The NIMBY problem

Bernard Hickey reviews the tough choices facing Auckland if it is to build affordable housing for 300,000+ more people and says current homeowners will have to accept big changes. Your view?

28th Oct 12, 10:05am by Bernard Hickey

By Bernard Hickey

The holy grail for any investor is making money by doing nothing. The second best option is to sit there and do nothing while stopping someone else from doing something that would hurt the value of the investment.

This central fact is now dawning on policy makers trying to solve New Zealand's biggest economic and social problem - housing affordability in Auckland.

The debate around the new Auckland Council's Unitary Plan and how to build 400,000 houses over the next 30 years to cope with forecast population growth has concentrated the attention of planners, politicians and economists alike.

The renewed 10-20% surge in house prices in Auckland this year to record highs has further focused attention.

The scale of the task is enormous and the roadblocks are as big they can possibly get, starting with inertia and the second most powerful force in the universe after compound interest - Not In My Back Yard.

NIMBYism is a force magnified by the power of tax-free capital gains and the forces of supply and demand, and it is alive and thriving in Auckland.

The essence of the problem in Auckland is that if Auckland is to build 300,000 of those 400,000 new houses within its existing boundaries, as specified in the Unitary Plan, then it has to intensify its housing massively with all the changes that entails.

Former McConnell Property CEO Martin Udale said this week 1 in 5 of Auckland's 385,000 existing homes would have to be demolished to allow for the development of medium and high density houses to hit that 300,000 target. The phrase 'medium and high density housing' is much less politically and emotionally explosive than what is really being talked about. This would mean a lot more apartment blocks, townhouses and intensified shopping, schooling and other infrastructure to cope with these extra people and services.

That means building up and around. It means the Auckland dream of a villa in a quiet suburb with a sea view and a back yard close to town is dead, or at least over-looked by an apartment block blocking the views to the sea.

This tension is at the crucible of the recent clash between Len Brown's Auckland Council and John Key's Central Government over the Auckland Plan.

The government is creating a panel to review objections to the Auckland Plan, blocking an attempt by the Council to get it exempted in its entirety from the Resource Management Act. This will allow many of the NIMBYists to challenge many aspects of the plan.

Udale captured the mood best when he said: "We can't allow the politicians to hide behind community nimbyism and the cave dwellers." He went on to refer to Auckland's phobia about building height.

Now we are getting to the crux of an issue which threatens to derail our economy and our population structure. Finance Minister Bill English is rightly concerned about the rapid ramp up in house prices in Auckland beyond the reach of ordinary young families, many of whom are either leaving New Zealand altogether or sinking back into the dispiriting prospect of long term and increasingly expensive renting. English is right to target Auckland's chronic inability to build new houses quickly that don't dissolve in the rain.

Auckland's building consents have languished around 3,000 to 4,000 a year for the last four years, well down on the 2002 to 2005 levels of around 12,000 a year, which is what's necessary year in and year out to meet expected population growth.

Something's got to give if Auckland is to avoid deepening its affordability crisis. Either Auckland quickly bulds up and around its centre with all the blocked views and population density that entails. Or it can sprawl to Hamilton and Warkworth in a blanket of single level dwellings and traffic jams.

The third option is the easiest for existing property owners and the most likely given the current players and approaches. That's the option of doing nothing and blocking development.

It has proved an exceptionally profitable strategy for home owners and land bankers alike, given the median house price in Auckland has more than doubled to NZ$515,000 in the last 10 years as the number of building consents has more than halved.

NIMBY is the most profitable investment strategy in New Zealand.

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72 Comments

by Brendon | 28th Oct 12, 1:44pm 1351385080

I posted this comment on another housing affordability article hoping for a comment from Hugh but I was quite late in the process so got no replies. Ironically because I was moving house and have only just got the internet back up. Anyway I think this comment is still relevant so am trying again.

To Hugh, thanks for all your efforts to solve the housing affordability problem. I broadly agree with you, having recently returned to Christchurch I think it is stupid that residential land is so expensive when you have farm land only 10 kms or less in some areas from Cathedral square.

Obviously the solution is to rezone that land to residential with some sort of rules that houses are quickly built on it to prevent land banking .

Where I differ from you is that I do not see the libertarian Houston model as the solution. I would prefer stronger local government along the lines of Northern Europe where the local municipalities have a greater tax base, say income tax as well as rates. And then being able to fund transport and other housing related infrastructure that I think most kiwis want.

I think local government is unfairly maligned in New Zealand about the costs of consents.They have no choice about the matter. The Resource Management Act dictates that local governments must charge the full cost for all new developments. This is Rogernomics neoliberal thinking that public goods, like roads, sewage, public transport etc, must be charged to the end user, in this case property developers who pass it on to new home owners.

I believe local government want to provide these public services because that would benefit the wider community. Local communities could retain and attract young people, many of whom are highly skilled after receiving 20 plus years of public and private investment.

But not only is local government legally stopped from doing this but they are also fiscally prevented. Rates is a very limited revenue source. Most local or state governments in other parts of the world have alternative and bigger sources of revenue. You can see this argument running in Auckland where the voters for the new super city voted for the candidate who promised higher taxes and better transport infrastructure and central government will not allow the super city a regional petrol tax.

Ultimately the problem comes down to central government politics. They could reform the system, they could give local governments freedom like they have in the US and Europe and we the voters could decide if we want a Houston or a Copenhagen, Helsinki or what ever.

by Dale Smith | 28th Oct 12, 10:47pm 1351417623

Hi Brendon, yes a Northern European type of structure does have possibilities for local councils to have more ability to raise and manage (not control) local revenue, but then it needs to come with more accountability to the ratepayer a la Swiss referendum system. Since that is not going to happen in NZ, then by default we are left with a more Texas liberal market approach, maybe a style a little closer to Dallas than Houston. Councils may have a legal obligation to charge for full subdivision costs, but they are charging far more than that. Yes they do have a limited ability to raise revenue through rates, which is why they have manufactured other forms of revenue like development levies, which are just a general tax pushed through under planning gain ie pay it or we won’t approve your consent. Council and others think it is about revenue generation, but it is more about cost/waste reduction. Get rid of council waste is a start to more affordable sections and not needing to raise rates as much. Or if a ratepayer agreed rates rise is needed for say a stadium, then the ratepayers have more disposable income to fund it.

by Brendon | 28th Oct 12, 2:42pm 1351388520

There seems to me to be four possible outcomes to the housing affordability problem in Auckland, we do nothing to reform the resource management act and local government. House building continues to be less than required to cater for new arrivals to Auckland, so house prices rise. This causes all the problems of over investment in non productive existing capital stock and excessive private debt that has been discussed in this blog. But existing home owners are not exposed to infilling and have an ever increasing asset.

Secondly central government uses its existing housing assets (state housing, publicly owned land etc.) to increase housing supply. They do this with the three year election cycle in mind. So they want economic growth just prior to elections, they want to reward their political supporters, especially financial supporters who will be rewarded with juicy housing contracts. This solution is most likely because it is New Zealand's political tradition of centralising important economic decisions. But other than the do nothing option this is the least effective outcome because it puts the governments short term political needs ahead of the countries long term economic needs. This is like before we had an independent Reserve Bank and monetary policy was used to win elections not to maintain stable economic development.

The third and fourth options are related. New Zealand could decide it needs a long term systematic way to control house price inflation. We could instruct the Reserve Bank to monitor house price inflation, if prices are going up because not enough land and infrastructure is being provided for housing to cater for new arrivals then the offending local bodies could be instructed to accelerate their urban development plans. If house prices are rising because of excessive borrowing then interest rates could be raised or alterative methods used, like raising the banks deposit requirements, reducing new loan terms (30years down to 25 or 20 years) etc.

The last two options is you could have the Hugh plan of unristricted peripheral development that leads to cheap housing but urban sprawl. In Auckland that means the city limits extend down to Hamilton. Or you have higher denisty develpment within the city or around major new transport hubs, like around stations for new high speed rail. The Reserve bank should be indifferent to whichever decision the local bodies choose as long as enough housing is built to cater for everyone. Hopefully the local bodies will have enough revenue sources that voters get a genuine choice.

by Dale Smith | 28th Oct 12, 11:30pm 1351420226

Hi Brendon, again some good points, but having less restrictive zoning beyond the fringe as Hugh is suggesting does not produce sprawl as we know it. In fact it is the present smart growth policies that do as evidenced by the sprawl at present. Present restrictive boundaries with the zoning creep that happens over time are responsible for giving us the present shape of the city and housing that is some of the most unaffordable to income in the world. As there is a direct correlation between land prices on the fringe and those in the centre, what would happen if we had less restrictive zoning is, those on the boundary who don’t care to develop now or never, like farmers and other long term non residential users would still not develop. Those developers that have purchased at the old inflated prices with debt would need to develop and sell asap at whatever they would get the market to accept, or try to add further value to their property to retain their margins. Either way more land would come to market but not necessary as affordable as it could be. You would also get other developers leapfrogging to rural Greenfield sites, maybe even to new towns or villages to provide truly affordable sections. This would also include development of more affordable commercial employment opportunities. Infrastructure can be easily supplied more cost effective and more environmentally friendly by private developers than councils can ever do. The market would quick determine the amount and most affordble price that a developer could develop and still make a profit. Thus putting a handbrake on the fear of 'everyone' will suddenly develop rural land. The net result of this would be a gradual lowering of prices back into the centre, which makes it just as affordable to move back into the centre and would slow down and even reverse the need to expand out. It is the ability of this to work as it does overseas, that is really scaring those that need the prices to stay high and grow further. They need the status quo to continue.

by Brendon | 29th Oct 12, 1:42pm 1351471367

Thanks Dale for your comments. I agree with you that if you have unrestricted housing development on the periphery then house prices in the centre fall. I think Hugh and others have conclusively proven this. And in an ideal world we would not have such restricted zoning. I think it is possible to have strong long government providing good local infrastructure and not have restricted land zoning. So it is not exactly Houston or Copenhagen there is a possible mix of the two. I think that is what Germany has and they did not have the housing boom and bust.

The problem is transitioning from our highly restrictive land development situation to a Houston/Dallas or German situation. If we overnight scrapped all our zoning and consent laws then their would be a massive fall in house prices. Many people would be in a negative equity situation with mortgages higher than their property value. This creates a whole lot of new problems, people go bankrupt, banks go bankrupt. Others decide to stay in there over valued property, but this restricts labour market mability. This is the situation the US has been since the global financial crisis. Interestingly it might have been because of the Houston's etc with their low house prices that caused the US housing bubble to burst. Before the crisis in the US you had some cities with low income to house price multiples like Houston and others with high values like San Francisco. I think the difference became too great to be sustainable and thus resulted in the crash. In New Zealand there is not so much difference and we have not had the big crash in house prices yet.

My idea is that new housing land could be gradually added to maintain house price stabability and as incomes rise, house prices in relation to incomes gradually fall. This process could be managed by the Reserve Bank because they are responisble for financial stability. Ultimately we could safely transition to the unregulated land zoning situation.

by Stephen Hulme | 28th Oct 12, 3:09pm 1351390198

The holy grail for any investor is making money by doing nothing.

Bernard, by doing nothing do you mean this or something else?

by scarfie | 28th Oct 12, 8:24pm 1351409086

That theory is flawed. First of all money is really a proxy for food, which you can't defer consumption of (otherwise you lose a bit of weight, too much weight=malnourished or dead). So savings are a surplus to requirements, a surplus of food that might give you security in case of famine but there are risks as well. Do a pros and cons scenario of storing food vs lending it and you will see that there equal risks shared by the borrower and the lender, on that basis there is no need to charge interest.

At the end of the day no matter how you dress it up with fancy words it is still unearned income, or money for nothing, and this always results in a transfer of wealth.

by robby217 | 28th Oct 12, 3:36pm 1351391776

Bernard,.

NIMBY is actually the 1990's strategy. The new strategy is actually BANANA.

Build Absolutely Nothing Anywhere Near Anyone

by Patricia | 28th Oct 12, 3:48pm 1351392480

To repeat myself

"In Christchurch the Govt should buy land (an asset) and provide the sections on a 999 year lease at a very low rental to lessees to build on. The Lessees should have the right to purchase over the term." But not for Auckland - there are too many people in Auckland now and to do nothing and allow a bigger Auckland to emerge is stupid. to repeat myself again Central Government should encourage companies that employ large numbers of people to go to other parts of New Zealand and if that means tax breaks so be it. Auckland should not be allowed to grow any further.

by Wolly | 28th Oct 12, 3:59pm 1351393147

"forecast population growth"....really....what's the evidence!

Oh of course...the pop growth will be the workers et al needed to build the how many thousand 'houses'....so does this mean the growth that demands the housing will not happen without the workers...err ummm....

by ngakonui gold | 28th Oct 12, 5:21pm 1351398106

high density housing is the ruination of suburbs.

one crappy owner or tenant can make life unbearable for lots of people.

they will still be to expensive for the average kiwi.

how can they save when rents inflated by govt handouts are so high.

by Gummy Bear Hero | 28th Oct 12, 5:39pm 1351399171

" The Holy Grail For An Investor Is Making Money By Doing Nothing " ....

Bernard , Bernard , Bernard ....... sweet , silly boy ! ....... if they've invested , then they've already done the lion's share of their hard work .......

...... it's hardly money for nothing , if you've risked your dough ...... those who risk , may reap the rewards , or may not .....

Those who sit on their chuffing backsides , risking nothing , waiting for a hand-up or hand-out , they get sweet F.A . ..... and deservedly so ....

" The Holy Grail For An Investor Is Making an Adequate Return on Their Money , and Being Confident that their Seed Capital is Secure . "

by Chris_J | 28th Oct 12, 7:07pm 1351404431

Exactly right GBH. But it seems the purpose of Bernard's next scaremongering trick is to convince people that nice suburbs are about to become grotty ghettos filled with scruffy apartments.

Good luck with that one, BH!

Bernard does seem quite angry that someone can buy a property and sit on it, not do anything, and that they might actually make money too.

Maybe it's because he's finally realising property is a good investment. $6,000 in 1975 in Ponsonby or Freemans Bay is probably $1.2m today.

Throw in rents on top of that and you can see why the whingers and backside sitters are wrong.

by powerdownkiwi | 28th Oct 12, 9:10pm 1351411824

ChrisJ and GBH - the wrong'un twins. BH is right on the

Money.

"Investment" only worked as an accounting system, in a growth period. The growth fooled everyone - still including those two, if we believe them.

Obviously, it had to be at the ultimate expense of someone else, at the point where real growth stopped. For every ChrisJ speculating, there is someone else underwriting, somewhere, sometime.

by wtf | 28th Oct 12, 6:17pm 1351401459

Halt immigration for 12-24 months and tighten credit at the banks. People will still leave for Australia and elsewhere. Watch how quickly house supply expands and prices drop. Cost - zero. No greenfield building required. No intensification. Where is the evidence that a continuously growing population is economically or socially beneficial? With another 400,000 people on the Auckland isthmus infrastructure will collapse and quality of life will plummet. If you want Hong Kong or New York's "vibrancy" go live in Hong Kong or New York. Talk about killing the golden goose....

by Stephen L | 28th Oct 12, 6:22pm 1351401771

On the off chance that the Council, residents, and the government do agree on a plan to allow more intensive development, they will need to identify land and areas where the existing property values do not make such development somewhat prohibitive.

Without wishing to offend residents in these areas, it seems to me the Western corridoor from Kingsland all the way out in line with the NW motorway; anything south of Mt Albert Road; a fair number of greenfield areas in the old Manukau City; Mangere through to the Airport may be areas where the economics won't stumble at the first hurdle. Some of the heritage rules in Mt Eden could also conceivably go- although I suspect will never get past Nimbyism.

Separately London in the UK has some effective planning rules that could be copied. These allow large companies to build significant sized developments, but a fair proportion of the units in any one development have to be lower cost housing. This allows housing for essential people who may be on lower wages to live in convenient locations; and also breaks up obvious and negative class structures. I still have a house in one of these developments by the Thames, and it all seems to work pretty well.

by wtf | 28th Oct 12, 6:41pm 1351402914

But why allow Auckland to get bigger? What's in it for anyone? Just as growing turnover is not a guaranteed indicator of a company's profit, neither is growing population and GDP necessarily a positive indicator of a nation's quality of life.

by Stephen L | 28th Oct 12, 7:02pm 1351404137

wtf,

It's a pretty good size now I agree; some say already too big for its own good, let alone anyone else.

I'm not an expert at all in city planning; but understand there is a difficult to reverse drift to larger cities. Spending $20 billion as we are doing on Christchurch should see it take off as a magnet in years to come. Wellington could do more, although challenged a little by its hills and topography.

If Auckland does grow despite some efforts to resist; then without some planning, housing affordability will be a real problem, is I think the essence of Bernard's article. So either keep spreading to Hamilton (not really a good solution) or infill and go up a little.

Auckland's lack of ability to agree will probably help achieve your objective; and maybe that is the best result.

by Chris_J | 28th Oct 12, 7:29pm 1351405767

Who's spending $20b in ChCh? - it's certainly not "we".

Taxpayers may be spending some (although a lot of that is actually insurance money too). Most citizens won't be spending much, and don't think it'll be the insurance companies spending either. There might be $20b in insured losses. But 75% is either cashed out or going towards something that already exists (whether that's in OZ or elsewhere in NZ).

Rebuilding will happen at a slightly above average rate - probably double or maybe triple the normal rate for a couple of years if you are lucky.

On your mixed class developments, that never works. No one wants riff raff living next door, and I hardly think London or England is the model of good planning - it has the most appaling housing standards with on average tiny (something like 90m2) terraced housing with inadequate parking, all of which will collapse when a 1 in 10,000 year earthquake strikes northwest Europe (the Alps didn't form without plate tectonics!).

Central Auckland is a prized treasure - one of the nicest central suburban areas in the English speaking world (in the top half dozen anyway...).

How about trying to make the rest of Auckland like the Central Suburbs rather the dumbing down what is already good and working well.

Fix up Otara and Otahuhu and Glen Innes, these are horrible areas, where crime is high and pride is low. Make them the new places to be.

by Christov | 29th Oct 12, 11:47am 1351464473

CTNZ....over time as the demographics alter, and they are being manipulated to depopulate both Glen Innes , Pt England and Otara of lower socio economic populations, you will find Chris J is correct in re determining what will become desireable as opposed to living in cramped, restrictive environments albeit they may be plush with accompanying view.

Two or three years ago, I banged on here about the agenda in G.I. and copped a lot of flack from those who could not see it happening....well it's happening.

The pepper pot principle of Savage is being unwound, slowly, surely, irrevocably.

by Kate | 29th Oct 12, 12:25pm 1351466736

Make them the new places to be.

And you think this cannot be done with the existing residents?

by wtf | 28th Oct 12, 7:30pm 1351405838

I'm a hard core Aucklander. Love the place and have always lived here. I feel it is on the cusp of destroying all the things that make it such a livable city. I appreciate that diversity in the form of immigration has made Auckland a more interesting place but there seems to be a rose tinted and mindless drive to make the city an Asian/Pacific "capital" without thinking of the effects on those facets of quality of life that make the city attractive in the first place. ie its ego driven by local and central government politicians determined to be another Sydney or Melborne not the existing population.

Would a Chinese or other Asian nation allow proportionately a European population to build up as rapidly in one of their capital cities? Not trying to pick on Asians but that's where the bulk of recent immigrants have come from. If in a decade 20% of Auckland came from Russia it would be no different. What is the end game?

by Basel Brush III | 28th Oct 12, 7:57pm 1351407467

Note the politicians who do not care. They are mainly national and behold, they have a large Asian voter support. Williamson, Lee-Curtis and others.

by Basel Brush III | 28th Oct 12, 9:17pm 1351412275

Whoops! Should be Jamie-Lee Ross, who incidentally just needs to keep that seat warm for the next 40 years to be elected by his increasingly non-Euro/non-Poly electorate. Probably taken lessons from Williamson, I guess.

by robby217 | 28th Oct 12, 11:16pm 1351419381

Well that is actually offensive to any thinking person.

A bit like saying Labour/Greens/Mana want to turn Auckland into a giant beneficiaryville, turn the whole city into Otara, Mangere etc so they can get the votes of all the bludgers,

by Chris_J | 28th Oct 12, 6:52pm 1351403530

Just because you zone land for a certain purpose, doesn't mean more intensive developments will occur.

In ChCh part of the old industrial areas were rezoned "Central City Edge" allowing intensive residential in about 2005. But in the 7 years up to the CERA rezoning to mixed use, not a single development was proposed, let alone proceeded.

Rezoning sites in Mt Eden to allow 200m2 site sizes isn't going to change things much. If a 500m2 section with an older villa sells for $1.2m, it is hardly going to be demolished to create 2 sections.

Sort out the areas where people don't want to live, but are close to city centres - ie Glen Innes, Avondale, Otahuhu, even Otara.

Making Epsom and Remuera denser is just plain dense.

by Stephen L | 28th Oct 12, 7:03pm 1351404224

Chris,

Was trying to make more or less the same point.

by wtf | 28th Oct 12, 7:05pm 1351404335

True but again why is it a foregone conclusion that A) Auckland must grow and B) that population growth is good. Business wise increased productivity per capita comes when fewer people produce the same or more because they have to, and innovative and/or high tech solutions are adopted to replace labour. Isn't that what we're all supposed to be aiming for? Decreased work hours with no drop in quality of life.

by Gibber | 28th Oct 12, 7:26pm 1351405576

wtf.

agree. I'm against growth for growth's sake.

However. I recognize that the pol-lies are wedded to population growth. In general terms, I've decided to take a back ward step and only comment now and again.

Once you realize that immigration is the way the pol-lies have chosen to keep the ponzie scheme going. AND that the Pol-lies are property investors and there-fore reliant on the ponzi going past their retirement date, THEN you understand that opposing ongoing pressure on the housing stock via immigration, for the benefit of the poorer amongst us who have to pay rent, is NEVER going to happen. Then you get to move on.

by wtf | 28th Oct 12, 7:42pm 1351406535

True otherwise it makes no sense at all unless the two main political parties are just trying to gerrymander various electorates with appreciative voters

by Gibber | 28th Oct 12, 11:11pm 1351419076

Yah.

National wants population growth to keep pressure on rents, for the benefit of the landlords, the national parties natural voters.

Labour wants population growth as they think new migrants will be poor and more likely to be labour voters....

by Kunst | 28th Oct 12, 7:17pm 1351405065

For B. English (government) cover up rich buddies - far more important then the young generation.

It is extremely difficult when the “NZselling houses to each other” - culture must be changed by politicians, policymakers, etc., who are part of it. Houses/ properties will increasingly be owned rather by rich foreigners before the majority of Kiwis realise they are tenants in their own country.

…and what to do with all the thousands of real estate agents working in that industry – crazy !

The NZReal Estate industry is far too powerful/ big in comparison to others.

by Basel Brush III | 28th Oct 12, 8:04pm 1351407860

It is more like 'NZers selling houses to overseas domiciled or flaky residents commuting to Asia" who then rent them out to NZers.

The rents they charge are sometimes uneconomic because that is the only way they can operate a business in NZ that does not have a language constraint / hands-on element. Also based on information from overseas publications there is at least $125 billion of hot money out of China alone. How much has landed here? Just draw your own conclusions. How much tax do they pass to our IRD?

by ngakonui gold | 28th Oct 12, 7:32pm 1351405967

little boxes

on the hillside

and they're all made of ticky tacky

by Matt in Auck | 28th Oct 12, 8:32pm 1351409522

cut immigration! make it REALLY targeted. That will help.

Of course, auckland will still grow quite a lot through natural population increase.

Reading BE's spiel today, I am not expecting much action tomorrow.

Sorry state of affairs, when solutions are quite simple.

by robby217 | 28th Oct 12, 11:21pm 1351419713

All v. well to say cut immigration, but what about the country that has accepted you as an immigrant?

The main issue is poor financing of infrastructure, council waste and poor land planning policy over at least 30yrs combined with credit that has gotten cheaper (and cheaper) resulting in 'asset' bubbles.

by Basel Brush III | 29th Oct 12, 9:14am 1351455274

Unfortunately we have to accept that we as a country have made some very poor decisions on immigration but at least we can stop the rorts and clean up the mess it has generated.

I would go so far as to say that had the immigration numbers we have had been well distributed over the whole country, we could assimilate them without the inevitable disruption.

by robby217 | 29th Oct 12, 9:55pm 1351500928

I'm not saying we can't review immigration policy, and the point is taken about distribution, but I think this issue is secondary to the main ones.

by Matt in Auck | 29th Oct 12, 10:30pm 1351503042

I never said ban immigration, I said cut it back by refocussing it to ficus on what skills the country critically needs.

I happened to have a skill that was in demand in Aus.

There are far too many free loader immigrants in NZ. How bout all the "doctors" driving taxis???

by steven | 29th Oct 12, 12:11pm 1351465869

Hi,

NB Design is very expensive when spread across 4million ppl instead of 10s of millions, hence we dont do much, then there is the tax breaks for R&D, Im not aware we do much in that line either...so we are a nation of importers.

Then there is the lack or competition....the numbers are so small that its not really worth parallel importing unless you are someone like Warehouse...the result is the legal importers can charge huge margins. This flows into productivity equipment and software as well, low wages and pricey kit makes justifing such purcahses very hard.

Then thare is the lack of choice, I'd like to buy various wood items yet the one person importing what I'd like does so every 4 months in small quantities, currently Im looking at April if Im lucky.

regards

by scarfie | 28th Oct 12, 8:38pm 1351409930

Don't worry Bernard, it won't be a problem soon. At the last census Auckland was only 53% people of european decent, given the missed census I would say we have dipped below the halfway mark. What will happen soon is that the minorities will band together and form a separate city state within New Zealand. Between Maori, Muslim and Polynesian interests they will ban private land rigths. The new structure will be a halfway blend of state control and iwi controlled land. All mortgages over land will be null and void and the new state will issue a new currency and forbid the charging of interest.

How secure do you Auckland property owners feel?

by Dale Smith | 28th Oct 12, 8:55pm 1351410943

The question is not whether that higher density (inner city) or lower density (suburb) is better than the other. That question is best left answered by those that chose to live there and by giving them that choice by making housing more affordable. What we need to question is, why all types of housing lifestyles are so expensive in NZ compared to many other countries?

Smart (arse) growth policies are without a doubt one of the reasons as the evidence shows, which fits in nicely with the Greens philosophy of reducing vehicle use. After all if you have spent all your money on rent or a mortgage to put a roof over your head, then there is not as much left over for vehicle use, or food for that matter. They now can also claim by starving us as well they are helping solve our reliance on food. Labours solution, as is also the Greens, is more subsidised housing. IE take more from one group and give to another (only puts the price of property up) plus pushes a few of those taxed into needing subsidies which means more taxes. You may see a trend developing here, the natural conclusion of which almost everyone needs a subsidy.

So what’s Nationals solution? Next week will tell but their dilemma (in common to all political parties) is how to get from the mess we are in, to where we should be in an orderly manner without upsetting (read -lost votes) those who have vested interests in not only stopping houses from being more affordable, but in making them more expensive.

But what all the political parties are really wanting is another GFC or similar to cause an arm’s length housing crash. Any ideas.

by powerdownkiwi | 28th Oct 12, 9:16pm 1351412207

The greens have dropped the ball, decided to become old labour.

Same oxymoron (close, isn't it?) as the message on the DoC emails; Conservation through Prosperity. It's b------ 'prosperity' is what trashes ecosystems, which is why they need conserved.

Until we stop population growth, and likewise curb per-head consumption, no amount of 'poverty relief', state housing, private development, or anything else, will make any diffo.

by Matt in Auck | 28th Oct 12, 10:08pm 1351415334

the solution to the housing criss is to keep doing what we are doing - Ie. building almost no houses.

That may push up prices in the shorter term but at some point you find the solution because either property prices collapse after the bubble inflates to bursting point, or people decide "bugger Auclkland, we'll live somewher else" - whether thats in Nz or Aus

by Matt in Auck | 28th Oct 12, 10:05pm 1351415157

How do we stop population growth PDK?

Instigate a china style one child policy?

How about shipping off all the polynesians who have so many kids (said firmly tongue in cheek)

by JimboJones | 28th Oct 12, 10:55pm 1351418120

Seems silly to me hat the council can't just change zoning etc. when they wish surely it is the councils job to zone so why is there something in the way?

They should zone anything 10km from city as high density and get rid of all heritage zones etc, let Auckland become a proper city. Might not lose as many young people overseas too if there was somewhere exciting for them to live.

by Chris_J | 29th Oct 12, 12:10am 1351422627

Have you seen high density housing in Auckland ... it's appalling.

The value of homes in the central suburbs are too high to consider demolishing them, and why would you demolish the type of homes people want in order to build rubbish that only bums and undesirables would occupy?

Just get over the fact that the leafy central suburbs are expensive and try and sort out providing more areas where people actually want to live.

If the state sold out of their holdings in the Isthmus, allowing the areas to develop naturally rather than having belts of $50pw beneficiary renters constraining the city, then the problem would be half solved.

And then also create beautiful new suburbs, not the garbage being built at Albany or Dannemora which are already on their downward spirals to becoming the next Otara.

Create suburbs that can evolve over time, not with a build it in one go and watch it decline (and/or rot) approach.

Look at the top suburbs, they constantly evolve and improve. Every new subdivision could be something stunning, but because it isn't, no one particularly wants to live in them.

by bob | 29th Oct 12, 9:18am 1351455497

People have no idea of what higher density even is - they think it's either leafy suburb or Nelson Street slums with nothing between which is bollocks. There's heaps of options between.

There's granny flats and split houses - density you can't even see. In Grey lynn you can only tell the density in villas by the number of letterboxes.

Some of the most expensive property in Auckland is in higher than normal density suburbs - Ponsonby, St Mary's Bay etc.

Most of Auckland Ithsmus is Res 6 which does not allow subdivision of a site smaller than 750qm (1/375sqm - it used to be less than that 10 years ago). A 750sqm site under Res 6 rules will take a 525sqm house - how can that possibly be seen as a reasonable minimum size?

The unitary plan is looking at decreasing density further to 1/400sqm so existing suburbs won't actually change anyway. It will also make any higher density developmnent than existing a Discretionary or RC activity so it will happen very rarely if at all.

by Chris_J | 29th Oct 12, 10:29am 1351459758

People want detached homes with a good sized lawn out the back.

Don't you look at what actually sells readily? Apartments and compact townhouses are as hard to move as a bad smell!

300m2 is about as small as possible for something acceptable in suburbia. 400m2 is better. Exceptionally good proposals at smaller site sizes should perhaps be easier to get through, but the problem is that most developers have no idea about design and refuse to employ decent architects or designers, so end up building oversized rubbish on small sites.

by bob | 29th Oct 12, 3:03pm 1351476227

If 'people' want detached homes with a good sized lawn out the back they can just look on Trademe - there's hundreds of them available right now. They can also get boats and flash cars and a gardener.

Just because they want it doesn't mean they, society or the environment can afford it.

by bob | 29th Oct 12, 9:21am 1351455715

"Have you seen high density housing in Auckland ... it's appalling."

Really - 229sqm overlooking the harbour not good enough for you?

http://www.trademe.co.nz/property/residential/for-sale/auction-524862514.htm

by Christov | 29th Oct 12, 10:21am 1351459264

Why that's just fantastic Bob....!

More than enough room for the kids to stare at the TV when they tire of the view.

More than enough room for the chihuahuato to crap in your handbag

Enjoy a sausage sizzle with your partner ,pre cooked, and pre sizzled, sit back relax and think how much better you are than the yobs below, but be sure to celebrate with screw cap Champers only ...as there is a noise ordinance on de-corkage.

And all this for a pizzling 2mill plus...crikey where do I sign...?

by Chris_J | 29th Oct 12, 10:22am 1351459328

That is a horrible development Bob. And it is hardly fitting for most suburban locations. What is the density? 1 unit per 200m2?? You can build detached homes at densities not much lower than that.

Do you really believe that the developments of Eden Terrace and the like are good quality? They are on their way to become slums as are the towers in Hobson St etc.

It is very hard to densify suburbs well. Blocks of flats will never achieve that. Small freestanding infill housing might be ok, but must be used in careful moderation.

by bob | 29th Oct 12, 2:52pm 1351475572

It's not relevant whether you like it aesthetically or not. Someone from Christchurch might hate every house that isn't made of stone, filled with doillies and has a nice dungeon. So what?

The question is - is it "appalling"? It's big, light, sunny and has good outlook. In what way is it "appalling"?

Eden Terrace? When did I ever say this was good quality? What's relevance? Are you claiming that Eden Terrace and Hobson Street high density are not nice therefore all development at a higher density than suburbia is bad?

by Chris_J | 29th Oct 12, 11:58pm 1351508313

You'll love my heretical revival revival architectural projects I have planned for the CBD then!

Towers, finials, arches ... the works...

High density afforable "flats" is plain dense. Individual sites and gardens is what make desirable suburbs. Why? Because individual properties allow alteration and improvement to occur naturally as needs of occupants evolve. Also one bad apple leads dense affordable developments into despair.

I'm not sure if you can point to ANY new built, affordably priced, strata styled suburban developments with more than say four units in one building which are not waterfront or parkside AND are beautiful successful developments ...

by bob | 29th Oct 12, 2:43pm 1351475011

It's traditional in logical arguement to respond to the original proposition. The original proposition was that all higher density housing in Auckland was 'appalling'.

This is an example found within minutes that disproves that proposition. The post had nothing to do with affordability. Google logical fallacy.

by bob | 29th Oct 12, 3:38pm 1351478298

This particular bit of thread is about whether all housing that is of higher density than suburbia is appalling. The answer is no.

This particular example does show higher density being much more affodable than free-standing dwellings in the same location. If this $2.6M 229sqm dwelling was a free-standing house in the same street it would cost twice as much.

by iconoclast | 29th Oct 12, 4:14pm 1351480446

That is a heck of a high price to pay simply for a desirable address .. right next door to the Parnell swimming baths with an outlook looking out over mechanics bay and the shipping yards and container gantries, and the trains passing by .. BUT the real question is this .. have a look at google maps in satellite view and there are two similar high rise apartments (3 stories?), number 154 (the property in question) and the next door property at 146 right behind it .. and which one went up first, or were they both developed simultaneously .. because the views of the units facing Tamaki Drive may be OK, but number 146 doesn't have any of that, whereas the original properties were probably sited so they both had views .. as I said above .. high price for an address .. not much land .. and as for the privacy bit .. imagine doing a bit of nude sun-bathing on the strip of lawn at the rear with the neigbours above hanging over the balcony and laughing at you ... only redeeming feature is the sewer pipe line across Judges Bay has gone ..

by Chris_J | 29th Oct 12, 11:30pm 1351506622

Of course there is exceptional high density living. (Although I don't think much of that attempt in St Stephens Ave).

But Auckland hasn't done exceptional high density in the lower to mid price ranges.

I'm not opposed to higher density housing. But it isn't the only answer, and the way it's been done so far isn't part of the solution for affordable housing.

by wtf | 29th Oct 12, 12:21pm 1351466463

The now desirable central areas were all slums for a long time. Our old place in Freemans Bay is back up for sale. Built in the 1870's as workers cottages the area was hardly salubrious. Slum area right through to the 1980's. All the sections in the street are 200m2 with 400m2 further down the hill. The house is double story, 5 bedrooms and only 130m2. It was more than enough for a family of 4. Two offstreet parks as well. To me it was a big house and the small section was a positive not a negative. Recent owners have ruined it by removing the trees.

http://www.trademe.co.nz/property/residential-property-for-sale/auction-515679167.htm

Ditto the 130m2 3-4 bedroom places in the Beaumont Quarter. Very well designed and livable with only a patio as a back yard but nice common areas.

by Chris_J | 29th Oct 12, 11:37pm 1351507035

It's a small world wtf! Did you own Renall or rent? My sister rented there many years ago, so I know the house reasonably well.

I think the brick wall next door is seriously limiting it's appeal.

I don't think too much of leaky leasehold Beaumont Quarter though.

by wtf | 30th Oct 12, 12:13am 1351509209

Owned it for about 7 years up til 2004/05. I liked the lodge wall myself. Blocked Ponsonby Rd noise and no neighbours but can see how some would be put off. My point was a 2 storied freestanding 130m2 house on a 200m section was more than adequate for a family of 4-5. We had 20 people out the back with no problem. Lots of parks and playgrounds within 5 minutes walk.

Beaumont Quarter isn't leaky as far as I'm aware. Some of the designs definitely have leaky potential but the body corporates are very vigilant on maintenance especially painting and waterproofing membranes. Many of the blocks are now freehold. Again the 3 brm are only 130m2, 3 storied and narrow but very modern, light and airy.

by Gummy Bear Hero | 29th Oct 12, 12:20am 1351423202

Hugh Pavletich threw out some very interesting figures , a day or two ago , which have shot right past with barely a response :

..... urban areas in NZ account for just 2000 sq. km . .... and house 80 % of the nation's population ......

..... lifestyle blocks ( the ubiquitous 4 ha blocks ) use up 8700 sq. km ..... 4 times as much land , to accomodate a fraction of the citizenry ....

There is no shortage of land !

by Neven911 | 29th Oct 12, 9:57am 1351457822

GBH, usially statistical inanity from Hugh, How much land is a commutable distance from a town centre, he enamoured with Texas where a 100k commuter is not unusual.

by steven | 29th Oct 12, 10:37am 1351460266

Yes, and where they use 10 ~ 20 mpg at most....so at $4 a Gallon that hurts when you have to fill the tank several times a week.

However I dont wonder when looking at the "future" seen by some that we need many '000s of new homes that there is no way to re-align that track....Hugh, the Govn and the planners all expect more growth, more ppl and more money to be "produced" because that is how it was. Its also a case of the emperor and his new clothes...no one dares to challenge the status quo as they will get laughed at....so we'll keep on building.

I cant myself see anyway for them to see sense until it wacks them hard in the face. We can see the empty surburbian lanscape that is the USA with sites that will never be built on...carrying debt that will never be paid off.

Conclusion is really we will default en-mass.....everyone will be too broke to pay the bills others like Hugh want to or will have forced on them.

I think we will dump the city limits so my one hope is we dont change the current funding model for utiilities and make the ppl who want the services pay up front....that might be the worse of several evils...

regards

by Basel Brush III | 29th Oct 12, 12:05pm 1351465503

Yes we must differentiate between citizens and others to make the place unattractive to the speculators from outside the country.

I like the idea of a large tax on the gross value of the property but allow it to be offset by income tax already paid. Tax of 2% of gross value would be equivalent to paying tax on a 6%+ yield for example. The benefit over a CGT is that the tax is paid each year every year and does not have to wait for the asset to be liquidated. Also there is no chance to offset overseas tax paid or mortgage interest claimed.

by iconoclast | 29th Oct 12, 12:19pm 1351466367

Sadly, if you have followed those people who have control of the microphone, you find all the discussions and solutions DO NOT discuss the causes of the problems. The only discussion is how to ease the impediments and simply make it easier for the COWBOYS to continue the problem. ie free up land, build more. Do they really think that will stem the flow of hot-money which will continue to come and buy up the additional supply. Unless there is a cessation of inbound migration, there is a high probability the point-of-no-return has already been passed. There are 385,000 residential dwellings in Auckland and they propose building an additional 300,000. Think about that. Where do you think those additional dwellings are going to go. Think about the consequences of the additional population and where they are going to go.

by WHODUNNIT | 29th Oct 12, 12:45pm 1351467949

Maybe a "Soylent Green" Production Facility based on the North Shore would be a good step in the right direction-?

I believe this also offers the added advantage that when our government finally decides to stop pretending it is running a Democracy it will be able to readily dispose of all or anyone who dares to speak out against it in any way at all !!!!

by Kate | 29th Oct 12, 1:59pm 1351472388

One thing for sure - a government cannot run a policy platform to make housing more affordable and at the same time deliberately drive wages at the low end of the income spectrum down.

http://www.stuff.co.nz/national/politics/7876821/Controversial-labour-law-changes-considered

Their brand of employment policy does nothing to relieve them of the growing requirement for accommodation supplement and WFF tax credits.

by kiwichas | 29th Oct 12, 3:16pm 1351477003

Don't worry about house price inflation in Auckland

Ban all new developments and keep Auckland and surrounds at the same population.

NZ as a whole does not need a population increase as we have put too much pressure on our environmental resources already.

Other countries are overpopulated, why emulate them??

The whole place is way too crowded.

So we need population limiting policies, not just a pandering to big business, who merely want to sell more products(that end up as landfill or pollution) to more people.

by rastus1 | 29th Oct 12, 3:25pm 1351477501

ummmm maybe I'm stupid...but if Auckland can't house this extra 3-400,000..then umm...maybe they won't come and umm maybe they may go where housing is affordable (Wanganui anyone?)??

but I'm sure someone will point out that I am in fact stupid....

by Mike B | 29th Oct 12, 4:50pm 1351482601

Bernard, our working lives are expanding. We used to work from 15 to 60 years of age, a 45 year work life. Now we work 15 to 65 and so a 50 year work life. Soon we will work 15 to 70, a 55 year work life and so on. Yet mortgages have remaind at 30 years, so why don't we expand the mortgage term to 50 years. Spreading the mortgage over a longer period reduces the weekly cost.

Another option is for the government to print a few billion and put it into a kiwi bank first homeowners account.

A first home owner would then get a 50 year mortgage, at 0%, from this first homeowners account to buy a section and build house. As this is a 0% loan, the government would own the section in lou of interest, and after a period, of say 10years, would charge rent for the section.

Further, loan terms and conditions could vary from place to place. Say, to buy and buld in Auckland the loan period would be 30 years and 1% interest. As against, say building in Dunedin where you would get the 50 year loan and 0% interest. This is to encourage people to the smaller centres and give the country a more balanced population spread.

You may say, but there are not enough sections, but if you aim for a better population spread with financial incentives not only will people move but councils in the smaller centres will openly welcome them

Just a thought