By Alex Tarrant
Auckland needs to build more townhouses and low rise apartments, and allow more house building on its fringes to help the city overcome its supply and affordability problems, the Department of Building and Housing says.
Meanwhile, the level of high-density development wished for by the Auckland Regional Council when it introduced the city's current urban limits in 1999 did not eventuate to any scale, the Department said. The council's plan to allow for 25% of development over the next 30 years to occur outside the existing urban limits should be reviewed, and the council should work closer with the private sector on development capacity and density targets.
Department projections indicated new nationwide construction volumes in the order of around 20,000–23,000 housing units per year were required over the next five years to keep pace with demographic and other changes in the market. However, average building consent volumes over the last three years had been below 15,000 dwellings per year, meaning action was required to help tackle the country's housing shortage.
That shortage was most evident in Auckland, which needed 10,000 new homes built every year to meet expected growth rates. Current activity levels were about half that, the Department said.
Releasing its post-election briefing to Minister-outside-Cabinet Maurice Williamson, who retained the post from the previous term, the Department said there needed to be changes made to the Resource Management Act and consenting processes to facilitate more medium-density development, as well as redevelopment of existing urban areas. New Zealand home buyers also needed to change their attitudes toward medium-density housing.
"There is a noticeable gap in the market (particularly in Auckland) in the availability of medium-density housing (ie, attached dwellings, terraced housing, low-rise apartments) and a lack of choice at the affordable end of the market," the department said.
"Increasing the demand for multi-unit housing would rely on people’s preferences changing. It would be assisted by providing developments that include the attributes of detached housing within new, more intensive housing types and additional benefits that enable households to make trade-offs," it said.
New Zealanders generally preferred stand-alone family homes, the Department said. More intensive housing was perceived to be of poor quality, less private, and was more difficult to plan and build due to consenting issues and more complex construction requirements.
RMA changes
There needed to be changes to the RMA and consenting process to facilitate redevelopment in existing urban areas and consents of medium-density developments.
"The Department is not convinced that the existing, “effects-based” Resource Management Act 1991 (RMA) is conducive to achieving effective and lower-cost urban development outcomes, particularly for larger scale development or redevelopment areas. An enhanced regulatory role for spatial planning could help to reduce the amount of regulation and design review underlying current planning regimes," the Department said.
Reduction in regulatory costs through more streamlined processes and certainty of regulatory outcomes would also reduce supply-side rigidities.
"The typical timeframe for making plan changes to bring greenfield land on stream for residential building (from feasibility and set-up to construction) is on average around five years, although the Department is aware of instances where this has taken 10-plus years. This is largely due to the hearing and appeals process," the Department said.
The urban richies don't like it
Community resistance was also a barrier to redevelopment and infill in New Zealand's major cities.
"This is particularly so in inner-Auckland, where land values support higher-density redevelopment, but where local communities are generally affluent, vocal and resistant to perceived changes to lifestyle and reductions in property values. Developers tend to focus on greenfield developments as they are more simple and face less community opposition," the Department said.
Enhancing the capability of institutions to accumulate green/grey/brownfield land holdings for redevelopment could also improve the supply-side environment. The objective would be to help drive supply, including intensification, through the accumulation of land holdings, potentially in partnership with private sector developers, it said.
Auckland the focus
Many of the building and housing challenges facing the rest of the country were magnified in Auckland. They included housing supply; urban development; homeownership affordability; rental affordability; social housing provision; and leaky home remediation, the Department said.
It summed up the situation in Auckland as:
- Auckland is one of New Zealand’s most unaffordable cities. Its median sale price for residential property is well above those of Wellington, Canterbury and New Zealand as a whole.
- Auckland needs around 10,000 new houses per annum to meet projected growth rates. Current activity levels are around half the volume required.
- The introduction of the metropolitan urban limits (MUL) policy in 1999 led to an increase in the price of land inside and just outside the MUL. The level of higher-density development envisaged by the Auckland Regional Council did not eventuate to any scale.
- Rents in Auckland are significantly higher than across New Zealand. Within Auckland, Central and North Auckland rents are higher than in South Auckland.
The Department was wary of the Auckland Council's draft spacial plan, which it said included;
- a new rural urban boundary, which allows for 25 percent growth over 30 years to occur outside existing MULs
- provision for new development areas (of about 6000ha) for residential and business growth, with a commitment to best-practice urban design and a range of densities and housing types
- ensuring 20 years’ development capacity (of land) is available through five years’ unconstrained capacity, with a further 15 years’ capacity planned
- a clear direction for the sequencing of growth and development over 30 years, including prioritising eight growth areas in the Plan’s first three years.
"The Department remains cautious about the ability of the proposed urban form to accommodate the anticipated growth. We consider the Auckland Council needs to do more work on:
- providing more detail about the development capacity and density targets, and engaging with the private sector to confirm market achievability of identified growth areas
- emphasising monitoring and review of land supply and development capacity as a core component of the development strategy
- increasing certainty about how the implementation framework will be applied and, in particular, giving greater direction on the regulatory approach that will be used to realise land-use objectives and on the role of economic and financial instruments
- increasing transparency about the challenges involved in realising urbandevelopment objectives, and the choices and trade-offs that need to be made."
157 Comments
Great idea, let's turn Auckland into a rats nest.
To me NZ housing is living in single family detached dwellings with a decent sized garden interspersed with reserves. Why not eliminate population growth so that we don't have to build this type of high density housing. At the rate we are going the NZ our grandparents were born in will have disappeared and the housing in our towns and cities will be just the same as every other slum location in the rest of the world. Is that what NZ'ers want?
You can have a proper city, just not turn it into a cesspit aka most other cities in the world.
Further, increasing density just makes the city un-sustainable in the future....more dense = more energy use.....we wont be able to spend that energy because we wont have it or be able to afford it.....so we have to get less dense....less energy intense....
Its not a case of dont live there, not so simple....Auckland wouldnt be standalone, if you make such a city that cant stand by itself it will suck the life blood out of the country.......
regards
I don't think big cities are cesspits - where do you go on your holidays? They are definately more fun and vibrant than Auckland is.
Surely dense is less energy intense - don't have to travel for miles, we could have public transport (powered by electricity not oil). Chucking more subdivisions on both ends of Auckland and building more motorways is not going to make it more energy efficient!!
Does Auckland really suck the life out of the country? Are you one of those people that think the only productive thing is farming? Is the GDP per capita less in Auckland than the rest of the country?
Even the Demographia urban sprawl pushers own research shows that density vastly reduces per capita pollution, energy use and traffic congestion - then they go to the bizarre conclution that density is bad because more pollution spread out is preferrable to far less pollution in a smaller area as it's not as noticable.
Finally , they have stated what has been so bloody obvious to most Aucklanders for years .
The real question to ask is whether anything will change ?
There are too many vested interests ensuring the supply of land is constrained , there is a plethora of bureaucratic red tape , over the top rules and regulations, and councils who rort the system in fees.
Can anyone tell me why it costs $120,000 to do a single section subdivision ( into 2) in New Zealand , when the same thing costs under AU$ 10,000 in Australia?
And in Aus , you get local councils actually encouraging the subdivision of urban land , the Town Planners walk you through the process.... and are helpful .
And we are planning to catch up with the Australians without any shift in attitude
Yeah right !
80% of our population growth is from people outside New Zealand.
Getting rid of third party appeals under the RMA would be a good start - let developers / planners get on with it without being held to the whim of neighbours. Sure, let neighbours have their say through the normal submission process, but get rid of third party appeals please! NZ only one of aobut 3 countries in the world that as it.
Exactly. There are some appeal rights in limited situations here in South Aus for applications, but plan changes can't be appealed. Makes a big difference to timeframes. I think the Gvt considered reducing appeal rights in the last RMA reveiw but tossed it out because of concerns about "Erosion of democratic rights"
the dept say:
"This is particularly so in inner-Auckland, where land values support higher-density redevelopment, but where local communities are generally affluent, vocal and resistant to perceived changes to lifestyle and reductions in property values.
there is some truth in this, but they fail to acknowledge that the inner suburbs also have genuine heritage qualities that do not readily allow for much high density development
A great majority of Americans — in fact, the highest level in six years of Saint Index surveys — oppose new development in their own community. 79 percent said their hometown is fine the way it is or already over-developed. Some 86 percent of suburban Americans do not want new development in their community. Asked, “What type of new development would you most like to see in your community?” the most common answer was “none.”
http://saintindex.info/general-attitudes#nimbyattitudes
'bit of a limits to growth issue I think.
DISCRIMINATION / SOCIAL EXCLUSION IS NOT "CLEVER"
........
Many New Zealanders believe that it is our low population and physical environment is an asset. A Chinese leader (several years ago) described NZ as "the last paradise". Your lot (capital gain entitled good old boys) are pushing the idea that NZ's "underpopulation" is an illness- yuck!
As I pointed out a whopping 80% of population growth is from those entering outside NZ so it isn't (only) about poor young people can't afford a home, it is about concsious policy choices (pushed by the good old boys of property) leading to continual population growth. While making your lot wealthier (because your entitled) it leaves the rest of us poorer, as we have to pay for your new harbour bridge (as we pay taxes).
Your idea that people create wealth independant of resources, geographic isolation etc. is just a right wing fantasy (JK Rowling aside).
jh - just because 70% of people think discrimination is a good idea - doesnt actually make it a good idea.
The poor and the young must have the right to the opportunity of affordable housing too.
...........
That isn't the issue; the issue is unfettered inward migration causing a reduction in peoples quality of life. This is reallity:
Once Redcliffs was an unprepossessing fishing village, distinguished by a collection of modest fishermen's cottages. Most have now dissapeared, replaced by more luxurious residences, and property values have escalated.
“It's a standing joke that we're being taken over by the Americans and British, who have taken advantage of the stronger property markets in their own countires and favourable exchange rates”
“I know an English couple who have summer here and go back to England in the winter”
“What other parts of the city have such nice walks?.....
Note poor New Zealanders priced out of a nice environment while you hawk "affordable" and Jesus will bless the infrastructure........
This is a report of FAILURE...by everybody involved in getting affordable housing for New Zealanders. Failure by Goverment, FAILURE by Council, FAILURE by DBH, etc etc
A lot of high falluting PC Bulls...t goes into every report (including this one) but the result for the past DECADES has been FAILURE after FAILURE.
The latest Auckland housing plan is just another PC Bulls..t piece of work by idiots which after 10 years will be reviewed as another failure.......
Auckland Local Authority must encourage businesses to move away from CBD area and pay more attention into developing satelitte centres (Manukau, Albany, Takapuna, Henderson etc..). Take a look at Sydney, Brisbane and Melbourne - all major companies are spread right across the ecity instead of the CBD.
I worked in Manukau City Centre until last year and it's a pit. It should be a vibrant city centre - instead it's a hang out place for home boys and taggers soon after 5:30PM
b) no the builder/buyer/developer should pay for all infrastructure up front....all you want to do is load costs onto ppls that cant afford it and wont use it....
Classic right wing mantra...you know, "user pays" you want a new thing, you pay for it.....rates then just cover maintenance and replacement.....
regards
I have looked at it, getting existing ppl to pay the interest for those who want to build new makes no sense to me....what you want to do is get rid of fair costs on some to others....
Intergenerational, to you means take a point in time/generation and expect every other point in time / generation coming later to pay for it and pay interest as a reuslt. No, just let every generation build as it needs and meet its costs at that time tahts also balanced and there is no decades of debt repayments or waste. That isnt efficient....how about the miles of roads and services put into developers sections that have never had houses put on them to gve a rates return? The existing rate payers will be paying that debt no one else is about to do so.....its wasted materials, energy and costs.....
"Common sens"e is a CRAP word for cant justify logically and fairly....."its common sense" means if I dare stand up to you Im not being sensible.....how about stop trying to put ppl down......because throwing "common sense" in often isnt....
regards
Hugh, now that large swathes of rural land have been rezoned in ChCh (particularly Halswell) and that residential zoned sites or sites that are easily zoned residential are now available at what is as low as $15,000 per site for the raw land, how is it that sections are still priced at $170,000 each (for pocket sized 450m2) and as high as any time since 2008?
I think you'll find the answer is that the cost of developing land is now getting astronomical and that's even for 100+ section subdivisions.
The main focus must be to get development contributions and infrastructure costs back to reality.
If a power or phone company wants to be able to get new customers and earn revenue from them, then they should provide the lines at their expense. That was the way things used to be, now they want connection fees and infrastructure upgrades etc etc.
Land rezoning alone will not lower prices.
As I've said many times before the prices are where they are mainly because the cost of developing and building houses is so high.
$50,000 sections are never possible.
If development levies and infrastructure upgrade requirements reflected the actual cost more realistically, sections may be able to be created at around the low hundreds on the outskirts, but at the moment the only places that can be acheived is further out where strangely development costs appear to work out much cheaper and the raw land cost is marginally less.
' first openly lesbian Mayor of a large American city. This should appeal to the Labour Party in particular in this country I would have thought !'
Hugh, that is a stupid comment. Who cares who people screw in private(unless you are a bigotted religo), its who's getting screwed in public that matters.
Stick to the real issues people.
HugeOne. Let it be said, some people do try to read and absorb what you write.
About 4 weeks ago, on another thread, contributor "Bob" set out factual, itemised, details of the council consents costs of subdividing in the Auckland region. The subdivision consent costs amounted to $100,000 plus per section. As you have so repeatedly drawn attention to the situation in Houston, I invited yourself and Philbest to provide comparable details for Houston in order that readers here may gain an insight into the differences.
Response. None. Silence.
I think it does matter, who is screwing who in private, but not for the way you think. I remember seeing once a fascinating interview with a researcher who looked at what elements were present in the most innovative (and generally the more wealthy and satisfying to live in) cities around the world. One of the major things he found was the size of the gay community in a city and the extent to which it was involved in city life. What he discovered was that the larger and stronger the gay community in a city was the higher up the innovation and prosperity index it reached. And it was a positively reinforcing dynamic. The more open and accepting a city was the more gay people lived there, which in turn meant greater innovation and more prosperity.
Look at the world’s great gay cities, New York, London, Berlin, Amsterdam, San Francisco, Los Angeles, Miami, Sydney, Tokyo. None can exactly be described as slouches.
A lesbian mayor could actually therefore be quite telling about the city she lived in.
Here's an entrez to the work.
http://www.thedailybeast.com/articles/2010/07/20/the-20-gayest-cities-i…
It would be interesting to interpret New Zealand's cities in terms of these ideas. I'm not a strong follower of the gay community in New Zealand, yet somehow it seems less notable or visible, or less dynamic now than it was 20 years ago. Is this another reflection of the overall decline in New Zealand’s standard of living? The massive immigration that we have had from countries of the world that do not have flourishing gay communities e.g., China, Taiwan, South Korea, suggesting less open and tolerant societies and therefore people, what are the near term implications of that for New Zealand’s endogenous creativity and innovation index??
The availability of new lifestyle blocks in Auckland completely contrasts with the spin that the urban plan must be constrained to prevent urban spread.
Auckland is a beatiful city and I can understand why so many want to live here, but it really has too many people for it's own good or the very limitted capacity of it's municipal authorities to cope. I strongly suspect that the nett income earned for the country per capita in Auckland is very small when compared with the rural areas or smaller towns and cities. We dont need any more imigrants in Auckland or New Zealand for that matter. We cannot adequately house or productively employ the number of citizens that we have, which is why we have such low productivity, a high level of poverty and an accelerating nett loss of people. We need to stop immigration, sort out the structural flaws in our ecconomy and concentrate on increasing our ecconomic output per capita. This will reduce the demand and price of housing (which is the reason the govt will resist it) and allow wages to rise sustainably.
Exactly 80% of our population growth is foriegn born people so the notion that "you can't stop people deciding to live here" (Auckland ) is b/s.
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
You've got to stop this
Damien Grant NZH 15 Jan 2012
Most people do not want to live in high-density housing. The first thing migrants from nations like Taiwan do is rush to Dannemora and buy the largest block of land and build the most ostentatious house their capital will allow.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10778773
..."I made the point earlier that the US and NZ had similar residential
investment shares of GDP during the decade prior to the boom. But we financed ours
at 350bps higher than they did theirs. That is a really rather staggering difference, and
it has shown no signs of sustainably narrowing at any time in the last 20 years. Why
did we have such high residential investment? Peter implicitly argues - and I agree
with him - that it was not about over-investment in housing. If anything new housing
supply may have lagged “need” at least on some measures. We needed such a large
share of real resources devoted to residential investment because the population was
growing rapidly. That was a policy choice.
Peter Peter highlights that we have a relatively high rate of natural increase in population.
But we also have a large and persistent outflow of NZers (large by any comparative
international standards). That outflow should best be seen as a rational response to
perceived opportunities - those abroad are better than those here. Outflows of New
Zealanders should generally act as a stabilizing force, helping to rebalance the
economy. Economies with slow growing populations need to devote a whole lot
smaller proportion of their real resources to simply maintaining the capital stock per
worker.
Based solely on the fertility and migration choices of New Zealanders (each
presumably behaving fairly rationally), our population growth would have been
growing only quite slowly since the mid 1970s. As it is, our population growth since
1990 has been second or third fastest in the OECD. What changed? Migration
policy did in the early 1990s.
And 80% of our population growth in the last couple of decades has been the net
inflow of non NZ citizens - thus almost purely a matter of discretionary policy
choice. Government policy interventions can act to stymie successful adjustment -
and I believe this to have been the case in NZ over the last two decades. Our negative
NIIP position is larger, our real exchange rate is higher, our real interest rates are
higher, and our capital stock per worker (and associated perceived business
opportunities) are lower than they would have been if we had simply let the selfstabilising
behavior take its course. As John McDermott’s slides showed earlier, that
adjustment was working prior to the mid 1980s.
Among policy and analytical circles in New Zealand there is a pretty high degree of
enthusiasm for high levels of immigration. Some of that stems from the insights of
literature on increasing returns to scale. Whatever the general global story, the actual
productivity track record here in the wake of very strong inward migration is poor.
In an Australian context, the Productivity Commission – hardly a hot-bed of
xenophobia or populism - concluded that any benefits from migration to Australia
were captured by migrants and there were few or no discernible economic benefits to
Australians. And that was in a country already rich and successful and with
materially higher national saving and domestic investment rates than those in NZ.
But very little of the global discussion of migration has factored in the sort of specific
circumstances New Zealand has found itself in. With relatively low national savings
rates, and with a relatively well-educated and skilled domestic workforce, it isn’t
obvious that applying a lot more labour to the situation was the route to success in
trying to reverse decades of relative economic decline (a very different situation say
from Singapore with lots of savings, bringing in people to utilize that domestic
resource)
Labour typically needs capital – houses, roads, factories, shops, offices – and it has
long been recognized that the demand effects of new labour outweigh the supply
effects for the initial period. But we have had not just one wave of new labour, but
repeated waves of new labour, with the numbers if anything generally tending to trend
upwards. Real non-tradables labour and resources need to be used to build the new
capital stock. That will have required the OCR (and the domestic interest rate) to be
higher than otherwise throughout the last two decades.
I don’t have time for an extended discussion of the competing hypotheses of why NZ
interest rates have been so high. For that I refer the reader to the Vowles and
Labuschagne Treasury working paper that I had some involvement with. Suffice to
say that widening current account deficits and increasing voluntary private leverage
are not usually phenomena that follow when the world markets impose a risk
premium on the domestic cost of credit. We do these interest rates to ourselves.
Those high real interest rates will have helped contribute to the sustained relatively
high exchange rate - and in particular, the failure since the mid 1980s of the real
exchange rate to adjust into line with the deterioration in New Zealand’s relative
productivity performance (even allowing for the terms of trade). Those high real
interest rates and high real exchange rate will have choked off investment projects,
especially in the tradables sector, which would otherwise have been profitable. The
Savings Working Group report quoted some rough estimates I was involved in putting
together, which suggested that if net immigration had been kept to 1980s levels, the
NIIP position might be 20 percentage points smaller than it actually is (and real house
prices would almost certainly have been lower).
People have to live somewhere, and so when we look at the last decade, the surge in
investment (for it is the investment share that rose markedly not the savings rate that
fell) is seen in residential investment (and public investment, much of it related to the
underlying public infrastructure a new population demands). At an OECD level, there
has been a strong long-term cross-country relationship between the residential
investment share of GDP and the rate of population growth - as one would expect.
There isn’t much sign of excess housing stock (Peter’s point) or excess public
infrastructure – the rapid population growth rates successive governments chose to
pursue, look to have crowded out real business investment.
You will notice that business investment as a share of GDP has pretty consistently
been around or below the OECD median since the late 1980s. But over that period
we have had among the fastest rates of population growth - so we needed more
investment as a % of GDP than the median OECD country just to maintain capital
stock per worker. Peter’s team sent me the national data underlying this chart: when I
plotted it there was basically no relationship between the business investment share of
GDP and the rate of population growth, suggesting that all else equal rapid population
growth crowds out capital deepening. At very least that seems to have been the case
here.
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
I bet you can find examples of beaurocrats who are shockers.... and "everyone has their realestate [person] story". If a developer has a chioce: layout or one (or two or five) more house(s) (= more profit), which option will he and his lender (other peoples money) choose?
High density is not the answer.
Take an urban area divided into 600m2 odd sections. With other infrastructure you have maybe 12 per hectare. Now consider whether you allow 1,2,3 or 4 units per site.
- If you allow 1 unit you will have regular NZ suburbia, with 12 households per ha. (Each household being suitable a large family - say up to 5 with an average of 4 = 48 persons per ha)
- Allow 2 and you will have adequate sized townhouses for living in and 24 households per ha. (Each household being suitable at least a small family - say up to 4 with an average of 3 = 72 persons per hectare)
- Allow 3 and by the time you put roading, parking and garaging for each unit, you now have very compact units which are lucky to have 30m2 of outdoor space, and just 36 units per ha. Not particularly pleasant. (Each household is suitable only a single or couple with one child - say an average of 2 = 72 persons per hectare)
- Allow 4 and you pretty much have no outdoor space at ground level and a completely undesirable type of development (unless you are right on the city fringe in a very urban area). Each household is suitable only a single or a couple say an average of 1.5 = 72 persons per ha).
So allowing 3 units on such a site rather than 2, goes from providing comfortable townhouses to allowing jam packed undesirability - all for little benefit and overall allowing no more people per hectare.
The solution to a city with the geographical constraints of Auckland is to provide subcities (or at least desirable satellite towns) on major rail links (possibly extended) that are within a 30 minute train ride (need to speed up the trains) of the CBD.
Create highly desirable low density towncentres in these areas where people actually will want to live and pressure will immediately be released from Auckland, as well as the risk from natural disaster being mitigated. Expanding existing undesirable outskirt towns will never get the momentum.
Auckland has plenty of areas of natural beauty nearby so that one or two could become desirable satellite towns.
Re-run those figures without the garaging, parking and with reduced roading and see what you come up with.
High Density can be done, but not as it is practiced in this country. The one thing that I am not aware of being achieved on any scale is high density with good thermal performance. But we don't have good thermal performance anyway. So there is a challenge.
But come back to the motor car. PhilBest posted a while back about the break from land barons that the motorcar facilitated. Looks to me like the land barons have got the upper hand again, all they have to do is mandate XXm2 for roading and parking.
If you are going to accept Hugh's expression then it has to be complete and absolute freedom to design as you wish, with sanitation being the only involvement of authorities.
Is there a town planner in the house? Think about it this way. Aucklands fore-fathers never contemplated what it is today. Going back in time, and knowing what you know now, starting with a blank slate, how would you plan an Auckland City capable of meeting the needs of the future. As I have stated here before, the geographical layout of Auckland is in the shape of an hourglass with a chokepoint in the middle. At it's narrowest, the distance between the Manukau Harbour (Tasman Sea) and the Waitemata Harbour (Pacific Ocean) is 800 metres. The optimal design of Auckland should (have been) along the lines of the Twin Cities of Minneapolis and St Paul in Minnesota.
From what I have seen Iconoclast, town planning is an avenue for Architecture Students to pursue when they realise they can't design.
To be honest I don't think those skilled enough would tolerate all those with their snout in the trough. I could have a crack, but it would involve some big changes in motor vehicle use. Most would scream blue murder over that, no matter how good the outcome could be for them. As I have said to you before though, it is a massive responsibility to tell other people how to live.
I think Sir Dove Myer-Robinson, "Robbie" Auckland’s mayor back in the 70s could see quite clearly where Auckland was going in the future, iconoclast. He wanted to develop starting back then a proper mass transit rail system for Auckland, as he said without question the city was going to reach 1 million people and continue to grow beyond that.
But of course, it's the same old kiwi story! All the arm-chair-experts, the know-it-alls with opinions, said rubbish. Auckland didn't need this, Auckland didn't need that, this wasn't proper, that wasn't right, my inverted fungal picker which I have developed myself is the answer to everything, and a mass transit rail system is completely unnecessary and a waste of money. And of course many trotted out that old kiwi chestnut for public inertia; if you can’t do it on the cheap then you don’t do it at all.
And we now have the city we have today with roads that are inadequately designed and incompetently configured, connections between and among roads that make no traffic flow or geographical sense, and traffic engineering practices carried out by the council that can only be described as bizarre, then throw in to that mix drivers who are not up to the best international best practice in driving skills and ability and you have what we have today, a mess.
And it’s Kiwis who did that, no one else.
David B – I think it is always good to see, how other cities are dealing with such problems – compare – learn – understand - and work out better solutions.
Too many bureaucrats interfering with each other are one of the problems.
A good way : http://www.euro.who.int/__data/assets/pdf_file/0009/98424/E89498.pdf
In Auckland City Res 6 750sqm is the minimum you can subdivide at. This allows for a 525sqm house with 300sqm of garden required - any smaller is deemed unacceptable. This is ridiculous.
If the density rule was removed and parking requirement changed to match PM 196 (smaller units can have 1 car) BUT the bulk, coverage, landscaping rules remained the city could look exactly as it does now with more household units (household sizes are reducing so it's smaller units that are most required).
At the moment a 45sqm 1 bedroom unit is deemed to have the same effects on the environment as a 1000sqm 8 bedroom, 12 bathroom mansion with 10 car garaging. They attract the same development levies which encourages less bigger houses to be built. If you looked at a big old villa in Grey Lynn 10 years ago it might have been divided into 3 flats. Now it most probably has been converted into 1 house with a couple living in it - and yet looks identical apart from being painted and having a Griselinia hedge added.
I grow quite a lot of veggies on the patio at my downtown apartment, don't need a yard of any size for that, also have grown some inside the windows and know of others who have produced more with just their window areas. I haven't bought any bull, I'm expressing my personal preferences and those of many other kiwis I encounter, not advocating a particular development path for the interest of the nation or city. It is happenstance that my personal preferences also make economic and environmental sense for Auckland to pursue.
Clearly those veges don't include pumpkins! I've got a single plant that after just a few months already covers the size of a single garage and is still growing. I don't think carrots or potatoes grow well in pots either.
Compressing people into high rises which cast shade over large areas, completely prevents any meaningful vegetation, generates large amounts of runoff, yet produces the same amount of waste and generally provides a lower standard of well being for the occupant, all hardly makes environmental sense.
There is no doubt many people prefer urban living, however the vast majority of people at some stage in their life (particularly when they have children) will prefer space.
The fact is that with medium density housing, you are unlikely to have much higher population densities (because each houshold is smaller) yet you will have more negative environmental effects (such as more site coverage (more runoff), less or no vegetation and more shade and noise).
The solution is better planning of greenfields developments so that they don't waste resources and make the best and most efficient use of what is available - ie less asphalt, more vegetation, less wasted space and more open, sunny and comfortable homes with efficient layouts (perhaps of smaller size to current standard new homes).
Agree Chris, better planning at the subdivision stage, and at the house/section stage, can make an enormous difference to economic efficiency and people's wellbeing.
One of the biggest problems I think is that most people have a short term focus. We will soon be building in a new subdivision and what I have noticed is that the combination of "protective" covenants and most people's desire to have the biggest house they can afford, results in a boring "Stepford" landscape that turns many people with aesthetic values off. Building companies, in the main, don't see it as their role to lead their clients away from the conventional. I don't really blame them as most Kiwis do not, in my opinion, value the importance of good planning and design, they just want to see bricks and mortar go up!
My wife and I have never lived in a new house (except as young children) and are at a stage in our lives where we can create a home that we will live in until we die, probably.So we are making a lifestyle decision rather than a financial investment, its future "resale value" is not important to us.Our desire is to create a home that will stand and perform for 100+ years, most of that time for the benefit of other people, but in the meantime for us a safe, warm and comfortable refuge from an increasingly troubled world.
In a nutshell, what I am saying is, while costs are important, values are critical, Bernard H would say we are "overinvesting in housing", to which I would reply,"we are not investing in anything, we are merely choosing how we want to live". So I don't get too hung up on Hugh's median multiples, they are merely an average, not a code to live by. Nor on costs - who goes to their deathbed regretting the cost of buying something!
P.S. I must acknowledge our insurance company without whom none of this would be possible..,
I think there are both free market and govt solutions - both will be required.
The free market solution - freeing up planning controls.
the govt solution - building more social / affordable housing, more partnerships with the private sector etc.
In my view freeing up planning controls won't be enough - the costs of building etc. will mean a lot of development options will still not stack up. So govt needs to pick up some of the slack. In international terms NZ has very low % of govt housing
Can't see the Nats instigating a large scale house building programme however
Agree on the government housing. There are builders including Lockwood who offer new 3 bedroom homes for around $100,000. Its the price of the land and the council consents that makes building too expensive. I would hope that one day Iwi will start building low cost modern healthy homes on land they own for their own people and make an effort to revive their local areas. Likewise local councils or the government buying distressed developers land or rezoning fringe land(after they've bought it) and resetting the price downward at the margins
BNZ talk up a big house building recovery - yeah right!!!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10783169
Auckland need LESS people!
Specifically lower growth in numbers.
Encourage immigrants to go where housing is easier to get.
Too many landlords and not enough owner-occupiers.
When the immigrants who are not natural English speakers come in with their money, the easiest investment is to buy a few houses because they can give them to a local manager and are accordingly prepared to accept a low return. If they try to put their cash in a hands-on business they face greater difficulties.
The flip side of low returns is higher prices than locals are prepared to pay. Hence a major problem of apparent supply balance. This is not necessariy fewer homes but does mean fewer prospective owners able to start out on home ownership. Local families cannot get in to own their own home once prices are set too high.
Then there are the locals who own another property who are in fact denying other locals of the potential to own their firat home. We need a change in policy at both local and national level to 'force' change in the best direction. We will not get it from National politicians who have neither the foresight or the brainpower to achieve anything resembling a policy.
I reckon Auckland's population will self regulate itself. It won't grow to anywhere near what the planners are projecting. Insufficient housing will be built, house prices /rents will creep up, economic growth will be anemic therefore insufficient jobs to attract new residents, plus deterent of high housing costs. This could change if there was radical policy change, but that is unlikely
Property vs Real Economy - and the winner is ....
That “Housing” topic = 40 entries was published 45 minutes after 90 seconds at 9 with economic news that 180 NZjobs are at risk result = 20 entries.
Another reflection of our imbalanced economy. The majority of Kiwis real interest is property, more then the real economy, but complain – HA !
No - it is not an accusation just a recognition of culture.
MESSAGE TO HUGH PAVLETICH
FACT - Increasing land availability does not necessarily reduce housing costs. For example Whangarei District:
EVIDENCE - Article by DR K Grundy, Planning Quarterly, December 2008
“In respect to supply and demand, let me use the example of …. Whangarei. Since notification of the first District Plan (1998) under the Resource Management Act, successive councils have pursued very permissive, market orientated policies in regard to the land market. Land regulation in the form of zoning and minimum lot sizes has been extremely permissive – based upon a largely laissez faire approach to land development. Liberal zoning and housing density provisions (a 350 square metre to three hectare minimum lot size across the whole district) reflected this approach. As a consequence, the district experienced a subdivision boom, resulting in a situation today where there is estimated to be around 10,000 vacant building lots in the District, spread across all zonings – a district of only 70,000 total population. At 2.5 people per lot this is enough vacant lots to accommodate 25,000 additional people, an increase in the district’s population of over 30%. Yet has this (inarguable) oversupply of residential land resulted in lower housing prices? Not at all. Housing prices in the district have more than doubled over the last ten years – at least as much if not more than the national average.
So if it is not the restrictions on the supply of land that has driven up housing costs over the last ten years what then is it? …it is investment in the property market (largely speculating on capital gain but with a component of rental return on capital outlay) together with high rates of leverage in a low inflation high liquidity environment. These…are the drivers of real estate increases over the last ten years”.
I dont understand why the council are hell bent on intensive housing within the MUL and yet drive north of say Albany and its all lifestyle blocks of 2-10 acres containing a family of four and running a horse, a couple of sheep and a crop of long grass and ragwort.
Surely this land is better used as either productive farms or suburban sections but not these lifestyle blocks which are unproductive and alot end up selling after 5 years once they realise the dream of living in the country isnt all its cracked up to be.
Auckland doesnt have urban sprawl it has Hobby farm sprawl.
Hugh, yes sections are still worth near zero (under $20,000) in some parts of Oamaru. These are steep hill sections though. Most regional areas still have super cheap sections, including Dunedin and Invercargill.
Many of the cheap sites in those areas have problems (expensive to build on), but in Invercargill that is not the case - sections in say Clifton or Kew can be $10,000 or much less for a flat quarter acre.
Does that make new housing affordable there? No seems the answer. New homes are still up around $300,000 plus.
The issue in those areas is that if you are spending $250k building, then why build on a $10,000 section when a much nicer section is $50,000 or a few acres might be $80,000?
The fact is new sections won't get down to under $100k in ChCh (unless you're way out of town or on a very small lot size 300m2 say) UNLESS all the developers over supply the market and go broke.
How are new homes in ChCh at say $350k for something basic going to affect existing house prices (a good older home can be bought in a close in suburb for mid $200s or something with a bit of unfixed damage for low $100s)?
Protest? Witch-hunt more like it - a lynch-mob and a few vested agendas momentarily aligned. Aided and abetted by those with narrow views, some with only one......
Dalziel had it right - it was entirely predictable, and it's what happens a certain time after events like that. Some are mature enough to overlook such nonsense.
I don’t know what that fuss (war) about housing concern: Planning/ developments of houses in today’s world should be done primarily in respect of rather simple principles:” Today’s People in Today’s Environment” - working together.
http://www.euro.who.int/__data/assets/pdf_file/0009/98424/E89498.pdf
Funny thing is most Americans don't have a clue about these numbers:
http://finance.yahoo.com/news/biggest-holders-of-us-gov-t-debt.html
Please can we consider soil types when carving up green belts. New Zealand is surprisingly short of versatile soils, suitable for market gardening. Unless we want to import our produce from China, we really need to control which areas are developed. New Zealand can't replace the produce producing capacity of areas like Marshlands in CHCH (which is soon to be the site of two massive developments).
Is cheap land for developers, and the questionable promise of cheaper housing, really more important than a secure food supply? The delusion that we're food exporters to the world is truly dangerous.
Funny how the 'urban richies' whinge loudest about the RMA, but the moment there's an announcement for intensification, they'll invoke it when it suits them. Do those in favour of relaxing MUL's really care about 'affordable housing', or do they really want to build more McMansions and speculate on them? And Wellington, like San Francisco, doesn't really have much room to grow fatter, so the only real way is taller.
As for myself, I'm part of a generation that has no interest whatsoever in a quarter-acre section, no matter how mythical it may be. It's not for everyone, but in the long run I'd like to live in an apartment. It's not too late to learn the lessons of the Bronx - places like Vancouver have managed to get it right with building upwards.
Also, head offices and hence plum jobs drifting to Auckland at the expense of the rest of the country isn't helping either, since regional development went out of fashion. Auckland also gets the vast majority of the migrant influx, largely because most of the long-haul flights land in Auckland. Maybe Wellington could do with a much longer runway.
Ah, 'freeing up controls', eh Matt? You sound like Banks - down with the RMA , it's restricting business.
Bollocks.
No legislation, and no Govt, is as big as what is happening at the moment. So sad to watch the believers, blinkers on, free-market to the fore..... It MUST work, so there MUST be some impediment....
There sure is - cranial, perhaps, do the free marketeers ever stop long enought o consider they might be just plain wrong?
OK let's deconstruct this SLOWLY....
I'm saying free up planning controls, because if, like me, you have any experience in the development industry, you know that a "compact city" objective is all very well, Powerdown, but you try and do the following:
- get a medium density development in most parts of Auckland to stack up financially - good luck
- secondly, if you can, get finance: again good luck
- then, try and get it through the planning system without public objections and a 3 year process including environment court process destroying any hope of getting the project to work
It's fine for you to sit at your computer on your lifestyle block spouting out a load of naive rubbish, and supporting "compact city" planned utopias, but you know NOTHING about the realities of making such visions realised. No credibility.
I never said abandon controls for a free market approach. Of course there is a middle ground to be reached. When I say "free up controls" I mean make them more liberal, flexible, and performance based / design driven
So, if you are so smart, you tell us how cities like Auckland can get intensification and urban redevelopment happening under the current system which you think is so great? (BTW Auckland has failed to get anywhere near its intensification targets set in the 1999 Regional Growth Strategy).Tell me how you can get townhouses / apartments to the market in Glen Innes for less than 400K (I'll tell you the cheapest you can get a 3 bed 90 sq m apartment to the market in Glen Innes is circa 450K, which doesn't stack up when 3 bedroom homes on full sections sell for circa 400K)
I'd be very interested in your answer, about how things can work under the system you hold in such high esteem, when all the evdience suggests the current system has failed in realising desirable urban outcomes. I'm waiting.
My comment earlier in this thread is trying to get people to think about the true cost of "freedom" and "mobility" that the motorcar brings.
My guess is that a case could be made for 50% of the cost of urban land actually being the cost of infrastructure for the motor car. That would mean half the cost of your rent or mortgage is actually the true of your car, and the true cost of the land is a helluva lot less. Freedom eh?
Makes the property bubble seem more ridiculous than it already is.
“This is truly a no-win situation if you are a Republican candidate,” said Jaret Seiberg, a senior policy analyst with Guggenheim Partners’ Washington Research Group. “Every answer requires more government help. There is no cheap or easy way to fix housing. So from their perspective, you are better off ignoring the problem than trying to put a plan forward.”
Hughes ideas not part of the lexicon. Huston an exception?
Auckland has plenty off houses in areas that no working families want to live.
The statehousing areas have caused this problem.These houses need to be sold to working families.Time limits to support,there are many people in my area that have been in there statehouses for 50 years.They have never worked an have no money,yet they drive better cars than anybody I know.
Most of these houses are getting at least 2 heat pumps installed an insulation.This is crazy people who have worked all there lives can't afford to upgrade there houses.
It does not make sense to have statehouses in expensive areas for people with no money,an do not work.
What country would build more new houses for a very large massive growing group off unemployable people.
Do it now an sell all statehouses an build high rise appartments.
Time limits an everybody has to do something for there money.
Nothing else has worked in the last 50 years
You've got a point there, the state house areas often aren't too bad, they have a bit of space and layout and lack the obvious squeeze em in look of your profit driven developer that blight the urban landscape. The problems of the state houses are feral people; it is just behaviour. People pay a bomb to get away from types like that.
....
and I might add there used to be a lot of offenses which we have done away with (Idle and disorderly; no visible means of support; uttering; giving the bird) these were pruning back feral behaviour. Civil libertarians have made these parts of town unlivable.
Hmmm....I think Auckland is locked into a headlong rush to equal the awful living conditions common around the world in other urban slum centres. I think Amsterdam has some form of strictly enforced residential laws, that force people to commute if they wish to work in the city. The pressure comes on the employers seeking staff...move out of the city or pay more to attract staff.
Auckland suffers from vested interests syndrome....bit like chch....and very poor local government.
Guys, before you canter off further into the cars-bad zone and even wilder estimates of car subsidisation, stop and consider how to accommodate the following transport users:
- food supply to markets
- refuse removal to houses
- buses and taxis
- housing repair and construction
Hmmmm. Roads are Good, sometimes. After all, what does the fabled Public Transport run upon? Even if it's carriages for the masses are drawn by steam engines, horses or the enchained ranks of feral State House dwellers 'pressed into service' as they used to say in the Navy?
I am not saying eliminate roads Waymad, you are quite correct in that some essential infrastructure is required. You could still even cater for personal motorvehcles. What I am saying is that a rethink about the way we use the motorcar could free up a good designer to do something really special.
From a community aspect the car simply kills it. Any urban design that requires a car for day to day needs is a failure. Mixed use could see school, work and shopping in walking distance, then people could interact as they go about these activities.
Appreciate you breakdown of costs below:-)
And a word about Development Contributions.
I'm an old grizzled ex-County Treasurer who actually used to administer these babies in the good old days before the dopey Sandra Lee LG Act 2002 injected 'Social and Cultural Wellbeings' into Councils spending arena.
DC's were really about public open space: land, reserves and the like. A simple cash amount, which was held in trust and applied only to reserves, was the norm, and/or a parcel or three of land set aside.
Nowadays, DC's have an incredibly complex calculation: Household Unit Equivalents (bit like the the Twenty' Equivalent Unit (TEU) measure for shipping container space) for almost everything a Council could conceivably dream up cost requirements for.
Recall that every legal human activity can fit within 'Social and Cultural Wellbeing', so naturally, there are Community Development Organisers, Events Planners, Reserves Consultators and dont even get me started on spatial planners, zonerators and other failed architects - all to be fed, housed, and their reports to each other and to the Council to be read and discussed with a straight face. All to be 'contributed' to....and then there are 'hard' spends like roading/water/sewer/drainage incremental impacts to be funded
The net impact of DC's (e.g. for an upcoming major Chch subdivision) is huge - $70K/section. And this impact is upfront - pay now, and this adds at the earliest stage, almost, to the hapless developer's carrying costs ('the carry').
At a commercial credit line rate (making the maths easy) of 10%pa, and a conception-to-first-sale time of 7 years, the rule-of-72 says that that $70K is now $140K. Yup, it has doubled.
See now why land prices in urban subdivisions are sky-high? Add everything together, recalling that those costs earliest on the list generate the highest carrying costs:
- land purchase
- 'carry' on land purchase cost
- survey and consents
- 'carry' on survey/consenting costs
- DC
- 'carry' on DC
- physical land development - civil works
- 'carry' on civil works
- sales and marketing costs
- developer margin
- and I've probably left a few cost items out....
and then ask:
1 - why anyone would be in this game?
2 - And for those brave enough to be there, why section prices are where they are?
The answer to 2 is - because of zoning (original purchase price inflated), the Social and Cultural well-beings (DC's inflated) , and the fact that Council staff have no concept of time=money ('carry' inflated)
After all, the Council staff don't have to carry the 'carry'.....so why not let that consent dawdle in the in-box for another month or six?
Now if the Wellbeings were deep-sixed, yer jest might have yerself a whole new ball game....keep watching!
Thanks for this....its a very interesting read, I love it when things are justified/explained adequately.....A council is classic monopoly rent.........
and yes I agree there are some big Qs to be asked on how efficient a council is.....Im pretty sure their spending is silly ie "everyone needs a sports centre to attract residents".....gee wiz when I was a kid I went swimming in the river.....
If that $70k is right per section, then some big Qs should be asked on why....that is not acceptable it sounds excessive....to me at least...
Of course as its a monoply rent, take that funding away aka use Hugh's/US's approach and would that solve it? suspect not......just the rate payers would foot it...
For me if the last 3 months of cockups by WCC is anything to go by, there should be some serious razor gangs sent into all councils....
regards
waymad, $70k sounds high.
CCC maximum charge for DCs are about $30k.
There are other costs that may be included such as pumping stations and infrastructure upgrades for a specific development.
Could you please advise how the $70k figure was obtained. How much for what infrastructure etc. Where the development was etc.
Waymad - great to hear another informed opinion. A good run down. Then add in the risks and delays associated with NIMBYs objections and appeals, as well as uncompetitive building rates (really a non RMA aspect, but certainly affected by the RMA as less development means less competivieness and economies of scale).
Yet some here seem to think the current system under the RMA is just fine and will allow cities to deliver upon compact city visions..........
Waymad - thank you very much for your overview of the DC's rorts going on. These Local Government losers are blugeoning the development and construction sectors back in to the Stone Age (PDKs habitat), because they have lost control of their costs and are going on power trips.
........
What about the big rort that produced 2 square meters of books in the Airport Bookshop on property investment and made so many developers rich? Asset inflation isn't wealth creation, it simply creates a hole that has to be filled (by buyers down the track).
John Key rejected a land tax (and developers opposed it) as house prices would fall.
Urban sprawl is one of the two man-made threats to agriculture around the world. The other is poor farming practices that strip away nutrients and topsoil, causing desertification. Thankfully, that's something we don't have in New Zealand because of the effort farmers put into good pasture management; rabbits in the high country notwithstanding.
Restoring Democracy in Christchurch =
Eliminate third party appeals to RMA= eliminate NIMBYS as NIMBYS want to live somewhere nice and humans evoloved in small population groups with a beautiful environment all around.
Ofcourse if we turn off the tap (80% of population growth is from outside NZ) the good old boys of the Property Council wont make much money?
"I'm just an ordinary ratepayer, non-partisan, apolitical, who has had a gutsful – that's all it's been about," he says.
Lynch has spent five years keeping a watchful eye on the council and hasn't liked what he has seen. Secret deals over central city property purchases and the council's acquisition of the Ellerslie Flower Show left him feeling disillusioned and hungry for change.
His job as an area manager for a safety equipment firm brings him into contact with people from all walks of life and he could sense the growing anger in the community over the council's performance in the wake of the quakes, but it was only when news came through of Marryatt's pay rise that he decided it was time to call the council to account. "When they gave him that massive pay-rise prior to Christmas that was the straw that broke the camel's back and I decided to act," says Lynch.
http://www.stuff.co.nz/national/politics/6367871/Mission-accomplished-for-protester
...........
but the real issue irking developers is the RMA (NIMBYS = citizens opposed to new development) and urban plans that interfere with property rights (the right to build what they want, where they want), urban limits, council charges and development contributions (adding people -80% from outside NZ - to infrastructure). In short getting on with the task of making money unempeaded by pesky citizens and officials.
It is sad to read in the New Zealand Herald how tough it is for many families and in particular how much wider the gap has got between the haves and the have nots. Hopefully the Council will try to do something about it but the status quo will probably remain as they seem more focused on their salary increases these days than anything important. This news also makes those who gleefully crow on this site about their properties increasing in value and their rents being increased look so shallow and selfish. All they are doing is making it harder for their fellow human beings. Sometimes I wonder who treats those around them the best. Us human beings or the wild animals with supposedly less intelligence.
Townhouses, these are fine when built properly....oh wait that costs to much and the architect says it looks boring....Things like a simple continious roof with a 600mm overhang/eve over the walls....no internal guttering, nothing flat....nothing to leak, easy to repair/replace......one huge low cost umbrella.....
Property is twice its fair value.....wait for the ponzi scheme to burst and decent sections/houses will be affordable again...the speculators will be broke of course.....oh how sad....
regards
Over the wekend I looked at a show home here in Brisbane. For about $199K you get a nice very modern 3 br + study, 2 bathrooms, double garage and for another 30K you can have a swimming pool. Why is it so much cheaper to build a houes in Aus eventhought their labour cost is much higher than ours. For comparision, a same swiming pool will set you back at about 70-80K in Auckland!
yeah I've noticed the same Moa. And those houses are often very tasteful and elegant too.
this is a massive comparative advantage for Aus. Good question as to why it is given the higher labour costs. I can only assume its economies of scale and much cheaper building materials.
There's a lot of discussion in NZ on planning impacts on housing and not much on building costs. I suspect its because little can be done to reduce building costs. There is a very simply explained constraint thats not easily fixed - lack of population!
Having said that freeing up planning constraints would help get more development happening and more economies of scale!
Apparently the Sherwin report also cited the fact that builidng in NZ is far more of a guild industry than in Oz, and hence the industry is less 'mass-produced' and more heavily customised. Also, there's the issue of vertical and horizontal integration in the industry.
Contrary to popular belief, a lot of NIMBY's aren't card-carrying greenies, but Range Rover-driving hoiti-toities who just happen to have interests in the property bubble. This stoush in leafy Khandallah a few years back comes to mind.
Agreed, although this stoush in Orakei had both the Range Rover-driving hoiti-toities and the greenies out in opposition:
http://www.stuff.co.nz/auckland/local-news/east-bays-courier/523834/Orakei-high-rises-under-fire
I found it curious that Keith Locke would oppose this as it was the kind of development that would achieve compact city visions. Maybe it had something to do with him being an Epsom candidate
Chris Barton of the Granny Herald had some wisdom on the matter not too long ago...
Home truths: Buying a home in New Zealand
"Andrew Coleman of Motu Economic and Public Policy Research is concerned too that Demographia's analysis doesn't take into account the essential financing cost of a house over an extended period of time. "For most of the last decade New Zealand has the highest interest rates in the OECD, so that makes housing far less affordable in New Zealand than elsewhere."
Another feature not taken into account is the increase in the average size of new houses in New Zealand - from about 130 square metres in 1990 to just under 200 square metres today. He notes too that the boom in house prices in New Zealand has occurred in places like Timaru which have few problems with land availability. "It's not really obvious that we have constraints in finding sites to build on .""
...
But just when the trend towards affordability is improving, a new barrier has emerged - the banks' increased deposit requirements. Whereas in the past, banks regularly lent 95 per cent and sometimes 100 per cent of the mortgage, they now require a 20 per cent deposit.
"A closer look at Demographia's list of 87 "affordable" housing markets in North America gives new meaning to the word. "Is it any coincidence that the top 20 most affordable markets are in economically distressed regions?" asks Keith Hall, chief executive of the New Zealand Planning Institute and a member of the American Institute of Certified Planners. "These are mostly the 'rust belt' cities of the American Midwest and neighbouring Ontario in Canada, areas chronically plagued by high unemployment among predominantly blue collar auto industry workers. The one exception to the auto-steel industry connection among the top 20 is a community on the equally distressed Atlantic Coast of Canada.""
...
"Unplanned and unzoned Houston is often touted as an example of how the lack of growth management and the absence of planning can maintain regional affordability. But the irony of Houston is that it's a city with lots of planners. "That is where I began my career in planning," says Hall.
Yes, planning processes in Houston are certainly different, and both the regulatory environment and the flat coastal landscape allow unabated sprawl in nearly every direction. But, says Hall, a key advantage to Houston's system of planning is that it has facilitated central city intensification. "Even in free market Houston, there is strong demand for high quality, medium and high density housing in walkable, mixed-use neighbourhoods with good public transport access.""
...
"A close reading of the Demographia data shows "affordable housing" is found largely in flat terrain with extreme climates, high levels of crime, dying economies, few natural amenities, and limited prospects for academic and professional achievement for the next generation."
Here is a challenge for Hugh.
Hugh you berate someone for their faulty reasoning but I want to call up on one you have used in the past. You have stated something along the lines of many surveys have shown a universal desire amongst people for detached housing on a small section".
This may be the case but it doesn't tell us "why" people desire this, or if they might desire a well designed alternative.
As part of my studies we tracked the history of the New Zealand "quarter acre" and it stems from romaticism rather than practicality.
"romaticism rather than practicality."
I agree, a dream for many, yet practical in area for food production?..... what area is needed to grow a family's food organically? I have 600m2......my parents 850m2.....neither seem big enough for most food requirements.
The future looks a lot different from the (recent) past......the Q is what does it look like.....
regards
I think that growing enough food on a 600-850m2 section to feed a family of four without any external input is indeed unrealistic. If you relax the requirement a bit however so that meat and milk can be obtained elsewhere so that the garden only supplies vegies, fruit, herbs, nuts, honey, then 600m2 becomes a whole lot bigger. My partner and I have been converting our 650m2 section to edibles only and some of the crops are quite substantial. It's a lot of work though, both in the garden and also processing the food for storage.
Then the council introduces water restrictions (we're in Christchurch) and suddenly your food production is in jeopardy... Then no section is large enough if your plants whither away in the summer sun.
Agree, and in fact the best option I see moving forward is probably less dense and grow at least some of your own....if only for the "luxuries".......In terms of skill there is quite a bit of experience to be learned in what grows on your plot with the minimum of energy (all energy incl your own work) and what does not....I put stuff in and tend to neglect it......if it needs a lot of effort to keep alive its not suitable IMHO....
When I was younger my grandma took my seawed and blackberry picking....free food if you will....funny but those skills / pass times are probably not that common and farmers etc probably jealiously guard their land and its more optimised....
regards
My family was given a pet rabbit last year (oh joy, he likes headphone and speaker cables, Im hoping he does a power cable soon) he lives in the back yard on grass when he isnt chewing cables....
:/
.......it has been interesting to watch.......I think my plot (600m2) could sustain maybe 5 rabbits at once....so that's 2 or 3 days food.....V many days on vegitables....I dont know how big an area I would need to continue to eat the meat I do now (and ive 1/2ed my intake....considerable I think....
Sun, yes I agree, also any weather extremes though, and personally I m seeing more I think, anyway I think bore water will become more common per plot in the future. So i took some time reading on bore holes and regs, some councils seem pretty relaxed on it....others not....but to water your garden with grey water seems a better idea than using potable.
Processing and storage seems an issue Im trying to work through as well.....jams etc....pickling....yet the jars to do it are expensive and need new seals etc all of which costs......so Im pushed to see how I can do it and save money....
regards
Re jam, pickling and all that, it doesn't have to be expensive. It's a complete myth that you need new specialised jamjars and equipment. Just save and reuse the ones that commercial products come in (or if cost is really an issue, check out the neighbour's recycling bin) and seal them off with cellophane circles - $2.50 for a pack of 25, including rubber bands and sticky labels. Same with pickling. I've been rotating pickled onions in the same two old 1kg coffee jars for years. One's in the fridge being used, one's in the cupboard maturing. Same with red cabbage.
Bottling fruit does require specialised equipment, and bottling non-acidic vegetables or meats even more so. Forget about it without a pressure canning gizmo. If you look at American jam-making instructions they're applying the processes for bottling fruit, and putting all kinds of superfluous steps into the process, but it doesn't have to be that complicated. A chimp could make jam and pickles if it had a copy of the Edmonds cookbook.
I once lived in a ground floor 2 bedroom unit. It was in a 2 story block of 12 units. Convenient. Close to shops and public transport. Problem was, in the unit directly above us, a group of "male surfers" would hold "quiet" beer parties on Friday and Saturday nights. It was never loud. But starting about 11:00 pm on both nights you heard every one of them continuously going to the toilet and piddling directly into the porcelain bowl. It went on till about 3:00 am. Impossible to sleep. A self contained detached accomodation became very desirable. The concept of romanticism never once entered my mind.
Haha, I have stayed in enough places to know about the noise intrusion created by moving water. It is a design issue that most simply ignore because they don't have the capacity to deal with it. Although sometimes it is the demands of the developer that won't permit it, but in that instance I believe it is the ethical responsibility of the designer to walk away.
The Kingo houses by Utzon are a good example of a higher density without some of the usual compromises made here.
Housing affordability has five components:
1 - cost of land - and we all know what's driving That up...see above.
2 - cost of building - and as NZ is well under scale, and hence has hopelessly overpriced materials: it's still worth going to the States and filling a 40' container and paying GST plus duty on the contents: most materials are around 20% of the NZ converted cost.
3 - time taken - as time=money - the 'carry' can be significant even for a single build.
4 - credit availability and terms.
5 - Household income levels
The stoopid Councils contribute directly to #1 and #3, the craft nature of building in NZ and the lack of scale accounts for #2, and Gummint policy affects #4 and #5.
In 2001, in Christchurch, it was possible to buy a doer-upper for well south of $50K, in the non-leafy suburbs. By 2003, the same house was x3. What changed?
In 2002 the Labour Gummint, trying to be nice to the hopeless, introduced a guaranteed $100K credit line. Qualification for this was simple: 'can you fog a mirror?'.
Instant result in Chch - every single price in shall we say the structurally challenged house class went up overnight by, spookily enough, that same amount.
So there's the Gummint's little push to unaffordability. #4 shows that easing credit adds to prices. Whodathunk?
And finally #5: the rise of credentialism, soft degrees like media, art and music, and the constant repetition of the mantra 'education gets you up in the world', have all lead to a situation of inflated expectations, but same old employment choices. And now the GFC has commenced a winnowing of the crop: only the truly useful souls can look forward to even a moderate income: the hopeless are condemned to menial jobs or the dole, and as has been the case throughout human history, the well-off are quite capable of looking after themselves. Average incomes are static in nominal terms, and falling in real. As Glenn Reynolds notes:
"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay in, the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers."
Oh, and there is no political way out of this, because there are more Tax Consumers than Tax Producers, and the Consumers can, have and will outvote the Producers when push comes to shove. The middle class vote has been purchased by WFF, and despite their occasional unease, they'll stay bought.
So there in a nutshell is the bind we're in. And as any solution involves a choice between the hard way out, and the really hard way out, I don't see much will move until it has to. As the saying goes: what cannot go on forever, won't.
In one sense, have been on about this for quite some time (e.g. http://waymad.blogspot.co.nz/2006/01/housing-hi-jinks.html) but then, this was at the start of the final run-up of prices and so on another sense, no-one was actually listening at the time: all too busy selling each other, each other's houses and banking a modest tax-free profit.
Now that the dust is settling and we see a generation or more will be needed to unwind the excesses, and at a declining standard of living which will mirror said price run-up, I do think that the listeners are out there.
Except of course in Local Government, who are still in 'we-know'best' la-la land.
But there's a bunch of angry townspeople with torches and pitchforks heading their way....
My thanks. Have been following this topic now for two years here on interest.co.nz. .. it has never come up or been mentioned in any of the Bernard Hickey articles .. how come? .. it is logical .. it is simple .. so simple it makes sense (stems from events that happened in 2001 and 2002) .. and raises the question of "what controls and accountability" exist over the unfettered "mad dash for cash" spending by local governments
Talk about hitting the nail on the head... Brilliant posts.. Waymad.
Bernard... don't let these posts disappear into nothing...
How about ..collaborate with Waymad and rewrite his posts for the wider audience.
The herald maybe.
This is very...very ..good stuff... in my view. ( his posts on housing affordability.. and development contributions )
cheers Roelof
ps.. not trying to tell u what to do.. just ...maybe...trying to plant the seeds of an idea..???
This is the best I have read..on the topic... and it is very consise.
Hmm...well im not sure on the context....it probably differed.........
for instance I do blame the govn for poor leadership, policy, regulation and protectng NZ's well being....oh and vision...that's their job...
the solution also differs, I'd want to fix/improve govn, Waymad, traibless etc would just remove it.....which wont work....
Public services are good and do work, maybe not the best way but.....the alternatives ie private enterprise/run can be worse, healthcare for instance....
regards
Oh a generalisation too far there S: Gummint is needed to an extent we can all argue about but I don't recall taking the abolitionist position.
Issue with local government is simple: a runaway bureaucracy with legal power to spend on anything that takes its fancy, no effective political control on this Particl;uarly over the 'soft' spend which is very popular e.g. festivals), and 100% guaranteed income. Shuffling around a few faces at a Council table or even firing the odd CEO or three will not alter things in the least. The bureaucracy has performed according to Parkinson's Law and the Peter Principle: growth in the absence of output, and has risen to a few clicks above its natural level of competency.
Hence the popular revolt.
But fixing this mess will involve taking an axe to the empowering legislation (the infamous Wellbeings), empowering communities and individuals to look after thermselves as in the recent past, and thoroughly decentralising the process so that these agglomerations of self-serving functionaries cannot easily just start off again and do exactly the same....
I'd start by firing 20% of the staff. Classic MBA tactic (yes, I'm one...). Gets their attention.
Pour encourageur les autres....
waymad,
In 2001, in Christchurch, it was possible to buy a doer-upper for well south of $50K, in the non-leafy suburbs. By 2003, the same house was x3.
That is a little simplistic.
Truthfully, very few properties sold for under $50,000 in Christchurch in 2001 - I bought one for $36,500 at mortgagee auction in Addington, without having the sales list in front of me I think that only about 20 or so liveable houses sold under $50,000 in ChCh city on freehold (fee simple or cross lease sections). A few unliveable homes sold in that price range as well (the lowest I believe was a fire damaged one in Rosewarne St at $29,000). Most of the liveable ones were close to $50,000. All were in fairly poor locations.
Now it wasn't like these properties all magically increased in value. There was negative hype in 2000-2001 so prices of rough and abandoned properties or estate sales were low and they were hard to sell and were often disposed of at prices below what they were a few years earlier (in regards deceased estates, I remember REAL (Real Estate Agents and Lawyers - remember that failure!) having at least 4 estate sales at under $50k (3 were under $40k) - one in North Beach, one in Woolston and 2 in Linwood).
The one we bought (for $36,500) had previously sold for about $65,000 in the mid 90s.
Realistically most of the places that sold under $50k would have sold for $60-75,000 in 1996 to 1999. So as soon the market started to improve and all of the very small existing stock cleared, prices immediately returned to where they were and vendors added on 5+ years of inflation to the price so these properties almost over night went to the $75-90,000 level (this was before the market really even moved).
Those sorts of properties by the market peak in 2007 got to the mid $100s (we bought a similar house to the Addington but on a section over 50% bigger in 2007 in Sydenham for $128,000).
With the earthquake, prices are quickly retracting in some of the more damaged areas, and with foundation damage to otherwise liveable houses writing many homes off, liveable homes are available at giveaway prices (one near new house advertised at $100,000 freehold in Wainoni as is and totally liveable).
The fact prices at the low end moved quickly was more to do with it being a small and diminishing market (many of those cheap homes were sold as sections and demolished).
The increase in prices for the really rough properties was also expected as in 2001 they were priced at say $50,000 because $20,000 of work needed to be done to make it comparably to the $80-90,000 properties.
By 2006 when the $80-90,000 properties more than doubled to $180-200,000, and the cost of renovations had increased only to say $25,000 so understandably people were prepared to pay $150,000 for what had been $50,000 just 5 years earlier, just so they could get into the market.
So the big moves at the bottom of the market were really just in line with the average move in the market.
Why did the market double in price?
1. It had been flat for at least 5 years and prices in 2001 were (like for like) down to about 1994 levels.
2. The standard of housing had improved (or at least the cheaper houses had disappeared). This was due to improvement in the desirability of inner areas and the redevelopment in those areas which "eradicated" the cheaper properties, as well as an increase in size and cost of new homes having been built. Once the oversupply issues were resolved (from migration loss post Asian crisis, and migration gain post 9/11) the market was ready to move.
3. The migration together with investors from overseas (ie Australia and England) buying multiple properties without restriction gave the market momentum.
4. With low interest rates owning property made sense literally at twice the price in 2002.
5. It was common sense that properties wouldn't hang around at $36,500 when you could rent them out at $140pw (about 20%PA gross) and interest rates were 6.5% or so.
2001-2004 wasn't a boom, it was an upwards correction.
T. ALexander on these issues:
While many contend that opening up more land for residential development is the answer that will not happen in New Zealand for at least two reasons. First, most of us are here rather than in a more developed and better performing economy elsewhere because we like the current living arrangements which offer us quick access to the rural recreational environment. We don’t want to have to travel greater and greater times through suburbs before reaching our particular non-urban patch of paradise.
Second, with a very small population spread over a country the size of Japan our infrastructure costs per person are high by world standards. Throw in the fact that GDP per capita in New Zealand is only 58% of the US, 68% of Australia, 82% of Japan and 78% of the UK, and we cannot afford the mass transit systems – train, wide motorways – needed to allow efficient sprawl of people.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
For Auckland this means just one thing. It goes vertical, or as the Mayor calls it - the compact city concept.
Makes sense. It also means developers with an eye to the future will want to secure land not too distant from the city centre, not too far from an existing transport node, and perhaps in an area which the council may have indicated will be favoured early on for compacting. For renters it means no end in sight to bidding against each other, rising rents, and eventually the return of more investors to the Auckland housing market.
After that happens the search for yield and presence of accrued capital gains to borrow against will see
these investors taking a look at other centres.
Goes vertical.....interesting point of view and blind to the energy costs...or maybe right for the wrong reasons....its hard to determine the least energy route....
The choice seems to be go local for the work but cart in food etc, or go local for food and go local for the job....even if thats telecommuting....
Mass transit does not work over distances and low population, I agree with that....watching empty buses capable of seating 30+ between 10am and 4pm is plain stupid....
I think we have got lazy over the last 50~80 years we expect so much and more all the time delivered so easily...only possible with cheap energy...
Triage time as PDK says, so the only sane option is no buses between 10 and 4.....
regards
but most modern western cities like Auckland are very decentralised, so we are not necessarily talking about a whole lot of peri-urban suburbanites commuting via freeways to a CBD, like Alexander seems to assume. In fact a lot of residents in new peri-urban subdivisions will be working locally, at home, or not at all (ie. retired) - like the likes of Elley, PDK etc
Auckland I think of as very de-centralised, I think its almost unique.....im not sure there is another comparible city?
How many ppl actually need to get to the CBD, I mean really? We pay ppl per hour as the norm so being in the office block for 40 hours is "proof" you have earned your money...you may have achieved diddly....so task driven....
What does that 40hours go on? as pdk says maybe we should only be working say 10.....we dont need ipods, we need food, water and some power.....
I now I could easily work from home.....
regards
Geographically Auckland is almost identical in layout to Sydney. Auckland has a better motorway system. Yet Sydney is much easier to move around / get around in than Auckland. As an indicator, once upon a time the Southern Motorway terminated at Penrose-Ellerslie and City bound traffic emptied out into Great South Road with collossal traffic jams in Newmarket up Khyber Pass and down through Symonds Street. Hopeless. Then they extended the motorway through to Symonds Street. All the fast moving traffic emptied out into it. All it did was shift the bottleneck. Now, today, at peak hour, the motorway system is itself the bottleneck. There are always roadworks going on. Never-ending. Getting around Auckland is difficult.
With regard to Alexander's viewpoint, I think its pretty naive and illustrates why bank economists struggle with real world things. If he really knew the development and construction sector (as I would argue he should do as a bank economist) he would know that the compact city is a pipe dream. The economics just don't stack up. He needs to get out a bit more and talk to developers and builders, rather than his beloved farmers
Also I think he's wrong to write off the opening up of more peri-urban land for urban development. The central govt is pushing this quite strongly (albeit slowly), and Auckland Council's own expert advice is telling them that achieving 75% of future housing within the existing urban area is impossible (they would be doing well to get even 50%, and even thats based on some pretty radical zoning upheaval)
Where he's right is that all these factors will squeeze rents up. Even if more peri-urban land is freed up, it will take years of rezoning, investigations, planning processes and appeals for any development to be realised.
So Auckland faces a stalemate where bugger all intensive housing will be built over the next few years, and bugger all peri-urban housing. Great if you are a rental property investor, terrible if you are in an industry or profession (20% of the economy?) directly or strongly associated with residential devleopment and transactions. This will in turn limit population growth, economic growth and wage growth in Auckland, which will have negative impacts on house price and rental growth that will balance the "positive" impacts of lack of development
- although in my view not to anywhere enar the extent that the lieks of Olly are predicting.
agreed - the likes of Alexander, Olly and co. are making big assumptions about renters' abilities to pay more rent. In an age of rising costs but limited if any wage increases, there WILL be limits as to how much rent people will be able to pay.
there will no doubt be some self regulation. If rents start climbing more people will live with family, overcrowd etc. Then that will take some heat off demand and limit rent increases
also if rents go up, and job growth stutters, then fewer people will come to live in Auckland
so there's all these feedback loops happening...
All these loops and interactions make things very complex...the iterations are mind boggling....
"feedback loops" Which is my biggest concern/query....for instance there are some good stats/discusions on commercial rent I read. I think that the "optimum" is described as 11% of the shops takings, in NZ the norm is 14% I think it said. So OK maybe that 11% can stand going to 14%, but can NZ stand going to 17%? I really doubt it and 20% uh no....so when Bigdaddy and Olly say its going higher I really wonder, house prices are already over-priced, so ppl have hefty geared mortgages to pay, hence the rnet is high. So house values are double the normal....so really go to 3x? even 2.5? I cant see how.....even a decent % seems too much to sensibly ask, now....
So Ok in good times, ie booms you can extract that extra, but in the bust times you wont achieve that....and then as (say) un-employment rises we start to see neg loops feeding in making the problems far worse, and probably more quickly....suddenly instead of finding a 1% drop in shop rent will keep the shop going as its taking have fallen you need 5% or the shop closes and the space is empty.....if the mall is highly geared it goes toes up......
It comes back again to infinite growth in consumption/use on a finite resource, at some stage the growth has to stop and possibly even decline....
regards
There's been a fairly steady stream of reports of well-established businesses that are going under, after operating successfully for years and years, when the rents are put up.
Why legitimate, productive businesses aren't protesting more vigorously about being squeezed to death by a bunch of short-sighted parasites I'll never know.
Chris J:
I don't recall saying that there was a large supply of under $50K houses in Chch in 2001. But there certainly weren't none....
And I notice you carefully skirted the main point there. Which was that dumping credit into this particular market in the hope that some very poor folk would thereby be funded into houses, was negated immediately by an equivalent rise in the prices thereof. An unintended but perfectly foreseeable consequence....an interesting exercise would be an OIA request for just how many such poor folk were actually assisted into a hovel by said scheme....
The $70K DC /section figure was from a trusted source associated with one of the large eastern subdivisions released by the emasculation of PC1, and was quoted during planning hearings. I don't doubt that there is a flurry of backroom activity under way to reduce this amount, being as how most of the 'facilities' to be thereby funded, presently lie in ruins.
waymad, I'm not disagreeing with the fact that the price rises from 2002 to 2007 were too fast and too great for the overall wellbeing of the economy. I do question whether schemes such as the Welcome Home Loan scheme were really to blame for the sharp price rises.
According to beehive.govt.nz about 900 Welcome Home Loans were approved on average for the first 6 years, that's not even 1% of the 100-120,000 sales that occurred each year during the same time.
The fact is prices were very depressed in 2001 (partially due to negative media coverage and business commentators even saying people should sell their homes, invest in managed funds and rent - nothing was further from the truth). If people hadn't been so talked out of owning their home, then the rush back into real estate would not have been so great. But in reality the biggest market driver was foreign buyers snapping up perceived bargains when our dollar was around 25p and US39c. At one stage in 2003 one Dunedin agent told me that well over half of their sales were to Australian investors.
Easier credit for investors and developers through finance companies probably contributed more to price rises than the Welcome Home Loan Scheme. The WHLS put into the housing market $910m in the first 6 years, South Canterbury Finance alone pushed a lot more than that into the market.
Credit to the first home buyer market wasn't the cause of prices doubling.
Prices being undervalued, foreign buyers, finance company easy credit and Alan Bollard being behind the ball were more to blame than the WHLS
gee Chris was the NZ dollar 25 p in the early 2000s? I always thought of the old 33p.
Gee if it did get down to 25p then pounds really went far in NZ back then. No doubt all the poms migrating here with their pounds and (relatively) cheap housing back then was a big factor in the boom. I still believe the old kiwi OE experience is underrated as a factor too. I know so many kiwis who went to the UK in the early 2000s, came back with say 50,000 pounds - $150 NZ, or closer to 200K based on 25 p - which was a damn good deposit back in 2003/2004. Now your 50,000 pounds is less than $100K, house prices are a lot higher, not to mention its much harder to get high paying OE jobs in the UK now
Maybe it wasn't quite 25p to sell your pounds, but in October 2000 and September 2001 NZ$1 bought about 25p at the NZ trading banks, if you were selling your pounds you'd have got about 28p over the counter.
Remember what you could buy at that time. (Some examples from memory) in 2001 you could buy a small villa do-up in Ponsonby (Wanganui St) for low mid $200s. A fully renovated (120m2 plus modern basement garage) with city views in a prestigious part of Freemans Bay for late $300s (Renall St). A big do-up on a large section in close in Mt Eden could be bought for about $300k. A nice bungalow on 600m2 in the good part of Onehunga or Three Kings would be about $200k.
So yes, someone coming from the UK in 2001 did very well. A central Auckland property could cost just 70 or 80,000 pounds.
In Dunedin, we had a neighbour who came from London in 2001 and bought a nice villa in a good street for $55,000 (a bargain which was really worth $80k+ at the time) but that only cost him 17,000 pounds, so little wonder he and many others arrived at that time.
We aren't having another exchange rate driven price shift any time soon.
Yep, I recall a Brit paying a price for a 1970s constructed beachfront bach (an "Initial" home I think - or whatever that less expensive Lockwood look alike was) on Manly St in Kapiti that was well over twice the market price. That subsequently drove all the rest of the land values in the neighbourhood sky high - and it took another 3-5 years for the rest of the market of buyers to catch up. And the Brit no doubt thought it an absolute bargain.
So, Hugh, let me get this right... you are predicting a majority of CCC planners with these "soft" degrees will lose their jobs following the (I assume also predicted) "fresh mid term elections"?
And you are also predicting that the new regulatory organisational structure(s) arising from the "many communities" model will not require input from those in the planning profession?
No, I don't know any of those things, Hugh - you're making the predictions here - and I must say they are interesting. "Normal growth", for example, good luck with getting consensus on what that means.
From the outside it seems to me that there is a human/social dynamic of contradiction: hurry up the rebuild but slow down the demolition - and on top of that fundamental problems, such as timely payout on insurance claims and ease of access to reinsurance to rebuild (to my knowledge) simply have not been resolved.
Sounds like Bob's comments (leading to Gerry calling him a clown) was a reflection of him (Bob) wanting central government to take a more authoritarian approach to resolving some of these fundamental issues.
Kate- first thing to note is tha arrogance - "also rans", suggests he's not one!
Then the ignorance "Normal growth". He's been told here, many times, about exponential growth, energy and finites.
Standing right back (perspective is a wonderful thing) Hughs kind have been pushing for less limitations on their particular activity, for years - but particularly since the mid-'eighties. Hindsight tells us that that will have been the time when exponerntial growth met opportunity restriction. Uncramped activity need no tout, and if growth forever was possible, unlimited Local Govt spending would be too.
Clearly the screws would tighten from there on, and we can't help folk who cling to a ratio of 'income' to 'shelter-worth', which only held for a heart-beat in the long picture. I've just finished "Empire of Debt", a book long on looking at the psychology of folk who think their short-term is forever (but a bit short on what underwrites activity). People sometimes - make that oftentimes - have to believe what they need to believe. Like the song says: 'It ain't necessarily so'.
These players will all be under stress (Bob, Gerry et al - folk I didn't respect before, I hasten to add) and must be well outside their familiarity zones. Indeed, it's hard to see how folk elected for a particular paradigm, can ever be the ones to address a new one. Sheer fluke if an intellect can make the morph. The fack that they're trying to replace deckchairs even as the deck tilts further, doesn't help, of course. Still, that's democracy, and supporting the leaders you have, proactively, is a lot more mature than inciting a rabble.
Somehow I think the biggest piece of the cake down there is going to Fletcher and friends. Fascinating that there is such an uproar over a quantum of money equalling $68,000 - when I've heard that Fletchers can over charge on a single demolition job by a similar amount. It's all the same money being sucked out of the economy unnecessarily - but in Fletchers case multiplied many times over.
I'm not saying the CEO deserved a payrise or otherwise, but I do wonder whether the energy of the collective angst is well directed.
Hugh: Just because you say it's so doesnt make it so. December 23 article in interest.co.nz about the "Big-Quakes" ran to two HUGE pages, which together amounted to 1007kb bytes of information, of which the tagteam duo of yourself and/plus Philbest accounted for 40% of the information. You were very busy.
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