Last week’s post about how considering transport costs is an important consideration when really understanding housing affordability has led to a fairly epic comments thread. This is perhaps because many sprawl advocates are so used to hammering the “sprawl is the only way to improve housing affordability” line that they feel quite threatened by a more comprehensive analysis of the situation.
To summarise many of the points made by blog authors within the comments thread:
- The research validly highlights that transport costs rise as you get further from the centre of Auckland and this counter-balances – to some extent – the higher housing prices experienced in some inner areas.
- We think it’s highly hypocritical for people to bang on about the need to remove urban limits while maintaining strong support for the majority of planning rules that limit development potential in already urbanised areas. Councillors such as Dick Quax and Cameron Brewer are particularly bad when it comes to this hypocrisy – surely height limits, building setback requirements, parking minimums, density controls and the like are just as much “social engineering” as urban limits.
- In places where sprawl has resulted in affordable housing (Texan cities are often given as the example) there has been huge (billions upon billions) spending on highways and other infrastructure to support that growth. Hardly the ‘market outcome’ that the proponents suggest.
We have supported urban limits in documents such as the Auckland Plan and the Unitary Plan. In fact we support stronger control over the release of greenfield land in the Unitary Plan compared to what’s currently proposed. The reasons for this are obviously multi-faceted but basically come down to the significant public cost of providing new areas with sufficient transport, water, wastewater, stormwater, schools, parks, medical facilities etc. With so much public investment required to make new development areas liveable, quality communities it’s critical for there to be a carefully staged plan of what areas will be developed when. Not having an urban limit makes this process extremely difficult and potentially undermines the efficiency of public investment because you often see “leap frog” development or a mismatch between where development happens and where public investment has occurred.
Putting that never-ending debate aside though and returning to the issue of how transport costs change our understanding of housing affordability, there are some additional maps in both the journal article referenced in our original post and in the thesis the article is based upon, which provide interesting further information. Please note that we have been asked by the thesis author Kerry Mattingly to not publish the thesis online.
The first interesting map looks at the proportion of household income that is spent on rent across different parts of Auckland. The author provides a number of reasons for using rent rather than mortgage repayments, which appear sound and supported by previous academic studies.
Perhaps what’s most interesting about this map is the lack of a clear pattern, with proportions being high in some areas (North Shore, southeast and parts of the isthmus) but low in other ‘patches’ – generally areas that appear to correspond to concentrations of Housing New Zealand property.
One map that does show a clear pattern is the mean annual commuter variable cost – which broadly tracks the amount of money each household annually spends on commuting.
Even though the methodology for preparing this map obviously didn’t assume everyone worked in the city centre, we still get a clear pattern that indicates the further you live from the city centre the more you spend on transport. Relatively employment-rich South Auckland sees lower commuting costs than employment poor west Auckland, but still generally not as low as the commuting costs for the inner isthmus.
The upshot of comparing these two maps is simply that when you add transport into the mix, the true ‘affordability’ of different areas changes quite significantly. That’s perhaps best illustrated in this third map – which shows how much (as a percentage of housing cost) transport adds onto the cost of living in a certain area.
This map is a little bit challenging to interpret initially, but basically it shows what proportion of housing cost would need to be added on to reflect the additional cost of commuting in that area. For most of the inner isthmus it’s less than a quarter of the housing cost that’s added on – so the housing costs make up most of the “combined housing and transport cost” that would be faced by someone living here. For areas further out – particularly it seems in the south (despite its relatively large number of jobs) – the proportion is much higher, often meaning that someone may need to add half again to the cost of housing to truly recognise the combined housing and transport cost of that area.
As a final point, I’ve overlaid (just roughly) the approximate location of land zoned future urban in the proposed Unitary Plan on top of the map above (excluding Warkworth as it was too far north to fit for me).
The concerning conclusion from the map above is that most of the land we’re proposing to urbanise over the coming years lies in areas where transport costs will be a huge added burden. In essence, even if the additional greenfield land does provide cheaper housing costs (and the high costs of Flat Bush give reasonable reason to be skeptical of that outcome), that ‘gain’ will probably be significantly undone by the high transport costs experienced by those living in these new parts of Auckland.