Crowded house, but we can dream it’s over

To renter Devon Sanson, a slum sounds a lot like a place he used to rent: Seven people in a collapsing

100-year-old villa that they can’t afford to move out of.

Sanson was living in Wellington’s Aro Valley when the

2016 Kaiko¯ ura earthquakes hit, almost destroying a chimney that ran right through the middle of the house and creating a large bulge in the walls filled with dislodged bricks.

Even before the earthquake, his living situation wasn’t great. Seven people had to be crammed into the house to sustain the eye-watering rent.

One of those seven was renting out a room not much larger than a broom closet, 3 metres by 6 metres, with a bed stretching from wall to wall.

‘‘The walls were bulging, the bricks were coming loose, and the house was already falling down a hill, it was depressing,’’ Sanson says.

These kinds of slum conditions are regularly tolerated, because while you might catch a respiratory illness living in one of these places. they do not harm the neighbourhood aesthetic, or stop sunlight from reaching the neighbours.

Government plans to loosen densification rules and allow buildings up to three storeys on most sites without the need for resource consent have sparked a frenzy of submissions to the environment select committee, warning about the potential for overcrowding. But it’s already here.

Coalition for More Homes spokesman Scott Caldwell says that under existing Auckland Unitary Plan rules, you can put three dwellings on a section across 80 per cent of Auckland. The only difference is you have to squeeze more people on to your property in granny flats shoved down the back.

If you think an apartment being able to look into your backyard is bad for privacy, try living in a granny flat behind your landlord.

Preventing density only allows us to pretend our housing crisis doesn’t exist, but it doesn’t rid us of it.

It hides overcrowding out of sight, on mattresses on the floor of converted garages, tiny cabins on shared sections, or out in far-flung suburbs where people sometimes spend hours commuting to work.

On Thursday the environment select committee released its report and recommendations on the Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill, a controversial deal between National and Labour to speed up an already controversial National Policy Statement on urban development.

Single-storey devotees downplay the role of housing supply in bringing down house prices, and largely blame everybody but themselves for the housing crisis. One minute it is central bank policy, the next it is the person who owns more houses than they do.

While there is plenty of blame to go around when it comes to the housing situation, it is also hard to envisage a solution which doesn’t involve a lot more density and housing.

New Zealand has experienced the third-highest property price increase in the world over the past year according to statistics compiled by the International Monetary Fund, but at the same time we also had one of the world’s smallest levels of credit growth.

The relationship between credit and house-price growth has been a lot clearer in other markets. Turkey experienced the secondlargest property price increase in the world, but has also had the world’s largest expansion of credit over the past year.

A shortage of land has created a similar situation to New Zealand in Luxembourg, where credit growth has been low, but recorded houseprice rises have been the highest in the world.

Clearly, quantitative easing and interest rates have an impact on asset prices, but equally clearly there is a real housing shortage at work here, too.

A major part of the housing crisis is that we haven’t built a greater number of smaller dwellings in the centrally located suburbs where people want to live. Auckland’s unitary plan allowed more housing on the city’s least valuable plots of land, but not in sought-after suburbs.

This new piece of legislation will give councils a lot less wriggle room to create situations like this, by allowing people to build three dwellings up to three storeys as of right.

The announcement of Labour’s and National’s bill came on the back of attempts by councils to dismember and carve out exemptions to the already announced National Policy Statement on urban development.

So, predictably, after the announcement of a bipartisan consensus in October, Team Granny Flat has gone into overdrive, flooding the airwaves and the select committee with concerns about design, sunlight, ‘‘slums’’ and infrastructure, all with the fervour of a group of stiffed investors queueing up for a bailout.

And stiffed they will be. An analysis from PwC and Sense Partners released alongside the legislation estimates it will prevent $198 billion in wealth being transferred from renters and firsthome buyers to existing property owners, thanks to the price rises it will prevent.

ASB economists have also noted the effect the new rules will have on house prices. Those effects might not be felt within the current property cycle, but they will make a difference in future property price cycles by allowing construction to ramp up a lot faster when demand arises.

Of course, sunlight, design, and bad buildings are all good issues to raise, but they also exist with or without this bill. Arguably, giving property owners a real incentive to redevelop their properties might actually create better-quality buildings compliant with today’s standards, as opposed to the building codes that were in place a century ago.

Despite all of this, the proposal seems to have escaped the committee relatively unscathed, with the consensus between Labour and National holding up, and the Green Party and ACT opposing it.

It is true a lot of good suggestions haven’t made it into the select committee’s majority recommendations, but a lot of bad ones haven’t either.

Other good debates to have, like the one over urban design, should happen next year when the Ministry for the Environment and Te Tu¯ a¯ papa Kura Ka¯ inga (Ministry of Housing and Urban Development) develop their national medium-density design guide.

And while infrastructure funding needs to be improved, this bill will not tip infrastructure concerns over the edge.

In its submission to the select

committee, Infrastructure New Zealand acknowledged more housing might come online than councils had planned for, but councils would also be compensated with increased developer contributions.

Infrastructure New Zealand also expected the need for extra infrastructure, like larger pipes, would be uncommon since, if houses were already there, then a lot of the infrastructure was likely already there, too.

‘‘Comments that the infrastructure is not there or not planned for to service the growth unshackled by this bill are baseless lies.’’

For the record, people like Sanson are not treating this bill as the silver bullet for our housing crisis, either. He is part of a group called Forever Affordable Homes, who view it as the ‘‘gateway drug’’ to more affordable housing – other Yes In My Backyard groups seem to have a similar attitude to it.

Forever Affordable wants to introduce new forms of tenure to New Zealand where people take ownership stakes in multi-dwelling properties and sell those on to others while agreeing to forego significant capital gains.

But to make his preferred kind of housing a reality, you first need to enable different types of housing to be built.

‘‘A lot of young people are forced to live in large flats with people they may not know very well, in spaces that may not actually be designed for living.

‘‘I think that’s much more of a concern than living close to other people.

‘‘If you’re having to share a single bathroom with eight other people, that’s really tough.’’

Team Granny Flat has gone into overdrive, flooding the airwaves with concerns about design, sunlight, ‘‘slums’’ and infrastructure.