Developers of land and houses in Special Housing Areas are able to take advantage of a number of benefits…
including a fast track approval process, the coordination and delivery of critical infrastructure such as water and transport, a ‘one stop shop’ provided by the Housing Project Office. In exchange, for larger developments, a portion is required to be affordable housing to meet the affordable housing requirements in the relevant Order in Council.
Affordable Housing Requirements
For Qualifying Developments in a Special Housing Area containing 15 or more dwellings, there are three options to meet the affordable housing requirements.
- Option one is that 10 per cent of the development is ‘relative affordable’ in that the dwelling is sold for no more than 75 per cent of the Auckland region median house price.
- Option two is that five per cent of the development is ‘retained affordable’ in that the dwelling is sold at a price where the monthly mortgage payments do not exceed 30 per cent of the Auckland median household income.
- Option three is achieving a combination of option one and option two. When combining relative affordable and retained affordable (i.e. option three), a ratio of two relative to one retained is required.
If affordable lots are created as part of subdivision consent, a mechanism is put in place to ensure the total land and house package will meet the relative affordable price point.
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 July 2016, the relative affordable price point is $578,250.
This figure will be updated in October 2016.
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 key difference between relative affordable housing and retained affordable housing is that retained affordable housing will be maintained as affordable housing over the longer term.
See below for eligible purchasers of retained affordable dwellings.
Eligible Purchasers of Affordable Dwellings in Special Housing Areas
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.
- Be a first home buyer and never have owned any other real property.
- Be 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 are CHRA-registered Community Housing Providers or Housing New Zealand Corporation.