Dwelling Capacity Model (DCM)
The DCM was first created by Council in the early 2000s. The tool measures the potential number of dwellings that could potentially be developed under existing zones. The DCM has been used as an important tool to inform Council’s planning over a number of years.
Over time, the DCM has become more sophisticated, and increasingly taken into account a number of factors to create a more ‘realistic’ ( as compared to theoretical capacity).
The DCM was subject to a comprehensive critical review in 2014 and 2015. The review considered that the existing DCM was significantly overstating realistic capacity.
Of particular note, the review has taken into account the recent findings of an expert panel comprising 15 experts in planning, development , economics and demography assembled by the independent panel considering Auckland’s Proposed Unitary Plan. The Panel tested the theoretical capacity enabled by the Proposed Unitary Plan and found that the realistic capacity was only around 26% of the theoretical capacity. Because the realistic capacity is much lower than the previously relied upon theoretical capacity, Auckland Council is facing a major issue in trying to backtrack and substantially increase densities.
The revision to Queenstown’s DCM now means that Council considers there is significantly less capacity in our urban areas, especially for infill housing in existing developed areas. This is one of the key reasons why we have looked to relax controls in the High Density Residential zone, and introduced a Medium Density Residential zone.
Importantly, the DCM also helps give us a picture of the composition of dwelling capacity ie. how the capacity is distributed amongst ownerships. Composition of dwelling capacity can be as important as the quantum of dwelling capacity. For example, to take a theoretical example, a town may have a large dwelling capacity of say 20,000 dwellings. But if a large proportion of that capacity, say 80-90%, is held in two ownerships, then ‘landbanking’ or drip feeding of sections and houses to the market may be incentivised, reducing housing supply competitiveness.
So, when reviewing the DCM in our District, we can see that around 82% of capacity is held in only 5 ownerships in the Wakatipu Basin.
The Proposed District Plan provisions will help to reduce this concentration, and allow for a much larger number of landowners to potentially develop their properties. This should help result in housing supply that is more responsive to demand, and also help disincentivise land banking by reducing scarcity.