Government housing projects axed as wastewater clampdown bites

Monday, 29 May 2023

Pehi Edmonds, right, loves his four-year-old Kāinga Ora house on Pine Ave in Bader. He said it was disappointing to hear plans for similar homes in the area have been scrapped due to wastewater constraints.

Housing projects in Hamilton’s southwest are being cut or put on hold as a maxed-out wastewater system puts the brakes on development there.

Government housing provider Kāinga Ora has axed five projects in Bader that were due to provide 30 new homes.

And private developers say they’ve deferred or steered away from projects in the southwest since the city council signalled they’d be unlikely to be approved – a situation one developer previously described as like “red-zoning”.

Hamilton City Council has said southwest suburbs – including Bader, Deanwell, Fitzroy, Glenview and Melville – were considered high-risk and had “limited or no capacity” for development due to wastewater network constraints. Some other pockets of the city were also under the microscope for potential issues.

Any potential developer who hadn’t already applied for consent for a project in a high-risk area was likely to be told it couldn’t happen until the council had invested to “ease any capacity issues”.

Kāinga Ora’s Waikato regional director Mark Rawson confirmed the council’s recent restrictions have seen the agency remove five “smaller scale” Bader projects from its development “pipeline”. No value had been put on the proposed projects.

“These five projects would have delivered an additional 30 new public homes by the end of 2024.

“Across these projects, nine homes were in the process of having customers move, in preparation for redevelopment. The opportunity to retrofit these homes is now being explored.”

But some buildings have already been cleared from sites.

Rawson said scrapping 30 homes wouldn’t have a “major impact” on Kāinga Ora’s business. Some of the five projects may eventually be reactivated. Any such development would depend on resolution of current infrastructure limits.

“We will continue to look at our portfolio across Hamilton to ensure we have warm, dry and safe homes located in neighbourhoods that provide access to needed employment, education, social support and public amenity,” Rawson said.

“In the short term this sees us continuing to look at redevelopment opportunities in communities across the city that we have existing ownership of houses. In particular, Fairfield, Chartwell, Nawton and St Andrews.”

Kāinga Ora was working with the council to get a sense of limitations and when improvements were planned, so its redevelopment plans fitted with “the capacity that is available”.

Capacity issues with wastewater pipes have called into question the amount of infill housing Hamilton can deliver in some parts of the city.

Private developers also spoke of putting things on hold and the uncertainty created by the new rules.

“We’ve had to defer a number of projects,” said Clapson Construction owner Keith Clapson. That included two in Greta St, Glenview. He had also been told that the council couldn’t guarantee connections to the network for two of his other projects.

“My business is buying land. How can I buy land [in affected suburbs] with so much uncertainty?”

McQuarrie Group owner Steve Chatwin had two properties he couldn’t develop in the foreseeable future.

“We have to wait … it’s not really a choice, you just can’t develop [in the affected areas],” he said.

Other developers were also holding off on projects until the situation became clearer, he said. The council was indicating it could be some years before the necessary remedial work had been carried out on wastewater infrastructure.

Assured Property chief executive John Kenel said he recently decided not to go ahead with a property he’d looked at in Melville, because the council indicated it was likely in a restricted area.

The restrictions were another “straw” on top of factors such as higher interest rates, which were making conditions difficult for developers, Kenel said.

“I think we’re at the beginning of another housing shortage.”

He was casting his development eye towards Australia, particularly Queensland.

Growth manager Blair Bowcott says the council’s working with Kāinga Ora to manage development and projects are in train to better handle south-west wastewater.

“I’ve just lost faith in New Zealand … I can’t see any light at the end of the tunnel at the moment.”

Managing director at real estate firm NAI Harcourts Mike Neale thought restrictions would continue to dampen development in the southwest and other affected areas.

“I would suspect lots of people looking to purchase land in those areas would pause … until there’s more certainty around timing of infrastructure upgrades.”

In a joint statement, the council’s growth manager Blair Bowcott and development manager Chris Allen acknowledged the situation could slow development and said the city was working with Kāinga Ora to align their plans.

Other developers would be delaying housing projects because of the constraints, but no specific figures were available.

But they added: ”There are many areas in Hamilton that don’t have capacity challenges and we are confident that localised capacity constraints won’t in themselves significantly affect Hamilton’s housing growth”.

Diverting some southwest wastewater to the treatment plant via the new Peacocke wastewater transfer station was due.

”We also have plans in place for a wastewater storage facility and further diversions in the next few years to free up more capacity for development in the area.”

Long-term solutions would be examined in the 2024-34 long-term plan process over the next 12 months.