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New ways to encourage inner-city living in Dunedin are under the microscope as mayoral candidates spar over the need for new ''downtown'' apartment blocks.
Dunedin City Council city development manager Anna Johnson said yesterday the council had identified ''significant latent demand'' for inner-city apartments.
The council was investigating new ways to encourage the development of inner-city living options and would present a report to councillors.
Mayor's Taskforce for Housing chairman Cr Aaron Hawkins said that could include rates relief and other financial incentives.
The move came after the task force's final report, released last month, said Dunedin was on the verge of a housing crisis as prices skyrocketed to nearly six times the average household income.
Cr Jim O'Malley had also pointed to housing as a major focus when he announced on Monday he would stand for the mayoralty in local body elections in October.
He said the city needed to find ways to encourage developers to accelerate the pace of new housing, and larger mixed-use apartment buildings in the central city offered one solution.
Such buildings - particularly in the central city between George St and the one-way street network - would also reduce traffic congestion and parking pressures, he said.
The city's population had grown by 1900, or 1.5%, to 130,700 in the year to June 2018, on top of a similar jump the previous year.
If the pace of growth continued, the city would need at least 500 new homes each year, and consenting and construction took time, he said.
''My feeling, and the general feeling out there in the community, is that any existing housing stock that was available is starting to disappear quickly.
''I think it [the crisis] is more or less here,'' he said.
He envisaged new buildings that included retail or other commercial activity on lower levels and apartments above, to enhance activity around them.
The first buildings would not be ''massive'', but taller structures could follow in time, Cr O'Malley suggested.
Dr Johnson said district plan rules limited buildings along central George St to three storeys, while those between George St and the one-ways could be up to four storeys. Apartments were permitted ''as of right'', and a resource consent might not be required, but ground floors were usually required to have a different use, such as retail.
Discussions with developers and real estate agents had identified latent demand for inner-city apartments including by empty-nesters, students and professionals, she said.
However, the economics of developing them - which usually requiring the demolition or conversion of existing buildings - stood in the way, she said.
Cr Hawkins said new inner-city apartment buildings were ''definitely part of'' the housing solution for Dunedin, but work was already under way, including budgeting $130,000 to start a housing action plan.
He found it ''odd'' the idea of encouraging new apartment buildings was being raised now, when it had been during the council's latest annual plan round - the third such budget meeting for the current council.
''At any point, in any of those years, anyone could have moved to increase or decrease funding. I don't know why people choose not to take those opportunities, but to pretend like we don't have them is just wrong.''