Wellington Housing Accord Monitoring Report 4

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1 Wellington Housing Accord Monitoring Report 4 July 215 to June 216 Based on: building consent data to month ended June 216 new section data to month ended June 216

2 Executive Summary This monitoring report spans the second year of the Wellington Housing Accord (1 July June 216), agreed between the Wellington City Council and Government on 24 June 214. The Housing Accord is a tool used to facilitate residential development in the city and sets targets for the consenting of new sections and dwellings in Wellington over five years. It also complements a range of other Council initiatives that seek to grow the Wellington economy through targeted investment in infrastructure, facilities and place making that will spur corresponding private sector investment in the residential and business sectors. This report builds on the third monitoring report that was limited to the period of 1 July 215 to 31 December 215. It reports on building consents granted for new dwellings, resource consents issued for new residential lots created and special housing areas established, for the second year of the Housing Accord. Consenting Numbers For the second year of the Housing Accord (1 July June 216), 612 new dwellings have been granted building consents and 21 new sections approved by resource consent for an adjusted total of 788 across the city. This is 712 less than the second year target of 15 dwellings and sections. The monitoring report prepared for the first six months of the second year of the Housing Accord (July 215 December 215) reported that 355 new dwellings and 74 new sections were consented, for an adjusted total of 43. Based on the monthly average and on the applications that were being processed by the Council at the time, a projection for a final year total of 84 was made. That projection for the full year has not been met on the back of some applications for consent not being lodged as quickly as anticipated. Highlighting the impact of timing in the consent process, in the week after the cut-off date for the second year one consent was granted for 131 new sections. Had this been finalised the week prior, the projected total would have been exceeded. This consent will now be reflected in the next monitoring report. The number of pre-application meetings for proposals within special housing areas (SHAs) has increased. These proposals would total approximately 135 additional lots or dwellings once applied for. In addition to these Housing Accord and Special Housing Area (HASHA) Act applications, there are also proposals which would total approximately 55 lots or dwellings either lodged or in the preapplication stage under the Resource Management Act. Special Housing Areas (SHAs) During the second year of the Housing Accord, four SHAs were established and an existing SHA was extended. This brings the total number of SHAs in Wellington to 25, with capacity for approximately 27 sections and dwellings, following their nomination by the Council in August 214, April 215, October 215 and May 216. For the second year of the Housing Accord, 197 new dwellings have been granted building consents and 113 new sections approved by resource consents within SHAs for an adjusted total of 293 new dwellings or sections. 1

3 Of the 788 consented dwellings and sections over the second year of the Housing Accord, an adjusted total of 37 percent are located within SHAs reflecting the status of some of these areas as existing growth areas. This compares to 2.5 percent of consents granted over the first year of the Accord. Land capacity for residential development Wellington City has capacity for significant residential growth across greenfield development (2+ years), infill development within existing residential areas (3+ years) and for central city apartment development (4+ years). The city is therefore well placed to meet expected growth over the next 2+ years. A Memorandum of Understanding (MOU) between Wellington City Council and Greater Wellington Regional Council (GWRC) has been agreed. This MOU has protocols in place to ensure efficient processing of resource consent applications for Qualifying Developments within SHAs that span the jurisdictions of both Councils. 2

4 Housing Accord Implementation Since the Housing Accord was agreed by the Council and the Minister for Building and Housing, 25 SHAs have been created. The first tranche of SHAs established in August 214 focused on existing growth areas identified in the city. A range of other sites in the second, third and fourth tranches provide a further range of development opportunities, including: Two greenfield SHAs in the Lower Stebbings and Lincolnshire-Woodridge areas. Two central city areas for apartment development within the height limitation prescribed by the HASHA Act (6 storeys or 27m). Three medium-density areas in Johnsonville, Kilbirnie and Adelaide Road. The imminent redevelopment of the Arlington Apartments complex. Shelly Bay as an area of redevelopment opportunity. Three Housing New Zealand properties that are to be comprehensively redeveloped. A number of smaller opportunity sites around the city. Council initiatives supporting residential development To support the implementation of the Housing Accord, the Council has a range of incentives to encourage development: To remit rates on greenfield development for newly created lots. This initiative seeks to increase the amount of sections being brought to market. A one-stop-shop resource consent process in partnership with GWRC and other relevant parties such as Wellington Water Ltd. This will provide a fully integrated, case-managed process for qualifying development consent applications with immediate and timely advice. Both Wellington City Council and GWRC have waived fees for officers time during pre-application meetings. Continued Council investment in key infrastructure and place-making improvements. Additionally, the Council is advancing a range of transformational projects for the City that aim to stimulate the economy and consequently boost residential growth: The 8 Big Ideas programme, including an extension to the airport runway, creation of a Tech Precinct, development of a film museum, convention centre and indoor concert venue, and creating a framework for the ongoing development of Miramar. Investment in urban regeneration projects, including the recently completed Victoria Street transformation initiative. This will catalyse apartment development, and will spur additional private sector investment such as the ongoing development of a new Whitirea/WelTec campus. Planning for further development opportunities in east Te Aro, Kent and Cambridge Terraces and development across the CBD. Rejuvenation and redevelopment of the CBD civic area. The construction of the Petone-Grenada link road that will open up a large area of land for future growth. 3

5 More recently, the Council has agreed to establish an Urban Development Agency. This would enable the Council to take a more active role in the property market by facilitating urban development and ensuring it fits within the Council s wider vision set out in the Wellington Urban Growth Plan. It is envisaged that this will be in place for the 217/18 financial year. These initiatives seek to boost the economic performance of the city as a whole. Residential development often lags as an indicator of economic performance so we expect to see a general uplift in residential development on the back of these economic initiatives. 4

6 Targets The Wellington Housing Accord targets are based on the number of new dwellings and sections consented in Wellington each year, adjusted to reflect overlaps between new dwellings and sections. Wellington Housing Accord Paragraph 16, Wellington Housing Accord Year Targets Total number of dwellings and sections consented Actual number of dwellings and sections consented to date (adjusted total) Year 1 (July 214 June 215) Year 2 (July 215 June 216) Year 3 (July 216 June 217) 15 - Year 4 (July 217 June 218) 15 - Year 5 (July 218 June 219) 15 - Dwellings Dwellings are measured at the point of building consent (source: Wellington City Council). Sections Sections are measured at the point of resource consent (source: Wellington City Council). 5

7 Overview After the second year of the Accord, the adjusted number of new sections and dwellings consented (788) is 712 less than the Year 2 target of 15 new dwellings or sections. To highlight the impact of timing in the consent process in the week after the cut-off date for the second year, one consent was granted for 131 new sections. Had this been finalised the week prior, the projected total reported in the previous report would have been exceeded. This consent will now be reflected in the next monitoring report. Adjusted number of new dwellings consented and sections created Wellington; July 215 June 216; adjusted for dwelling/section combinations (see next page) Adjusted number of dwellings and sections consented Housing Accord Targets / / /217 6

8 Adjusted total in Year 2 The number of new dwellings consented and the number of new sections created must each be adjusted for the 25 occasions they overlap. Adjusted number of new dwellings and sections created* Wellington; July 215 June 216; adjusted for dwelling/section combinations; Wellington City Council (dwellings and sections) Overlap 25 Sections Sections with dwellings Dwellings Total new dwellings consented Total new sections consented Adjusted number of new dwellings and sections consented * As illustrated in the graph above, the adjusted total adjusts for any overlap that occurs between new sections created and the dwellings that are consented on those sections (i.e. it avoids double-counting). Where a newly created section has a dwelling consented on it, the section and dwelling are counted as one. If more than one dwelling is consented on the section, then the additional dwellings are also counted. In the second year of the Housing Accord, this overlap is minimal, but will become more pronounced in subsequent years as more new sections are converted into dwellings, or as subdivisions occur around previously established dwellings. 7

9 New dwellings and sections In the second year of the Accord, 612 new dwellings were consented and 21 new sections were granted resource consent. Both building and subdivision consent rates show variability on a monthly basis. The number of subdivisions consented on a monthly basis ranges from 3 to 59 with an average of 17 and the number of dwellings ranges from 18 to 148 with an average of 51. Number of new dwellings consented and sections created Wellington; cumulative totals to end of June 216; adjusted for the overlap; Wellington City Council 16 Dwellings consented to date Overlap Sections consented to date Target /215 - Full Year 215/216 - Full Year 216/217 8

10 Consented dwellings monthly The average number of dwellings consented on a monthly basis are steady over the period of the Housing Accord and since the Global Financial Crisis. The average number of dwellings consented per month in the first year is 52 and in the second year is 51. Number of new dwellings that received building consent Wellington; monthly total; Statistics New Zealand and Wellington City Council Year 1 Year 2 Jun-16 May-16 Apr-16 Mar-16 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 Sep-14 Aug-14 Jul Apr-16 Nov-15 Jun-15 Jan-15 Aug-14 Mar-14 Oct-13 May-13 Dec-12 Jul-12 Feb-12 Sep-11 Apr-11 Nov-1 Jun-1 Jan-1 Aug-9 Mar-9 Oct-8 May-8 Dec-7 Jul-7 Feb-7 Sep-6 Apr-6 Nov-5 Jun-5 Jan-5 Aug-4 Mar-4 Oct-3 May-3 Dec-2 Jul-2 Feb-2 Sep-1 Apr-1 Nov- Jun- Jan- 9

11 Consented apartments monthly In line with the long-term trend, the consenting of apartments remains highly variable on a monthly basis, and the overall number of consented apartments remains low. An increase in pre-application processes highlights plans for further supply and there is an ongoing construction programme, for instance in Victoria Street. Number of new apartment dwellings that received building consent Wellington; monthly total; Statistics New Zealand and Wellington City Council Year 1 Year 2 Jun-16 May-16 Apr-16 Mar-16 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 Sep-14 Aug-14 Jul Jan- Jul- Jan-1 Jul-1 Jan-2 Jul-2 Jan-3 Jul-3 Jan-4 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 1

12 Location of new residential building consents: July 215 June building consents for new dwellings were issued within SHAs in the second year of the Accord. There is no clear pattern to the distribution of building consent activity. However, there is some clustering in the Lower Stebbings and the Lincolnshire Farm Woodridge areas. 11

13 New sections monthly Subdivision consent rates show continued variability and the average number of consents granted for new sections has decreased from an average of 21 sections consented each month in the first year to an average of 17 in the second year of the Accord. Number of new residential sections granted resource consent Wellington; monthly from July 214; Wellington City Council Year Year Jun-16 May-16 Apr-16 Mar-16 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 Sep-14 Aug-14 Jul-14 12

14 Location of new residential sections consented: July 215 June 216 The number of sections approved by resource consents within SHAs is 113. There is no clear pattern to the distribution of subdivision consent activity. However, it is clear that the majority of new sections are being consented in the Northern growth areas of the city. 13

15 Special housing areas potential supply The 25 approved SHAs have the capacity to supply approximately 27 dwellings and sections over the five years of the Housing Accord targets. From the beginning of the Housing Accord, 465 dwellings and new sections have been consented in SHAs, with 172 granted in the first year and 293 in the second year. This number is increasing as expected and reflects the lag in time from the creation of a SHA, to applications for resource consent and building consent being lodged. Estimated supply of dwellings and sections from within Special Housing Areas Wellington; July 214 June 219; Wellington City Council Estimated Supply (Tranches 1, 2, 3, and 4) Actual dwellings and sections consented / / / / /219 14

16 Special housing areas - Year 2 Adjusted Total The number of new dwellings consented (197) and the number of new sections consented (113) within SHAs must each be adjusted for the 17 occasions they overlap. After the second year of the Housing Accord an adjusted total of 293 dwellings and new sections were approved within SHAs. Adjusted number of new dwellings and sections created within SHAs Wellington; July 215 June 216; adjusted for dwelling/section combinations; Wellington City Council (dwellings and sections) Sections Overlap 17 Sections with dwellings Dwellings Total new dwellings consented Total new sections consented Adjusted number of new dwellings and sections consented * As illustrated in the graph above, the adjusted total adjusts for any overlap that occurs between new sections created and the dwellings that are consented on those sections within SHAs (i.e. it avoids double-counting). Where a newly created section has a dwelling consented on it, the section and dwelling are counted as one. If more than one dwelling is consented on the section, then the additional dwellings are also counted. In the second year of the Housing Accord, this overlap is minimal, but will become more pronounced in subsequent years as more new sections are converted into dwellings, or as subdivisions occur around previously established dwellings. 15

17 Special housing areas- new dwellings and sections The below table shows the number of new dwellings that have been granted building consent, the number of new sections granted resource consent and the SHAs with consents in the pre-application stage. Out of the 25 SHAs, 1 have had either new dwellings or new sections approved within them from 1 July 214 to 3 June 216. Number of new dwellings granted building consent and new sections granted resource consent within SHAs. Wellington; July 214 June 216; Wellington City Council; Unadjusted for overlap. Special Housing Area New Dwellings (July 214 June 215) 16 New Dwellings (July 215 June 216) New Sections (July 214 June 215) New Sections (July 215 June 216) Pre Applications? Tranche 1 Arlington Stebbings Valley (North of Churton Park) Lincolnshire Farm Woodridge Johnsonville MDRA Te Aro (Central Area South & South) Adelaide Road 26 2 Kilbernie MDRA 5 2 Thorndon (Central Area North) Tranche Adelaide Road, Newtown 59 Spenmoor Street, Newlands Mansfield Street and Princess Street, Newtown Ohariu Valley Rd, 224 Westchester Drive and 34 Winsley Terrace Helston Road, Paparangi Britomart Street, Berhampore 175 Owen Street, Newtown McLean Flats, 32A The Terrace Erskine College, Island Bay Reedy Land, 28 Westchester Drive, Glenside 98 Westchester Drive, Churton Park 3 White Pine Avenue, Woodridge Tranche 3 Shelly Bay expanded area 1 Surrey Street, Tawa 2 Glanmire Road, Newlands Mein Street, Newtown Tranche 4 Abbott Street, Ngaio Total In the second year of the Accord the number of pre-applications for proposals which would result in new dwellings or new vacant lots within SHAs has increased for a total of approximately 11 new dwellings and approximately 25 vacant lots. However, not all of these will progress to the next stage and be granted consent. Therefore, these numbers should be taken as an indication for what could be expected in future years of the Accord only.

18 Potential supply city wide Across the entire city, there is significant capacity for residential development of various typologies. Based on historical rates of development, Council has undertaken a land capacity study to inform future planning initiatives. The Housing Accord provides an opportunity to accelerate the development of some of these key strategic sites. Theoretical development capacity. Wellington City Council Type of residential development Supply Years Capacity Greenfield Residential (Northern Growth Area Mostly) 3,2-5, Infill Development 14,+ 4+ Central City Apartments 9,+ 41+ Conclusion This fourth monitoring report prepared as part of the Wellington Housing Accord shows that residential development in the city is steady but still recovering from the significant slow-down caused by the global financial crisis. 25 special housing areas have been established under the HASHA Act. There are encouraging signs that the residential development sector in the city is positioned for a period of increased activity. For example, the increase in the number of new dwellings and sections in the pre-application stage shows an increasing uptake of these development opportunities. These suggest that future monitoring reports will reflect an increase in consenting activity. 17

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