Housing is one of the most basic needs for people, and stable housing is linked to positive economic, educational and social outcomes for individuals and communities. The lack of affordable housing is one of the most significant challenges facing the Nelson region. Our housing market is consistently one of the least affordable in the country.

Although Nelson rent and house prices are slightly lower than national medians (4.7% and 2.4% respectively), household incomes (recorded for Nelson, Tasman, Marlborough and the West Coast combined) are 22.9% below the national median. This results in a higher level of unaffordability for both renters and property purchasers.

Housing affordability compares current average house values with mean household income. The index is the ratio of the average current house value to average household income.

We see the impact of this housing crisis in our community every day – in the rising numbers of homeless people, the families living with housing vulnerability, people leaving the region or being more reluctant to move here, and our growing tide of residents struggling to keep a roof over their heads.

Council has made affordable housing and intensification a focus area and is committed to helping to improve the situation. Unless otherwise specified, the measures outlined below don’t have a material impact on debt or rates.

Partnering with Central Government

Many of the factors affecting housing affordability, such as rising prices due to increasing demand, and the level of household income, are not within Council’s control so it is crucial that we work closely with central government to ensure Nelson is receiving as much help as possible. The government’s recently released public housing plan recognises Nelson’s housing challenges and acknowledges that we are a priority area for assistance.

Council is working in partnership with Kāinga Ora; the Government's primary housing and urban development delivery arm with two key roles, firstly to be its own public housing landlord, and secondly, to partner with the development community, including local government, on urban development projects. Council is supporting Kāinga Ora in the development of its strategic plan for Te Tauihu for potential development projects.

Council consulted the community on the divestment of its community housing portfolio to Kāinga Ora and how the proceeds should be applied. $12 million from the proceeds of the sale have gone to create a Housing Reserve. The Reserve will be used to work with and support partners who have the ability to deliver social and affordable housing solutions for the community. Council sees the Reserve as a community asset for which it has a stewardship role.

Council is undertaking research and talking to partners and experts including regional and national Community Housing Providers, the Ministry of Housing and Urban Development, Community Housing Aotearoa, and other councils about how the Reserve could operate and continue to deliver positive housing outcomes for Nelson over the long term. We expect decisions on the fund to support housing development during 2021.

For Nelson to be A Smart Little City, a vibrant place to live where business and innovation thrive, it is vital that Council plays its part in helping ensure that housing development keeps up with demand.

In the short term Council is anticipating a low rate of growth, with an additional 1,256 rating units from 2021 to 2031, but we are planning for higher growth in the longer term. (Read more about growth in this section). Part of this planning for growth includes providing for further intensification of housing.

What is intensification?

Enabling housing intensification is a focus for Council in this Long Term Plan. This improves our use of existing land to provide more housing, encourages more housing types and choices, and delivers to our climate objectives. On previously developed land (brownfield developments), it typically involves adding dwellings to sites, or adapting and replacing dwellings on one or more sites with more housing. Intensification also happens in previously undeveloped (greenfield) areas, through higher-density housing.

Intensification of housing along or close to our main transport corridors has many benefits including supporting our sustainable transport and carbon mitigation objectives.

Council’s approach

Council’s support for greater intensification in Nelson includes funding of infrastructure projects which enable higher density housing. Infrastructure services (such as water supply, wastewater and stormwater) need to be in place before new homes are built. Existing services in an area often need upgrading to meet the increased capacity required by intensified housing. For ‘greenfield’ development, totally new services are built.

Council receives payment for providing these additional services through development contributions. Council borrows the money required for the work when upgrades and installations are required prior to developers starting work and paying the contributions.

Over the next 10 years we will concentrate our proactive infrastructure upgrade activity in Washington Valley and the wider Nelson City area, and be responsive to city wide intensification demands. As well as preparing for intensification, upgrading the infrastructure in these areas has additional benefits such as replacing ageing infrastructure, increasing stormwater capacity, reducing the risk of wastewater overflows, and improving water supply flows and pressures. This activity is budgeted to cost $23 million.

Supporting development

Council provides guidance and staff time to assist property owners undertaking intensification projects. The rules around higher density housing and tiny houses are also being re-written as part of the draft Whakamahere Whakatū Nelson Plan. The 2018 Development Contributions Policy waived development contributions for up to 30 Housing Units of Demand (HUDs) per year in the City Centre and City Fringe areas. The draft 2021 policy proposes that the 30 HUD per year limit be removed so that all residential development in the City Centre qualifies for a waiver.

To comply with the National Policy Statement on Urban Development, Council resolved that Nelson Resource Management Plan (NRMP) on-site car parking requirements no longer apply from 1 January 2021. This means there is no requirement to provide a specified number of on-site parking spaces, except for accessible parks. A number of changes will be made to the NRMP in 2021 to reflect these changes.

Council will also be considering methods of making some of its own landholdings available for intensification projects and mixed use developments.

What are the alternatives?

Council’s proposal is to undertake a range of work to promote affordable housing and intensification. The alternative would be to not proactively progress the many strands of work outlined above. This would have a minimal impact on rates and debt as it mainly involves staff time. However the impact would be fewer initiatives to improve the amount of affordable housing in Nelson. Without this staff resource the Housing Reserve would not be able to be activated for innovative projects which leverage additional funding. The Reserve would need to be disbursed as grants, which don’t require significant resource to operate.

Housing in Nelson is some of the least affordable in the country. Do you agree with Council’s proposal to focus on affordable housing and intensification, or would you prefer that Council simply met the legislative requirements in this area and did not devote resource to innovative partnership approaches and leveraging funding?