Mackenzie council boss pushes for $20,000 to study district-wide housing crisis

Friday, 27 October 2023

Houses near Lake Takapō/Tekapo, the township with the most expensive real estate in the Mackenzie District. (File photo)

Permission to spend about $20,000 for an investigation into the growing housing crisis in the Mackenzie District is being sought by the council’s chief executive.

Angela Oosthuizen’s report to Tuesday’s district council meeting, being held in Lake Takapō/Tekapo, seeks approval for a review of what other councils and organisations are doing in relation to housing.

The intention was to gather information that would help the Mackenzie council to understand its options and the approaches it could take.

The full review, proposed to be carried out by consultants Rationale, was expected to cost about $20,000.

Oosthuizen’s report said the “lack of suitable and affordable housing is not a new problem in the Mackenzie”.

“During the spatial planning project, concerns were raised about the lack of affordable housing and the shortfall of worker accommodation in Tekapo and Twizel, while in Fairlie there were concerns about poor quality urban housing,” it said.

A housing stocktake, completed for the council in 2020 by Rationale, showed that from 2010 to 2018 house values increased over 100%, while household incomes only increased 40%, the report said.

International migration and tourism is driving population growth in Twizel, according to a Mackenzie District Council report. (File photo)

“A lack of housing choice across the district means there may not be the right housing options for certain demographics, such as young families and older people.”

Several factors were listed as contributors to Mackenzie’s housing problem:

Population growth, especially in Twizel and Lake Takapō/Tekapo, driven by international migration and tourism.
Low supply of new housing units, which are mostly unoccupied or rented out. This results in a high demand for accommodation. It is exacerbated at peak tourism times when there is high demand for worker accommodation. Hospitality workers tend to earn lower incomes and so the demand is for more affordable rentals.
High housing prices make it difficult for first-home buyers and low-income households to afford a home.
Limited availability of pensioner housing units, which are owned by the council and located only in Fairlie and Twizel.

Infometric's Gareth Kiernan says the removal of tax restrictions by a new National government will mean more investors jump into the housing market.

“These factors have created a housing crisis in the district, which affects the quality of life and wellbeing of the residents,” the report said.

“Councils have traditionally not played a role in the provision of housing, with development being undertaken by private developers or central government agencies who have catered for social housing.

“The need in Mackenzie is a different one – it is based on being able to provide an adequate supply of the right typology of accommodation that meets the needs of the particular township.

“In the interests of trying to find a way to tackle this issue, [the] council realised we needed to better understand how other councils have tackled this problem.”

The report said determining whether housing was affordable was not a perfect science. Rather, it depended on “each household’s circumstances and expectations of what qualifies as a socially accepted standard of living. This is a challenge common to all efforts at measuring material hardship.

“The average house value is now $758,000, while the corresponding average land value has increased by 14.5% to a new average of $365,000.

“Tekapo has the highest average capital value of approximately $1,138,000, followed by Twizel with an average capital value of $723,000, and Fairlie with $465,000.”

Oosthuizen’s report said elected members and the community had indicated that housing was a priority area that needed to be addressed by the council. However, there was no unified view on the root causes, who was affected, or what role the council could play in addressing the issue.

In addition, the council had “limited funding, which also compounds the development of solutions”, the report said.

“The council, the community and stakeholders need to collaborate and work together with central government and other agencies to try to find solutions that can address this housing shortage and ensure that everyone has access to adequate and affordable housing.”

Oosthuizen’s proposal called for two stages: a concise summary of existing evidence related to the issue of housing in the district, and an investigation into other housing approaches, both to be completed by Rationale.

The second stage would involve examining different models being used by other stakeholders, including how they had been set up, how they were governed and funded, and how successful they have been.