A Bill giving territorial authorities new powers to get more affordable homes built for first-homes buyers and modest-income families who are renting was passed today, says Housing Minister Maryan Street.

“The Affordable Housing: Enabling Territorial Authorities Bill aims to give councils tools to stimulate the provision of more affordable housing, where a shortage is identified in their city or district. The Bill is enabling, rather than mandatory. 

“Councils will first have to assess the housing needs of their area and establish that they have a shortage of affordable housing. They would then need to develop an affordable housing policy in consultation with the community.

“The Bill will create more choice and opportunity for families by giving councils the flexibility to promote a wider variety of house sizes, ownership models and costs in the new home market,” Maryan Street said.

“Although we build large numbers of new homes each year in New Zealand, very few have been designed for first-time buyers or modest-income families. Over the past 15 years, the size of new homes has increased by 50 per cent.”

“There have also been unprecedented house price rises over the past six years, locking many New Zealanders who would have previously become first homeowners, out of the market.

“The Bill is part of a wider package of initiatives the Government is implementing to improve housing affordability. This includes the recently launched Shared Equity Scheme, where the government takes a share of the mortgage to reduce the repayment burden on homeowners,” Maryan Street said.

“Councils have a role in ensuring the Kiwi Dream of homeownership remains able to be realised and that good rental housing is available in their areas. Ensuring there is an adequate housing supply for workers is crucial to local economies.

“The Bill was simplified as a result of the select committee process, addressing local government concerns that it was overly complex and prescriptive. The Bill passed today is also more closely aligned with the Local Government Act, a change also requested by local government,” Maryan Street said.

“Local authorities in the United Kingdom and the United States have similar tools, which enable them to address imbalances in the supply of new homes through a combination of requirements and incentives for developers.”

“The Bill will also prevent the use of title covenants which are used to exclude social or affordable housing from developments. These covenants have become a small but growing problem and unfairly discriminate against some of our most vulnerable people, such as older people and people who require assisted living.”

“The Labour-led government believes homeownership is part of our national identity and an important stabilising influence in society. The government has a responsibility to do what it can to maintain this tradition and to ensure an evenness of opportunity between generations,” Maryan Street said.

Key Elements of the Affordable Housing: Enabling Territorial Authorities Bill:

• The Bill will enable councils to require developers to either:
  • include affordable housing in their developments, make payments towards the cost of providing affordable housing elsewhere, or
  • provide land for the construction of affordable housing.
• However, councils can only introduce these requirements if they have first established evidence of affordable housing need in their area and developed a plan to deal with it that has been appropriately consulted on.
• Councils will be able to offset the costs developers might incur in providing some affordable housing by offering incentives to developers. These incentives may include the waiving of development contributions, or permitting greater densities in developments than might otherwise be allowed.

Notes:

• Guidance material is currently being created by Housing New Zealand Corporation for territorial authorities, developers and anyone else interested in affordable housing.
• The guidance material will be produced in stages, with the first stage to include an overview of the Act and links to the legislation.
• This information is to be placed on the Housing New Zealand website soon.