The Queenstown Lakes district has a shortfall of about 1000 homes, but simply opening up more land for housing will not solve the problem, an economist says.
At resumed hearings on the district council's proposed district plan (PDP) yesterday, property economics specialist Philip Osborne told the hearings panel the district's housing affordability was among the lowest in the country. Only 35% of residents owned their own home.
The issue had to be addressed because a high proportion of the district's rising population was employed in service sectors where incomes were lower, creating greater demand for more affordable sections and houses.
However, the district's ''relatively unique'' housing market meant rezoning more land as residential was not the whole answer, Mr Osborne said.
Over the past decade, section sales had made up about 40% of all residential sales, making for a ''highly speculative'' market in which sections had become a tradeable commodity.
''Typically, this occurs in a market where capital gain is unusually high and potential gains on land value outweigh the risk and additional investment required to build on the property.''
The high percentage of houses used for short-term visitor accommodation also had a high bearing on affordability.
Mr Osborne said the supply of new houses could be accelerated by providing for more medium and high-density residential development in central locations.
As well as improving affordability, that was likely to lead to higher ownership levels, infrastructure efficiencies, reduced transport costs and more lower cost housing options.
The potential costs were congestion, an increase in land values and higher construction costs, he said.
The hearings resumed yesterday after a three-week break. They are covering the five 'residential' chapters of the PDP: low-density, medium-density and high-density residential, the Arrowtown Residential Historic Management Zone and large lot residential.
The first two days are being taken up by the council's submissions. Submitters on the chapters will present their submissions to the panel from tomorrow.
The panel consists of Denis Nugent (chairman) and commissioners Ian Munro and Mel Gazzard.
