Frequently Asked Questions
Affordable housing is accommodation where the total housing costs are affordable to those living in the housing unit. The commonly accepted guideline for housing affordability is a cost that does not exceed 30% of a household's gross income. Affordable housing can comprise of both rental and home ownership tenures.
Special Housing Areas offer a fast-track consenting process (3 months for a brownfield Qualifying Development application and 6 months for a greenfield Qualifying Development application) with a proactive Council pre-application process, limited notification and appeals – all of which are designed to enable better and faster implementation. A Special Housing Area also enables a more integrated planning and consenting process that will include a strong focus on quality development.
'Retained affordable housing' in a term used in connection with a Special Housing Area. A dwelling is classed as relative affordable if it will be sold for no more than 75 per cent of the Auckland region median house price. The median house price is that published by the Real Estate Institute of New Zealand for the most recent full month of September, in relation to the date the application for consent is lodged. As at August 2015, the relative affordable price point is $461,250.
'Relative affordable housing' in a term used in connection with a Special Housing Area. A dwelling is classed as retained affordable if it will be sold at a price where the monthly mortgage payments do not exceed 30 per cent of the Auckland median household income. The Auckland median household income is published by Statistics New Zealand and is based on the statistic published for the most recent June quarter before the relevant date (i.e. the date an application for a Qualifying Development is lodged). Assumptions for the retained affordable house price are that the dwelling is purchased with a 10 per cent deposit and the balance of the purchase price is financed by a 30-year reducing loan, secured by a single mortgage over the property, at a mortgage interest rate equal to the most recent average two-year fixed rate. This interest rate used is that published most recently by the Reserve Bank of New Zealand in relation to the relevant date. As at August 2015, the retained affordable price point is $363,180.
A SHA is a Special Housing Area that is a tool provided for within Auckland Council’s agreement with the Government, the Auckland Housing Accord, and accompanying Housing Accords and Special Housing Areas legislation to boost Auckland’s housing supply. By increasing the number of new sites and dwellings in Auckland, Auckland Council and the Government aim to make housing more accessible and affordable.
Auckland Council has the following criteria for establishing Special Housing Areas:
- Alignment with the Auckland Housing Accord.
- Alignment with Auckland Plan and Proposed Auckland Unitary Plan.
- Availability and readiness of infrastructure (physical and social).
- Iwi requests and/or views.
- Land owner requests and/or views.
- Location, such as reasonable access to employment and essential services.
- Local Board views.
- Demand to build - the developer is ready to begin construction quickly.
- Demand for housing - evidence that the development will meet an existing need.
- Affordability - the development contributes to housing affordability, either in terms of overall housing supply or pricing of homes.
Community housing is social and affordable housing provided by non profit community organisations, including Maori or Iwi organisations. Third Sector housing refers to housing that is not provided by the private market (first sector)or public/government agencies (second Sector) i.e. the third sector is housing provided by not-for-profit community and social enterprises.
Community housing organisations (CHOs) are not-for-profit organisations which have been building, buying, leasing, managing and refurbishing quality affordable housing in Auckland for decades. In addition, CHOs provide social wrap-around services to support sustainable tenancies. CHOs are monitored by the Community Housing Regulatory Authority.
In SHAs, under the retained affordable housing option, housing is sold or rented to CHOs, which then manage and fund tenancy and housing maintenance matters on behalf of the developer/landowner at no cost.
Tenancy management refers primarily to the function of property management connected with landlord/tenant relations rather than with repairs and building maintenance issues. Tenancy management includes working directly with the tenant to ensure the success of the tenancy for both the landlord and the property owner, and includes accepting rent, responding to and addressing maintenance issues, advertising vacancies, and doing credit and background checks on tenants.
Eligible purchasers of a relative affordable dwelling in a Special Housing Area are those persons who:
- Have a gross household income, as at the date of the declaration, which does not exceed 120 per cent of the Auckland median household income as set at the relevant date and have paid a price for the affordable dwelling that is not more than the relative affordable price point.
- Intend to own and occupy the affordable dwelling exclusively as their residence for no less than three years after gaining title to the dwelling.
- Are a first home buyer and never have owned any other real property.
- Are a natural person purchasing the affordable dwelling in their own name and not in the name of any other person.
Eligible purchasers of a retained affordable dwelling in a Special Housing Area.
Registered Community Housing Provider means an organisation that is Registered with the Community Housing Regulatory Authority (CHRA), a unit of the Ministry of Business, Innovation and Employment. See the current list at: http://www.shu.govt.nz/chra-home/chra-register/
Mixed housing refers to the creation of a variety of housing types in a given development or community. Within a social and community housing concept it can be used to describe a mixture of housing types (types of houses within the development) as well as housing tenure groups (rental and pathway to ownership, usually based around affordability needs).
This is a mixed housing development concept where the aim is to ensure there is no visual difference in whether affordable, social or market dwellings are rented or owned by the occupants.
Housing provided for people on low incomes with a high housing need as confirmed by Work and Income through the Social Housing Register and delivered by government and community not-for-profit agencies, combining both social support services and an affordable rent.
Placemaking is a multi-faceted approach to the planning, design and management of public spaces. Placemaking capitalizes on a local community’s assets, inspiration and potential, ultimately creating good public spaces that promote people’s health, happiness and wellbeing. Placemaking is both a process and a philosophy, and is an important consideration in the design, upgrade and/or development of all housing.
Housing that is offered for sale or rent on the open market without any form of subsidy or direct public assistance and which is affordable to households with moderate incomes, because it is below the median house price due to its location, size and/or design.
The Housing continuum provides a framework for understanding the housing needs and the range of housing tenure choices (rental and ownership, market and non-market) available to households in varying economic and social circumstances. It stresses the importance of providing a range of housing options to assist and provide a pathway for people to move from dependent to less dependent housing.
Emergency Housing is temporary accommodation for individuals and families who have an urgent need for accommodation because they have nowhere else to stay, or are unable to remain in their usual place of residence. The temporary accommodation, with an intended duration of no longer than three months, provides a place for the individual or family to stay while their needs can be understood and addressed and longer-term sustainable accommodation can be found.
Fully Supported Rental is subsidized rental combined with wrap-around supportive services appropriate to the household needs. Rents funded by a tenant portion with the balance of the market rent provided by the Income Related Rent Subsidy (IRRS).
A rental tenure where the rent is subsidised, through only the IRRS, or funded by a tenant and assisted by the Accommodation Supplement, or set at 70%-80% of market rent with other capital funding provided.
Affordable Assisted Ownership provides a pathway towards homeownership for a household, and is offered primarily through two different types of tenure products:
- rent-to-buy programmes provide an affordable rental accommodation, but with the ability to purchase the home as a portion of the rent is accrued toward the family deposit.
- shared ownership (affordable equity) programmes enable a family to qualify to purchase typically 60%-85% of the market value of the home through a tenants-in-common legal agreement, with the CHO holding the remaining % share.
Accommodation Supplement is a non-taxable benefit that provides assistance towards accommodation costs. A person does not have to be receiving a benefit to qualify for Accommodation Supplement. It is administered by Work and Income, a business unit of MSD.
Housing bonds pool investor capital to provide loans for eligible housing developments, with risks clearly understood and tightly managed resulting in a lower cost of borrowing.
A Housing Bond is a mechanism to raise a pool of investor (philanthropic and socially responsible investment) capital that allows a separate entity for Auckland Housing Bonds, overseen by Community Housing Aotearoa to make loans to community housing providers at lower interest rates and on more favourable terms
A Council Housing Bond Guarantee is the provision of a limited guarantee by the council that provides greater bond investor confidence and hence lowers their expected return requirements from an investment in housing bonds.
Structured as a socially responsible investment with a council guarantee, the Auckland housing bonds are aimed at fostering partnerships between philanthropic investors, private developers of Special Housing Areas and community housing organisations to deliver retained affordable housing, as set out in the Auckland Housing Accord.
Housing bonds have proved effective internationally in delivering lower cost capital for affordable housing. Auckland Housing Bonds propose to pool $30 million over 3 years from philanthropic investors for loans to registered community housing organisations committed to delivering retained affordable housing in Special Housing Areas.
The housing bond loans enable long term retention of the value created when a registered community housing organisation purchases land at the retained affordable price set out in the Housing Accord - ensuring such value is retained and recylced to keep the housing affordable for the first and future families.
This first stage of Auckland Housing Bonds will assist in delivery of up to 200 new homes, affordable to families earning the Auckland median household income of approximately $75,000 per year or less. With the demonstrated success of the initial bonds, additional investment is anticipated to permit the programme to expand.