the success of communities that comfortable, affordable housing is available, particularly at the lower end of the property ladder. Younger people and those on lower incomes currently have much less chance of ever purchasing their own home.”

The Commission has found that taxation was not a key driver of the recent housing boom.

“We carefully considered the claims that housing is tax advantaged, but concluded that any advantage is much smaller than often suggested” said Mr Sherwin.

Containment policies such as ‘Smart Growth’ and Auckland’s Metropolitan Urban Limit (MUL) were also found by the Commission to have an adverse effect on housing affordability by limiting the availability of land for housing.

“Pressure on land prices needs to be reduced and the Commission has recommended that there be an immediate release of new land for residential development in high demand areas such as Auckland and Christchurch”.

“Councils should also ensure they aren’t putting up barriers to development and should take a less constrained approach to urban planning. There also needs to be a review of regulatory processes with the aim of speeding up and simplifying consent processes”.

“There is no need for our homes to be expensive - we can construct quality, affordable homes. But, it will take councils and developers to work together so that sections can come to market quickly at a price that allows the building of homes at an affordable price”.

The Commission has also recommended reconsideration of current social housing reforms.

“The community housing sector has a unique and very valuable role to fill.  It can provide below market rents and more security of tenure than is available from private landlords. It is also well suited to providing the range of ‘wrap around’ services required by many social housing tenants with needs that run well beyond just affordable housing.”

“But, the social housing sector will need considerable assistance if it is to scale up to the extent required, and do so within a reasonably short timeframe. The Social Housing Fund set up to help the community housing sector grow is not equal to the task demanded of it”, said Mr Sherwin.

View submissions

Submissions on each stage of the inquiry can be viewed here.

Government's response

The Government issued its response to the inquiry in October 2012: The Government's response to the inquiry.

In response to our inquiry recommendations, the Government commenced a comprehensive work programme, including follow-on work for relevant government agencies. The Government agreed in full, or agreed in principle, to 21 of the 33 inquiry recommendations. Of the remainder, the Government considered 4 were adequately in-hand through current initiatives and the remaining 8 were the subject of ongoing reforms or further policy review work.

More generally, our work stimulated discussion and debate on affordable housing in New Zealand and has been widely referred to by media, government agencies, Members of Parliament, academia, overseas agencies and policy commentators. It prompted Ministers and their agencies to take a more holistic view of housing affordability – and to do so more urgently – and laid the foundation for significant policy reform and ongoing policy work.

Inquiry performance evaluation

Performance evaluation results for the inquiry: