Bay housing crisis looms

Eroding home ownership and rising rents are forecast for the Bay of Plenty.

Buying or renting a home in the Western Bay of Plenty is going to become harder, unless a range of actions are taken now, according to a new Housing Demand and Need research report released today by the SmartGrowth Partnership.

The report's key findings are that housing costs are increasing faster than household incomes. Between 1991 and 2017, median house prices increased by 464 per cent in Tauranga City and 400 per cent in Western Bay of Plenty District, while household incomes only increased by 128 per cent and 141 per cent.

Deteriorating housing affordability has increased the number of private renter households experiencing housing stress in western Bay of Plenty.

Most renters, nearly 90 per cent cannot affordably purchase a home priced at $500,000 and the median home price in March 2017 was $620,000 in Tauranga City and $550,000 in Western Bay of Plenty District.

The SmartGrowth report by Community Housing Solutions and Livingston and Associates, paints a picture of eroding home ownership and increasing rental demand from couple-only and single person households.

The report also predicts a big increase in senior renters. Those aged over 65 and renting are set to increase by 222 per cent over the next 30 years in Tauranga City, and by 182 per cent in the Western Bay of Plenty District.

The report's key projections are that the rate of home ownership will continue to decline to 58.1 per cent in Western Bay of Plenty and 54.6 per cent in Tauranga City by 2047

  • Couple-only renter households will grow the most, increasing by 112 per cent between now and 2047
  • One-person renter households will also grow by 105 per cent between now and 2047
  • Couple-only owner-occupier households set to grow strongly, increasing by 37 per cent
  • One-person owner occupier households up 50 per cent
  • Renter households with people aged 65 years and older projected to increase by 6,830 or 222 per cent in Tauranga, and by 1,970 or 182 per cent in Western Bay of Plenty

The report suggests a number of key response areas for the SmartGrowth Partnership including

  • Considering three inter-related housing issues: overall size and number of bedrooms of homes in the market (typology); the overall cost of renting or purchasing a new home (affordability); and the failure of incomes to keep pace with housing costs (wages).
  • Suggested responses include
  • Land development/planning leadership – consider Urban Development Authorities
  • Inclusionary zoning – ensure specified levels of all new development are affordable to residents by mandating certain percentage of new homes developed at defined affordable levels, normally related to the area's median income.

New Special Housing Areas could trial a retained affordable home product based on household income and finance costs.

· Support for shared ownership proposals

· Support community housing trusts

· Support student accommodation provision

· Seasonal worker accommodation eg. review the 50 day occupancy limit for caravan parks/campgrounds

· Co-ordinated advocacy – eg. particularly with regard to Income Related Rents subsidy and inability of councils to access this.

The new data, analysis and research gives the Partnership a better and more fine-grained understanding of short and long-term housing trends and possible responses, says SmartGrowth independent chair Bill Wasley.

'It puts the numbers behind an issue that is the biggest future challenge we have in the Bay – how do we supply not only the right number of homes but also the right types of homes people need now and in the future, at a range of price points whether renting or owning?

'The SmartGrowth Leadership Group – a joint committee of council leaders and tangata whenua - today approved developing a comprehensive Smart Housing Action Framework to bring all the work we are already doing together. We'll need to look at new short and long term actions too. This report predicts a stressful picture of our future unless we act together with others in the housing space.

'We need to crack this hard nut of giving a growing community like ours a choice of housing including smaller and more affordable housing for renting and owning. That is important if we are to continue attracting and retaining key workers like teachers, health care providers, horticultural workers, students, older renters and many others. Councils certainly can't do this alone – and neither do we think the market will deliver the entire range of housing we'll need for smaller, but also lower and middle income households.

'We hope the Government will help us to fund and pilot new kinds of housing models involving central government working with housing trusts, councils, iwi, community housing providers and developers,” says Bill.

The Housing Demand and Need Research Report was commissioned jointly by SmartGrowth, Tauranga City Council, Western Bay of Plenty District Council and BayTrust.

Click here for the full report.

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2 comments

Actions not Reports.

Posted on 03-01-2018 08:50 | By Bruja

The 'reports' need to end now and some actual ACTION needs to happen. Councils and other organisations keep on 'studying' and coming up with figures and graphs etc. These are not numbers, they are PEOPLE. People struggling to buy food because of their housing costs, that's if they can actually FIND somewhere to live. :(


@ Bruja

Posted on 03-01-2018 11:18 | By MISS ADVENTURE

Not so SmartGrowth only keep a seat warm and look at PC screens and take Ratepayer holidays to Aussie. The knowledge basis is very limited. The ability to be objective/realistic cant be as their pay-masters are the problem+themselves. The reakl issue here is not the cost of building but the huge increase in the costs of land - a section. Councils have added mega costs to developments and constricted the process of land transforming from farms/rural to a section with a title. This is where all the price/cost rises are. I estimate that the costs of building a house has doubled, the cost of a section would be about 6-8 times more in the same time frame.


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