Releasing land to "saturate the housing market", as the Government "seems to be keen to do" will not solve housing affordability issue, the New Zealand Planning Institute (NZPI) says.
The Government is currently pushing legislation through Parliament that would enable the development of "housing accords" with local authorities to fast track development of new housing. But, controversially, the legislation also give the Government the opportunity to over-ride local authorities.
Disagreement between the Government and the Auckland Council has cast doubt over the proposed Auckland Housing Accord aimed at developing 39,000 new houses in the Auckland area. See all our stories about the accord here.
NZPI chairman Bryce Julyan said the housing accord bill may be useful to councils that are experiencing housing demand, so long as development is undertaken in accordance with good planning principles – good master-planning for comprehensive housing developments, for instance.
“But most informed thinkers agree that sporadic or ad hoc development, not aligned with a clear and locally-endorsed plan, is a backward step and out of line with good practice in the developed world,” he says.
“It is a blinded view to think that allowing tracts of land to be developed outside a planned framework is a good outcome.”
He also took issue with the "over-ride" provisions in the current legislation.
“Apart from the undemocratic implications, the ability for the Government to override local authority plans is something we should all be very cautious about,” he says.
“The Government should be able to work with the planning profession and local authorities to innovate tools to enable good growth without holding a threat over local government and community plans.”
Mr Julyan says if the government wishes to influence housing affordability there are much more appropriate and useful ways it can intervene to do this.
“Housing affordability is a complex and multi-faceted issue,” he says.
“It is difficult to force without ‘hands-on’ involvement and a holistic approach – things like reducing the costs of construction materials, building houses rather than simply opening land for development, incentivised schemes for first home buyers, rental developments and schemes that use existing urban land so that productive land is used for employment and business over non-productive uses.”
The NZPI believes that far from being a ‘stop’ on development – as recently suggested by Finance Minister Bill English - good planning begins a process for enabling development, whilst managing effects on the environment, within a defined and understood framework. It allows local authorities to plan for development that are well served by infrastructure, services and community facilities.
“There is a need for balance and choice in the type and form of housing and while expansion of towns and cities may be appropriate, unmanaged and unplanned sprawl driven by speculative subdivision is taking us back 50 years,” says Mr Julyan.
“It’s an outdated and unsophisticated approach out of line with a developed, competitive nation in the 21st century.
“If New Zealand is to truly compete on the world stage we must adopt best practice and improve the quality of our urban management, not reduce it.
Mr Julyan says that if planning has such an effect on the economy as Mr English recently suggested, then it follows that good planning is able to have a positive effect on the economy.
129 Comments
[ Sentence deleted because it is personal abuse. Warning #1. Ed.] He's sticking to his ivory tower ideas aobut how things should be done and ignoring the fact that smart growth just doesn't work.
The reality is, it forces people into living in garages and sheds, or the cramming of 2 families into one house and so on.
Is he going to pay for the health bills caused by people being forced into too small and ill suited properties?
Is he going to develop a block of super insulated, high spec (and therefore high cost) apartments with his own money on the line?
Of course he's not. He's just going to lecture others. Because that's what planners do. They like to inflict their ideas on others and try and exert control over them. They are the adult version of school councillors.
Considering Auckland is about the densest urban area in the "New" world already with the exception of Toronto (pop. 6 million) and some of the ghetto-ised South African ones, it is pretty obvious that its growth has been constrained by planners.
It is also denser than every city in France outside of Paris (pop. 11 million) and similar in density to most cities in Germany. And these were around for centuries before the car was invented.....!
Auckland is two to three times as dense as a truly low density unconstrained US city - al of which incidentally have housing half to one third the price. There is actually a correlation here.
Data here.
http://www.demographia.com/db-worldua.pdf
Furthermore, check out whether the affordable, unconstrained US cities have any worse traffic congestion than high density, constrained, unaffordable cities like Akl or Toronto or UK cities:
http://www.tomtom.com/en_gb/congestionindex/
Time to start basing the public debate on something other than the lies emanating from the planners and utopians and social engineers.
That all you can do, Bob? Resort to false smears to try and discredit a work of genuine scholarship that is recognised and used by the London School of Economics and numerous other leading academic institutions?
Auckland is denser than "greater New York" because even Manhattan's density gets diluted by the massive amount of very low density sprawl that spreads contiguously north and south and inland. Using municipal boundaries to calculate densities is not just wrong, it is dishonest.
They should contract out the consent process to private certifiers. I am doing a 64sq extension here in Brissy, my permit was done by private ceritifiers for $1200, 2 weeks wait. Building permits will only require council involvement if it's outside the planning rules.
Building Cerifitiers here are subjected to liabilty insurance and the same for builders. Part of my permit required builder insurance in case of unfinished work and any faults to building work.
The problem is long term liability. So I trade as an inspector this year so I have insurance this year. What happens if my company stops trading and 5 years from now or even 10 years problems surface? how carries the cost then?
PS my experience with private inspectors is they cost more, and with the above Im not sure they are much protection, but sure they maybe faster.
regards
The compulsory insurance required here is job specific, not an overall liability for the builder. And it covers any defect in a set time frame (I think it's 10 years). as for permit cost, I am paying $1200 incl. two inspections.
Last time I appiled for a carport in Auckland and it was $7500 in fee + inspection fees and the overall building cost was about 1/4 what i am doing now. Someone is making good money!
Spot on re insurance, Chairman. Insurance companies can handle standards and inspections far better as an add-on to their insurance core business, than Councils can handle liabilities as "insurer of last resort" as an add-on to their standards and inspections core responsibilities.
1. Please provide a long section of the ROW. The applicant shall clearly indicate on the long section where the manoeuvring areas for lots 2 and 3 would be. Please also provide cross section for intersection of the private manoeuvring areas into the ROW.
2. Please provide a plan clearly showing the garage, width of garage, width of garage door, depth of parking, depth of manoeuvring area for both lots 1 and 2. Please check for the compliance of parking and maneuvering. Please also comment whether the parking on Lot 1 will comply with Rule 7.8.1.9.
3. Please also comment on the approved parking arrangement for
Lot 3.
4. Please provide .a commentary on erosion and sedimentation control.
5. Please provide the Height in relation to boundary calculation on point F and D of Lot 1 and on point B of Lot 2.
NZ Planning Institute strongly supports Demographia says the headline.
"New Zealand Planning Institute® strongly supports Demographia’s call for planners, local councils and developers to collaborate more proactively and effectively on the provision of an adequate supply of affordable new residential housing." says the press release
Not the same thing
NZPI is another santuary ivory tower for people who don't know what reality from fiction.....
These ivory towers chaps just seem so engrossed with their "concepts" that everything else just cannot be comprehended...another of those "those who don't know they don't know" type.
Every 2 year old on planet earth knows "When you increase supply, price drop"...
Granted Land prices is not the only determinant of house price, given that a section (in Flat Bush, a Greenfields development, so should be easiest and therefore cheapest to develop) can cost as much as $350,000 only an imbecile with half a brain can say that "saturate the market with land will not lead to more affordable housing..."
"Hells teeth" if the past is anything to go on God help us.
NZPI have failed to meet the needs of a growing community.
The best thing Bryce can do is keep quite and get on with the job of increasing land supply to bring down its inflated cost. Basic Economics 101?
Nevertheless probably the most harm to humanity in history has been done by regimes dominated by people who possessed the type of brain that was incapable of grasping a single economic concept. Winston Churchill said in about 1920 that "Vladimir Lenin is undergoing the world's most expensive economics lesson. The price is millions of Russian lives".
To start with thats extremely short sighted as doing something short term that doesnt help or makes things worse long term is a poor choice. Plus we are at that point (cross the bridge) that we havent worried about or ignored for 50 years, hence the mess we are in.
regards
That'e exactly why we need to plan - to avoid the folk who (just like 'markets' , really) don't/can't think more than 5 minutes ahead, don't want to accept responsibility for ramifications, don't want to ascertain whether what they are doing/advocating is sustainable, and ignore the fact that the 'we' copping the outcomes isn't the 'we' so happy to proceed blindly.
How does artificially restricting land supply, causing houses to double in price, address any of the issues you like to bang on about? If you're right about oil running out, how does forcing higher density in our cities help?
Your thought process reminds me of the underwear gnomes from South Park:
Step one: steal underwear
Step two: ?
Step three: profit!
In your case it's:
Step one: strangle land supply
Step two: ?
Step three: solve energy crisis!
If energy costs do increase, surely the last thing people need is to be paying a massively inflated mortgage as well as their expensive petrol and power bills.
It's an assumption based on empirical evidence: cities with growth management regimes almost invariably have house prices of at least five times household incomes and sometimes much higher. Those that don't have these restrictions in place almost always have prices at or below three times incomes and a small handful rise to about 3.5. This has been chronicled by the Demographia surveys for almost a decade.
It is also based on logic and basic economics: if you restrict the supply of something the price will tend to increase. Those "cheap fringe sprawl suburbs" are twice the price of equivalent locations in affordable markets. It is well-documented that inner-city suburbs tend to rise the fastest during booms so I don't know what point you are trying to make.
Thank you for your comments, Kleefer. I keep saying that I cannot understand why the owners of a specialist financial and economics site allow it to be crapped all over on a daily basis by economically and financially illiterate trolls serving ruinous ideologies and/or vested interests.
Powerdownkiwi has been asked a zillion times already to explain how providing urban fringe land owners with an inflation in the value of their land from $10,000 per acre to $1,000,000 per acre, and doubling and even tripling the price of ALL housing options for the young, has anything to do with sensible "peak oil mitigation" strategies.
If he was my father, I'd be abusing the shite out of him for being such a swine to my generation.
Kleefer - sorry, no TV, never seen South Park. but -
Step one - identify overriding problem.
(long-term sustainabllity - because if not, why anything else?).
Step two - Assess what will be the limiting factor(s), in light of proven technology/knowledge.
(It's energy - all life is based on energy-return vs energy-invested. If the wolf gets less energy from eating the rabbit, than the chasing expended, the wolf dies. It doesn't matter how many rabbits he chases, a point some folk miss. Technology only uses energy, is useless without it, another point often missed)
Step three - assess known sources, supply-rates, decline-factors, demand rates, EROEI decline.
Step four - determine maximum sustainable population (remember the wolf, but you have to decide on his target weight/condition). The more energy-efficient, the more you can carry - to a point.
Step five - determine the most energy-efficient ways to (a) house, (b) feed, (c) water (d) energise (e) allow whatever quality-of-life level (wolf condition) you agreed upon.
Step six - educate people in integrated systems, so that oxymoronic comments like 'land supply' aren't bandied around any more, and so that we stop trying to endlessly assuage 'growth' (which will kill the species off en masse, and not long away either, given what exponential growth does), We won't get there - too late, too overshot, too big now - but that's the valid proactive approach.
http://questioneverything.typepad.com/
I went ahead, and built a house addressing as many of the issues as I could (energy efficient, low cost, self-servicing, low maintenance, low mass, no need for cavity walls, low labour demand etc etc. Homestar 8 rating, most are 2-4. Others are addressing food, supply-lines, sustainability, transport. Co-housing is interesting, as is the stuyding of what Cuba did. I was at a recent discussion at which a soil-scientist was pointing out that local food-growing round old lead-based-paintedhouses was problematic - ruling out home-grown food for a large number. That's the kind of thing that has to be integrated into what we decide to put in place, given that it will live through 100 years or so.
BTW - mortgage costs can be eliminated by eliminating banks/usury/mortgages. Funny, just like 'land supply' , how many folk take 'mortgages' for granted. Unquestioned. That system is the major rort.
Question 1) What did you pay for your land, per acre?
2) Why shouldn't someone be allowed to pay a similar price for land and build houses on it at a rate that is, say, 4 per acre?
3) Why shouldn't someone be allowed to pay a similar price for land closer to the existing built up area than you, and do 2)?
All the rest of your comment is irrelevant to this discussion and I respectfully ask this site's moderators to start, from now, deleting all such comments. Exponentially too much wastage of space has occurred already on this forum when we are discussing the serious moral issue of what young and poorer New Zealanders are going to get ripped off for the essential of "housing", in the "price of land" component.
Not only is it irrelevant, it stinks to high heaven of deliberate obfuscation, smokescreeing, and subject changing every time the issue comes up. Can one presume the Kaimog land bank is your retirement fund? Hoping for a residential zoning one day?
No, but it could still be rezoned.
The value of zoned land is inflated in all sorts of crazy places, simply because the total amount is so limited and "land-bankable".
It is not contiguous "sprawl" that leads to high levels of "planning gain" in zoned land even in places like Carterton and Thames and Rangiora. It is the pressure of demand from households priced out of Wellington and Auckland and Christchurch, and the fact that local zoning is insufficient for that demand.
As Hugh Pavletich pointed out about those el cheapo houses in Pukekohe; they would be $90,000 in an undistorted market, not $230,000 plus. New first-home-buyer housing in Pukekohe is not "sprawl" from Auckland having spread as far as Pukekohe; however it is "leapfrog" demand due to Auckland's growth constraints.
A lifestyle block location with great views would be a goldmine to its land owners if it could be rezoned for housing, even if it was miles from the existing fringe of a city; under the existing conditions of strict planning. Without those conditions, no racket is possible.
"...the battle for unearned income...."
Exactly. Note that the developers don't generally get much out of it unless they win a VERY long game of strategic land banking - which is not inherent to them being a developer.
Developers are not only forced to try and "land bank", they are forced to play Gladiators and fight each other to the death trying to get land banks in the first place. The losers go out of business. Half the winners also go out of business. The last men standing "cream it".
In undistorted land markets, developers provide work, provide actual product for which there is a demand, make an honest buck, and the whole process is predictable and transparent and serves the consumer's best interests.
It is odd that we would never put up with regulatory interference and gaming of the supply of food and clothing to force the prices up to "what people absolutely have to pay for a necessity". Yet we put up with it in housing.
Thanks, Brendon. Have you talked to Hugh Pavletich at all? He describes how the conservative older developers tend to wind down their activities during these times, because "bubble bunnies" go crazy and hog all the land supply with crazy high bids for it. You get cowboys like Hotchin and Serepisos whose "business model" incorporates a 10% per annum capital gain in their land holdings. Then when they go bust, they whine that "their business model was faulty". And investors who relied on this "business model" whine to the gummint for a bailout.
I see there is even an "Affordable City" political party now, aiming to contest local body elections......
They seem to have the right idea.
I disagree , the release of land is the only way to go , we need 30,000 sections of 450m2 each and this can be achieved on 2000 hectares of land .
There is way more than 2000 ha of land owned by landbankers ,or lying fallow, not being farmed at all within a reasonable commutable distance of Queen Street, Auckland
You can already buy Hugh's cheapo 3 bed fringe sprawl boxes for under $230,000:
http://www.trademe.co.nz/property/residential-property-for-sale/auction-569801462.htm
http://www.trademe.co.nz/property/residential-property-for-sale/auction-314513307.htm
http://www.trademe.co.nz/property/residential-property-for-sale/auction-603446062.htm
Although houses in Auckland are increasing 15% pa on average these are dragging that figure down - they are not increasing in value at all (Refer REINZ figures).
When the existing Hugh house sprawl stock actually starts to increase in value then I will start to beleive that more of it is required.
That illustrates nicely the point I repeatedly make; that people "priced out" to places like Pukekohe - and even Thames and Paparoa - tend to consume a LOT more energy commuting than if development had been allowed on all that land that "Boatman" is talking about and prices kept affordable.
It is also a fact that inner city apartments in affordable US cities are a fraction of the price they are here, so forcing the prices up has in fact REDUCED efficient choices for some people who might have made them.
A front page article in the NZ Herald daily newspaper on Mar 14, 2012 laments Auckland city's sustained increases in unaffordability (this in the face of national economic and personal income stagnation from 2007 onwards), and a small sub-heading perfectly conveys the point I am making: “Priced Out, So It's Off To The Suburbs”.
There is hardly a better illustration of the "unintended consequences" of planning. Planners stuffed Russia and China in the past - urban planners in the partly-free west are doing damage different only in some respects. But the principle is the same. These people are economically ignorant slope-brows who should not be allowed within miles of the levers of social control. Hayek was right about "the kind of mind that is attracted to planning".
Bob, if you don't understand what I said, that just shows your incompetence to comment at all on these issues. You share this incompetence with most urban planners, by the way. But I know enough intelligent people who "get it" when I explain it, to know that the problem is with your intelligence, not with my logic. But here is some more for you to chew on, see if you get the point yet:
From Anthony Downs; "Can Transit Tame Sprawl?" Jan 2002:
".....In "The Costs of Sprawl 2000", a recent study conducted by Rutgers University, the Brookings Institution and several other organizations, part of the research examined how housing prices vary with distance from the regional downtown of each metropolitan area. Although only a few areas were analyzed, the study showed consistently that prices of similar homes tended to decline about 1.2 to 1.5 percent per additional mile from the regional downtown, except where proximity to the ocean had more influence on prices—as in Southern California. Meanwhile, longer-distance commutes added to fuel and travel-time costs by about the same amount per mile in every region.
The study also found that per-mile housing-cost savings from added commuting distance were much larger in regions with absolutely very high housing costs than in those with absolutely low housing costs. Therefore, it was MORE LIKELY TO BE ECONOMICALLY WORTHWHILE FOR HOUSEHOLDS TO MOVE FURTHER OUT TO GAIN CHEAPER HOUSING in HIGH-HOUSING-COST REGIONS such as the San Francisco Bay and Boston areas, THAN IN LOW-HOUSING-COST areas....." (My emphasis).
Downs calculates in his 2004 book "Still Stuck in Traffic", that the higher the median house price goes above $170,000, the more marked this effect. (Below $170,000, it is possible to save money by moving closer to the centre of an urban area, because the transport savings might outweigh the extra cost of the housing).
Also, Downs was one of the contributors to the famous "Costs of Sprawl 2000" paper that he refers to. There is a chapter entitled:
"The Effect of Lower-Cost, Outlying Land on Housing Costs":
Page 448 onwards of the following PDF is highly relevant:
http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_74-c.pdf
One of the ironies of this is that anti-growth policies that force up the price of housing, end up forcing more and more people to live further and further away from where jobs are, if they want to live or remain living in the region. This is actually "peri urban" sprawl, which is far worse than "fringe sprawl".
Thanks for that, Scarfie.
What I would try to point out to Bob, then, is that if he was in an affordable US city trying to sell apartments, he would be selling a far higher value-for-money product, in competition to other high-value-for-money products.
In Akl he has to sell rabbit holes at a cost of several hundred dollars per week. In affordable markets, apartments are actually decent, at a fraction of the cost.
All Bob needs to do is get on some RE sites and educate himself. I suggest any US city with a median multiple of around 3, and a similar population to NZ cities (none of this invalid comparison stuff using LA and NYC).
Here's a start:
Knock yourselves out.
Does one single one of them have the gumption to notice that the owners of land favoured by their "plans" get to charge $1,000,000 per acre for it instead of $10,000 per acre?
If they haven't noticed, they should not be doing the jobs they are doing and should be sacked forthwith. If they have noticed, they need to be prosecuted for malice and investigated for corruption.
Cheaper land = more profit for builders and building supply companies, not more affordable housing. It's not rocket science. It's simple greed. Any thinking person reading some of the posts here can see that greed bubbling away looking for the next target to flame.
I doubt anyone here really wants to live in a city with no overall plan, if they think about it for a moment. No wide-area planning could make flushing the toilet interesting, for example.
Some features that, combined, will truly (eventually) bring down house prices are:
Higher interest rates
Higher unemployment
Meaningful tax on property investors
Tighter lending conditions
An end to the banking and government regime that favours borrowers over savers.
Which of course is not that palatable to many. But don't worry, that day of reckoning isn't here yet. No one is closing the party just yet.
While I agree there will be more profit and lots of greed, I think the profiteers will be the land bankers and the developers. Builders etc are usually just the guys in the middle, one more person for the land banker/developer to squeeze.
Watching the EU and OZ im not so sure its that far off...
Borrowers v savers is a mis-nomer IMHO, I think you mean the borrowers v the saved. 6 years ago the saved enjoyed 7%+ while the borrowers paid 10%+...now its the other way around and its staying there a long time IMHO.
regards
by Whaleoil on June 11, 2013
Property Parrot says:
Why does Auckland Council hate Property Developers? Surely that’s bad for business?
Have you ever wondered why Council simply cannot get along with developers – despite the obvious – that they should work together? One planning, the other delivering.
The answer is simple – Auckland Council has bred a culture of hate towards property developers. Those cardigan wearing bohemians at Council love to hate developers. Everyone knows it and if one didn’t believe that then this Parrot advises them to apply for a Resource Consent and see what dreaded deathly hallow ensues.
Property Development is very difficult. For most property developers life is a hard slog where projects take long periods of time and income arrives sporadically in lumps. Financing projects is hairy and onerous. Risks are higher than Everest. Margins are low. Turnover even lower.
There is an urban myth about property developer margins which needs dispelling (and before readers say ‘cry me a river’). Mostly development margins sit between 12-25% on paper and typically half that by project completion.
A large project of $20m value might forecast a margin of 20% ($5m) but over 4 years that is a 5% return per annum ($1m per annum less tax and overheads to be $500k per annum). If the margin achieved is less the corresponding return is lower. And that return has to fund the future including living costs, business costs, staff and wages. What a developer takes home is a nice car on tick. That’s about it.
Let’s make it clear – there are plenty of businesses in NZ of different ilk that produce more substantial margins and returns on capital or turnover than property development. Some of our listed companies run double digit margins every year. So development is not a golden sunrise.
Property development has no cash flow despite money flowing out for years and accruing interest cost. Property development requires financial discipline and rock steady determination to make it through to the end of a project with one’s shirt still on. Generally there is more money to be made in trading property that developing it.
A property developers’ biggest enemy is time (interest) followed by interference by Councils.
Auckland Council generally makes life difficult for developers, particularly where planning officers have a say in the design and outcomes of a development. Council does this fiddling though onerous planning rules that give rise to forensic analysis of consents, impose notification and community revolt (let’s not forget they hate developers too), forced changes to projects and forcing costs onto developers in return for consent approvals. This process hurts development substantially. The process can take a very long time and the consultancy costs sky rocket along with interest payments.
Council is writing a Unitary Plan and has prepared a document that is even more difficult for property development. Rather than entice development the plan prefers to introduce more onerous consenting processes and a heavy discretion over design. For what reason? Isn’t design subjective? Who is the arbiter of design – a planner in sandals?
Add to that the general dislike of property developers and a boiling cauldron of disunity is created. The tensions between the two groups are always high and Council is always screwing opportunity for developers. And so developers hate Council in return for the immense difficultly created. Ask a developer if they ever had a good experience with a consent process?
Council interference costs time and changes to projects reduce the viability of them.
When was the last time a Government department stepped in to fiddle with the operation and running of a NZX listed company? They don’t and that is the point.
There is no other industry in NZ subject to such detailed interference. Imagine a Governmental agency with discretion and a seat around the table deciding outcomes for Nike running shoes, Apple iPhones or Fonterra Milk products. It would be a scandalous proposition. Yet Auckland city pokes it’s fingers into development when it should be embracing, helping and encouraging developers with a hand up not a punch in the face.
Not that this Parrot has a particular affinity for property developers and nor is this Parrot suggesting Polly Developer should be fed a nice easy cracker.
This Parrot is saying that Auckland Council are stupid. They cannot see that the Auckland Plan and the Unitary Plan are meaningless visions without property developers. Len and his band of merry men shit all over the property development industry and yet they are utterly dependent upon them to deliver the goods. They meddle with the business of other people and whinge about what those people produce whilst ignoring other less scrupulous business types and turning a blind eye to more pressing issues.
Ironically the market has a different affinity to property developers. They like what the developers produce and they prove it by buying their wares (dwellings).
The relationship between developers and Auckland Council is shockingly poor. And it has been created by a Council bred internal culture based on prejudice, uninformed assumptions and a loathing hate of what developers do. And that conflict created by Auckland Council is ruinous to Auckland. What are the costs?
This Parrot says an attitudinal shift needs to occur from within Auckland Council. A good leader would see that and remedy it to protect their vision. Restoring relationships and righting wrongs with the property industry is long overdue. It is Len’s duty to crack the whip and change the culture.
But the chances are low because Len isn’t likely to cosy up to property developers for fear of backlash from voters. Mind you, he does have no less than six spin doctors to write speeches and prepare catch phrases for him. Surely they could resolve to help Len overcome the objections if they are any good at what they do?
Auckland is perilously balanced in the hands of an organisation that is determined to press on with its own plans. But before its plan can be realised a massive shift in attitude is required.
Bob – good to see that you agree that ONLY three years ago council HATED developer’s, and of course within that three years it has changed to LOVE. As Al Capone said “I find that I can get further with a kind word and a gun, than a kind word alone.” Yes the meetings between council and developers are very civil, especially when the council are holding the figurative gun of approval (or not) against the developers head.
Bob what are you then?
A planning employee? An independent consultant? I know you can't be a developer because your comments indicate that you have no idea what the development realities are, nor what the market actually wants, nor what is actually economic to build.
Bob, the constant belligerance towards Hugh P suggests that you have no idea that there is a huge market for brand new standalone homes in nice subdivisions on the outskirts (say 200m2 single level homes on 600m2) but the fact that in Auckland or ChCh you will now pay $250k or even $450k for the site alone is just getting insane.
I suggest you state your position if you are going to continue to make silly comments about how great the council is. Both the Auckland Council and the CCC have and are doing a terrible job in setting zoning rules, charging fees and processing applications within acceptable timeframes.
(And btw council staff on day 18 of an application sending out letters for more information on trivial or nonsense matters in order to give themselves more time is hardly good performance by councils...)
Yoda:
"......Cheaper land = more profit for builders and building supply companies, not more affordable housing. It's not rocket science. It's simple greed......"
And as Hugh Pavletich has been saying repeatedly, some people simply never learn no matter how many Demographia Reports are published. You clearly are the one who is not a rocket scientist.
The ability for developers to build almost anywhere, and do their own infrastructure, is the sole factor that underlies the stable affordability of the median-multiple-3 cities in the USA.
There have been episodes of median multiples of around 3 in cities around the world that do not have this total freedom, but it has always been due to an institutional culture in government at all levels in favour of "development". Everywhere that this culture has reversed, housing has become unaffordable.
These issues were far better understood a few decades ago; development and "pay as you go" for infrastructure was all part of giving the next generation a fair go. It is our generation's "experts" that are the fools, charlatans and fraudsters. Our grandparents generation was Einstein blended with Mother Theresa, in comparison.
From Wikipedia:
"Wendell Cox is a leading proponent of the use of the private car over Rail projects. He is the principal and sole owner of Wendell Cox Consultancy/Demographia, based in theSt. Louis metropolitan region and editor of three web sites, Demographia, The Public Purpose and Urban Tours by Rental Car. Cox is a fellow of numerous conservative think tanks and a frequent op-ed commenter in conservative US and UK newspapers.
Cox generally opposes planning policies aimed at increasing rail service and density, while favoring planning policies that reinforce and serve the existing transportation and building infrastructure. He believes that existing transportation and building infrastructure reflects what people prefer, while his opponents argue that his positions are based more on a belief that road transport and low density are inherently superior."
I'll delete what I was going to say about this chap - before the moderator does.
'What people prefer' is a self-fulfilling prophesy; they're pumped that full of advertising, that 'what they prefer' is largely what they've been told to prefer. If I visit someone with a TV, I'm amazed at the inane level at which most advertising is pitched. Add in peer-reinforcement of same, and you have suburbia.
Says a lot about you, that you automatically assume that a position like the ones taken by Cox immediately rules him out of consideration as a scholar.
Paul Cheshire of the London School of Economics, who was in NZ and gave a lecture in Akl and Wgtn, can't speak more highly of Cox's incredible scholarship, crunching huge amounts of data that should be done by the thousands of well paid, fat-arsed bureaucrats in "Housing" and "Transport" departments, but never is.
It is Cox's opponents who are a pack of liars and propagandists - as I am consistently demonstrating on here with links to actual data. The data supports the claim that road transport and low density are inherently superior. You show me one single factor about the UK's cities on average, that is superior to the same factor for typical US median-multiple-3 cities. By that, I mean cities like Liverpool, Manchester, and Coventry, versus cities like Indianapolis, Nashville, and Salt Lake City. I mean, leave out the unique outliers like London and NYC and Detroit and LA.
Len Brown et al only show their idiocy by harping on about cities like New York and Hong Kong and London. If Auckland had been the main arrival point for the first several dozen waves of immigrants to a "new world" growing into a global superpower, and then ended up the preferred location for the industries now known as "Wall St", Auckland might stand a chance of "being" Manhattan.
If Auckland had been the capital city of the world's largest empire for centuries, and had been where Europe's great financiers had all fled at various times of upheaval in their own countries, and had ended up today the location of the world's largest clusters of finance firms and media firms, Auckland might stand a chance of "being" London.
If Auckland had been made an outpost at an important fringe of the world's greatest colonial-trading empire for centuries, and run by an economic libertarian colonial administrator, and for decades as a tax haven, Auckland might stand a chance of "being" Hong Kong.
Expecting to "be" like those cities by drawing urban growth boundaries, forcing everyone to build "up", and by throwing truckloads of taxpayers money at commuter rail, is intellectually akin to headhunter tribesmen in Papua New Guinea clearing airstrips in the jungle like they saw white men do, because then the gods would send the magic flying monsters down to make them wealthy too.
Why is high urban density, not low urban density, the logical way humanity can continue to exist in a post-energy world? We all sell each other financial instruments, cut each others hair, write reports for each other, make each other coffee, and catch trains to work?
To have an economy thus based on "consumption", you need to have created wealth in the first place by using resources.
The post-energy economy has to be a lifestyle-block-survivalist one. Arguments for a post-energy high-density-urban economy are simply intellectually incoherent.
Of course some people are planning their own lifestyle-block-survivalist future even as they advocate the high density urban death sentence for everyone else........even though they are not candid about it, I would recognise their underlying dedication to their self-interest and genuine belief in their opinions (and assume they are armed to the teeth as well without letting on).
Scolars look at data and information and use models and/or experiments and/or logic to arrive at sound conclusions. Their work is usually peer reviewed and robust, Wendal Cox a) appears to have no standing ie shows no peer reviewed academic track record of note. b) is biased ie wearing libertarian / conservative political blinkers, c) Is supported by yourself, a clear technical and mathematical illiterate.
I see no evidence he deserves the title scolar.
regards
How much does "peer reviewed academic track record" matter to you anyway?
You have consistently ignored everything on THIS data base:
http://www.performanceurbanplanning.org/academics.html
Cox's data crunching is willingly used by numerous academics on that list. It is fair enough if some concerned citizen manages to get private funding to crunch data that crooked bureaucracies will not produce.
Where is there any peer reviewed academic auditing of Cox's median multiple calculations, or his urban area density calculations, that finds he has deliberately inputted false population numbers or "urban footprint" sizes or whatever? The only people who claim to "debunk" Cox are themselves mostly a pack of liars in irrational and non-objective advocacy groups who dislike having their own cover blown.
The NZPI, Auckland City Council, Central Government, and in reality most posters (either for or against release of more land) have no understanding how releasing more land will work if done correctly.
This is because they are using the wrong definition and no understanding of the psychological effects that are produced by using one definition and method over the other. To most people ‘increase the supply of land’ means identifying which land they are going to re zone (10 ha, 100 ha, 1000 ha, 10,000 ha it does not matter) and thereby highlighting to all speculators and land bankers which land to buy up. Of course since most increase of urban limits is by re zoning land that is adjacent to existing residential zoning, purchasers have no trouble in anticipating which land will be next, and as a result have already purchased the land ahead of any council intent in anticipation of the rezoning., and it is almost always developed from closest to the existing fringe, out. The developer/land banker either buys early and has the expense of holding costs, or buys late and pays a much higher price. Either way, the price is far higher than the underlying rural value, and much higher than it needs to be. Further many of the original farming owners have no intention in the short to medium term to change their present use (therefore the land is not available for development), in spite of what the council says.
In short, supply is less than demand, and what supply there is cannot be brought to the market at the rate of demand, and even the sections that can are way over priced due to high costs. The issue then becomes not the amount of sections that are bought to the market, but their price.
My definition of ‘increase the supply of land’ is that ALL land is available for development unless otherwise legislated against, for environmental reasons for example. This may sound like what councils are already doing, but counter intuitively, it is the opposite. This definition starts off with the assumption that there is an oversupply and works back from there, which is the opposite of the present definition used by Central Governments, councils, and NZPI which is ‘residential land is limited and we will increase it.’
This ‘All land is available’ is how the Texas supply of land works and is the basis of how they achieve low costs, affordable housing, in spite of high growth. Note I said that this is the basis, not the sole reason of increasing supply at low cost.
I agree that other controls maybe needed to stop councils (via up zoning value capture etc.) and developers (super profits) from capturing any saving that should have been passed onto the end purchaser, or immigration demand issues that could always swamp supply, no matter how much is supplied.
Contrary to some concerns, with this ‘All land’ developers do not rush out and over supply the market as they are very weary of flooding the market. But what is does mean is that there is no impediment to building at the rate of demand (this has to go hand in hand with quick consenting approvals) and therefore a shortage of supply does not happen. There is no boom or bust of housing prices and that is why, even with huge population growth in Texas, and a booming house building industry, prices do not increase as they would where land supply is incrementally released, even if it is done in ‘large’ amounts.
So sadly, but for reasons they and many others do not understand, the NZPI are right.
Any land that is released under the Auckland Unitary Plan WILL NOT decrease prices and is an ideological sham and the Housing Accord only magnifies this by further limiting supplies by trying to quickly open up limited special areas. Doing the wrong thing quicker only will achieve the wrong thing quicker.
That is a model statement of the facts, Dale. Everyone should read it and take note.
You've actually worked in property development in Texas, haven't you?
But note that it is not just Texas - dozens of cities in many States have a similar approach, and this is what keeps them affordable.
Kansas actually has the highest elasticity of supply of housing of any State in the US. But once supply is elastic enough - i.e. clearly above "one" - you will have affordable housing. Supply elasticity calculated by urban economists for unaffordable cities like in the UK, Australia, Canada, NZ, and California, find something well below "one". The UK's supply elasticity is almost zero right now. That is, there is almost no identifiable supply response to an increase in demand. I would argue that the trend will be always in this direction, the longer that policies of growth constraint are persisted in. The UK has been doing it longest.
Absolutely; take a look at this too:
http://www.macrobusiness.com.au/2013/03/a-better-way-to-fund-housing-infrastructure/#comment-224342
I wonder why we aren't having this same "to sprawl or not to sprawl" conversation about Wellington?
According to Wiki;
Auckland Metro Area = 1,086 km2
Wellington Metro Area = 1,390 km2
Auckland Urban Density = 2,900/km2
Wellington Urban Density = 890/km2
Wellington Metro includes Wellington, Porirua, Kapiti, Lower and Upper Hutt.
Generally, I think most folks would have thought Auckland had sprawled more than Wellington, but area-wise (if Wiki is right) that is not the case. The key difference I can see is that greater Wellington is serviced by adequate rail and bus transport links.
I seem to think Auckland City Council (as per the previous ARC) is being forced to justify the need for central government funding of public transport infrastructure on density-based modelling arguments, so they plan for increased density to strengthen those arguments - hence the creation of the MUL by the ARC, and hence the defense of the MUL (albeit renamed) by the ACC.
Meantime all Wellington needs to do as Porirua goes up and Kapiti goes out is order another dozen or so rail cars.
Auckland traffic is (as I understand it) already more than a worst case scenario nightmare. I can't imagine many Aucklanders voting for more Aucklanders - full stop. Unfortunately no one allowed the planners to plan for no growth. Therein lie the problem.
Isn't the key differences between Auckland and Wellington geography. Rough terrain has prevented contiguous sprawl in Wellington. So the greater metro area is made of isolated villages along the coast and in the odd valley.
But I do wonder why Wellington gets half decent public transport while Christchurch and Auckland both being bigger cities do not. I suspect if all our tax did not go to Wellington then this would not be the case.
They are from Wikipedia;
http://en.wikipedia.org/wiki/Wellington
http://en.wikipedia.org/wiki/Auckland
and Auckland metro area taken from here;
http://www.google.com.au/search?sourceid=navclient&ie=UTF-8&rlz=1T4AURU_enNZ498NZ498&q=auckland
Not saying that makes them correct - but having such numbers about geographic area and population density in comparison is important - as the Wellington area simply does not have the same 'to sprawl or not to sprawl' argument going on.
My point being that it could well be that sprawl (which really is an argument about the effects of population growth and the congestion associated with it) in Wellington is somewhat constrained by geography and that in itself provides an interesting insight/lesson.
Kate, I don't know when Wikipedia is going to wake up to the fact that data bases that they are relying on for population densities, are invalid.
There is a world of difference between "how many people live inside a municipal boundary", and "how many people live inside a pixelated map of actually built up area".
Wendell Cox's figures are regarded as authoritative, and there are others that use the same, valid approach - I think the Lincoln Institute has one.
http://www.demographia.com/db-worldua.pdf
"......sprawl (which really is an argument about the effects of population growth and the congestion associated with it) in Wellington is somewhat constrained by geography and that in itself provides an interesting insight/lesson....."
Kate - I am really, really overjoyed that at last someone on this forum is starting to show such insight. Think this through. When 50% of your geography cannot be built on, what will that do to average travel distances?
The only "answer" in this situation, is dispersed amenities and employment. But Wellington is possibly the most "city centre first" planned city in the world - 32% of the workforce works in Wellington CBD. In Auckland it is 14%, and this is close to the international average.
Wellington is also an international outlier in "commuter rail patronage" for its population size. The cost per rider kilometer is nevertheless similar to the cost of every rider running a car instead. Most of this cost is borne by ratepayers and taxpayers.
But while the 2-corridor urban model and a "city centre first" planning policy gives an artificially good (and still burdensomely costly) result for commuter rail patronage, it is a disaster for everything else. Housing is unaffordable, average trip distances greater, the "pricing out" effect of the house price curve is magnified, and congestion is a disaster.
tomtom.com/en_gb/congestionindex/
Note that Wellington's "delay per hour of peak time driving" is 37 minutes. LA is 39 minutes. Auckland is 41. Houston is 33. Indianapolis is 15...!!!!!!! Philadelphia is 22.
The UK's cities, Canada's, Australia's, and NZ's are the absolute worst in the world for traffic congestion delays. This is in spite of far smaller size than allegedly "worst case" automobile-mad cities like Houston. And when you get a city in the USA of SIMILAR POPULATION TO OURS, that is non-constrained, has VERY affordable housing that of much higher average quality and is on much larger sections, and covers many times as great an area with low density sprawl, it PISSES ALL OVER OUR CITIES FOR TRAFFIC CONGESTION DELAY....!!!!!!!!!!!!!
Be an iconoclast, and be RIGHT.....!!!!
Here then are Wendell's comparative figures:
Auckland land area = 544 km2
Auckland density = 2,400/km2
Wellington land area = 184 km2
Wellington density = 1,900/km2
So Wellington has a much higher urban density according to Wendell which serves to strengthen my argument that public transport is key. No sense in comparing the "delay per peak hour of peak time driving" as that's the whole point - the rail commuters don't experience this delay. And if they are an international outlier in respect of population size: public transport users, then it's because the major transport investment wasn't on roading upgrades, but rather on rail upgrades. And as to whether or not PT is subsidised by road users - well road users are obviously benefiting from reduced delay times per peak hour of driving time!!!!
And as I said, I'm not using housing affordability as a benchmark of good/bad planning. I feel the focus on this affordability issue in judging the rightness or wrongness of the Auckland Plan means we lose sight of what really matters - Auckland's number 1 problem: congestion.
Yes, geography is key - it means Wellington's metro area has only been able to grow in two directions - and both those directions are serviced by a commuter rail network. The Wellington suburbs in all directions (Newtown, Karori, Miramar etc.) are serviced by a bus network. You could say that geography and the foresight of prior generations in terms of public transport lobbying and support resulted in better planning outcomes for Wellington.
whereas roading (in every direction) has always been Auckland's focus; up until the ARC kicked off lobbying for public transport. They and the ACC should not have to fight every step of the way in respect of this public transport argument. The problem as it is presently being portrayed as a 'housing affordability' issue is wrong - Auckland's problem is a congestion and transport issue to my mind.
The ACC was misguided to ever imply it had any place in the resolution of the housing affordability - it's a combination of immigration, foreign investment, credit expansion and local labour market - all central government issues.
"......You could say that geography and the foresight of prior generations in terms of public transport lobbying and support resulted in better planning outcomes for Wellington....."
"Better"?????
See my comment above.
Wellington is "better" in the same sense that the UK's heavily planned cities are "better" than the USA's comparable cities without all the growth-containment planning.
Do you call traffic congestion delays twice as bad on average, "better"?
Do you call economic productivity 20% or more lower, "better"?
Do you call housing two to three times the price, for something twice the age, half the size, on one eighth the section size, and in more dilapidated condition on average, "better"?
Do you call "housing choice" involving 6 times the travel distance to where the jobs are, for something the same price, "better"?
I have not seen authoritative comparisons of infrastructure cost but it would not surprise me if the advantage was to the lower density cities there too. This whole subject is swamped with false assumptions.
I have seen a study that found that the cost of "unconstrained growth" was $80 per household per year. This was advanced as a reason to constrain growth, without a moment's regard being given to the several thousand dollars per household per year added housing burden cost as a result.
This whole subject is swamped with false assumptions.
Well I agree with you there - which is why I like using actual stats to form opinions and then provide considered assertions.
Which brings me to your post above - Wellingtonians do not define their lives by referring to the nightmare of traffic congestion - Aucklanders do. I do an exercise with my students at the start of every semester - one where the students have to complete the sentence "My community is best known for its ................ " and then the rest of the class has to guess where they are from. Aucklanders always fill in the blank with "traffic congestion" or something similar - and every time the rest of the class 'gets it'. Wellingtonians generally fill it in with "cafe culture" or "performing arts" or "public service".
I have no idea of economic productivity comparisons for the two cities - perhaps you have those stats. Nor do I have the stats for average travel distance to place of work for the two cities - again, what is the comparison? I'm guessing Wellingtonians travel further distances on average, but have lower average travel times than Aucklanders. Who knows - again happy for you to ensure we don't make any false assumptions!
There isn't a major outcry at the moment about runaway Wellington house prices. Again, the assumption I make in this regard is that not everyone wants to live close to the centre of Wellington because there are good public transport links from everywhere within the greater Wellington region. From my observation, Auckland's runaway prices are concentrated in the centre (the 'old' Auckland council area) and on the North Shore.
Kate, I think you are worth trying to convince on this. You are using your intelligence.
I am not trying to compare Wellington with Auckland, I am trying to compare both of them with policy-approach alternatives that present themselves from around the rest of the world. All NZ's cities are a disaster for traffic congestion, even if students don't pick this about Wellington. The fact that students pick "cafe culture" or "performing arts" or "public service" is not really relevant to the fact that Wellington has about the world's worst possible traffic congestion for a city of its size, and Auckland has about the world's worst possible congestion for a city of its size. Both are comparable with LA, which has more than ten million people. This is a disgrace.
We simply do not have enough data about trip times and lengths for NZ cities. I believe our local governments are running scared of releasing any data, or even of getting analysis done in the first place. TomTom congestion data (GPS based) is the first time we have had a chance to blow the cover on our cities disgraceful performance.
Your point about "good public transport links" can be summed up in: "price 'em out from living in the Newlands/Grenada area and heavily subsidise rail travel for 'em instead, from the Wairarapa, where they might be able to afford a house".
Now, the shocking truth about commuter rail travel is that it is not so much more efficient than private cars, that we are saving anything by replacing 7 kilometer car drives with 80 kilometer train rides. In fact, the cost of commuter rail suggests that it is about on par with running cars. Fares should be about triple, to cover the true cost - and this would make a train ride about as expensive as the cost per km over a lifetime, of running an average car.
You make the point that rail riders "don't experience the delay" from traffic congestion, and that our "major transport investment wasn't on roading upgrades, but rather on rail upgrades". But in the big picture, what is the point? Rail riders generally spend even longer from door to door, than drivers on congested roads, let alone drivers on less congested roads. What I am suggesting is that the model represented by the affordable, low density US cities with their investment in road capacity, is superior on all counts. The savings on trip times by car is far more beneficial in the "big picture" than consigning society to very high average trip times, some of which is allegedly by "sustainable" public transport, but the great majority of which is still by car. Our approach has us taking one step forwards and three backwards.
You say "road users are obviously benefiting from reduced delay times per peak hour of driving time" - but they certainly are NOT in comparison to people in cities where investment has been in roads. And the difference between being able to afford a home close to where jobs are more concentrated, or being "priced out", is a killer.
I say housing affordability is one indicator among many, of the "dialectics" of how urban economies work. It is no accident that cities with affordable housing have LESS traffic congestion. You say: "There isn't a major outcry at the moment about runaway Wellington house prices". No, but there ought to be a major outbreak of civil disobedience over the prices in every city in NZ. Get on US affordable city RE sites, and start getting appropriately sickened about the betrayal and rip-off of the young here in NZ. Get those students looking, and see what they say.
I had not got around to the point that travel TIMES are a different thing to congestion. I am really pleased you have touched on it. The appendix “Table 8” beginning on page 36 of this paper is quite comprehensive and enlightening:
http://www.fcpp.org/files/1/PS135_Transit_MY15F3.pdf
Unfortunately we have no data for NZ cities. However, I observe that there is no evidence there that denser cities have shorter trip times. Their congestion, and their "pricing out" effect, tend to destroy any advantage that might be assumed from having "a more compact city". Our own experience on roads in NZ cities at rush hour, would make me incline to think that our average will be dragged up considerably by the large numbers of people who spend over an hour travelling from where they can afford a house. The congestion on both SH1 and SH2 is just ridiculous and a disgrace to an allegedly first world country. We have engineered ourselves the sort of commuting hell that applies in cities with ten times the population.
Even from closer suburbs, the trip times are absurd due to congestion. The average speed one takes to get from Wgtn airport to CBD at the wrong time, compares with Mumbai and Mexico City. It takes longer in Mumbai and Mexico city, only because the CBD and the airport are further away from each other. Traffic proceeds at about the same speed in Wellington. How stupid is this for a city of 350,000 people?
What I am suggesting is that the model represented by the affordable, low density US cities with their investment in road capacity, is superior on all counts.
Except maybe not everyone wants to live in these places!
In terms of livability and affordability - I'd rate Palmerston North as a sort of comparison to Houston. Land locked, flat land, cheaper housing, more pavement per capita population than perhaps anywhere in NZ, less traffic congestion, unemployment running at roughly the nationwide average.
But can we use it as a "model" for affordable housing throughout the rest of NZ? Of course not.
I'll leave it to you to tell me why.
Great, your observations always point in the right direction for further discussion.
Yes, it is a good insight to liken Houston to hundreds of Palmerston Norths adjacent to each other. But of course Houston has more Fortune 500 Companies located there than any other city. But people can and do exist in their daily lives, in a relatively limited area, and the affordability of housing means that if it becomes more efficient for them to relocate (eg they get a job in another part of the region), they can easily do so.
".....maybe not everyone wants to live in these places!...."
Actually, they do. Most people want their place to have low traffic congestion and nice houses, and their kids to be able to afford to stay in the neighbourhood; on top of the natural amenity, and don't want to move to Palmerston North to get part of what they want. They just haven't worked out how to do it in their own region, they have been fed lies for years.
But plenty of people in the USA do tend to relocate to the affordable cities. It is all very well to have natural amenities, but when too great a sacrifice in discretionary income needs to be made to live there, people do give up on it. But their affordable cities already have a critical mass. An affordable Christchurch would be a serious magnet for migration like an affordable Palmerston North wouldn't be for decades.
There is also still enough land around and beyond Auckland to allow for affordability indefinitely. In fact there is oodles and oodles of it. California stayed affordable for decades until they started containing urban growth; and they finally did so at a point at which the land area was around twenty times as "urbanised" as NZ is. Good planning can preserve green space without needing to affect affordability. The thing is to go for "enclaves", not a tourniquet around the region.
Look at "The Woodlands" near Houston; then see on Google Earth, how many times "The Woodlands" could be duplicated around the Auckland region. One of our problems is the the people in cities like Hamilton and Palmerston North do not want growth either. Therefore, what we need to do is allow the growth to occur out of sight, out of mind. The people of much of the USA have worked this out and never lost the insight - that is, if you don't want your own neighbourhood ruined with highrises, you need to allow development to happen on greenfields somewhere else.
The people of Dorkland, in contrast, want to have their cake and eat it too - "yes, please, a compact city - yes, we'll give St. Len a mandate", and then when the plan is rolled out, it is "Aaaargh, hands off my beautiful leafy suburb". Heck, the redneck gun-totin' bible basher Yankees are Einsteins in comparison.
It is also absurd to use that "no-one wants to live in a city like that" argument against what am also pointing out, that tens of thousands of people could live far closer to Wellington at the same house price that they currently have to go to Carterton or Otaki for, if only more development was allowed. In fact plenty of people would be grateful for the choice and the opportunity.
I also notice that high density infill is happening in Titahi Bay and Stokes Valley, which fits with what academics like Patrick Troy and Alain Bertaud have pointed out as another unintended consequence of growth containment. High density infill at inefficient but less unaffordable locations. The result is visible on the graph of Portland's "Spatial Distribution of Density" on page 12 in this paper by Alain Bertaud:
http://alain- bertaud.com/ images/AB_ The%20Costs% 20of%20Utopia_ BJM4b.pdf
The same effect is visible on spatial density graphs of London, Seoul, Stockholm and other planned cities. I say it is visible with the naked eye on Google Earth in every city in NZ and Australia.
I say we should ditch the 2-corridor model in Wellington, put a decent road network in to open up the oodles of land in the Horokiwi area, connect Tawa/Porirua and Lower Hutt in several places between Hayward's and Petone, and put in a decent road network to open up the oodles of land between them.
Enclaves of Regional Park can be preserved and indeed made accessible to and utilised by many more people than the status quo. There is oodles and oodles of useable land. "Splatter" development at low density can maintain a visually pleasing aspect, especially with "landscape urbanism" development.
Commercial parks, retail and office zoning can ensure jobs-housing balance. A decentralised, affordable Wellington would beat the status quo hands down. The current CBD-centric arrangement is spitting at fate anyway, given the inevitability of "the Big One". It is a disaster for everyone except the CBD's property owners, that Wellington did not "spread". The whole set-up is like a CBD property owner rent-seeking scheme.
There is a paper by the urban economist Alex Anas on "Congestion in systems of cities" where he suggests that it is more efficient for an old, congested city to "leak" population and economic activity to a fast-growth, affordable and well-planned sattelite, than to try and cope with the cost of the status quo, including costly renewal of infrastructure in locations where access is massively disruptive.
I say we should ditch the 2-corridor model in Wellington, put a decent road network in to open up the oodles of land in the Horokiwi area, connect Tawa/Porirua and Lower Hutt in several places between Hayward's and Petone, and put in a decent road network to open up the oodles of land between them.
Head for the hills, eh? Well I can imagine it - winding, dangerous, narrow roads; can't bike (or walk) safely around the neighbourhood; living in the mist/clouds much of the time; wind swept; construction costs high relative to the retaining walls and sloping sites; much of the land subject to slips/erosion. That area?
It's why folks specify (and pay more) to live on the flat in the Hutt. No amount of land that you open up in "them thar hills" is gonna change that. It's also why Wainuiomata is presently affordable - and you even get flat land in the bargain there!
Such a "splatter gun" approach (even if anyone wanted to live in these back block hills) would worsen traffic congestion to the centres (something you are already complaining about) and make finding a park at Queensgate on the weekends even harder.
Did I not say, zone for plenty of commercial/retail/office parks?
My whole argument is based on running with the natural decentralisation of activity; with 33% of it in Wgtn CBD there is massive pent up forces just waiting to be unleashed in the direction of decentralisation. It is decentralisation that reduces congestion and reduces trip distances, and a geographically challenging region like Wgtn has the MOST to gain from such an approach. Remember the first question I posed for you?
Our ancestors did not look at Kelburn and Karori and Mt Victoria and throw up their hands in despair about the geography. Nor did our more recent ancestors do that with Khandallah and Wadestown and the Western Hills of the Hutt Valley.
I mean "splatter" development where it is simplest, on the lower slopes of the hills, preserve the peaks as public green space, tunnel through lower down, connect up the 2 corridors at multiple spots (the Transmission Gulley project is already going to have massive construction teams in the general area) and boost the whole region's productivity. Wellington is designed to be a dead local economy, as it is.
"New towns" like "The Woodlands" near Houston should be done on the flat land up the Coast and over the Rimutukas. Jobs-housing balance should be one of the top priorities. "The Woodlands" developers actually gave sites away free to desirable employers relocating from other cities. Imagine drawing desirable employers and their workforces, from Dorkland. This is what you can do when you pay $10,000 per acre for the land instead of $1,000,000 plus.
When Fran Wilde was Mayor a quarter of a century ago, she boasted about the loss of Wellington's industrial base - it was a desirable thing in the eyes of her and her cronies. Wellington was going to become "the lifestyle city". Never mind about paying the rent.
Wainuiomata needs better connections to the rest of the region. The Hutt Council is proposing a road and tunnel from Naenae into North Wainuiomata, which is a great idea. A couple more bridges over the Hutt river will help too.
I am enjoying the conversation - given I know the area whereas I don't know Auckland.
Did I not say, zone for plenty of commercial/retail/office parks?
My whole argument is based on running with the natural decentralisation of activity;
Since when did decentralisation become "natural"? To my mind what you are suggesting would be more along the "forced" lines - given the development of such difficult road networks is a 'taking' (tax) cost to wider society.
And just because you "zone" an area for commercial/retail/office parks doesn't mean these industries will come. Wainui is a perfect example - New World recently left the mall... and there is an existing, established population over there who are a bit of a "captive" market. But there is no work there, despite there being plenty of appropriately "zoned" office space/retail etc land, so everyone commutes to the centres for work and (I assume) buy their groceries at Pak 'n Save on the way home. Sure if you tunnel thru Naenae and attract a greater population - Pak 'n Save might come, but such decentralisation is far from "natural". Sounds like a "plan" to me.
And besides, if we take a "scatter gun" approach to residential development - why place zoning constraints on commercial/retail/office parks?
One place that more or less took that unconstrained everything approach recently was Kapiti - virtually every private plan change approved and every resource consent granted. It's a horrible place - they made a nightmare out of a previously uncongested seaside town. Every peat swamp has been built upon, every farm drain filled in - massive stormwater problems; major traffic problem (seen the number of lights you now have to go through to reach SH1 from Paraparaumu Beach)?
The No. 1 concern of residents way back when they did their first LTCCP (Commmunity Plan) back in 2002 was "freshwater" and the No. 2 concern was "development management". The plan actually states the community wanted an end to "growth for growth's sake" (or something to that effect). Well, look at it now - the council obviously didn't listen.
I am glad you are enjoying this, so am I. You are not one of these subject-changing time-wasters we get on this forum. You're making highly relevant challenges to my arguments.
Of course decentralisation is natural. It has happened all over the world. It is continued centralisation that you need to look at good and hard as to "why" it has remained that way.
Yes, the road networks that support decentralisation are a taxing cost to society. But this cost is only a fraction of the cost of economic land rent that everyone is subjected to if you don't allow for physical growth to accompany the economic and population growth.
It is obvious to me why Wellington has remained so centralised. You refer indirectly to "subsidies" to car drivers - well, the cost of the roads is about 5% of the total cost of owning and running cars. So the "subsidy" is about 5% - if you omit the reality that most of the people paying this 5% subsidy via other taxes, are car users anyway...!
But the commuter rail system? Subsidised approximately 70%? Is this not a subsidy that specifically perpetuates the artifical strength of Wellington's CBD, which already has the advantage of having government bureaucracy, and of being located at the apex of a 2-corridor urban form, itself the result of strict planning, not the free market at all?
The once-famous econometrist and land economist Colin Clark made the following argument in one of his last books, "Regional and Urban Location", 1982.
".....If rail and subway services to the center of large cities were charged at full cost....two consequences would follow. The employers of the lower paid workers in the city center would have to raise their wages, reduce the level of service offered, or move to suburban locations......Meanwhile the higher paid......would have an incentive to move their residences closer to the center...... .
"......These movements would have their reflection in the price of land.......In net effect, the subsidies on rail and subway transport are subsidies to the owners of certain types of land - for which there is no social justification......"
The question is increasingly being raised, about the social justice inherent in subsidies to subway systems such as Manhattan's, disproportionately benefiting the highest income earning quartile in society. Ross Elliott from Brisbane, Australia, whose insights I greatly respect, has pointedly raised this question about Australian cities:
http://www.macrobusiness.com.au/2013/05/no-the-cbd-is-not-the-driver-of-jobs-part-4/
(There are links from that article, to all of Ross's series of essays on the subject).
The reason communities like Kapiti and Wainuiomata do not experience the benefit of regional decentralisation, is that they are isolated and only connected into the regional economy "one way". A decentralised regional economy has transactions going on in all directions everywhere within it. I agree that geography can make this difficult, but there is geography, and then there is planning that maximises rather than minimises the disadvantages of the geography. The "disadvantage" rather being an advantage to the Wellington CBD property owners.
Look, if you look on Google Earth or other resources, my gut feeling is that New Zealand has an inordinate amount of tall-building floor space for a country of 4 million people. Especially in an economy that is predominantly agricultural - we are not a centre of global finance or anything. This indicates to me that the whole process of planning and infrastructure investment has been "gamed" by the land owners at the location of these artificial mini-Manhattans.
It is all the worse, that Wellington is right on a fault line and greater dispersion would have been sensible disaster impact mitigation policy. But look at what is going on in Christchurch now - having had their buildings wiped out, the "growth containment" forces are fighting to the city's death, to protect their vested interests.....! The fringes should have been chucked open within weeks of the big one, as far as I am concerned, and the new, more dispersed city would be humming already. It is doing something like this by default now, using temporary suburban premises and mobile homes.
Agree 100% about your last paragraph about Christchurch. IMHO Christchurch would be the big 'winner' if we got rid of all this growth containment thinking in New Zealand. I think Canterbury has great potential if local and central government stops working against it.
From a connectivity perspective in the event of earthquake, landslide, traffic accident etc. the decision-makers in Wellington have been woefully inept in not significantly upgrading the Akatarawa Road. That route, not Transmission Gully would make more sense as the alternate route out of Wellington, I'd have thought.
I see Upper Hutt Council are taking it upon themselves to start his work. Good on them.
And yes, this would have very positive influence on the aspect of regional transactions going on in many directions.
I must admit I never saw any such alternative proposal when the Gully route was being considered, did you?
That's very interesting, my thinking on filling in the "V" of the two corridors hadn't extended up as far as the Akatarawa Rd yet, but yes - that makes great sense too.
Consider this possibility - the forces influencing policy behind the scenes, seem to always work to prop up the gains to the major CBD property owners. There is obvious rational incentive for this even if it remains invisible.
Porirua had to fight to get connected at all to the new Gulley route. The powers that be wanted to "keep the cost down" by having it run straight through to Takapau Rd with no on-ramps and off-ramps at all for the back of Porirua or for Linden. How shameless is that?
So using Akatarawa Rd and SH2 would have been anathema to the Wellington-CBD-centrists. And of course it would make sense to be able to drive from Waikanae to Upper Hutt and on to the Wairarapa - via a proper traffic tunnel through Rimutuka hill. It is absolutely crazy to have the Manawatu Gorge as the main means of getting accross the bottom of the North Island for pretty much everyone north of Otaki.
I liken a regional economy to a printed circuit board or of course, a silicon chip which is a miniaturised circuit board. A 2-corridor model urban form is like having a PCB on which all signals have to run back and forth along just two wires. How slow would this PCB be? But an urban economy that is an amorphous "blob" with all parts roughly connected to each other, is like a typical high-performance silicon chip. "Signals" can go from anywhere, to anywhere else, by the shortest possible route.
Wellington has muddled along with the advantage of being the capital city, which gives it a "weightless" flow of primary income into its economy (bureaucrats wages). But the rest of the region should not be tied by the apron strings to Wellington CBD merely as a kind of "dormitory suburbs" appendix.
Another interesting point you make is this one;
Your point about "good public transport links" can be summed up in: "price 'em out from living in the Newlands/Grenada area and heavily subsidise rail travel for 'em instead, from the Wairarapa, where they might be able to afford a house".
Now, the shocking truth about commuter rail travel is that it is not so much more efficient than private cars, that we are saving anything by replacing 7 kilometer car drives with 80 kilometer train rides.
Which is why I assume ACC are pushing for the light rail system in Auckland - 80kms whether by road or rail is 80kms. Intensification + light rail solves the two problems (commute distance and traffic congestion).
Is the land adjacent to the light rail system going to be compulsorily acquired?
Anthony Downs, in “A Growth Strategy for the Greater Vancouver Region”, 2007:
"......The cost of land poses a key dilemma for urban planners everywhere who want to concentrate jobs together so they can be best served by public transit. Such concentration raises the costs of land near centers; in fact, it would confer a monopoly advantage on landowners who owned such land and could exploit firms trying to locate there. Then firms will want to locate elsewhere to cut their land costs.
Planned concentration of jobs in a few centers is not consistent with private ownership and control of land. Some type of collective control over that land would be necessary to prevent monopolistic exploitation of land values. In theory, this could be done with high land taxes in such areas and special zoning rules. But adopting those devices is politically difficult in a free enterprise economy.......
"......A similar but less intensive dilemma concerns land near transit stops, where it would be most efficient to concentrate high-density housing and jobs. That also creates ownership monopolies over such land unless it is specially controlled or taxed. Yet focusing development near transit stops is a key to using more transit....."
These “transit oriented” grand urban plans are just one of the biggest economic rent-seeking rackets in existence, unfortunately largely unrecognised as such. This is why “transit oriented development” is always such a fiscal disaster. The intensification on which its success depends, never occurs precisely because rising rents “price out” everyone from the efficient locations, except the few who first relocate.
If the city fathers were serious about making it work rather than lining the pockets of their property-investor friends, they would be talking about compulsory acquisition of the land involved, or paying for the project by way of special tax assessments on the benefitting property owners, as suggested by Anthony Downs. But the “popular support” for the “plans” would most likely evaporate under these conditions.
Note that in Portland, massive subsidies have been thrown at "Transit Oriented Development" to make it happen. This is a straight out wealth transfer to the property owners concerned.
Commuter rail “investment” creates much greater incentive for lobbying and pork barrel politics than roads. The value created by roads is more widely dispersed, and the costs and benefits more fairly apportioned. Transport investments that bring more land into the urban economy, lower the level of “economic rent” (i.e. zero sum wealth transfer) associated with land in the economy. The theoretical grounding for this was established as far back as 1926, by Robert Murray Haig. It was well understood by non-economists such as Ebenezer Howard, Charles Booth, Henry Ford and Frank Lloyd Wright, among others.
Do you follow why real estate markets and economic land rent make these projects a disaster for everybody except the property owners?
There is a growing body of academic literature now using terms like "optimism bias" and "strategic misrepresentation" to describe what seems to happen to all rail based public transport cost and ridership forecasts. There is also a growing movement asking for the consultants involved again and again in such projects, to provide a list of audited past forecasts compared with actual outcomes, so that the project under consideration can be subjected to appropriate public skepticism.
Tony Randle did an excellent audit of the Akl Rail Loop business case (available for download at Kiwiblog); he found it riddled with errors and biases mysteriously all running the same way. Discount rates. Cost of essential bus service upgrades for "feeder" services omitted from the "Rail" case. Lavish dual-lane bus tunnels that are not used anywhere else in the world, included in the "Bus" case.
And we don't even need to look at whether the ridership projections are likely to be realised or whether the cost will end up under budget. The whole case was "cooked" anyway.
Did you realise that a rare, successful case of "Transit Oriented Development", that in Curitiba, Brazil; was successful because 1) it used buses and rapid busways
and 2) the land for the adjacent development was nationalised, during a time of military rule.
Yes, I understand - I've seen my fill of cost/benefit analyses written to suit whatever the objective/interest of those commissioning the report are. I don't take alot of interest in that side of things because I think all values-based positions can cook the books in whichever direction they like.
And yes, Auckland City/Region should have designated land for future growth in transport infrastructure years and years ago - just as the Harbour Bridge should have had a bike lane. Basically these problems you mention are no different whether you build a road or a rail corridor.
So why PT over road? Well cars have to park when they get to their destination for one. Few people share cars, no matter what is tried in that regard. Children under 16 can't drive cars. Fossil fuels are a dwindling resource. On-road costs (including WoF, Rego, new tyres etc.) are becoming beyond the capacity of many families - hence all the unpaid fine upon fine upon fine for all these infringements. Car manufacturing plants are closing the world over. And I could go on. Private vehicle use is likely to become a luxury item in future (for many it already is one).
Kate, I recommend you read Gately, Dargay and Sommers, "Vehicle Ownership and Income Growth Worldwide, 1960-2030".
You might imagine that things are as you say regarding cars. But you are quite wrong. Car manufacturing is increasing worldwide. Plants are closing in countries where the fiscal conditions are no longer conducive to car manufacturing, but the production is ramping up like never before, elsewhere.
The potential real cost of automobility per kilometer has only steadily fallen and has never been lower. This is why people of lower and lower incomes have become car owners.
The cost of crude oil is not the cost of petrol. And the cost of petrol is not the cost of automobility. The crucial thing for the real cost of automobility for most people, is the efficiency and reliability of an affordable used car. The real cost per kilometer over a few years of ownership by a low income earner, of a ten year old Toyota Corolla now, would beat hands down the same comparison for a ten year old Morris Minor bought in 1970.
The real, and immoral constraints on household expenditure now, is the cost of housing. It is despicable that in the name of "protecting" people from the "costs of sprawl and car dependence", they are lumbered with thousands of dollars per year higher housing costs, to the benefit of "big property" and "big finance". If growth was left unconstrained and housing was left affordable, and every young person on buying their first home, was socked a tax by the government of around $200,000 and this was spent on infrastructure, we would have an amazing fund for infrastructure and the young people thus gouged would at least have the comfort of knowing that the money gouged was going to some useful cause, rather than executive jets and holiday cruises for the people at the top in "big finance" and "big property".
But our great grandparents generation were not fools. That's the "experts" of our generation. Our great grandparents generation understood that "development" and "paying as you go" for the cost of financing infrastructure, was all a matter of "a fair go" for each oncoming generation in its turn. If it is justifiable to change the rules of the game at the expense of whoever is young when the rules are changed, then to level the playing field, every incumbent home owner should have the windfall increase in value of their home taxed away and the revenue given to young first home buyers.
Car manufacturing is increasing worldwide. Plants are closing in countries where the fiscal conditions are no longer conducive to car manufacturing, but the production is ramping up like never before, elsewhere.
What exactly are the "fiscal conditions" you refer to that make a nation/economy no longer "conducive" to car manufacturing?
I fear a failure to add in the extortionate cost of car finance and the model rationalisation car firms undertake to use one platform for previously different brand names - Volkswagen comes to mind - it was also said some years ago by Toyota, that they could supply the world's car demands if they had sole rights and ran the plants 24/7. We are no where near cheap motoring. Serious mining of what little wealth we have still prevails without shame in the auto industry. Japanese imports that land at NZD 7,000 end up costing NZD 14,000 to the end user.
Kate:
".....What exactly are the "fiscal conditions" you refer to that make a nation/economy no longer "conducive" to car manufacturing?....."
The UK is the classic example. Policies that force up all costs in urban economies, starting with land costs, tend to disproportionately affect land intensive industries. UK urban economists such as Paul Cheshire and Alan Evans are pretty clear about this.
It is noticeable that parts of the USA, those with low land costs, few regulatory delays, low local taxes, business friendly regulations, and unrestricted local resource extraction, are actually gaining in manufacturing. This is in spite of an obvious labour cost disadvantage compared to Asia.
http://online.wsj.com/article/SB10001424127887323549204578315714070017932.html
Car manufacturing is growing in places like China, India and Brazil which has a growing middle class that wants private vehicle ownership. Wheras in those countries with a stagnant middle class the demand for cars is no longer growing so some of the car manufacturing is relocating. Common sense really if you think about it.
Exactly - and half an hour to or from the airport, in Wellington, equates to a similar speed to and from the airports in Mumbai and Mexico City. I have read "shock, horror" stories about their traffic to and from their airports - well, Wellington is just as slow, it is just a shorter distance, that's all.
My observation of New Zealand's transport infrastructure compared to Europe's (sorry I have not been to the US) is we have a lot less of it. In all areas. Less motorways, less public transport, less bikes lanes.
I lived in Helsinki/Finland for a long time. A country a little bigger in size and population than NZ. Meaning its pop density is about the same. My wife had a job with a work car and she did a 50/50 mix of town and country driving. Her average speed was 59km/hr. Because the motorway system was so good. Here in Christchurch a far smaller city the average speed is 39km/hr.
And Finland has significantly more costs to supply good transport infrastructure. They need to run a fleet of snow clearers for several months a year and the compulsory winter tyres significantly increase wear on the roads.
I think when kiwis travel (to Europe in particular) they see these cities that are so much better to get around. And they focus on one thing that they might see. Say an underground system, or trams and think that is the answer. Currently Christchurch has a craving for bike lanes. But what most people do not get is that you need the whole package and it will cost seriously cash. Look at a Copenhagen on Google map, it has nice bike lanes. But around Copenhagen are a significant number of motorways that get the cars off the local roads that make bike lanes possible. Putting bike lanes into Christchurch costing $800 million without sorting out congested local roads is just a recipe for disappointment.
Good point, I was arguing the same thing recently with someone else.
They have generally done a far better job than us, of connecting their airports and ports and hinterlands and their nodes of non-CBD economic activity, with highways and roads.
Of course the critical mass of population helps. But note that their transport mode share splits are still overwhelmingly dominated by private cars.
Wendell Cox's "Rental Car Tours" are designed to let tourists see the parts of European cities that ARE typical, instead of seeing only the touristy old parts by public transport, then coming back home as self appointed experts on how we should all travel everywhere.
In the middle parts of Europe critical mass might? help (but if you understand public goods from an economic point of view too much' mass' leads to congestion, a killer for public goods like roads). But that doesn't apply to Finland because the only country they are close to is Russia and they are not so keen on investing any dependence on them. So strategically Finland is like an island with only a weak land bridge to Sweden from their least populated side of the country.
The strange thing from a kiwi viewpoint about Europe is that transport infrastructure lacks the fanatacism. I never came across a PDF. Or even the cynacism against motorways. I never heard 'if we build it it will just end up congested'. There seems to be more pragmatacism about using different transport infrastructure. They didn't seem to have the car camp versus the public transport camp.
I am not sure why New Zealand has such bad transport infrustructure. Perhaps Phil or Kate have some thoughts?
A couple of thoughts from me.
I recall reading somewhere that NZ had one of the highest kilometres of road per capita population of anywhere in the world. This due to the fact that we settled the country with small farms in every little remote corner and of course stock/produce had to transported out of all these remote places. So our colonial history was road fixated - we prided ourselves on being able to build a road into anywhere: on any cliff face, through any gorge, across any mountain. If you haven't you should visit the Bridge to Nowhere on a tributary to the Whanganui River - its history illustrates this brilliantly - and it's a beautiful place where nature prevailled, so to speak!
Rail had a huge place in our early history - for both goods and people transport. Everyone travelled by rail - our wartime troops were transported by rail - small towns on the main truck line flourished due to rail. It was a huge industry - supporting lots of workers and tradespeople.
Then in the 1980s with the privatisation of the railways, the rail assets were stripped swiftly and ruthlessly with no thought for the public good or the future. Part of that process saw the closing down of many, many small/light engineering railway workshops located throughout the country. These were the training ground for many of our fitters and turners - and our light engineering industry/expertise all but disappeared overnight.
Government also liberalised the goods/road transport market at the same time - and again within a very short space of time, heavy vehicles started making a mess of our main arterial routes - so major upgrades and costly repairs/roadworks on the State Highway system began in earnest. A whole new private sector industry grew in support of these roadworks with the downsizing of the old Ministry of Works. Basically, central government came to have no in house expertise in transport markets/networks. The private sector was going to look after that for us - and of course this included public transport.
Also during that period of economic liberalisation, the government allowed the importation of used vehicles from Japan and as a result the number of cars per capita of population increased markedly and quickly. A 'cheap' used car prior to this might cost a minimum of $10K - overnight you could get one for less than half that.
And lastly, economic liberalisation deregulated the taxi transport industry. Whereas prior to deregulation people queued for taxis, after deregulation taxis queued for people (big time). The owner-driver taxi industry (which had been a well paying form of self-employment) disappeared - and a corporate ownership model moved in. Taxi numbers burgeoned and fares were cheap (for a limited period of time!).
So, as a nation we lost all momentum in respect of public transport in the 1980s. What PT networks existed were privatised and run down. It's been a long road back to getting any positive attitude/outlook for PT back in government/governance circles. It (public transport) became labelled a "greenie" political argument - the butt of jokes by the neoliberal status quo.
Coincidentally, yesterday on another thread, I said:
"King Dick" Seddon's government in the late 1800's borrowed huge to put in national rail and ports and other infrastructure, on the assumption that immigration would continue to the point that NZ's population would reach 30 million. This is the reason why NZ has a national rail system that is like the "Concorde" project. It cost heaps to build, and has never "paid back" a cent, being an ongoing "cost sink" to the government. The subsidies thrown at it every year merely add to the total cost already accumulated. (You need to find and read Prof. Dave Heatley's report on it).
Everyone knows I am not a Greenie, but because I am an objectivist on economics, I would say that most of NZ might as well have been left to nature, rather than farmed for decades at a net cost to the economy as a whole - this being in the cost of transport subsidies for bulky low value produce as well as the decades of direct subsidies that were mercifully ended by Roger Douglas. Note that while roads that carry 35,000 cars a day for the urban economy, are deprived of the funds to make them 2-lanes-each-way, the country has tenss of thousands of kilometers of rural roads that carry single figures of vehicles every day, to serve a rural economy that probably contributes about 1/500th of the tax revenue per road lane mile of what the urban one does.
If you read Belich's history books is that late 1800's period central government spent massively on infrastructure in the North Island to attract migrants so they could out breed Maori in the Waikato/King Country/Taranaki/East Cape area. So King Dick might have said he wanted 30 million people to settle New Zealand. But what he really wanted was to have control over the entire length of the country.
This was necessary because the Maori wars were essentially a draw. Maori still contrlolled majors parts of inland North Island.The North Island colonies other than Auckland and Wellington were floundering. The solution was to move central government to Wellington, abolish the provinces. Borrow massively against Otago gold and encourage settlers to come north. This was a success from a central government point of view. But has made Central government relationships with local government and Maori strained and probably unique in the Western world.
My family history had 8 family members arrived in Christchurch in the late 1870s. All but one of them traveled up to Taranaki and settled there. This was a rational response to the fact that Canterbury's Provincial government was abolished in 1876 and opportunities in New Zealand were now in the North Island directed by Central government.
New Zealand has a high length of public roads per capita but not the highest. But we have one of the lowest amounts of motorways per capita.
Compared to Finland we have 22.57 metres of road to there 15.06 metres per capita. Wheras Finland has 140mm of motorways compared to our 41.3. http://en.wikipedia.org/wiki/List_of_OECD_countries_by_road_network_size .
I think if we looked at public transport figures we would also find a lack of investment.
So I think these statistics go to show we have not invested in raising the capacity of our transport system.
I think the problem dates back to Vogel abolishing the Provinces. Ever since central government has underfunded and interfered in local matters. Issues like rail and motorways have become political footballs preventing consistent long term investment. We have lost the competitive element of many well funded local areas competing against each in how well they provide important infrastructures such as transport. So a Auckland or a Christchurch is constantly falling behind a Sydney or a Adelaide.
Thanks, really interesting comment. I find it quite confirming of what I think of NZ's problems.
BTW, re King Dick and James Belich's books, Belich seems to have backed off a bit from those earlier assertions, in his later books. Have you read "Replenishing the Earth: The Anglo World and the Settler Revolution"? One of the single most knowledge-enhancing books I have ever read. Crammed with peripheral information from all angles as well as being near exhaustive on its particular focus. Belich deserves lasting fame for it.
No I haven't read Belich's more recent books and in fact I lost one of his New Zealand series books when a work colleague failed to return it before I moved to Finland.
You refer to such interesting books I should get a whole reading list from you! I have not done so much reading in recent years because of young kids. But now they are getting older I should be able to manage some more reading.
If I had the opportunity to tell everyone to read just one simple booklet-length work, it would be THIS:
http://www.policom.com/PDFs/FLOW%20OF%20MONEY%202013.pdf
The Flow of Money is a 24 page booklet written to assist community leaders in understanding the nature of their local economy. It presents the “basics” on what every community needs to do to cause a growing economy or to stop decline.
The booklet explains how money flows into and out of a community, how primary industries create wealth for an area, and which industries a community should focus upon to cause economic growth. It is in essence "Economic Development 101."
Then it's horsepoo.
You can pile up money till the cows come home, or till the homes come to the cow in your case.
But there has to be an increasing amount of stuff to buy. Do that globally, and there has to be a global increase in the amount of stuff to buy.
Which is the fundamental flaw of 'Economic Development', and citing it means you haven't grasped the problem, in 4 years here. Not that you're alone in that - the CSA falls flat on his face in the exactly the same way.
Definitely, Brendon. Have you been following my comments above? NZ and Australia have the worst traffic congestion in the world, followed by the UK, followed by Europe, and the USA has the least problem.
Here is what I think happened. The USA was by far the earliest nation into mass automobility and automobile based development. This actually served their economic growth very well; as I say, it eliminated economic land rent in urban economies, which has massive flow-on economic advantages in productivity and discretionary spending.
But somewhere along the way, the rest of the world drew the wrong conclusions from what was happening in the USA. "Urban planning" as a newly established course of academic qualification, is especially responsible - it seems the people who were largely responsible, were appallingly non-objective and the whole thing has always been based on a series of shallow assumptions and a total blindness to economics, land rent, and real estate markets.
For some reason, the tendency of highways to congest again as fast as they were built and expanded, was interpreted almost solely as "induced demand". Vital facts were completely ignored, regarding economic growth, income growth, women joining the workforce, the increased mobility of the elderly and the young, the falling real cost of automobility, and the massive increases in discretionary income as economic land rent was undermined.
Of course cars were a lot more dirty back then, leading to notorious air pollution in Californian cities, which were unique in a number of aspects. Firstly, their rate of population growth following WW2 was astonishing. California grew at about double the rate Texas has recently. The truth about those highways in LA and SF is that the construction of them never ever kept up with all the increases that were nothing to do with "induced traffic" - these increases were happening anyway.
It was not anticipated that vehicle technology improvements would solve the pollution problem anyway, and Californian cities actually attempted to spend up large on commuter rail services to ameliorate the problem. However, this is never an effective use of funds. Anthony Downs formulated his "triple convergence" theory way back before 1970 - if a new driver is "induced" by road expansion, why wouldn't a new driver also be "induced" by someone else catching a train instead? Freeing up the space on the road for a new driver by spending the kind of money necessary to entice someone onto a train, is a far more costly way to "induce" each new driver than expanding the road capacity.
And is an "induced driver" not merely a new participant in a growing economic agglomeration cluster, which is a desirable thing? At some point, the urban economy has to find its own level. No economic agglomeration cluster keeps growing indefinitely and indeed most types of cluster are not suited to high density anyway. The decentralisation of employment has everywhere been hugely beneficial to economic growth and productivity. You can't expect manufacturing and warehousing to cluster at the same place as finance and bureaucracy. Multiple clusters of different types are efficient - forcing them into the same general location is a disaster.
LA and SF are actually not "low density" (I won't go into an explanation of why they developed at medium density rather than low, here). Almost every other city all over the USA has far lower density suburbs - even New York. Now, what "planners", politicians, and the public all over the rest of the world, have missed, is just how dam efficient all those low density urban economies in the USA are. The focus is all on LA, and all the wrong conclusions are drawn. We are told that LA is the illustration of the consequences of "unconstrained low density sprawl" and endless "wasting of money on highways", when in fact LA is the USA's worse congested city because it is the USA's densest city, lacks road lane miles relative to population level, and has spent up to 1/3 of "transport infrastructure" spending for 3 decades now, on public transport that almost nobody uses.
You are surely aware of how, in NZ, spending on urban highway networks for which there were plans, was abandoned wholesale in the 1970's, initially due to economic constraints, but into the 1980's, due increasingly to Greenie and NIMBY opposition? The same thing has happened in Australia, Canada, the UK and Europe - if you were not conscious of any antagonism against highways in Europe, it is probably because the anti-highway forces have long since conquered the arena and almost no-one now has the courage to be politically incorrect and speak out in favour or roads and cars.
But the irony is this. In attempting to "not make the same mistakes America did" as we too achieve greater "automobility" for our population, we have in fact made the mistakes we did not see as mistakes, and have reaped exactly the consequences we thought we were avoiding. We do have LA style congestion, for the same reasons, and in far smaller cities.....!!!!! The best thing we could have done, was follow the examples of cities like Indianapolis and Jacksonville and Salt Lake City. Allow low density "splatter" sprawl, especially where there is the ideal land space for it; allow (and indeed encourage) employment to decentralise; build roads; keep land costs low.
But even in hindsight, almost no-one anywhere in the world is willing to look at the evidence and admit it.
"Public transport" provided by the private sector, totally deregulated, with subsidies following the rider, would be far more efficient than the public monopoly model that we have, which ends up only marginally more energy-efficient than cars with only 1 person on board, if even that. "Atlantic City", New Jersey, has an interesting model.
Phil I have read your threads and am trying to understand to keep up. The one argument for public transport that might have some merit is it is insurance against a possible future where private vehicle transport becomes unaffordable. But the economics of the particular scheme really needs to be examined as your above threads clearly show.
What annoys me is those who say that public transport can be afforded if we increase housing density. Because it is a con. They are selling horse pee as wine. The con artists imply that existing residents will not have to pay to get better infrastructure. They are promising something for nothing. It is just politicians doing what they do best... lie, lie, lie and then lie some more.
But the fact is we could have better infrastructure to relieve problems like congestion, we just need to pay for it. It is expensive but not as expensive as say the Working for Families policy.
I suppose my thought is that if we get rid of this so called smart growth urban growth limiting thinking that just transfers housing and transport costs from the propertied to the propertyless. Then we can honestly look at what transport infrastrcuture is needed, how much it costs given different scenerios, who provides it and how to fund it.
But while we have this magic thinking that we can get better infrastructure at no cost. That a Auckland will magically transform into Manhatten by simply stopping outward growth then we will be going nowhere.
Kate I think somewhere you said this is an infrastructure problem not a housing one, but I can't find the thread. Anyhow, I think you are kind of right. Politician like say Nick Smith or Bill English believe that urban containment policies that our local councils have do not work. That they do not provide affordable housing and lower transport costs. That they are not a solution to congestion. And the evidence is they are right to think that way.
But that opens up the question of what these politicians think should be done to fix our congested cities and our poorly connected provincial centres? What other developed countries still have one laned bridges on major highways?
I think there is an awful lot of confused thinking on this issue. Public debt is bad but private debt is good? We don't think urban containment will solve the problems you are concerned about. So we will stop you and make no attempt to find other solutions to your problems. What is that about?
I think somewhere you said this is an infrastructure problem not a housing one
Yes, in reference to the politics going on with respect to the Auckland Plan. Central government have directed the public discourse into a "housing affordability" one - rather than a city/local infrastructure planning one.
Unfortunately, Auckland Council dropped the ball and actually responded to it with a plan for affordable housing of their own. Dumb. Ensuring that all NZers have a roof over their head has (in NZ anyway) always been a central government responsibility.
Central government had an opportunity recently to build greefields affordable housing in Hobsonville - what did we get? Semi-detached two story units starting around $400K - hardly affordable - and they OWNED the land!
Kate that not quite how I see it. I think it is reasonable for central government to tell local government that your plans are not working and causing houses to become unaffordable. If that is what they believe and there is plenty of evidence that is true.
The issue I have is that if you expose the lie. If kiwis learn that preventing outward growth does not give you all these great amentities for no cost. What do you replace it with? Some of those amentities that people were promised are desperately needed. Auckland, Wellington and Christchurch are slow and congested. Other smaller places are poorly connected to the rest of New Zealand. If National say they are going to alter/bypass Council plans to ensure affrodable housing surely they also have a responsibilty to give Councils alternative tools to solve residents genuine concerns about inadequate infrastructure. Can Wellington just interfer with local areas to ensure that one need is met and just ignore how it affects other local needs.
To just say this is a housing issue or just a infrastructure issue is irresponsible. Either way genuine needs are not going to be met.
Auckland ratepayers need to get used to the idea they will be stumping up about $1bn as their share of the housing accord.
Sorry Brendon and Kate. This is slightly off your thread but I got fed up with all the noise about raw land prices and construction costs and did some musing on infrastructure costs over here. When we are ripping into planners we tend to forget that councils' major role is as a network utilities provider with limited forms of capital raising at its disposal.
As far as I can see, despite the whinging about council charges, new developments end up getting a free ride even if it is small.
So, up at the Palace they must find the prospect of rampant and random development terrifying.
That's right. I mean how many times did we hear from council's that they needed to GROW the population in order to spread these costs to a greater number of ratepayers.
But then where have rates gone DOWN as a result of the population explosions?
The highest residential growth during that 2002-2007 boom time were I believe Tauranga, Kapiti and Queenstown-Lakes .. and they also notably had some of the highest rates increases over the period. And where QLDC and KCDC are concerned the debt levels went through the roof. Don't know about Tauranga.
Kumbei you are welcome to join our discussion. All of that infrastructure sounds terribly expensive. But as tax and rate payers we must realise that by far the greatest amount of our taxes go to fund big ticket items such as health, education and social welfare. Transport and local government infrastructure spending is way down the list.
My suspicion about New Zealand is that local infrastructure has been under provided for generations. Further up the thread you will see how little motorways NZ has compared to others. I am not mad keen on motorways, I like bike and bus lanes too. But that statistic was easy to find and I think it indicates how impoverished our local infrastructure is here in New Zealand.
I think the flaw in comparing New Zealand cities to US ones is that in the US Federal government is generous in its subsidies for motorways. I have no actual proof yet. But I think that Hugh/Best MUDs can create and fund fanastic new towns like the Woodlands and it's MUD ratepayers pay for all the infrastructure within the township. But it is not the ratepayer who connects that town to Houston or wherever but Federal taxes through some National highway scheme. I could be wrong, maybe State government is involved.
Where I lived Finland it was all done by local government. But then I paid something like 10cents in the Euroof PAYE to them. They did amazing stuff. 10km down the road from me they converted a ring road with lights into a motorway by tunnelling 800m through a hillside and adding lanes and putting on and off ramps for several kilometres. This despite or maybe because that area was well connected with commuter train and bus hubs.
Infrastructure is not a limiting problem, there just needs to be a sensible plan on who provides it and how it is funded. The problem is we are not having that debate.
My suspicion about New Zealand is that local infrastructure has been under provided for generations.
Your suspicion is right. This issue was looked at by a central government inquiry team back in 2007 - their output report and all input documents etc are here;
I am starting to lose track of what I have already said on this thread. However, a significant study called "The Costs of Sprawl" was done in the USA in 2006. It put some dollar costs on the difference in infrastructure cost, between "unconstrained growth" and constrained growth.
The dollar cost was $80 per household per year.
Every advocate and bureaucrat uses that as justification for "constraining urban growth".
But no consideration is given to the massive increase in housing costs, which ultimately will exceed $80 per household per year by orders of magnitude.
But I suspect that what we are talking about in NZ is not just a need for this kind of increase in rates to fund expansion; we have a massive infrastructure deficit to catch up on.
And one of the prime reasons Councils like infill development, is that they can shake down developers for fees that are allegedly for "infrastructure expansion" but are actually for renewal that should have been funded through decades of rates revenue.
If the government could shut down this illegal behaviour by Councils it would go a long way to making them less eager to force developers into "infill" instead of Greenfields development.
Rates would then need to rise. This is the inconvenient truth. But the Council staff like that Blakeley guy are lying when they say the rates increases will be "because of greenfields sprawl". The rates increases will be necessary because Councils have been failing to fund renewal of existing infrastructure, as if this is not the prime reason for which they exist.
There is also an intergenerational equity issue with charging upfront for infrastructure versus "pay as you go". I think we all understand that now.
Phil Re:" But I suspect that what we are talking about in NZ is not just a need for this kind of increase in rates to fund expansion; we have a massive infrastructure deficit to catch up on."
I would like to discuss NZ's infrastructure deficit but agree this thread is getting too long and confusing. I am sure housing will come up again in the coming week or so and we can try then.
Thanks for your many interesting comments.
Brendon - look at Hobsonville - it's a greenfields subdivision - land price wasn't an issue because the Government owned the land - it did not need to be profit seeking on that aspect of the overall cost of development - YET the "affordable" housing element that Government built was priced at;
... between $465,000 and $485,000, prices that worry those looking out for Auckland's poor.
As Tony Alexander points out in his 8 point article elsewhere on here - there are many other policy issues at play - not the least of which is the competition aspiring Auckland FHBs face from foreign buyers and rent-seeking landlords.
The Government's "affordable" houses are the price they are for a raft of reasons that have less to do with zoning and far more to do with infrastructure provision and construction costs. These are the reasons why developers of greenfield subdivisions do not build or cater for affordable housing - they use caveats as a means to exclude this less than $300K all up sector of the market.
Phoenix and Las Vegas ended up having a severe housing affordability crisis from about 2006, after years of rapid growth with affordable prices, because their fringes grew out to the point where most of the land was owned by government departments.
And those government departments proceeded to exploit their monopoly position and gouge, gouge, gouge.........
Same problem in some locations in Aussie too evidently.
You ain't gonna get government these days selling off its land holdings for a cent less than what the market will stand, even if they claim to be concerned about house prices......!
PhilB – Yes, and I am surprised that others have been so slow to realise this. At the end of the day, anyone who owns land wants to maximise the profit at whatever the market will pay. If a purchaser wanted to pay twice as much for your property as you knew it was worth, would you point out the error of their ways? Public entities are no different. On an individual basis, Govt. employees can empathise (but most don’t) that the Govt. has a moral obligation to lead the way with their public policy of providing truly affordable housing, but in reality they have a legal (the law is an ass) obligation to obtain the full market value for the property. After all it is sitting on the books at that price, and agreeing that it is worth a lot less has other implications. Both National and Labour have promoted ‘affordable’ housing at Hobsonville at $45,000 raw land value per unit site (approx. 250m2). This equates to $1,400,000 per ha. Their solution therefore is to sell it at the full market value ie to a third party (then impossible to provide affordable housing), or on paper to themselves, and then funnel the money through the system and provide affordable housing by way of subsidy from the profits. While everyone wants to provide affordable housing, but no one is prepared to remove the waste from their system first; After all one person’s waste is another person’s revenue. If the Government won’t take the moral high ground, why should anyone else?
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