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Want lower rates? Cut back on urban sprawl

Suburban sprawl is a radical, government-led re-engineering of society, one that artificially inverted millennia of accumulated wisdom and practice in building human habitats. Charles Marohn

In the recent article The Conservative Case Against the Suburbs Charles Marohn (@StrongTowns) takes on the awkward relationship between conservative Americans and cities. He questions why conservatives not only perpetuate myths around the suburban experiment but also cede urban issues to the left. Like Peter’s post on Monday this The American Conservative piece is a response to geographer Joel Kotkin’s love letter to the suburbs in Why Suburbia Irks Some Conservatives.

Marohn cites the federal largess of central government programs- the FHA, Fannie and Freddie and the interstate highway system – all of which have underwritten and subsidised the smudging of cities over the landscape.

The sad reality is that, despite the marketing, the suburbs were never about creating household wealth; they were about creating growth on the cheap. They were born under a Keynesian regime that  counted growth from government spending as equivalent to that coming from private investment. Aggressive horizontal expansion of our cities allowed us to consistently hit federal GDP and unemployment targets with little sophistication and few difficult choices.

That we were pawning off the enormous long-term liabilities for serving and maintaining all of these widely dispersed systems onto local taxpayers–after plying municipalities with all the subsidies, pork spending, and ribbon cuttings needed to make it happen–didn’t seem to enter our collective consciousness. When all those miles of frontage roads, sewer and water pipes, and sidewalks fall into disrepair–as they inevitably will in every suburb–very little of it will be fixed. The wealth necessary to do so just isn’t there.

He also questions why conservatives tend to entrench the notion of an urban left and a rural right when cities could benefit from a closer look at inefficient market distortions.

These are places that have been abandoned to the left for decades. Many urban dwellers are hungry for better government. They want a more responsive bureaucracy. They favor unwinding many of the stifling regulations and perverse subsidies that have built up over the years. They are angry with the political patronage systems run by a governing class that has been unchallenged for decades. Why would conservatives cede this ground so easily?

Strongtowns has been covering a wide range of transport and urban issues over the last several years including some highly critical pieces on the traffic engineering profession, transportation economics, and street design. During that time I never considered their work to be following a particular left/right political paradigm.

I’ve written a few things inspired by the Strongtowns aproach.  Below is a diagram calculating the property value of various land development types (land value+capital value)/area. Note how poorly suburban/horizontal/car-based typologies perform compared to traditional land developments (see for example the Onehunga Mall property). This is how the ponzi scheme of suburban car-oriented development pencils out. Atlantic Cities wrote a great piece calling this “the simple math that can save cities from bankruptcy” which describes the thought process:

We tend to compare buildings to each other, without looking at their unit value. This would be like comparing the fuel economy of the tank of a Ford F-150 to the tank of a Prius. We don’t shop for vehicles that way, because that makes no sense. We look at miles-per-gallon, not miles-per-tank, because tanks come in all different sizes. We should look at buildings, Minicozzi argues, the exact same way.

In a country where many people derive income come from land productivity, it seems that this approach would resonate. But maybe not. One  example is Westfield (malls) pleading in the Unitary Plan hearings to maintain minimum parking regulations.

Parking minimums, set at reasonable and appropriate levels, are essential to ensure that sufficient parking is provided for identified activities and localities.

Such regulation, requiring spatially inefficient development, ensures that the return on public investment – roads, pipes, footpaths – remains very low.

Property value - location and form

Property value – location and form

Here’s another example. This 3D graphic illustrates property values (land value+capital value/area) not height. The new, modest, 4-story apartment block (Ockham Building) has 13 times the property value as it’s neighbours (mostly one-story stand alone homes). This property value also translates to rates which for the most part fund ongoing road maintenance but also city services like community pools, libraries and berm mowing.

occam

Doing the math – property value premium of infill intensification

This above image was cross posted to Facebook and someone (I assume) with a “conservative” disposition said:

It probably generates more than 13 times the cost involved to provide additional council services – plus additional congestion costs!

Lets take this comment at face value. Here is a project that has few car parks, is located on a frequent bus line, next to rail station, and within cycling (if not walking distance) from the largest concentration of jobs in the city. This part of town has a very active mode share and the shortest journeys to work averages (0-6km). Worrying about congestion in this context is a failure to understand the spatial implications of congestion mitigation (see image 1 above) or a very optimistic expectation about vehicle travel time contributing to economic productivity.

As far as the additional council services – I don’t know the specific impacts that 20 additional households has on existing schools or the pipes under the street, but a recent Council study has determined that attached dwellings are only 60-80% as costly to serve. (link)

Overall it seems very likely that 20 households in an existing neighbourhood close to the city centre in the space of 20 meters is much more cost effective than serving the same across 200m in a greenfield scenario. And it seems reasonable, and even fiscally responsible, that someone should do this math.

27 comments to Want lower rates? Cut back on urban sprawl

  • One funny thing about the Ockham building you give as an example: it is shorter than the tree directly across Sandringham Rd from it. People seriously overestimate the impact of 3, 4 storey buildings.

    • ianauldnz

      I agree! Buildings of this scale also make for great neighbourhoods when intersected with tree lined, traffic calmed streets and interspersed with parks. This is what a city should be!

  • Neil

    “As far as the additional council services – I don’t know the specific impacts that 20 additional households has on existing schools or the pipes under the street, but a recent Council study has determined that attached dwellings are only 60-80% as costly to serve” – having been involved in calculating the water and sewage contributions I can say that infill suburban housing is very expensive for a water utility. It means replacing perfectly good pipes with larger ones. The Watercare charge is an average for all new units and is kind to infill houses and not kind for apartments,

    • How does this compare to running water utility (supply, stormwater, sewage) to a new development? Surely the feeder pipes connecting new suburbs to existing services must also need an upgrade to serve a similar new of [new/additional] residents, as well as trenches dug from scratch for local utilities?

    • Ari

      Yes this is often forgotten. New houses on the fringe need all new infrastructure put in PLUS upgrading all the existing infrastructure on the way to the treatment plants. Guess what part all the new developments don’t pay for. Infill is better by far.

    • Sailor Boy

      We would nee to replace that pipe somewhere no matter where the houses went as dwellings require pipe capacity.

      Would you rather supply 40 dwelling on a trunk pipe or smeared ove r1km^2 of countryside?

  • I attended the meet the developer meetings about the Bellfield SHA and was gobsmacked at the lack of thought put into the development about issues such as:
    Access to the nearest shops Where are these 350 household going to access shop[s
    Access to the motorway and channeling 2-3 cars per house onto the motorway and through the Papakura and Takanini interchanges
    Impact on the nearest schools one a decile 8 and the other a decile 1. one across the Gt south road and the other across Opaheke
    Rd. And cars delivering the children to both relatively inaccessible schools
    The idea that a railway station would be built at Opaheke ahead of Takanini, Drury ,Paerata and Pukekohe.Never mind the Walters Road Railway overbridge and Spartan Road.
    Suddenly the $1.75 million that the council was being paid to lift the encumbrance on the Golf Course was starting to look small bikkies indeed.
    But the councillors and local board members in attendance were oblivious to the rate costs that this development was going to impose on the local people to get the adequate level of infrastructure to support these new households.

  • Al

    Another excellent post. People from all sides of the political spectrum must acknowledge the failure of state-driven sprawl over the past century. If you’re on the right, you must accept that the market ensures efficiency through density, and if you’re on the left, the state must change tack in a big way.

    • Steve H

      Surely everyone on the spectrum can agree that development contributions should capture all costs. I’m talking physical & social infrastructure and externalities (including congestion), both now and in the future. Let the market do the rest and our cities can grow in a socially optimal way.

  • Goos afternoon to you all .One way to lower the rates is to look at the Maintenance contractors charges .It is widely known that there charges are over the top .We see clipping of the ticket all the time in most cases this has been clipped a number of times before it arrives at the council for payment .E.G we quoted $55 a sqm for coloured surfacing to a maintenance contractor by the time the quote turned up at the council it had turned into $110 a sqm ..Then on a blog some time ago we where told we charge double .Sadly the council had been told porkies again

  • Nik

    Does anyone know why Westfield were supporting parking minimums, is it to support their current business models associated with access to their properties or am i missing something?

    • Clearly Westfield doesn’t need minimum parking regulations to support their own massive overprovision of carparks as they can just do that anyway – I’m gonna be cynical and say they know MPRs will inhibit the development and revival of older town centres and villages (including/especially new developments there). Town and village centres compete with malls and MPRs weaken that competition (as development becomes more expensive) which favours the malls.

      • Yes. Their submissions are all about competition suppression.They want to keep the regulations that make operating at any other scale and form than their specialisation more difficult.

      • Realist

        The argument they use is that if no one else provides on-site parking then lots of people will start illegally parking in their sea of parking. Hardly a compelling reason in my view – just enforce parking restrictions on your site!

      • mfwic

        Maybe Westfield are sick of visitors to AT in Henderson parking in the Westfield carpark and walking across the road. All because some twit built a building with insufficient carparking to externalise the cost of their adverse effects.

        • Auckland Transports Henderson site is 80% parking already. There is literally acres of the stuff.

          If Westfield have a problem they should manage their own parking supply, not expect everyone else in Auckland to provide an even bigger glut so their pile becomes the least attractive.

          Seriously, you are suggesting that the solution to the malls self inflicted parking issues is that Neighbouring businesses be forced to provide even more parking than the mall?

      • mfwic

        OK so I have read your post a few times now and I dont really get what your point is. Are you suggesting that the goal of local government it to maximise their harvest of rates per hectare? I thought it might be more about giving people the services they need to have a good life and letting them choose how they would like to live it. You suggest suburbs are subsidised yet all the new suburbs I have seen treat their stormwater, underground their telecoms and power, and provide all of their own local sewers and roads with the community looking after the trunk. By comparison in the CBD it was the general ratepayers who have paid to upgrade sewers to stop shit going into the harbour, not the CBD residents, and they still dont treat their stormwater. Finally (imo) saying that rates would be lower if the cheaper houses didn’t exist is as naive as saying taxes would be lower if everyone was rich.

  • The Real Matthew

    This concept seems sensible but is there an international rates comparison that re-inforces the theory?

    I understand it would be hard as we wouldn’t be comparing apples with apples but we should be able to get some idea of the trend.

  • anthony

    The use of right vs left vs conservative etc., labels annoy me when it comes to sprawl. As I see it there are only two types of people, those who have taken time to think about ALL present, future, personal, public, monitary and time costs of sprawl vs intensification, and those that blindly follow a party line.
    I choose to live close to work and immenities in accomodation I can afford.
    I‘ve done the hour long comute, it was a waste of my life and money.

    • Bryan

      I do the hour (and a quarter) commute, and it saves my life and money. 😉

      How? The time includes a brisk 1.5km walk from my house to the station, and a 1km walk from Britomart to the office. Keeps me fit and saves thousands in gym fees. For the 50 minutes on the train, I use my laptop and smart phone to get work done, so I can spend that much less time in the office. 🙂

      I like the semi-rural area where I live, and the sub-$500k house prices give me amenities and accommodation I can afford. When the kids have left home, an apartment with sea views at the Wynyard Quarter might appeal. 🙂

    • Peter Nunns

      Anthony – I think you’ve hit the nail on the head! The point that Kent and I have been trying to make is that better cities and market-led intensification are basically a win-win situation. They can save us money, improve the efficiency of our economy, and make us better off socially and environmentally. People of all political stripes should be able to get on board with that!

  • stevenz

    suburban sprawl had nothing to do with keynesianism and everything to do with bad government policy based on short term gain from investments that are long term in their nature. it would have been a different story if decent planning preceeded highway-building, but that never happened. it would have been different if freeways hadn’t penetrated downtown areas [the guy who came up with the idea of the limited-access highway warned about this, knowing it would eviscerate cities. freeways are much more efficient at moving value than they are at moving cars]. it would have been different if the property owners who benefited directly and handsomely from public investment had been forced to share their government-created windfall with government to recover the costs of road building. if if if if. these were, of course, exacerbated by other policies that, unwittingly or not, promoted sprawl and discouraged reinvestment.

    sprawl is the biggest failure of planning since the 19th century, and it has made good planning extremely difficult. coulda shoulda woulda.

  • David E

    Apartments are all well and good, but you’re not really a kiwi unless you own a house.

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11348068

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