Price effects of the special housing areas in Auckland

Housing prices in Auckland have persistently increased in the last decade. To fast-track development of housing, Special Housing Areas (SHAs) were created in September 2013 as a measure to improve affordability. It is not clear the extent of the success (or failure) of SHAs as they were disestablished by May 2017. This paper investigates the causal effects of the SHAs programme on housing prices and the implications on affordability. We used a dataset comprising more than 170 thousand sales transactions between 2011 and 2016 in Auckland. Our approach consists of a Difference-in-Difference approach where the treatment consists of tranches of land designated as SHAs. Our results indicate that the SHAs caused an average price increase of approximately 5% and did not contribute to increases in the likelihood of affordable transactions. These findings are robust across several specifications and question the effectiveness of the SHAs on improving affordability.