This section briefly describes exemplary strategic housing market assessments in practice in Cambridgeshire, UK. The purpose being to indicate the direction that Auckland Council could aspire to in its practice and process of carrying out Housing Market Assessments, and also to highlight good practice data and monitoring requirements.
Cambridgeshire’s housing market assessment activities are being carried out broadly in line with the guidance contained in Strategic Housing Market Assessments: Practice Guidance prepared by the UK Department for Communities and Local Government (CLG) in August 2007 (UK, 2007).
Cambridgeshire’s experience in conducting and using Strategic Housing Market Assessments (SHMA) is helpful because it indicates the kinds of difficulties Auckland might encounter along the way with this process. Forewarned is forarmed. For example in the Identifying Housing Need section of its 2009 SHMA update, we find the following advice:
…the SHMA is designed to be built on and updated as time passes and information changes and improves. So this iteration is bound to change, adjust and improve as its foundation data does the same… the CLG Guidance is written as just that – guidance, rather than a detailed roadmap of how to do it. For example, some sources of data do not provide the detail or the cross-tabulations needed to work out the figures for a specific sub-region or district. For this reason we have supplemented secondary sources of information with our primary MRUK household survey where necessary, to try to provide a more realistic local picture of housing needed for our sub-region…
…we are still looking to evolve our approach, to investigate:
- more frequently updated sources of information
- ways to analyse data using mapping and GIS systems
- data systems to track changes in the housing market and in factors such as inflation, land prices and incomes (Cambridge, 2009, Chapter 27 Pg 2)
The outputs from Cambridgeshire’s SHMA include a section reporting on affordability by tenure and size, for each of the districts that make up the Cambridgeshire region. These outputs are based on data sources that have developed over time, and are presented in tabular form which provides for rapid cross comparison between different districts.
The full assessment report contains similar tabulations and analysis for each of the districts within the region, and these are then compared and cross tabulated to give a comprehensive regional picture of relative housing affordability, by tenure type.
Queenstown New Zealand
While it is interesting to understand and learn from what is happening in other countries in regard to measuring housing affordability and stress, there are also some interesting and effective SHMA initiatives being undertaken here in New Zealand – which use local data systems.
The Housing Our People in Our Environment (HOPE) strategy developed by Queenstown Lakes District Council (QLDC) contains actions that the Council intends to take to address the issue of housing affordability in Queenstown. The purpose of the strategy is: “to help address the growing problem of people and households in the District not being able to rent or buy houses due to the growing gap between incomes and rental and mortgage costs..” (Queenstown, 2007)
Interestingly, one purpose of this SHMA work is to require that new developments in Queenstown contribute a specific quota of affordable homes as part any development, following an assessment of the likely demand for itinerant and other workers that the new development will cause. Thus a nexus is established between the new employment demands established by the development, and the need for the developer to take specified responsibilities regarding the provision of affordable housing that will be required by a proportion of those new employees.
QLDC retained the services of a consultancy – Rationale – to assist in assessing the current and future demand for affordable housing within the Queenstown Lakes District. The aims of the assessment include:
- district wide demand for affordable housing including existing and future demand;
- demand defined on a rental and ownership basis;
- demand projections on a catchment basis
The data, and assumptions used to prepare these assessments are broadly as follows, by each of several sub-areas of Queenstown District:
- a maximum of 30% of household income to be spent on housing
- the proportion of ‘owned’ to ‘non-owned’ homes (as in 2006 census)
- number of occupied houses in each sub-area over 10 years (from LTCCP)
- portion of home-ownership in each income bracket (as in 2006 census)
- income distribution of new arrivals (as in 2006 census)
- house price inflation rate drawn from MAC Property – 2007 Update
- tabulation of 1st Quartile house price Vs mortgage available over time provided by AMI
My understanding of the Rationale report indicates the following process details were broadly followed in the assessment:
- The proportion of owned/non-owned homes in Queenstown is approximately 40% (compared with 33% for the rest of NZ), and was assumed to remain constant throughout the assessment period;
- The number of occupied houses in each sub-area (lifted from the LTCCP) was effectively treated as a proxy for the growth of each area within Queenstown – and assumed to accommodate new arrivals to the district;
- The split between renters and buyers was assumed to stay the same as the 2006 census shows now;
- The ability of new buyers to buy the 1st quartile home took into account earnings inflation and housing price inflation, and the proportion of new arrivals to the District with sufficient capital to put down the necessary deposit (from 2006 Census data for households by income bracket with no mortgage)
This broad approach was applied. However there were a host of minor adjustments and detailed modelling ‘fixes’ agreed between Rationale and QLDC in the process. These were generally to deal with gaps in the data. This is an extraordinary initiative with lots to commend it.
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