ANALYSIS OF DEMOGRAPHIC TRENDS AND HOUSING DEMAND IN UPPER HUTT CITY

Transcription

1 Report to: Upper Hutt City Council ANALYSIS OF DEMOGRAPHIC TRENDS AND HOUSING DEMAND IN UPPER HUTT CITY Prepared by Dr Adrian Slack Copyright BERL BERL ref #5191

2 Analysis of Demographic Trends and Housing Demand in Upper Hutt City 1 Summary Analysis of housing demand Key economic performance indicators for Upper Hutt City Recent trends in population growth and location in Upper Hutt City Projected population growth in Upper Hutt City, Average household size Dwelling and residential land projections, Dwelling supply in Upper Hutt City Assessment of housing supply and demand Appendices Sensitivity Analysis The Riverstone Terraces property development Implications of an aging population for the projections Implications of Rimutaka Prison for the projections Tables Table 1 Upper Hutt City 2010 Economic KPIs... 3 Table 2 Upper Hutt City Economic KPI Trends... 4 Table 3 Projected population growth, 2006 to 2031 (years ending 30 June)... 7 Table 4 Projected household type and household size (base: 30 June 2006 estimate)... 7 Table 5 Projected demand for additional dwellings and residential land... 9 Table 6 Projected population growth, 2006 to 2031 (medium growth series) Table 7 Projected demand for dwellings and residential land (medium growth series).. 12 Table 8 Projected population growth, 2006 to 2031 (March 2006 base) Table 9 Projected household type and household size Table 10 Projected demand for dwellings and residential land (March base) Figures Figure 1 Upper Hutt City Resident Population Growth Trend (index base in 2000 = 100) 4 Figure 2 Upper Hutt City Resident Population Location (Census 2006)... 5 Figure 3 Upper Hutt City Resident Population Projections (StatsNZ)... 6 Figure 4 Upper Hutt City Population Projections by age group (StatsNZ)... 8 Figure 5 Number of new dwellings consented in Upper Hutt City, Figure 6 Riverstone Terraces property value by use (Quotable Value New Zealand) ii Report to Upper Hutt City Council

3 1 Summary This report provides a brief analysis on projected housing demand in Upper Hutt City to 2031, and the number of additional dwellings that may be required. The report is intended to provide Upper Hutt City Council (UHCC) with an independent assessment of the City s housing needs, and how this relates to the proposed Maymorn development. As part of this assessment, BERL also reviewed earlier reports based on Statistics New Zealand and UHCC data (BECA 2008, 2009). As noted in the Council s Urban Growth Strategy (September 2007), Maymorn sits on relatively flat, mostly rural land, between Mangaroa and Te Marua in Upper Hutt. It is crossed by the Mangaroa stream, is serviced by the Wairarapa train line, and is close to State Highway 2. The planned development comprises 1,780 dwellings over 162 hectares. This report considers whether there is sufficient demand to justify progressing the Maymorn Structure Plan to a District Plan change. We estimate that from the 2006 base, Upper Hutt City s population will increase by 5,900 people by 2021 and by 8,700 people over the 25 year timeframe to This population increase will combine with a declining average household size due to demographic changes, such as an aging population, to create a substantial demand for new dwellings. We estimate that 3,900 new dwellings will be required to accommodate Upper Hutt City s population to 2021 and 5,945 dwellings by Based on current housing densities, these requirements would translate to around 335 and 515 hectares of residential land, respectively. June base, High growth series By 2021 By 2031 Additional population 5,900 8,700 Additional dwellings 3,900 5,945 Additional residential land (ha) Source: BERL, StatsNZ The Council s Urban Growth Strategy (September 2007) allows for the (forecast) construction of 2,100 dwellings between 2006 and 2026, excluding new greenfields developments such as is indicated in the structure plan for Maymorn (BECA, 2009). This forecast indicates the potential supply of housing over this period. Based on UHCC s strategy of adding around 105 dwellings per annum, this would suggest an increase in the supply of housing of 1,575 dwellings by 2021 and 2,625 by Given the projected additional housing required, there is a potential undersupply of 2,325 dwellings by 2021 and 3,320 by This may pose a risk to the City achieving its population and economic growth targets. As such, this analysis suggests that there is sufficient demand to justify a development like Maymorn as part of a solution to 1 Report to Upper Hutt City Council

4 accommodating the increased housing needs of Upper Hutt City. BERL does not, however, make any strategic or planning related judgments as to whether Maymorn is the optimal location or specification. These judgments are ultimately for the Council to make. We consider that the estimates contained in this report are realistic: while they are based on Statistics New Zealand s high growth scenario, they are not inconsistent with the City s growth patterns over the past decade. Looking forward, the economy of the City and country as a whole are likely to grow, and as such the demand for housing is likely to rise. We note that in addition to Upper Hutt City s own growth, it is well located to be a high functioning satellite settlement to Wellington. 1 As a satellite city, Upper Hutt City has an important role in contributing to the Region s growth and to benefit from this in terms of growing its own population. Upper Hutt City s character and lower land values (than Wellington City), combined with increased amenity from new housing developments and employment growth consistent with the Council s strategy will increase demand within Upper Hutt for new housing. Taking this wider view, the core population projections for Upper Hutt City may underestimate the positive impact of economic growth in Wellington City and the region. In particular, with its increasingly constrained supply of land, this is likely to spread population (and economic) growth to the surrounding areas. Thus, the rate of growth will be influenced by a range of factors both within and outside of UHCC s boundaries. This, along with a review of data specific to UHCC, leads us to the view that high growth scenario is appropriate. UHCC therefore needs to plan now for growth in future housing demand. 1 The NSW s metropolitan transport strategy City of Cities emphasises the crucial role of an integrated city system to permit optimal growth. A core part of this strategy is that wider Sydney acts as a networked entity, with strong satellite cities supporting the core. In this view, the cities are not competitors but critical components in a wider system that act to relax the growth constraint at the centre. 2 Report to Upper Hutt City Council

5 2 Analysis of housing demand We begin this analysis with a brief overview of the context for economic growth and development in Upper Hutt City (UHC). While there will be fluctuations in economic and population growth from year to year, it is important for long term planning and development to focus on longer term trends. We therefore consider both recent population growth and trends, which provide context to the projected population growth for UHC. 2.1 Key economic performance indicators for Upper Hutt City The recent economic downturn has made the year ended March 2010 a tough year for Upper Hutt City, with a decline in a number of the key economic performance indicators (KPIs). However, the City s population growth matched its major metropolitan neighbour, Wellington City, and New Zealand as a whole. Table 1 Upper Hutt City 2010 Economic KPIs Key Performance Indicators Upper Hutt City %pa for 2010 year Wellington City New Zealand Resident population growth Real Value Added (GDP) growth GDP per capita growth Employment growth Labour productivity growth Business units growth Business size growth Source: BERL Regional Database Looking at the City s longer term trend in Table 2 below, it is apparent that it is an attractive destination for people who wish to live in the Wellington Region. On average, Upper Hutt City s resident population has grown by 0.9 percent per annum over the past decade, employment by 1.2 percent per annum and income per person (real GDP per capita, in inflation-adjusted terms) has risen by 0.5 percent per annum. This means that there are more people, with more jobs and higher incomes available to spend. 3 Report to Upper Hutt City Council

6 Table 2 Upper Hutt City Economic KPI Trends Key Performance Indicators Upper Hutt City %pa for Wellington City New Zealand Resident population growth Real Value Added (GDP) growth GDP per capita growth Employment growth Productivity growth Business units growth Business size growth Source: BERL Regional Database 2.2 Recent trends in population growth and location in Upper Hutt City BERL estimates that Upper Hutt City s population reached almost 39,800 people by March 2010, having grown by 1.2 percent p.a. over the last decade (BERL Regional Database). 2 This rate matched those of Wellington City and New Zealand as a whole in As Figure 1 shows, Upper Hutt City has sustained a positive population growth trend for over a decade. Figure 1 Upper Hutt City Resident Population Growth Trend (index base in 2000 = 100) 2 The BERL Regional Database population estimate is based on the usually resident population count from the (March) Censuses, with interpolation between the Censuses. The estimates from the 2006 base are calculated using the annual growth rate implicit in Statistics New Zealand s sub-national population projections for each region. StatsNZ uses a June, rather than a March year, for its projections. For example, StatsNZ estimated that Upper Hutt City s population as at June 2011 was 41,500, while BERL s (provisional) estimate as at March 2011 was 40, Report to Upper Hutt City Council

7 Figure 2 indicates the various areas that make up the City and the populations living in these areas (based on 2006 Census data). Figure 2 Upper Hutt City Resident Population Location (Census 2006) 2.3 Projected population growth in Upper Hutt City, Figure 3 shows the population projections for Upper Hutt City between 2011 and 2031 released by Statistics New Zealand (StatsNZ) in December The projections have three growth scenarios: low, middle and high growth. 3 The medium growth scenario from 2006 to 2011 is broadly on track, with actual growth reaching 3.5 percent between 2006 and In the medium growth scenario, this period is followed by moderating growth before a projected contraction after The annual growth rate between 2011 and 2021 is 0.14 percent in the medium scenario, then between 2021 and 2031 Upper Hutt s population growth is essentially stagnant under this scenario. 3 The alternative growth series are produced using different combinations of fertility, mortality, and migration assumptions for each Territorial Local Authority. 5 Report to Upper Hutt City Council

8 In BERL s experience, the StatsNZ medium growth scenarios are generally too conservative. Over the last decade, Upper Hutt City has experienced population growth of 0.9 percent per annum on average, with the highest rate (1.2 percent per annum) being in Focussing on the next decade, to 2021, if the recent trend were to continue, then we believe that the high growth scenario is more realistic, if still slightly conservative. The annual average growth rate in the high growth scenario from 2006 to 2021 is 0.93 percent (and 0.80 percent per annum on average to 2031). Figure 3 Upper Hutt City Resident Population Projections (StatsNZ) The StatsNZ projections of population and family/households are based on its estimate in each area of New Zealand at 30 June ,5 As at this date, StatsNZ estimated Upper Hutt City had 39,700 people residing in 15,100 (occupied) dwellings. For consistency with the StatsNZ projections, we use a 30 June 2006 base and the StatsNZ high growth scenario to give the change in population to 2021 and These scenarios are reported in 5-year brackets, and are underpinned by a set of fertility, life expectancy and 4 The Census in March 2006 is an actual figure rather than an estimate, and recorded 38,415 usual residents living in 14,253 dwellings in Upper Hutt City. While the Census figures are lower than the June 2006 estimates, StatsNZ explains that population estimates and projections are not directly comparable with Census counts. Census counts give a snapshot of the population at that time but make no allowance for New Zealand residents temporarily overseas or for net census undercount. 5 Individual figures and totals for a region may differ across the various tabulations that StatsNZ generates due to its rounding procedure. The rounding of figures is determined by the total population size of the geographic area. For Upper Hutt City, individual figures may be rounded to the nearest 10 and totals by up to 100. The rounding rules that have been applied are described at the following link. 6 We examine the sensitivity of the projections to the base and population growth scenario in Appendix Report to Upper Hutt City Council

9 migration assumptions. 7 The projected population figures are converted to an estimate of required (occupied) dwellings using the projected number of residents per household. 8 Based on the high growth scenario from 30 June 2006, Table 3 shows that Upper Hutt City will need to accommodate an additional 5,900 people by 2021 and a total of 8,700 by Upper Hutt City Table 3 Projected population growth, 2006 to 2031 (years ending 30 June) Change 2006 to Population 39,700 42,500 44,100 45,600 47,100 48,400 5,900 8,700 Avg % p.a. 1.37% 0.74% 0.67% 0.65% 0.55% 0.93% 0.80% Source: StatsNZ Our projections of dwellings focus on occupied dwellings, and do not include additional dwellings that may form part of the overall required stock of housing. That is, the projections do not allow for the increase in the total stock of dwellings, which also includes dwellings that are under construction or unoccupied at any particular point of time. As such, the projections are a conservative estimate of the increase in the total housing stock required Average household size The StatsNZ sub-national household projections show a decline in average household size for Upper Hutt City between 2006 and Table 4 Projected household type and household size (base: 30 June 2006 estimate) Upper Hutt City Household type Other Family multiperson Oneperson Average household size % 2% 25% % 2% 27% % 2% 29% % 2% 31% % 2% 32% % 2% 34% 2.3 Source: Statistics New Zealand 7 The assumptions are specific to particular territorial authorities and are publically available from StatsNZ. 8 StatsNZ defines a dwelling as any building or structure, or part thereof, that is used (or intended to be used) for the purpose of human habitation. It can be of a permanent or temporary nature and includes structures such as houses, motels, hotels, prisons, motor homes, huts and tents. There can be more than one dwelling within a building, for example an apartment building where each separate apartment or unit is considered a dwelling. 9 For example, the March 2006 Census recorded that Upper Hutt City had a total housing stock of 15,102 dwellings, of which just under 95% were occupied. That is, the total stock was comprised of 14,211 occupied private and 42 non-private dwellings (94.4%), 705 unoccupied dwelling (4.7%) and 144 dwellings under construction (1.0%). 7 Report to Upper Hutt City Council

10 Table 4 shows a projected downward trend in average household size between 2006 and The average household size is projected to decrease by 7.7 percent from 2006 to 2021 and by 11.5 percent by We use this projected trend in household size in our projections. The decline in average household size reflects a number of influences, including increases in life expectancy and changes in living arrangements. Increased life expectancy is projected to result in an aging population in Upper Hutt City, as in most parts of New Zealand, as shown in Figure 4. Figure 4 Upper Hutt City Population Projections by age group (StatsNZ) The impact of an aging population on the demand for housing depends amongst other things on the size of the older population group and the proportion of this group living in private versus non-private dwellings, such as communal elder care facilities. An increase in the number of people living in non-independent elder care facilities would reduce the demand for private housing. However, StatsNZ projects that an increasing proportion of older people in Upper Hutt City will age in place and will thus remain in private dwellings (these may be in separate houses or independent, self-care units). The net effect of these influences is a projected increase in the number of households and private dwellings required for the older population group in Upper Hutt City out to 2021 and Table 4 uses an estimate of an area s resident population at 30 June 2006 (from Statistics New Zealand s subnational population projections). The Census in March 2006 recorded that the (actual) household size in Upper Hutt City was 2.7 people per dwelling. This differs (slightly) from the estimate of 2.6 as at 30 June 2006 as shown in the Table. As noted above, however, StatsNZ population and household projections are not directly comparable with Census counts. 8 Report to Upper Hutt City Council

11 2.5 Dwelling and residential land projections, We project the demand for dwellings based on the population projections and household formation trends outlined above. To provide an indication of the potential land area required for the additional dwellings required, we use QV data on the amount of residential land in Upper Hutt city in 2006 to estimate the number of dwellings per hectare. 11 We estimate that there were 11.6 dwellings per hectare (ha) of residential land on average in The following table shows the projected demand for additional dwellings and residential land. The number of additional dwellings allows for the housing needs of a growing population plus the additional dwellings required to accommodate fewer people per dwelling. Table 5 Projected demand for additional dwellings and residential land June base, High growth series By 2021 By 2031 Additional population 5,900 8,700 Additional dwellings 3,900 5,945 Additional residential land (ha) Source: BERL, StatsNZ Section 2.6 relates the projected demand for housing to the planned supply of dwellings Caveats to the projections of housing demand The projections above draw on historical information, projections from Statistics New Zealand and BERL s judgement of a likely growth scenario. The projections implicitly allow for demographic change, which is carried out through a parameter-based approach. The projections of dwellings and estimated residential land demand assume that the number of dwellings per hectare will remain constant. However, changes to urban form that encourage denser living, such as in-fill housing, could increase the number of dwellings per hectare. We have not allowed for such changes in this analysis, as the projections of dwellings are not based on this assumption. A second caveat is that we have not allowed for unoccupied dwellings in our projections. That is, the projections are based on the number of occupied dwellings. However, it is typical for the stock of dwellings to be slightly greater than the number of occupied dwellings to account for vacancy and turnover. The 2006 Census indicated that just under 5 percent of the housing stock in UHC was unoccupied dwellings, and around a further 1 percent was 11 While we do not rely on the estimate of dwellings per hectare in our projections of the number of dwellings required, we include this to give an indication of the potential land area required. 9 Report to Upper Hutt City Council

12 under construction. The impact of allowing for dwellings that are unoccupied and under construction is examined in a sensitivity analysis reported in appendix Dwelling supply in Upper Hutt City The sections above provide an indication of the demand for dwellings in Upper Hutt City to 2021 and Below we consider the potential supply of dwellings as per the Council s plans and consented work to date. Figure 5 shows the number of new dwellings in Upper Hutt City consented over the last decade (for years ending September, which provide the latest data). Figure 5 Number of new dwellings consented in Upper Hutt City, Between 2006 and 2010, Upper Hutt City consented 953 new residential buildings, or an average of 191 dwelling consents per annum. We note that not all of these consents will convert to completed structures, so the actual increase in supply will be lower than these figures. Industry experts contacted by BERL indicated that the conversion rate is typically between 70 and 90 percent. Based on these rates, between 133 and 172 dwellings would have been constructed on average per year. In the last three years ( ), residential building consents have fallen, reflecting the tightened circumstances following the Global Financial Crisis (GFC). The average number of dwellings consented over this period was 148 dwellings per annum, suggesting between 104 and 134 dwellings being constructed per year. Within the timeframe of this project, however, we have been unable to confirm what proportion of these consents manifested as completed dwellings, but the conversion rate could have been lower than the typical rate. 10 Report to Upper Hutt City Council

13 The Council s 2007 Urban Growth Strategy (UGS) indicates that supply, allowing for changes in urban form, would be in the range of 2,100 dwellings between 2006 and This excludes new greenfields developments such as Maymorn. 12 The UGS indicates the potential trend in the supply of housing in the future, with the addition of about 105 dwellings per annum. This level is at the lower end of the range of consented dwellings that are likely to have been converted to actual dwellings, noted above. The trend indicated in the UGS is broadly in line with the recent trend in the number of consents and likely completions of new dwellings. Based on the forecast trend, this would suggest an increase in the supply of housing of 1,575 dwellings by 2021 and 2,625 by Assessment of housing supply and demand We estimate Upper Hutt City will require 3,900 additional dwellings by 2021 and 5,945 by Given the potential supply of 1,575 dwellings by 2021 and 2,625 by 2031 this indicates that there will be an undersupply of housing (under the high growth scenario). We calculate that this gap will be around 2,325 dwellings by 2021 and 3,320 by Under the medium growth scenario, we estimate Upper Hutt City will require 2,440 additional dwellings by 2021 and 3,045 by Given the potential supply of dwellings, noted above, this indicates a housing supply gap of 865 dwellings by 2021 and 450 by BERL does not recommend the Council should plan based on the medium scenario. The projected housing supply gap, based on the projections and assumptions outlined above, suggests that there is sufficient demand to justify the development of Maymorn as part of the solution to accommodating the increased housing needs of Upper Hutt City. In the event this project does not proceed as planned, development may relocate elsewhere in the region, or UHCC may be able to identify other locations for this growth. BERL has not evaluated or taken a position of the strategic merit of this. The estimates of housing demand are based on Statistics New Zealand s high growth scenario. However, they are not inconsistent with the City s growth patterns over the past decade. Looking forward, the economy of the City and country as a whole are projected to continue to grow over the next 20 years, despite the recent downturn due to the GFC. As such, there will be a rising demand for labour, and therefore population growth will likely continue, and over the long term that supports the use of the high growth scenario rather than the medium growth scenario where the City s population growth is stagnant. 12 We understand that the Council may have recently reduced this figure following a reassessment of capacity in the Riverstone Terraces development. We have not quantified or incorporated this adjustment in this report. 11 Report to Upper Hutt City Council

14 3 Appendices 3.1 Sensitivity Analysis Alternative growth scenario (Medium series) The main projections use StatsNZ high growth series population projections (for Upper Hutt City). The scenario below employs the medium growth series. Upper Hutt City Table 6 Projected population growth, 2006 to 2031 (medium growth series) Change 2006 to Population 39,700 41,500 41,900 42,100 42,000 41,800 2,400 2,100 Avg % p.a. 0.89% 0.19% 0.10% -0.05% -0.10% 0.39% 0.21% Source: StatsNZ Table 7 Projected demand for dwellings and residential land (medium growth series) June base, Medium growth series By 2021 By 2031 Additional population 2,400 2,100 Additional dwellings 2,440 3,075 Additional residential land (ha) Source: BERL, StatsNZ Under the medium growth series, the population is projected to grow by 2,400. Combined with a declining trend in household size, this scenarios indicates an additional 2,440 dwellings would be required. This is just under two thirds (63 percent) of the additional number of dwellings projected in the main report The impact is more pronounced out to 2031, as the net population growth is less by 2031 (+2,100). However, the declining trend in the number of people per dwelling indicates additional dwellings would be required. Given the potential supply of dwellings, noted above, we calculate a housing supply gap of around 865 dwellings by 2021 and 450 by 2031 under the medium growth series Alternative population and people per dwelling base: March 2006 The 2006 Census records that Upper Hutt City had 38,415 usually resident people living in 14,253 dwellings, with an average household size of 2.7 people per dwelling. These figures differ (slightly) from the 30 June 2006 estimates used in the main projections. In this scenario, we examine the impact on the dwelling projections of using this alternative (March) base rather than June. 12 Report to Upper Hutt City Council

15 The table below shows the projected growth in Upper Hutt City s usually resident population based on the March 2006 Census count, and applying StatsNZ high growth scenario. Upper Hutt City Table 8 Projected population growth, 2006 to 2031 (March 2006 base) Change 2006 to Population 38,415 41,125 42,675 44,125 45,575 46,835 5,710 8,420 Avg % p.a. 1.37% 0.74% 0.67% 0.65% 0.55% 0.93% 0.80% Source: StatsNZ Using the March 2006 base, instead of the June base, and StatsNZ projected decrease in average household size between 2006 and 2031 gives the following table. Table 9 Projected household type and household size Upper Hutt City Average household size Source: BERL Table 10 Projected demand for dwellings and residential land (March base) March base, High growth series By 2021 By 2031 Additional population 5,710 8,420 Additional dwellings 3,450 5,355 Additional residential land (ha) Source: BERL, StatsNZ This scenario indicates that UHC would require around 12 percent fewer dwellings (3,450) by 2021 and just under 10 percent fewer dwellings (5,355) by 2031 compared to the main scenario, which is based on StatsNZ high growth series Projecting occupied dwellings versus the total housing stock This scenario scales up the projection of occupied dwellings to allow for the portion of the housing stock that tends to be unoccupied or under construction. The 2006 Census count for UHC indicated that these two categories were 5.5 percent of the total housing stock. June base, High growth series By 2021 By 2031 Additional population 5,900 8,700 Additional dwellings 4,115 6,270 Additional residential land (ha) Source: BERL, StatsNZ 13 Report to Upper Hutt City Council

16 This scenario requires 4,115 dwellings (i.e. 5.5 percent more) by 2021 and 6,270 by 2031 compared to the main scenario. This would indicate a housing supply gap, under the high growth scenario and per the UGS trend in housing supply, of around 2,540 dwellings by 2021 and 3,645 by The Riverstone Terraces property development To illustrate housing demand in relation to new developments in Upper Hutt City, we consider a recent major property development in Upper Hutt: Riverstone Terraces. The figure below charts the rise in capital values in this suburb by land use. The figure indicates that there has been high demand for this new development. Figure 6 Riverstone Terraces property value by use (Quotable Value New Zealand) The 2007 to 2008 spike will - to some degree - reflect the general property boom prior to the global financial crisis. But it is worth noting that these properties were in demand, and that residential property values in that area continued to rise in 2009 while the more general trend was flat or falling. For example, in Urban Upper Hutt City property values rose by an average of 1.2 percent in 2009, while in Riverstone Terraces the increase was 4.8 percent. 14 Report to Upper Hutt City Council

17 3.3 Implications of an aging population for the projections StatsNZ s sub-national population projections for Upper Hutt City show a decline in average household size between 2006 and 2031 (from 2.6 to 2.3 people per household). This decline reflects a number of influences, including increases in life expectancy and changes in living arrangements. As such, our assessment of housing demand implicitly allows for an aging population and consequent changes in living arrangements. The projection methodology and assumptions for StatsNZ s national and subnational family and household projections can be found in the technical notes. 13 Below, we summarise aspects of the methodology relevant to the implications of an aging population. This is based on the projection technical notes and information provided by the Population Statistics Unit of Statistics New Zealand. The impact of an aging population on the demand for housing depends amongst other things on the size of this population group and the proportion of this group living in private versus non-private dwellings. Elder care facilities are non-private dwellings, and residents of such dwellings are not counted as households. 14 The household projections are derived by applying living arrangement type rates (LATRs) to the population by age and sex. As such, an increase in the number of people living in elder care facilities would be a suppressing influence on the projected number of households (and thus the demand for private housing). However, the national projections assume: increases in life expectancy declines in morbidity rates increasing rates of the 'Partner in couple-without-children family' LATRs for the older ages, that is, more couples surviving to older ages increasing rates of the 'Person in one-person household' LATRs for older males, due to life expectancy improvements. These influences result in decreasing non-private dwelling LATRs at older ages. That is, although an aging population would increase the number of people in elder care facilities, a smaller proportion of older age people are projected to live in such facilities. Thus, the projections incorporate a rising proportion of older age people remaining in private dwellings. 13 Links to: National Family and Household Projections - Technical Notes and Subnational Family and Household Projections - Technical Notes. 14 A household consists of either one person usually living alone, or two or more people usually living together and sharing facilities (for example, eating facilities, cooking facilities, bathroom and toilet facilities, a living area), in a private dwelling. 15 Report to Upper Hutt City Council

18 3.4 Implications of Rimutaka Prison for the projections Rimutaka Prison is located south of Trentham Racecourse. The population of this institution is potentially counted as part of Upper Hutt City s population. Below we briefly assess the implications of this measurement issue for the projections. Statistics New Zealand records a prison's population within the area unit it is located in, and in the Census if an inmate writes this in as their usual residence. This raises two questions for the projections that we consider below. Does including prisoners in the base and projected population affect the additional number of private dwellings required? Does the prison population affect the average household size in Upper Hutt City? We begin by noting that neither of these issues is likely to significantly impact on the projected additional demand for dwellings. First, residents of Rimutaka Prison are not counted as households as they do not live in private dwellings. As such they do not affect the base number of households, the number of occupied private dwellings, or the average household size. Second, Statistics New Zealand s projections assume that a prison's population will remain constant. Therefore, the projected growth in Upper Hutt City s population would be for noninstitutionalised people who require dwellings. In practical terms, the prison population is also constrained by the facility s capacity. As at 13 December 2011, Rimutaka Prison had 748 prisoners, with an operating capacity of 932; the maximum operating capacity (permitted upper limit) is 1,002. The Department of Corrections advises that it has no plans to add capacity at this stage. Therefore, the projections of additional dwellings are unlikely to be significantly influenced by the appearance of the prison population in the base population count. 16 Report to Upper Hutt City Council

19 All work is done, and services rendered at the request of, and for the purposes of the client only. Neither BERL nor any of its employees accepts any responsibility on any grounds whatsoever, including negligence, to any other person. While every effort is made by BERL to ensure that the information, opinions and forecasts provided to the client are accurate and reliable, BERL shall not be liable for any adverse consequences of the client s decisions made in reliance of any report provided by BERL, nor shall BERL be held to have given or implied any warranty as to whether any report provided by BERL will assist in the performance of the client s functions. 17 Report to Upper Hutt City Council