No one much thinks that either National or Labour-led governments are going to do anything serious about freeing up land use and markedly lowering house prices (and price to income ratios). A few individual figures in the two parties occasionally talk a good game, but their governments don’t do what is necessary to make a difference. All indications are that the parties don’t really care that much – sure, they seem to need to be seen to show a bit of concern from time to time, but affordable housing across the board seems to be rapidly becoming one of those things our political leaders would prefer people just forgot about. Get used to living in expensive dog-boxes on tiny sections or in apartments – all this in a country with abundant land.
Graeme Farr isn’t willing to give up. He’s launched House Club, a club and political party in one, designed to make affordable housing an option again. As the website puts it, the gist is
House Club does not want to change any of the crazy number of rules and regulations that affect housing – it just wants it’s own areas where none of them apply!
House Club creates its own “Club Zone” which is outside the RMA, the Building Act and council zoning rules and can have from 5 to 5,000+ houses.
Here is the fuller text on what a “Club Zone” is
A Club Zone is land where building does not have to comply to the RMA, the Building Act or local council zoning. This is nothing new – until the 1980’s the Government and its departments like the Post Office, Railways and Ministry of Works did not need to get building or resource consents for anything they built on Government owned land. In some US states such as Texas there are no town planning rules. This was the same in NZ until 1953 and the Town and Country Planning Act – yet houses build before this act are equally sought after and valued than later ones – often more so!
House Club decides solely on where a Club Zone is created. The land can be bought outright by House Club or it can award a group or private landowner a Club Zone – or a combination of both. Each Club Zone site can determine it’s own rules or convenants to suit its purpose, but these will need to be approved by House Club if it is not a partner or owner.
He is planning to have House Club become a registered political party – for which he needs at least 500 members ($3 for three years’ membership) – contesting the party vote in this year’s election, aiming for 5 per cent of the vote and the balance of power, with a single issue they’d be looking for action on. In concrete terms,
House Club will provide houses for UNDER $300K for a 100m2 three bedroom home on a proper section within 30 minutes drive of the centre of Auckland, Wellington or Christchurch and even closer in other cities and towns.
“Proper section”? Well, according to a Westpac survey last year, 90 per cent of New Zealanders wanted a backyard.
More generally on the House Club model
House Club will contain many Sub-Clubs who want to do their own thing – House Club55 for low cost seniors housing, Tiny House Club for tiny house villages, Eco House Club and Co-House Club for eco and co-housing schemes and Private House Club for selected private developers who want to provide low cost housing to Club members.
When Graeme first told me about this idea a few months ago it was in the context of retirement villages
1. I am thinking large scale ones – say 200 to 2000+ houses like they build in the US. They are super cheap there and most are freehold titles. I can send examples – you would not believe the prices they can achieve using economies of scale.
2. Dairy factories and timber mills are usually permitted activities in rural zones – so a retirement village will most likely have less affects
3. Retirement villages are better than standard fringe housing as they do not need things like jobs, schools, public transport, wastewater pipes, roads etc. Residents don’t travel at peak hours – they have their own buses. The councils do not need to provide infrastructure like a standard subdivision.
As I noted then, I couldn’t imagine wanting to live in such as village, but it is clear that lots of people do. And as the website indicates, the model generalises.
The vision is for developments of the fringes of existing cities/towns
Developing in the fringes is not only cheaper but faster too. If the density is kept low then the rural road network and infrastructure that exists around most cities will be sufficient for the intial Club Zones. Modern self contained wastewater plants can service the zones if trunk connections are not nearby. Freshwater and stormwater can be collected and disposed of on site if need be and most rural roads have a power network.
What about building standards?
Do Club Zone houses need to comply to standards likeNZS3604?
A: No they don’t as long as they are only one or two storeys. There would be well over a million houses in NZ which come nowhere near to complying to standards like NZS3604 and you can legally buy these – often at very high prices. Builders will probably choose to use some standards as a selling feature but making them not compulsory means you can import a house kit or building materials from overseas without restriction. This undermines the local materials supply cartels which contribute to the very high building prices here.
Members buying in the Club Zones will accept they are paying much less for having a house which may contain building products which are not made in New Zealand or made to a ‘special’ NZ standard. Most imported mass production materials are made to adequate or better standards than we have here anyway. At present aluminium windows made for Australia do not comply to the NZ standard NZS4211:2008 – yet they have hurricanes in Australia. The current review of the Building Act will tighten importing rules – supported of course by the NZ Building Industry Federation who represent the local suppliers and manufacturers.
In other words, seeking to address both the land and construction cost elements of our current house prices.
And in a telling, if more lighthearted, response to a suggestion that there might be 2500 rules governing building a house
It is hard to add up all the rules and regulations the Government and councils have made for building a house but it is true pleasure craft in New Zealand need to comply to no construction rules at all, irrespective of size. You can build a 100 metre boat and unless you are using it for commercial use or charters there are no regulations at all – you can build it out of blotting paper if you like. This applies to around one million boats in New Zealand and could of course equally apply to basic housing.
There is even a, perhaps tongue in cheek, plastic bag policy.
It isn’t a first-best policy option by any means, but no significant party shows any sign of championing first-best reforms, and local governments are mostly the enemy of anything that would seriously liberalise market (the mayor of Wellington – sworn enemy of the backyard – is quoted on the front page of this morning’s paper talking of “if you can squeeze twice as many houses on the same land why wouldn’t you?” – this about privately owned land, for privately-owned houses).
But as a second-best option I think it has a lot going for it and, at very least, deserves some serious scrutiny and debate. I don’t need a house myself, but I’ve just signed up (to support a good cause rather than deciding, at this stage, to vote for them). I don’t suppose it is likely House Club will get to 5 per cent – it is hard – but it would be much better, for members and for wider New Zealand, if they did manage to do so, or even if they just managed to put some more pressure on National and Labour to take seriously the plight of our younger generation – including my kids 10 years or less hence – for whom the elite message seems to be that home ownership is for the especially fortunate, the abnormally determined etc, not a normal and everyday part of life for people across the economic spectrum.
Here, again, is the link to the website.
croaking cassandra 
Sounds like a good idea. Only $3 to kick our politicians seems like a bargain.
This article in the Spectator about the Grenfell disaster points out the danger of the growth of excessive building regulations allowing popular issues such as access for the disabled and climate change to dominate regulations and resulting in the cladding of tower blocks with flammable materials to be missed.
https://www.spectator.co.uk/2019/11/toxic-regulations-not-the-fire-brigade-are-to-blame-for-the-grenfell-deaths/
The idea of a housing club for the retired is attractive (Club55). Commercial retirement villages have been highly successful and I meet many active retirees who swear by them and wish they had entered earlier. However they are too pricey for the average person.
There may be concern when ClubSpringbok, ClubMandarin and ClubIndianCricket are more successful than ClubDiversity with its handful of retired politicians and sociologists. ClubMongrel and ClubBlackPower in Hawkes Bay would need to be well separated. So long as we retain race relations laws I should have no problem moving into ClubIndianCricket (ClubEnglishCricket being too depressing).
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I did notice when ClubBlackPower sets up in a neighbourhood, the prices in that street fall quite considerably. Could be the answer.
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Interesting idea.
One would think ACT would be a supporter of a policy like this – freedom from government interference etc.
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Epsom Electorate would vote for falling house prices? Really?
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They might vote for their neighbours not building 6 townhouses next them – as the potential buyers are all out in a House Club village!
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One question…. can you insure the house?
Because if you can then bank finance is an option… but if you can’t the number of punters willing to do this is likely to be very small indeed.
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Presumably you can in the comparable US developments, but a fair question for Graeme here.
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Falling house prices has a direct relation to higher equity requirements for LVR bank lending. Banks are particularly difficult when house prices are falling.
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Insurance: that is a critical question. Presumably the first question to be answered by a club before building. However when building a Swedish or Australian kit-house I assume a Swedish or Australian insurance company would be happy to oblige.
It is not just new builds that should be a buyer’s concern – what about old property that no longer meets earthquake standards especially where relevant new quake faults are discovered. It is the reason I have not bought property near sea level for over thirty years (that is London, Northern France and Auckland); as you can see I was very cautious since sea level rise has been in millimetres not metres. But why take any chance.
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What is amazing we always speak of foreign made kit houses. Why is it, for a country covered in trees, NZ has never developed a kit house maker that supplies eco-friendly, low cost, attractive homes for NZers, and is a successful exporter to world markets? No – we just chop the logs down and send them off in a boat for someone else to add the value. The economy has simply never left the colonial era – from 1973 therewas a chance to turn this around but the opportunity has been missed. Maybe we can never catch it up…
I see ads all the time in Germany for these kind of houses and garden sheds:
https://www.butenas.de/blockhaus-holzhaus.html
The prices are listed there – €70000 ($105k NZ) for what is as good and probably better as a cheap fibro NZ house. The smaller versions of these you can basically build yourself (I did our garden shed one over a week – just need a saw, a drill, a ladder, and a rubber mallet).
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Having completed a 3 site subdivision I now have the opinion that we are perhaps the most corrupt country in the world. We just know the special art of legal corruption.
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Yes in the same way you can insure a second hand house. At present insurance companies have some guidlines (eg no old untreated wooden piles) but generally the ‘Club Zone” houses will be a low risk for insurance companies partly because the replacement is so much cheaper. We will obviously work with insurance companies to make sure they are insurable – unlike some other housing options like apartments in parts of Wellington!
One thing a fireman friend told me was he would exhange all the building fire regulations for one that said you were legally obliged to have two working smoke alarms in a house. One alarm hard wired and one battery. Perhaps we pick up his idea?
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Philosophically I am in favour of any liberalisation of land use – New Zealand’s finest normal homes were all built in the era before regulations became dominant. When you have space and affordable materials you can start to think intelligently about house design, form etc. What little is being built in NZ today makes me weep – plastic ugly boxes, crammed together.
My concern with this (or any) liberalisation proposal is that in the absence of immigration reform, it will make things even more attractive for hot foreign money to rush in, and throw up shabby, cramped buildings. There is almost infinite demand for NZ property, and the only regulator on that is government immigration and
overseas investment policy. There is a fundamental cultural disconnect between what NZers want from a home and what many migrants may want – a 75sqm “house” with a 10qm garden represents regress for an established NZer, but for someone coming from a Chinese or Indian megacity, this is wonderful (and a bargain at $1m). Fixing one without the other looks dangerous to me. Addressing migrant numbers first seems far more sensible – the variables involved are more linear, and more immediately responsive to policy changes.
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Interesting angle. I’m pessimistic on sustained change on either count, and perhaps a bit more sceptical than you on likely foreign demand for NZ housing. Important as I think immigration changes are to the long-term econ and social health of NZ, land use could be fixed without immigration changes (and vice versa of course). At a personal level, the impossible burden of my kids being able to buy a house in land-abundant NZ 10 years hence is becoming more immediate than the long slow relative productivity decline.
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There’s a lot of checks councils (who will be there for the long haul) do on things like drains, water etc and developers (who may be gone tomorrow) may be tempted to skimp because once they’re covered over inspection is difficult. I also remember an article about building in unrestricted places on the outskirts of towns in the USA: the house buyers were conned into thinking that they were going to be connected to the sewage & other facilities, but of course the town didn’t want them and things went downhill. In both cases I can see public bodies picking up the pieces at public expense.
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As I understand what Graeme is proposing he envisages self-contained sewerage systems. But the sorts of questions you pose seem like reasonable ones House Club would need to have good answers to if they are to get traction over time.
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I did put in a self contained sewerage and waste water holding tank. Cost about $15k to install in a Huntly property that did not have access to the public system. You do need plenty of land(5,000sqm in this case) and there is a regular maintenance cost to ensure the pumps are working to slowly disperse. Not exactly a cheap option and can get flooded in a heavy downpour. I have had to replace the pumps at a cost of $1200 a couple of times already where heavy rain drowned the pumps.
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I presume Graeme is envisaging something large scale for each HouseClub community, rather than one per house, which woiuld presumably lower the per unit costs considerably.
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There are plenty of small towns and villages which have their own full wastewater plant. At our bach at Taupo there is one which serves 600 houses. Probably the fastest way to roll out wastewater systems is the STEP/STEG types like they use for 900 houses at Jacks Point. Its a system which has a tank for solids and the liquids are pumped (STEP) or gravity fed (STEG) to a treatment plant via small diameter (50mm) pipes. Then the solids tank is emptied about once every 10 years – and its just soil by then anyway.
Conventional plants are around $15K per household – and the STEP/STEG systems are about $25K with the home owner paying half.
What is expensive is paying excessive costs for serviced sections while Watercare or some council waits to extend the trunk mains at THEIR leisure. Then pump the sewage miles across town because they dont want to do a resource consent for a local plant. Watercare are spending $1.4B on a pipe to do just that at present.
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Good to see people thinking outside the box.The future is not far away – how many of the 650,000 expat Kiwis in Aussie will come home when bushfires and floods get too much for them. And what of the Aussies who can come and stay any time they like? Tent cities maybe? And re-education centres a la Zinkiang for the Chinese who can’t go home to Wuhan?
Seriously, NZ will be a great destination for climate/pandemic refugees. not merely a bolt hole for the wealthy. Who are these few ‘individual figures’ who ‘occasionally talk a good game’? They need to come centre stage, develop their ideas and bring their comrades with them.
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