By Alex Tarrant
A strong surge in building activity, a revamp of urban limits and deregulation of the building code over the next two to three years would help eat into a nationwide housing shortage of 45,000 homes, BNZ chief economist Tony Alexander says.
But, despite policy makers being able to acknowledge what policies would help increase the supply of cheaper housing, Alexander believes the market will struggle to build the amount of houses needed, putting upward pressure on prices and ownership further out of reach.
Speaking to interest.co.nz, Alexander said the current shortage of 45,000 homes would be around for “quite a number of years,” for a number of reasons.
“Number one: In the past three years the number of people doing construction apprenticeships has fallen 30%,” Alexander said.
“Number two: From January 1 next year builders need to be licensed and some of the elder builders are indicating they’ve decided they’re not going to do it.
"Number three: The traditional providers of finance for new subdivisions have been finance companies, and they’re goneski as well,” he said.
“Number four: Ageing of the population. Old folk do not go and trade the four bedroom house for a two bedroom low maintenance flat. They stay in the house with a spare bedroom for the kids, gym, home cinema, etc, and an ageing population leads to a decrease in the average occupancy rate – you need more houses for the same quantity of people.
“Number five: We’ve had our economy being tough now for three-and-a-half years, and many people have put off their household formation decisions,” he said.
An example, would be a couple who had got married three years ago while the economy was in recession.
“You’ve had bad news since then so you’re still living at home with your spouse with someone’s parents. You want to get on with life and I would expect as the labour market improves, a lot of these delayed, frustrated ‘home formation people’, they will be entering the market to get their own house,” Alexander said.
And that would put upward pressure on prices.
What to do?
Although low-cost kitset housing which was easy and cheap to build could be an answer, this was not likely to be seen on a larger scale in the New Zealand housing market for some time.
“I don’t believe that’s what most New Zealanders are looking for. I think one of the things that keeps us here in New Zealand, one of the ways we define ourselves as Kiwis, is that we tend to have a stand-alone house - we’re not living in the semi-detached or whatever dwellings they have on Coronation Street in the UK,” Alexander said.
“And we don’t, for some reason, tend to be supportive of cookie-cutter suburbs like they have in America – all the same houses. Even though sometimes they look the same here in New Zealand. We like them individually designed,” he said.
“So while there’s always talk, and there always has been for many, many years now, of cheap, kitset housing etc, it tends not to be what we Kiwis want. We look down our nose at these sort of things, we’re our own worst enemies in that regard.”
'Open up the fringes'
More importantly, in order to make a big difference and radically improve housing availability and affordability, measures such as forcing councils to change land designations from rural to residential – opening up the availability of land for building on – were needed.
Measures cutting the building code would also help.
“We keep increasing it – insulation requirements, leaky home requirements, earthquake strengthening, all these sort of things, green requirements – you’d have to look at that as well,” Alexander said.
“Those are two things I’d throw in there if you wanted to make a radical difference."
But selling the idea of opening up city fringes to the public would prove a hard task.
“I’m a Kiwi as well. I live in the country side and I’m quite happy that I can only see one other house from my place. So do I personally support that? As a pretty straight up-and-down Kiwi, I’d say, not really,” Alexander said.
“It would help the situation but, you see, we Kiwis are not going to vote for that. We’re concerned about our urban sprawl, we’re concerned about the extra roading that would have to be built, the extra rates increases that may have to be there to fund the infrastructure stretching further into the country-side. This is why I don’t think it [extention of residential zoning] happens,” he said.
In terms of theory, opening up the fringes would be a way of supplying cheaper housing.
“My concern is that we’ve got younger people, people in the lower socio-economic level, who are going to find housing increasingly unaffordable. Be it ownership or even to rent as well,” Alexander said.
“That is going to force government and local authorities to have a look more seriously at issues such as the quality of first homes that get built – the standards that they must adhere to, etc,” he said.
See the latest Roost Homeloan Affordability Report here.
For the latest first home buyer affordability report, see here.
Building costs
Another issue in terms of improving the situation was developers’ levies.
“Developers have to pay some fairly hefty levies to councils in order to put in place new properties. So again, if somebody says, ‘Tony you’ve got power for a day to do something radical about this, and your sole focus is boosting house supply at the lower end of the spectrum,’ it’d be looking at the developers’ levies, easing up on the building code, and, much as I personally wouldn’t vote for it, making more land available,” Alexander said.
However, despite this being what should happen, what would happen was a completely different story.
“I believe, desirable as it may be that we have cuts in developers fees and lower cost housing built, what I believe will happen is that we will struggle to build the houses that the population are demanding, and it would lead to upward pressure on house prices,” Alexander said.
'Not ready for high density housing'
Kiwis - namely in Auckland - were also unlikely to change their attitudes toward more medium and high density housing.
“I don’t think we are near wanting it. I don’t think we are yet close enough to embracing the good urban dynamics you can get from high-density housing in conjunction with stronger local community facilities,” Alexander said.
If authorities were going to look at high-density housing, it would have to be presented to Kiwis as a package where people were going to living in cheaper housing closer together, but they would also have closer facilities such as medical, school and shopping facilities.
“You will have better footpaths for going from your high-density housing to your community facilities. It would have to be presented, I think, in that light, whereas generally we just think about it as more people living together with no other change in the community facilities. It has to be sold as a package deal,” Alexander said.
“It can be done. I don’t see any reason why we can’t do that, but it’s just going to take time to make people realise it,” he said.
123 Comments
Golly. Looks like Tony is going to have an exciting retirement, doesn't it! Sitting around in his ( their) big house, all kitted out for the visit from the kinder once or twice a year; and doing what? Waiting to die! There's far more to do once the children leave home, Tony, than sitting around in the old family home, shuffling from the bedroon to the cinema room,waiting for time to pass.....and mobility is the key to that; not the millstone of the property dreams of the past, hanging about your neck. Because sure as egg is eggs, ya 'aint takin' it with ya!
If that's to me, David B, then tell me...what do you want to do when you retire, whatever age that might be, if indeed you aren't already? What ever it is, your as entitled as anybody to 'do whatever you like' and in that regard, Tony Alexander's assumption that those who have a large property are likely to stay put, ~ "Old folk do not go and trade the four bedroom house for a two bedroom low maintenance flat." ~ is just as likely that they will not. Personally, I enjoy moving about; living in different countries and experiencing all sorts of new things. If that's not for you, then I have not problem with that.
Oh look, I'm terribly sorry Hugh. I must remember to tug my forelock more often! That been the case I'll do my bit for New Zealand real estate and remove myself to the trailer park where I'll live with Bo Hickey and his good wife, Bubba. They make a mean coffee for the young’ins you know. You just add extra milk.
That is what I am worried about that BBs need office, study, computer room, gym, guest room, hoby room, collecting rooms these days. Some old couples are sleeping in different room. A 4 bedroom house may not have enough rooms for their stuff. They will never sell their house before they get really old. I cannot just wait BB to sell the houses, we have do something to let them out of the big city so we can buy cheaper house.
Can we really afford 200+ m2 four bedroom, two bath, 2 car garaging homes? I don't think so with a median annual income of $28,000. By the time it's all hooked up to the (upgraded) sewer, roaded and footpathed it's going to be 4 hundred K at least. More debt we can't afford. With an average of about 2.5 people per house, one of half that size is plenty. And expanding a place like Auckland outwards creates even bigger problems with transport and other infrastructure, makes no sense - then they've got their hand out for the rest of the country to subsidise the god awful mess.
So why not encourage more folk into the towns and small cities. A lot of businesses and Govt. departments find their costs of operation, wages etc are less in these places.
James Quinn:
In 1970, 37% of households consisted of 4 or more people and we somehow managed to get by with one four door car per household. Today, only 24% of households consist of 4 or more people. There are 113 million households and over 250 million passenger vehicles, or 2.2 per household. So, even though the number of people in our households has shrunk dramatically, we needed 120% more vehicles to transport our vast quantities of stuff. Not only do we have more vehicles, but the size of these symbols of gluttony has doubled and tripled, with fitting names like: Tundra, Navigator, Titan, Yukon, Suburban and Hummer. Every soccer mom with two kids needed a 20 foot long, 6 foot high Yukon with an 8 cylinder engine, getting 12 mpg to shuttle around little Aiden and Chloe to their ten scheduled weekly activities. It wasn’t only automobiles that Americans went gaga over. The average home size in 1970 was 1,400 square feet (we drive cars bigger than that today). By 2009, the average home size reached 2,700 square feet. God knows we need 12 rooms for our 2.4 person households. The expenditure cascade started as a trickle in 1970 but became a raging uncontrollable waterfall by 2008"
There are some good points in this article.
To what extent ageing baby boomers want to downsize is a bit of an unknown I would suggest. My parents and most of their friends circa age 70 have either typically downsized to townhouses, or moved to a countryside area somewhere.
But how many boomers will have enough savings or investment income to remain in their family suburban homes? Possibly quite a few.
I think the jury is out on this aspect, I wouldn't think its going to be a significant factor either way.
I think things will be self regulating to a certain extent. I don't necessarily think Auckland will get the kind of population the planners think it will get in the next 20 years. If affordable housing doesn't get built, I think less people will come to Auckland, more people will move out, and their will be higher household occupancies. These factors will mitigate the supply / demand imbalances to some extent, limitting the price increases Alexander foresees.
Interesting question for all those older home owners in the suburbs who don't want to sell and don't want to open up land around them: Who will be visiting them to stay in those spare rooms?
Their grandkids? Not very often because they won't be living in New Zealand...
cheers
Bernard
Tony is in it for the bank that Tony spins for....look through the smoke and there is Tony, mortgage offer waiting for a fool. His bank wants to pork the borrowing. To do that they have said to Tony..." time for you to earn your salary boy"
45000 missing houses....bollocks. He got that number from the same place Gerry pulled Shipley's name from.
GOOD ARTICLE This man is onto something . Firslty , he has recognsied that there is no shortage of land in New Zealand , and secondly he has recognised that the Admininstered Costs by local authorities and the restritve application of the RMA has ensured there is an artificial shortage and a huge barrier to entry .
Hopefully this article stimulates some seriuos public debate
No shortage of land? Well that spends on how you look at things. The Waikato River is dead, Lake Taupo dying and Southland waterways turning to waste drains.
Why?
Because we want more productive land?
Every new subdivision puts more pressue on.
The state of our waterways indicates a shortage of land allright.
vested interests Tony A?
Its classic nimbyism isn't it. Don't want greenfield development because it will spoil "countryside vistas" (even though most of NZ is countryside vista), and we don't want urban intensification. Result - stalemate and big housing problems
My lotto fantasy is owning a whole lot of land surroudning a development site and telling the developer to "go for it" in terms of development (provided there were urban design checks and balances, adequate sunlight allowance etc). Just to prove that someone in this world is not NIMBY
NIMBYism is the utlimate in selfish self-interest. Of course no one wants a nuclear power plant next to them, but some of the absurd protestation that goes on around reasonable development is pathetic
Matt in Auck...agreed...an example of NIMBYism gone mad were the protests in St Heliers over those Art Deco houses:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10701160
We need more high density, and not just in the CBD but suburban areas close to amenities...below is a good example of an awesome development built near my place:
http://www.trademe.co.nz/property/residential-property-for-sale/auction-390402555.htm
IMO, if we've going to open up the fringes, at least make sure it's done with due consideration to how a decent public transport service can be routed through these areas and integrated with the rest of the Public transport network, not more swaves and swaves of "all over the place" extrene car-oriented / car only suburbs with only a token one bus (largely empty) per hourly service zig zaging all over the place which we seem to get with many of the new suburbs springing up in Auckland. South East Auckland (Howick, Pakuranga, East Tamaki, Flat bush, etc) I believe is an epic example of what to avoid, poor land use planning, key zones scattered all over the place and as a result hard to service with anything other than the almighty automobile -- Extreme car dependence (Lack of travel choice) and Traffic congestion mostly consisting of single occupant cars. The area is Far away from motorway access, far away from Train access and you have to be quite frankly pretty gung ho to consider commuting regularly via a push bike. Personally I firmly believe you can still have your low density living and provide decent public transport if it is planned right. Look at Perth as loosely one example. Christchurch and Wellington have done better than us in Auckland, why is this? How did we manage to do so poorly in the transport department relative to other cities?
Perth is an example of how the best intentions by one government can be stuffed up by another. The former built the rail corridor, the latter delayed ordering more train carriges and hey presto public transport is inefficient again. Yet another example of short team gains ending in long term pain
Address the crux of the problem and it's causes without creating more issues. One of the reasons housing is largely unaffordable is because councils charge too much - reserve contributions, red tape, slow consents.
The last thing we need short sightedness - we need long term planning. I can just see it now if Tony gets his way, opening up the country to cheap shitty housing that no one wants to actually live in, creating slums that are a blight on the landscape. With all the issues of "Plaster homes" it seems the council is still intent on allowing them to be built. This will create on going costs. Cavity or no cavity they will all require extensive work.
We all know what a plaster home looks like after 10 years. They look like shit. If there is an issue, you don't just pull off one or two weatherboards you have to replace entire sheets of plaster board. What will they look like after 100 years????
Yet weatherboard homes retain there character. They last a 100 years. They can be maintained.
The other reason why housing is unaffordable is low paying jobs. NZ has opened its markets up to FREE TRADE for a number of years, but our trading partners have been slow to give any real benefits to NZ. Aside from Dairy, Forestry, and our Fisheries, any company that shows potential is delisted on our Stock Exchange and sold to bigger fish. We have a large proportion of the country on low income or benefits. Majority of the taxes are paid by a decreasing minority.
So in the Knowledge Economy, how does NZ compete with the rest of the world to create higher paying jobs - in NZ?
I can't believe I'm reading from a spokesperson of a serious commercial organisation, let alone from one of NZ's largest banks, that he's proposing "easing up on the building code"
“We keep increasing it – insulation requirements, leaky home requirements, earthquake strengthening, all these sort of things, green requirements – you’d have to look at that as well"
What he's actually proposing are higher rates of respiratory illness, energy unaffordability, equity destruction (which will suit BNZ of course - new revenue streams), loss of life and equity destruction (again...) in a country that's experienced 14 events >6 Richter in the last 10 years.
"Green requirements" probably means adequate effluent disposal or something similarly undesirable.
Oh and the babyboomers.
Babyboomers will downsize when steadily increasing rates and other costs (think: heating, transportation) impact on fixed incomes.
Not before because housing markets are among the least rational.
I would just have hoped for more intellectual insight from a chief economist. Then again, MBA is the acronym for "Mediocre but arrogant"....
I assume by "green" he means not using non / low toxic materials and finishingd and hence using cheaper.........Typical economist/accountant all he can see is the first cost, not what it costs to run or live in.....
This is the quality of the discusions we are having as a nation? Fudging a few marginal costs when housing is simply vastly over priced? its like an elephant in the room thats ignored....but we worry about some ants.....
regards
Amazing really. TA says relax the building code. Nuts. If the government / councils didn't come to some arrangement the banks would be steering down some humongous losses. Insurance only goes so far. Personally I reckon the government should have let some of the banks take a hit. They happily kept lending knowing full well defective houses were being built and losses likely to eventuate. Nice try TA
We should build as many of our homes / apartments out of timber as possible. This is the traditional NZ material / vernacular. Internationally they are even building 4/5 level apartments out of timber construction, this helps reduce the costs of concrete slab construction
I agree regarding the timber, 10 stories are now being done with engineered timber. Not that you should go that high, 4 stories is thel limit from a psychological perspective.
Trouble is from a thermal performance angle we need thermal mass in our houses. Thermal mass on orientation are the two biggest of many factors to consider.
So you end up coming back to earth, which can perform in earthquakes if engineered right. I just got some info on that recently.
Water and stone can store heat well. Brick is also okay despite its embodies energy. Concrete could be okay of used the right way and on designs that will last. But yes a lot of energy.
Straw bale/timber mix is also good.
He's a dinosaur, extinct.....Translate his waffle into "Lets build cheap crap that we can get yet more mortgages on".....
Our market is seriously over-priced ie 50% which he ignores....energy is going to get a lot more expensive, so commuting will hurt poor ppl the most and he expects them to commute bthe furthest just look at the US for that, which he ignores....pensions and savings and importantly investments are going to take a hammering which surprise surprise he ignores....so we wont see down sizing? funny but he ignores ppl not having much choice....
regards
the cause of the housing issues is really quite simple - land costs too much, building costs too much. Council fees are the "iceing on the cake", but really it all starts with land and building costs
Nz always has and always will struggle with economies of scale in terms of building. Alexander mentions prefab housing and kiwis' dislike for it - well maybe we simply have to get used to it. Nicely designed prefabs are common place in Europe and North America. Surely if we had more nicely designed choices it might become a more popular choice?
in terms of land costs...of course freeing up land supply will help, but it won't radically solve the problem. Hugh should be congratulated for his consistent advocacy, and some of his ideas might help, but its retrofitting a historic problem - there's no way abolishing MULs will suddenly deliver a whole lot of housing to the market at 3X median household income - 4X could be realistic
the answer? We need to minimise future house price escalation, AND get our economy stronger so people earn more, thus reducing the median multiples
Yet when you do a one off design, much of the framing is brought to site ready made so the difference cant be that huge in some ways. Ive seen kitsets, they are (at least the ones Ive seen) very cut price....yet adequate....I assume they cant get the price up to justify making them better quality.... Ive also seen some recent houses and frankly at least one was pretty ikky, no better than a kitset for materials and the installation just sucked. So in design terms I cant see why you cant get a good product done in a factory where you can have good quality control and fairly cheap labour.....somehow its not happening.....
Hugh harps on about land prices being too high, and yes I can see there is some % in the cost in that.....however in the real world unless you can flood the market with a lot of land it isnt going to drop in cost/price. Is that going to happen? dont be silly, the land owners just outside the boundaries will let it go piece meal to hold up the price.....it will make hardly any difference in that case except make some ppl money and over indebt others....
House price escalation is finished for maybe 3 decades....at least one, bearing in mind its been 3 years of small drops. I think Japan can guide us on that, they are 2 decades now and this is a global event and the problems are not being fixed just like Japan. So at its best i think we will see 4~6% losses per year in real terms for the foreseeable future. The kicker will be what happens when oil shortages really bite......and faster drops.....who knows a big overshoot, maybe a 2 x 1 multiplier.....a lot of negative equity....I t hink a lot of misery, and anger..
regards
Seems to me his proposal carries with it a lot of subsidies and a bit of a boost for banks selling mortgages and a bit of a day dream about where all these people are going to come from to build all these extra houses -- there aren't enough for rebuilding Christchurch, let alone the extra build he is talking about.
Opening up the fringes and rural areas for housing is a cost to society (local and central government) unless the developer ensures that there is is good public transport provided, wastewater and stormwater reticulation is provided, and the other normal infirastructure we expect provided and a coherent community is provided. And it is sensible to make sure that climate change and peak oil is addressed.
However the impression I get from the proponents of this "cheap housing on the periphery" idea is that the infrastructre should be rporvided bythe ratepayer and/or the taxpayer as a subsidy for the developer.
Tee Hee. Much as Tony the A has been derided, his basic ideas - free up land supply, get rid of development contributions, ease up on the ridiculous building licensing and ancillary regulation/costs (electric gear certification, scaffolding to climb to ceiling height, fencing around painting jobs, fer crying in the sink!) - are not bad.
And in Christchurch, the light-bulb has flickered into life over the Clueless City Council's head, as they have suddenly realised that if they don't Accent-you-weight the Positive, Elim- In -eight the Negative - then CERA will simply take over, zero their precious development contributions, squiggle new lines on maps, consent their new subdivisions in a weekend, and generally do what Tony A is advocating.
Classic example: Prestons (PC30) was refused consent because it lay outside the MUL, had traffic generation concerns, was refused access to the sewer pressure main which ran right alongside (it was 'reserved for Belfast....') and oh, a whole Decision's worth of blather.
Now, suddenly and magically, because Prestons is the only East-side subdivision likely to appeal to a whole bunch of people displaced from the wetlands reserves of the near future, the Council has decided that the alteration in growth occasioned by a certain earth tremor series has:
- invalidated every single one of the previous objections
- opened the door to a re-think of North Eastern sewers because they have been comprehensivley puckerooed and hence Prestons can tap in, as it were
- won't generate extra traffic because it will house displaced East-siders anyway
- etc etc etc
Just like the classic scene in Lock, Stock, the City Council, strapped to its narrow bed by the CERA monster, and with lighted paper tapers burning towards its toes, has Seen the Light!
Not before time.....
And a parting shot:
To all the hapless common taters who envisage a Public Transport-filled Future, two questions (answers at the bottom fer all you slow readers):
1 - during every significant temblor, snowstorm, or flood, which form of transport became instantly unavailable in greater Christchurch?
2 - during today's snowstorm, which group of public-spirited transport operators were called upon by Police and other Services to render urgent assistance?
Answers sbulc dw4 - 2 tropsnart cilbup - 1
Couldn't agree more with you Hugh and your comments on Tony Alexander.
It's funny how this expert looks to everybody else and points to area's where they could do common sense things better.
If Tony wanted to promote more affordable homes and contribute as a banker he could promote 30% deposits as mandatory.
I'm not sure if anybody will share my point of view as banks have been pulling the wool over our eyes for so long now, but, if people had to save and they weren't able to borrow as much then house prices would come down over night.
Agree, I share your view 100% (until somone can prove us wrong!)....though even 20% would be enough / neutral apparantly.....I think if you really wanted to put the icing on the cake with this you also hand that LVR to the RB and allow them to vary it to contain house price inflation.......I think Steve Keen? pointed out that even small variations of 0.5~1% would have the desired effect....I think Texas? has a 80%/20% law and it seems to have contained or been a big factor in containing sillyness in the US....
Prices coming down, yes I think so....the OZ Govn porked the housing market again and again doing a first time lenders payout. I think its pretty conclusive that it only made housing more affordable in the very short term. Once that $8k was factored in, house prices rose and it was negated....so really it achieved nothing positive long term and was actually counter-productive medium and long term......
regards
waymad....to answer your parting shots.....re Public transport. Where is the cost of deisel and petrol going? and its availability? Easily $3 and probably $4....likely in the future both will be rationed.....Did NZers survive before the invention and mass production of the motor car? Yes becasue here we sit.
An MiEV is $60k, has a life expectancy of 1/2 a $20k equiv....Prius I think is $45k?, Honda $38k....all will last about 10 at most 15years and are about in small numbers....So in effect are un-affordable for most ppl......
What will they use instead? The options are, walk, push bike or public transport....now some ppl with land and the ability to grow oil rich crops are going to have bio-deisel....those same ppl of course will get visited in a civil emergency and their bio-fuel and possibly their "borrowed"
Get used to the idea that SUVs wont be around in the quantities they are now because of the crippling costs....
regards
Also consider, what you are saying is, hey give us fuel as once in a blue moon we are useful!....does that really cut it? somehow I dont think so....
One of the reasons I have not got a bio-deisel tank and my 4wd converted is there is no point when the police can visit and under the civil emergency law simply take the truck and its fuel with no recompense, and I might never get it back......ever.....Well say several years later if it needs repair work.....and in that time it probably wont be serviced....maybe they would be nice and drop it off for a few hours every six month so i can pay for the service and then they take it again....makes so much sense....not.
Reality check time.....your and my future is not more freedom, its probably way less....
regards
Well I'm overseas at present,currently in Gyeongju and the Hilton here has free, fast internet access. Am intrigued people still 해ㅑㅜㅎ ㅐㅜ 뮤ㅐㅕㅛ (woops, went back into Korean for some reason), says am intrigued people still going on about houses in NZ
We are fortunate to have such relatively cheap houses in NZ, for what you can get, except may be for some parts of Auckland. 6 days ago saw a 3 bedroom appartment, fairly tired looking, on 4th floor in 12 storey block in sth Seoul, 100 sq meters, and even with our dollar value currently it costs $1.5 million to purchase. So lighten up, things in comparison in NZ are pretty damn good value, I would suggest. By the way you will find the average income in Sth Korea similar to that of NZ, although seeing places like the Posco iron and steel complex at Pohang yesterday, they will probably soon surpass us (but they can still learn a lot from us in some things too, and the proposed FTA will be a coup for us if we can succeed).
Don't know why Hugh is slagging Tony - from my perspective they're both on the same team, and both fullbacks.
We have to learn to live withing our 'natural capital' budget, and you don't do that by exponentially growing. It's also better to apply the brakes earlier - always gives you more room to manouevre.
Demographics says we will have more house-per-head, and peak energy says we will go into a period of severe constraint with 90% of our existing housing stock unreplaced.
Which means the best approach to our urban infrastructure is retrofitting.
Because Hugh has a pretty extremist point of view?
Retrofitting, agreed.....the biggest thing that screams is energy to change and it will be too "expensive", if available to do so. Therefore we have to do as much as we can to what we have....the problem that worries me is how do we then hang onto it? Potentially under a "civil emergency" all your preperation work gets "shared" out with those who didnt, have not or wont....
One of the key things therefore is driving local self-reliance and community, has to be which means village in spirit, layout and execution.
regards
Ain't that the truth.
What gets me about all these folk - BH too - is the way they cling to the Emperor's clothes bit. Even that Grantham fellow droped the energy ball with the last one.
Physics doesn't 'muddle through'. I either 'does' or it 'doesn't'. Our whole global society is built on one which is just starting to 'doesn't.
Too late to morph without pain, at that point, though morphing is what has to happen. Longer it's left, the more pain. Bit like putting off a cancer op.
Well give BH time....look how far he has morfed in 3 years!....
Grantham....I assume, while very intelligent isnt an engineer/scientist. "Muddle though", well I think we will, but its going to be a massive shock, its on the scale of the preparation and cost of WW2....and im sure some wont make it.....which is a worry if say Pakistan dis-integrates and of course they have nukes....and thats pretty likely IMHO.....then there is china.....
I'd like to see some sort of chart / graph saying this is the essentials....and their dependancies.
Example, pretty clearly electrical power is one of the key items....so we have to be able to make our own generation kit all within NZ....what does that involve?
1) some heavy engineering and the shops and skills to go with it.....building lathes? all imported I assume....so that existing stock in NZ becomes critical....
2) Locating, extracting, smelting and machining copper for instance.... Can we draw our own wire? how complex is it to do so? what about insulation? Im sure we wont make plastic here....so when we have to start replacing our aging infrastructure it will be with lesser materials, so it wont work as well or last as long....seems to point us back to local again.....
regards
If our goverment has bought us to a point where we are 45,000 houses short, then they have no place allowing any more imigrants into the country. As it is we are losing lots of people because between a lack of employment, low wages and high house prices, they cannot afford houses. I suspect that if the govt boosted the number of imigrants to 100,000 then the number of people leaving would rise to match. We simply do not have the capacity to absorb more. The ponsy manoeuvre of pumping the ecconomy with imigrants has reached it's natural limit.
One of the many problems that we have is low productivity, that is too many people producing to little (especially exports). Our capacity to retain let alone expand non agricultural enterprise is abysmal and probably negative. Untill we can reverse this, our productivity (and real wages) can only be increased with less people.
Or, to put it another way: More people = lower wages.
You couldn't be more wrong. If that were the case Japan and the USA would be impoverished. Having a bigger population allows for greater economies of scale and a more advanced division of labour. New Zealand's small and sparse population is a big disadvantage.
And aren't they? Or why else do they both have interest rates at 'zero' trying to' un-impovrish' themsevles; what do you think the trillion worth of debt is that The States has; or the debt/GDP figure of 220% (?) that Japan has? Wealth! and let's be honest; neither country has an open door immigration policy, nor an open economy! How did the immigration chaps treat you the last time you went through the doors in either country?
Kleefer - Adam Smith was relevant to his time.
Which was a long time ago.
We are at the top of the gaussian curve now - all reference to the fellow who wrote an early chapter needs reappraisal at that point.
http://www.towards2060.org.nz/assets/Strong-Sustainability-for-New-Zealand.pdf
Note the graphs
Economics doesn't count inputs (resources) or outputs (pollution). So it was an artificial creed which just happened to fit the upside of the physical extraction.
On the downside, les people means more per head.
Hope you didn't pay to be taught to think like you think.
Spot on PDK! " less people means more per head." And any new arrival 'takes' from the resident population that which it has established. ie: the schools, roads,hospital etc that they will never pay for with whatever taxes they pay in their lifetime. More poeple, for the sake of 'consumption' is what got us into this mess. If an economy is expanding, fine! There will be jobs to fill. If it is sagnant or contracting ( now and for who knows how much longer), jobs will be shared out amongst the available workforce - that's lower wages if you import people. "People" don't make an economy grow; jobs and produce do.
No it's not "spot on", it's absolute nonsense like everything else that Malthus acolyte writes. In a market economy new arrivals don't "take" anything, they have to trade for it (in other words, give something in return). They only "take" something if they go out and steal it, whether they do it themselves or use the big state PDK seems to worship to do it for them.
"People" don't make an economy grow; jobs and produce do.
What ignorance! Where do you think "jobs" come from, out of thin air? Economic growth comes from capital accumulation enabling greater productivity. Politicians have stuffed up this process by debasing the money supply, stealing from wealth producers and introducing regulations that discourage free enterprise. You should blame them, rather than immigrants, for our economic malaise.
"Economic growth comes from capital accumulation enabling greater productivity".
Not 'comes', 'came'.
Capital is a proxy, always assumed to be redeemable as an exchange for goods and/or services. It could only facilitate what was being done physically, in itself it's nothing - certainly nothing real.
That system required an exponentially-increasing supply of whatever made those goods and/or services. If that plateaued, so too did the underwrite, as did the ability to inflate debt away.
Calling people 'Malthusian' as if that will change the reality of exponential math, is seriously ignorant.
You live on a finite planet. Get used to it. Money doesn't change that fact. Not one iota.
Bue we've already proved you don't understand that.
PDK .. Chill out a little ..
We can house the entire worlds population with 5 to a house on 1/4 acre sections in just West Australia leaving 10 % for roads etc.
Just as Feynman's great " There's lot's of room at the bottom " lecture opened up possibilities beyond our wildest dreams - ( 32 Gig on a chip retailing for $ 80 ) technology will open up opportunities to address growth.
Breeding molten salt thorium nukes with waste heat for fresh water production etc etc and many things we haven't even thought of as yet.
Life will go on - it will be as different in 2100 as we are today from life in1900.
Not better or worse - just different !
Humans are very adaptable - excluding tea party activists !
JdeB - I've read your stuff before. You get the problems in every area but one.
For some reason you're myopic about nuclear energy, and the 'technological fix'.
It had to have happened by now, boyo.
I've been through the Aussie desert - and I'm telling you, you're out of lead-time. And of a system to make it happen. Look at climate change - nothing has happened in a real reduction sense in 20 years. Do you really think someone is going to suddenly address the future?
Lite won't go on for many species, and the remnants of ours will likely not thank us for our efforts either. But yes, the planet will continue.....as it once did with a no-oxygen atmosphere.....
JdeB - I've read your stuff before. You get the problems in every area but one.
For some reason you're myopic about nuclear energy, and the 'technological fix'.
It had to have happened by now, boyo.
I've been through the Aussie desert - and I'm telling you, you're out of lead-time. And of a system to make it happen. Look at climate change - nothing has happened in a real reduction sense in 20 years. Do you really think someone is going to suddenly address the future?
Lite won't go on for many species, and the remnants of ours will likely not thank us for our efforts either. But yes, the planet will continue.....as it once did with a no-oxygen atmosphere.....
Exactly, Kleefer! Jobs do not come from thin air. They're created to satisfy a need for a product or service. In an expanding economy jobs will be created and capital accummulated. In stagnant or contracting economy, jobs will remain constant, or even reduce ( cost efficiencies). So any 'new arrival' will be in competition with the resident population, and its progeny for jobs. Hence, any increase in population into a non-expanding economy ( whether those workers are imported or organic) creates competition for work = lower wages. I am not against immigration per se, just that it fit the economic circumstances. And now , is not right for importing workers; especially give the roll of unemployed/underempolyed we 'pay for' in New Zealand, currently. If 'people' created jobs, there would be high wages and a booming economy in Ethiopia.
Japan is an interesting case. It's population is droping, quite quickly. This seems to have had little effect on their ecconomy. Any problems that they now face are the aftermath of the investment/property investment/debt bubble that they suffered 10 or so years ago. (a portend of what the west is now facing)
From my visits to Japan it seems to be two distinct ecconomies. The Industrial/Tech/export sector is ruthlessly efficient and highly productive. The domestic/service/govt/retail sector is highly bloated overstaffed and unproductive. Their unemployment benefit provisions are meagre so it seems that people are socially accomodated in this latter area. Accordingly I expect that their reducing population will be simply accomodated by increasing the efficiency of the non export sector.
I guesse that a big home market helps to some extent but I doubt that the NZ pop'n will ever become large enough for this to become a significant factor. There are plenty highly compedative countries that have relatively small populations. Denmark, Finland, Singapore.
Har de Har: another icy day in the 85% Just Fine city of Christ-with-only-half-a-church.
Public transport - nowhere.
Hospitals getting 4wd clubs to transport Important Medicos to their places of work.
As as fer the Pea Coil argument beloved of PDK and Steven, it's broken record time.
There is 300 years of transport fuel-equivalent in the Southland lignites alone.
So that buys a leetle time for the Marvellous Bacteria-driven futire of liquid fuels
Well, must away. Into the trusty Subaru, over the ice to the next demanding client. I would normally have taken the bus, but the poor things are still locked in a shed somweheres.....
way to go Waymad - I have looked into this problem with the buses and can report the phenonoma is known as Peak Public Transport
the way forward for NZ is a Retreat to the Caves - according to solemn research by PDk & Co
PS I guess you have seen this link ? http://mises.org/daily/661
Gonzo - (why is it that I start humming a Boney-M tune whenever I see your posts?)
That link is the Julian Simon drivel rehashed. Serious horseshit, wrapped up in lots of innuend oan invective, aimed at a section of the populace stupid/egotistical/arogant enought to swallow it.
the funniest part is 'if and when'.
I'll put the brakes on when and if I hit the wall.
What forces you to tout such nonsense? You remind me of the CEO's of tobacco companies, all spin and horseshit attempting to prolong the screwing of others.
Powerdownthe tubes - nothing is forcing me - thats typical enviro hysteria assuming that because someone puts up a rebuttal of retro ideas there must be a mysterious force behind it. Your emotive language indicates a fear that the masses will have their eyes opened
Gonzo - spin 101 says "try and splash your own shortcomings at those you wish to denigrate".
The truth is always found in comparing the vested interests involved - or lack of same.
I started with - and continue to have - no vested interest. Notice I'm happy to say who/what I am, and to provide scientific (not mantra) links.
More chance of getting at the truth, that way,
You won't say who you are, or what your vested interest is - therein lies the difference between us.
LOL, get real......you are now talking war and / or piracy...piracy can probably be handled.
War, as a nation of 4 million ppl we cant build enough ships or buy enough to mount a credible defence against say China or the USA, cant be done and its obsolete anyway.
To conduct a war this far you need fuel or a return on the fuel invested....these days only pirates need to hijack ships, the rest like china do trade deals which are totally legal and above board, they just buy things.
regards
Actually its quite well docuemnted that the tobacco industry for decades funded the same organisations and ppl that have now moved onto the deny AGW bandwagon. The difference is now the funders are the likes of Exxon.....Lets also not forget to mention the political angle, these same ppl are highly extreme in their views, far right wingers and libertarian in outlook so will oppose any truth that brings the danger of laws or regulation....purely on political principle, no science involved.
Eyes opened, trust me I hope for it....what they will see will not be pretty......lets look at the recent Republican congresional hearings, we had a few sceptics ate best. like only 6 were prepared to front up and none were Climate scientists. Any of the big names in the denail industry? like Tony Watts? uh no...in fact if I recall correctly his absence was noted....as a congresswoman(?) tried to submit a statement by him(?) which was rejected I think as he was not there. and further hearings? no they have died a death when it became apparent there was no support on the deniers side for a day under the spotlight.....maybe becaus eits a legal situation equiv to a court? and therefore awkward Qs can be asked....like how are you funded....
regards
yeah right...even if true, Greenpeace is what? a single organisation..
http://en.wikipedia.org/wiki/Patrick_Moore_%28environmentalist%29
This guy? at best a AGW skeptic but reality a denier?
Oh and he resigned in the 1980s....a long time ago....and he was not a\the founder.....at best one of the early ppl.
Ex-communists, uh no....I see opinions in right wing rags on that.....WSJ, hardly surprising its so biased really....and they seem to use the term socialists.....but hardlu hi-jacked if they were there first.
regards
You are correct. He and some of the other founders of Greenpeace who had genuine care of and love for the environment were horrified at what Greenpeace had become. A political organization that had become overtaken by people who still held strongly Marxist-Leninist, anti-capital anti-business views.
As I said in here before, and was abused for it too I might add, Greenpeace and 'Green environmentalists' are using the environment as nothing other than a means to an end. And what end is that? The control of capital.
Exactly. Do you find it as interesting as I do, that the anti-business lefty lettuce heads hold up saintly pure science as their champion on all matters 'proving' human (read big business) caused global warming, but in the same breath, damn science as nothing more than the untrustworthy lying monster that it is in the back pocket of big agribusiness as soon as science says there is no evidence that GE crops pose a threat to the environment or to human health.
Interesting huh?
Have you also noticed as I have that the only thing consistent to both approaches by the lefty lettuce heads is that both act to restrain/control business?
too true - the worry for NZs future is that they are typically quite well organised and politically noisy and so gain influence out of all proportion to their business experience while you and me are out there trying to produce real income . Lange,Clark,Goff,Cullen/King/,Obama,Brown/ Norman etc - common thread being teachers/activists/lawyers/unionists/community organisers
David – NP -propaganda chief.
David- don’t mix up words badly. But then - I think you could make a great master chef, mixing up all sorts of ingredients for a perfect “Italian Spaghetti Dish”.
http://www.youtube.com/watch?v=UerBCXHKJ5s
I don't know of any form of transport we currently have that burns coal.
What about the 5-10 years that it would take to put a GTL plant in, and even then there is a chance of failure as Sasol has experienced.
Steam train or ship? Wait let me go down to the Warehouse and buy one.
I think the original deisel engine could burn coal powder and vegitable/peanut oils were possibilities. When I left the Merchant Navy in 1983 Sulzer etc were experimenting with <80rpm coal powder injection in engines.....However the quality of the coal was important, the sh*iity lignite is almost certainly too poor quality (lots of ash)....its options are conversion to liquids or used in a steam plant I suspect.....
Steam trains and ships used high quality steam coal, there is hardly any left....certianly not enough to use like this.....but there is lots (relatively) of crappy hvy fuel oil about....so that isnt the immidiate worry, deisel, jet fuel and petrol are ie the light stuff.
Also steam trains are massively in-efficient, and not very flexible....I would think far higher efficiencies are possible by burning crappy quality coal in a static plant to make electricity and transmitting it....and running electric trains.
regards
Steam is far from dead. A lot of work has been done and is being done to improve flexibility and efficiency. In an energy crunch we can make new locos in NZ.
http://5at.co.uk/uploads/Articles%20and%20papers/Malcolm%20Cluett%20Perth%20Presentation.pdf
OMG - actually solar-to-steam turbine-to-electricity is a low-tech goer. You have to be careful though - the transitions always carry losses (almosty always as heat).
I suspect we're better doing more micro-hydro, concentrating on efficiencies, and electrifying rail within a radius of big population centres.
Looks like the ability to even 'do' the motorway type projects is fast diminishing:
Micro-hydro is definitely under exploited and there is great potential. There has been a lot of work done on modern steam in NZ but can't for the life of me find it in my files. Recently twice on high speed trains in western China there was a short power cut and we came to a grinding halt.
Crown minerals, already read it, wriiten by second rate economists frankly......
3 things, one they see it extractable in terms of dollars and not in terms of energy.....the return on converting lignite to transport fuel is terrible.
I'd like to see the sums but $4+ a litre wouldnt surprise me.
AGW, converting it, its impact on AGW is awful.
bacteria driven.....all renewables are capital intensive, and are starting from a tiny base so they wont be a huge addition to dwindling fossil fuel, you have to build the conversion plants and they are attached to each main plant. So instaed of say a few huge refineries we ahve thousands of small producers, it has to be collected and distributed...no small task, so less efficient so more costly.
AGW, you are still outputing more and more CO2, as you use coal as the primary driver...bacteria just recycle...but the CO2 wont stop going up.
It comes down to maths, physics, and time everytime....
broken record...? yeah right....I see your head is still firmly planted in the sand.....all the way to your ankles it seems.
regards
I read the piece on bio-fuel, it was interesting, I didnt know we still had a subsidy or that it expires in 2012. I had also seen mention of a tallow plant that was going to be built but could then find no further mention, yet its 3/4s complete and was mothballed.....I have asked the Green's what their view is on extending this policy/grant....
In terms of economics I see no mention of energy return on energy invested, just a dollar cost.....slight of hand I wonder? even if te second generation bio-fuels are say 2 to 1 return thats way lower than the 8 to 12 to 1 we need....dollar cost is immaterial...it will rise in step as the input energy cost rises.
regards
Notice that gonzo is new, perhaps a reincarnation of certain other clowns that have graced these pages. Trrroooooll....
Reading his posts is doesn't actually say anything worth reading so I probably won't in future. I would invite you and PDK to ignore him also, I am sure you a better use for your time.
Yeah - but these folk are essentially lying to the populace.
And there are worse uses of your time than countering that.
You should have seen the temp diff either side of the panel last night Scarfie - best snow/freeze we've had for a while. Had 2 stranded car-loads staying and a Brazilian backpacker as well. Mattresses strewn all along the mezzaning - t'was like the Waltons....
There were comments about a house that could maintain a 20 degree (19.6 to -0.6) split without artificial input. :)
go well
It was damn cold here last night also so it must have been brutal down there. I went through 3 baskets of wood instead of 2. Mind you I was living in Invercargill when they had the coldest frost on record, a 13.8. It didn't go above 0°C for a week, and because it snowed just before, it sat around and killed all the cabbage trees and flax. I built my own multi fuel stove to replace the wood burning Yunca, and I was glad for it that winter. I just reused the door and shroud to make life easy for me. Not so sure on the coal now of course.
Must of been cool having lots of people around. If you get to read Alexander one day he talks about how travelling used to be like that, and still is in some asian/eastern areas. A big communal area with cubicles off to the side with just a curtain across. Travelling then becomes more about people:)
I think the 'Garbage Warrior' would have been doing the 20°C split back in the 70's with earth homes in Arizona. Those houses would be better than 99.9% of the trash we live in.
Invercargill....hmmm 98 or 99? I seem to recall the locals saying it was so cold it killed many trees....I left after 3 days....I visited to look at some work then I think they wanted me to stay and run the hospital facilities full time....I made it clear that place was of no interest...what a hole....
regards
PDK , the real lying to the populace does not come from this site, it's not that large a readership here.
Keep at it though , do you use your knowledge etc in the directions of influence. eg elsewhere other than this site.
This site will not make change as in order to do so it would have to cross into a space I would be certain BH is not prepared to tread.
I noticed the new troll, but to be honest he seems more stupid than anyone else I can recall in here...so I dont think he's an alias.
Ignore him, could do but the issue I have there is he says things that if not countered remain as a "truth" so he should be challenged as a matter of course.....So ppl can see his posts and a counter and then hopefully they will go look it up for themselves....
Tiem wasting, debating is always good, sharpens the mind and makes you do research which broadens your knowledge. Sometimes its worth it, Waymad's post this moring for instance took me to the biofuel site which answered some Qs I had had for a while but had been unable to find the answers on....ie state of the tallow plant romoured to be being built on North Island. So from taht I pinged my Green MP and asked him the position of the Greens on the subsidy.....
regards
I'm sure I've met this one.
Think your way through the BoneyM songs......
Yes Steven - 100mm walls, 125mm roof. We actually gained about 0.4 deg. overnight, I think due to combined body-heat. (Scarfies's right!- travel is fun).
150mm or so of snow on the roof - sprung the spouting outer face a bit, I'll galv strap it next time I'm up there - all else good. Dozens of cars stranded up here, Waitati hosted 220 all up.
I looked at second hand on trademe must get the prices of new to compare. Cost is important new seems to always be an arm and a leg....I actually enjoy doing this sort of stuff....it wont be hard....flashings is just bending a bit of tin and few pop rivits, fill the voids with expanding foam....easy peasy....So I'll remove the old timber clading, attach the panels to the house frame, I will then re-clad it in the timber so it "disappears"....just make new ends....for the difference.
regards
I see where you're going. If you buy second-hand, weigh it first. Old freezer panels (coolstores aren't as bad and houses not at all) have a fair internal precipitation chance, if they weren't very well sealed. The foam is hygroscopic - one way traffic. Don't buy heavy - you'll never dry it out, and that's the reason it's for sale.....
11kg per sq metre, from memory, is 100mm panel dry weight. Last I costed it new, it was about $60 a sq/m (but I'm out of date with that).
Tony - good thinking. How about this too:
Would it have usefully restrained the bubble pricing dynamic in the last upswing?
Cheers, Les.
I'm late to the party with this topic but bank economists are given way too much weight by the press in New Zealand. They unfailingly normalise behaviour in their customers that benefit their employers, the banks behind an artifical facade of academic independance. Every time I read these warm fuzzy pieces from bank economists, and they do spin the worst possible news in the nicest possible way, its a wonder how out of step with other research and publically available information they are, and how they have more in common with lobbyists than academic economists.
bank economists are good spruiking entertainment!
But you are right, its scary how much credibility the MSM give these lobbyists. Their track record is generally poor
that fella Stephens looks mighty young for a "Chief Economist" - wonder how much real world experience that guy has, versus being a geek crunching numbers and models since graduation
Put the key in, give 'er a coupla winds, and just lookee...
Electrons tortured: few. Entertainment produced - priceless!
But seriously, chaps and chapesses, taking these polar positions actually doesn't advance the debate aboot Housing much.
Because, just like with Transport, Preferences trump Planners.
And adaptability plus innovation (oftem with backs jammed up against a wall of our own making) has seen us - er - evolve into what we are now.
Why change this dynamic?
So the Future (apart from being, as dear old Leonard Cohen predicted 'Murder'), will be a positively teeming Ecosystem of steampunk, biofuel, microhydro, solar-in-building-envelope, passive solar build, micro-nuclear, geothermal, coal-to-fuel, biochar, tidal, wind, bacteria enslaved to build our specified carbon rings, and so on. Of course, we're not aboot to abandon Metals, so Mines, Furnaces and Dark Satanic Mills will be a part of it all too.
Just try Controlling an Ecosystem, folks. Damn thing has a mind of it sown....
As a builder of 35 odd years living in a 1905 house - there is no way I would live in anything built after 1990. Totally sealed boxes for "warmth". Suck in those poisons from the Carpet, couches etc.
Others talking here are right about the costs involved in building. Something has got out a wack since 2004. concents have been falling since - now becoming very serious for some and fantastic for others.
Once again a bank employee finding it impossible to even contemplate a marked reduction in the value of houses.
Markets are lead by sentiment for a considerable period of time but always return to a mathematical equation that works.
With NZ its simple- currently we have low wages and high house prices- this can only continue for so long, eventually one side of this equation has to change.Perhaps there is going to be a significant increase in NZ wages - this does seem unlikely at this stage, but this is the only change that can prevent house prices falling heavily at some point.
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