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Global Cities and Affordable Housing: Auckland

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Global Cities and Affordable Housing: Auckland

Tāmaki Makaurau, the Māori name for Auckland, means “desired by many.” Māori are the Polynesian indigenous people of mainland New Zealand.

Cityscape of Auckland, New Zealand.The 2022 median home price in Auckland was slightly more than NZ$1 million, which is more than US$600,000. This represents a sharp rise in housing costs over the previous decade, and is eroding affordability for many low-income residents.

Auckland is a vibrant city boasting a wide variety of food, art, and cultural attractions. The most populous city in New Zealand, Auckland is home to roughly one-third of the country’s 5 million people. The city is full of harbors where fine dining and wine tastings are never far away. In fact, a 40-minute ferry ride from Auckland is picturesque Waiheke Island, known for its beautiful vineyards, olive groves, and black sand beaches. Visitors can enjoy fine dining and walk along Auckland’s beautiful waterfront at Viaduct Harbour.

Although Auckland is an attractive destination for visitors, it is an expensive proposition for locals. The 2022 median home price in Auckland was slightly more than NZ$1 million, which is more than US$600,000. According to the Auckland Council, the municipal government for the area, New Zealand has no agreed-on measure for housing affordability. Often, localities adopt the international measure of housing affordability — spending no more than 30 percent of one’s gross income on housing. From 2011 to 2021, the nation’s home prices rose dramatically, destroying affordability for many low-income citizens. A lack of supply along with population increases also helped fuel the rise in home prices. Outdated zoning regulations also contributed to the problem, because many regulations did not allow homeowners to build up (add levels) and included parcel restrictions. Many of New Zealand’s policies dated back to the 1980s and encouraged low-density building, with high rises permitted only in urban business districts. As a result, the city needed to change its policies and regulations to create societal advantages in housing.

In 2021, New Zealand’s government introduced the Medium Density Residential Standards, which require highly populated cities such as Auckland to allow buildings of up to three stories and up to three homes on existing residential parcels. In 2016, Auckland introduced upzoning, which is the practice of changing zoning permits to allow additional multifamily and mixed-use development. The city upzoned approximately three-quarters of its residential area under the Auckland Unitary Plan (AUP). The plan directs Auckland’s use of its natural and physical resources through various determinants and includes district and regional plans. It also includes land development guidelines. As a result, construction has increased. The Auckland Council, the municipal government for the area, estimates that the plan has tripled the city’s housing capacity. The resulting increases in supply, along with the influence of other programs, have helped make the dream of homeownership more accessible for many.

Housing Foundation, established in 2001, is a charitable trust that uses affordable housing programs to help clients attain homeownership. Housing Foundation is funded through grants, rents, and other fees and receives support from leading philanthropic organizations in New Zealand.

Under its Shared Ownership initiative, the foundation helps people through the process of purchasing their first home by offering them fractional ownership. Applicants buy a percentage, or shares, of the Housing Foundation-owned home until they are able to buy out the foundation’s share in the property and own it outright. This arrangement reduces the buyers’ out-of-pocket expenses associated with home purchasing, such as downpayments.

Another Housing Foundation initiative is the Rent to Own (HomeSaver) Programme. Under this program, prospective first-time homeowners with manageable debt, a deposit, and full-time employment can apply for a unit in a Housing Foundation property of their choice and secure a mortgage. The foundation helps applicants through the financing process and introduces them to banking partners that are familiar with the program. An annual household income of between NZ$85,000 and NZ$120,000 annually is recommended, but this range can vary depending on the chosen property and other determinants.

The foundation also offers the KiwiSaver Program whereas the applicant can only withdraw funds for the purchase of their first home and the First Home Grant which is a $10,000 grant towards your first home once the applicant has made KiwiSavings contributions for 3-5 years along with other documentation such as income.

The foundation has delivered 994 homes as of the end of 2021, with 305 additional homes planned and under construction. 115 homes will be completed by mid-2023 through a joint venture with CORT Community Housing, a development company, and Te Tumu Kāinga, a trust that invests in housing projects.

Over time, Auckland has developed ways to address its affordable housing issues. Changes in development regulations and housing policy have made this city a popular and desirable place to live.

Auckland Council. 2012. “Auckland Action Plan: Stage 1.” Accessed 19 March 2023. ×

 
 
Published Date: 4 April 2023


The contents of this article are the views of the author(s) and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. Government.