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OPINIONPoliticsFebruary 7, 2024

The second report on the future of Wellington’s housing is out, and it’s even shittier than the first

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The panel in charge of Wellington’s District Plan is back with their second report. It’s full of more regressive decisions that allow a lot less housing in Wellington. Joel MacManus breaks down the worst parts.

The independent hearings panel, a group of eight planners and architects deciding Wellington’s new District Plan, has released its second batch of recommendations. Just like in the first one, the panel appears determined to heavily restrict the amount of new housing in Wellington. While the first report mostly rejected attempts to expand zoning, this one went even further, slashing back progress the council had already made. The panel massively expanded character areas – where it is effectively impossible to demolish homes built before 1930 – and reduced the maximum height limits allowed in many suburbs. 

It’s a blow for pro-housing groups like City for People, who spent years lobbying the council to reduce character areas, and initially succeeded – the council’s draft of the District Plan reduced the amount of inner city land covered by character protections from 306 hectares to 85 hectares. The panel has increased them again, back up to 206 hectares. It even created one entirely new character area in Lower Kelburn. If this recommendation isn’t overturned by the council, it will mean a whole lot of extremely desirable, central land will be effectively excluded from upzoning for new housing.

The IHP expanded character areas in Mount Victoria.

It was clear from the first report the panel did not want to allow any more housing than is absolutely legally necessary, but this new one shows just how far the panel will go to push that stance – and the utterly bizarre arguments it was willing to use to get there. 

Here’s another whistlestop tour through some of the panel’s strangest findings:

There’s no point trying to make the inner suburbs more affordable 

The inner city areas are among the most expensive in Wellington, and for good reason: they’re close to all the good stuff. The panel “heard many witnesses expressing concern about the struggle for people to find affordable homes to rent or buy in inner-city areas”. After learning about the scale of the housing crisis, the panel was determined to do absolutely nothing to fix it. 

“Generation Zero told us that rents in inner-city suburbs would remain high because of the attractiveness of those areas. Put another way, the market is unlikely to deliver affordable homes in inner city suburbs irrespective of the level of planning regulation….  Accordingly, we do not find that the Character Precinct provisions are likely to have any effect on the provision of affordable housing.”

The panel effectively threw up its hands and decided better things aren’t possible. The inner city suburbs would always have high demand, so there was no point trying to improve affordability by increasing supply. That is presumably also why colour TVs cost $2500 when they first came out and have never got cheaper, no matter how many are made. 

Side note: I read Generation Zero’s submission and it appears the panel has misrepresented their argument. Generation Zero did not say rents in inner suburbs will remain high even if upzoned, as the panel claimed. In fact, it said the exact opposite: that inner suburbs have “the highest land values in the region” and removing character protections would “provide greater opportunities for residential development… thereby reducing inner-city housing prices”. 

Too many houses are allowed already

When Judith Collins and Megan Woods announced the MDRS, a bi-partisan housing agreement allowing three-storey townhouses on almost every section, it effectively doubled the number of new homes enabled by the new District Plan – up to 60,000, much more than the council’s estimated need of 31,000 based on population projections. But just because new homes are allowed, doesn’t mean they will be built. One council report found the extra capacity would be a “necessary buffer” to make sure new homes would be built even if market conditions were bad or there were infrastructure problems. 

The independent hearings panel didn’t feel the same way. It used the extra new homes allowed by the MDRS as a reason to keep character areas. “If the number of realisable dwellings had been close to the margin over predicted 30 year demand… the case to prune if not delete the Character Precincts would have been strong. But that is not the situation we face.”

Lawyers for Kāinga Ora and Waka Kotahi tried to argue that there should be a “high bar” requiring “significant justification” for a suburb to be considered a character area and exempt from the MDRS. That earned the lawyers a sassy little telling off from the panel: “We have to confess that we found the level of over-statement, if not hyperbole, somewhat surprising when coming from experienced counsel.” 

The panel downgraded several high density (apartment) zones, and rejected several attempts to upgrade zones for medium density (townhouses) or large lots (single houses with big sections). Kāinga Ora pushed for minor height increases in most suburbs, trying to squeeze in extra potential housing. In every case, the panel used the same argument  – there was already too much housing capacity. “On the basis of this anticipated surplus, there is no convincing case for increasing heights,” it said. In another instance: “Wellington City faces no identifiable development capacity issue… there are no demand-related grounds for a general increase to heights and densities beyond those already provided for in the Plan.”

House prices are too low

Ben Wauchop from the Ministry of Housing and Urban Development argued inner-city Wellington suburbs were ideal for intensification, and the only reason those areas hadn’t already built lots of apartments was because of restrictive zoning. The panel didn’t agree: “There is plenty of land in Wellington. Development is not occurring because of excess cost, and on-sale values that are too low to drive development.” You didn’t misread that – according to the the panel, the real problem with Wellington housing isn’t the rules that make it incredibly hard to build, it’s that prices aren’t high enough

Wauchop tried to present studies showing the benefits of higher density urban development – the same studies used to develop the NPS-UDThe panel refused to accept them, because “the authors of those studies were not before us and we could not therefore discuss with them or the relevance of their findings to current conditions in Wellington City.” In a similar vein, I will never acknowledge the law of gravity until I meet Isaac Newton and can question that bastard to his face. (This is useful when it comes to walking uphill, a task the panel considers an impossible mystery.)

More homes won’t reduce per-home infrastructure costs 

Banging his head against the table in frustration (I imagine), Wauchop continued trying to convince the panel that it was a good idea to allow more housing in the middle of the city. He gave them a bunch of studies showing infrastructure costs are lower on average for inner-city areas. 

The panel wasn’t buying this either. Instead, it looked at a Wellington Water report, which showed the per-home cost for pipe upgrades was highest in the inner suburbs (which have the oldest pipes), and lowest in the newer suburbs like Khandallah and Churton Park. “That evidence supports the opposite conclusion to the one Mr Wauchope [sic] put to us. It also illustrates the dangers of assuming that the findings of generic studies of the type Mr Wauchope put to us apply to the Wellington City context.”

I’m not some fancy planning commissioner, but please allow me to point out one small thing: This analysis was done on a per home basis. Inner suburbs have more infrastructure, but (in most non-insane cities) they also have more apartments, so the cost is split across more homes. Wellington doesn’t have that, because character protections have blocked apartments in most of the inner suburbs. The cost of infrastructure is a reason to upzone, yet the panel treated it as the opposite. 

Restricting density won’t create sprawl 

Like a parent struggling to convince a toddler cheese pasta isn’t “yucky”, Wauchop kept trying to get through to the panel. If character areas were expanded, he argued, it would shift new housing developments into the outer suburbs, which are less suited for intensification. 

Let’s go through that again, slowly: If the rules make it too difficult to build new homes in the inner suburbs, developers will instead build them in the outer suburbs. If that’s a bit of a tricky concept to get your head around, think of it like this: If you flip a coin and it does not land on heads, it will instead land on tails. Unfortunately, it was all far too complex for the panel, which concluded: “We do not think he was in a position to say more than that this was a possibility.”

To be fair, there is another potential outcome: there will be no new developments at all, and Wellington City will eventually be absorbed as a distant wing of the Greater Hutt metropolis. 

There’s no evidence sprawl leads to more emissions 

If all the new developments are in the outer suburbs, that’s bad news for the climate. People drive more and generate more emissions when they live further out of town. Many submitters argued urban sprawl would have big costs for carbon emissions, including: Greater Wellington Regional Council, Waka Kotahi, Kāinga Ora, Property Council New Zealand, Generation Zero, VicLabour, Victoria University of Wellington Students’ Association, and several individuals. 

The panel didn’t consider this a good reason, because “no one provided evidence to us as to how material those [emission] costs are” and suggested “the Council’s failure to have greater regard to this as an issue was a significant failure on its part”. However, it was willing to accept an argument by Historic Places Wellington that demolishing old homes would be bad for the climate due to the emissions involved in building new homes. This is true: the best way to reduce emissions is to never do anything, ever. Strangely, in an entirely different part of the report, the panel agreed that “concerns over carbon emissions associated with building development do not provide a sufficient basis for limiting intensification”.

Oriental Bay is accidentally upzoned due to a weird loophole

There isn’t much to celebrate in this report if you were hoping to see more upzoning, but there is one delightfully weird outcome. Oriental Bay, home to the most outrageously expensive villas in Wellington, is currently covered by a special “height precinct” which bans houses taller than 12.6m in some areas. The panel supported the height limit in Oriental Bay, saying it protected “important city values”. However, it was missing a specific kind of report required to justify its existence. “The council’s failure to provide evidence…leaves us hamstrung,” the panel said, seething at having to upzone something against their will. “As a result, we have been forced to recommend that the height limits in this precinct be a minimum of 21m.”

The area of Oriental Bay covered by height limits.

What will happen next

The recommendations of the independent hearings panel are not final. Wellington city councillors still have the chance to make changes to the District Plan in a meeting on March 14, as long as they can get a majority vote for their amendments. Any changes the council makes will need to be signed off by the minister for the environment.

How to follow along

If you want to stay on top of everything that happens throughout this process, subscribe to The Spinoff’s War for Wellington newsletter. Every week, we’ll send a roundup of the most important stories about the District Plan process and the future of housing in Wellington. It will include highlights from our own coverage, perspectives from experts and activists, and the best reporting from other media around Wellington.

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