Waikato Business News January/February 2017

WAIKATO BUSINESS NEWS January/February 2017 3
Housing push sparks
concern about pressure
on builders
Hamilton’s already booming building scene
is about to be put on steroids as Hamilton
City Council actively ramps up its dwelling
and section consent targets for the next
three years.
By GEOFF TAYLOR
In line with the Hamilton
Housing Accord signed
with the Government the
week before Christmas, the
council has set residential
consent targets of 1300 this
year, 1400 in 2018 and 1500
in 2019. In 2016 the council
granted more than 1200
consents, already a massive
amount compared with just
481 in 2008 when the Global
Financial Crisis was kicking
in.
But while the need for
more sections and more housing
in the city is well acknowledged,
there are concerns
within the building industry
about its ability to cope with
even greater demand for construction.
Waikato Master Builders
president Craig Wallace
has warned there is already
a strain on the industry and
added pressure to build more
houses could impact quality
of housing.
Two major tools will be
used to ramp up the number
of sections available for
housing. One is the council’s
application for a 10-year
interest-free loan from the
Government’s $1 billion
infrastructure fund which will
help it to foot the bill for
expensive infrastructure in
its Peacocke and Rotokauri
growth cells. The Peacocke
subdivision south of Dixon
Rd could ultimately add more
than 7000 sections to the city.
The second, more immediate
tool is the establishment
of Special Housing Areas
(SHAs), pockets of land not
currently zoned for housing
which the council can quickly
rezone for housing. New
laws allow the Government to
fast track these developments
to reduce planning hold ups.
The council has been asked
to isolate a number of SHAs
and recommend them to the
Government so the process
can begin.
Minister for Building and
Construction, Nick Smith
said under the Resource
Management Act, it could
take up to seven years to
zone new areas as residential.
Under the new process for
SHAs it could be done in
seven weeks.
Other tools to help fast
track housing include a red
tape review to be conducted
within the council to ensure
resource consent and subdivision
consent processes are
streamlined.
The Housing Accord was
put in place in recognition
of lack of affordable housing
nationally. Hamilton is one of
the locations earmarked as a
priority in the Government’
National Policy Statement on
Urban Development Capacity.
But Mr Wallace, who owns
Waikato building company
CJW Build says the building
industry is already under
significant strain, epitomised
by the amount of time it was
taking the council to perform
building inspections. He said
before Christmas he was having
to wait 7 to 10 working
days to get a building inspector
out to a house.
“There’s a lot of pressure
on all building businesses
in Waikato at the moment.
I probably have 18 month’s
work in front of me and I’m
looking to take on more staff
and there are not that many
good builders out there looking
for work.”
“Many builders are looking
for staff and subcontractors
are harder to get on site
because they have so much
work on.”
Mr Wallace said builders
would sometimes find materials
were out of stock. Last
year he had to wait six months
for concrete panels to come
from Auckland for a house he
was building in Hamilton.
He was also concerned
about people getting into the
building industry to make
some money rather than do a
good job.
“It’s a bit of a worry. The
more things are pushed the
more the quality of some
building work is going to
drop.”
It is estimated that
Hamilton currently has sufficient
land for four years
of Greenfield housing supply,
mainly through existing
sections in Rototuna. The
council’s 10-year infrastructure
plan provides another
seven years of supply. In-fill
housing in areas such as
Hillcrest, Melville, the Lake
and Frankton is presently providing
nearly half of the city’s
new housing each year.
Key for the council is to
progress the Peacocke subdivision
but there are massive
costs in provision of a bridge,
roading and water and wastewater.
Hamilton Mayor Andrew
Hamilton Mayor Andrew King.
King said the council was
being proactive by entering
the Housing Accord.
"We're excited about this
strong partnership between the
council and the Government.
I'm pleased to be working so
closely with them to achieve
great outcomes for our city,"
said Mr King.
"Even though we have
developer-ready land available,
I believe we need a
surplus of titled sections on
the market. A recent shortage
in titled sections has pushed
prices to unacceptably high
levels. An increase in supply
will positively impact on
prices for prospective home
owners."
The city’s population is
about 161,000 but the council
expects to gain another
16,000 residents in five years.
Dr Smith said if home buyers
in Hamilton are to get a fair
go, the city needs genuine
competition.
“That is over-supplying
the market quite deliberately
so there are not regulatory
barriers in which those
property developers are able
to effectively profit from an
excessive premium for their
sections.”
Geoff Taylor, the author of
this story is also a Hamilton
city councillor.
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Anna Curzon (Managing Director, Xero New Zealand)
Chris Joblin (CEO, Tainui Group Holdings)
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