Kiwis Have Eye on Housing Affordability

Commentary, Housing Affordability, Frontier Centre

If we are looking for pragmatic solutions to make our housing more affordable in Saskatchewan or Canada, we should take note of the latest changes in public policy in New Zealand.

New Zealand is a small country built on 268,021 kilometres squared and ranked 75th in world land mass.

With a growing population of approximately 4.4 million, they have been early adopters of urban containment strategies of their cities and have some of the strongest regulatory environments for residential housing in the modern world.

Understandable, as the diversity of land on this nation of islands are not friendly to construction of new homes or neighbourhoods. Nationwide, they have also been one of few countries that have lead in the erosion of housing affordability over the past 30 years. In the 1980s it only required the average New Zealand family two times its household income to purchase the average home; in 2012 it was 5.5 times.

In response, the New Zealand government has recognized that housing affordability is complex in its detail, knowing that governments do intervene in housing markets in many ways. They also made it conceptually simple as Bill English the deputy prime minister of New Zealand stated, "It costs too much and takes too long to build a house in New Zealand".

New Zealand has developed a four-point plan to address housing affordability for all Kiwis:

– Increase land supply by working with local governments to increase the land made available for residential homes. They are creating opportunities for more Greenfield and Brownfield developments and allowing further densification of cities, where appropriate.

– Reduce delays and costs of government processes associated with housing that create uncertainties and delays, which have frustrated the development of more residential areas. Part of the policy shift contains a six-month time limit on local councils to process medium size development consents.

– Improve the timely provision of infrastructure to support new housing, which includes new ways to coordinate and manage infrastructure for subdivisions. This includes finding new ways to fund infrastructure such as roads, water and waste water facilities.

– Improve the productivity of the construction sector by undertaking a market-level approach to the construction sector – to identify barriers to improving housing affordability. With the creation and evaluation of what they are referring to as Productivity Partnerships, the New Zealand government is pursuing strategies to create a 20 per cent increase in productivity among the residential construction industry by 2020.

English has stated, "Decisions made by local councils not only affect local communities, but have wider effects on the economy and the government's books. Many of the changes that will make a difference lie with councils and the government expects them to share the commitment to improving housing affordability."

It is an interesting dichotomy that a country (NZ), which has a very limited land supply and high urban density is renovating its planning policies to ensure housing affordability for the entire market is part of the urban planning decision process.

In the meantime, a majority of Canadian municipalities, in a country with the second-largest land base in the world (9,984,670 km squared), continues to place significant limits on urban growth and is increasing regulations on where and what type of new homes can be built. I am not aware of any plan approval process in Canada that considers how new projects and developments will impact supply and housing affordability. Maybe it's time our government does.

In addition, it is important that the federal government recognize that there is not one Canadian housing market, but numerous housing markets. In Canada, our housing policy should not be centred on our three biggest urban centres.

What our province and local government needs to recognize is that the multitude of planning rules are not well understood as a whole and often full of internal contradictions. Much of the rule book for residential development dates back to the 1960s and 1970s. As each decade has passed, numerous new additions of complicated policy changes that vary from one jurisdiction to another have been incorporated.

If we are to address housing affordability for the entire population, we could learn something from New Zealand. Our provincial government has the ability to ensure an adequate land supply occurs in the market for cities to grow up and out.

We need the provincial government to mandate effective regional planning and ensure our municipalities bylaws and policies are whittled down to an essential, coherent and well-managed suite of guidance that aids the delivery of good planning and ensures real choice in the housing market.