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Building our way to affordability?

It’s logical that when housing supply does not meet housing demand, prices will rise. Housing affordability is a huge issue in many cities around the world – with the blame often falling on planning rules and restrictions: both in the form of restrictions on sprawl and restrictions on the level of intensification. While there’s a logical connection between a lack of housing supply and higher housing costs, it is perhaps a little more complicated if we start to take this connection and apply it through saying that if we build a lot more dwellings we will start to make a positive difference to affordability.

For a start, there are two different ways in which we might try to improve affordability by constructing more housing supply: building more houses on the urban edge and building more houses through urban intensification. As many previous posts have pointed out on this blog there are likely to be a number of ‘false economies’ if you attempt to improve affordability by allowing urban expansion. Not only are many of the housing cost savings likely to simply be eaten up in transport cost increases, but there’s an enormous hidden cost in such an approach: all the additional infrastructure that’s required. An interesting Australian research paper suggests that the infrastructure costs of servicing urban expansion rather than urban intensification are huge:   There are really only two ways to pay for the additional infrastructure costs of urban expansion. The first option gets development in peripheral areas to properly ‘pay its way’ – adding huge development contributions to the cost of each dwelling and therefore significantly undermining the ability of this development to actually be affordable. The second option, which seems to be what happens in a lot of American cities that provide ‘affordable’ housing on their peripheries, is to hugely subsidise that development – largely through not requiring it to pay fully for the infrastructure necessary to service it. But then there’s a bit of a logic gap here – why is the rest of the city helping to subsidise those on the periphery who contribute most to congestion, the urbanisation of farmland, probably the greatest amount of CO2 emissions per capita and so on?

The other option is to provide a lot more housing through intensification. This is more logical in a number of ways:

  • You have lower infrastructure costs on a per capita basis and therefore the existing city either doesn’t need to subsidise the new development as much, or the development contributions don’t need to be so high.
  • Most demand seems to be for inner-city housing (that’s where prices are increasing so dramatically), so you provide housing where people actually want to live.
  • You avoid the ‘trade-off’ between housing affordability and transport affordability. More affordable housing in inner areas really will be more affordable for its inhabitants and they won’t see the gain eaten away at the fuel pump.

Harvard economist Edward Glaeser is a big proponent of the concept that you need to build your way out of affordability problems – criticising (for example) Jane Jacobs who wanted to maintain a mix of building ages in an area – even if that came at the cost of allowing additional development. The paragraphs below come from Glaeser’s fascinating article in The Atlantic, which is an excerpt from his book “Triumph of the City”:

But then, during the 1950s and ’60s, both public and private projects ran into growing resistance from grassroots organizers like Jane Jacobs, who were becoming adept at mounting opposition to large-scale development. In 1961, Jacobs published her masterpiece, The Death and Life of Great American Cities, which investigates and celebrates the pedestrian world of mid-20th-century New York. She argued that mixed-use zoning fostered street life, the essence of city living. But Jacobs liked protecting old buildings because of a confused piece of economic reasoning. She thought that preserving older, shorter structures would somehow keep prices affordable for budding entrepreneurs. That’s not how supply and demand works. Protecting an older one-story building instead of replacing it with a 40-story building does not preserve affordability. Indeed, opposing new building is the surest way to make a popular area unaffordable. An increase in the supply of houses, or anything else, almost always drives prices down, while restricting the supply of real estate keeps prices high.

The relationship between housing supply and affordability isn’t just a matter of economic theory. A great deal of evidence links the supply of space with the cost of real estate. Simply put, the places that are expensive don’t build a lot, and the places that build a lot aren’t expensive. Perhaps a new 40-story building won’t itself house any quirky, less profitable firms, but by providing new space, the building will ease pressure on the rest of the city. Price increases in gentrifying older areas will be muted because of new construction. Growth, not height restrictions and a fixed building stock, keeps space affordable and ensures that poorer people and less profitable firms can stay and help a thriving city remain successful and diverse. Height restrictions do increase light, and preservation does protect history, but we shouldn’t pretend that these benefits come without a cost.

This is an interesting debate, because of what Glaeser hints at halfway through his second paragraph: that while the new buildings themselves may not be affordable, they should contribute to an improvement in affordability by increasing general supply. The rationale seems to be that richer people currently living in older houses/apartments will shift to the shiny new houses/apartments, and their older houses will be less valuable and therefore more affordable. I’m not entirely sure whether I follow that logic. It makes sense for office space, as companies able to afford premium space generally lease it and therefore are keen to occasionally “trade up” to the shiny new buildings – leaving their previous space more affordable and now available for a second-tier of companies to shift into. But when it comes to housing, I’m not entirely sure whether building more inner-area apartments and terraced housing is going to make existing housing in that area too much less attractive for prospective buyers. In effect, you’ll have the choice of older lower-density housing or newer higher-density housing (which will probably be constructed to a fairly flash standard). Neither of those sounds particularly affordable to me.

This interesting Glaeser/Jacobs debate was picked up on in a post on the superb City Builder Book Club blog, which is going through Jane Jacobs’s masterpiece, The Death and Life of Great American Cities, chapter by chapter:

One of the most insightful observations that she makes about old buildings is that their capital costs have been written down and therefore the landlord does not need to charge a high rent. New construction is very expensive. It takes 20 or 30 years for a developer to pay off the mortgage. It is only then that there is less pressure on the owner to charge high rents.

This simple observation has recently been questioned. Edward Glaeser (Harvard economist and author of last year’s book, Triumph of the City), for example, has completely misunderstood this chapter. Glaeser asserts that keeping old buildings leads to nothing but high rents — that it’s a simple issue of supply and demand. He tells us that the only way to go is up, up, up, and if towers were built in the place of these older, smaller buildings, districts like Greenwich Village in cities all over the world would become far more affordable. That is, more density equals lower rents.

Can you think of anywhere you’ve seen that happen? It certainly has not been my experience in the past decade of tall building construction in Toronto. Nor has it been the case anywhere in Manhattan that I am aware of. It probably isn’t the case in your city either. I cannot think of an example in an economically healthy city where an old building was torn down and replaced by a new taller/bigger structure and this new structure has cheaper rent than the building it replaced. 

It is certainly quite fascinating to compare these two argument – both of which seem to make logical sense, but at the same time find themselves almost diametrically opposed. What perhaps this highlights to us is that to improve affordability, we need to be a bit more specific than simply saying “expand housing supply”. What really needs to happen is a specific expansion of affordable housing supply. Perhaps the final word on this matter should go to this recent blog post by Cap’n Transit – looking at housing affordability and New York:

Suppose that tomorrow there’s a revolution in New York City. Zoning and rent control are abolished, and every member of the City Planning Commission and the community boards is sent off to the reeducation camps. Spreading out from the Empire State Building, developers cover the New York area in parking-free high-rises until there’s enough housing for everyone, at affordable prices. Sounds great, right?

Almost. But all housing is not created equal. Some apartments are bigger, some have better views, some have are more conveniently located. Some come with relatively superficial amenities like pools and package services. Some are dangerous or bad for your health, from crime, pollution, bad construction or neglect.

Some housing differences are a matter of taste, like neighbors who play loud salsa music or cook Indian food. Some people choose their housing out of racism, moving out if a Black family moves in. Some people want to live near people like them. Some people want to live where there is ethnic diversity, with no single group dominating.

All these factors affect the price of the housing. People who can’t afford higher rents will necessarily have to put up with some undesirable features, like bad views, loud music, crime or a long commute…

…There is a more market-oriented solution, though: build more cheap housing. And cheap housing is bad housing. The next question is: bad in what way?

If the only determinant of an apartment’s price is its distance from job centers, then the poor and the young will all wind up living on the outskirts of town, paying for their poverty with long inconvenient commutes. If the only determinant of price is proximity to a hazardous waste dump, or neglected housing stock, or gang activity, then the poor and the young will wind up in substandard housing, exposed to toxins and victimized by gangs. If the only determinant of price is proximity to “the right people,” then the poor will wind up clustered together, having little contact with other social classes.

To prevent segregating the poor into inconveniently located bad housing with crime and pollution, we need to make some safe, solid housing available closer in, integrated with the rich people’s housing. that is still affordable. In order to do that, we need to allow housing that’s cheap in the non-dangerous, non-segregated ways. That means housing that’s small or ugly, with crappy views and no doormen. Maybe housing that allows loud music if it doesn’t bother anyone else.

Ironically, a good example of this in the Auckland context are the much maligned ‘sausage flats’ built in the 1960s. While they’re pretty much universally disliked from an architectural point of view, they provide quite a lot of relatively affordable housing in places where people actually want to live (Mt Eden, Epsom, Three Kings, Herne Bay etc.) Their aesthetic unattractiveness, in a somewhat bizarre way, has ensured that they remain affordable and means that the supply of relatively affordable housing in inner Auckland is significantly greater than it would otherwise be.

I guess the key point is that just as building more 5 bedroom McMansions on the urban edge won’t make a blind bit of difference to housing affordability, building super-flash inner city apartments, townhouses and terraced houses is also unlikely to help. Clearly, constrained housing supply leads to housing becoming unaffordable, but to resolve that we need to not only build more houses generally, we need to build more affordable houses. How to do that in a way that still allows developers to make a sufficient level of profit for them to bother is perhaps one of the biggest questions facing Auckland in the next few years.

31 comments to Building our way to affordability?

  • Ben

    Shudder when that name Jane Jacobs gets mentioned (happens when you study Planning at Auckland Uni).

    Ok so there is high demand for housing near or even in the CBD and its associated fringes if the media are anything to be given by. While some have unrealistic expectations (Champaign tastes on beer budgets syndrome) and possibly we are hopeless at spreading job centres around the entire city to slow down cross commuting (which would never happen so long as free choice remains) how do we get supply up near or in the CBD then?

    Bob Harvey did say he could get 20,000 peeps down at Wynyard Quarter and the Viaduct (more like 7,500) http://tvnz.co.nz/national-news/auckland-waterfront-could-home-20-000-4802792 Love to see that happen. We could squeeze a few more in Downtown – if we moved the port but anyone game for opening up our water frontier?

    I guess the key point is that just as building more 5 bedroom McMansions on the urban edge won’t make a blind bit of difference to housing affordability, building super-flash inner city apartments, townhouses and terraced houses is also unlikely to help. Clearly, constrained housing supply leads to housing becoming unaffordable, but to resolve that we need to not only build more houses generally, we need to build more affordable houses. How to do that in a way that still allows developers to make a sufficient level of profit for them to bother is perhaps one of the biggest questions facing Auckland in the next few years <<<<< hang on let me find the link, Josh Arbury said something about it and I picked up on it as well: From Texas http://www.macrobusiness.com.au/2011/09/housing-supply-australia-look-to-texas-to-solve From Josh: http://transportblog.co.nz/2011/10/23/taking-a-fresh-look-at-planning-regulation/ Maybe relaxing the planning rules and fees so developers aren't hoop jumping and shelling out the bucks for high planning compliance costs (I said planning not building – even I believe H3 and H4 timber should be used building houses)

    • Peter

      The challenge with lowering compliance costs is the question of how you do it. If it’s through getting rid of things like parking requirements then that’s great, but if it’s through cutting back on the need for good urban design then you’re likely to end up with rubbish intensification that further stigmatises it. If you read the relevant sections of the Auckland Plan it’s highlighting a stronger and stronger focus on quality intensification. That suggests a greater focus on good urban design.

      I just hope that a focus on ‘quality’ doesn’t meant that we end up with high-end intensification and nothing else.

      • Ben

        The former Minister of Environment Ms Hobbs in 2005 released the New Zealand Urban Design Protocol which was meant to form the Framework of ‘Quality’ Urban Design that you (and I and the rest of Auckland) are seeking for.

        Having read the Urban Chapter of The Auckland Plan and having commented on it through my Blog and in my formal submission quite heavily I am aware of what the Chapter called for on in good quality urban design – thus supported on it in my submission and Hearing to Auckland Council.

        Having noted The Auckland Plan calling on quailty urban design, I advocated that Auckland Council use The Urban Design Protocol as the base framework for good quality design

        Now the question is where do we start in reducing compliance costs?

        Also I am sure you can build a very good quality but basic house that would not break the bank for someone or some family on a total income of 45-70k per year. Catch is costs associated with the building.

  • George D

    Glaeser’s statement that: Protecting an older one-story building instead of replacing it with a 40-story building does not preserve affordability. is one that I think is fundamentally correct. There are a number of competing values in any situation that presents competing possible uses. Currently however we have a regulatory environment that prioritises existing uses, without much regard for future amenity value. While wholesale destruction is certainly a bad thing, giving any one value trumps over all others is also harmful to a living city.

    I’m not entirely sure whether building more inner-area apartments and terraced housing is going to make existing housing in that area too much less attractive for prospective buyers. I don’t think that you’ve quite got his argument, which seems to me that increasing the supply of housing will lower the cost of housing across the board. If attractive, they’ll compete with other attractive housing, and if unattractive they’ll compete with unattractive housing. While the value of the building to society will be the result of its priced and unpriced costs (externalities) and benefits, lowered housing costs will be among those. Unless of course the building forecloses the possibility of building other housing which would lower the cost (as is frequently the case when low-density housing is created).

  • I think a problem with Jane Jacobs’ math is that she assumes that capital cost is the only significant overhead on property ownership. I wish. Stewart Brand, another famous US activist of the second half of the 20th century says in his flawed but insightful: How Buildings Learn, that after 30 years a commercial building will have cost as much to maintain as it did to build. You can see what happens to old building stock if an owner tries to spend nothing on it. If you’re old enough to remember the inner city suburbs of Ak before they fashionable again, or much of the Dunedin student housing now, you will know what this looks like. Although landlords will still up the rent if the market rises. NYC still has rent controls, of course, unlike the wild west that is NZ.

    Yes to get affordable housing you do need to choose to build it. And best practice internationally is to mix it up as a proportion of every development, so that 1. It happens at all, and 2. It isn’t ghetto-ised in clumps; bad old ‘project housing’. Problem is this gov won’t do it. Key personally removed the affordable house portion out of the Hobsonville development appealing directly to his electorate’s snobbery and fearfulness. Encorouging it in fact, as well as the developers greed.

    The other problem and this has been pointed out by commenter Tim R; we don’t do big enough developments here, lots of little spec builders. Nothing like what the Housing Commission does in Melbourne in partnership with private developers and including a proportion of affordable units in every development for example. Stone fields and Hobsonville were our only recent chances; and we blew it both times.

    • Greg N

      Isn’t Stonefields supposed to provide the “affordable” units they promised when they get round to building the high-rises down by the so-called “lake” on the southern (lower) end of the old quarry? My recollection was that the reason why they got the old ACC Residential 8C (highest density) zoning down there was because of this fact.

      Of course, the higher end smi-detached and terrace style stuff is still being built (sales being pretty lacklustre the last few years) so they haven’t got around to that part yet…

      • Ben

        How much are one of those “affordable” units at Stonefields meant to cost?

        • Greg N

          I have no idea, but given the type of the development, the unaffordable ones did start at about 750K and go up.
          I wouldn’t expect the affordable ones to be much less than 500-600K though.

          However, none are built yet, so who knows, those shoe box style apartments might be outlawed now, but you’d be amazed what developers can get away with in the name of “affordability”.

          • Ben

            I often laugh when developers say affordable housing and you find affordable is $500k for a 3 bedroom heap.

            Affordable as defined by Demographia and Professor Wendell Cox (ooops bad word :P ) is where one’s primary dwelling does not cost more than 3x than the combined income of the wage earners in that set dwelling. As a rule of thumb you can push it to 4x (defined as slightly unaffordable but do-able) if the people in the dwelling knuckle down and watch the budget each week.

            So say family of four or five with both mum and dad earning average wage of (I think) 50k per year means a combined income of $100k. That means to stay affordable they should be shelling out no more that $300k for the dwelling (3-4 bedroom working on 1.5 people per bedroom) with $400k being the maximum.

            And here comes the crutch – average 3-4 bedroom house is over what $500k? No wonder why we have a Housing Affordability Mark of 6.4x (extremely unaffordable).

            So affordable QUALITY 3-4 bedroom house for $300-$400k? And 5-6 bedroom for under half a mil – dang I must be dreaming here in Auckland.

  • Oh and nice research Peter, I know how much work can go into these posts!

  • Greg N

    Like I said Ben,
    Nothing to do with affordable housing exists there yet so all bets are off as to how much they’ll be or how big. Landco (the original developers) and now Todd Property (who took over LandCo) made big noises about the affordable options, but the plans were left pretty vague (“market lead” was the term they used to hide the fact they had no actual idea what the places would be like or cost) in the Environment court, council planning stages and everywhere else (like the open days they held).

    The original plans had them getting 3000 residences in there, but that was whittled down to around 2,500 last I checked, meaning some 6-8,000 people in the old quarry.

    My perception from going there is that the part built so-far of Stonefields is aimed at 2 car and 2 income families, despite the glossy brochures and master plans saying otherwise the facts of whats there now speak for themselves. They did say the northern part would be built first to give the place some sense of community (like the affordable housing occupants down the south end don’t have/want a sense of community).

    Theres no real PT in that place yet (well the 635 Bus goes in there once every half hour or so at peak, once an hour off peak), and there may never be. The nearest train station is at GI is a long long walk away (its over 1KM away – and its mostly uphill). Its not even within the old 800 metre circle of the train station that the old ACC said was suitable for a SGMA.

    As a result I don’t see too many folks living there without at least one car needed to get to work and shopping even though the planners think otherwise.

    And oddly enough, at the edge of Stonefields along the Eastern side of Ngahue Drive – (what was College Road “south”), the houses built there, all zoned “low density” Res 6 detached houses usually have 4 or more cars/trucks/vans parked outside each property and usually some on the roads, some on the property, and with 2 more in the double garage, meaning that their so-called PT friendly development is anything but already and thats the oldest part of the development which is outside the quarry and is closest by distance to PT. I suspect that the places there are all rented out as flats and that everyone who lives there has their own car to get around hence 4 or more cars outside each property. Not quite the mum, dad and 2 kids the brochures suggest though. Same goes for whats been built in there too. Take a drive down there sometime and see for yourself.

    When the high-rise show boxes arrive (oops I meant affordable housing) then the whole suburb tone will probably change and those who are there already may well petition council for a name change to “Stonefields Heights” or some such more exclusive name to separate them from those other folks down the hill near the stormwater ponds (oops I meant lakes).

    • Ben

      LOL, had to chuckle Greg reading that. I’ll take a drive down there on my next day off and have a look. However it sounds rather similar to Addison in Takanini in some respects including the PT department and 4 cars/trucks per house when the place was only designed for two per house. Err no buses nor trains (despite the rail line being right there) either so Addison is buggered. However if Papakura Local Board can get that Walters Road Interchange (Bus, Train, Park and Ride) then things might change but as you said wait and see.

      It seems we have an absolute Buggers Muddle (to borrow an analogy from Cameron Slater) with Stonefields and Addison with “Master Planned” Communities (Master Planning at epic failure?) and planners still pushing for them yet can’t get even the first lot right with decent ammenities and transit.

      As with Stonefields – reopening Tamaki Station going to do much (I doubt it)

      • George D

        There’s also the problem that leaving out a proper western entrance (which was entirely doable) has turned the entire suburb into an east-facing cul-de-sac.

        Learning takes a long time.

        • Greg N

          George D,
          the lack of proper western entrance for Stonefields was entirely Winstones (the quarry owners) fault in the early ’00s.

          They put up a private plan change with a rough drawn sketch to the community showing the plan for the old quarry after it ceased being a qurry around 2001, showing the main way in and out was to be via a multi-lane road running from the east to the west coming out onto College Road opposite Norman Lesser Drive.

          And they planned to put a whole lot of hi-rise business center stuff with up to 10m high buildings in the middle, and allow industrial development around the northern edge. And bang lo-density residential everywhere else, unless they couldn’t sell the industrial land, in which case they reserved the right to plonk houses in the industrial zones too.

          The drawing they put up was so rough a 1st year architecture student could have drawn it better.
          Maybe it was drawn up by a 1st year architecture student for all I know.

          Basically their half arsed plan got the St Johns Park residents screaming blue murder about the traffic it was going to funnel into their streets through rat running, across the quarry floot and so they lobbied the council to toss it out. Winstones got nowhere (turned down) and then waved the white flag and flogged the quarry off to LandCo and walked away.

          LandCo then used the RMA (Section 274) to slip in their plans via the back door without any community consultation (they said that the old Winstones plan change had been notifed and therefore they didn’t need to renotify them even though their plans were totally different).

          Long and short, under S274 noone got any proper say via the usual process and LandCo got their master planned development shoved through the Environment Court. The old ACC couldn’t bend over quick enough or far enough for LandCo either to accommodate whatever they wanted.
          Course LandCo went broke before the land sold, so Todd swooped in and bought them out.

          Thats where it sits today, roads done, but less than half the houses planned finished, more than 7 years since the plan change was rubber stamped by the Environment court. Theres a school, none of the promised shopping/business district is built, nothing except residential houses scattered over the site.

          Even the lights and road widening on Ngahue Drive (the old College Road) LandCo/Todd were required to put in last year as part of the original Environment Court approval was a “do minimum” job. No self-respecting cyclist on earth would use Ngahue drive today and if they do they’ll get run off the road in short order as the left hand lane in each direction is just only wide enough for a car – not a car and bicycle.
          And theres no footpaths on the western side either.

          All in all a very shonky tale of corporate greed.

          • George D

            That sounds more like a failure of our public institutions (and a fair degree of legislative failure too).

          • Greg N

            George D
            That sounds more like a failure of our public institutions (and a fair degree of legislative failure too).

            Maybe, but the same thing can and would probably happen today.
            Nothings changed with the SuperCity that I can tell.

            Basically the real problem is that land use rights private developers have (or think they have) overrides everything the council does or says.
            - In the council planners minds if nowhere else.

            So when the developer says we want x, y and z then the council rubber stamps it after adding a gloss of public consultation.

            Unless this council stands up to these guys and says no you can’t put your Stonefields development there until PT in that area is sorted, then and only then will you get better outcomes.

  • Peter

    Here’s an interesting insight into how Vancouver (which has even more of a housing affordability crisis than Auckland) is approaching the issue: http://pricetags.wordpress.com/2012/03/27/dva-dialogue-the-amenity-affordability-equation/

  • Greg N

    Ben,
    Tamaki is also too far away from Stonefields to make any difference (and its up another slope to get out of the quarry so no wins there either).

    Plus you’ll soon need to cross a “4 lane” (1 lane each way plus a bus lane each way) highway (AMETI) to get to Tamaki station.
    Thats of course when AMETI is built in the next 3 years.

    And last I heard even Tamaki reopening was a “nice to have” not a given anytime soon. ACC had a plan to put a innovation precinct round there, but seems that got buried of late too.

    As I measure the “present” Tamaki station platform (which is still there) as the crow flies to the centre of Stonefields it is 1.3Km and there is no direct route that short you can walk or drive. The shortest achievable walking distance is more like 1.6-1.7Km, but will possibly be longer depending on the road layout in the eastern end of the quarry.

    Mind you the same measuring shows the walking distance from GI station to the same location in the middle of Stonefields is 2.0 Km, so technically Tamaki is closer walking wise. But who wants to walk uphill to a train station, crossing a major 4 lane highway to do so, when theres no PT to get you there?
    Of course you’ll drive like everyone else does.
    By the time they put PT in there no one will use it.

  • Greg N

    Oops,
    I stand corrected. Price paid was $300m for 60Ha in 2004. Means the section price was $500 m2 in 2004 terms.

    Heres the original Herald story from Jan 2005 when Fletchers bought the bulk of the quarry land back from LandCo:
    This link
    In it they quote the following info:

    In the Mt Wellington deal, Waters is buying back land the company sold a few years ago. (for $38m)
    “What did we sell?” asked Waters. “A quarry.
    “What are we buying? Suburban sections with roading, sewage, power, lights and council approval.
    “We’re not a developer. It was the right thing to do, to sell it and buy it back.
    “It’s totally the wrong message to say to anybody that we sold it for peanuts and we’re paying hundreds of millions to buy it back again.”

    The OIC decision says the Mt Wellington purchase will let Fletcher build on 1722 housing lots and four apartment sites.
    “The acquisition is viewed as an expansion of the residential building business,” the commission said.
    The block spans sites on College Rd, Morrin Rd and Lunn Ave.
    The decision follows an approval in 2002 for the company to buy 12ha of the quarry for $42 million.

    The biggest (of the 3 OIO approvals for Fletchers in 2004) is $299.8 million for 60.27ha of former Mt Wellington quarry land.

  • bbc

    Not sure if people ahve posted this, put this post fits perfectly with an article recently on Atlanta Cities

    http://www.theatlanticcities.com/jobs-and-economy/2012/03/simple-math-can-save-cities-bankruptcy/1629/

    “All of this is also just looking at the revenue side of the ledger. Low-density development isn’t just a poor way to make property-tax revenue. It’s extremely expensive to maintain. In fact, it’s only feasible if we’re expanding development at the periphery into eternity, forever bringing in revenue from new construction that can help pay for the existing subdivisions we’ve already built.”

  • Ben

    I remember as a Post Grad Planning student I had to do a Community Transformation Project assignment for one of my Urban Design papers in the course. The area was Tamaki (Panmure through to G.I)and boy did the class have a narrow view when renewing the area, trust me to go well outside the box and try something more extensive. As an extension I tried to connect Stonefields to Tamaki through two roads (one rebuilt, one new), reopening Tamaki Station and building I think three transit hubs surrounded by mix use development – oh and just to wind a few people up I threw in the Eastern Highway to boot.

    Well all I could say is that Stonefields was effectively buggered and isolated despite rebuilding an arterial road, building a new direct link to the east side of Tamaki, one Eastern Highway for long distance travel and even a transit hub at G.I and Tamaki.

    I suppose Stonefields was not the way in “building our way to affordability” when it is anything but.

    As for the rest of Tamaki – still got hope there as that gets renewed over the next 20 years :D

    • Greg N

      Perhaps that Stonefields is not the model for (re)building our way to affordability.
      But most of the previous (and current too I’d bet) council planners would insist (publicly at least) that Stonefields is a model “text book” example of how to do such a development for urban renewal and do it well.

      To me the development is a text book case of how not to do it. The only thing that Stonefields had going for it in fact was that it was cheap land to buy as it came from an old exhausted quarry prone to severe flooding, bordering and old landfill. Little else worked or works in its favour though.

      However I think the true “redeveloped” costs of the finished land (at about $500 per m2 in 2004 dollars) shows the actual costs you face when preparing new/rennovating old land for building on these days as most of whats in Stonefields was paid for by the developer, ACC put in as little of its own ammenities as it could get away with.

      It also shows that by extrapolation, that the only way forward affordable housing is not “low density” development, probably not even a medium level development is enough either. So it does show that you need multi-storey developments where the land used for the building platform and ammenities can be spread over more floors (occupants) to lower the land cost.

      Seems to me that the cost of land in Stonefields is not out of proportion to what you’d pay anywhere else in Auckland Isthmus area now if a green or brownfields site was redeveloped for housing. To compare the land cost on Ngahue road frontage, which was the 12 Ha sold for $42 million earlier to Fletchers, this land was zoned Res 6 so required 600m2 sections (and the price was lower to reflect that fact and also as the road frontage was already there.
      This meant that the $ cost per m2 of that land was $350 m2 in 2001 dollars which is about the same price as older Res 6 sections further up College Road developed 40 years ago were worth then.

      But none of this does anything about the desire for everyone it seems to want to have a fully finished McMansion which is what Stonefields is full of and perhaps thats a re-education campaign that needs to happen as well to ensure affordable housing sheds its slum image.

      Finally, just because a land site is somewhat near a transport hub doesn’t mean its suitable for such a development, and the land use needs to integrate from day 1 with the transport not as an afterthought. So development needs to be held back until that can take place.
      Which is something the ACC refused to do for Stonefields and I fear the current council would also refuse to do too.
      And therein lies the nub of the problem.

  • Geoff Houtman

    “How to do that in a way that still allows developers to make a sufficient level of profit for them to bother is perhaps one of the biggest questions facing Auckland in the next few years.”

    Maybe developers shouldn’t be the ones doing it? Is this something Council or Central Govt should be doing?

    Or is that politically incorrect these days?

  • Ben

    [Quote] Finally, just because a land site is somewhat near a transport hub doesn’t mean its suitable for such a development, and the land use needs to integrate from day 1 with the transport not as an afterthought. So development needs to be held back until that can take place.
    Which is something the ACC refused to do for Stonefields and I fear the current council would also refuse to do too.
    And therein lies the nub of the problem.

    Damn it, thing crashed so have to type again.

    And that is where the problem lies, intergrating transport with urband development from day one – and most likely in a phased development.

    Trying to play catch up because someone screwed up is expensive and a pain to all concerned.

    Hate to say it but 4 years at Uni for your “planning” degree means pure diddly squat.
    Want your planning qualification maybe should take one out of the American’s books and “learn” Sim City 4 (soon to be Sim City 5) before being let loose on the real world.

    We do not need any more muddling through the next 30 years of Auckland growth.

  • KLK

    Sound familiar?

    http://smh.domain.com.au/real-estate-news/terrace-housing-could-be-answer-to-shortfall-20120330-1w3ix.html

    Tales from Sydney. A lack of “affordable” housing, intensification of middle-ring suburbs part of the solution, terraced housing wildly popular with buyers, but practically wiped out by planning rules….but it may have its day once again.

    I can, however, imagine the horror such plans would have on some Aucklanders…..they didn’t use the best image to push its cause.

  • How to do that in a way that still allows developers to make a sufficient level of profit for them to bother is perhaps one of the biggest questions facing Auckland in the next few years.

    It’s not societies place to ensure that people profit. It is societies place to ensure that no one within that society is living in poverty.

    Answer to housing shortage: Have the government build houses and rent them out. High density ones scattered around the cities of course.

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