Housing woes

09/05/2012 § 5 Comments

There’s an ad running on TV that reminds us of one of New Zealand’s failings: cold houses. On average, houses are colder than WHO recommendations, and that is making us sick. The government is tackling the problem directly with subsidies for insulation and better heating. I have some ideas, too: build roads and reduce minimum lot size requirements.

See, I’m trying to buy a house in Wellington — I have been for about a year. I’ve found out more about land use planning as a result, and noticed how it interacts with transport planning. Basically, it’s making us spend too much on houses.

With houses, there are two categories of characteristics:

  • changeable — you can move the kitchen to the sunny side of the house, add another bedroom, build a garage, and make the house warmer with insulation and better heating
  • unchangeable — the aspect, view, sun and wind exposure, and proximity to schools and the central city are fairly fixed.

In the area where we are looking, the cost of an old, cold, damp house is shocking. What you’re buying are the unchangeable characteristics — location, location, location. Unfortunately, their prices have been bid up so high that there’s little money available to pay for the other things. So, people end up close to the city but unable even to paint their houses, much less add double glazing.

I ask why, and the numbers respond. Wellington City went from 158,000 people to 179,000 between 1996 and 2006 (the region’s population is roughly twice that), a 13% increase. Karori is the largest suburb, but the population has increased only 4.2% to 14,000. Wellington prides itself on lots of green space, and mandates minimum lot sizes to maintain a certain population density. But the problem is that the population increase between 1996 and 2006 is one-and-a-half times the population of the city’s largest suburb. Where are all these people supposed to live? By constraining the number of people who are allowed to live within easy access of the city, the council is pushing up land prices. Nice for some, but difficult for new entrants.

One solution is transport. We have looked all over the Wellington region, but we keep coming back to travel times. It is difficult to move between suburbs, partly because of topography but partly because no one has bothered to build the roads. It isn’t just commuting, either. It’s also all the running around after children’s activities. But, as I whined about previously, the transport planning doesn’t seem to take this into account.

Instead, the plan is that most of the expected population growth of 46,000 will happen downtown. It’s a lovely thought — but the side-effect of trying to pack people into the downtown is that land prices in the inner suburbs will continue to be bid up as people try to buy just a little more garden and one more room. The current house owners won’t have to maintain their properties, but will still receive a healthy capital gain.

The next time someone tells you about the healthy green space all around Wellington and the healthy walking lifestyle in the central city, remember the cost: thousands of musty bedrooms where people spend of third of their lives in unhealthy dampness.

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§ 5 Responses to Housing woes

  • Had dinner the other night with a woman who works for one of the Councils in the greater Christchurch region. She was surprisingly frank: minimum lot sizes and other zoning rules are in place deliberately to keep out undesirables. If housing is expensive enough, poorer and browner people from the East Side of Christchurch won’t move there. She doesn’t work in zoning, but part of her job is talking with the folks who do the planning.

    It’s totally a bootleggers and baptists story. All the “Oh we care about being green and sustainable and isn’t sprawl evil and what about our precious farmland!” gives a nice public interest veneer for policies that very deliberately work to screw over poor people and prop up housing values for rich people sitting on valuable regulation-protected assets.

    • Bill says:

      That jibes with what I’ve always thought a strange regulation in Ch’ch: the minimum lot size close to downtown (in the SAM8) is 500m2, but falls to 450m2 a little farther out. The regulation is pushing against the natural shape of a city, with concentric rings of decreasing density.

      • It’s hard to see what the right fix is. More flexible zoning allowing but not mandating higher density mixed commercial/residential use seems important, but there are real infrastructure costs on increasing density in brownfield sites where, for example, sewerage mains aren’t up to the task higher density would demand. But if you give Councils the power to set development levies to offset that cost, they’re doing to use it to effectively re-implement minimum lots sizes and restrict development on the fringes.

  • nolan83 says:

    “The next time someone tells you about the healthy green space all around Wellington and the healthy walking lifestyle in the central city, remember the cost: thousands of musty bedrooms where people spend of third of their lives in unhealthy dampness.”

    Nice conclusion

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