Auckland, New Zealand, could be model for housing in Hawaii

The following commentary was originally published in the Honolulu Star-Advertiser on Aug. 23, 2023.

Gov. Josh Green recently issued an emergency proclamation that suspended numerous laws and regulations in an effort to drastically increase the state’s scarce supply of housing. But that doesn’t mean Hawaii legislators and county council members should stop looking for ways to increase the state’s housing supply themselves.

In particular, Hawaii lawmakers should consider the practice of “upzoning,” which has achieved excellent results in cities where it’s been implemented — especially Auckland, New Zealand, according to a series of recent studies by economists in New Zealand and the U.S.

Hawaii residents have heard a lot in recent years about the so-called Singapore, Tokyo and Vienna models of housing, but not so much about what we might want to call the Auckland model.

Until 2016, most residential land in Auckland — much like Honolulu currently — was restricted to single-family housing. But then the city’s elected officials implemented the Auckland Unitary Plan. The AUP “upzoned” three-quarters of the city in one fell swoop, removing restrictions on multifamily dwelling units and lot sizes en masse, thus tripling the possible amount of new dwellings.

Various U.S. cities have implemented upzoning, but only in targeted, small areas. The results have been limited and unimpressive.

In Auckland, the bold, broad-stroked move roughly tripled the amount of additional housing units that could be built after infill and redevelopment from 345,000 to nearly 1.1 million.

Since its implementation, the AUP has been the subject of at least five studies by economists from New Zealand and the United States, who examined the policy’s impact on local housing supply and housing prices.

Most recently, in June 2023, University of Auckland economist Ryan Greenaway-McGrevy published a study examining the AUP’s impact on local rents in Auckland. It found that rents for three-bedroom units fell by 26% to 33%, and rents for two-bedroom units dropped by 21% to 24%.

Greenaway-McGrevy also released a study in May 2023 using the latest data on Auckland’s housing construction. The study found that 27,000 housing permits were issued after the broad-based upzoning was implemented, equal to about 5% of the city’s current housing stock

This study was actually a follow-up to a previous paper that Greenaway-McGrevy co-authored with Yale University economist Peter Phillips, which observed that the AUP doubled the city’s construction rate.

In March 2023, Greenaway-McGrevy developed an economic model to evaluate the impact of the AUP on local housing prices. He documented that housing prices had decreased between 23% and 39% in Auckland as a result of the increase in housing supply caused by the AUP.

And back in 2021, Greenaway-McGrevy, Kade Sorensen of the University of Auckland and Gail Pacheco of the Auckland University of Technology found that housing prices dropped almost immediately after upzoning was introduced in neighborhoods that already had large numbers of apartments and multifamily units.”

In total, these five rigorous studies confirm that upzoning has had a substantial effect on the housing market in Auckland, resulting in many more homes being built and substantially lower home prices.

If Hawaii lawmakers really want to make a dent in Hawaii’s housing crisis, they should consider following in the footsteps of Auckland.

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