Wellington City Council

Wellington City Council

Wellington City Council

TPG PLANNING STRATEGIC PROBLEM SOLVING FOR INNOVATIVE OUTCOMES REPORT TO: WellingtonCityCouncil WellingtonCityHousingandResidentialGrowthStudy: FinalPlanningAssessmentandRecommendations September 2014

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 1 Table of contents E X E C U T I V E S U M M A R Y . . 5 1 . I N T R O D U C T I O N . . 16 2 . C O N T E X T U A L O V E R V I E W . . 17 2.1 RESIDENTIAL PLANNING . . 17 2.2 HOUSING AND HOUSING AFFORDABILITY AS PLANNING ISSUES . . 17 2.3 CENTRAL GOVERNMENT REFORM . . 17 3 . H O U S I N G D Y N A M I C S . . 19 3.1 WELLINGTON METROPOLITAN CONTEXT . . 19 3.2 A BRIEF HISTORY OF RESIDENTIAL DEVELOPMENT IN WELLINGTON CTY . . 19 3.3 CONTEMPORARY HOUSING MARKET . . 25 3.4 EXISTING HOUSING STOCK . . 29 4 . D E M O G R A P H I C P R O F I L E A N D T R E N D S . . 36 4.1 POPULATION AND HOUSEHOLD FORCES . . 36 4.2 DEMOGRAPHIC DRIVERS . . 36 4.3 TENURE TRENDS . . 36 4.4 SOCIAL AND ECONOMIC DRIVERS FOR CHANGE . . 37 4.5 LOOKING FORWARD OVER THE NEXT 10 – 20 YEARS . . 37 4.6 POPULATION AND HOUSEHOLD GROWTH . . 38 5 . E X I S T I N G P L A N N I N G F R A M E W O R K . . 40 5.1 STRATEGIC SETTINGS . . 40 5.2 WELLINGTON CITY DISTRICT PLAN . . 41 5.3 WELLINGTON CITY HOUSING ACCORD . . 43 5.4 WELLINGTON CITY LONG-TERM PLAN . . 44 5.5 METROPOLITAN PLANNING FRAMEWORK . . 44 6 . H O U S I N G V I E W P O I N T S . . 45 6.1 DEMAND SIDE PREFERENCES – THE HOUSING SURVEY . . 45 6.2 SUPPLY SIDE VIEWPOINTS – THE DEVELOPER SURVEY . . 48 7 . L A N D S U P P L Y . . 51 7.1 EXISTING DEVELOPMENT PATTERNS . . 51 7.2 LAND AVAILABILITY AND DEVELOPMENT CAPACITY . . 53 7.3 INFRASTRUCTURE CAPACITY . . 56 7.4 IMPACTS AND PERFORMANCE OF PLANNING CONTROLS . . 56

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 2 7.5 DEVELOPMENT AND REDEVELOPMENT OPPORTUNITIES . . 58 8 . W H A T ’ S H A P P E N I N G I N A U C K L A N D A N D D O E S I T M A T T E R T O U S ? . . 62 8.1 BACKGROUND TO CHANGE IN AUCKLAND . . 62 8.2 HOUSING AFFORDABILITY IN AUCKLAND . . 62 8.3 THE AUCKLAND PLAN AND PROPOSED UNITARY PLAN . . 62 8.4 HASHA ACT AND AUCKLAND HOUSING ACCORD . . 64 8.5 DISCUSSION . . 65 9 . P L A N N I N G T O O L S A V A I L A B L E . . 66 9.1 DISTRICT PLAN . . 66 9.2 WELLINGTON HOUSING ACCORD . . 66 9.3 STREAMLINED RESOURCE CONSENT MODELS . . 66 9.4 MELBOURNE GROWTH AREAS MODEL . . 66 9.5 LAND DEVELOPMENT AGENCY . . 67 9.6 FINANCIAL INCENTIVES . . 68 9.7 REGULATORY INCENTIVES . . 68 9.8 REGULATING HOUSING AFFORDABILITY . . 68 9.9 STIMULUS PROJECTS . . 69 1 0 . C O N C L U S I O N S A N D R E C O M M E N D A T I O N S . . 70 10.1 ADDITIONAL DEVELOPMENT CAPACITY REQUIRED . . 70 10.2 PRIMARY RECOMMENDATIONS . . 71 10.3 SECONDARY RECOMMENDATIONS . . 76 10.4 CONCLUSIONS . . 77 B A C K G R O U N D M A T E R I A L . . 79 FIGURES Figure 1: Wellington City and neighbouring territorial local authority areas Figure 2: New Zealand Company Plan for Wellington 1840 Figure 3: Wellington Waterfront 1868 Figure 4: Te Aro housing 1940 Figure 5: Seatoun Tunnel in the 1920s Figure 6: Arrival of the first train at Johnsonville Figure 7: Northern Motorway under construction in the 1960s Figure 8: Churton Park (2014)

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 3 Figure 9: Mt. Victoria (2006) Figure 10: Central city apartments (2014) Figure 11: House price trends New Zealand main urban centres Figure 12: Housing affordability in selected urban centres Figure 13: House price trends in Wellington metropolitan and constituent local authority areas Figure 14: Housing affordability in the Wellington metropolitan area Figure 15: House price by distance from Wellington CBD Figure 16: Housing stock by age and location in Wellington City’s sub-districts Figure 17: Housing stock by type in Wellington City communities Figure 18: Standalone and multi-unit housing development in Wellington City by period Figure 19: Housing by no. of bedrooms in Wellington City Figure 20: Stand-alone and multi-unit dwellings in Wellington City’s sub-district Figure 21: Dwellings by no. bedrooms in Wellington City’s sub-districts Figure 22: Dwellings by no. bedrooms and dwelling type in Wellington City Figure 23: Average dwelling value by type and community in Wellington City Figure 24: Dwellings by no. bedrooms and Wellington City sub-district Figure 25: Urban Development Strategy growth management concept Figure 26: Summary of development sector expectation of future dwelling demand in Wellington City Figure 27: Summary of development sector expectation of future dwelling construction in Wellington City Figure 28: New dwelling construction and earthworks on a steep site in Wilton (2013) Figure 29: Vacant residential lots for sale in the Wellington metropolitan area (December 2013) Figure 30: Housing New Zealand owned lots in the Strathmore area Figure 31: Underutilised development potential in Strathmore area Figure 32: Figure of greenfield expansion areas in the Proposed Auckland Unitary Plan Figure 33: Tranche 2 of Auckland’s special housing areas Figure 34: Demonstrating the proposed approach to new medium density zonings and transition zones TABLES Table 1: Forecast id© household projections by Wellington City sub-district Table 2: Statistics New Zealand Medium Growth Projections Table 3: Summary table of territorial local authority planning documents (Wellington metropolitan area)

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 4 Table 4: Dwelling completions in Wellington City by type 2008 - 2012 Table 5: Dwelling completions in Wellington City by broad area 2008 - 2012 Table 6: Dwelling completions in Wellington metropolitan by constituent local authority area Table 7: Vacant sections in the Wellington metropolitan area by constituent local authority area Table 8: Assessment of forward development capacity in the Wellington City District Plan

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 5 EXECUTIVE SUMMARY INTRODUCTION AND CONTEXT This report has been prepared by The Property Group Limited (“TPG”) for Wellington City Council (“Council”) as an input into existing planning workstreams including preparation of the Wellington City Urban Growth Plan (“urban growth plan”) and ongoing review of of the District Plan. In turn it will also form an input into Council’s 2015 – 2025 Long Term Plan (“LTP”). All of these workstream are relevant to decisions about where new housing should be constructed over the next 10 – 20 years, and what forms of housing should be encouraged. To address these needs Council asked TPG to undertake analysis across three distinctive work areas:  Housing forces – analysis of the demographic and other forces shaping future housing demand and supply in Wellington City, to include population and household projections (disaggregated to community level), tenure trends, labour market impacts and residential development trends.  Housing preferences – consultation with key stakeholders (developers, housing providers and decision makers) and selected housing consumers to better understand the drivers and housing preferences of those people most affected by Council housing policy settings.  Planning and regulatory – analysis of issues relevant to spatial planning and residential growth management including land supply, the effectiveness of existing planning settings, and the impacts of Resource Management Act (“RMA”) reform.

WELLINGTON CITY’S HOUSING CONTEXT Residential zoned land comprises approximately 75% of all urban zoned land in Wellington City. Further, residential activity is encouraged in other urban zonings, notably the central city zone (“Central Area”) and suburban “Centre” zones. For this reason Council’s approach to residential planning is a central component in urban growth management. In recent years housing, and more specifically housing affordability, has become a dominant issue in the New Zealand planning scene. Nationally the debate has been driven by issues in Auckland, and more recently Christchurch. In both these centres house prices have risen sharply in recent years, in Christchurch as a result of the earthquakes. In Wellington too this has long been recognised as an issue by Council. Housing affordability problems are regularly linked to the Resource Management Act (“RMA”) and planning and the current National-led government has been active in reform of the RMA since coming to power in 2008. Primarily the reform has been directed to a “business friendly” approach where applicants can approach RMA processes with greater certainty.

An underpinning rationale in this is a desire in government to release more land in order to reduce land and housing costs. Other initiatives, outside the RMA and planning, are also being pursued in an effort to arrest rising house prices in Auckland (and to a lesser degree elsewhere). Notably and recently was the Reserve Bank loan to value ratio (“LVR”) initiative requiring homebuyers to hold equity equating to 20% or more of the purchase price.

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 6 Wellington City sits within the broader Wellington urban area and housing market. For the purpose of this study we have defined this area as the five major urban councils – Hutt, Upper Hutt, Porirua and Kapiti Coast. Although located at the southern end of this conglomeration Wellington City acts as the fulcrum, providing the majority of employment (primarily in the CBD) and supporting the most expensive housing market. The four other council areas support some employment of their own but each play dormitory roles, with residents commuting to Wellington City for work in substantial numbers. The impact of these dynamics on the urban geography is that Wellington City is the most densely populated and expensive place to live in the urban area, with comparatively few greenfield development opportunities. The market has responded over time with substantial infill development in established suburbs and apartment development in the central city. This contrasts with the dominant low density nature of development in the neighbouring cities. Wellington City’s natural geography, hemmed between the harbour and steep hills, has also played a central role in creating this density and land scarcity. House price trends in Wellington City, Auckland urban and Christchurch urban Source: Quotable Value (www.qv.co.nz) Whilst rising house prices and declining housing affordability have been identified as a national issue the effects have been felt most keenly in Auckland and Christchurch (where the earthquake has substantially reduced the supply of housing). By comparison Wellington City and the broader Wellington urban area has experienced only slow price growth over the last 5 years. However, Wellington City remains one of the least affordable urban areas in the country.

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 7 Housing affordability in selected New Zealand urban areas Sources: MBIE (2013), Demographia (2013) As we have already described higher house prices in Wellington City are a function of economic geography as much as anything else, and our further work has demonstrated that the most expensive suburbs in the metropolitan area are almost exclusively located in Wellington City, and in general house prices decline with distance from the Wellington CBD. In itself this information does not point to a Wellington City land supply problem because there are no obvious, new development fronts available and because the city acts as the epicentre of the metropolitan employment housing market. This is a basic function of urban economic geography that is observed in metropolitan areas worldwide. Notwithstanding, there are tangible benefits to providing an ongoing land / housing supply in closer proximity, within Wellington City. House price by distance from Wellington CBD

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 8 WELLINGTON CITY’S EXISTING HOUSING STOCK The City’s existing housing stock can be summarised as follows:  At the end of 2013, Council’s residential database listed about 72,000 private residential dwellings within urban-zoned areas, not including student accommodation and housing associated with other uses.  The Wellington housing portfolio had a total value of around $34 billion, and a land value (including vacant land) approaching $15 billion.

 The 72,000 dwelling units consumed about 32,000 hectares of land, not including roads, parks and other residential infrastructure.  About 5,000 hectares of subdivided residential land was either vacant or under development at the end of 2013.  In total, the City’s residential zones make up about 75% of Wellington City’s urban area. WELLINGTON CITY’S DEMOGRAPHIC PROFILE AND KEY TRENDS Based on preliminary results from the 2013 Census, we estimate that Wellington has a population of around 200,000, living in about 74,000 households:  In 2013, family-with-children households (including single parent households) made up only 36% of all Wellington households.

 In almost all of Wellington’s 31 neighbourhoods and communities, family-with-children households (including sole parent families) make up less than 50% of all households.  This reduces to 20% for the CBD, Te Aro, and city edge communities.  Single person or couple households now make up more than 50% of all Wellington households.  Group households (two or more unrelated people living in the same dwelling) make up about 12%.  Between 2011 and 2031, Wellington’s population is projected to increase by about 30,000 (16%) to 230,000. The total household count will increase by about 14,000 (20%) – see further detail in Section 3.6 below.

 Single person and couple-only households are expected to make up about 66% of net household growth.  Family households with children will increase by about 3,000 (20%).  Multi person households (10%) and other households will make lesser contributions. Growth has slowed since considerably since 2006, however, which means that Council’s current community-based growth projections can no longer be relied upon for detailed planning purposes. This is a matter that we suggest Council look further into. For now we have adopted Council’s official figures but also considered them alongside Statistics New Zealand figures, and made planning recommendations on the basis of that growth is likely to occur somewhere in the range between the two.

Wellington City Council

Wellington City Council Wellington City Housing and Residential Growth Study 9 Other key patterns and trends include:  An ageing population with the consequential impact of smaller household sizes.  Declining rates of home ownership and associated increase in rental households.  Ongoing increases in professional employment, particularly in the CBD (this even despite public service restructuring and the global financial crisis). Over the forseeable future household and population growth rates in the City are expected to be steady with projections indicating Council needs to be prepared for 750 – 1,100 new dwellings in the city year on year for the next twenty years.

Wellington City Sub-District New households 2011 – 2031 Central City and Fringe 6,586 Northern Suburbs 3,206 Southern Suburbs 2,253 Eastern Suburbs 1,484 Western Suburbs 1,436 Total Wellington City 14,965 Forecast id© household projections by Wellington City sub-district WELLINGTON’S EXISTING PLANNING FRAMEWORK Council’s approach to urban development is to encourage a “compact city” by targeting most new housing into the existing urban area. Aside from identified greenfield growth areas in the north of the city, development is generally to be contained within the outer green belt, and within this area encouraged around suburban centres and a “growth spine” running from Johnsonville to Kilbirnie. The primary strategic document governing this approach is the Urban Development Strategy (“UDS”) adopted by Council in 2006. Key aspirations of the UDS include:  An approximately even split of new housing into greenfield areas, existing suburbs and the central city.

 Providing for Wellington’s greenfield growth on the northern fringe.  Concentration of 60% of new housing onto a growth spine running through the established area from Johnsonville to Kilbirnie.  New housing and employment into and around suburban centres. The plan is well conceived in terms of applying the compact city philosophy to the Wellington City context in a well-founded, area specific manner. The UDS encompasses the previously adopted Northern Growth Management Framework (“NGMF”) (2003) and the subsequently adopted Centres Policy (2009). This

Wellington City Council Wellington City Housing and Residential Growth Study 10 report forms part of Council’s strategic review of the UDS and the development of a new “urban growth plan” which will supersede both the UDS and the Transport Strategy. Underneath of but critical to this strategic direction is the district plan, Council’s regulatory planning document. As the first district plan prepared under the Resource Management this became operative in 1999 based on a laissez-faire approach to land use and development typical of the period. Urban design guidelines were a key innovation in the plan but otherwise it adopted an effects based approach and was relatively simple in its conception. Since that time a number of plan changes (PC38, 56 and 72 in particular) that have been implemented to reflect the strategic directions adopted in the UDS, NGMF and Centres Policy.

Council’s long term planning under the Local Government Act governs asset management and capital expenditure and has been closely aligned with regulatory and strategic planning, particularly since the adoption of the UDS. This has manifested in such things as road and stormwater upgrades and public improvements in key centres. A powerful new planning tool at Council’s disposal is the Wellington City Housing Accord recently agreed with central government. This operates under the Housing Accords and Special Housing Areas Act (“HASHA Act”) and enables Council to identify areas where resource consent and rezoning processes will be substantially streamlined to provide greater certainty to developers.

It is also important to remember that the City forms part of a broader urban area. The Wellington Regional Policy Statement (“RPS”) and Wellington Regional Strategy (“WRS”) prepared by the Greater Wellington Regional Council together set out a high level planning framework for the Wellington metropolitan area which encourages urban intensification and nodal development. Notwithstanding, the direction set out is broad, and there remains firm reliance on the individual territorial councils to control development and planning within their jurisdictions through their strategic documents and district plans. This report forms part of Council’s strategic review of the UDS and the development of a new “urban growth plan” which will supersede both the UDS and the Transport Strategy. VIEWPOINTS RESEARCH Some key findings from our housing consumers survey included:  At least 50% of respondents would actively consider living in more compact housing to stay in their preferred location and 25% would consider living in an apartment.

 80% of all those surveyed said they would prefer to stay within the same neighbourhood or general area that they currently live in.  About 50% of our sample also placed a high priority on access to local shops, cafes and restaurants, health and social services.  About 30% had made trade-offs to live in their chosen location, including paying more for housing.  Only 12% had serious concerns about current or future housing affordability.  A growing proportion of housing stock in the CBD and Wellington’s southern and eastern suburbs is being utilised for rental housing.

Wellington City Council Wellington City Housing and Residential Growth Study 11  ‘Empty nester’ older singles and couples make up a growing proportion of owner-occupier housing in the city’s western and inner-northern areas. Some key findings from our housing developers survey included:  Respondents were generally supportive of Council’s Central Area planning rules, but believed more could be done to promote compact housing forms in the Inner and Outer Residential Zones.  Restrictions on infill housing introduced by PC56 were seen to be out of alignment with what the market wanted, and minimum lot sizes acted as a substantial brake on comprehensive redevelopment.

 There is a view amongst some within the development community that not enough land is available for housing, and that the larger sub-markets are dominated by only a few players.  Suburban areas on the fringe of the central city will experience an upsurge in intensive housing development, reflecting the increasingly diverse population in these areas, and the fact that lower- density housing development is no longer viable in these areas.  Developers are prepared to adapt to the changing demographics of Wellington’s housing marketplace.

 Household growth (coupled with demand growth) in the inner city is changing the form of housing that can be delivered within reasonable commercial parameters. LAND SUPPLY AND DEVELOPMENT CAPACITY Through our research we have brought together data of different types and sources to arrive at a view regarding land supply / development capacity in the City. This has included review of data from the neighbouring territorial local authorities also to ensure that a metropolitan perspective was taken. Data reviewed included the five urban territorial local authorities own data regarding land supply (2013); spatial assessment of housing prices and affordability; and the incidence of vacant of vacant sections. Whilst these paint a general picture of sufficient land supply and development capacity across the broader urban area Wellington City faces some specific challenges in terms of unlocking land for residential development:  A substantial proportion of the greenfield supply is held in the ownership of two land owners and they are releasing vacant lots / new homes to the market at slow rates and overall Wellington City is playing a subordinate role in the delivery of new greenfield housing lots in the broader metropolitan market (see Figure 29 below).

 The majority of recent dwelling completions (approx. 80%) have occurred within the existing urban area of the city and some of these areas present significant cost and consenting challenges for developers and some sites tightly held by passive investors – on this basis we believe that the real forward supply of infill and central city land is likely to be substantially less than the figures represented (which set out the development capacity within the district plan).  Some land is constrained by steep topography and requires costly earthworks and engineering to develop. Such sites will only be developed by parties with no immediate need to realise a return, where a number of units can be developed to make projects viable, and in the worst cases when

Wellington City Council Wellington City Housing and Residential Growth Study 12 engineering technology becomes more affordable. Our overall assessment of the land supply / development capacity in the City is as follows:  In greenfield areas a forward supply of land in excess of 20 years exists.  In the central city a supply of development capacity in excess of 20 years exists.  In established suburbs we estimate in the order of 10 years forward supply exists for infill development. In respect of established suburbs and infill we have come to our estimate based on a combination of the following factors.

 The generally constrained nature of infill land.  The suppressing effect of passive landowners (i.e. no intention to sell or develop).  The existing strict infill planning regime in the district plan.  The current pattern of broadly dispersed, small scale infill indicates that infill development opportunities are limited. More roundly our view is that there is currently no land supply problem in the broader metropolitan area but there is definite pressure within established areas of Wellington City. WHAT’S HAPPENING IN AUCKLAND AND DOES IT MATTER TO US? Auckland is experiencing rapid growth and inward flows of investment that are unprecedented in New Zealand. As a result house prices are increasing rapidly and housing affordability reducing year on year. Reduced capacity in the development sector following the GFC, artificially constrained land supply, and labour shortages exacerbated by the Canterbury earthquakes have further contributed to increasing prices. Against this background some bold steps have been taken including local government amalgamation; adoption of the Auckland Plan; the signing of the Auckland Housing Accord; and notification of the Proposed Auckland Unitary Plan. Amongst all of this comes more streamlined resource consent processes and a significant release of new land and development capacity.

The picture in Wellington is altogether different. Population and household growth is steady, but slow, and house prices have been stable since 2008. Further, given the stark differences between Auckland and Wellington simple application of “the Auckland solution” is not appropriate for Wellington though lessons can be learned from the groundbreaking initiatives occurring there. PLANNING TOOLS AVAILABLE To stimulate residential development and create new development capacity, for which there is a demonstrated need (particularly in existing suburban areas), Council has a range of tools at its disposal. These include:  Promoting changes to the district plan.  Utilising the Wellington Housing Accord to promote development in strategic areas.

Wellington City Council Wellington City Housing and Residential Growth Study 13  Forming a Council land development agency to consolidate strategic land parcels to catalyse the market to deliver significant brownfield redevelopment.  Remitting or exempting development contributions in strategic areas to catalyse private housing development.  Strategic investment in infrastructure and the public realm to catalyse private housing development. CONCLUSIONS AND RECOMMENDATIONS Wellington City’s residential history and recent planning initiatives tell an interesting story of steady growth and gradually diminishing land and capacity for new development. Central in all of this is the city’s position in a spectacular but constrained setting between the harbour and hills. Easier development opportunities exist in the cities to the north which form part of the same urban conurbation. This broader urban setting and housing market is important to recognise – Wellington City does not exist in its own bubble. Nevertheless Wellington City is forms the epicentre of the broader metropolitan market, and prices, demand and land scarcity are all at their peak within the city’s boundaries. This is demonstrated by house prices and affordability indexing which indicate Wellington City is experiencing a land squeeze that its neighbours to the north are not.

Growth is not rampant, and the stakes not as high as in Auckland, but our view is that Council should be opening up new development capacity. The city is approaching a level of maturity and constraint where a passive “effects based” regulatory approach alone will not be sufficient to maintain a reasonable forward supply of development land. The primary constraint is currently in the established suburban areas in the city where we believe the real forward supply of development capacity is in the order of 10 years only based on projected growth rates. Our research indicates that current and future demand for housing in these areas is strong, and the development sector willing to provide it subject to feasible development opportunities being available and enabling regulatory planning controls.

By comparison greenfield and central city development capacity is healthy (20 years plus supply) and this is reflected in our planning recommendations which focus primarily on the existing suburban areas. Notwithstanding, it is important that Council maintains a balanced approach and we have also made recommendations aimed at increasing development capacity in greenfield areas. Overall, we recommend a suite of regulatory and non-regulatory mechanisms:  Encouraging more efficient (i.e. denser) development in greenfield areas.  Encouraging site development that consolidates yard areas for future infill.  Investigating areas for modest greenfield expansion on the urban fringe.  Evaluating Council’s reserve portfolio for potential residential rezonings.  Further residential medium-density upzonings around suburban centres.  Relaxation of infill controls in transition zones around medium-density zones.

Wellington City Council Wellington City Housing and Residential Growth Study 14  Adjustments to district plan policy to explicitly support development of individual sites to their full permitted potential.  Adjustment of policy and rules to explicitly support the adaption of large homes into multiple dwelling units.  A Council land assembly function which consolidates strategic development sites.  Reduction and removal of development contributions to incentivise development in strategic locations.  Strategic use of the Housing Accord to incentivise development appropriate locations through streamlined planning processes.

 Working with Housing New Zealand to facilitate redevelopment of the Strathmore area. Demonstrating the proposed approach to new medium density zonings and transition zones (location chosen for illustrative purposes only)

Wellington City Council Wellington City Housing and Residential Growth Study 15 The recommendations are made as broad principles and further, detailed work is required to fine tune the individual proposals. We recognise that there are inherent tensions in some of the proposals (e.g. rezoning reserve land) and that some will not be pursued. However, we believe all are reasonable proposals in- principle and deserve individual investigation. Further, we believe that in order to materially increase development capacity in the city a number of these initiatives need to be adopted.

Wellington City Council Wellington City Housing and Residential Growth Study 16 1. INTRODUCTION This report has been prepared by The Property Group Limited (“TPG”) for Wellington City Council (“Council”) as an input into existing planning workstreams including preparation of the Wellington City Urban Growth Plan (“urban growth plan”) and ongoing review of of the District Plan. In turn it will also form an input into Council’s 2015 – 2025 Long Term Plan (“LTP”). All of these workstream are relevant to decisions about where new housing should be constructed over the next 10 – 20 years, and what forms of housing should be encouraged. To address these needs Council asked TPG to undertake analysis across three distinctive work areas:  Housing forces – analysis of the demographic and other forces shaping future housing demand and supply in Wellington City, to include population and household projections (disaggregated to community level), tenure trends, labour market impacts and residential development trends.  Housing preferences – consultation with key stakeholders (developers, housing providers and decision makers) and selected housing consumers to better understand the drivers and housing preferences of those people most affected by Council housing policy settings.  Planning and regulatory – analysis of issues relevant to spatial planning and residential growth management including land supply, the effectiveness of existing planning settings, and the impacts of Resource Management Act (“RMA”) reform.

This report is informed by analysis undertaken in these three work areas, including iterative consideration of the issues arising from each in order to arrive at fully informed recommendations for Council. It focuses on needs within Wellington City, whilst recognising that the City and its housing market operates within a metropolitan context. The granularity of the research is finest within the City, but important macro-scale analysis of the broader metropolitan area has also been undertaken to ensure findings are meaningful and in context. This is particularly the case with regards to the City’s residential land supply, which cannot be considered in isolation from its hinterland.

The study is also primarily focused on market-housing and does not include an assessment of future social- housing needs. However, it does explore housing affordability issues in detail and many of the recommendations about strategic land use and regulatory planning are as relevant to social-housing as they are to market-housing.

Wellington City Council Wellington City Housing and Residential Growth Study 17 2. CONTEXTUAL OVERVIEW 2.1 RESIDENTIAL PLANNING Residential zoned land comprises approximately 75% of all urban zoned land in Wellington City. Further, residential activity is encouraged in other urban zonings, notably the central city zone (“Central Area”) and suburban “Centre” zones. For this reason Council’s approach to residential planning is a central component in urban growth management. 2.2 HOUSING AND HOUSING AFFORDABILITY AS PLANNING ISSUES In recent years housing, and more specifically housing affordability, has become a dominant issue in the New Zealand planning scene. Nationally the debate has been driven by issues in Auckland, and more recently Christchurch. In both these centres house prices have risen sharply in recent years, in Christchurch as a result of the earthquakes. Other centres, notably Wellington and Queenstown, have also been identified as unaffordable. In Wellington this has long been recognised as an issue by Council. Housing affordability problems are regularly linked to the Resource Management Act (“RMA”) and planning, notably in the following ways:  Costs and delays in RMA processes generally (e.g. resource consents).  Lack of certainty.

 Insufficient availability of urban zoned land (particularly in Auckland).  Development contributions. Direct resource consent costs, the cost of delays (notably developer’s holding costs) and land scarcity have all been identified as impacting on the price of housing delivered to the market. In response government has adopted a supply side approach by promoting greater supply of zoned land for development, whilst some councils (notably Auckland Council) have attempted to address affordability through district planning regulations requiring a proportion of new developments to be set aside as affordable units. These matters are addressed in detail in subsequent sections of this report.

2.3 CENTRAL GOVERNMENT REFORM The current National-led government has been active in reform of the RMA since coming to power in 2008. Primarily the reform has been directed to a “business friendly” approach where applicants can approach RMA processes with greater certainty. Two rounds of amendments have been enacted (2009 and 2013) resulting in the following broad level outcomes:  Reduced scope for trade-competitive submissions.  Presumption towards non-notification of resource consents.  Reduced ability for councils to “stop the clock” and request information from applicants in resource consent processes.

 Creation of a national consent authority for proposals of national significance (the Environmental

Wellington City Council Wellington City Housing and Residential Growth Study 18 Protection Authority / “EPA”).  Streamlined consenting processes for consents of differing scales.  Greater onus on the quality of plan making by councils.  Delaying the legal weight of rules until council level hearings are complete. Further reform is proposed but has been delayed because the Māori and United Future parties withdrew their support for some of the more ambitious elements. Among the proposals in the reform package are:  Changes to the high level principles of the RMA encouraging efficiency and an “overall balanced approach” to decision-making.

 A national planning template to simplify and standardise RMA planning documents.  Consolidation of regional and district plans into “unitary plans”.  A requirement for councils to provide a ten year forward supply of urban land. Many of the proposals have emanated from concern about land supply and resource management practice in Auckland, and Auckland has been the subject of further, locally specific reform. This has included legislative amendments for a mandatory spatial plan, an Auckland unitary plan, and a housing accord developed under new legislation. The housing accords initiative has recently been expanded to other parts of the country and an accord signed covering Wellington City and is fully explored in Section 5 of this report.

Underlying all of this is a desire in government to release more land in order to reduce land and housing costs. Other initiatives, outside the RMA and planning, are also being pursued in an effort to arrest rising house prices in Auckland (and to a lesser degree elsewhere). Notably and recently was the Reserve Bank loan to value ratio (“LVR”) initiative requiring homebuyers to hold equity equating to 20% or more of the purchase price. The Auckland situation is discussed in more detail in Section 8 of this report.

Wellington City Council Wellington City Housing and Residential Growth Study 19 3. HOUSING DYNAMICS 3.1 WELLINGTON METROPOLITAN CONTEXT Wellington City sits within the broader Wellington urban area and housing market. For the purpose of this study we have defined this area as the five major urban councils – Hutt, Upper Hutt, Porirua and Kapiti Coast. Although located at the southern end of this conglomeration Wellington City acts as the fulcrum, providing the majority of employment (primarily in the CBD) and supporting the most expensive housing market. The four other council areas support some employment of their own but each play dormitory roles, with residents commuting to Wellington City for work in substantial numbers. Figure 1: Wellington City and neighbouring territorial local authority areas. The impact of these dynamics on the urban geography is that Wellington City is the most densely populated and expensive place to live in the metropolitan area, with comparatively few greenfield development opportunities. The market has responded over time with substantial infill development in established suburbs and apartment development in the central city. This contrasts with the dominant low density nature of development in the neighbouring cities. Wellington City’s natural geography, hemmed between the harbour and steep hills, has also played a central role in creating this density and land scarcity. 3.2 A BRIEF HISTORY OF RESIDENTIAL DEVELOPMENT IN WELLINGTON CTY 3.2.1 Early beginnings and natural forces Wellington City had its beginnings in 1839, when the first settlers were embraced by the natural harbour and protecting hills. The New Zealand Company had long regarded the harbour as an ideal location for its first commercial settlement, to be named Wellington in recognition of the Duke of Wellington’s strong support for the company's colonisation principles.

The City actually began life at Petone, near the mouth of the Hutt River but, after a series of floods had

Wellington City Council Wellington City Housing and Residential Growth Study 20 carried away the original settlers’ makeshift homes, a decision was soon made to relocate to more elevated land at Te Aro. The New Zealand Company’s legal claim to some of the land it occupied was debateable, but it wasted no time in marketing the ‘new’ Wellington to prospective colonists. By August 1840, Wellington’s had its first ‘spatial plan’, prepared by William Mein Smith ‘…Captain of Artillery and the Company’s first Surveyor General’. The plan contained 1,100 lots averaging 1 acre, sandwiched between Mounts Albert and Victoria, and the Tinakori hills. Most lots were to be allocated by ballot to fee-paying colonists, who were promised extra farming land outside the settlement once they had cleared their original lot.

The original plan still dictates much of Wellington’s inner-city skeletal form, and perhaps explains the questionable logic behind some of Wellington’s steepest streets. Figure 2: New Zealand Company Plan for Wellington 1840 By the end of 1840, Wellington had a colonial population of about 1,200 settlers and 800 Maori. The European population had grown to 4,750 by 1864, effectively displacing the formerly-resident Maori population. By 1857, a small but regionally-significant commercial centre had established itself on reclaimed land next to Plimmers Ark, and waterfront facilities had been upgraded to accommodate overseas trading vessels.

The Wellington settlement had also begun to take on a more permanent look, but not before absorbing lessons from the 1855 earthquake, which put paid to notions of the settlement becoming a facsimile of British architectural styles. Timber, not bricks and mortar, was to remain the main building method well into the 20th century, for rich and poor house builders alike.

Wellington City Council Wellington City Housing and Residential Growth Study 21 Figure 3: Wellington Waterfront 1868 3.2.2 From Settlement to Capital City Despite its increasing importance as a regional centre, Wellington’s financial future was not assured until 1865, when Parliament and Central Government administrative functions were relocated from Auckland to Wellington. Public administration became even more centralised in Wellington after the abolition of the Provinces in 1876. Figure 4: Te Aro housing 1940 (Photo: Bruce Orchison) Wellington’s elevation to the nation’s Capital did much to lay the foundations for the city as we know it today. Between 1865 and 1900, Wellington’s population had increased tenfold to almost 50,000, fuelled by exponential growth in Government expenditure and a flood of new British migrants. Wellington became

Wellington City Council Wellington City Housing and Residential Growth Study 22 New Zealand’s busiest port during this time, and quickly replaced Dunedin as New Zealand’s pre-eminent financial centre. The residential impact of such rapid growth was initially managed through an early form of infill housing. The large plots envisaged in W.M. Smith’s plan were subdivided into progressively smaller lots – size largely dependent on topographical considerations and social class. Areas which had seen only limited development were ‘reimagined’ into denser housing areas – perhaps best illustrated by older parts of Newtown, and residual pockets of original housing in Mount Cook and Te Aro.

3.2.3 Eliminating the barriers to physical growth By the end of the nineteenth century, an extensive public works programme had begun to connect Wellington City with its neighbouring (mainly rural) boroughs to the east and west. The founders of Miramar and Karori had long seen residential subdivision as a pathway to prosperity, and had prepared subdivision plans as early as the 1870s, in anticipation of Wellington spilling over the Te Aro basin’s natural barriers. Figure 5: Seatoun Tunnel in the 1920s By the time the Karori Tunnel was completed in 1900, Wellington had a thriving commuter culture. Continuous improvements to the city’s public transport system (both land and sea) allowed workers to travel freely between home and the CBD – and in some cases, home for a midday meal. By 1910, Wellington’s tramway systems ran all the way to Miramar and Seatoun, aided by improvements to waterfront roads leading to Kilbirnie and the Watts peninsula, and completion of the Seatoun Tunnel and Miramar cutting. Local government amalgamation was also a feature of this period, with Karori and Miramar both being absorbed by Wellington City by 1921.

In 1940, Wellington City’s population had grown to almost 120,000, and the City was again pursuing opportunities to expand its residential capacity. Improvements to the northern rail corridor in the 1920s and 30s accelerated residential development in the northern suburbs.

Wellington City Council Wellington City Housing and Residential Growth Study 23 Figure 6: Arrival of the first train at Johnsonville (New Zealand Rail publicity photo) The foundations for Wellington’s first ‘car-dependent’ suburbs had also begun to be laid, with construction of the Centennial Highway, an ambitious project that included massive improvements to Ngauranga Gorge and the Hutt Road in the early 1940s. Construction of Wellington’s urban motorway system in the 1960s and 1970s effectively eliminated travel- based constraints on housing. By car or by public transport, Lambton Quay was 30 minutes away from just about anywhere in the City.

Figure 7: Northern Motorway under construction in the 1960s 3.2.4 To the suburbs and back Between the 1950s and 1970s, the suburbs continued to grow - both in size and as a proportion of Wellington’s total housing stock. A sluggish start to housing construction in the immediate post-war period gave way to a new housing boom in the 1960s and 70s. New housing in the suburbs became more accessible to low and modest-income family households, thanks

Wellington City Council Wellington City Housing and Residential Growth Study 24 to low-cost housing loans for families and expanded state rental programmes. Closer to the City, social housing was being built for older residents displaced by change, and other low-income non-family households, including Council’s own Arlington and Central Park complexes. Overall, however, the population’s contemporary preference for suburban living served to diminish the residential importance of the inner city. Housing stock in the city’s heart made way for growth in commercial and government activity. Flat areas around the CBD periphery (Thorndon, Te Aro, Mount Victoria and Mount Cook) became home for Wellington City’s light industrial and warehousing activity. Figure 8: Churton Park (2014) Those pockets of housing that remained within W.M. Smith’s original city boundary became even more sharply differentiated by privilege and location. Older established suburbs like Wadestown and Roseneath remained popular with professionals and more urban-focused family households, while lesser- cost housing areas became ‘zones of transition’ for Wellington’s new migrant populations and the City’s growing tertiary student population.

Figure 9: Mt. Victoria (2006)

Wellington City Council Wellington City Housing and Residential Growth Study 25 Since the 1980s we have witnessed a reversal of sorts. Continued population growth has put greater pressure on Wellington’s transport infrastructure. Arguably, it takes longer in 2014 to travel from suburb to city than it did in 1984. The inner city itself has become a more attractive place to live. Gentrification and other reinvestment has improved the quality of much of the housing stock. More people are now choosing to stay in the inner city, and appreciating the character of older refurbished housing or (more recently) apartment-style living.

Figure 10: Central city apartments (2014) 3.3 CONTEMPORARY HOUSING MARKET 3.3.1 National and metropolitan house prices and housing affordability Whilst rising house prices and declining housing affordability have been given national attention, their effects have been felt most keenly in Auckland (see Section 8 for further detail) and Christchurch where the earthquake has substantially reduced the supply of housing. Recently, the impact of rising house prices in Auckland and Christchurch (together comprising more than 40% of the national population) has been to paint a picture of rising house prices across New Zealand generally, when in fact many areas are experiencing only slow price growth or even static prices.

Certainly the Auckland and Christchurch markets are very different to Wellington which has experienced only slow price growth over the last 5 years. In this context it is interesting to note that in 2008 Wellington City and the Auckland Council area had an almost identical average house sale price (approximately $500,000). However, by 2013 the Auckland figure had risen to almost $700,000 whereas the Wellington figure was approximately $525,000 (see Figure 11 below). The substantial price growth in Christchurch following the 2010 and 2011 earthquakes is also shown.

Wellington City Council Wellington City Housing and Residential Growth Study 26 Figure 11: House price trends in Wellington City, Auckland urban and Christchurch urban Source: Quotable Value (www.qv.co.nz) Using government’s method for assessing housing affordability (an index based method of median house prices and median household income) Auckland is “severely unaffordable” with a figure of 6.7, and Wellington is also severely unaffordable but with a lower score of 5.8 (see Figure 12 below). Based on the current buoyant market in Auckland and flat market in Wellington we expect the two figures to further diverge into the foreseeable future. To put affordability into a national context the figure also shows affordability figures for Christchurch, Tauranga – Western Bay of Plenty and Napier – Hastings. Figure 12: House affordability in selected New Zealand urban centres Sources: MBIE (2013), Demographia (2013)

Wellington City Council Wellington City Housing and Residential Growth Study 27 Turning to the Wellington metropolitan context Figure 13 below demonstrates that house prices are significantly higher in Wellington City than other parts of the Wellington metropolitan area (around 20% higher than the metropolitan average and 50% higher than each of the other cities). However, the figure also demonstrates the interconnected nature of the housing market across the metropolitan area because although the individual cities have different price points the prices themselves move in parallel trajectories. Figure 13: House price trends in Wellington metropolitan and constituent council areas Source: Quotable Value (www.qv.co.nz) Figure 14: House affordability in Wellington metropolitan Sources: MBIE (2013), Demographia (2013)

Wellington City Council Wellington City Housing and Residential Growth Study 28 Figure 14 addresses the metropolitan context. This shows that even taking into account adjustments for household income (which are highest in Wellington City) Wellington City is the least affordable in the metropolitan area. However, even within Wellington City there are varying patterns of affordability and do we warn against using these figures in isolation. 3.3.2 Wellington metropolitan urban economic and geographical issues As we have already described higher house prices in Wellington City are a function of economic geography as much as anything else, and our further work has demonstrated that the most expensive suburbs in the metropolitan area are almost exclusively located in Wellington City, and in general house prices decline with distance from the Wellington CBD (see Figure 15 below).

Figure 15: House price by distance from Wellington CBD In itself this information does not point to a Wellington City land supply problem because there are no obvious, new development fronts available and because the city acts as the epicentre of the metropolitan employment housing market. This is a basic function of urban economic geography that is observed in metropolitan areas worldwide. Notwithstanding, the pattern of high prices has social and economic implications that necessitate further investigation. Whilst the outer cities play key dormitory functions for Wellington City workers there are tangible benefits to providing an ongoing land / housing supply in closer proximity, within Wellington City. Land supply issues are considered in greater detail in Section 7, but this basic urban geographical context is of central relevance to the information contained in that section.

Wellington City Council Wellington City Housing and Residential Growth Study 29 3.4 EXISTING HOUSING STOCK In this section, we provide an overview of Wellington’s City’s overall residential housing stock, and comment on the type and location of housing added to the portfolio in the past ten years. Our findings are based on an analysis of the Council ratings database, and recently-released Census data. In summary:  At the end of 2013, Council’s residential database listed about 72,000 private residential dwellings within urban-zoned areas, not including student accommodation and housing associated with other uses.

 The Wellington housing portfolio had a total value of around $34 billion, and a land value (including vacant land) approaching $15 billion.  The 72,000 dwelling units consumed about 32,000 hectares of land, not including roads, parks and other residential infrastructure.  About 5,000 hectares of subdivided residential land was either vacant or under development at the end of 2013.  In total, the City’s residential zones make up about 75% of Wellington City’s urban area. 3.4.1 Location and age About 80% of all housing in the City’s northern suburbs has been built since the creation of the Wellington motorway system (half of this since 1980). A higher proportion of contemporary housing is also evident in Johnsonville, inner-northern suburbs (e.g. Khandallah / Broadmeadows) and Karori, where greenfield capacity was able to support substantial new dwelling construction well into the 1990s. The figures below summarise the location, type and era of construction for all residentially-zoned housing units on the Council rating database. Our summary assessment is that the urban character of many older communities is substantially intact, although densities have built up within Wellington’s earliest suburbs of Miramar and Karori. Southern and eastern suburbs in particular have been transformed by infill housing, conversion of existing housing into flats and (latterly) an upswing in multi-unit construction. A surprising number of houses in communities around the City’s edge are also original, although many have subsequently been divided into flats. In the CBD and Te Aro, only pockets of original housing remain. More generally we note that even now most parts of the city are accommodating new housing development, though as we note in subsequent sections of this report opportunities in some parts of the city are in short supply, and soon we may see no new development in many parts of the city.

Wellington City Council Wellington City Housing and Residential Growth Study 30 Figure 16: Housing stock by age and location Wellington City sub-districts Figure 17: Housing stock by type Wellington City communities

Wellington City Council Wellington City Housing and Residential Growth Study 31 3.4.2 Housing type and size Council’s rating database identifies 60% of all residential dwellings in the Wellington urban area as single- lot, standalone houses with the balance being multi-unit in character. This is consistent with the 2013 Census count, which recorded 35% of all occupied dwellings as multi-units, with a further 5% being ‘other than’ a separate dwelling. Based on Council data, it would appear that multi-unit housing has always been a feature of the Wellington housing scene. Almost 4,000 multi-units on the database are listed as being built before 1919. In the inter- war period and immediately post World War II, most of the housing constructed was single lot. The 1960s and 1970s saw a substantial increase in multi-unit construction, in part due to central and local government willingness to play a greater role in the housing supply chain. During this period, there was an expectation that the state would actively provide for the older people and low income singles, who had hitherto relied mostly on private board and boarding houses. We estimate that as much as 40% of all multi- unit construction over this period was initiated by state or local government agencies. Housing type is a significant determinant of housing size, with about 75% of all one and two bedroom dwellings in Wellington being multi-units. By contrast only 17% of all dwellings with three bedrooms or more are multi-units, with more than 80% being standalone dwellings.

Multi-unit housing is distributed unevenly throughout the city. In the northern suburbs, only about 20% of all housing are attached or multi-unit in character, compared to 67% for the central city and periphery suburbs. Within the City’s heart (central city and Te Aro) multi-unit housing now makes up more almost 95% of all available housing stock. The distribution of multi-unit housing has a strong bearing on housing choice. This illustrated in the figure below which suggests that, singles and couples would find it difficult to access smaller housing forms in Wellington’s northern suburbs, while purpose-built family housing is rare in the city centre. Figure 18: Standalone and multi-unit housing development in Wellington City by period

Wellington City Council Wellington City Housing and Residential Growth Study 32 Figure 19: Housing by no. of bedrooms and stand-alone and multi-unit dwelling types Figure 20 - Stand-alone and multi-unit dwellings by Wellington City sub-district

Wellington City Council Wellington City Housing and Residential Growth Study 33 Figure 21: Dwellings by no. bedrooms and Wellington City sub-district 3.4.3 Net growth trends by housing type Wellington’s occupied housing stock grew by about 9,500 units between 2001 and 2013 Censuses, although this may be over-stated because of definitional variances between each Census. As Figure 18 above illustrates, the period is notable for a strong return of multi-unit housing, and a trend towards larger standalone housing.

The multi-unit renaissance is most evident in Te Aro, which has become Wellington’s fastest growing new housing area. Conversely, new housing suppliers in suburban areas appear to have eschewed multi-unit housing in favour of standalone housing with three-bedrooms or more. New subdivisions in the northern suburbs in particular are strongly biased towards larger family homes. In Mount Cook and Newtown, the impact of the tertiary sector is most evident with a proportionally large number of multi-bedroom multi-units coming on stream. Further analysis of housing growth is presented in Section 4.6.

Wellington City Council Wellington City Housing and Residential Growth Study 34 Figure 22: Dwelling growth by no. bedrooms and Wellington City sub-district 2001 – 2013 Source: Statistics New Zealand (2013 Census) Figure 23: Average dwelling value by type and community

Wellington City Council Wellington City Housing and Residential Growth Study 35 Figure 24: Dwellings by no. bedrooms and Wellington City sub-district 2001 – 2013 Source: Statistics New Zealand (2013 Census)

Wellington City Council Wellington City Housing and Residential Growth Study 36 4. DEMOGRAPHIC PROFILE AND TRENDS 4.1 POPULATION AND HOUSEHOLD FORCES Based on preliminary results from the 2013 Census, we estimate that Wellington has a population of around 200,000, living in about 74,000 households:  In 2013, family-with-children households (including single parent households) made up only 36% of all Wellington households.  In almost all of Wellington’s 31 neighbourhoods and communities, family-with-children households (including sole parent families) make up less than 50% of all households.  This reduces to 20% for the CBD, Te Aro, and city edge communities.  Single person or couple households now make up more than 50% of all Wellington households.  Group households (two or more unrelated people living in the same dwelling) make up about 12%.  Between 2011 and 2031, Wellington’s population is projected to increase by about 30,000 (16%) to 230,000. The total household count will increase by about 14,000 (20%) – see further detail in Section 3.6 below.

 Single person and couple-only households are expected to make up about 66% of net household growth.  Family households with children will increase by about 3,000 (20%).  Multi person households (10%) and other households will make lesser contributions. Growth has slowed since considerably since 2006, however, which means that Council’s current community-based growth projections can no longer be relied upon for detailed planning purposes. This is a matter that we suggest Council look further into. For now we have adopted Council’s official figures but also considered them alongside Statistics New Zealand figures, and made planning recommendations on the basis of that growth is likely to occur somewhere in the range between the two. 4.2 DEMOGRAPHIC DRIVERS Like all New Zealand cities, Wellington’s housing future will be affected by an aging population. We estimate that the population aged 60 years and over will grow by at least 10,000 (50%) between 2011 and 2031. The number of students and younger working people (18-34 years) is also projected to increase by 10,000 over the same period (16%).

4.3 TENURE TRENDS Net household growth between 2001 and 2013 suggests that the current balance between tenures is being gradually reversed (i.e. renting is becoming more popular). The number of renting households grew by more than 5,000 between 2001 and 2013, an increase of almost 25%. This compares to 3,500 (10%) net growth in owner-occupier households. Rental households made up 60% of net household growth between 2001 and 2013. Based on these trends, renting households will make up about 45% of all households in

Wellington City Council Wellington City Housing and Residential Growth Study 37 Wellington by 2031. One of the most significant drivers of rental housing growth is a shift in housing behaviour of 30-44 year- olds, who have historically moved to home ownership during the family-formation phase of their life-cycle. Between 2001 and 2013, home ownership rates for this age group dropped by 15%, in part because of deferred family formation, but also because of changing lifestyle preferences. Rates for younger households have also declined, suggesting a continuation of the trend for younger households to spend longer in the rental market. Those who are unable to make the transition to home ownership at a later stage will become part of the ‘intermediate housing market’, which is generally defined as those who can afford to pay market rents (with or without the help of an Accommodation Supplement) but are unable to purchase a home in their preferred location. 4.4 SOCIAL AND ECONOMIC DRIVERS FOR CHANGE Despite the Global Financial Crisis (GFC) and public sector restructuring, Wellington City’s workforce grew by more than 10,000 between 2001 and 2013.

Most growth has occurred in higher-wage sectors like public administration and professional services, although the city has lost some higher-wage financial services and information technology capacity to Auckland. Secondary industries like warehousing and wholesale have also relocated elsewhere within the wider metropolitan area, which has reduced the quantum of secondary sector jobs available. Positive employment and wage growth should stimulate construction of new housing, especially in the inner city, although slow growth and job uncertainty has affected market confidence in recent times. In our view, this is cyclical, and will soon be replaced by more buoyant housing market fed by deferred demand. 4.5 LOOKING FORWARD OVER THE NEXT 10 – 20 YEARS The housing forces research has assessed what new housing is needed to meet net new demand for housing. In our view, suburban sub-markets will take a different path to the CBD, Te Aro and City Edge communities.

Suburban markets should experience a significant upsurge of demand from single person and couple households, mostly as a result of existing residents selling larger family homes but wanting to stay in a suburban environment. Net demand for family housing will continue in most areas, although (as discussed earlier) some areas face the risk of negative growth. Other key points are:  Based on recent tenure trends, we expect about 40% of all net growth in suburban housing supply will be rental – either purpose-built new rental housing, or via transfer of existing housing stock from owner-occupier to rental.

 An increase in 70-plus age groups should also see increasing demand for supported housing for older people, and possibly other innovations in the older persons housing market.  Based on ForecastID© projections, the CBD, Te Aro and surrounding suburbs will grow by almost about 6,500 households between 2013 and 2031.

Wellington City Council Wellington City Housing and Residential Growth Study 38  We expect that about 1,000 new multi-person housing options will be required – mostly to cater for about 3,500 new 18-24 year-old residents expected by 2031.  However, the bulk of demand growth will come from single person and couple households. About 3-3,500 new units will be required, with strong demand across all age cohorts from 25-34 years to 70 years and over – the latter reflecting a proportion of suburban empty-nesters moving from the suburbs.

 About 2,000 new units will also be required to cater for increases in demand from family-with- children households, although the supply channel has yet to factor this market segment into their development plans.  There may also be an increase in boarding-house and collective housing for those who cannot access more mainstream housing product. This market segment is easy to overlook.  60% of net demand will be for rental housing. This means that housing investors will play a significant role in determining the type and quality of new housing in the inner city and city-edge communities.

4.6 POPULATION AND HOUSEHOLD GROWTH Council commissions Forecast iD© to undertake city specific population and household growth forecasts. Their figures have been adopted for the purpose of this study and we note that their household growth projections differ from those of Statistics New Zealand. For the period 2011 – 2031 we note that Forecast iD© forecast 14,965 new households in the city compared to the Statistics New Zealand “medium growth” projection of 21,600. Further breakdown of these figures is shown in the tables below. Wellington City Sub-District New households 2011 – 2031 Central City and Fringe 6,586 Northern Suburbs 3,206 Southern Suburbs 2,253 Eastern Suburbs 1,484 Western Suburbs 1,436 Total Wellington City 14,965 Table 1: Forecast id© household projections by Wellington City sub-district New households 2011 - 2016 2016 - 2021 2021 - 2031 Total: 2011 - 2031 5,800 5,300 10,500 21,600 Table 2: Statistics New Zealand Medium Growth Projections

Wellington City Council Wellington City Housing and Residential Growth Study 39 Regardless of the figures adopted growth is expected to be steady (in actual numbers over the period) meaning that Council needs to be prepared for 750 – 1,100 new dwellings in the city year on year for the next twenty years. Data shown in Section 7 shows that over the period 2008 - 2012 new dwelling completions were low (660 per annum average). This is below the figures adopted for planning purposes in the UDS and is likely to have been caused by reduced access to finance and a lack of confidence in the property market. As would be expected dwelling completions in the 5 – 10 years prior to 2008 were higher (generally above 750 per annum).

It is important that the planning framework can accommodate projected growth, and the UDS was constructed around this premise. Council’s existing planning approach and actual rates of development are explored in Sections 5 and 7 respectively.

Wellington City Council Wellington City Housing and Residential Growth Study 40 5. EXISTING PLANNING FRAMEWORK 5.1 STRATEGIC SETTINGS Council’s approach to urban development is to encourage a “compact city” by targeting most new housing into the existing urban area. Aside from identified greenfield growth areas in the north of the city, development is generally to be contained within the outer green belt, and within this area encouraged around suburban centres and a “growth spine” running from Johnsonville to Kilbirnie. The primary strategic document governing this approach is the Urban Development Strategy (“UDS”) adopted by Council in 2006. Figure 25: Urban Development Strategy growth management concept Source: Wellington City Urban Development Strategy (2006)

Wellington City Council Wellington City Housing and Residential Growth Study 41 Key aspirations of the UDS include:  An approximately even split of new housing into greenfield areas, existing suburbs and the central city.  Providing for Wellington’s greenfield growth on the northern fringe.  Concentration of 60% of new housing onto a growth spine running through the established area from Johnsonville to Kilbirnie.  New housing and employment into and around suburban centres. The plan is well conceived in terms of applying the compact city philosophy to the Wellington City context in a well-founded, area specific manner. The UDS encompasses the previously adopted Northern Growth Management Framework (“NGMF”) (2003) and the subsequently adopted Centres Policy (2009). Various centres plans have also been prepared under the overarching framework of these higher order documents. The overarching development concept envisaged in the UDS is shown in Figure 25 above. This report forms part of Council’s strategic review of the UDS and the development of a new “urban growth plan” which will supersede both the UDS and the Transport Strategy. 5.2 WELLINGTON CITY DISTRICT PLAN Council’s “first generation” district plan (i.e. first plan prepared under the RMA) was notified in 1995 and became operative in 2000. A feature of the plan was a deliberate move away from the extensive zoning system and prescriptive land use controls typical of prior “district schemes” prepared under the town and country planning acts. Key tenets of the plan insofar as residential development was concerned included:  Two residential zones (inner and outer) and only seven zones altogether.  A liberal “effects based” approach to development control.  Emphasis on character and amenity protection.

 Introduction of urban design controls for selected circumstances.  A general policy of containment within the outer green belt.  Broad use of restricted discretionary rules and non-notification clauses. The distinction between the inner and outer residential zones (referred to as “areas”), which persist to this day, is important. The inner areas are older suburbs located within the town belt – these areas are naturally denser, more historic and exhibit greater character (e.g. Mt Victoria, Thorndon). The outer areas are generally lower density suburbs (e.g. Johnsonville, Miramar) which were developed after 1900. These settings are reflected in the planning rules. In the inner zone a regime of character and heritage controls apply, though higher density is permitted. In the outer area fewer restrictions apply and a traditional suburban density is permitted (e.g. 35% site coverage, 8m maximum height). On top of these broad regimes the district plan includes a number of neighbourhood overlays and appendices, mostly in inner areas, which impose specific development controls (e.g. Thorndon heritage area).

Wellington City Council Wellington City Housing and Residential Growth Study 42 The framework described above prevailed more or less unchanged until plan changes associated with the NGMF were notified in 2005 and 2006 (PC36 and PC45). Together these plan changes facilitated a more co- ordinated, planned approach to greenfield development in the northern suburbs. This includes the use of structure plans, greater emphasis on neighbourhood linkages, and protection of existing vegetation and watercourses. Simultaneously, infill development and general redevelopment was thriving widely across established suburbs. In response to threats to neighbourhood character in inner suburbs PC38 was notified and increased the coverage of character rules across Newtown, Berhampore and Mt. Cook (previously only Mt. Victoria and Thorndon). In Miramar and Strathmore infill development was rampant, such that single house lots are now the exception rather than the rule. Some of the development and design outcomes were poor, and in response Council notified PC56 (“Infill Housing”) in 2007, imposing stricter development controls on infill dwellings and subdivision. Senior Council consents planners anecdotally report that this had an immediate dampening effect on infill development, and even caused some developers to disappear from the Wellington development scene.

PC56 was conceived as an interim measure to immediately address infill housing issues and was followed by the notification of a more comprehensive “residential review” in 2009 (PC72). This was undertaken simultaneously with the “suburban centres review” (PC73) which ensured a comprehensive approach to residential planning in the City, outside of the central city. PC72 continued the approaches of PC38 and PC56 and included a number of other measures, most notably the introduction of medium density residential areas (“MRDA”) at Johnsonville and Kilbirnie. This zone provides for higher density living around the centres and is a direct extension of the strategic directions set out in the UDS and Centres Policy. Both zonings are operative, though in Johnsonville’s case only after an Environment Court decision in 2013.

In the CBD residential living has been encouraged going back to the notification of the district plan in 1995, with a significant level of apartment development occurring in the ensuing period. This approach was continued in the full review of the CBD (“central area”) zone notified in 2006 (PC48), with apartment development and conversion continuing throughout. With the changes described the residential planning framework of the district plan is changed from the original version. In general terms the changes represent a tightening and fine tuning of the provisions, generally with intention of protecting neighbourhood character. In some cases the changes (e.g. introduction of a minimum lot size) materially reduced development capacity, and this is explored in greater detail below in the context of the existing, zoned land supply. It should also be noted that throughout the changes the district plan has maintained tight control on subdivision and development in the extensive Rural Area around the main urban area. As a result of this, and probably more attractive rural land in the cities to the north, there has been very little residential lifestyle development in Wellington City. The district plan has also maintained a light-touch regulatory approach to development over earthquake prone land (“hazard faultline” and “hazard groundshaking” areas) in areas like Kilbirnie and Thorndon.

Hazards are a matter that are likely to be at the forefront of Council’s thinking regarding its upcoming urban growth plan, and likely to be informed by a higher-level analysis of the costs and benefits of intensifying development over hazard prone areas or actively locating new development (and in some

Wellington City Council Wellington City Housing and Residential Growth Study 43 cases existing development) away from these areas. At this stage in the project our recommendations are not especially location specific. However, as a preliminary comment, and in general terms, we think it is unlikely, given existing patterns of investment, that a significant shift in development patterns will be justified in response to hazard threats alone. Further, there is currently insufficient development pressure to ensure a quick or meaningful change of existing patterns. This is not to suggest that locally specific retreat will be unjustified in the future, but simply that a wholesale shift of the City’s development pattern is unlikely and probably unjustified.

5.3 WELLINGTON CITY HOUSING ACCORD The Housing Accords and Special Housing Areas Act (HASHA Act) was enacted in 2013 in response to government concern that constrained supply of residential land is adversely affecting house prices. Primarily this concern relates to Auckland (see Section 8) but the HASHA Act can apply elsewhere in the country. It has already been applied to Wellington City (rather than the broader Wellington metropolitan area) with a Wellington City Housing Accord agreed between Council and the Minister for Housing in June this year.

The HASHA Act gradually expires over the period September 2016 – September 2018 and provides alternative, streamlined pathways for the rezoning of land and consenting of residential development – notably this includes the setting aside of the RMA and traditional resource consenting procedures. Advantages for developers include the following:  A more permissive approach to resource consent categories.  Reduced scope for notification and third party participation.  No right of appeal to the Environment Court.  Faster decision making on resource consents and rezonings (20 working days for non- notified resource consents, 70 working days for limited-notified resource consents and 130 working days for rezonings).

Area specific housing accords enable the provisions of the HASHA Act to be tailored to the local environment and this is true of the Wellington City Housing Accord. Of particular relevance are the following elements:  The purpose of the accord for Council and central government to work in partnership to address housing affordability in the City.  Increased supply of land and housing is emphasised with a target of consenting a combined number of 7,000 dwellings and lots over a five year period. The Housing Accord can form a key part of Council’s overall toolkit for delivery of new housing in coming years. The streamlined planning mechanisms referred to above can only be accessed in identified “special housing areas” but could act as a powerful incentive to developers. Council needs to ensure that in applying special housing areas it identifies those areas which are appropriate for residential growth. We understand this work is well underway but have not been involved in it.

Wellington City Council Wellington City Housing and Residential Growth Study 44 5.4 WELLINGTON CITY LONG-TERM PLAN Under the Local Government Act (“LGA”) Council spending (including asset and infrastructure spending) must be planned for and included in a tri-annual “long term plan” with a ten-year outlook. The current long term plan is the 2012-22 plan, due to be updated next year. Over time Council has proactively co-ordinated strategic urban planning, the district plan and long-term plans. This aims to ensure that public works, infrastructure capacity and private development occur in the same places. A notable example of this is Council’s approach to Johnsonville and Kilbirnie where the medium density zonings are supported by town centre upgrades and programmed infrastructure upgrades. Council’s urban growth plan initiative is driven by a desire to achieve an even greater alignment of regulatory planning, infrastructure planning and financial planning, and is working to a timeframe to ensure integration into the 2015 – 2025 long term plan. 5.5 METROPOLITAN PLANNING FRAMEWORK The Wellington Regional Policy Statement (“RPS”) prepared by the Greater Wellington Regional Council sets out a high level planning framework for the Wellington metropolitan area which encourages urban intensification and nodal development. This broad level direction emerged from Wellington Regional Strategy (“WRS”) adopted by the metropolitan councils in 2007. Notwithstanding, the direction set out is broad, and there remains firm reliance on the individual territorial councils to control development and planning within their jurisdictions through their strategic documents and district plans. This regime of plans is represented in the table below.

Strategic plans Regulatory plans Wellington Urban Development Strategy Wellington City District Plan Hutt Urban Growth Strategy Hutt City District Plan Upper Hutt Urban Growth Strategy Upper Hutt District Plan Porirua Development Framework Porirua City District Plan Kapiti Coast Development Management Strategy Kapiti Coast District Plan Table 3: Summary table of territorial local authority planning documents In recent years a higher level of collaboration has occurred between the different cities, with a regional planning forum convening regularly and reporting potential shared initiatives to the region’s chief executives. Initiatives currently being considered include a regional hazard strategy and regulatory plan, shared plan changes (e.g. Iwi plan change) and a combined or “unitary” plan. The framework represented by the above strategic plans also promotes a general approach of consolidation within the existing urban area, typically around suburban centres. This is supported by the regulatory district plans, though there is an argument that these lack the teeth to properly implement urban consolidation – in general the rules support traditional suburban development through the use of low density planning controls (e.g. maximum 35% site coverage and 2.5m + 45º height recession planes) and to a lesser degree character protections. Notwithstanding the successful intensification of some suburbs, in general the tension between supporting urban intensification and protecting character is skewed towards protection of existing character and amenity. As development capacity reduces within the existing urban area, this balance will have to be reconsidered.

Wellington City Council Wellington City Housing and Residential Growth Study 45 6. HOUSING VIEWPOINTS 6.1 DEMAND SIDE PREFERENCES – THE HOUSING SURVEY 6.1.1 Sample and overview The household profile of those who responded to our survey was generally consistent with Wellington City’s overall profile, although there may be some bias towards western suburbs and older-age homeowner households. Key findings include:  69% of sample respondents lived in owner-occupier housing (including dwellings held in a family Trust). 31% of all respondents lived in rental housing.

 78% of all owner-occupier respondents lived in standalone housing compared to only 33% for renting households, who are divided between multi-unit housing, townhouses, and older houses split into flats.  Renting respondents generally lived in smaller housing than their owner-occupier counterparts, with fewer features like storage, off-street parking and private outside space. The survey confirmed recently-released findings from the 2013 census, that Wellington City households are highly mobile, specifically:  50% of all respondents had moved to their current address within the last four years.  83% of all renting households, and 33% of owner-occupier households, expect to move within the next five years.

6.1.2 Dwelling utilisation Our survey hints at some significant changes in the way Wellington’s existing housing stock is utilized, specifically:  A growing proportion of housing stock in the CBD and Wellington’s southern and eastern suburbs is being utilised for rental housing.  ‘Empty nester’ older singles and couples make up a growing proportion of owner-occupier housing in the city’s western and inner-northern areas. 6.1.3 Perceptions of housing affordability It would also appear housing affordability is not a major issue for most of those living in Wellington City:  More than 60% of those surveyed could comfortably afford to live or rent in their chosen location.  About 30% had made trade-offs to live in their chosen location, including paying more for housing.  Only 12% had serious concerns about current or future housing affordability.

Wellington City Council Wellington City Housing and Residential Growth Study 46 6.1.4 What’s most important when Wellington households choose where to live? Respondents reported that easy access to work and public transport was considered highly important by almost two thirds of all those surveyed. Other key findings included:  About 50% of our sample also placed a high priority on access to local shops, cafes and restaurants, health and social services.  80% of all families with children regarded good local schools as a high priority.  Safety and security are the highest priority for 90% of all households surveyed, although it must be noted that fewer than 5% of all respondents had safety concerns about their current housing situation.

 Access to natural amenity values like sunlight and ventilation are also regarded as non-negotiable by most respondents.  Friendly neighbourhoods that reflect local character are highly prized, no matter whether the community is in the CBD or suburbs. 6.1.5 Where do Wellington households want to live? When asked if they had to move inside Wellington City tomorrow:  80% of all those surveyed said they would prefer to stay within the same neighbourhood or general area that they currently live in.  About 65% of respondents would own their own home, 35% would rent.  80% of all renting respondents, and 65% of owner-occupiers, expected that their tenure, location and housing type preferences would be constrained by housing affordability issues. 6.1.6 What type of housing do we prefer?

Key findings in terms of people’s housing preferences were:  81% of all respondents would prefer to live in a standalone house, but only 25% would not consider any other dwelling type.  50% of all those surveyed would consider living in a townhouse or other attached dwelling with outside space.  25% would consider living in an apartment.  Single person households would prefer at least two bedrooms, although many renting singles are reconciled to living in single bedroom multi-units or flats.  Couple-only households prefer three bedroom housing, but renting households would generally accept two bedrooms if the location is right.

Almost all families with children want to live in standalone housing with a minimum of four bedrooms.

Wellington City Council Wellington City Housing and Residential Growth Study 47 Homeowner families would generally prefer four bedrooms, while renting families are more willing to make trade-offs in size and location to live in their preferred area. 6.1.7 What’s most important when choosing a new home? Our sample regarded the having the right number of bedrooms and housing affordability as being more critical than being able to live in a preferred location or housing type. Location remains an important consideration, however:  At least 50% of respondents would actively consider living in more compact housing to stay in their preferred location.

 A similar proportion would trade off non-essential housing features like off-street parking and outdoor space to live in their preferred location.  A third of all respondents would be prepared to pay more to live in their preferred location. 6.1.8 Planning implications Although standalone housing remains the preferred tenure for 81% of all Wellington households, a significant proportion are willing to consider more compact housing forms, (especially townhouses with some private outside space) in order to live in their preferred location or keep their housing costs down. There are also growing numbers of older single people and couples in suburban areas who no longer want to (and in some cases can’t afford to) stay in larger family housing, but want smaller housing that reflects suburban amenity values: Our summary conclusion is that emerging housing preferences in suburban areas should be supported by more dynamic District Plan settings for the outer and inner-city residential areas, for instance:  Rules that actively promote small-lot housing.

 Rules and objectives that support growing the population base around existing suburban centres, which are currently being undermined by age-based de-population?  Is there also a case for adapting our planning regime to recognise the dynamics of the market? For instance, Wellington’s highly mobile population (and more general affordability issues for low- medium income earners) means that rental housing will make up a greater proportion of total housing stock over the next 10-20 years. Is may be time to recognise this in the City’s planning regime, for example by enabling the construction of smaller, lower maintenance housing units favoured by investors.

 By reducing rule-based disincentives for commercially-viable development of compact housing forms close to suburban centres and in the outer residential zone?  The sample also suggests there is scope to improve utilisation of existing housing stock (in particular large dwellings in key locations are occupied by a small number of inhabitants and options should be considered for shifting their tenure to larger households or adaption into multiple units).

Wellington City Council Wellington City Housing and Residential Growth Study 48 6.2 SUPPLY SIDE VIEWPOINTS – THE DEVELOPER SURVEY In a parallel exercise to the consumer preference survey, we sought the views of members of Wellington’s development industry about what they think is most important if the City is to meet its target of building 1,000 new units annually over the coming years. To achieve this target Council must do what it can (within statute and reason) to promote new housing development, which is largely developed by Wellington City’s ‘residential development community.’ 6.2.1 Wellington’s development sector Wellington’s development community is largely divided between suburban and inner-city-focused developers and development professionals. The City has only a handful of large-scale developers operating in each sub-market, the largest of which are located in the City’s northern suburbs, the CBD and Te Aro. 6.2.2 Where do developers think the market is heading?

Body text Over the next five to ten years, Wellington developers and associated housing professionals expect that the market for new housing will largely follow recent trends:  The market for suburban housing will be dominated by existing owner-occupiers, in particular older households who will make up more than 50% of demand for new suburban households  The market for housing in the city’s core is more diverse, catering for a high proportion of younger, temporary non-family households. Here the market will be driven by investors catering for these market segments, along with growth in the owner-occupier market.

The biggest short term risks to new housing development raised by developers were land and construction costs, and rules that constrain developer’s ability to deliver higher densities in suburban and city fringe locations. Specific feedback on district plan settings was as follows:  Respondents were generally supportive of Council’s Central Area rules, but believed more could be done to promote compact housing forms in the Inner and Outer Residential Zones.  In particular, restrictions on infill housing were seen to be out of alignment with what the market wanted, and minimum lot sizes acted as a substantial brake on comprehensive redevelopment.  There is a view amongst some within the development community that not enough land is available for housing, and that the larger sub-markets are dominated by only a few players. 6.2.3 The sector’s longer-term vision for Wellington Wellington’s development community is largely positive about Wellington’s housing future, provided that District Plan settings are aligned with their future housing vision, and the market can support commercially- sustainable development.

Wellington City Council Wellington City Housing and Residential Growth Study 49 Overall, the industry expects that Wellington’s housing sub-markets will follow different pathways, although increases in newly-built compact housing will feature in all locations:  The suburban market will still be driven largely by family-with-children households, but the market will also target older people who want to retain their suburban links.  Suburban areas on the fringe of the central city will experience an upsurge in intensive housing development, reflecting the increasingly diverse population in these areas, and the fact that lower- density housing development is no longer viable in these areas.

 The City Centre will complete its transition to a high-density housing zone. The tables below present a composite picture of how Wellington’s development community views the new- build housing market in ten years’ time. There are sharply divergent views on how the industry should respond, so we have compiled a broad brush vision based on a weighted score of all responses to the developer preferences survey. Figure 26 summarises respondents’ collective views on who will be buying new-build housing in ten years’ time. Figure 27 summarises the development community’s view of at what types of new housing will be being built in each sub-market in ten years’ time. Figure 26: Summary of development sector expectation of future dwelling demand Figure 27: Summary of development sector expectation of future dwelling construction]

Wellington City Council Wellington City Housing and Residential Growth Study 50 In conclusion, we note that that the industry’s collective view of Wellington’s housing future is largely consistent with messages from the consumer preferences survey. In particular:  The supply chain wants to adapt to the changing demographics of Wellington’s housing marketplace.  Household growth (coupled with demand growth) in the inner city is changing the form of housing that can be delivered within reasonable commercial parameters.

 The question is will the supply chain lead market acceptance of more compact housing forms? Or will it lag behind consumers own perceptions of what’s most important for Wellington in the coming years.

Wellington City Council Wellington City Housing and Residential Growth Study 51 7. LAND SUPPLY 7.1 EXISTING DEVELOPMENT PATTERNS 7.1.1 Wellington City The City’s residential form comprises of three main elements:  Greenfield development on the main northern development front and more limited expansion around the fringes of existing outer suburb.  Medium-density and infill development in established suburbs.  High density apartment development in the central city. Using these broad categories Council monitors the location and type of new dwelling completions, and the five year period from 2008 – 2012 (calendar years inclusive) provides a useful snapshot of the most recent trends. Table 4 below shows volume of new dwellings by broad type and Table 5 by location. Table 4 also compares the mix of new dwellings against that projected in the Urban Development Strategy (“UDS target”).

Housing Type No. dwellings 2008 – 2012 Percentage New Dwellings UDS target Greenfield 760 23% 34% Infill / Medium Density 1258 38% 30% Central City / Apartments 1269 39% 36% Total 3,287 100% 100% Table 4: Dwelling completions in Wellington City by type 2008 – 2012 Area No. dwellings 2008 – 2012 Percentage New Dwellings Central City and Fringe 1569 48% Northern Suburbs 710 22% Western Suburbs 410 12% Southern Suburbs 400 12% Eastern Suburbs 198 6% Total 3287 100% Table 5: Dwelling completions in Wellington City by broad area 2008 - 2012

Wellington City Council Wellington City Housing and Residential Growth Study 52 The figures help to highlight the dominant role that higher density, centrally located dwellings are playing in the new development market. The figures have also been collated at a more granular, neighbourhood based level (31 neighbourhoods in total) and highlights include:  Central city and greenfield areas dominating the high growth neighbourhoods  A lower than forecast rate of dwelling completions (660 dwellings per annum average compared to the long-run average of 760 assumed in the UDS).

 A high concentration of new dwellings (apartments) in the central city.  Newtown and Mt Cook have provided a substantial proportion of infill housing.  An otherwise even distribution of new dwellings in established suburbs (generally infill).  A lower than expected contribution of dwellings from greenfield suburbs.  A negligible contribution in the form of rural-residential dwellings.  An elevated level of development along the growth spine (70%, which is greater than the 60% projected in the UDS).

Overall the results indicate supply and demand forces operating broadly, and an associated requirement to provide development opportunities across the city, generally in line with the existing approach embedded in the UDS. These matters are considered roundly in Sections 9 and 10. 7.1.2 Wellington metropolitan To put the Wellington City growth figures in context, they represent approximately 50% of new dwelling completions in the broader Wellington metropolitan area, demonstrating the city’s dominant role. The table below shows total dwelling completions for the five metropolitan cities across the five year period from 2007 – 2011 (complete calendar years).

Territorial Local Authority Area No. dwellings 2007 – 2011 Percentage New Dwellings Wellington City 2910 51% Porirua City 849 15% Kapiti Coast District 736 13% Upper Hutt City 663 11% Hutt City 565 10% Total 5723 100% Table 6: Dwelling completions in Wellington metropolitan by constituent local authority area

Wellington City Council Wellington City Housing and Residential Growth Study 53 7.2 LAND AVAILABILITY AND DEVELOPMENT CAPACITY Much of the debate around city planning and house prices has centred on Auckland and its “land supply problem” (i.e. shortage of developable land). In this context there is a risk that planning becomes exclusively focused on the opening up of new land on the urban fringe. We believe a better way to conceive the issue is in terms of “development capacity”, meaning the broader ability of an urban area and its planning framework to accommodate growth, taking into account infill potential, brownfield redevelopment and central city apartments (as well as greenfield growth). This is especially important for Wellington City because there are no obvious new growth fronts, and recent growth has a mixed profile, with a substantial proportion of new dwellings being provided within the existing urban area. We have made an assessment of remaining development capacity in the Wellington metropolitan area (at a broad level) and Wellington City (more detailed) by reviewing and synthesising work carried out by Council and a range of other information sources relating to the City and the broader metropolitan area. This has included responses from each council to a Local Government New Zealand request about land available for development in early 2013. Taking into account the figures available and applying conservative assumptions about supply in Hutt City (we were unable to source their data) over 3,500 vacant lots (either fully approved or in the final stages approval) were present across the Wellington metropolitan area. Based on existing growth figures this represents over two years of immediate supply even assuming that every new dwelling will be a new standalone house on a new lot. Infill capacity within existing lots, high density development, and un-subdivided zoned land were not factored in, but would have substantially increased the supply. At the time there were 841 vacant lots in Wellington City.

To triangulate these figures we have monitored the availability of vacant lots on the Trade Me property website (http://www.trademe.co.nz/property) which is regarded as an almost complete database of market available property. In December 2013 the following vacant lots were available across the Wellington metropolitan area: Territorial Local Authority Area Total residential sections advertised December 2013 Wellington City 96 Kapiti Coast District 230 Porirua City 177 Hutt City 43 Upper Hutt City 40 Wellington metropolitan 585 Table 7: Vacant sections in Wellington metropolitan by constituent local authority area Source: Trademe Property (www.trademe.co.nz/property) Subsequent monitoring has demonstrated that the number of lots available has been steady over recent months with some lots having been listed for an extended period. This indicates to us there is no pressing metropolitan wide land supply shortage. We note in this context that vacant section sales in the wider Wellington region were at a 20 year low in 2012.

Wellington City Council Wellington City Housing and Residential Growth Study 54 At a more basic level we have undertaken a desktop review of current metropolitan aerial photography and drive-by surveys and we have observed that a lot of development capacity (vacant lots and substantial infill potential) remains in existing zoned areas throughout the metropolitan area, particularly on the fringes of the other cities / districts within the metropolitan area. If there were a pressing metropolitan land supply shortage and associated unmet housing demand we believe this capacity would be being taken up at much greater rates, as it is in Auckland for example.

Turning specifically to Wellington City research undertaken by Council officers in 2012 estimated the following zoned land supply / development capacity in the City under current planning settings: Housing Type Supply (no. dwellings) Supply (years) Greenfield 5,000 22 Infill 6,400 – 14,000 28 – 55 Central City >18,400 >60 Table 8: Assessment of forward development capacity in the Wellington City District Plan In respect of these figures we note that the central city supply figures are based on available airspace in the district plan (i.e. unrealised height) rather than land. We also note that infill land, whilst substantial in terms of supply, is difficult to release because of land fragmentation / ownership issues and the challenges of developing in an already established environment.

More refined and up to date land supply calculations are currently being carried out, but preliminary work indicates that figures of the same general order can be expected. Whilst these figures paint a general picture of health we note that Wellington City faces some specific challenges in terms of “unlocking” the land supply for residential development:  A substantial proportion of the greenfield supply is held in the ownership of two land owners and they are releasing vacant lots / new homes to the market at slow rates and overall Wellington City is playing a subordinate role in the delivery of new greenfield housing lots in the broader metropolitan market (see Figure 29 below).

 The majority of recent dwelling completions (approx. 80%) have occurred within the existing urban area of the city and some of these areas present significant cost and consenting challenges for developers and some sites tightly held by passive investors – on this basis we believe that the real forward supply of infill and central city land is likely to be substantially less than the figures represented (which set out the development capacity within the district plan).  Some land is constrained by steep topography and requires costly earthworks and engineering to develop. Such sites will only be developed by parties with no immediate need to realise a return, where a number of units can be developed to make projects viable, and in the worst cases when engineering technology becomes more affordable.

Our overall assessment of the land supply / development capacity figures represented above is:  The greenfield figure is generally reliable and at current growth rates a supply in excess of 20 years exists.  The central city figure is high but correctly identifies significant residual development potential and

Wellington City Council Wellington City Housing and Residential Growth Study 55 at current growth rates a supply in excess of 20 years exists.  The infill figure represents a broad range and significant residual development potential but we believe the actual development capacity is significantly less – we estimate in the order of 10 years forward supply. In respect of infill we have come to our view about constrained development capacity based on a combination of the following factors.  The generally constrained nature of infill land.  The suppressing effect of passive landowners (i.e. no intention to sell or develop).  The existing strict infill planning regime in the district plan.  The current pattern of broadly dispersed, small scale infill indicates that infill development opportunities are limited.

More roundly our view is that there is currently no land supply problem in the broader metropolitan area but there is definite pressure within established areas of Wellington City. Figure 29: Vacant lot availability in Wellington metropolitan December 2013 Sources: Trademe Property (www.trademe.co.nz/property) In Figure 29 the black bars represent Wellington City suburbs and the grey bars non- Wellington City suburbs. The red bars are house and land packages that were available in Wellington City at the time. In addition to the above land supply calculations must be placed in the context of the market. Maintaining a tight match between the supply and demand of land is not recommended because this reduces the development sector’s choices, increases land values, and provides no flexibility in the event of market upswing or unforeseen growth. Land supply should also be couched in terms of the market’s ability and

Wellington City Council Wellington City Housing and Residential Growth Study 56 propensity to utilise that supply. For example, some land will not be developed because the development economics do not “stack up” and other land because it is held passively by owners with no intention to develop or pass the land on. For these reasons we recommend a degree of oversupply to allow the market flexibility and the ability to deliver housing at reasonable prices. Figure 28: New dwelling construction and earthworks on a steep site in Wilton (2013) 7.3 INFRASTRUCTURE CAPACITY Council is current modelling the capacity of the “three waters” (sewer, stormwater and water supply) and transport network. Whilst Wellington is not suffering from the underinvestment in infrastructure that has happened in Auckland for example, it does have some limitations. Because of the topography there are definite “pinch points” in the transport network and areas where water related infrastructure is operating at or above capacity. We understand that due to rising sea levels parts of Rongotai and Lyall Bay struggle to discharge stormwater in king tides and heavy seas.

We have undertaken initial discussions with Council’s infrastructure unit and understand that much of Council’s bulk infrastructure is of the same vintage and will require replacement over the next twenty years. We have not been advised of any particular areas where bulk infrastructure is a constraint to growth or intensification, on the basis that there are no pressing constraints and that Council’s asset management programme can respond to identified areas of future growth as specific proposals are put forward. 7.4 IMPACTS AND PERFORMANCE OF PLANNING CONTROLS Taking into account the district plan settings described in Section 5.2 and feedback from various stakeholders we note the following:  There are few options for the release of new greenfield land in Wellington City – therefore growth will have to be almost exclusively accommodated within the existing identified urban and growth areas.

 The cumulative effect of character controls, heritage controls and a policy emphasis on retaining

Wellington City Council Wellington City Housing and Residential Growth Study 57 existing character suppresses development potential in established areas. However, at this point we believe that only selective and strategic reconsideration of some areas is likely to be justified.  The medium density zonings at Johnsonville and Kilbirnie have created meaningful redevelopment opportunities in those areas but alone will not achieve macro-scale intensification across the city – further “upzonings” are required to present options to the market and achieve a meaningful volume of nodal intensification.

 The “easy” infill development opportunities on flat, suburban sites have largely been exhausted, particularly on the extensive flat areas of Miramar and Strathmore. This, allied to tightening of infill rules through PC56 and PC72, points to reduced infill capacity. Given the overriding compact city philosophy and lack of new land, specific attention needs to be given to the tension between protecting neighbourhood character and providing capacity for new housing.  Currently the Rural Area is more or less “locked up” under the district plan controls. Much of this land is hilly and remote though there is some flatter and more accessible land in Ohariu Valley. However it is doubtful that this would be more attractive to the market than better connected parts of Porirua and the Hutt Valley.

We have undertaken a review of the primary development controls for the residential zones to identify problem controls and triangulated this with discussions with senior consent planners. We have also reviewed the controls with a view to future – i.e. whether the existing controls will remain fit for purpose. Our primary thoughts around these matters are as follows:  The 400m² minimum lot size which applies broadly across the residential zones is likely to encourage a comparatively low density of development because lots of this size are only really capable of accommodating a modest single dwelling. We believe smaller lot sizes should be considered in some areas and note that some greenfield subdivisions in Auckland include lots as small as 150m².

 Widely applied infill controls governing on-site open space, minimum lot size and the height of infill units (introduced by PC56) directly govern and reduce the density that can be achieved. Given the constrained nature of land supply in the city thought should be given to ways of facilitating materially higher density whilst maintaining an emphasis on quality design, layout and amenity. The approach could be applied selectively through further roll out of medium density zonings around suburban centres alongside broader “transition zones” which simply relax infill controls.  Medium density zones in particular need to be carefully selected, and it should not be assumed that zoning alone will stimulate denser housing development. Area selection and the allied planning controls need to be properly evaluated and sensitive to development economics, or else there may be no market response. We understand from Council officers that uptake in the Kilbirnie medium density has been slow for example.

 The Outer Residential Area comprises the majority of residential zoned land in the city but its redevelopment and infill potential is constrained by traditional, low density development controls (e.g. 8m maximum height, 35% maximum site coverage). In our view thought should be given to a finer grained approach which recognises the differing characteristics of neighbourhoods and more permissive controls in selected locations (see note regarding “transition zones” above).

Wellington City Council Wellington City Housing and Residential Growth Study 58 Inherent in these points is the view that development controls should be set at the appropriate permitted level. Some planners hold the view that planning controls should be set strictly to ensure that Council can exercise control over most developments. Without derogating from the need for regulatory control per se we believe that it is important to recognise the profound impact that district plan regulation has on developer confidence and activity. Our recent engagement with the development sector indicates that resource consents are one of if not the single biggest obstacle to getting development proposals off the ground. In most cases commercial contracts and bank funding are dependent on obtaining resource consent, and accordingly any uncertainty (avoidable or unavoidable) can cause developers to abandon proposals. With this in mind we believe the setting of permitted thresholds and non-notification clauses should be exercised carefully in future plan making processes, and unnecessarily high thresholds avoided. 7.5 DEVELOPMENT AND REDEVELOPMENT OPPORTUNITIES Historical development and topography means that Wellington City is constrained for new development opportunities, with nearly all the flat, accessible and easily developable land already exhausted. On the other hand this lack of easy development opportunities has driven a denser development pattern and a different housing market (at least in the New Zealand context) which is attuned to alternative housing types (apartments, town houses etc.). Set against this context, and in addition to opportunities enabled by existing district plan settings, we have identified various residential development and redevelopment opportunities in the city. These are set out below.

7.5.1 Medium and high density upzonings Upzoning already developed land like that in Johnsonville and Kilbirnie can be an effective tool in stimulating redevelopment by increasing the development yield possible under planning rules. For example, upzoning has been identified as one of the key tools for releasing new development potential in the Proposed Auckland Unitary Plan. Council has an existing “areas of change” programme which emerged from the UDS and resulted in the Johnsonville and Kilbirnie zonings, but has not yet advanced to upzoning of further suburban areas.

We believe that a newly primed areas of change programme is potentially the key tool available at Council’s disposal to create new development capacity around existing suburban centres. This nodal approach to new growth is in line with compact city and transit orientated development principles, and fit well with the denser Wellington model of suburban development. Further, our research identifies a growing market for compact housing around suburban centres and a willingness on the part of developers to deliver it. Notwithstanding our general support for a reinvigorated “areas of change” programme we believe it is important that the areas are chosen carefully and the planning rules carefully crafted. Generally speaking we are more supportive of “medium density” than “high density” because this is more likely to be acceptable in suburban communities, even if this is simply a matter of terminology. Experience from Johnsonville indicates that suburban communities can be very sensitive to the impact of density on neighbourhood character, and so rules relating to height, site coverage etc. need to take this into account whilst ensuring that the development yields possible (i.e. number of units, density) presents commercial viable development opportunities.

Wellington City Council Wellington City Housing and Residential Growth Study 59 Further, our overall view is that upzonings are likely to be more appropriate in larger centres with some existing higher density development and a wide offering in terms of goods and services, as these are more likely to support a market for higher density housing and have the requisite physical characteristics to effectively absorb it. 7.5.2 Adaption of underutilised reserve land for residential use Wellington City has a high ratio of park / reserve land to residents and some of this land is underutilised and well located for residential development. However, there are significant constraints to this including:  Likely political and community opposition.

 Complex RMA and Reserves Act processes.  Potential Treaty of Waitangi “offer back” requirements under the Public Works Act. Notwithstanding these constraints we believe that ultimately Council will need to confront this issue. In a city which is constrained for development opportunities in the way Wellington efficiency of land use needs to be considered, especially if protecting underutilised reserve land pushes demand to the urban fringe or into the cities to the north. This goes to the heart of the city’s compact city approach, with the co-location of employment and residential areas deriving substantial social and economic benefits whilst simultaneously reducing the effects of long commutes. In a constrained city like Wellington at some point trade-offs will have to be made – be it staunch protection of reserves at the cost of pushing development to the urban fringe or beyond; or loss of reserves to have new, well located housing.

Without derogating from the points made above we emphasise that development of reserves would need to be carefully conceived because they are an essential part of Wellington’s social fabric and quality of life. We also note that provision of well located, high quality reserves is essential to supporting higher- residential density more broadly. 7.5.3 New greenfield growth fronts Opening up large new greenfield growth fronts is a traditional tool utilised by local authorities to increase the forward supply of developable land. In Wellington City’s case the opportunities are strictly limited because historical development has occurred in the easily developable parts of the city and the steep topography limits outward expansion. Existing council policy, to restrict development within the outer green belt provides a further constraint, though we note that beyond the existing urban area (even the on fringes) topography is generally very steep, would be difficult to develop and expensive to service. Based on a high-level review we have identified that existing outer residential zonings in southern suburbs (including Island Bay, Brooklyn and Happy Valley) appear to have potential for 250 – 450 new lots, with their release to date likely hampered by market conditions and topography / access. A further yield of 20 – 40 lots appears possible on vacant outer residential zoned land in Karori (Parkvale Road). As zonings are already in place Council may need to explore other ways to stimulate release, including discussion with landowners. This could include application of special housing areas. Some potential exists on open space

Wellington City Council Wellington City Housing and Residential Growth Study 60 zoned land at Takapu Valley and Mt. Crawford though yields are likely to be limited due to topographical constraints. 7.5.4 Advocacy and regulatory stimulus to promote more efficient use of brownfield land In general the Wellington development sector has been active at realising the redevelopment opportunities presented by the district plan settings. Primarily we refer to infill opportunities, which on the flats of Miramar and Strathmore for example, have been substantially taken up. However, there are areas where residual opportunities exist, primarily due to inactive property owners or investors satisfied with the way in which they are able to utilise the property or its rental or capital gain returns. Such landowners will always represent a proportion of the residential property market but motivating these owners to develop or pass their land on can be beneficial from the perspective of growing a functional, compact city. This is particularly the case where the existing level of development on their holding is well below that permitted under the district plan (e.g. only 15 – 20% site coverage on an outer residential lot).

Whilst Council cannot compel private landowners to develop their land to its full potential under the district plan it can encourage them through positively worded planning policy (i.e. encouraging infill development within district plan limits) and initiatives such as distributing information about what is possible under the district plan. This may encourage passive landowners to consider their options, including on-sale to developers. Favourable, positively worded district plan policy may also catalyse the development sector by giving them greater confidence in undertaking residential intensification projects. In the context of the above we particularly note the Strathmore Park area bound by Broadway to the north, Wellington International Airport to the west, Beacon Hill Reserve to the east and Ataturk Park to the south. This area is characterised by single dwellings on large lots, with many only developed to around half of their allowable site coverage (15 – 20% of their permitted 35% site coverage). We estimate that in excess of 200 properties in this area are owned by Housing New Zealand (see Figure 30 below), and many of these are developed at very low rates of density. We believe there is an opportunity to work proactively with Housing New Zealand to increase residential densities in this neighbourhood, and in doing so deliver a material number of new dwellings into the market in a part of the city which is popular and desirable.

In this context we note that Housing New Zealand, in general, is trying to reduce its concentration of housing in any given neighbourhood to only 15 – 20 % of all dwellings and in other locations is actively redeveloping its sites to release capital and achieve deconcentration. This involves developing some new units as market housing. We believe this presents a genuine opportunity for Wellington City, particularly as parts of Strathmore Park have already redeveloped, indicating a ready market for good quality, new housing.

Wellington City Council Wellington City Housing and Residential Growth Study 61 Figure 30: Housing New Zealand owned lots in the Strathmore area Figure 31: Underutilised development potential in Strathmore area

Wellington City Council Wellington City Housing and Residential Growth Study 62 8. WHAT’S HAPPENING IN AUCKLAND AND DOES IT MATTER TO US? 8.1 BACKGROUND TO CHANGE IN AUCKLAND There has been significant change in local governance, strategic planning and regulatory planning in Auckland in recent years. The establishment of a single Auckland Council in 2010 arrived against the background of a protracted debate on local governance, including a Royal Commission. Since then there has been a sequence of legislative reform directed to improve the performance of local government in Auckland. Specifically on planning issues the current National-led government has enacted changes to facilitate more co-ordinated planning and infrastructure delivery and release more greenfield land, which had been constrained by the 1999 metropolitan urban limit.

8.2 HOUSING AFFORDABILITY IN AUCKLAND Whilst rising house prices and declining housing affordability have been given national attention, their effects have been felt most keenly in Auckland. Various factors including a large local market (1.5 million people), strong inward flows of foreign capital, and strong domestic and foreign immigration contributing to an overall picture of solid population growth have combined to generate a high demand for new housing. These issues have been exacerbated by a scarcity of developable land in established and greenfield areas and loss of capacity in the local development sector following the global financial crisis in 2008. A number of Auckland based developers were bankrupted at this time, with flow on effects to local contractors (e.g. construction workers and earthworking companies). Recovery has been further stalled by the high demand for contracting firms and workers for the Christchurch rebuild.

Overall, the above establishes a picture which is very different to Wellington. For example, in 2008 Wellington City and the Auckland Council area had an almost identical average house sale price (approximately $500,000) but by 2013 the Auckland figure had risen to almost $700,000 whereas the Wellington figure was approximately $525,000. There has also been substantial price growth in Christchurch following the earthquakes. Further detail on these matters is set out in Section 4. Using government’s method for assessing housing affordability (an index based method of median house prices and median household income) Auckland is “severely unaffordable” with a figure of 6.7, and Wellington is also severely unaffordable but with a lower score of 5.8. Based on the current buoyant market in Auckland and flat market in Wellington we expect the two figures to further diverge into the foreseeable future.

8.3 THE AUCKLAND PLAN AND PROPOSED UNITARY PLAN Urban planning was a key issue in the forming of Auckland Council, and has been since. Lack of co- ordinated urban planning by the previous eight local authorities led to an amendment to the LGA mandating a spatial plan with a 20 – 30 outlook to: “…enable coherent and co-ordinated decision making by the Auckland Council (as the spatial planning agency) and other parties to determine the future location and timing of critical

Wellington City Council Wellington City Housing and Residential Growth Study 63 infrastructure, services and investment within Auckland…” Subsequent, specific amendments to the RMA sought to give regulatory effect to the spatial plan (now known as “the Auckland Plan”) through a new “Unitary Plan”. The amendments address the content and process for the plan, and includes special government auditing of the costs and benefits report; extended submissions processes; a government appointed hearings panel; provision for cross examination in the hearings; reduced third party appeal rights; and a requirement for Auckland Council to make decisions on the plan within three years of notification. The Proposed Unitary Plan (“PUP”) was notified in September 2013 and the further submissions process recently closed.

Key elements of the Auckland Plan and PUP as far as residential growth planning is concerned are the significant upzoning of land in established urban areas; release of substantial new tracts of greenfield land; and expansion of the metropolitan urban limit (now known as the “rural-urban boundary” or “RUB”). The latter two measures were direct responses to the 1999 metropolitan limit which was identified as causing a land supply problem and increasing land and house prices. The expansion of the urban limit and release of further greenfield areas in the PUP is shown in Figure 32 below.

Figure 32: Figure of greenfield expansion areas in the Proposed Auckland Unitary Plan Source: Auckland Council (www.aucklandcouncil.govt.nz)

Wellington City Council Wellington City Housing and Residential Growth Study 64 8.4 HASHA ACT AND AUCKLAND HOUSING ACCORD Notwithstanding the expansion of the urban area provided for in the Auckland Plan and PUP government remained concerned about the lack of urban zoned land in Auckland and sought a short- term measure to increase supply ahead of the PUP becoming operative. This led to the enactment of HASHA Act (see Section 5.3 above). Using this initiative as a key tool government has identified an aspirational target of having 39,000 new dwellings granted resource consent in Auckland over three years. To date several special housing areas have been identified. These are predominantly greenfields sites but do include some brownfield sites as well. Some of the sites are very large – well beyond the scale of potential sites in Wellington. For example the Wesley College special housing area in Pukekohe is 278 hectares in size and expected to deliver over 1000 dwellings. This is 50% more than the current level of annual dwelling completions across all of Wellington City.

In a short period of time a strong market has developed around the special housing areas, with land owners often negotiating with two or more prospective developers of their land. The private sector is also vigorously lobbying Auckland Council to identify new special housing areas. To manage the processing of resource consents for qualifying developments and identify new areas Auckland Council has formed a new division called the Housing Project Office (“HPO”). The HPO operates as a “one stop shop” with developers / applicants not expected to liaise separately with other parts of council or council controlled organisations. The overall sense in Auckland is that the Housing Accord and HPO is breaking new ground, and if successful will provide a template for consenting of new developments in Auckland, and perhaps other high growth urban environments in New Zealand.

Figure 33: Tranche 2 of Auckland’s special housing areas Source: Auckland Council (www.aucklandcouncil.govt.nz)

Wellington City Council Wellington City Housing and Residential Growth Study 65 8.5 DISCUSSION Auckland is experiencing rapid growth and inward flows of investment that are unprecedented in New Zealand. As a result house prices are increasing rapidly and housing affordability reducing year on year. Reduced capacity in the development sector following the GFC, artificially constrained land supply, and labour shortages exacerbated by the Canterbury earthquakes have further contributed to increasing prices. In this context it could be argued that the expansion of urban limits and application of the HASHA Act are reasonable steps to take, notwithstanding their boldness.

The picture in Wellington is altogether different. Population and household growth is steady, but slow, and house prices have been stable since 2008. Further, given the stark differences between Auckland and Wellington our view is that simple application of “the Auckland solution” is unlikely to be appropriate for Wellington. In this regard we note that Council has an opportunity through its own urban growth plan initiative and Housing Accrod to address local issues in a tailored manner.

Wellington City Council Wellington City Housing and Residential Growth Study 66 9. PLANNING TOOLS AVAILABLE 9.1 DISTRICT PLAN The primary tool available to Council in delivering the outcomes identified in the upcoming urban growth plan is the District Plan. This is inherent in the preceding sections of this report and the planning recommendations set out in Section 10. 9.2 WELLINGTON HOUSING ACCORD As noted in Section 5.3 Council has agreed a Housing Accord with central government and the streamlining provisions associated with this and the HASHA Act form part of Council’s toolkit for incentivising development in identified growth areas. Council is already seeking to align the Housing Accord with its strategic planning objectives through identification of an initial group of special housing areas. 9.3 STREAMLINED RESOURCE CONSENT MODELS Streamlined processing of resource consents (allied to setting clear expectations with applicants) can be instrumental in creating an attractive investment environment. Council already employs a number of best- practice techniques to set clear expectations and ensure efficient processing of resource consents and ultimately can only operate streamlined resource consent models within the parameters of the RMA and district plan (except where the HASHA Act applies). However, the approach of Auckland Council’s Housing Project Office (“HPO”) provides a useful case study. Among the methods they employ are:  An operating model where all the relevant experts sit together in one place (rather than operating in discipline based silos).

 An associated “one stop shop” approach where resource consent applicants do not have to deal separately with other parts of Council or council controlled organisations.  Case managers who act as the primary point of contact within the HPO and resolve issues internally (where possible) to avoid unnecessary exposure of the applicant to internal processes and discussion. 9.4 MELBOURNE GROWTH AREAS MODEL Victorian state government has a tradition of being actively involved in consolidating strategic land parcels and its “Growth Areas Authority” (“GAA”) planning model makes a useful case study for New Zealand because of the broadly similar structure of local government and planning approval processes. The GAA was formed by the Victorian state government to take over residential growth planning in designated “growth areas” on Melbourne’s urban periphery and has recently been expanded and renamed the Metropolitan Planning Authority (“MPA”).

Melbourne is experiencing rapid population and household growth and urban expansion and state government decided that an overarching body was required to facilitate consistent and timely planning and approvals processes in high growth municipalities. Another factor was the “depoliticising” of the planning process and having developments facing different planning hurdles in the different municipalities. The GAA

Wellington City Council Wellington City Housing and Residential Growth Study 67 was formed and took over greenfields planning in those municipalities. The primary tools used by the GAA / MPA to speed the delivery of housing to the market are rezonings and “precinct structure plans” (“PSPs”). PSPs are detailed community masterplans developed with wide stakeholder input and incorporate infrastructure provision and community facilities such as local schools. They also establish a broad range of regulatory approvals in a single step. The councils and developers are intimately involved in the process but the MPA is the statutory planning body responsible for the process. There is a twenty year forward programme of PSPs with 37 completed to date. The MPA’s ambit recently widened to “unlock” strategic brownfields sites, for example along rail corridors. This was not a focus for the GAA, as it was focused on greenfields areas alone. This model, though different in detail, has strong parallels with the HASHA Act model currently operating in Auckland and the Auckland situation in general:  Major urban conglomerations experiencing high rates of growth and household formation.  State / central government intervention in planning processes normally falling within the sole domain of local government.

 Adoption of special planning / consenting processes and processing models with a focus on development certainty. Although the Wellington context is very different, the approach emphasises that in constrained or high growth environments “business as usual” may not be adequate to unlock land and give confidence to the development sector. 9.5 LAND DEVELOPMENT AGENCY We understand that Council has previously considered the idea of a development facilitation function or “land development agency” to create a business friendly investment environment and assemble strategic development sites (among other things). We further understand that the targeted growth projections in the UDS assumed that Council would take a more active role in facilitating development along the growth- spine (where land fragmentation and passive property investment has the potential to stymie new development). A Council function that addresses these sorts of issues could sit at various points along a risk spectrum, and includes the following options:  A low risk “development facilitation” function where Council engages actively with the development sector and helps them overcome issues without investing any money in the development process.

 A basic land assembly function where Council purchases and assembles strategic parcels and tenders the purchase and development of the land back to the private sector.  A full scale land development function where Council purchases and assembles strategic parcels and undertakes or closely controls redevelopment. As noted above we believe Wellington is reaching a level of maturity and constraint where more active roles such as these should be considered.

Wellington City Council Wellington City Housing and Residential Growth Study 68 9.6 FINANCIAL INCENTIVES Relaxing or exempting Council charges can incentivise developers to act where they otherwise would not. With this in mind reducing or exempting development contributions may provide a material incentive to Wellington developers (rates relief is less attractive because rates are not a direct cost of development). Development contributions are applied on a dwelling unit basis in Wellington and the rate applied depends on the location (but are generally in the order of $5,000 - $7,000). Although development contributions represent only a small proportion of the overall development cost they can be significant because profit margins are often slim. Where they eat into the margin the developer may decide that the ratio of risk and return is too great to proceed.

For Wellington we believe the primary opportunity lies in reduction and exemptions in areas which are strategically located along the growth spine and around suburban centres, and where existing infrastructure capacity is high. In these areas development contributions revenue is less critical than in greenfields areas or in established areas where significant upgrades are required. Consideration could also be given to reducing or exempting development contributions when a development includes a proportion of “affordable” housing (say a set proportion of units at 75% of the Wellington market median). The same approach could be applied to developments that provide other “public good” elements (e.g. parks, public access, other public facilities). We recommend specific investigation of this approach under the Local Government Act.

9.7 REGULATORY INCENTIVES Regulatory incentives can also be used to encourage affordable housing and public good elements within developments. For example, more relaxed resource consent processes could be considered in developments that provide affordable housing. We believe a more effective method might be to incentivise the delivery of affordable units, for example by raising the permitted height limit above that of standard developments and imposing a non-notified clause. 9.8 REGULATING HOUSING AFFORDABILITY Auckland provides a current case study in regulating housing affordability through planning documents. This is via the Proposed Unitary Plan and Auckland Housing Accord.

Dealing first with the Proposed Unitary Plan, new developments resulting in more than 15 new dwellings or lots are required to set aside 10% of those new properties as affordable housing. A complex set of supporting provisions and definitions has been developed to make this method workable, and these relate to matters such as the eligibility of buyers, legal mechanisms to maintain affordability, and ensuring the affordable properties are of adequate size and quality. A similar approach is being followed under the Housing Accord for developments being pursued in Special Housing Areas under the HASHA Act, though this is an informal operating policy rather than an explicit provision in the Accord itself. We understand that Auckland Council is requiring 10% of new units and lots to be offered to the market at 75% of the Auckland median price.

Queenstown Lakes District Council also provides a useful case study. In 2007 it notified Plan Change 24 (“Affordable Housing”) to address housing affordability issues arising from expensive house prices and the

Wellington City Council Wellington City Housing and Residential Growth Study 69 dominance of the service sector in the district. The method adopted requires new developments to include a proportion of affordable housing or pay an equivalent financial contribution. What followed was a protracted period of legal proceedings in the Environment Court and High Court. Specifically members of the development sector argued that council had overreached its jurisdiction under the RMA. All appeals were dismissed, establishing legal clarity for local authorities to use RMA documents to regulate for affordable housing. The substantive appeal was eventually settled in Court assisted mediation in 2013, with a resultant watering down of the original provisions.

Seeking to regulate housing affordability in this way does come with complications. Sophisticated legal mechanisms and ongoing administration are required to ensure the method is workable. The Queenstown Lakes case also signals the opposing view held in the development sector, and a similar response is emerging in Auckland following the notification of the Proposed Unitary Plan. Another matter to be aware of when considering this approach is that it is a redistributive method and does result in an overall reduction in housing costs. Previous consultation we have undertaken with developers suggests a common response where the reduced sale price of affordable units will be compensated by increased sale prices on the balance units. Developers argue that this is required to maintain viability and profit margins.

9.9 STIMULUS PROJECTS Council commitment to infrastructure investment, capital works and improvement projects can make localised areas and stimulate private development on the basis that they will be well serviced, better connected and have higher amenity. This is central to the concept of the urban growth plan – achieving alignment of Council investment, regulation and private development. Where this approach is adopted Council’s investment should be strategically targeted to areas where there is a likelihood of a positive market response. We understand this is a central tenet in the upcoming urban growth plan, so we will not comment any further except to endorse the approach.

Wellington City Council Wellington City Housing and Residential Growth Study 70 10. CONCLUSIONS AND RECOMMENDATIONS 10.1 ADDITIONAL DEVELOPMENT CAPACITY REQUIRED 10.1.1 Greenfield As set out in Section 7 we believe there is in excess of 20 years forward supply of undeveloped greenfield land in the northern suburbs based on current uptake and projected growth rates. On this basis we do not see a need for substantive Council intervention in the greenfield housing market (i.e. further release of land). Notwithstanding the supply of zoned land we acknowledge the tightly controlled ownership and development of the existing greenfield supply is a source of frustration. However, we do not think it is having a fundamental effect on housing supply and cost across the city or broader metropolitan area. We estimate the long-run effect of this tight control will be an annual shortfall of 50 greenfield dwellings (approx.) when measured against UDS targets, and believe this will be largely offset by land supply in greenfield Porirua and alternative housing elsewhere in Wellington City rather than manifest in a material housing shortfall.

Notwithtstanding our comments above we believe there is value in additional district plan regulation to increase efficiency and flexibility in the development of greenfield land. This would recognize and respond to the fact that the city’s greenfield land is a strictly finite resource. Achieving slightly higher densities may release a 15 – 20% efficiency gain, which would translate into another 3 – 4 years supply. In addition, consolidating yard areas would create easier conditions for infill when the market conditions are right, and may realise additional meaningful development over time.

10.1.2 Central City As set out in Section 7 we believe there is in excess of 20 years forward supply of development capacity (i.e. airspace) in the central city. Survey findings further indicate indicate there is no need for further plan changes to the Central Area from a housing supply perspective, or indeed any other substantive Council intervention. Further, the view in the development sector is that the central city is currently “looking after itself”, in general the planning regime governing apartment development is permissive, and central city development is comparatively unaffected by “NIMBY” issues. However, it will be important to maintain development quality in this high profile part of the city, and this is covered below. 10.1.3 Established surburbs As set out in Section 7 we believe the real forward supply of development capacity in established suburbs is on the order of ten years and on this basis there is a need to create new development capacity in the district plan in the near future, not least because as the existing capacity is progressively taken up (i.e. before it is exhausted) land and house prices in established suburbs are likely to rise, particularly if a lack of development opportunities becomes tangible. Taking into account good planning principles and survey feedback additional capacity should be located around suburban centres and more generally in proximity to local services and public transport connections. Recommendations for opening up these opportunities

Wellington City Council Wellington City Housing and Residential Growth Study 71 are set out in Section 9.2 below. 10.1.4 Rural areas We see no substantive need for change in the residential development settings in the rural areas to the south and west of the city’s urban area. Much of this area is remote and physically dislocated. Based on this and associated cost and market desirability we see no need at the current time to facilitate a higher level of development than is currently allowed for. Our research clearly demonstrates that the “main game” for housing in the City is in the established areas, though this should be revisited at the next review juncture. 10.2 PRIMARY RECOMMENDATIONS This section sets out our primary recommendations which we believe Council should follow or seriously evaluate. We note that it includes both regulatory and non-regulatory actions. With some minor exceptions we have not made location specific recommendations. We envisage building upon our current recommendations with location specific recommendations upon receipt of updated development capacity assessments currently being carried out within Council.

Please also note, in respect of all our recommendations, that we have focused on areas where we believe change to the existing planning and policy regime is required to address housing supply and affordability issues. In its entirety this regime is multi-faceted and complex, and in most aspects it remains sound and fit for purpose. On this basis we remain silent on large parts of the district plan, other Council policy and Council activities. As an example we note the existing district plan emphasis on design quality, which we endorse and view as a non-negotiable approach for Wellington where higher-density housing will form a critical part of the city’s future.

10.2.1 Suite of regulatory adjustments to release development capacity in established suburbs We suggest increasing the forward supply of development capacity via the following strategic and regulatory planning initiatives:  Continuation of the “areas of change” programme which promotes medium-density housing development around suburban centres (officers are currently considering a range of new areas).  Relaxation of infill development controls in broader, strategically selected neighbourhoods around the City (“transition zones”).

 Reconsideration of the character controls in some parts of Mt. Cook, Berhampore and Newtown (added in PC38) where character is inconsistent, housing dilapidated and significant redevelopment potential exists.  Rules which enable the adaption of large single homes into multiple (3+) household units (in response to low utilisation rates in key locations).  Adjustments to district plan policy to explicitly support the development of sites to their full permitted allowance.

Wellington City Council Wellington City Housing and Residential Growth Study 72 These changes will require district plan changes and the areas selected should conform to good planning principles, namely have adequate infrastructure capacity, high-levels of connectivity, ready access to local services etc. We recognise the relaxation of infill controls across broader neighbourhoods may be viewed as bold and/or a reversal of the policy direction established by PC56. However, we do not envisage this being rolled out across the whole city; in fact we see it being applied on a relatively discrete basis as extensions of new medium density zonings. If sensibly and strategically applied it has the potential to substantially increase development capacity (see Figure 34 below shown for illustrative purposes). In this context please also note our recommendations below about a Council land-assembly function and the ongoing importance emphasising urban design and housing quality in the district plan.

Figure 34: Demonstrating the proposed approach to new medium density zonings and transition zones (location chosen for illustrative purposes only)

Wellington City Council Wellington City Housing and Residential Growth Study 73 We have undertaken a high-level assessment of where new MDRAs and transition zones could be applied. We have used Council’s centres policy as a basis for an initial, broad suite of potential locations, as the high- order centres in the centres policy (namely “town” and “district” centres). These centres and some lower order centres have the levels of service provision (including public transport) that can support residential intensification. Our assessment identifies the following locations as having potential:  Miramar.

 Karori.  Island Bay.  Khandallah.  Tawa.  Crofton Downs.  Newtown.  Brooklyn. Other areas with (lesser) potential were identified as Berhampore, Churton Park and Newlands. Johnsonville and Kilbirnie already have MDRAs in place and were not considered appropriate for transition zones at the current time whilst the MDRAs are still bedding in and their impacts monitored. We also note that these assessments have focused on potential around and not in the centres. Some centres have large development blocks within the already zoned centres land, and this provides for residential development already.

10.2.2 Promoting greater efficiency in the development of greenfield land We think Council should consider achieving more efficient (denser) and flexible subdivision and development patterns in identified greenfield areas, in recognition of the fact that greenfield land is a finite resource that if managed well could last beyond the projected 20 year supply. This could be achieved by promoting denser development and subdivision (noting that greenfield subdivision in Auckland includes lots as small as 150m² but in Wellington are rarely less than 500m²) and site development that consolidates yard areas for future intensification.

As a general comment we support Council’s existing “structure plan” approach to greenfield development and strongly advocate for its continuation, which we believe will work well in concert with this recommendation. The recent development of the Churton Park centre is a tangible example of how the central provision of local services can improve dormitory suburban communities. 10.2.3 Wellington Housing Accord The HASHA Act and Housing Accord presents an opportunity to stimulate development through streamlined consenting processes provided for under that Act. As noted in previous sections streamlined, certain consent processes can provide meaningful incentives to developers to pursue projects. Council is advancing this work in a parallel worthstream.

Wellington City Council Wellington City Housing and Residential Growth Study 74 10.2.4 Strategic sites We believe Wellington City is reaching a level of maturity, land fragmentation and constraint where Council should be taking an active role in promoting the redevelopment of strategic sites which are disused or underutilized. Council’s role could be anywhere along a spectrum from simple advocacy (low risk) to acting as a developer (high risk), though as set out in Section 9.2.5 below we suggest the strongest role Council takes is in assembling land for development. In terms of strategic sites we believe the following present potential strategic sites for residential redevelopment:  Shelly Bay.

 Mt. Crawford.  Kent Terrace (multiple sites but notably car yards).  Lincolnshire Farm – zoned but potential should be revisited with finalised alignment of proposed Petone – Grenada Link Road. 10.2.5 Land assembly function Allied to the above we also believe Wellington City is reaching a level of maturity, land fragmentation and constraint where a land assembly function should be strongly considered. We favour a land assembly function where Council undertakes the following:  Consolidates strategic residential redevelopment sites.  Seeks interest from developers to redevelop the site subject to criteria.  Selects a preferred bidder.

 Sells the site to the preferred bidder and contracts them into achieving the criteria. We favour this option because we believe it can achieve the following:  Meaningful consolidation of sites that the private sector cannot achieve.  Good social and design based development outcomes.  Cost neutral outcomes to Council.  Removes Council from the financial risk of the development process whilst also reducing risk to the developer. A variation on this option is that Council could remain the landowner and lease the site back to the developer over a specified period. This is similar to that currently carried out by Wellington Waterfront, where the land (being sensitive waterfront land) remains in Council ownership. Other relevant matters to consider are:  Risk mitigation measures would need to be built into this function including careful selection of land assembly sites (to ensure commercial viability and sufficient market demand) and partnering with reputable developers.

Wellington City Council Wellington City Housing and Residential Growth Study 75  Council could use the Public Works Act to effect compulsory acquisition of land for new housing development. However, our initial advice is that this is technically possible but likely to become complicated by “offer back” requirements. Where possible it would be better for Council to act as a buyer and seller of land on the open market, probably acting through an agent to preserve anonymity and thereby avoid vendor price escalation.

 Upon sale of land to developers any development outcomes Council requires (e.g. specific design outcomes, proportion of retained affordable housing etc.) would need to be carefully agreed and contracted because we understand some government bodies have had difficulties in enforcing requirements on developers post sale. 10.2.6 Strathmore partnership approach As signalled in Section 9 we believe there is genuine opportunity to intensify properties in Strathmore within the existing permitted thresholds in the district plan. Housing New Zealand is the owner of in excess of 200 properties in the area of Strathmore south of Broadway. There is an opportunity to work with Housing New Zealand to achieve the twin benefits of more efficient land use and de- concentrating Housing New Zealand dwellings from the neighbourhood (in line with their “pepper potting” policy). We further note that Housing New Zealand has bought apartments in the central city, indicating their willingness to place tenants in other housing types elsewhere in the city. We appreciate that for this partnership approach to work both parties must be committed to it, but we believe this represents a golden opportunity for central and local government to work together and simultaneously achieve social and urban development outcomes that aligns with existing policy at both organisations. 10.2.7 Alignment of public and private investment, regulation Building on points made above we are strongly supportive of the approach proposed for the urban growth plan where all of Council’s relevant activities are aligned to encourage development in the right places. This involves Council’s planning activities under the Local Government Act and RMA. Regulation and public investment are powerful tools, but all the more powerful if they are working effectively in unison. Specifically we see that the following elements should be aligned to ensure that the right activities happen in the right places, at the right time and at the right scale:  District plan regulation.

 Council’s “hard” infrastructure investment (e.g. stormwater).  Council’s “soft” infrastructure investment (e.g. community facilities).  Council suburban centre upgrades.  Investment by other infrastructure and service providers (e.g. Ministry of Education, NZTA, telecommunications providers). This approach will also derive financial benefits to Council and ratepayers by helping to optimise infrastructure use. We understand that Council is already in support of and following this approach, but we take this opportunity to remind Council of its benefits.

Wellington City Council Wellington City Housing and Residential Growth Study 76 10.3 SECONDARY RECOMMENDATIONS 10.3.1 Strategic removal of development contributions Council has recently adopted a new development contributions policy. We are supportive of a regime that removes or reduces the requirement for development contributions in locations where Council infrastructure has latent capacity (i.e. where development will not have a direct and material influence on infrastructure capacity). We have not undertaken a specific financial analysis but this would provide a potentially significant incentive to developers and could reduce the eventual price of new housing to the market. Whilst new dwellings would not come with a direct financial injection to Council, Council would benefit over the longer term in the form of the larger rates base. Whilst we are supportive of removal or reductions in areas with adequate infrastructure generally, we also think it could be particularly beneficial in areas where Council is encouraging development by other means (e.g. medium density zonings, town centre upgrades etc.). Importantly we still see a role for development contributions in greenfield areas where infrastructure is generally not in place. Again we note potential limitations under the Local Government Act and suggest this matter be specifically investigated.

10.3.2 Investigate options for expansion of urban fringe Currently the City’s residential greenfield development land is concentrated in the north and largely in the hands of two development interests. This has resulted in incremental release of land and slowed the delivery of new housing to the market. Zoning new greenfield land in other parts of the city owned by different parties could stimulate competition and result in higher rates of release overall. Our high-level audit of opportunities around the city identified that topographical constraints are widespread, with existing development having already exhausted valley floors and easier lower slopes. Overall the gains from expansion of the urban fringe are likely to be modest, but if a suite of opportunities could be pursued they could still make a difference in the broader scheme of housing choice and supply in the City. 10.3.3 Audit reserve land for potential residential rezonings We believe a grouping carefully selected reserves could play a material role in increasing land supply whilst generally protecting the character and recreation opportunities provided by the city’s reserve network. We are aware that Council has embarked upon a programme of disposing road reserve land for this purpose, and believe this programme could be broadened to encompass underutilised, low quality recreation reserve land. We have not undertaken a review of the status or utilisation rates of individual reserves so we make this recommendation only at a general level. In addition careful consideration must be exercised because high quality, strategically located reserves can actually support intensification in surrounding areas and are critical to maintaining a high quality living experience in the city.

Wellington City Council Wellington City Housing and Residential Growth Study 77 10.4 CONCLUSIONS Wellington City’s residential history and recent planning initiatives tell an interesting story of steady growth and gradually diminishing land and capacity for new development. Central in all of this is the city’s position in a spectacular but constrained setting between the harbour and hills. Easier development opportunities exist in the cities to the north which form part of the same urban conurbation. This broader urban setting and housing market is important to recognise – Wellington City does not exist in its own bubble. Nevertheless Wellington City is forms the epicentre of the broader metropolitan market, and prices, demand and land scarcity are all at their peak within the city’s boundaries. This is demonstrated by house prices and affordability indexing which indicate Wellington City is experiencing a land squeeze that its neighbours to the north are not.

Growth is not rampant, and the stakes not as high as in Auckland, but our view is that Council should be opening up new development capacity. The city is approaching a level of maturity and constraint where a passive “effects based” regulatory approach alone will not be sufficient to maintain a reasonable forward supply of development land. The primary constraint is currently in the established suburban areas in the city where we believe the real forward supply of development capacity is in the order of 10 years only based on projected growth rates. Our research indicates that current and future demand for housing in these areas is strong, and the development sector willing to provide it subject to feasible development opportunities being available and enabling regulatory planning controls.

By comparison greenfield and central city development capacity is healthy (20 years plus supply) and this is reflected in our planning recommendations which focus primarily on the existing suburban areas. Notwithstanding, it is important that Council maintains a balanced approach and we have also made recommendations aimed at increasing development capacity in greenfield areas. Overall, we recommend a suite of regulatory and non-regulatory mechanisms:  Encouraging more efficient (i.e. denser) development in greenfield areas.  Encouraging site development that consolidates yard areas for future infill.  Investigating areas for modest greenfield expansion on the urban fringe.  Evaluating Council’s reserve portfolio for potential residential rezonings.  Further residential medium-density upzonings around suburban centres.  Relaxation of infill controls in transition zones around medium-density zones.  Adjustments to district plan policy to explicitly support development of individual sites to their full permitted potential.

 Adjustment of policy and rules to explicitly support the adaption of large homes into multiple dwelling units.  A Council land assembly function which consolidates strategic development sites.  Reduction and removal of development contributions to incentivise development in strategic locations.

Wellington City Council Wellington City Housing and Residential Growth Study 78  Strategic use of the Housing Accord to incentivise development appropriate locations through streamlined planning processes.  Working with Housing New Zealand to facilitate redevelopment of the Strathmore area. The recommendations are made as broad principles and further, detailed work is required to fine tune the individual proposals. We recognise that there are inherent tensions in some of the proposals (e.g. rezoning reserve land) and that some will not be pursued. However, we believe all are reasonable proposals in- principle and deserve individual investigation. Further, we believe that in order to materially increase development capacity in the city a number of these initiatives need to be adopted. Report prepared by: Report peer reviewed by: Andrew Macleod Earl Hope-Pearson National Planning Manager Manager Special Projects 12 September 2014 12 September 2014

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Wellington City Council (Operative 2009), Plan Change 56: Managing Infill Housing Development. Wellington City Council (notified 2010), Plan Change 72: Residential Review. Wellington City Council (notified 2010), Plan Change 73: Suburban Centres Review. Wellington City Council (2010), Kilbirnie Town Centre Plan. Wellington City Council (Operative 2013), Plan Change 45: Urban Development Area and Structure Plans. Wellington City Council (2013), Our Capital Spaces. Wellington City Council (2014), Draft Wellington Urban Growth Plan 2014 – 2043. Wellington City Council, Rating database information.

Wellington City Council, Ministry of Business, Innovation & Employment (2014), Wellington City Housing Accord.

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