An accusation that planners and SmartGrowth related studies are a major cause of unaffordable housing in Tauranga is rejected by SmartGrowth BOP independent chairman Bill Wasley.

The recently released Demographia survey finds Tauranga and the Western Bay of Plenty is the second most unaffordable housing market in New Zealand and is 'severely unaffordable”.

Tauranga was the second most unafforable city in NZ.

On the unaffordable scale, which works by dividing the median house price by median income, Tauranga had a multiple of 6.6. Housing is considered unaffordable when median house prices are more than three times median income, or more than three on the scale.

The report says Tauranga-WBOP's median house price is $364,800, while the median household income is $55,000.

Auckland was the most unaffordable city with a rating of 8.0, with Christchurch third at 5.8. Wellington had a median multiple of 5.4, while Palmerston North-Manawatu, followed at 4.5 and Hamilton-Waikato, at 4.8.

The Demographia survey compares median prices and incomes in 85 major housing markets.

The survey also says house prices rising much faster than household incomes is invariably associated with urban containment policy, and is most evident in Australia, New Zealand and United Kingdom and some markets of Canada and the United States - all markets rated severely unaffordable.

'That could be one factor,” says Bill.

'They seem to relate housing affordability and land supply as the beginning and end of it, and in our view it is a somewhat more complex situation.

'And if the land supply is constrained and I'm not saying that is the case in the Western Bay, we would argue that with a current uptake rate of just under 500 lots per year there is probably enough zoned land in a range of locations for about 20 years.

'So, if there wasn't adequate land provision a constrained supply could contribute to housing unaffordability.

'We would argue that there's adequate supply throughout the Western Bay sub-region, that there's more to housing affordability than just the supply of land.”

While the supply of land seems to be the focus of the Demographia report, Bill says it doesn't seem to recognise the effect of the cost and provision of infrastructure.

He refers to the cost of transforming a paddock into a housing development with roads and the three waters; piping for water, sewerage and stormwater. Population growth and the cost of building materials also adds to the cost of housing.

The development contributions required of developers to pay for the infrastructure also varies across the country and internationally, says Bill.

In Australia a lot of the state governments pay for infrastructure, but in New Zealand there aren't that many options,” says Bill.

The New Zealand Government pay some roading subsidy, but the three waters are all paid for by local government.

The Demographia report writer, research scholar Alain Bertaud says affordable housing is affected by the same restrictive land use policies that have destroyed the historic relationship between house prices and incomes.

'Typically, land use policy authorities fail to compare credible measures of housing affordability with historical standards,” says Alain.

'When faced with the reality, housing costs rise disproportionately high relative to incomes, they seek to identify virtually any cause except for the principal cause itself: the destruction of the competitive market for land.

'By severely limiting or even prohibiting development on the urban fringe, urban containment eliminates the ‘supply vent' of urban fringe development, by not allowing the supply of housing to keep up with demand, except at prices elevated well above historic norms.

'In addition to higher costly housing costs relative to incomes, the higher densities in urban containment markets are associated with greater traffic congestion and longer average work trip journey times.”

'There is no silver bullet to increase the supply of affordable housing. But if planners abandoned abstracts and unmeasurable objectives like smart growth, liveability and sustainability to focus on what really matters – mobility and affordability – we could see a rapidly improving situation in many cities.

"I am not implying that planners should not be concerned with urban environmental issues. To the contrary, those issues are extremely important, but they should be considered a constraint to be solved not an end in itself.”

The Demographia International Housing Affordability Survey is produced to fill the gap left by urban planning policies that have largely failed to meaningfully monitor housing affordability in the areas under their jurisdiction, says Alain.