Staring down the barrel of the RaSHpipe

Transcription

Staring down the barrel of the RaSHpipe:
New Zealand’s Retirement and Social Housing Pipeline 2015
DRAFT report July 2015, Prepared by Pamela Bell for PrefabNZ, [email protected]
Preface
This report has been prepared as part of the ‘Levers for Prefab Action Plan’ research programme by
Pamela Bell for PrefabNZ Incorporated. The report is made possible by BRANZ as part of their
commitment to Building Levy funded research. It is also assisted by design and construction industry
input, in particular by Spanbild Group.
PrefabNZ facilitated a workshop with Retirement Villages Association (RVA) members as well as
interviews with RVA members and Community Housing Aotearoa (CHA) members towards this
report. The cooperation of RVA and CHA is gratefully acknowledged.
This ‘Retirement and Social Housing Pipeline’ report follows on from the ‘5 year Impact Report’ and
feedback on MBIE’s ‘Guidance for Manufactured Systems’ – all are short-term action points
identified in the ‘Levers for Prefab’ report supported by BRANZ and the Productivity Partnership
(MBIE) and launched at PrefabNZ’s CoLab in April 2015.
PrefabNZ was established in 2010 as the hub for prebuilt construction in New Zealand (NZ).
PrefabNZ is a non-profit member-based incorporated society representing specifiers (architects,
designers, and engineers), producers (manufacturers, builders and distributors) and building
professionals (quantity surveyors, building officials and researchers). www.prefabnz.com
Contents
1. Key Findings
a. By 2030, New Zealand’s social and built environment will
change in dramatic ways
b. 75,000 social and retirement housing units are needed by 2030
c. Current delivery rate is up to 3,000 units per annum so a
shortage of about 30,000 homes is forecast by 2030
d. Largely urban locations for housing demand yet widespread
delivery of parts needed
e. There is a need for a fit-for-purpose, on-time, on-budget built
response
f. Key challenges are in bite-sized innovation that can be readily
absorbed into business-as-usual
2. Background
a. Demand – social and retirement housing
b. Supply – housing capability
c. Construction industry
d. PrefabNZ
e. Levers for Prefab Action Plan with BRANZ + MBIE
f. Other pipelines of relevance - MBIE Productivity Partnership
National Construction Pipeline
3. Social Housing
a. Overview
b. Housing New Zealand Corporation (HNZC)
c. Community Housing Aotearoa (CHA)
d. Social Housing Unit (SHU)
e. Ministry of Social Development (MSD) purchasing intentions
f. Industry comments
4. Retirement Housing
a. Overview
b. Jones Lang LaSalle report
c. Industry comments
5. Next Steps
a. Universal Bathroom Pod competition
b. Competition partners and stakeholders
6. Appendix
a. Parties involved
b. Terminology
c.
References
1. Key Findings
a. By 2030, New Zealand’s social and built environment will
change in dramatic ways, with:
-
population increasing to $5 million,
-
half the population living in the Auckland, Hamilton Tauranga triangle,
-
one million people aged 65 and over,
-
a gross undersupply of universal or lifetime design houses – nearly a quarter million homes,
-
a general housing shortage of 100,000 homes – most of these in the affordable bracket,
b. 75,000 social and retirement housing units are needed by 2030
The Ministry of Social Development (MSD) is forecast to purchase around 65,000 social housing
places across New Zealand over the next two to three years by 2017/18. This is equivalent to 3,000
homes. If this rate is consistent to 2030, this would mean 1,000 homes a year or 15,000 homes in
total.
In the local government sector, 62 councils provide 13,400 homes, with 89% in the form of bedsits
and one-bedroom units.
Not-for-profit community housing organisations (CHO) currently provide at least 5,000 homes, with
a minimum of 9,700 bedrooms, to more than 15,000 individuals and families in New Zealand. Some
providers are oversubscribed by 10 times in demand for the homes that they produce. Community
Housing Aotearoa (CHA) forecasts demand of 2,000 homes per annum needing to be met. If this rate
is consistent to 2030, this would mean 30,000 homes in total.
The number of retirement village dwellings has grown rapidly from 10,000 in 1998 to 17,250 in 2010.
The Retirement Villages Association (RVA) has forecast that operators will need to build 800-1,200
dwellings annually to meet rising demand as New Zealanders age. Jones Lang La Salle’s 2014 report
goes further placing demand at over 2,000 retirement homes per year, equivalent to 14 villages per
annum from 2013 to 2043. This is based on an average village size of 150 units and a penetration
rate of 12% of people aged 65 and over living in retirement villages. If this rate is consistent to 2030,
this would mean 30,000 homes in total.
c. Current delivery rate is up to 3,000 units per annum so a
shortage of about 30,000 homes is forecast by 2030
The expansion of community-driven social housing is continuing with 46 CHO organisations saying
they would be delivering more houses over the next year, with forecasts of an additional 670
housing units. There is still a shortfall in demand of over 1,200 homes, which means 18,000 homes
by 2030.
According to Statistics NZ, over 2,000 retirement village units have been built in the last year (April
2014 – March 2015). At this rate of supply, the predicted demand is being met, reflecting the
retirement village sector’s ability to plan ahead and finance its development pipeline. However, the
past year is a ‘boom’ year and construction technology currently employed is still traditional so
potential advantages of modern methods of construction are still not being utilised.
The projected forecast is therefore mainly social housing units, due to a lack of a visible
development pipeline, hindered by no financial clarity due in part to the short political planning
cycle.
d. Largely urban locations for housing demand yet widespread
delivery of parts needed
Auckland demand constitutes approximately one half of MSD purchasing intentions demand and
20% of community provided social housing. One-third of current retirement village developments
are located in Auckland, increasing to 40% of future developments. This indicates that up to a half of
all future social and retirement housing development may occur in the Auckland region.
Furthermore, there are approximately 80,000 to 90,000 households in Auckland (based on 2009/10
numbers) who are working and renting and are permanently locked out of the home ownership
market.
However, the construction industry is nationally distributed and made up of 91% of firms consisting
of 1-5 people. This means that most builders build only a few houses a year and use traditional
methods, incorporating basic prefabricated pre-nailed wall frames and roof trusses.
By 2030, as labour force ageing rates increase, house construction methods will need to adapt and
incorporate less manual work at site. Simultaneously, more emphasis on health-and-safety will mean
more work will take place off site in safer controlled conditions. This will mean increased use of a
broader range of prefabricated components, panels and volumes that will be manufactured at
widespread regional locations to service mainly urban centres, largely into Auckland.
e. There is a need for a fit-for-purpose, on-time, on-budget built
response that the prebuilt sector should respond to
Auckland’s 15 year housing demand shortfall of 5,000 houses a year could be met 60% faster using
increased prefabrication. This would mean more production facilities for bathroom pods and wall
and roof panels would need to be established.
At this rate, Auckland’s housing demand shortfall of 5,000 houses a year could be met by an
additional 25 suppliers assembling 20 houses per month over a 10 month working year.
f. Opportunity for a prebuilt bite-sized innovation that can be
readily absorbed into business-as-usual
There are opportunities for increased prefabrication such as volumetric bathroom pods, roof
assemblies at ground, panelised construction, all using durable materials with fast assembly times to
get maximum benefits of increase quality, reduced time at site, reduced remedial period, reduced
interruption at site, and flow-on cost efficiencies.
The current issue is that large retirement villages are building as fast as they can with a highly visible
and well-financed development pipeline. This is in stark contrast to social housing providers who
have very little certainty of future funding. Both retirement and social housing developers struggle
to incorporate innovative construction practices under current conditions.
A way forward is for the prefabrication sector to provide bite-sized, easily-accessible, regionallyavailable methods of innovation. The next step is to increase the availability of a prebuilt universal
bathroom pod. There are currently limited options for custom bathrooms and no ‘drag-and-drop’
ready-made universal bathroom pods.
2. Background
a. Demand – social and retirement housing
Forecast population changes will have huge impacts on the demand for retirement and social
community housing. New Zealand’s population is expected to grow by 300,000 by 2021, and to 5.1
million by 2031. Auckland is expected to have the largest population growth (of almost 600,000 by
2031). Together, Auckland, Hamilton and Tauranga will likely house 53% of the population in 2031.
The rest of New Zealand, particularly provincial areas, is expected to experience slower, and possibly
negative, growth.
At the same time, the population is getting older, with the percentage of people aged over 65 years
expected to increase from 13% of the population recorded in 2009 to 21% in 2031 (totalling more
than 1 million people). Canterbury is expected to have one of the oldest age profiles in the country
(Statement of Intent, HNZC, 2014).
According to CHRANZ’s ‘Older People’s Housing Futures in 2050: Three Scenarios for an Ageing
Society’, in 2050 there could be over 800,000 households headed by older people in New Zealand.
In just 35 years’ time, a quarter of the population will be people aged 65 years or more – in the
region of 1.35 million people. Most of these older people will live in their own homes, but the
numbers of households headed by an older person in the rental market will more than double.
Shamubeel Eaqub (NZIER)
Older people will be more diverse ethnically than today and there will be more older people entering
their eighties and nineties. Older people will typically live alone or with an older partner.
There will be increased pressure on transport systems, with well over half a million older people
expected to have a disability that impairs their mobility. Around 325,000 older people will not have a
drivers licence and even more are likely to be dependent on public transport, walking or on others.
The challenge is how to ensure that older people have the sort of housing that keeps them well,
keeps them connected, and keeps them productive. In 2050, the impacts on wider society of the
housing conditions in which older people live will not be able to be ignored. The housing future of
older people is the housing future of New Zealand. The scenarios presented here are designed to
help us actively mould a positive future.
According to Shamubeel Eaqub of the New Zealand Institute of Economic Research (NZIER), the baby
boomer cohort is expected to dramatically increase the proportion of older (65+) workers, from
about 115,000 in 2013 to just over 450,000 some fifty years later.
Older people are less likely to engage formally in paid work. Just for this reason, as the population
ages, the fraction of the population participating in the workforce – the participation rate – will fall.
The Department of Labour projects our participation rate to decline from the current 69% to about
63% by 2050,1 driven by the changing demographics (Department of Labour 2010). By 2050, there
will be more than a million older people not in paid labour.
According to Kay Saville-Smith of the Centre for Research, Evaluation and Social Assessment (CRESA),
81% of older people are in owner occupied housing. Their housing priorities are functionality, cash
(via release equity or minimised housing costs) and connectivity.
Housing locations matter for older people, with increasing dependence on public transport and over
a third of women aged 75+ years without a drivers’ license. One in five households with 75+ year
olds have no vehicle so reliance is on public transport and community services.
Source: CRESA
CRESA terms the ‘rental refuge’ as the growing number of older people forced into housing rental
circumstances with extremely low choice of functional, affordable and convenient homes. This
unmet demand for owner occupation has grown from 187,000 households in 2006 to about 200,000
households in 2011 and is forecast to grow to over 260,000 households by 2030.
There is an affordability crisis for low-income tenants and over 66% of renters are dissatisfied with
their housing. There are huge demands on housing repairs with over 42,000 (possibly 88,000) leaky
homes. Over 40% of rental housing is without ceiling insulation and almost 40% of all landlords make
no provision for repairs and maintenance.
There is also a strong demand for universal design or lifetime design homes. Currently it is estimated
that there is a need for 140,000 more of these homes, with a forecast 240,000 undersupply by 2039.
There is a clear demand for resilient, efficient, adaptable, liveable homes. Affordable up-front costs,
operational costs and connected living all need to be delivered. These need to meet the lower two
quartiles of housing price. They need to be functional and may well be compact, as well as needing
to be delivered in short timeframes from site works through to latch-key.
Saville-Smith suggests that housing solutions will need to maximise site opportunities (go up as well
as out) and utilise design-led prebuilt technologies to enable increased labour productivity and
reduce risks and uncertainties. In the future, there may be potential for NZ to be a test-case
laboratory for an export industry of these housing typologies.
According to CHRANZ’s ‘Older People’s Housing Futures in 2050: Three Scenarios for an Ageing
Society’, a number of workshops were conducted with older people and their related services
providers who considered housing affordability to be a critical issue facing New Zealanders as they
age.
The older people’s services workshop commented that, in working with their clients, they find that
current housing and income support policies do not match up with the diverse financial
circumstances among the older population. Increasingly older people have mortgages, which
reduces their disposable income. The number of older people renting is increasing. The number of
older single people (whether they have never been married, or are divorced, or widowed) is also
increasing, and their financial situations are likely to be restricted. Many older people cannot afford
to go into supported living arrangements such as retirement village housing. In some areas, older
people cannot afford to downsize because of insufficient equity in their current home.
The housing provider workshop identified affordability as a challenging issue for the housing sector.
Some of those retiring now have lost income as a consequence of the economic downturn. Although
there are home equity release schemes available, up-take is low. The cost of maintaining housing,
paying rates and other on-going costs places an onus on people in retirement. Many retired are
asset rich but cash poor. Housing affordability will continue to be a critical issue for younger
generations as they age.
CHRANZ’s housing provider workshop was adamant that quality should not be reduced to keep
housing costs down. Housing quality needs to be maintained as poor housing creates costs
elsewhere, such as in higher demands on health services.
CHRANZ identified the following policy and funding areas that need to be addressed:
• There are only a few not-for-profit providers that can provide units for those of modest means.
• The rental market needs to be affordable, and to offer secure tenure for older tenants.
• Reverse equity is not widely understood among older people. Although it is one option that should
be available, older people need to be better informed about the costs, risks and implications.
CHRANZ’s consumer workshops considered that if today’s housing issues for all ages are not
addressed, desirable housing futures for older people will not be realised. Across the workshops
there was a growing sense of unease about housing and an appetite for action to improve housing
for all age groups. If current housing problems are not resolved, the undesirable outcomes were
seen to be urban environments that fail older people, increasing isolation of older people,
compromised health and increasing inequalities between ‘haves’ and ‘have nots’.
A wide range of current housing issues were identified in the workshops. These are summarised as:
• The suitability of dwelling size and design;
• The need for affordable housing;
• The need for more residential options for older people;
• Problems with dwelling condition, performance and safety;
• The need for supports to enable older people to remain in their homes;
• A greater focus on good neighbourhood design and connectivity;
• The need for improved housing information and advice.
Looking to the future, increased dwelling size was highlighted as a key trend. However, the want to
or need to downsize needs to be balanced with needs for a spare bedroom to enable family or
whanau to stay, as well as live-in carers if needed. Home ownership looks set to continue as being
highly desirable in future. All workshops supported older people owning their own homes, and
considered that young people should be encouraged into home ownership. However, home
ownership is seen as a largely unachievable goal for some groups in the population, increasingly
difficult for young people and the rise in older people who are not home owners is an acknowledged
trend.
CHRANZ’s Maori workshop noted that for Maori, home ownership is not just about the physical
dwelling, it is about whanau, a way of life and cultural values, which are all interrelated. The Pacific
workshop observed that a desire for and sense of home ownership, and pride in their homes is part
of Pacific Island culture. The home is regarded as an asset to pass on to their children. Older Indian
people also considered their home as an asset for their younger generation.
b. Housing Supply Capability
i. Construction industry
PrefabNZ’s ‘5 year Impact Report’ (2015) reiterated construction industry factoids also in the Pure
Advantage ‘An Idea Whose Time Has Come’ (2015) Estimates are that there will be a shortage of
100,000 homes by 2030 at current rates of demand increase. This demand is centred on Auckland
with 5,000 houses needed each year over the next 15 years. Christchurch maintains strong demand,
and residual demand is spread across Wellington, Hamilton and regional centres.
In order to meet this demand, it is necessary to look at the construction industry’s ability to supply
housing. The proportion of construction firms consisting of 1-5 people is 91% so there is an
overwhelmingly heavy reliance on an established material supply chain and business-as-usual. This
means that most builders build only a few houses a year and use traditional methods, incorporating
prefabricated wall frames and roof trusses.
As labour force ageing rates increase, it is likely that house construction methods will need to adapt
and incorporate less manual work at site. Simultaneously, more emphasis on health-and-safety will
mean more work will take place off site in safer controlled conditions. This will mean increased use
of a broader range of prefabricated components, panels and volumes.
ii. PrefabNZ
Prefabrication is a method used to increase quality of built outcomes and reduce assembly times at
site. There can be cost efficiencies and material savings associated with use of prebuilt parts, as well
as health and safety benefits and other social sustainable gains such as less disruption at site and
better worker conditions.
PrefabNZ was established in 2010 as the hub for prebuilt construction in New Zealand (NZ).
PrefabNZ is a non-profit member-based incorporated society representing specifiers (architects,
designers, and engineers), producers (manufacturers, builders and distributors) and building
professionals (quantity surveyors, building officials and researchers).
The PrefabNZ ‘Value Case for Prefab’ (2014) pointed out that prefabrication can reduce up to 60% of
time at site (bad weather alone adds 13% more time to a typical build), and reduce costs of building
(labour and materials) of $25,000-40,000 on a detached home of 137m2 built using a bathroom pod
and wall panel construction. These types of savings would enable a faster delivery of housing if taken
up at greater scale than current.
Auckland’s 15 year housing demand shortfall of 5,000 houses a year could be met 60% faster using
prefabrication at scale. This would mean more production facilities for bathroom pods and wall and
roof panels would need to be established.
Post-Canterbury earthquakes in March 2011, a PrefabNZ member outreach found that 37 businesses
said they could supply about 850 houses in a month period. This was in response to then
Department of Building and Housing (DBH) request for information. This works out at about twenty
houses per supplier per month, once production and material supply was in place.
At this rate, Auckland’s housing demand shortfall of 5,000 houses a year could be met by an
additional 25 suppliers assembling 20 houses per month over a 10 month working year (December
and January are slower months in the construction sector).
There is widespread belief that the ‘housing crisis’ of escalating house prices in Auckland is fuelled
by a lack of housing supply. Creating the means to meet this pent-up housing demand would be a
way to effectively cool this market, and potentially avoid the damaging effects to the national
economy if a housing price adjustment was to take place.
There has been extensive research in the prefabrication sector led by both PrefabNZ and BRANZ.
Following on from PrefabNZ’s ‘Roadmap for Prefab’ (2013), ‘Value Case for Prefab (2014) and ‘Levers
for Prefab’ (2015), the ‘Levers for Prefab Action Plan’ research programme with BRANZ, MBIE +
Spanbild evolved (2015).
As ‘Levers for Prefab’ explains, “It is now vital that we learn from the early adopters and first
followers of prefabrication and smooth their path by identifying the levers for prefab and acting on
eliminating challenges and creating opportunities. Established residential builders identified the
three levers for prefab of scale, liability and show-and-tell:
1.
Scale is collaborating on both demand- and supply-side to improve consistency of workflow
2.
Liability is clarifying the regulatory compliance process
3.
Show-and-tell is communicating prefab benefits to change perceptions”
A work programme based on these three levers forms the basis for future outcomes. The first of
these is the Levers for Prefab Action Plan research programme between PrefabNZ, BRANZ, MBIE and
industry partners such as Spanbild. The five-staged programme covers charting prefab through
infographics, manufactured building systems regulation guidance, pipelines for social and retirement
housing, and the launch of a competition for an open-source prebuilt component suitable for multiunit housing.
The Retirement Villages Association (RVA) and Community Housing Aotearoa (CHA) have agreed to
work with PrefabNZ towards developing a visible pipeline for retirement and social housing.
Workshops held in Auckland (February 2015) provided the fora for retirement / social housing and
prefabrication industry representatives to discuss upcoming work and opportunities.
This workshop and follow-up conversations constitute the output that has been gathered into this
Retirement and Social Housing Pipeline report by PrefabNZ to provide ways for the sectors to work
together. A further output will be a design competition for a repeatable ‘widget’ such as a bathroom
pod, staircase assembly, or basic living unit for a specific retirement village project.
c. Other pipelines of relevance
i. MBIE Productivity Partnership Second National Construction
Pipeline (December 2014)
The visibility of a pipeline of forward building and construction work can provide a basis for
improved planning by all participants in the sector, scheduling of investment in skills and capital, and
coordination between construction clients (particularly central and local government) that could
lead to better scheduling of construction projects.
The Productivity Partnership, via the Auckland Procurement Forum, produced a separate
construction pipeline report for Auckland. The Auckland Pipeline Report provides data on current
plans and forecasts for capital investment in building and construction across Auckland. The fifth
Auckland Pipeline report, released in October 2014, is available at:
http://buildingvalue.co.nz/sites/default/files/Auckland-Pipeline-Report-5.pdf
Statistics NZ/BRANZ / Pacifecon
The value of all building and construction nationally is still forecast to reach unprecedented levels,
with a sustained rate of growth that has not been seen in 40 years.
The value of all building and construction nationally, for the year ending March 2014, is fractionally
lower than the previous peak of $27 billion - in the year ending March 2008. The forecast shows
construction activity rising a further 29%, from March 2014, to an unprecedented peak of $35 billion
in the year ending March 2017-8.
Auckland continues to dominate the national demand for building and construction, accounting for
over a third of all building and construction work, by value, from 2012 to 2019. The forecast value of
all building and construction in Auckland steadily increases to a peak in 2017 ($13.1 billion) before
reducing in 2018 and 2019.
Residential activity continues to drive growth in Auckland, and is forecast to more than double in
value from 2012 ($3.5 billion) to the peak in 2017 ($7.3 billion). The number of multi-unit dwellings
consented in Auckland each year is forecast to rapidly increase. Nearly 4,800 multi-unit dwelling
consents are estimated in 2019 – nearly five times as many as in 2012 (just over 960).
Pacifecon / BRANZ
Higher density housing increases its share of residential construction over the forecast period,
mainly due to more multi-unit dwellings in Auckland. Nationally, the number of multi-unit dwellings
consented per year peaks in 2017. In 2019, multi-unit dwellings will make up 36% of all new
dwellings consented, (increasing from 18% in 2012). The number of detached homes consented
nationally will peak at 19,990 in 2015, then decline each year through to the end of 2019.
3. Social Housing
a. Overview
The social housing sector’s dominant provider is Housing New Zealand Corporation (HNZC) with
around 69,000 homes. The HNZC Statement of Intent (2014) outlines a future ten-year investment in
Canterbury of $1 billion alongside the plan to have built 2,000 new houses nationally in the last two
years from 2013-2015. Local Government delivers another 13,400 homes and Community Housing
Providers deliver a further 4,000 dwellings to house approximately 15,000 people.
The new Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act 2013
allows community housing providers (CHPs) to apply for government funding for income-related
rents. CHPs fall into two groups of largely registered charities which are affiliated with the sectoral
body Community Housing Aotearoa (CHA) and charity providers identified on the charities register
as having some sort of housing activity that do not appear to affiliate with CHA. The Community
Housing Provision (2014) report describes three groups among the CHPs:
• Firstly, there are those that identify with the housing sector and are aware of and attempting to
engage with changes in the social housing sector.
• Second, there are those charities that provide housing largely detached from the debates around
sectoral change.
• Third, there are also those that have had their strongest connections with health or welfare
agencies, rather than the housing sector, and delivered various forms of housing, mainly group
housing, through contracts within those sectors.
Community Housing Aotearoa (CHA), established 10 years ago, is the national umbrella group for the
community housing sector. CHA represents 74 members, including councils and not-for-profit
organisations delivering community housing solutions. CHOs operate throughout the country with
houses identified in 58 local authority areas, in both urban and provincial New Zealand. A quarter of
the housing stock is in the Auckland region (1,044) followed by the Wellington region (933). Longterm accommodation is the most common type of housing provided by CHOs. The sector also
delivers night shelters and emergency accommodation.
Of the 91 CHOs surveyed they collectively generate annual revenues in excess of $1.3 billion and
hold equity of over $2.1 billion against debt of $500 million. The social housing sector takes a
considered approach to financial management with those surveyed saying they would take on debt
to develop new or acquire existing social and affording housing only if the right market conditions
were present.
CHOs are currently contributing at least 4,021 homes with a minimum of 9,700 beds. CHA estimates
a further 1,000 units likely operated by sector organisations that did not respond to the survey. CHA
will continue to use the estimate of 5,000 units as sector portfolio size and further estimates that
over 15,000 people are being housed.
Expansion is continuing with 46 organisations saying they would be delivering more houses over the
next year, with forecasts of an additional 670 units.
In the local government sector, 62 councils provide 13,400 homes, with 89% in the form of bedsits
and one-bedroom units. Many local authorities are considering a range of options for the future of
their stock. Christchurch City Council in particular has a development programme in place to
respond to the post-earthquake demand. They have 2,278 social housing units and plan to increase
this by a further 88 units over the next two years. This will consist of 41 new builds and 47
refurbishments of earthquake-affected properties.
Auckland Council has a small amount of elderly housing stock in the North Shore that they are
looking to jointly administer with a CHO. Wellington Council is part-way through a large
refurbishment and development programme of works. Hamilton Council is looking to sell their social
housing holdings and Dunedin Council is continuing to administer their own social housing stock.
Wellington City Council has approximately 2,168 social housing units, including 104 currently under
refurbishment or construction. In the next 12 months, 57 units are planned to be demolished and
replaced with approximately 100 new units. After this spate of activity, there is unlikely to be further
development until 2021.
The social housing sector is challenged by a short-term central government funding strategy. The
CHA ‘Details Matter’ (2015) report lays out the sector’s objectives to provide positive outcomes for
communities, families and individuals, achieved through local responses to delivery of the necessary
services and homes.
It goes on to explain that these positive outcomes can only be delivered when there is long-term
certainty of the operating environment for the community housing sector. This will include enabling
regulations; contracting, investing and purchasing frameworks; tax and charitable status; pipeline;
funding tools; transaction structures; development; capacity and capability; and research and
evaluation. To achieve this future state requires new settings that prioritise long-term, community
outcomes over short-term monetary returns.
The social housing sector sees a future based on collaboration with the public and private sector to
meet the housing needs of families across New Zealand and deliver long term sustainable
communities.
b. Housing New Zealand Corporation (HNZC)
It is difficult to ascertain the size of the development pipeline for new build social housing by HNZC.
The Ministry of Social Development’s (MSD) purchasing intentions provide the clearest data as they
service the tenants of the HNZC properties (see MSD info below).The HNZC website outlines housing
development intentions, several of which are already out of date, including the abandoned Rightsize
programme that used prefabricated panel and volume techniques. According to the website, HNZC
has launched 24 redevelopment projects across Auckland to build and refurbish at least 150 houses
– some to be state rentals, and the rest for private ownership and other social housing providers.
The 24 projects, which cost approximately $45 million, are to be delivered in partnership with the
private and community housing sector, to be completed over the next two to three years to 201718.
The 24 redevelopment sites are located mainly in West Auckland, and include 80 old state houses on
large, under-utilised sections. Extra units gained per site will range from 1 – 23 new properties. The
design, final number and layout of properties, as well as tenure, will be determined in conjunction
with private sector partners. However, it is expected that around half of the 80 houses will remain in
place and be refurbished, and at least 110 brand new properties built.
There are further developments in Wellington, including Pomare where up to 20 HNZC homes, 20
social housing units and around 110 private ownership dwellings are forecast. A large rebuild
programme in Christchurch includes completing up to 5,000 repairs and building up to 700 new
homes by the end of 2015. The HNZC website cites around 30 contractors and up to 1,000 workers
fixing or constructing their houses across the city.
c. Community Housing Aotearoa (CHA)
In the 2015 strategy ‘Our Place: All New Zealanders well-housed’, CHA set out their proposed
direction for the community housing sector in Aotearoa. “Housing is the centre of the jigsaw – if we
can fix this it may also fix a host of other social issues.” CHA is positioned to enable choice in
housing, but in order to do this CHA members need long-term certainty of the operating
environment.
CHA members currently house approximately 15,000 people and aim to provide homes for 50,000
people by 2020, an ambitious increase of 35,000 in the next five years. In order to meet this need,
CHA identifies the need for local responses to housing delivery, through an increase in local
partnerships that meet community needs among iwi, private sector, service providers and CHOs.
In the 2015 report ‘Details Matter’ five priority areas are identified as:
1. Housing policy: leadership from a sector perspective. Develop and resource a long-term 20year Social and Affordable Housing Plan in partnership with health and social service
providers, commercial partners, government and other stakeholders.
2. Sector expertise: assist government to align its work streams.
3. Strong providers: build the capability and capacity of diverse housing providers. Facilitate
and share innovation, thought-leadership and evidence-based practice
4. Grow supply: of social and affordable housing in mixed-tenure, mixed income communities.
Facilitate collaboration and partnerships with all stakeholders for mutually beneficial
outcomes.
5. Measure achievements: evaluate social outcomes and demonstrate our value. Develop a
knowledge base of sector capacity to measure and report change and growth over time,
identify trends and forecast future requirements
CHA will monitor success indicators including strong, diverse providers working to their natural
strengths.
d. Social Housing Unit (SHU)
The Social Housing Unit, Te Wāhanga Kāinga Pāpori, works with organisations that provide social and
affordable housing, including not-for-profit, iwi, and private sector providers. It allocates funding and
facilitates partnerships, including land transfers and sale or lease of surplus state housing stock.
The SHU aims to increase the supply of social and affordable housing for New Zealanders. The unit is
particularly interested in working with organisations that will be able to deliver significant growth in
social and affordable housing. The SHU is a government agency set up as a semi-autonomous body
within the Building and Housing Group of the Ministry of Business, Innovation and Employment. It
was established in July 2011 in response to the recommendations of the Housing Shareholders
Advisory Group report, ‘Home and Housed: a Vision for Social Housing in New Zealand’ in August
2010.
The principal tool that the SHU has had to achieve its objectives has been through the Social Housing
Fund. A total of $141 million has been invested to date, in Budget 2011, 2012 and 2013 via $139
million in Social Housing Fund capital grants, $2 million in Capacity Funding and Sector Development,
and $400,000 toward the Chatham Islands Housing Repair Fund.
Between 2011/12 and 2014/15 $139.41 million in capital grants from the Social Housing Fund have
been provided to 33 community housing providers. This investment has been more than matched by
these providers, with total funding of $305 million going towards social and affordable housing
projects. When fully developed, these capital grants will result in approximately 890 new units, or
2,377 bedrooms added to the housing supply. The forecast completion dates for these units are
below.
The grants distributed from the Social Housing Fund have gone toward a number of housing projects
that span the housing continuum. Capital grants of $99 million have gone toward projects where the
646 units built will be used for social and affordable rentals. The remaining $40 million in capital
assistance has funded the development of 244 units to be used for assisted home ownership.
Year
Forecast Completions
2012/13
25
2013/14
140
2014/15
325
2015/16
340
2016/17
60
Total
890 (2,377 bedrooms)
The majority of units funded out of the Social Housing Fund have gone to areas of high demand. Of
the 890 units funded, 478 units (54%) have been in Auckland. A further 190 units (21%) will be built
in Canterbury. The remaining funds were distributed to various community housing providers across
the country.
A full breakdown of the regional allocation is provided below:
Grant
Total grant
Project
Number of
Number of
Number of
Amount
%
Value
Units
Units %
Beds
$81.6m
59%
$183.5m
478
54%
1445
Canterbury
$24.2m
17%
$56.6m
190
21%
354
Bay of Plenty
$11.9m
9%
$21.5m
67
8%
168
Wellington
$5.4m
4%
$12.4m
34
4%
78
Northland
$4.3m
3%
$7.4m
32
4%
99
Hawkes Bay
$4.1m
3%
$6.2m
24
3%
79
Waikato
$3.6m
3%
$7.7m
30
3%
62
Nelson
$1.9m
1%
$3.9m
15
2%
43
Gisborne
$0.9m
1%
$1.2m
7
1%
14
Queenstown
$1.0m
1%
$4.2m
10
1%
28
Whanganui
$0.6m
0%
$0.8m
3
0%
7
Region
Auckland (incl.
Weymouth)
In Budget 2014 an additional $30 million was committed to the Social Housing Fund. Specifically, $10
million per annum was committed for the years 2015/16, 2016/17 and 2017/18. No projects have
yet been committed to this funding, but the sector has indicated that is has significant interest in the
fund, and a number of bids ready for when the funding round opens next year.
e. Ministry of Social Development (MSD) purchasing intentions
MSD is forecast to purchase around 65,000 social housing places across New Zealand over the next
two to three years by 2017/18. This translates into about 3,000 housing units. The following tables
set out MSD’s current level of purchasing for each location.
Broadly, the level of current purchasing (ie the total demand for social housing) correlates with the
level of unmet need – locations where there is already a lot of social housing are also locations
where more is needed.
Ministry of Social Development (MSD) Purchasing intentions
Level of current
social housing
Increase purchasing
(high unmet need)
purchasing
Maintain purchasing –
Maintain purchasing and
no additional places
decreased purchasing in
(low unmet need)
(total demand)
long-term
(low unmet need and
decline in long-term)
Very high
Auckland
(over 10,000)
Manukau
High
Christchurch City
(>2,000 to 10,000)
Waitakere
Lower Hutt City
Hamilton City
Porirua City
Moderate (>500 to
2,000)
Wellington City
Palmerston North
Napier City
Gisborne District
Dunedin City
New Plymouth District
Papakura
Rotorua District
North Shore
Wanganui District
Whangarei District
Tauranga District
Hastings District
Far North District
Nelson City
Whakatane District
Low (>50 to 500)
Timaru District
Upper Hutt
Waipa District
Marlborough
District
Franklin
Invercargill
Horowhenua District
Kapiti Coast District
Matamata-Piako District
Thames-Coromandel
Taupo District
Waikato District
District
Ashburton District
Tasman District
Waimakariri District
Kaipara District
Western Bay of
Hauraki District
Manawatu District
South Taranaki District
Grey District
Opotiki District
Plenty District
Buller District
Rodney
Waitaki District
Wairoa District
Waitomo District
Ruapehu District
Rangitikei District
Central Hawke’s Bay District
Very low (<50)
Hurunui District
Otorohanga District
Kaikoura District
South Waikato District
Waimate District
Westland District
Queenstown-Lakes
Gore District
District
Selwyn District
Stratford District
Kawerau District
Clutha District
Central Otago District
Southland District
None or extremely
low <5
Mackenzie District
Masterton District
Carterton District
Tararua District
South Wairarapa
District
MSD Purchasing intentions by region
The following table sets out MSD’s purchasing intentions for those areas where it wants to increase
purchasing over the next two to three years.
Location
Purchasing intentions
Auckland – an estimated 1,810 additional places
Auckland
Manukau
North Shore
Waitakere
Papakura

an estimated 420 additional one-bedroom places

an estimated 150 additional two-bedroom places

an estimated 140 additional four-bedroom and larger places









an estimated 100 additional four -bedroom and larger places



Franklin
Rodney



Canterbury Region – an estimated 480 additional places



Waimakariri District

an estimated 20 additional one and two-bedroom places
Ashburton District

Timaru District

Christchurch City
Wellington Region – an estimated 150 additional places
Wellington City
Lower Hutt City
Porirua City






Waikato Region – an estimated 170 additional places
Hamilton City

an estimated 90 one-bedroom places


Waikato District

Bay of Plenty Region – an estimated 100 additional places
Tauranga District
Western Bay of Plenty





District
Whakatane District
Northland Region – an estimated 60 additional places
Whangarei District
Far North District




an estimated 10 additional four or more bedroom places
Otago Region – an estimated 30 additional places
Dunedin City

Hawke’s Bay Region – an estimated 30 additional places
Hastings District

Napier City

Marlborough Region – an estimated 10 additional places
Marlborough District

Nelson Region – an estimated 10 additional places
Nelson City

MSD Purchasing intentions in Auckland region
The Auckland Region has 2,537 applicants on the register in March 2015 (1,828 are on the housing
register and 709 are on the transfer register), accounting for over half of total register demand.
Auckland also has 29,921 occupied social houses.
The Auckland Region is expected to account for almost half (48 percent) of the national growth in
the number of households over the period 2006 – 2031 (Statistics New Zealand, 2010). Forecasts
indicate that households aged over 50 years will comprise the majority of growth in household
numbers (Darroch Ltd, 2010). The number of families in Auckland Region is also increasing at an
annual rate of 1.5 percent (Statistics New Zealand, 2010).
Housing affordability in Auckland is low for renters, and as at June 2009, close to half (49 percent) of
private renter households had housing costs that came to over 30 percent of their household
incomes. Most of the growth in the number of households experiencing financial housing stress is
expected to come from couples without children and single person households (Darroch Ltd, 2010).
Demand forecasts of social housing need in Auckland developed as part of the Auckland Region
Housing Market Assessment have projected significant growth in the need for social housing in the
period 2009 to 2026 (Darroch Ltd, 2010).
MSD Purchasing intentions in Christchurch region
Christchurch City has the third highest number of applicants on the register, with 539 applicants on
the register in March 2015 (454 are on the housing register and 85 are on the transfer register),
making up around 11 percent of the total register. Christchurch City also has 5,153 occupied social
houses (March 2014 data). Demand is greatest for one-bedroom places, and demand for fourbedroom and larger places also exceeds the number of tenant exits per year. There is some demand
for two-bedroom places.
MSD has taken into account that the demand situation in Christchurch City is affected by the impact
of the Canterbury earthquakes. Christchurch City’s repair and rebuild programme has been slower
than expected, and rebuilds are not expected to be completed until the end of 2017.
While demand for social housing does not appear to have increased since the earthquakes, there is
some evidence that homelessness levels may have increased (Mitchell, 2013). Work done as part of
the Greater Christchurch Housing Market Assessment indicates that while the number of renter
households in housing stress declined immediately after the earthquakes, affordability is expected
to worsen over the next five years and the number of households in housing need to increase
substantially (Mitchell, 2013).
Housing New Zealand Corporation (HNZC) has a programme underway to repair 5,000 properties by
the end of 2015, with repairs now completed on more than 3,000 earthquake-damaged properties.
HNZC also has a goal to build, or have under contract, up to 2,000 new homes, 700 of which will be
in Christchurch.
f. Industry comments
Dominic Foote – Housing Foundation
The Housing Foundation delivers shared-ownership access to housing through a close relationship
with The Tindall Foundation. They have a registration of interest programme to ascertain housing
demand levels. Their yearly demand between 2015 and 2020 will easily be 1,500 houses. If they
marketed their housing products it would be higher.
There are approximately 80,000 to 90,000 households in Auckland (based on 2009/10 numbers) who
are working and renting and are permanently locked out of the home ownership market. By 2025
the social housing demand would possibly be closer to 2,000 per annum (based on house price
predictions and household income predictions) even if house prices flatten and fall in Auckland,
household incomes are woefully shy of what is required.
The key issue for Housing Foundation’s uninterrupted supply of social housing is builders nearly
going or going in to receivership. They work with five to six contractors who employ apprentices and
have access to construction gangs when they need to build more housing. The key issue facing the
construction industry will be resourcing of skilled trades people. The Housing Foundation funds
school-based carpentry trade training academies which provide students with a pathway in to
construction.
Housing Foundation has under construction or contract over 100 houses for construction in 2015.
They have had experience with prefabrication with eHomes Global at Waimahia who built ten
houses in 2013/14 for The Salvation Army, under Housing Foundation project management, as well
as ten houses for Pukaki Trust in Mangere, along with the 19 houses for Housing Foundation at
Waimahia. Important lessons learnt were that prefabrication works when it is fully aligned with a
construction based company. The quality of finish was as good if not better than traditional but the
in-house design at eHomes was not preferable.
Looking to the future, Housing Foundation suggests an apartment pod 60m2 to 80m2 that can be
utilised in a new multi-unit residential block. Another suggestion is that prefabricated panel
manufacturers team up with design-build companies to complete the on-site building package.
Waimahia website rendering
Nigel Smith - Accessible Properties
Accessible Properties (AP) is part of IHC and manages a $260 million unencumbered property
portfolio. AP is a niche disability housing provider that started in 2012 as social housing provider.
Formerly they operated under the name IHC Properties since the 1950s.
AP has received SHU funding of $100 million to build 180 units over three years. They have built 115
to date, have 40 in construction and 50 in building consent stage, with resource consent already
granted. The regional emphasis is one-third Auckland, one-third Christchurch, and the other third
spread over Wellington, Tauranga and Hamilton.
AP started as landlord and has evolved into a housing developer, choosing to employ group home
builders in order to reduce the cost and the risk. They choose to work with GJ Gardner, Classic
Builders, Stonewood, Spanbild, and Miles Construction etc. with 80% of developments on AP land
and 20% on land developed by others.
The forecast over the next three years is for only $30 million in SHU funding available to the
community social housing sector, along with the IRRS rent subsidy that is administered by MSD.
AP housing units are a standard type of design with a hip or gable roof with ample soffit and brick
and tile cladding. They are built to Building Code standards and to universal design Lifemark 4 star,
with level access, lever door handles, and heating (wall heater in North and heat pump in South).
They prefer to build single detached housing, as multi-unit developments have compliance issues
around access and fire safety that are more costly to meet. AP have looked at prefabrication
methods in Christchurch with Concision.
There is no register of interest or forecast demand, as clients come via a government waiting list, as
well as IHC clients, reflecting a wider social housing need. There is no aggregate of demand in this
area and it is difficult to get statistics, but there are 20-30 associated organisations in the disability
sector. They note that the disability allowance is less than $200 a week so meeting housing rental is
challenging for these clients.
In terms of supply, it was realistic three years ago to deliver 100 housing units per annum, so up to
1,000 in ten years. Ongoing challenges are with neighbours “not in my backyard (NIMBY)” opinions
and push-back due to disabled clients. Industry challenges are with builders going broke or
complaints about poor workmanship. There are also concerns with builders doubling capacity but
not keeping up with process, so it is important to use liquidated damages clauses in contracts so that
there is a legal penalty for running overtime in delivering completed housing.
AP see opportunities with regional stock transfer, IRRS scheme, and HNZC procurement where
others are invited onto HNZC land to develop. All AP housing schemes are very site specific, so it is
more likely that a universal bathroom pod would be more useful than a simple house design would
be useful.
Warren Jack - Habitat for Humanity Auckland
Habitat for Humanity (HfH) is an international organisation that completes a staggering 115 homes
around the world every 24 hours. In NZ, their work encompasses assisted home ownership,
volunteer-driven housing repairs, social housing rental, disaster relief and international projects.
HfH uses volunteers to help build homes, with the housing owners putting in sweat equity as part of
the shared ownership structure. The houses are built using pre-nailed frames and trusses, with some
panel systems such as Metrapanel reconstituted timber panels. At Auckland’s Waimahia, they have
15 houses in construction using a mix of traditional and panelised technologies.
The Auckland HfH branch forecasts to build 10 houses in the next year, which is lower than their
completions at Waimahia as they are stretched with borrowing capacity at present. On average they
usually build 3-4 homes per year.
Nick Green, HfH General Manager Central North Island, predicts 3-4 homes to be built in the coming
year and cites most building activity in Auckland, Hamilton, Tauranga triangle (3-4 homes each) plus
rebuild in Christchurch. The other 6 affiliated regions are only building 1-2 homes in the next year.
The challenges cited include high land prices, rising construction costs, and a lack of financial subsidy
to reach shortfall between costs and client ability to finance.
Demand for HfH housing is not documented, but anecdotal evidence is that they receive interest
from about 300 people at public meetings about housing projects, with a following 50 applications
for 5 houses, so each home is ten times oversubscribed. In loose terms, they could build ten times as
many homes in order to meet this demand.
HfH cites challenges around the country with land pricing. In Auckland, this is the biggest constraint
with sections at $250,000 per site. In these cases, their housing delivery model only works with
subsidies.
Current housing is focused on families with dependent children; therefore 3-5 bedroom houses are
preferable. There is an awareness of a growing demand for 1-2 bedroom housing, indicating a new
area to serve in the future. Any prefabricated parts that would assist the process would need to
balance function and aesthetics – with modular bathrooms being one prebuilt part in that process
that would need functional capabilities such as addressing moisture build-up on ceilings.
Metrapanel system
James Woolley - VisionWest
VisionWest Community Trust evolved out of a church-based community in West Auckland in the
1980s to grow to a current capability of 450 volunteers serving 9,000 individuals and families. They
offer a range of services from community housing, kindergarten, healthcare, foodbank, budgeting
advice and counselling.
Their community housing initiatives are currently influenced by buying more off-the-shelf designand-build packages with developers who take all the risk. They have completed 20 homes in
Christchurch with Mike Greer Homes, 10 two-storey houses in Henderson with Stanley Group
(utilising precast walls), and 5 transportable homes with Keith Hay Homes. In 2015 there are
currently 30 homes completed, 15 in build process to August (in Henderson), and 20 more in the
design process (6 with Mike Greer Homes, MGH, in Rangiora).
VisionWest has grown rapidly since 2006, with total builds by mid-2016 estimated at 92 housing
units. The demand for their homes is through a waiting list with an average of 50 families dropping
in per month to be added to the list. They indicate that the MSD waiting list is the best indicator of
social housing demand, and stress that there is a ‘hidden demand’ of homeless people and this
statistic is invisible (for more info on homeless pipeline, see NZ Coalition to end Homelessness).
Challenges in the current build process are in assembling the right team, with the right people and
the right competency, hence the drive to use established housing providers MGH and Stanley Group.
Other challenges are in meeting timeframes where ‘time is money’, or rental income.
In looking at prefabricated construction, VisionWest has experience with panelised and
transportable housing delivery. Their comment is that these systems seem to work to deliver time
savings and quality increases, but that the buildings can be harder to adjust later on when needs
change. VisionWest prefer to work with architects for custom site-specific projects, and to deliver a
better designed housing solution that tenants are more inclined to take better care of.
They commented on future potential for an open-source building component such as a wet-area
incorporating bathroom, laundry and kitchen needs. Furthermore, VisionWest can see the potential
for an open-source component that can be computer numerically controlled (CNC) fabricated at a
number of locations around the country.
Vision West housing designed by Strachan Group Architects with Unitec Studio 19
4. Retirement Housing
a. Overview
In 2050 there could be over 800,000 households headed by older people in New Zealand. The
population of people aged 65 years or more is likely to be in the region of 1.35 million. That is, about
a quarter of the population will be older people. The majority of older people will live in their own
homes, but the numbers of households headed by an older person in the rental market will more
than double. Older people will be more diverse ethnically than today, and there will be more older
people entering their eighties and nineties. Older people will typically live alone or with an older
partner. More than a million older people will not be in paid labour and well over half a million can
be expected to have a disability that impairs their mobility. Around 325,000 older people will not
have a drivers licence and even more are likely to be dependent on public transport, walking or on
others. (CRESA, October 2009)
Retirement villages are typically marketed as a lifestyle choice in which retirees can have
independent living in a managed facility. New Zealand’s retirement villages range from small
facilities with a few units to large complexes. Some retirement villages are also attached to rest
homes and high dependency care.
There are around 179 village operators, some of whom operate more than one village. Around
30,000 people live in retirement villages. Overall, there are 330 registered retirement villages. Of
those, 266 registered villages are members of the Retirement Villages Association. The RVA is made
up of 54 percent corporate, 25 percent independent (for profit) and 21 percent not-for-profit
providers.
Around 5 percent of New Zealanders aged 65 years and over live in retirement villages, with the
Auckland region having the most villages. Kapiti and Tauranga have 11-14 percent of their older
population in retirement villages. The number of retirement village dwellings has grown rapidly. In
1998 there were around 10,000 retirement village dwellings. Those increased to 17,250 dwellings in
2010. The Retirement Villages Association has forecast that operators will need to build 800-1,200
dwellings annually to meet rising demand as New Zealanders age. (CRESA and Public Policy +
Research, July 2011)
Building Consents by Institutional Sector – total units by month (Statistics NZ)
Month
Retirement Village Units
Hospitals, nursing homes and
other health buildings
March 2015
179
9
February 2015
56
6
January 2015
126
11
December 2014
346
9
November 2014
117
8
October 2014
88
3
September 2014
162
9
August 2014
196
16
July 2014
271
10
June 2014
132
9
May 2014
127
2
April 2014
190
10
TOTAL (12 month)
1,992
102
http://www.stats.govt.nz/infoshare/ViewTable.aspx?pxID=002729ad-7f6f-4d07-b50a-6d7b4872332b
b. Jones Lang LaSalle report
The New Zealand Retirement Village Database (NZRVD) was published in May 2015 by Jones Lang
LaSalle. A summary of key relevant points follows.
Demographics / Summary
A substantial growth of 111,429 or 22.5 percent occurred within the 65+ age bracket between the
census years of 2006 and 2013, contrasted by the 5.3% experienced by the overall population during
the same time frame. The grow in the population aged 65+ years shows no signs of slowing, with an
estimated increase of circa 114% 2013 to 2043. This is reflected in the increase of the proportion of
this age group relative to the population as a whole, increasing from 14% in 2013 to 24% by 2043.
The growth within the 75+ year’s population subset is forecasted to grow at a greater rate than the
65+ age group reflecting the fact that New Zealand will not just have more elderly people moving
forward but also this demographic cohort is likely to live longer than previous generations. The 75+
age group has projected growth of 193% 2013 to 2043. The proportion of the population within this
age group is forecasted to increase from 6% in 2013 to 14% in 2043.
A simple demand model based on Statistics New Zealand’s February 2015 median population
projections, showed a penetration rate of 12% (people living in villages) and an average new village
size of 150 units, indicating a demand for 13.6 villages per annum between the years of 2013 and
2043.
Data from 2013 to 2014
Increasing demand for retirement village accommodation is attributed to three areas – aging
population, increased acceptance of retirement villages, and wider range of housing products being
available. Higher aged care facilities currently include 15,000 beds – 49% rest home, 42% hospital
and 9% dementia. Other key points are:
- 363 villages operating – increase 12% from 2013 (plus 51 retirement villages within the
development pipeline)
- 25,272 units in 2014 – increase of 1,124 units from 2013
- 1.30 resident occupancy rate – up from 1.13 in 2013
- 32,854 residents in 2014 – increase of 5,567 in 2013
- 70 units is average village size – up slightly from 69 in 2013 and 64 in 2012
- 5.1% penetration rate for 65+ - up 0.6%, and 12% for 75+ - up 1.5%
- Bay of Plenty has highest penetration rate with 17.5% over 75+
- West Coast of South Island has 0%, and South Island in general is lower than North
Future demand at current penetration rate of 12% is forecast to double – 45,600 units will be
needed over the 20 year timeframe 2018-2038. If the penetration rate grows to 14% then 53,200
units would be needed 2018-2038. The development pipeline data indicates 11,936 units (up from
10,646 in 2013) – representing an equivalent 80 villages of 150 units each – spread roughly equally
between existing villages (43%) and new villages (57%).
There are 75 NZCO registered villages in development – one-third in Auckland and one-quarter in
the Bay of Plenty. New village development is up 42% since end 2013 to 51 new villages at end 2014.
The visible development pipeline is regionally spread over Auckland 38%, Canterbury 16%, Bay of
Plenty 13% and Wellington 9%. It is interesting to note that the top three areas capture two-thirds of
all future forecast development.
To watch
The Jones Lang La Salle report outlines Industry trends to watch in land banking, premium unit
supply, increasing age of resident entry, and more listed operators. This seems to indicate future
issues with affordability and lower cost unit supply as these areas are not being addressed.
Overall there are few signs of general oversupply, many opportunities for growth and expansion,
and indicators of strong future demand. It is acknowledged that appropriate location is an important
factor in future success. The Big 5 providers maintain 49% market share: Ryman 17%, Metlifecare
16%, Summerset 8%, Bupa 5%, and Oceania 4%. The report expects to see the percentage of market
share owned by top five to increase through acquisitions and strong development pipeline.
In the future, the average village size is generally increasing with 147 unit average in development
pipeline, versus current average of 70 units per village. Also larger villages of multiple storeys and
units are being planned for larger urban centres, such as Auckland.
It is worth noting the impending challenge of aging villages. A third of retirement villages were first
developed prior to 1990 and will find it increasingly difficult to compete with new modern and
luxury developments. Older facilities may be useful in offering more cost effective options for
residents as they are forced to compete on price rather than facilities.
c. Industry comments
Retirement village industry members met with PrefabNZ and RVA in a February 2015 workshop (see
Appendix for details) with the following summary as a result of that feedback process.
The retirement village sector is an established provider of affordable housing to older New
Zealanders. There are a range of delivery methods from in-house to out-sourced and a huge amount
of ongoing construction activity. It is common to limit the number of housing unit options and to
offer controlled choices of finishes, in order to minimise costs. These conditions of standardisation
mean that prefabricated components, panels and volumes are appropriate.
Some providers are familiar with prefab technologies, such as HPA’s use of Metrapanel since 1999.
Overall, more information about specific prebuilt systems is needed to provide the relevant
economics to development teams. Upfront analysis is needed to clarify life-cycle cost benefits from
time-savings, controlled quality, reduced disruption at site, reduced remedial works, and increased
value to clients. (NB: see Value Case for Prefab document for an outline of these cost savings)
Key messages:
•
A number of the larger organisations are moving to a completely in-house design and
construction model, incl. MetLife, Ryman, Summerset (eg. 17% in-house savings)
•
Future considerations involve the need to manage the level of choice available in the market
for ‘Baby Boomers’ who will need more personalisation and potentially higher finish levels
•
BUPA have 80+ year entry target audience, which provides complexity in utilities
•
BUPA are committed to a level of standardisation for housing unit design specifications (4-5
unit options) with variations in cladding and roof lines
•
HPA have used Metrapanel since 1999, recently completing 120 units at Betham Village in
Gisborne and another 175 unit development in progress
•
Comment made that the RVA sector is ‘by default an affordable housing developer’
•
There is an ongoing need to cut costs – how do you take out 10-15% of the cost (NB: HPA
answer is to construct a ‘factory’ onsite)
•
Sweet spot for provision of hospital care level housing is $160k per room (NB: highly
regulated with example given of ‘body protected’ electrical requirements etc.)
Issues identified:
•
Multi-unit developments have the primary issue of differing site and ground conditions –
major investment in in-ground structure before any prefabricated components can be brought to
site – value of prefab limited to ‘above ground’ (NB: potential cost and time-savings from site-based
foundation works occurring concurrently with offsite manufacturing of building components)
•
Time is critical – with a number of housing unit (apartments, rooms etc.) orders being
cancelled (25%) due to the 6-12 month delay from pre-sales to moving in (nature of dealing with
elderly)
•
Perceptions of prefabrication identified as still being a barrier – with acknowledgement that
there have been significant changes in understanding following the Christchurch earthquakes
•
Prefabrication is a useful strategy when considering a well-staged development – a second
or third stage will need to be built less intrusively once there are residents on site
•
The requirement to get into tender process has led organisations to develop their own in-
house capability – there is scope for more collaborative procurement processes to reduce tender
costs
•
Difficulty in educating and managing definitions with banking sector’s valuers and quantity
surveyors – need for more visible benchmarking between traditional and prefabricated construction
(NB: the Institute of Quantity Surveyors is aware of this)
•
It is very difficult to make new developments in smaller regions (eg. Whanganui) stack up
due to stagnant housing values and costs of construction being similar to urban centres – regional
development are predominantly detached dwellings rather than apartments
Building Consent issues:
•
Question why Building Consent costs $3k for every house/unit when there is repetition of
unit types with only 3 or 4 different designs
•
Considered using Multiproof, but too difficult as there is a continual need to resubmit for
minor alterations to plans – need more flexibility built into Multiproof tool
•
Requirement for units/houses to have level entry with surface drain plumbed into main
drainage system can add $6k to cost of each house/unit
•
Comment on Hamilton City Council’s Partnership Programme – a precedent for establishing
a lower-cost and quicker processing model through pre-consenting a specific house model
Opportunities:
•
Opportunity to provide/develop a pattern-book of hospital care modules and retirement
village living units
•
Undertake staged work programme with ground works in summer months and develop
offsite modules during winter months for installation – having the shell finished and available for
sale with the fit-out being completed following pre-sale agreement
•
Potential for smaller regional retirement village organisations to form a collaborative model
to utilise benefits from offsite manufacture (eg. bathroom pods), whilst still maintaining individual
style – currently these organisations are not competing with each other as they work in different
markets/locations
•
Creating onsite offsite manufacture using a structure at site to create shelter to construct
components (eg. bathrooms, kitchens, trellis, staircases etc.), and which can be handed over to
village as an asset, such as a community hall, on completion of housing project
•
Develop a channel for regulatory ideas to feed into MBIE and Building Consent Authorities
(BCAs) to minimise increased compliance costs – see new initiative from Commerce Commission’s
Rules Reduction Taskforce www.govt.nz/rulesreduction
•
Develop working guidelines for clients, designers and installers for a range of panel
construction – size/quality, etc.
•
BUPA are currently looking to undertake a duplex development and whilst couldn’t commit
to a fully prefabrication methodology, would consider looking at bathroom pods
•
QU: What about fit-out changes, such as installing new personalised upgraded bathrooms /
kitchens into living units between occupiers – does a solution need to be designed to enable
controlled choices of finishes and bolt-in fixtures and fittings that save installation time?
5. Next Steps
a. Universal Bathroom Pod competition
PrefabNZ is focused on information, education and advocacy. Levers for Prefab (2015) identified the
three levers for prefab of scale, liability and show-and-tell. Several short-term action points formed
the Levers for Prefab Action Plan research programme between PrefabNZ, BRANZ, MBIE and
industry partners such as Spanbild. This report is the fourth stage to make visible the pipelines for
social and retirement housing. The fifth and final stage is the launch of a competition for an opensource prebuilt component suitable for multi-unit housing in the second half of 2015.
Design competitions are internationally recognised ways to encourage the uptake of new
technologies and ideas. After discussion with stakeholders and partners, the design competition will
be for an open-source universal bathroom pod which could be built by local manufacturers. At a
later stage, this could assist with regional skills development specifically targeted at Maori and
Pacific youth in Northland, South Auckland, East Cape and Porirua.
The competition will be aimed at teams of designers, students, manufacturers and developers.
Bathroom pods were chosen for their repeatability and usefulness in application to a wide range of
social, retirement and multi-unit housing of various types. In New Zealand, bathroom pods are made
by Stanley Modular (Matamata), PLB Construction (Huntly) and De Geest (Oamaru).
Hickory Sync
In Australia, innovative prefabricated bathrooms are made by companies such as Hickory Group,
Interpod, PreFab Bathrooms and Podfirst. They are made from high grade materials that perform
well on a variety of measures.
Hickory Group’s “Sync” prefab bathrooms, for example, utilise Kerlite floor covering, which is a high
grade pressed porcelain product from Italy. Although only 3mm thick, it is frost, scratch, stain and
graffiti resistant, Class 0 fire retardant and has a water absorption rate of less than 0.01 per cent.
Interpod bathroom pods are durable, safe and built for maximum infection control, making them
suitable for hospitals, nursing homes and other health and aged care facilities. They are built to the
specific hospital or DA guidelines required and can incorporate shower seats, grab rails and an ultralow floor profile for level entry, ensuring they adhere to disabled accessibility regulations. For easy
maintenance and cleaning, they can include wall-hung toilets and vanities, a single plane floor, and
mould resistant, easy-to-clean PVC and vinyl surfaces. The manufacturing process takes place under
strict supervision to ensure each bathroom pod conforms to the highest standards.
Hickory Sync
Reasons to use bathroom pods in multi-unit residential construction include:
1. Significantly reduce construction time – Remove bathrooms from project’s critical
path, and cut project’s overall build time by up to 30%
2. Reduce cost and increase profitability – Take project to market sooner, and
significantly reduce construction costs.
3. Maintain exceptional quality control – Slash construction defects by up to 80%, with
strict quality control.
4. Maximise efficiency with streamlined project management – All bathroom trades
coordinated in factory.
5. Use sustainable construction methods – Contribute to a better future through
following sustainability guidelines.
Hickory Sync, Australia
b. Competition partners and stakeholders
Key partners in the Levers for Prefab Action Plan research programme are BRANZ, with MBIE and
Spanbild.
Key industry organisation consulted are RVA + CHA.
Collaborating industry associations to spread the competition information include architects and
builders, such as NZIA, ADNZ, DINZ, RMBA, and CBANZ. It is noted that NZIA maintains design
competition guidelines which will be adhered to where possible.
Design competition partners also involved in discussions to date include the Property Council,
NZGBC, Lifemark, and Victoria University’s School of Architecture and Design.
1. Appendix
a. Parties involved
PrefabNZ ran a workshop with RVA on 25 February 2015 at Knightsbridge Village in Auckland.
Attendees (alphabetical):
Pamela Bell (PrefabNZ)
Marcus Beresford (Quicksmart Homes)
John Collyns (RVA)
Terry Coombes (HPA Group)
Angela Eglinton (PrefabNZ)
Cody Marshall (Quicksmart Homes)
Richard Stephenson (BUPA)
Interviews (chronological):
Warren Jack (Habitat for Humanity) by phone 24 Feb 2015
Nigel Smith (Accessible Properties) in Auckland, 25 Feb 2015
Dominic Foote (NZ Housing Foundation) by email 5 March 2015
Kay Saville-Smith (CRESA) in Wellington, 11 March 2015
James Woolley (Vision West) by phone, 12 March 2015
Ian Page (BRANZ) by email 26 May 2015
Dean Bryant (Summerset Group) in Wellington, 17 June 2015
Christine Stevens (Massey University) 12, 29 June 2015
John Collyns (RVA) 29 June 2015
Nick Green (Habitat for Humanity) 9 July 2015
Paul Hulse / David Bailey (Christchurch City Council) 9 July 2015
Vicki McLaren (Wellington City Council) 12 July 2015
b. Terminology
According to Ian Page of BRANZ, Statistics NZ categorises retirement apartments as per the National
Pipeline definition in that they attempt to split out the residential units from the common areas,
(dining, gym, etc.) for each building consent they get. Rest homes are different because there is
usually on-site health services provided of a substantial nature, so they go into the health category.
From March 2015 onward Statistics NZ is supplying separate data for houses, apartments,
retirement villages, and flats/ townhouses/ units, etc. This will help BRANZ to get a better handle
on the retirement sector which is expanding.
According to Statistics NZ, the updated 2014 building type classification better reflects the current
types of dwellings in New Zealand (eg. townhouses, apartments, and dwelling units within
retirement villages). Stand-alone houses are more clearly separated from all other types of
dwellings. The main changes for residential buildings are:
‘Houses’ now replace ‘non-apartment dwellings’, and only include stand-alone houses. Previously,
the non-apartment dwellings series included some consents for apartments, townhouses, and
retirement village units with 1–9 units.
‘Apartments’ is now split into three dwelling types: ‘apartments’, ‘retirement village units’, and
‘townhouses, flats, units, and other dwellings’.
Apartments, townhouses, and retirement village units are now no longer limited to consents with 10
or more units. Other non-residential building types are now reclassified to more meaningful
categories (eg. medical centre is now under ‘hospitals, nursing homes, and other health buildings’ –
previously it was under ‘offices and administration buildings’).
From March 2015, Statistics NZ updated building categories to reflect a separate category for
residential retirement village units, as a villa, townhouse, apartment, or other dwelling within a
retirement village, including those owned through a license to occupy (excludes care apartments).
Serviced rest-home rooms and hospital-level care rooms fall into the non-residential category for
hospitals, nursing homes, and other health buildings. In many cases, the dwelling or unit or room
size is similar, but it is the ownership structure which differs and which is captured by Statistics NZ
data.
http://www.stats.govt.nz/browse_for_stats/industry_sectors/Construction/building-consent-changes2015.aspx
c. References
Websites (alphabetical):
BRANZ www.branz.co.nz
CHA www.communityhousing.org.nz
CHRANZ www.chranz.co.nz
HNZC www.hnzc.co.nz
MBIE / Productivity Partnership www.building.govt.nz (formerly www.buildingvalue.co.nz)
MSD www.msd.govt.nz
PrefabNZ www.prefabnz.com
RVA www.retirementvillages.org.nz
Statistics NZ www.stats.govt.nz
SHU www.shu.govt.nz
Documents (alphabetical by author):
Pamela Bell, Canterbury Replacement Housing Supply Summary, Contact and Capability List,
PrefabNZ, 6 March 2011
Pamela Bell (PrefabNZ), PrefabNZ Value Case for Prefab, 2014
Pamela Bell (PrefabNZ), PrefabNZ Levers for Prefab, 2015
Community Housing Aotearoa (CHA), Details Matter: Taking Stock of the Community Housing Sector
in Aotearoa, 27 February 2015
Community Housing Aotearoa (CHA), Our Place: All New Zealanders well-housed, 2015
Shamubeel Eaqub (NZIER), Changing Demographics presentation to PrefabNZ Auckland event
“Innovative Approaches to Changing Demographics” July 2013
Housing New Zealand Corporation (HNZC), Statement of Intent 2014-2018, October 2014
Jones Lang LaSalle, New Zealand Retirement Village Database (NZRVD, May 2015
Matt Philp, An Idea Whose Time Has Come, Pure Advantage, www.pureadvantage.co.nz, accessed 14
April 2015
Kay Saville-Smith (CRESA), Bev James (Public Policy & Research), and Julie Warren (CRESA) with
Andrew Coleman (Motu), Older People’s Housing Futures in 2050: Three Scenarios for an Ageing
Society, Centre for Housing Research Aotearoa New Zealand (CHRANZ), July 2009
Kay Saville-Smith (CRESA) Rise of the rental refugee presentation to PrefabNZ Auckland event
“Innovative Approaches to Changing Demographics” July 2013
Kay Saville-Smith, Ruth Fraser and Nina Saville-Smith (CRESA), Community Housing Provision, CHA,
17 December 2014
Website Pages (chronological):
http://interpod.com/benefits/ accessed 27 June 2015
http://interpod.com/interpod-bathrooms/aged-care-hospitals/ accessed 27 June 2015
http://www.architectureanddesign.com.au/features/the-changing-palette-of-prefab-in-australia 24
June (accessed 27 June 2015)
http://www.hnzc.co.nz/housing-development/developments-overview/auckland accessed 28 June
2015
http://www.hnzc.co.nz/housing-development/developments-overview/wellington accessed 28 June
2015
http://www.hnzc.co.nz/housing-development/developments-overview/christchurch/new-andimproved-houses-for-aranui accessed 28 June 2015

Staring down the barrel of the RaSHpipe

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