Expand Auckland MUL, Bayleys says

Super City Council should expand Auckland Metropolitan Urban Limits for more commercial, residential development, Bayleys says

29th Nov 10, 12:16pm by Alex Tarrant

<p> Auckland's Metropolitan Urban Limit is in red</p>

Real estate firm Bayleys, which has a large commercial client base, has called on the Auckland Super City Council to expand the city's Metropolitan Urban Limits (MUL) to open up more business and residential-zoned land for development.

MULs are currently subject to possible reform of the Resource Management Act (RMA) being pushed by Environment Minister Nick Smith. A Ministry for the Environment (MOE) report last month said MULs were blunt instruments in New Zealand compared to how they are used in other countries.

"They tend to be applied rigidly and do not consider the social and economic benefits and costs of their use. For example, the objective of the Auckland MUL is simply to protect rural and coastal environments," the MOE says in the paper.

"MULs are used effectively as a tool elsewhere in the world (eg, Melbourne and Portland) because they are one part of a broad suite of tools, including ongoing monitoring of land supply, and are kept under review. This is central to their effective use."

Last year Motu economist Arthur Grimes, who was part of the Urban Technical Advisory Group that looked at RMA reform, said in a submission to the 2025 Productivity Taskforce that extension of Auckland's Metropolitan Urban Limits was one way to remove roadblocks to the development of New Zealand's biggest city.

Grimes told the taskforce that Auckland's development was at risk from being stifled by high house prices, with current policy settings around the MUL making houses more expensive. Auckland was land-rich, Grimes said, adding that the MUL could be extended around existing infrastructure such as the Northern Motorway. This would have the double effect of lowering Auckland house prices and creating more space for productive 'urban' activities not allowed outside the boundaries in rural zones.

'Urban' activities not allowed included setting up factories or housing, or even schools in rural zones.

Please Sir, may I have some more?

Bayleys national commercial and industrial general manager Chris Bayley said bureaucratic hurdles to land development were further exacerbated by a reluctance from the Auckland Regional Council to extend the Metropolitan Urban Limit (MUL) to open up new greenfields areas for business and residential development.

“While the ARC had good intentions in terms of endeavouring to contain Auckland’s urban sprawl, its policy of encouraging more intensive brownfield development in centralised areas with good access to public transport did not work that well for business,” Bayley said in a media release.

“The reluctance to zone new land for business development means that there is now very little land left on which businesses can have premises developed which suit their particular requirements, and can cater for their future growth," he said.

“An imbalance between demand and supply pushed the price of land in popular industrial areas up to the point where it was no longer affordable for a number of businesses with basic warehousing or factory requirements. They have to head north to areas such as Silverdale - or even Ruakaka - or look south of Auckland," he said.

Here is the release from Bayleys:

Property developers in Auckland are eagerly waiting for the new Super City council to unveil its strategic plans for industrial building locations across the region.

With the new Super City taking a ‘bigger picture’ view of the city’s ever-expanding boundaries, developers are hoping that the new council will look to city-fringe sites for building opportunities…. particularly factories, shops, and warehousing.

Bayleys national commercial and industrial general manager Chris Bayley said one of the big issues for the property market under the previous two-tier council strategy -encompassing the various city councils, in conjunction with the Auckland Regional Council - was the shortage of business zoned land within existing boundaries.

Chris Bayley said the bureaucratic hurdles to land development were further exacerbated by a reluctance from the Auckland Regional Council to extend the Metropolitan Urban Limit (MUL) to open up new greenfields areas for business and residential development.

“While the ARC had good intentions in terms of endeavouring to contain Auckland’s urban sprawl, its policy of encouraging more intensive brownfield development in centralised areas with good access to public transport did not work that well for business,” Mr Bayley said.

“The reluctance to zone new land for business development means that there is now very little land left on which businesses can have premises developed which suit their particular requirements, and can cater for their future growth.

“An imbalance between demand and supply pushed the price of land in popular industrial areas up to the point where it was no longer affordable for a number of businesses with basic warehousing or factory requirements. They have to head north to areas such as Silverdale - or even Ruakaka - or look south of Auckland.

“The prolonged economic downturn has taken some of the pressure off in the short-term, and there has been little demand for business land over the past two years which has meant prices have fallen substantially. However, once the economic recovery gathers momentum and demand picks up, the shortage of land is likely to quickly become an issue again.

“In Bayleys’ view, unless the news super city addresses this and provides more growth areas for businesses - particularly those requiring industrial land - then the next industrial suburb of Auckland could well be Hamilton, which has good quality affordable land and much improved road access from Auckland.

“The Auckland region’s population growth is also forecast to continue to charge ahead and these additional people will need jobs. Businesses create jobs and they need an adequate, affordable supply of land from which to operate.”

Chris Bayley hoped that the Super City structure would also remove inconsistencies and differences of approaches that existed between the different territorial councils in areas such as development levies and reserve contributions as well as interpretations of the Resource Management Act.

“The comment we get time and time again from clients is that the development consent process has become complicated and convoluted – taking a long time to get anything approved. They will no doubt be hoping this will improve under the new Super City structure.”

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48 Comments

by MartynC | 29th Nov 10, 12:51pm 1290988313

Why don't we save time by just moving the limits to Whangarei & Hamilton now?

by Roger Witherspoon | 30th Nov 10, 10:27am 1291066040

Yeegads man, you cannot be serious. That might actually sove the problem. You must be new here, don't you realise that most kiwis like half baked titting about rather than actually getting the job done? There will be outrage.

by Andrewj | 29th Nov 10, 1:01pm 1290988919

Son, listen carefully, never never never never, take advice from a real estate agent.

by Keyser Söze | 29th Nov 10, 1:38pm 1290991135

even if on this occassion they are right?

by steven | 30th Nov 10, 7:14am 1291054474

Yet occupancy rates are not very high?

by Tim Archer | 29th Nov 10, 2:29pm 1290994153

This sounds like Bayleys have been lunching with Stevensons amongst others, who want to rezone 362ha of rural land near their Drury quarry into an industrial zone. They've been buying the land up for years before their plan was announced and the MUL is their main obstacle. Yet, as Bayleys release concedes, the current levels of demand for industrial land aren't that high (vacancy levels are currently very high in Takanini and the Wiri), and the scaremongering about business going to Hamilton is both obvious and entirely palatable. While it is lucrative to perpetuate the myth that rural land is unproductive, to do some scaremongering of my own I might add that these areas are responsible for growing much of Auckland's food. Isn't your weekly grocery bill high enough as it is?

by PhilBest | 29th Nov 10, 2:47pm 1290995224

AHH, some ethics and professionalism from the RE profession at last, after years of bubble-cheerleading.

I guess there's nothing like a crunch that affects your own work and income to force a cold hard look at reality.

Even architects are starting to wake up to the cause of their lack of work.

by steven | 30th Nov 10, 7:16am 1291054613

LOL..........

How shallow.....somone agrees with your Libertarian political outlook and suddenly they are "professional"....

regards

by Gavin Jones | 29th Nov 10, 3:37pm 1290998223

I agree that some zoning shifts would make sense. Especially in regards the many families that have lived on 10 acres or more for years (on the city fringe) yet still cannot slice off a portion to help their families get a piece of land.

Even if the zones were opened up, with the current development costs I can't see developers flocking in.

by Boatman | 29th Nov 10, 3:41pm 1290998510

YES JUST GET ON WITH IT .

by PhilBest | 29th Nov 10, 3:58pm 1290999488

Arthur Grimes' point is so right. High house prices filter through to un-competitive workforces.

Furthermore, a lot of new business start ups, especially high tech ones, are helped by young entrepreneurs being able to get a cheap first premises.

California would not have Silicon Valley if it's anti-development regulations of today, had applied from 30 years earlier.

Who knows what enterprises NZ is foregoing, by barriers to entry like stupidly high land prices?

by KW John | 29th Nov 10, 4:51pm 1291002660

hmmm... not quite who I expected to be trotting out this argument...

Phil/Hugh can you explain again the market mechanisms that will prevent the spruiksters from keeping the land price inflated?

Still think a few compulsory purchases , and some large subdivided parcels of 99 year leasehold land at very low ground rent ( the houses won't be there in 99 years!), may help to lubricate the market a bit. A little less vanilla, as Mr Rudd describes it.

by PhilBest | 30th Nov 10, 1:41pm 1291077704

The crucial thing is the price of fringe land. Farmland is so cheap that sections could be developed from it at $40,000 each.

This doesn't happen, because by the time any land gets developed, it has been owned by one or more spruikers for ten years or more already.

If restrictions were light enough, there would be little point anyone "holding land" to make money; the money would have to be in building freakin' homes. The people who built freakin' homes would effectively be depriving the "sitters on land" of their gains. But currently, it PAYS to be the "longest sitter on land". Even better, if the guys whose cash flow couldn't stand the interest costs past 10 years, go bust and surviving spruikers buy their land to add to their own holdings too.

Your suggestions show that you are thinking seriously about this issue. Yes, there probably are other ways to try and stop the spruikers. The Chinese are looking at some interesting options. They were talking about limiting the amount of zoned but undeveloped land that any one person could own; and stripping the right to develop if it is not done within 1 or 2 years. (And maybe forcing sale to another developer who WILL develop the land).

The absence of such suggestions so far in NZ, is a sign that we haven't got this debate along nearly far enough yet, to the stage where we even admit there is a problem, and move on to "ways of solving it".

I have often wondered about the lack of comment about the role of land supply in Japan's famous late 1980's property bubble. I have just found THIS paper: http://halshs.archives-ouvertes.fr/docs/00/39/43/62/PDF/Property_markets-manuscrit.pdf On Page 39, we have the following comment:

".......It is generally acknowledged that expensive land prices in Tokyo cannot be

explained by the scarcity of urban land4, or by economic fundamentals. Yet explanations

of this striking feature are divergent. Scientists dealing with Japanese land issues can be

roughly divided up into two groups. The first group comprises American and Japanese

economists using neo-classical approaches (Hatta, Miyao, Idee, Mera, and Elderstein

among others). They argue that the current tax system and urban planning rules strongly

hamper urban development and therefore sustain inflated land values. Consequently, they

advocate addressing the ‘land problem’ with a massive liberalization of town planning

and tax regulations......." Ref 4:

"Several authors have discussed the ‘land scarcity myth’ in Japan. See, among others, Calder (1986) and Noguchi (1992).

From there to page 83, is an in depth discussion of the arcane complexities of the Japanese land regulation system, and the various attempts of the government to rein in the expanding bubble, all of them fruitless.

Anyone who wants to "avoid making mistakes that have been made before", should read that section of that paper. The Japanese tried nearly everthing EXCEPT liberalizing town planning.....! It is surprising to me that the Japanese experience hasn't been on the table for analysis as the various nations confront their own bubbles now.

by Matt in Auck | 29th Nov 10, 8:31pm 1291015889

A nice piece from Bayleys, who've always had more of a blue chip / strategic arm to their operation compared to other RE outfits.

A nice place for the new Council to start would be to free up currently rural land between Albany and SIlverdale. I would suggest it could be pocket settlements (ie. three or four communities of say 15,000 each) , it doesn't have to be (nor should it be) blanket low density sprawl all the way. Great access off the northern motorway, and etxend the busway from Albany northwards

easy, done

by Keyser Söze | 29th Nov 10, 9:28pm 1291019331

well that and they have probably figured out their sales would be much, much better if house prices and commercial and industrial properties were lower and supported by yields....I would have thought RE is after all more of a volume game than a pricing game. But IMHO you are right - bayleys seem to be more of the premium resi, plus the big ticket rural and commercial or industrial properties - not your typical nasty and disengenious resi outfit.

by Matt in Auck | 29th Nov 10, 8:58pm 1291017516

"To explain these failures away, they con the public with the "smart growth" nonsense - which is in reality, no growth. "

Good point, Hugh,

mid rise apartments around the town centres of Remuera and Glen Innes??

ha ha ha ha h aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

by Rob of the North | 30th Nov 10, 11:35am 1291070114

Architects and Urban Planners...sounds like Hunters and Collectors song...an unholy alliance is going on here???

by steven | 30th Nov 10, 7:12am 1291054375

Yet occupancy rates are not very high?

regards

by PhilBest | 30th Nov 10, 1:24pm 1291076694

I take it you are referring to rental occupancy rates.

Yes, this is another feature of our recent land price bubbles that is still being studied. These recent bubbles have required re-analysis of many common assumptions about the laws of economics.

It IS possible to have "enough" supply or even apparent "over supply" for short periods; AND bubble PRICES. Have you heard of the old, old term, "corner the market"?

The fact that there are plenty of diamonds does not stop DeBeers from charging "above equilibrium" prices.

Do you remember the NZ government in the early 1980's, auctioning off motor vehicle import licenses? They auctioned off "enough" import licenses each year. So did this keep prices at a fair level, because there was "enough" import license in the system? Ha ha ha. Guess what the people who won the auction process, thought about that.

The same thing has happened with urban land today. When new developments come onto the market, the land has always been "owned" for ten to twenty years already by someone who was looking for a return on their oligopoly position. New developments happen to be the price "denominator" for whole regions. If you want a property near the CBD, you have to pay several times as much for the land as for a fringe section. If the fringe section is too expensive, relative to incomes, so will the conveniently located property in the established area - in fact, the number of people who can afford that property will be very low.

The "bubble mania" itself sets in because the "fringe land" is no longer a "ceiling" to the price of ALL urban property. The prices will just keep going higher and higher until the Ponzi scheme founders. Remember what happened to the motor vehicle importers in the early 1980's? Eventually, the guys who won the auction had had to bid so high for the import license, that the cars they wanted to sell were too expensive for most people to buy at all. Then the importers, instead of making a killing, went bust.

This is often what regulatory interference in free markets DOES. It makes a previously self-stabilising system, a high-risk, high-return one. The "high return" part comes first, and the "high risk" part becomes apparent later.

SOOOO, back to your "low occupancy rates". How many property speculators have become so blase about capital gains, that they didn't even bother with tenants? Sure, these properties SHOULD be all on the market now and the market should find its own sensible new price level. What is stopping it? Partly psychology - no-one wants to be the first to blink. The other thing that is stopping it, is that no-one can give the oligolopolists on the fringe the middle finger, and build a few houses with their mates on rural land 1km further out. (At a cost of half or less what the oligopolist is ripping them for).

I know that having that option on the table would be deeply depressing to the disciples of the First Church of the Gaia Mother against Urban Sprawl; BUT it is like a option whose very PRESENCE is far more valuable than the rate at which it gets USED. In metros where there are no urban limits, the fringe tapers off into the countryside gradually; there are actually very FEW homes "beyond the fringe", and the LOW price of ALL land means that more people can exercise their choices in favour of efficient locations.

I am sure I have explained all this to you before.

by bob | 30th Nov 10, 8:59am 1291060769

What complete imbiciles - probably all 60+ year olds who are steeped in modernism, still think it's the 1960's and cars are the solution to everything. So far urban sprawl has given us hideous traffic congestion, enourmous house prices and no option but owning a car for every person in the family who wants mobility, so these idiots want more of the same.

Auckland needs density before way before it needs more suburban sprawl. Yes Auckland is hugely low density. Forget the Demographica pro sprawl website. It's a load of bollocks. According to it Tokyo is only 2x the density of Auckland!! Sydney and NY are less dense than Auckland!! Anyone with access to Google maps, ability for thought or been there can see it's rubbish. Lumping Manhatten in with NJ is meaningless nonsense. to have any meaning it would need to measure density as a function of distance from center, not an arbitrary 'edge of built up area as suits our propoganda'

Auckland is one of the few places where low density suburbia starts on the edge of CBD 1 km from center of town. Lets ring the CBD with Res 5 / 1 per 500sqm, Res 1 1 per site and make everyone else live 40 mins drive away, or even better make them live in Albany and work in Manakau, cool.

by PhilBest | 30th Nov 10, 1:03pm 1291075405

Bob,

Before deciding who is talking nonsense, how about getting acquainted with a bit of urban economics and a bit of history?

Where in the world is there a metro area WITHOUT surrounding "sprawl"?

If you put regulatory brakes on the sprawl, you cause the whole urban economy to collapse, because of the distortions to land prices that occur.

It would be meaningless nonsense to try and create Manhattan WITHOUT surrounding suburbs. It would be like a Medieval castle for the nobility, WITHOUT the peasants in the surrounding miles of countryside.

Actually, Metros with dispersed employment and mixed land use, "democratise" land values. A monocentric metro merely increases inequality, because the same people who can't afford homes near the CBD, also have to do the most travelling, AND if urban limits are imposed, ALL land is driven up in price, adding to their burden. This is reality today.

Our planners, instead of seeing that it is possible to have living-jobs balance in Manukau, living-jobs balance in Albany, etc etc, are hell bent on forcing the longest possible commutes on everyone AND the most unaffordable housing and the least possible "options" of getting out of this bind. Either they are being driven by some kind of "rail worship" where rails are the END in themselves rather than efficiency; OR they are on the take from CBD property owners, who are the beneficiaries of the vast "wealth concentration scheme" that monocentric planning IS.

And yes, EMPLOYMENT growth beyond Auckland's current fringe would be the best thing out. These jobs would be far more efficiently accessed from nearby suburbs, than CBD jobs could be.

by bob | 1st Dec 10, 10:04am 1291151056

Every metro area was without urban sprawl until the invention of the automobile and consequent invention of mono-use zoning in the early 20th century as reaction to conditions in industrial revolution cities. Until then metro areas were mixed use naturally based on walking distance. Suburbia just meant the slum areas on the fringe where the poorest people lived 'cos they had to walk the farthest.

Sure great cities like NY, London, Rome, Sydney, Paris are NOW surrounded by horrible autocentric suburbia, but they still have the desirable higher density centers which is where you go when you visit them. Auckland doesn't have this - it's low density residential from the very edge of the CBD.

You don't get "dispersed employment and mixed land use" by getting rid of MUL's and continuing the existing mono-use zoning we already have. You get it by changing existing zoning rules. If you are not getting a good outcome from the planning rules you already have why do you think doing more of the same will suddenly change things?

We don't yet have any 'smart growth'. Density and use is still constrained by the District Plan to mono-zoned, low density free standing houses. If I want to live close to town I have to pay $600K for 600sqm of land with a $250K house on it. If this bit of land was allowed 2 dwellings my land cost would be $300K and cost of my dwelling would have dropped by 35%. The road and services are already there. Hugh Autovitch and the more-suburbia fanatics would rather that this 600sqm stayed untouched and the second dwelling was built miles away requiring new roads and services to be built and everyone living in it to be car dependant because it's 'cheaper'. What rubbish.

There should be no extensions of the MUL's until after we have sensible, rational planning in the city we already have. Otherwise we have no choice or variation in dwelling type/cost/location. All we get is mono-zoned freestanding single family homes ad-infinitum.

by scarfie | 1st Dec 10, 10:32am 1291152756

I have made reference to you in my post currently at the bottom of this thread Bob.

It looks like you have had some of the same schooling I have just had. Some of the nice English cities have been destroyed through accommodating the motor car, York was one that came up in lectures. They achieve this through what is called a sunset policy, that is restricting development in an area so it becomes derelict and the prices drop. That way the council can buy the land cheap to put their expressway through.

by Chairman Moa | 30th Nov 10, 9:31am 1291062674

Get real we have the RMA, Consents laws etc - this proposal will never take off.. consider this old story:

A woman from Auckland , who was a tree hugger, Greens supporter, and an anti-hunter, purchased a piece of bush land near Coromandel. There was a large Kauri tree on one of the highest points on the block. She wanted a good view of the natural splendor of her land so she started to climb the big tree. As she neared the top she encountered a mynah bird that attacked her. In her haste to escape, the woman slid down the tree to the ground and got many splinters in her crotch.

In considerable pain, she hurried to Thames Hospital to see a doctor. She told him she was an environmentalist, a Greenie, and an anti-hunter and how she came to get all the splinters. The doctor listened to her story with great patience and then told her to go wait in the examining room and he would see if he could help her..

She sat and waited three hours before the doctor reappeared. The angry woman demanded, "What took you so long?"

He smiled and then told her, "Well, I had to get permits from the Department of Conservation, Resource Management Act , County Council, Regional Authority and Iwi before I could remove old-growth timber from a recreational area. I'm sorry , but they all turned me down."

by Tim | 30th Nov 10, 9:33am 1291062836

Yes this is just a RE company touting for business. The last thing Auckland wants is more uncontrolled sprawl. This is precisely the cause of the traffic problems. Higher density living with better public transport is the only way to go for a city with over a million inhabitants.

Hugh, it is ridiculous to compare urbanisation % in countries of wildly differing population densities. Have you ever driven across England.? For the most part it is a sprawling urban mass interspersed with a few green fields here and there. Far better to be in NZ where you have sprawling countryside interspersed with a few cities/towns.

Eating up the countryside so everyone has a quarter acre which they are then condemned to mow each weekend is ludicrous.

by PhilBest | 30th Nov 10, 12:46pm 1291074411

Tim, there is ignorance, and then there is people who don't even think at all.

If everybody in NZ had a quarter acre, I suppose we might be able to cover 2% of the land instead of less than 1%.

You need to look at Google Earth instead of making your assumptions on the basis of driving along roads that go through the middle of all the population areas. Hugh's stats on urbanisation are pretty reliable.

Several mistakes are being made by people who are planning policy makers, because they have no clue about urban economics. One assumption is that you can make a city more dense "by decree", when LAND actually has a "market", and "prices" work out as the result of "market forces". Drive all the prices up, and nobody has any choice at all. What happens, is younger generations living in SMALLER homes, FURTHER AWAY from work, and with HIGHER transport costs; because the SMALLER home FURTHER AWAY from work, was all they could afford.

Another collossal mistake being made, is to assume that everybody shalt work in the CBD and catch public transport to get there. It is actually perfectly natural in "free market" cities, to have multiple "nodes" of activity, mixed uses of land, low land prices, and EVERYBODY has good choices of location close to jobs and amenities, at affordable prices. Planning a monstrous monocentric metro, with limits on the fringes and high land prices, is a guaranteed increaser of inequality in society, as I described above, the lowest income earners are also forced into the longest possible travelling.

But I suspect there is a certain kind of mind, that is incapable of grasping any of this. The same sort of people ran the USSR from about 1919 onwards. Winston Churchill, way back then, called it "the world's most expensive lesson in basic economics". Impose your low-brow assumptions about everything, and wonder why nothing works.

by bob | 30th Nov 10, 1:38pm 1291077526

Bollocks. There has of yet been NO smart growth in Auckland City. There has been talk of it but nothing done apart from the yet to be used, useless (notified) Res 8 zone. There has been constraint on density and MUL's hence prices are driven up.

One of these constraints needs to be removed for prices to get reasonable and tragically stupid growth will probably win out over smart growth.

Everyone doesn't live in your suburbia because of preference. They live there 'cos there's no choice. Your failed idea is firmly thrust down our throats All our zoning is for suburbia. Sure zone some suburbia for old people who need fences to hide behind, but some of us want a choice which isn't either suburbia or apartment and which doesn't involve every member of the family being reliant on cars and spending hours a day in traffic jams.

I only want to use my car for holidays, I want to keep living close to town, but without my useless 5m front yard and 1m side yards. I want the same size house I got but on less than half the site area, say 200sqm over 2.5 floors, zero lot boundries and and 90sqm of garden - all of which is 'non-complying'. I want frequent reliable public transport and traffic on my street to be slow and safe. I want no traffic congestion when I do use my car. I want footpaths that are safe and aren't lined with 2m high fences concealing driveways. However I don't get my preference because everything is zoned for your car reliant suburbia.

Your last paragraphs are nonsense. Increasing density would reduce house prices faster than increasing sprawl. Sprawl requires servicing and roading whole new neighbourhoods - all of which adds to section costs and then maintenance of which becomes another expense for councils to pass on to ratepayers. Increasing density does not. Sprawl increases traffic congestion, kills public transport, alienates the young and old who can't drive. It isn't working now, why on earth would you propose more of it? Your failed old fashioned idea has been thrust down our throats long enough. Give us something else.

by Rob of the North | 30th Nov 10, 11:43am 1291070595

I see no evidence that Bob and Tim support the bank's excessive mortgages as Hug contends above?

explain how you come to that conclusion, Mr Urban Spaceman?

by Tim | 30th Nov 10, 4:46pm 1291088793

Well Hugh you have such a way with words. The point is 2% of the land will not be evenly spread over NZ, It will not even be spread on the accessible flat land. It will be on the urban fringes of Auckland, Wellington etc.. Dont you understand that people who want to work in Auckland want to live in Auckland. They dont choose to live in the fringes because they enjoy the hour in the traffic every morning, they do it because the land is cheaper. Why is the land cheaper? Because it is 2nd choice - people actually want to live in the centre and those who can afford it will pay the premium to be there.

But it is not worth raising any point with you as you are so offensive it is not even worth engaging in discussion with you. Have you ever considered that your opinions are ignored for a good reason?

by Tim | 30th Nov 10, 4:50pm 1291089006

If you had a smattering of economic nouse you would realise that availability of land alone cannot possibly account for the excessive mortgage debt. That is so naive as to be childish.

by bob | 30th Nov 10, 4:50pm 1291089014

Why do you think increasing the number of sections on the outskirts of the city would make section prices cheaper, but increasing the number of sections inside the city would make sections more expensive? bizarre.

Surely a new section that taps into services and roads that already exist is cheaper than a new section that requires the construction of new services and roads. That's pretty basic.

What have the mortgage loads of Sydney vs Fort Worth got to do with it? Twizel has an even lower mortgage load - so what? Let's make Auckland's zoning the same as Twizel's 'cos then houses will be the same price as they are in Twizel?

The big problem is the elderly folks who own sections in town don't want anything to change - especially zoning in their neighbourhood which might take their property values down.

by Tim | 30th Nov 10, 9:21pm 1291105266

Well actually Hugh, there's nothing you say there that I disagree with in that reply, except the "struggling with" bit. So I'm not sure why you (and actually it was Phil Best who was the dick who also mis-translated my post to read something else). It does not mean however that I share your vision of the future. My error was supposing that I was allowed to have a point of view that was neither black nor white. Just because I don't like cats does not de facto mean I like dogs, or v v. So if I differ from your viewpoint then I am de facto a banker? I thoroughly dislike blogs and discussion boards because they are so bereft of colour, and seem to bring out the crazies. So with that I recognise the futility of correspondence herein.

by bob | 1st Dec 10, 12:28pm 1291159721

"It doesnt matter if the development occurs on the fringe or within the urban area." Great - that's a step in the right direction.

Next step:

Yes it does actually matter if development occurs in fringe or within urban areas. You can have your endless suburban autocentric sprawl AFTER there's more density in the existing city because that way I get the choice of living in a higher density area close to town rather than being forced into a freestanding suburban house with 2 cars - the only choice I currently have.

If I could add another dwelling to my inner suburb section then my land cost would halve. My house would be 35% cheaper. No new roads or services would need to be built. My rates would not need to increase to pay for maintenance of your new fringe subdivision roads and services. With different yard, height, HIRTB rules I could have a better house than I have now on a smaller site.

Where on earth do you get the idea that fringe values are 'artificially cranked up because local authorities have losr\t [sic] control of their costs'?

A small CBD apartment can attract $50k of contributions/unit, whereas a fringe subdivision is more like $7K per unit. As contributions relate to land values (http://www.aucklandcity.govt.nz/council/documents/district/text4b.asp) they actually get cheaper at the fringes. Sure land values per unit drop as you cross the MUL, they also drop per unit if density increases, but without all the negative costs associated with suburban sprawl. The only advantage of sprawl is there's less Nimby's so it's easier.

by Rob of the North | 30th Nov 10, 5:09pm 1291090144

You really are the "one trick pony " i described you as yesterday, Mr Urban Spaceman, except you're now a more rude and "blinkered one trick pony "that appears to be getting more delusional by the day.

Essentially, your main objective on here seems to be to promote your own tedious website in a vain endeavour to promote more of your ego-centric ramblings and self-congratulatory conclusions.

No, I'm not a bank employee although my bank(s) do pay me to hold part of my rather large personal finance structure...which is a nice way of saying i'm alright jack and " stop being such a dilly Dally and go off and get a life"...

by powerdownkiwi | 30th Nov 10, 6:36pm 1291095385

I second that. A good debate is good, but this is mantra.

You can sense fear in back of these folk - I mentioned it in a comment to Roger Kerr - I think they realise that this time, it's different.

Despite the 'Malthusian' comments, and the ridiculous "the stone age didn't end for want of stones" (a million people vs 7 billion, no consumption-per-capita vs ?) shyte, you can sense that they know all is not well.

But if I hear Texas again........

Did you ever see the Marx Brothers punning on dollars/taxes vs Dallas Texas?

by Rob of the North | 30th Nov 10, 7:54pm 1291100066

Can't say I did, Powder, but i was probably out having a Duck soup at the time...i s'pose i'm a bit ruthless in my response to some of these poseurs but i ,like you, just get tired of their causeist rants when, as you so correctly ascertain, they have no more clue as to what really is going to happen than the next bloke.

i have no doubt that Pavlevitch, the Urban Spaceman, can do line drawings and algebraic conclusions till the cows come home but in the end , is he making any difference?....the only wheels we can now rely on are the ones that broke the butterfly....and so it is..just like they said it would be..rock on Powderfinger....and vote to raise the Texas next year..why doncha?

p.s did you realise that the reason why there are so many dead pukekos on the roads is because they eat gravel to aid their digestion.....just thought you should know that !!

paranoia...it's a Japanese word for " goodbye" ?

by Rob of the North | 30th Nov 10, 8:27pm 1291102029

You're the only one that does , Hugh, my esteemed but boring academic...but that's the whole point..none of us are here to gain personal kudos or bang on about our websites...it's an exercise in collective consciousness...you know....the sum part of the whole!

it's only the info we're into;not names and CV's...if i told you who i was, i'd never get any work done!

regards

Miles

by Rob of the North | 30th Nov 10, 9:40pm 1291106434

You're incorrigible!

by KW John | 30th Nov 10, 12:10pm 1291072257

Business and Economic commentator Rod Oram discusses the Auckland Council's business case for the CBD rail loop and Transport Minister Steven Joyce's comments on the issue.

http://static.radionz.net.nz/assets/audio_item/0006/2438160/ntn-2010113…

by Kunst | 30th Nov 10, 2:58pm 1291082314

While I like Rod Oram’s interview and he’s points he’s rising - it doesn’t go far enough. How are more skilful jobs for the wider Auckland community generated ? Building roads and rail tracks construction isn’t good enough. Cost benefit ratio should also considered for the manufacturing of the entire rail system including rolling stock and compared with importing. Therefore most NZinfrastructure needs to be done right here in NZ by the NZworkforce. This would not only benefit our economy performance, but also the social structure of our country.

Shrink the government - some of the ministers need to be sacked ! Joyce/ Brownlee first - they aren't performing good enough - with short term policies adding to our "Patchwork Economy" only.

by powerdownkiwi | 30th Nov 10, 6:43pm 1291095807

Oram still doesn't go to understanding that economic growth is finito.

He doesn't, in my opinion, because (I stand to be corrected) he has religious beliefs.

He does get Peak Oil, resource scarcity, all that, but I think his humanity doesn't let him go where logic would take him.

Joyce, on the other hand, was chanting mantra in the SST. Given that the Clint Smith report is on the Parliamentary table, there is no excuse for such codswallop.

He has to prove the existence of a viable, proven alternative, at current rates of consumption, to even justify supporting BAU with increasing debt.

Let alone promoting growth.

It parallels religion - requires you only to believe, not question.

by Rob of the North | 30th Nov 10, 7:59pm 1291100341

http://www.newgeography.com/content/001680-how-texas-avoided-great-recession

by Gibber | 1st Dec 10, 10:37am 1291153051

http://baselinescenario.com/2009/08/18/vermont-texas-and-subprime-loans/

by scarfie | 1st Dec 10, 8:26am 1291145213

Hugh and others that believe in urban sprawl I hope you get to read this.

I have posted before on the need for higher density housing, but this is not from an economic point of view. I got slammed for suggesting it once before but the trouble is that these comments are based on the likes of research I have seen on your website. That being comparison to the way high density is being done, not how it should be done.

Coming hot off an urban design paper the research has been done to show what sort of housing is beneficial for people to live in, and 30-60 people per acre is the target.

However that catch is that this doesn't necessarily disagree with your recommendation of unrestricted urban fringe development Hugh.

If you want to see a housing development that is cheap, yet of such quality and desirability that they rarely sell then look at Jorn Utzon's (Sydney Harbour Bridge) Kingo houses.

The Kingo houses are only the housing side though and need to be combined with sensible planning. That is mixed use so that people can live, work and play without commuting large distances.

Bob actually comes pretty close to what is required when he outlines what he wants in a house. The challenge for you as a developer Hugh is to listen to that and make it work economically.

It can be done and I did something pretty close to what Bob wants for an Architecture project this year. And that is where you need a competent Architect, which is also a problem because the young graduates are being taught in a new curriculum but go on to work with established firms of Architects who were trained under the modernist system.

Perhaps that is a little unfair as there is also the framework we have to work withing that is faulty, the restrictions to the way we use our land. Build right to the boundary!

Don't forget I also did thermal performance and sustainable design for another paper. These are areas that are also sadly lacking.

I predict that a lot of buildings in our newer industrial and commercial ares that are now empty will eventually be pulled down, because they will be too expensive to run. That is what you get when developers control the building sector, cheap, nasty, inefficient and unsustainable buildings. This isn't necessarily a criticism, just the work people will work within a given framework. The way I read it Architects gave up the right to be in control but not being good enough.

by KW John | 1st Dec 10, 1:03pm 1291161818

Not quite sure why Mr Pavletich attracts such venomous replies.

Anyhow...

Am I still not getting it?

Artificially restricted urban boundaries inflate the price of the house/land inside the boundaries (seems likely to me).

But only because the boundaries do not expand quickly enough.

At some point subdivision of the land inside those boundaries is financially worthwhile, and incentivised.

Sell your garage space to someone who sticks a unit or a 'relocatable' on it (p.s. these indicate the true worth of some of our housing stock)

Result - unplanned mess. Houses that should have been condemned. Retrofitting rarely occurring - rent the hole to someone with less money than you, wait for the capital gain.

Nothing worthwhile e.g Scarfie's 'Kingo houses', can be developed in /near the inner city. Options like this have been prevented because the inner city land exists on multiple titles.

Took me a while, but what I thought was 'reserve' land for future development (e.g 'lifestyle' sections), will also suffer from multiple titles eventually as they are spasmodically subdivided and sold on.

Urban sprawl eventually results because of the unresponsive urban boundaries?

Next come commuter townships on major commuter routes - fine if there is a train line.

BUT we mustn't build these too well/ cheaply as people may desert the centre, wiping out the increase in house price that we were expecting (after all, they are after a suburban home, but a better built one(hopefully) at a better price.

The more I think about it, the more I'm persuaded that large block land titles should be on a common lease. Acting as a buffer that can be increased in density once the lease expires. I'd probably prefer the state to own the lease - but this would annoy! This may also serve to deflate house prices, as the land price would be considerably cheaper!

Maybe after the land had eventually been used in dense parcels, it could be made freehold?

Nice link Gibber.

by KW John | 1st Dec 10, 5:25pm 1291177539

Yup - looks like I'll have to give the Lamborghini back now....

Odd thing is... I don't see many Lamborginis - what did everyone else buy then?

by amalgam | 1st Dec 10, 5:32pm 1291177940

"Investment" property, apparently.

by scarfie | 1st Dec 10, 6:39pm 1291181955

Hugh I was going to comment the other day on your housing bubble value estimates, but will do so now.

I figured this out in 2007 just before the crash by simply looking at the RBNZ graphs page and plotting the long term trend against the current bubble.

That method suggested a 40% over valuation in our housing stock.

I think Bernard is still likely get his 30% devaluation.