9 Jul 2018

House in Queenstown's first special housing area sells for $890k

11:45 am on 9 July 2018

A home in Queenstown's first special housing area has sold for $890,000.


Queenstown Photo: 123RF

Special housing areas (SHAs) were meant to increase the affordability of homes by "streamlining the planning and consent process", according to their architect National MP and former Housing Minister Dr Nick Smith.

But figures obtained by RNZ show the average price of homes sold this year in the Bridesdale Farm development - Queenstown's first special housing area - was more than $800,000.

Special housing areas have created about 1000 sections and units in Queenstown, and about 700 more are possible in the district.

But to date only about 50 homes have actually been built.

The Labour Party - which derided the legislation in opposition, saying it was used by speculators and developers to get rich - are curiously silent on the possibility of scrapping them.

This week an interview request with the minister with oversight of SHAs - Jenny Salesa - was declined as the government did not want to distract from their other housing policies, namely KiwiBuild.

The government would assess SHAs sometime in the future, RNZ was told despite Housing Minister Phil Twyford describing them as a "spectacular flop" in the past.

It was unclear whether SHAs could be assessed as having worked or not - if affordability was the measure it would appear not.

Average property values in Queenstown Lakes district sat at $1.15 million in May - a 74 percent increase on average values in June 2014 when Queenstown Lakes was included in the special housing area legislation.

But Queenstown Lakes District Mayor Jim Boult said without the special housing areas, affordability would be even worse in the town.

He was unaware of the $890,000 price tag of the latest sale in Queenstown's SHAs.

Jim Boult Queenstown Mayor

Jim Boult Queenstown Mayor Photo: supplied

"The problem is you can create sections and people can build houses on them, but that doesn't then stop them selling them on the open market for whatever price the market says they're worth," he said.

"One of my great criticisms in the past has been the fact that there has been no restrictions on people just profiteering from the value of a house that's created."

Concerns about profiteering had been answered with a council requirement for 10 percent of homes in those special housing areas to be set aside for truly affordable housing to be run by the Queenstown Lakes Community Housing Trust, Mr Boult said.

Those affordable homes might be in the form of rent-to-buy, affordable rentals or shared ownership.

The trust's executive officer, Julie Scott, was also critical of the Bridesdale Farm development in the past and led the call for the 10 percent affordable homes provision.

She said that stand had paid off.

"There's no silver bullet to solving the housing issues of the Queenstown Lakes district," she said.

"The SHA process of requiring 10 percent of homes to come across to the housing trust is just one mechanism to work towards achieving that.

"170 homes is pretty good to me when we have got 520 households on our waiting list."

At present there were 29 homes in the pipeline for the trust in special housing areas and cash equivalents from other developments.

Dr Smith stood by the legislation and believed it had been a success.

"There's no question the legislation helped support rapid growth in new house construction," he said.

"That affordability problem will remain until such time as sufficient land and sufficient homes are being built to match demand.

"Is the problem solved? No. Is the special housing areas contributing positively to it? Absolutely."

Dr Smith said the slow rate of building in the areas was to be expected.

"Anybody who has had experience in the housing area knows that it takes time from when the policy is corrected and made more conducive to building more houses and more affordable houses to when the results come out the other end," he said.

Mr Boult agreed: "You have to appreciate that this isn't a five-minute process."

"Land has to be developed, sections created, roads created, et cetera and that all takes an amount of time. But there are a couple of SHAs in our district where houses are actually now being built."

The developers of Bridesdale Farm - like the government - declined to be interviewed.

Questions remain about the special housing area process and its outcomes for everyday New Zealanders, but the government is not willing to provide them.

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