A Local Government approach for housing systems change

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“We can’t just keep doing the same thing and hope that somehow affordability will arrive or increasing topology will arrive. It’s all about advocating for system change that actually sees different outcomes coming.

And what it takes is for councils to say, “Oh, is our job. We can be enabling. We can choose to do this. We don’t need the central government to change the law. We actually have the power already to set regulation and this is still within the parameters of what we can choose to do.”
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— Aksel Bech

I interviewed Aksel Bech in this latest podcast episode. We are tackling housing unaffordability and the levers within legislation, policy, and at the local government level that are available to be able to create better outcomes for housing.

I reached out to Aksel because he and I care deeply about addressing this housing unaffordability problem in Aotearoa NZ and he is leading the way on housing reform in his local area through The Housing Czar, a housing advocacy initiative in the Waikato. (http://housingczar.nz/)

We mainly talk about:

·      The Waikato Housing Initiative (WHI), which is a collaboration of all the different councils within that Waikato region as well as the broader housing ecosystem of social to market housing, where they came together to create a local strategy around how to tackle the regional housing crisis. (https://www.waikatohousinginitiative.org/)

·      Inclusionary Zoning/Housing:  A policy that a local government can put into place to make land available for affordable housing.  Recently the Waipa District Council approved to include IZ into their Resource Management Plan.  We explore why they did this and the benefits it will bring to that District.

·      The Community Land Trust (CLT) as a means of creating housing to be perpetually affordable. We touch on how this model works particularly well when paired with IZ.

·      Collective and community-focused housing.  We discuss the importance of common and shared spaces between the houses to create a sense of neighbourly cohesion and belonging.

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Below are the highlights taken from the interview with Aksel

Council need to act on their power to bring about more affordable housing in their area:

And what it takes is for councils to say, "Oh, is our job. We can be enabling. We can choose to do this. We don't need the central government to change the law. We actually have the power already to set regulation and this is still within the parameters of what we can choose to do.”

So really looking at councils to do the things that they can do because they've got their hands on more levers than anybody. In the land and the policy and regulation area, they really control a lot of the levers there. And it doesn't need legislative change for them to adopt a different approach.

Part of the things we're asking you to do on behalf of your community includes well beings and housing is at the core of so many wellbeing outcomes for families.

The Waikato Housing Initiative is about councils needing to do things differently to take a collaborative and systemic approach to better housing outcomes

About seven years ago, through the Mayoral forum, here in the Waikato, 11 different mayors 11 councils all [came] together. They basically made the call, the government's not gonna come.  There's no white horse coming over the horizon here to save us. We're going to have to step up here. We're going to have to lead,  or things are just going to continue to get worse. They formed a Regional Housing Initiative to say, “well, what are the things we can do? What are the levers we can control that will start to make systemic changes? So not individual one project or one development, but systemic changes and introduce new models that will actually produce different outcomes?”

The big focus initially was councils because they control a lot of the levers, but it is a whole of continuum thing. You can't just tweak one bit, you have to have the whole of the continuum in mind.  And specifically we are looking at affordable housing.

• The challenges to housing affordability

  House prices locked into high land price:The cost of [commissioning the right kind of houses to be built], though, is the affordability train that's well and truly left the station. So even if you were to say, “Hey, I want you to build me this,” and the builder said, “that's cool, and it's going to be $800, 000 at the end of it.”  Whoops, that's a different problem, right? Because now it's the perfect answer to what I need. But I can't afford it.

  Rental market instability/insecurity: At some stage the landlord decides that they now want to sell that particular investment property because it is just an investment house, so sorry, but you've got to go. So there's very little ability to sort of firm that secure tenure that we have in the present model.

  Regulations that add to unaffordability: There's a range of policy regulations that, often not intentionally, ended up adding to unaffordability.

  The rental trap: Unless there's a mum and a dad, somewhere in behind who can help with the deposit, [people will] end up in this awful trap where their rent might be higher than a mortgage repayment would be, but they can't access that, so they're excluded from that ownership path, or even secure tenure, because even though they can afford to pay the rent. We need a lot more product in that affordable space. In order to promote these better outcomes longer term and just for there to be a pathway that gets you into the free market.

• Commissioning the right kind of housing to be built

  It’s much better off to go to the developers,  or whom this is their core business, but applying different lenses, changing the settings to change the outcomes that we want at the other end. The system now is broken; it's not delivering the right topology in the right places at the right price. So the problem, in some ways, is we haven't commissioned the right sort of homes.

• Community Lands Trust to create affordability

  For example, with inclusionary zoning and the lands trust, where basically land is about half the cost of a new dwelling, with some version of lease holding [the land],  all of a sudden that $800, 000 home is a $400, 000 home.

• The importance of neighbourhood design

  So to get the design right, it's really important. It's not just about getting maximum yield or the number of sections you can get in there. It's actually thinking about how people are going to live there, how people are going to connect, how people are going to be proud of where they live, be proud to offer their contribution to making it livable.

Inclusionary Zoning is a policy which has incentives to prioritise affordable housing

So the whole point of inclusionary zoning is that actually only the council, only the community can change the zoning. The community via the council changes the zoning. That's a gift only the community itself can give. When we've got a housing crisis, maybe a little bit of that gift, 10-20% of that gift, that uplift,  needs to stay with the community.  That's kind of the philosophical way to  put it.  Where there's growth, it's a really powerful lever.

So whether that's money that's yielded, reflecting the uplift, or whether it's actual titles of sections within that development, that's then passed back to council for council either to do something with directly or perhaps to put into a Lands Trust which might itself do something or might partner with [an organisation] like Habitat for Humanity, Wise group, Bernardos or the Salvation [Army]. Or it could be an ecovillage.

The point is that that land would remain in community ownership in perpetuity. It's not winning the lottery for the first people who buy it, who sell it at market price thereafter. The land itself and possibly the dwelling, depending on the model would remain in the ownership of the Lands Trust, ensuring perpetual affordability.

[Councils] have got the opportunity with development still coming on stream to say, “This is when we need to introduce that new tool. We need to be brave. We need to stand up on behalf of  our community, which is increasingly distressed by unavailability of rentals, unaffordability of rentals, and the inability to purchase.  We need to intervene before we get as bad as Queenstown.”

Inclusionary zoning “carrots” that council can offer developers

• Upzone only if affordability is integrated

  Councils only upzone only if there is affordability integrated into the plan.   Otherwise, the landowner can continue to own the land but the zoning doesn't get changed.  This could also curb the supply-side challenge of land-banking.

• Allow greater density

  Allowing greater density than would normally be allowed if some of the development is affordable.  That would result in additional yield for the developer.

• Priority for infrastructure

  Priority is given to which development gets the infrastructure.  So, if a development has affordability integrated, council gives that project priority.

• Infrastructure grants

  Infrastructure funding assistance from central government if that’s available.  This means that rather than the developer fronting the infrastructure costs, it could borrow and pay that back later when sections are sold.  This eliminates a capital hurdle for the developer.

• Lower development contribution

  Offsetting or lowering the amount of the development contribution if the development is affordable.  For instance, if the development is later taken over by a community housing provider, some of the DCs would be paid back.

• Fast track consenting

  This would be a concierge service for developers who have integrated affordability.  This means, the developer is not dealing with 15 different people for the consenting process, they deal with one.

• Bulk consenting

  If a developer has multiple dwellings that are the same, not having to do an individual building consent for every house, but rather one that covers 20 of the same houses.

For more detailed information and explanation videos on Inclusionary Zoning, AKA Inclusionary Housing, you can visit this site: https://inclusionaryhousing.org/inclusionary-housing-explained/what-is-inclusionary-housing/

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About Common Ground

It is the consulting agency I started to provide professional services that enable more affordable, socially connected, resilient, and climate-adaptive housing and neighbourhood development and place-based living.

We work with local government, community housing providers,  for-purpose developers, and groups of people wishing to lead their own housing initiatives.

We provide services in housing strategy, in design and facilitation of meaningful community engagement, in research, in policy development, in training in new approaches to better housing outcomes,

We also provide services in Workplace Culture and Communication to create more cohesive and effective teams and workplaces.

Why work with Common Ground:

• We take a whole systems and innovative approach

• we have decades of experience in community and regenerative development,

• we have a compassionate work culture,

• we are aligned with the community engagement best practices of IAP2,

• our knowledge is research-based, and

• we work with a spirit of joy, creativity, and collaboration.

Visit our website at https://www.commonground.net.nz/ to learn more about our services, get the two reports—one on housing for women and another on the community land trust model.

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Get in touch with Zola directly at zola@commonground.net.nz