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A matching simulation to assess additional housing capacity in Auckland

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  • Mario A. Fernandez

Abstract

The current policy focus to improve housing affordability in New Zealand is reflected in the National Policy Statement on Urban Development Capacity (NPSUDC), which prescribes that local governments must ensure there is sufficient housing capacity to meet demand. Though some households may benefit because of better purchase conditions, additional capacity may not have a significant impact on improving affordability. In this paper, I explore how additional housing capacity is matched with demand by setting up a housing allocation model to simulate competition between potential buyers as they bid for any additional unit. I found that rate of take-up differs across scenarios, and households that manage to buy a house have median incomes that are more than double than the median household income in Auckland. Hence, overall affordability does not improve for medium or low-income households. The model and results provide insights about the outcomes of the NPSUDC and support the development of other housing programs.

Suggested Citation

  • Mario A. Fernandez, 2020. "A matching simulation to assess additional housing capacity in Auckland," New Zealand Economic Papers, Taylor & Francis Journals, vol. 54(1), pages 67-88, January.
    • Handle: RePEc:taf:nzecpp:v:54:y:2020:i:1:p:67-88
    DOI: 10.1080/00779954.2019.1585386
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    Cited by:

    1. Mario A. Fernandez & Shane L. Martin, 2020. "Staged implementation of inclusionary zoning as a mechanism to improve housing affordability in Auckland, New Zealand," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 13(4), pages 617-633, February.
    2. Mario Andres Fernandez & Shane L. Martin, 2021. "Affordable housing policies in a post-COVID aftermath," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 15(1), pages 126-144, April.

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