Ockham

Residential Investment and Development

Who are we? The Ockham Building

The Ockham Building

The Isaac
Images here

Station R
Images Here

Station R

The Turing Building

Images here

The Turing Building

The Housing Affordability Problem.

There is an affordability problem across the entire

socioeconomic spectrum.
For the mimimum wage workers this means any
new house is unaffordable.

The Two Questions

1. How to reduce the cost of housing for those who

can afford housing?
2. How to provide housing for those for whom all
housing is unaffordable?
In this presentation a will address how the PAUP can
address the first question.
The second issue is one that the private sector or
market cannot solve alone. There is a fundamental
disconnect between the income of low income earners
and the cost of new housing.

Density and Amenity Are they Correlated?

The current poorly defined density metric titles
per hectare with out regard to size or occupancy
is not at all correlated with amenity.
Thesis

In the suburban context retention of green space

is the key metric and closely associated with
amenity.
If green space is retained then what is the problem
with setting three levels as the standard for almost
all existing suburban environments??

OBSERVATONS

Auckland Council Planners Got it right before political

interference removed unlimited density in the mixed
housing zone.
Unrestricted Density promotes diversity and
affordability.
Auckland 2040, Community Groups, and the Auckland
Councillors Got it wrong.
Universal Density restrictions promote unaffordability,
a monochromatic housing supply, and socioeconomic
stratification of our city.
Increased site coverage rules in the mixed housing
zone destroy existing amenity.

The two BIG Issues for the Unitary Plan

1. Supply.
How does the Unitary Plan make it
economically viable for the private sector
to bring 13,000 consents p.a. to the
table?

2. Affordability.
How does the Unitary Plan make it
economically viable for a large portion of
these 13,000 units to be affordable?

Two Comments
1. Putting Capacity issues aside, the private
sector will struggle to identify 13,000
economically viable opportunities under the
new Unitary plan.

2. The Single House and Mixed Housing Suburban

Zones which make up 7/8 of our current
suburban housing will not provide A SINGLE
AFFORDABLE HOUSE!
(I define affordable housing as a one, two or small three bedroom home. I
have no comment to make on the supply of social housing which I define
as the disconnect between low wages and the cost of ANY HOUSE)

High Level Criticism of Zoning

Over 95% of residentially zoned land has out dated
density provisions that are mistakenly motivated by
a belief that density restrictions protect
neighbourhood amenity.

These density restrictions make it an economic

impossibility to build small one, two and three
bedroom units.
The economic reality of the PAUP density
requirements in resdential zones (1 unit per
200sqm or 1 unit per 300sqm) dictate that each of
these units will be a large, unaffordable unit.

SIZE MATTERS
Lot Size
House Size
The politically sensitive subject of Density is
greatly debated.

The metrics of Density are widely

misunderstood.
With affordable housing size is all that matters.
(Lot size and house size are intimately linked by financial necessity)

Common Myths about Density.

Density means more building coverage and less
green space.

Density results in loss of green space.

Density lowers capital values
Density means low quality construction.
Density means structures completely out of scale
with existing buildings.

(In fact, increased site coverage is closely correlated with a reduction in suburban amenity- and this
threat to community amenity has slipped in the back door while everyone is focussed on DENSITY!)

Density Actually Promotes

A diverse housing supply.
A larger housing supply.
Affordable housing options.
More green space, less concrete.
Opportunities for inter-generational living.
Vibrant local shops and facilities.
Better public transport opportunities and
viability.
Creates value for existing residents.

Increased density is clearly the best

use of the urban environment.

Case Study A: Mt Wellington.

1:300sqm

Case Study A: Mt Wellington.

1:300sqm

Case Study A: Mt Wellington.

1:300sqm

Metrics
Total Cost: $5.80M
Total Floor area:1920
Cost per square metre: $3020 psm
Sale Price: $3,590 psm
Profitability (cost/value): 84.1%
Land: 25%
Design and Construction: 68%
Taxes: 9%

Increase over permitted density: 40%

Green space: 40%

The Status Quo..

Case Study B:

Ellerslie.

1:200sqm.

Case Study B:

Ellerslie.

1:200sqm.

Case Study B:

Ellerslie.

1:200sqm.

Metrics
Total Cost: $3.93M
Total Floor area: 918 sqm
Cost per square metre: $4281 psm
Sale Price: $5424 psm
Profitability (cost/value): 78.9%
Land: 20%
Design and Construction: 70%
Taxes: 10%

Increase over permitted density:

Green space: 50%

60%

Case Study C:

Ellerslie.

1:100sqm.

Wilkinson Road 10 x 2 Bedroom Units

Case Study C:

Ellerslie.

1:100sqm.

Case Study C:

Ellerslie.

1:100sqm.

Metrics
Cost: $3.71M
Floor area:984 sqm
Cost/sqm: $3770
Sale Price: $5,254
Profitability (cost/value): 71.8%
Land: 19%
Design and Construction: 71%
Taxes and Consenting: 10%

Increase over permitted density: 333%

Green Space: 50%

The Status Quo.

Opposite

Yours for $1,060,000.

Comparative Table
Density
1:300 1:200 1:100
Increase over permitted 40% 60% 333%
Size(sqm)
160
114
74
Green space
40%
50%
50%
Profitability (cost/value) 84%
78%
71%
Bedrooms per 1000sqm 10.3
17.5
14

Density doesnt mean Loss of Green Space or massive

increases to infrastructure loading.
Density does mean more, smaller affordable houses
where people actually want to live.
Density does mean increased financial viability and
hence opens the door to improved materials and
urban design.

Benefits of Removing Density Limits

More Housing where people actually want to Live!!!.
-300% 500% increases in density are possible.
More Green Space!
-increase from 40% to 50% because concrete drives dont dominate developments.

Smaller Houses.
-Becomes economical to produce smaller units.
Cheaper Houses.
-Size is all that matters in addressing affordability.
Better UD outcomes.
-communal spaces, larger boundary setbacks more articulation, better quality materials.
Profitable for the developer.
-There is an incentive to provide more affordable houses.
-No trouble finding 13,000 economically viable opportunities.
No increase in storm water loading for large increases in density.

Minor increases in sewer loading relative to the large increase in density.

Avoids site aggregation problems.
-can be done on small lots.
Helps with capacity issues in the construction sector.
- this approach allows smaller companies to get involved in high density intensification.

Conclusion

Ensuring 13,000 consents are lodged each year,

that is the challenge and it is ECONOMIC IN
NATURE.
Before all else, the PAUP planning rules must
make is financially possible for the private
sector to provide the range of affordable
housing typologies needed across the vast
majority of existing urban environments.

Ockham
Residential Investment and Development