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RNZ News
5 days ago
- Business
- RNZ News
Making it easier to build a granny flat makes sense - but it's no solution to a housing crisis
First published on Building a basic 70-square-metre granny flat will cost between NZ$200,000 and $300,000. Photo: 123rf As part of its resource management reforms , the government will soon allow "super-sized granny flats" to be built without consent - potentially adding 13,000 dwellings over the next decade to provide "families with more housing options". This represents genuine progress in reducing regulatory barriers. But the scale of the housing crisis means we have to ask whether incremental reforms can deliver meaningful change. The numbers provide important context. Against current consenting rates of 40,000 to 50,000 new dwellings per year, those projected 70-square-metre granny flats represent a 2.6 percent increase in housing supply. In Auckland, where housing pressure is most acute, 300 additional units might be built annually. For some, that's likely to be useful. But for a country already facing a housing crunch, it's insignificant. The numbers also reveal who can participate in this proposed solution. Building a basic 70-square-metre granny flat will cost between NZ$200,000 and $300,000. Add site works, utility connections and mandatory licensed building practitioner supervision, and total project costs will be closer to the upper end of that range. At current interest rates, financing $250,000 requires approximately $480 weekly in loan payments. While rents of $500-$600 per week are achievable in urban markets, these thin margins assume optimal conditions. For property owners with existing equity, this presents a viable investment. For those seeking affordable housing - young families, essential workers, recent immigrants - the benefits remain largely theoretical. This dynamic illustrates a persistent challenge in market-based housing solutions: policies intended to improve affordability often primarily benefit those with capital to deploy . Each granny flat requires full residential infrastructure - water, wastewater and stormwater connections. The development contributions - fees councils charge on new builds to fund infrastructure - will help fund network upgrades. But New Zealand already faces a $120-185 billion water infrastructure deficit over the next 30 years, just to fix existing systems. The challenge is particularly acute in established suburbs where these units are most likely to appear. Parts of Christchurch serviced by vacuum sewers already operate at capacity. Auckland's combined sewer areas face overflow risks during heavy rainfall. Wellington's ageing pipes struggle with current demand. Adding thousands of dispersed infill units to stressed networks poses genuine engineering challenges that funding alone cannot solve. Transport infrastructure faces similar pressures. With minimum parking requirements axed across the nation, these new granny flats will likely increase on-street parking demand and local traffic. While some granny flat residents may rely on public transport or active modes, New Zealand's car ownership rates - 837 vehicles per 1,000 people - suggest most will own vehicles. International experience offers instructive parallels. California's 2017 Accessory Dwelling Unit legislation provides the closest comparison. After removing similar regulatory barriers, California saw permits increase from 1,000 in 2016 to 13,000 in 2019. However, construction costs and infrastructure constraints limited actual completions to roughly 60 percent of approved units. Australian cities report similar patterns. Despite permissive regulations in many areas, only 13-23 percent of suitable properties actually added secondary dwellings. High construction costs and infrastructure limitations proved more binding than regulatory constraints. Closer to home, Auckland's experience with minor dwellings under the Unitary Plan suggests cautious optimism. Since 2016, the city has averaged 300-400 secondary dwelling consents annually where permitted. The number of units actually constructed is unknown. Allowing one-storey detached 70-square-metre units without building consent may increase this modestly. But they are unlikely to dramatically accelerate production given persistent cost and capacity constraints. The policy's benefits flow primarily to existing property owners. They will gain new development rights without competitive tender or public process. While perhaps justified by broader housing benefits, it's worth acknowledging this is a form of wealth transfer. Granny flats typically add roughly their construction cost to property values, providing capital gains alongside rental income potential. For renters, benefits depend on how many units actually materialise and at what price point. Secondary units often rent at 20-30 percent below comparable standalone houses due to their size and backyard location. This could meaningfully expand options for singles and couples. But families requiring larger accommodation will see limited benefits. The policy's design constraints also tell us what kind of urban density is acceptable. Single-storey height limits, two-metre boundary setbacks and standalone requirements essentially mandate the least efficient form of intensification. Units could share walls and services, and two-storey designs that use less land could be permitted. Instead, the granny flat exemption favours the one configuration that maintains suburban aesthetics while delivering minimal extra housing. The granny flat exemption exemplifies New Zealand's approach to housing challenges: acknowledging a crisis while implementing modest responses. Despite severe shortfalls in housing supply, the medium-density development common in comparable countries remains largely unrealised. An estimated 180,000 households could be accommodated through comprehensive densification. There are genuine benefits worth acknowledging, of course. The exemption reduces bureaucratic barriers, enables some additional housing and gives property owners new options. The question isn't so much whether the new policy should be embraced. But rather whether the government is willing to complement it with larger changes the housing crisis demands. This story originally appeared in the Conversation .
CBC
09-05-2025
- Business
- CBC
Proposed higher-density housing next to Fredericton universities gets mixed reaction
Zoning changes would permit buildings up to 6 storeys on parts of Windsor Street, Graham Avenue A plan to allow more multi-unit apartment buildings in Fredericton's College Hill neighbourhood was met with mixed reaction from residents this week at a public information session hosted by city hall. About 40 people attended the session that offered a chance to speak with city staff and councillors about proposed zoning changes to allow apartment buildings as tall as six storeys on streets near the university campuses. "I think this is a very reasonable plan to try to make more housing options, especially for students, because when we moved here, I was a student and it was very hard to find an apartment and the prices were a little eye-popping," said Kevin Lavigne, one of those who attended the session Tuesday. The College Hill area includes properties within the boundary of Beaverbrook, Windsor, Montgomery and Regent streets, and its development has been governed for the past 30 years by a municipal plan that city staff say has become outdated. Adopted in 1994, the College Hill secondary municipal plan sought to address neighbourhood concerns about non-owner-occupied homes, and thus significantly restricted the permitted uses for properties in that area. That means that despite the growth in student and non-student residents, housing options in the area have been primarily limited to single and two-unit detached homes. Under city hall's proposal, the College Hill plan would be repealed, and the zoning for dozens of properties would be changed to allow the construction of denser buildings. The plan would see the largest buildings allowed on properties on Graham Avenue and Windsor Street between Beaverbrook Street and Kings College Road. There, properties would be rezoned to MR-4, which allows buildings of up to six storeys with a maximum of 100 units per hectare. Properties on other streets, like the eastern sides of Regent and Windsor streets between Kings College Road and Montgomery Street, would be rezoned to MR-2, which allows for buildings up to four storeys with a maximum of 62 units per hectare. Properties on the western side of Graham Avenue and Windsor Street, as well as the northern side of Montgomery Street, would be rezoned R-5, which allows semi-detached and townhouses. More density could benefit students, says graduate Lavigne said he moved to Fredericton three years ago with his wife to attend university. Moving from Japan, he said, he began searching for an apartment about a year in advance and was still only able to get a 400-square-foot bachelor apartment costing more than $1,000 on Montgomery Street. He hopes the proposed changes allow for more flexible housing options and a greater supply of units overall. "I don't think people should have to live on the outskirts of town and commute in to find affordable housing. And I know that new builds aren't always affordable, but we have less than one per cent vacancy rate … so we need more housing, and we need it now." Greater density a concern for neighbourhood Cathy MacLaggan, who has lived on Hanson Street for 43 years, is opposed to allowing denser housing in her neighbourhood. She said homes around hers have increasingly been purchased by investors looking to rent them out to students, and she's concerned this trend will ramp up if the proposed changes go through. "I believe that the for-profit, like the absentee landlord and financialization of the properties, has a very damaging effect on our neighborhood," she said. MacLaggan said she was already dismayed by the city's recent decision to allow up to four units in homes across the city, and is worried the latest proposal could change her neighbourhood even further. "This is not going to create green space. This is going to be more parking, more more big buildings, fewer trees." Changes would likely be incremental, says landlord Nick Difeo takes issue with the notion that absentee landlords have negatively affected the neighbourhood. He doesn't live in College Hill but owns 20 homes in the area and said he's actively involved in making sure they're properly maintained. "The reality is as a property owner, you know, I have a sizable investment that I need to protect," he said. "So I have a vested interest in actually being here and trying to make things work properly." Difeo said he thinks the proposed changes likely won't result in investors like him building large four and six-storey apartments right away, given the need to consolidate multiple lots and source significant capital to do so. Rather, he thinks the changes are more likely to result in smaller-scale projects, with larger buildings taking much more time to materialize. "So is there an ability to densify existing single family homes? Absolutely. But we're talking adding maybe a second unit, maybe adding an extra three to four bedrooms. We're not talking about adding 48 units." The proposed changes are scheduled to be considered by Fredericton's planning advisory committee on May 21. They'll then go before councillors at their June 9 general meeting, when members of the public will be allowed to weigh in on the changes. A final vote by council is scheduled for June 23.
