Geography and housing supply dynamics

Last week, I introduced the concept of elasticity of supply with respect to price as a useful measure of housing market dynamics. Supply elasticities measure how responsive builders are to an increase in demand. In other words, when people turn up wanting dwellings, how quickly do the tradies start building more?

Supply elasticity can in turn have a big, long-run effect on prices. If the building sector is consistently slow to respond, it creates the condition for an ongoing shortfall in supply, which means that people will bid up prices more.

My post last week took a look at some of the (limited) international comparisons of planning regulations, which seem to indicate that New Zealand is not an especially poor performer. For example, consent processing time is relatively fast and efficient compared with other OECD countries.

However, regulations are only part of the picture. For example, Patrick wrote a good post a while back looking at Auckland’s geographic constraints:

AKL from space

Intuitively, we’d expect Auckland’s limited supply of developable land to have an effect on housing supply dynamics. But how much of an effect should we expect?

The empirical literature provides us with a reasonable estimate. A 2010 paper by MIT economist Albert Saiz (Massachusetts, not Manukau) measures constraints on land availability in large US cities and uses them to estimate the effect on housing supply.

Saiz finds that there are large differences in land availability between different cities. For example, “flatland” cities like Atlanta or Houston have very little area constrained by lakes, rivers, oceans, or steep slopes. Over 90% of the area around these cities is available for development. Coastal cities like San Francisco, San Diego, or Miami, on the other hand, might be able to develop less than 1/3 of the surrounding area.

Saiz concludes that:

Quantitatively, a movement across the interquartile range in geographic land availability in an average-regulated metropolitan area of 1 million is associated with shifting from a housing supply elasticity of approximately 2.45 to one of 1.25. Moving to the ninetieth percentile of land constraints (as in San Diego, where 60% of the area within its 50-km radius is not developable) pushes average housing supply elasticities down further to 0.91.

Translated from economese, this means that cities with less developable land have housing markets that respond more slowly to increased demand. (Or, as non-economists might say, duh.) For context, an elasticity of 0.91 indicates that a 10% increase in house prices is met by a 9.1% increase in housing supply. Even if regulations are held constant, a “flatland” city is expected to have a more responsive housing market than a coastal city with lots of hills.

In other words, when people compare Houston’s house prices with San Francisco’s or New York’s, they’re not comparing like with like. Geography matters quite a lot!

So what does Auckland’s geography look like? A 2014 NZIER paper modelled the effect of geographic and regulatory barriers on the city’s house prices. The authors conclude that: “relative to even Australian cities Auckland’s twin harbours severely restrict the availability of well-located land close to the city centre.” Overall, they estimate that less than one-third of the area around Auckland is available for development – most of the rest is water:

NZIER Auckland's narrow geography

In other words, Auckland has very severe geographic constraints. In terms of the availability of developable land, it’s similar to hilly coastal cities like San Diego. Saiz estimated that a city of around Auckland’s size with an average level of planning regulations would have a supply elasticity of 0.91. So: does Auckland perform better or worse than this in practice?

A 2010 study by Arthur Grimes and Andrew Aitken provides some relevant data. Using data at a district council level, they looked at how quickly new dwellings were built in response to “shocks” in demand such as increases in net migration. Their key conclusion was that housing supply in New Zealand’s urban areas tends to be a little bit more responsive than supply in rural areas:

If we divide regions into urban and rural, we find faster adjustment in urban areas (average γ1i = 0.0093) than in rural areas (average γ1i = 0.0064). This result is consistent with an active development industry, based principally in cities, facilitating new construction.

In other words, the authors estimate a supply elasticity of around 0.93 for NZ’s urban areas (principally Auckland). This is almost exactly what we would predict based on Auckland’s geography. The implication of this is that Auckland’s housing market functions more or less as expected given its geography – we don’t have to assume unusually restrictive planning regulations to explain the observed outcomes.

There are a couple lessons we can draw from this.

First, Auckland’s geography is a primary driver of the city’s housing supply dynamics. If we have higher house prices than we’d like, it’s partly because we have less land for housing. As I’ve written before, some analyses of Auckland’s high house prices fall prey to omitted variable bias – i.e. ignoring important causal variables and thus over-estimating the impact of specific policies. This can result in flawed policy recommendations.

Second, we shouldn’t compound constrained geography with bad policy. Because Auckland doesn’t have much developable land, there is an even stronger incentive to use land efficiently. (A fact with implications for transport policy, planning policy, tax policy, and publicly-owned land.) Land-hungry policies might not be too bad in a land-abundant place like Houston, but requiring Auckland to follow a similar pattern is economically calamitous.

As most New Zealand cities are also heavily constrained by geography, this challenge isn’t unique to Auckland. But it’s also not all bad: the interplay of mountains, volcanoes, harbours, and oceans is what makes New Zealand such a beautiful place to live. Let’s build cities that enable us to get the best out of it.

Double EMU Orakei Basin

51 comments to Geography and housing supply dynamics

  • “For example, consent processing time is relatively fast and efficient compared with other OECD countries.” is slightly misleading…..just saying 🙂 Do we have any data on how Auckland Council are performing against their own targets for building consents alone? The MFE RMA survey of local authorities is voluntary and for Resource Consents

    • Peter Nunns

      Good question – I haven’t looked for data on building consent processes. Let me know if you find any!

      That being said, the point of this post was to provide another data point on the issue. And on the face of it, Auckland’s supply elasticity matches that of a land-constrained city with average regulatory permissiveness. (Or at least, it did in the recent past.) Any regulatory system will have its quirks and perversities, but there’s no reason to believe that Auckland’s is unusually bad.

      Of course, as I said in the post, geographic constraints mean that we _can’t_ settle for average performance and expect decent outcomes.

      • Bruce

        Have just spoken to someone yesterday that is looking to build a small house on a small footprint. They have been told by AC that after a geotechnic report on the section (including scans and drilling cores) they will also have to have the site walked over by a member of local iwi (who isn’t actually local btw) who will somehow magically be able to say whether they can go ahead and build or not (after the fee payment and transport costs etc naturually). If they say they can’t go ahead then they will have to have further inspections (at further cost) by iwi. There has been no reported usage of the site by Maori at any time by the way.
        This adds about another week to the process of getting consent and adds hundreds to the cost. What a f**king joke. It’s BS like this and other council and government requirements that do add a lot of costs and invariably reduce supply elasticity in the process.

        • Stu Donovan

          I have no problem with the geo-tech report.

          I have problems with the iwi inspection, more specifically that the cost needs to be funded by the landowner. If indeed cultural heritage is an issue for this particular area then such surveys/inspections should be funded by the Council – not by the private landowner.

          Cultural heritage is a public good, and the Council is best placed to engage with iwi and pay for surveys as necessary.

          • Bruce

            Yes good point that would make more sense (personally I think there shouldn’t be any of this unless the site is known to be a burial ground, or if something is discovered while excavating). Paying someone to just walk over the ground is a crock. If it’s really that important then they can do it for free.

      • Well, in the most basic of Google searches….”When the total elapsed time from lodging the application to issuing the consent is considered, Auckland Council processes 80% of applications within 40 working days. However, in exceptional circumstances, some applications can take more than 100 days to process.”

  • Thanks Peter; clearly teasing out the massive flaw in the sprawl sector’s arguments.

    Interestingly I am in Melbourne right now and they are having a spectacular building boom, I thought it was impressive in AKL, this is on another scale again. And despite having less physical constraint than AKL for spread huge residential towers are going up right in the city. Partly this is the market’s desire for proximity (new land is now a long long way out) but it is also a result of planning process where existing suburbs of single level houses are being locked up by local councils, even along Transit corridors, through NIMBY demands.

    Yet Melbourne needs to supply 1000 additional dwellings a week; got to go up then.

  • Frank McRae

    “cities with less developable land have housing markets that respond more slowly to increased demand”

    The problem with drawing conclusions from this study is that the elasticity of housing supply is a function of: natural constraints + regulatory constraints.
    Therefore it is wrong to conclude that the current elasticity in naturally constrained markets is inevitable. Only the natural constraints are inevitable and while they can’t be changed the elasticity of supply can be improved through easing regulatory constraints.

    If anything regulatory constraints are even more costly in a naturally constrained city. Restrictions on density don’t matter so much when you have an abundance of land on a featureless plan. But when geography makes developable land an extremely scarce resource it is imperative that regulations don’t unnecessarily prevent its efficient use.

    It is right to point out the limiting factor of geography and how that will mean Auckland could never be as affordable as a city on a plain. But it is wrong to then conclude that geography makes current house prices inevitable and to think that this means regulation is blameless.

    “My post last week took a look at some of the (limited) international comparisons of planning regulations, which seem to indicate that New Zealand is not an especially poor performer. For example, consent processing time is relatively fast and efficient compared with other OECD countries.”

    Using consent processing time or the % of consents granted is not a good measure as it doesn’t capture the consents not applied for because of would be developers calculating that they wouldn’t succeed or would be too costly.

    • Peter Nunns

      Agreed on all counts. The implication of the research, I think, is that while Auckland probably doesn’t have unusually bad regulations, it needs to do _better_ than average.

      • Stu Donovan

        Yes I think this is the critical point: Economic geography (both international and domestic) has not been particularly kind to New Zealand, insofar as it 1) places us a long way from major markets and 2) makes it more difficult to build stuff.

        For this reason, to achieve the same level of wealth and elasticity of housing supply, we actually need to do better than average. That’s why I’m annoyed whenever people say “oh Melbourne has minimum apartment sizes so we should too”.

        No, no, no. Melbourne has (comparatively speaking) buttloads of land available and is much closer to major markets. We need to do better than Melbourne, just to be equal.

        Nutshell: From a policy perspective, NZ needs to be o for awesome. And our current planing policies are far off the mark.

  • mfwic

    I have read your post twice and I still don’t follow your argument. Maybe I am being a bit thick this morning. You have stated we have geographic constraints that bind us to a greater degree than other cities and therefore we should regulate city boundaries and prevent the one thing we can do to reduce the constraint? We can’t grow east or west so we shouldn’t grow north and south?

    • No, he is saying that sprawl is unlikely to allow Auckland to build enough houses to meet demand because of the geographical constraints.

      Therefore, intensification becomes even more important for Auckland than for cities with less geographic constraints.

      Combined with the fact that Auckland’s long, thin topography is ideal for long narrow rail corridors (and challenging for wide motorway corridors), it is clear what model Auckland should be going for. Dense, transit oriented development as much as possible.

    • Peter Nunns

      You’re confused because you are assuming that I must be saying something that I’m not.

      I am arguing _against_ policies that use land inefficiently, such as MPRs or overly restrictive height limits, but that does not imply that I am arguing _for_ urban growth boundaries.

      For reference, here’s my position on horizontal urban growth:

      • mfwic

        So you would support intensive sprawl provided it was funded?
        Sorry if I misunderstood your current post. My mistake was I read it and didn’t differentiate your post from the comments above.
        My point is given our founding father put a city in a constrained place then we need sprawl more than most cities to compensate for the problems geography causes. If Patrick had put up a wider picture you would have seen the opportunities we have at Clevedon, Karaka, Runciman, Dairy Flat etc.

        • Peter Nunns

          I’m more concerned about the structure planning aspects than the location of suburbs, yeah. The problem with a lot of fringe growth in Auckland is that it’s built with few transport choices and little to no future proofing for PT, walking and cycling. And then the fringe suburb becomes part of the urban fabric, and it’s suddenly impossible to run a bus line through it.

          As far as geographic constraints go, the constraints closest in to the centre are the most important ones. Sure, Auckland’s got land at Dairy Flat, etc. But other cities have Dairy Flat right on the door of the CBD, rather than a harbour.

        • No one is claiming that Auckland is in fact a small island surrounded by water on all sides. Though it isn’t only water that constrains it, there are also landform constraints; swampy or steep land. Yes there is inhabitable countryside north and south of the city, but as in the NZIER image above shows that clearly means that new land is in the shape of narrow wedges ever getting more distant from the city, compared to other geographies. This is clearly going to have different cost and distance implications than for a city on a flat plain with more accessible and proximate land on all sides.

          This, as I read it, is Peter’s point. Please try not to conflate ‘constraint’ with ‘absence’. There is some land supply ‘out’ but it is constrained. Surely that is both a valid observation and a graspable concept?

          • mfwic

            Yes I think my mistake was reading your claim that he was ” teasing out the massive flaw in the sprawl sector’s arguments” and blaming Peter for that point when he never said it at all. Most cities are influenced by their geography whether it is harbours like us, mountains like Bogota a lake like Geneva or rivers like most of Europe. The issue is how we manage the part we actually control. If we have a rule that says no development is allowed in the easy parts then the price goes up. If we have people like the authors of the Auckland Plan in positions of responsibility then supply remains inelastic. The amazing thing is they can’t see it themselves.

          • Stu Donovan

            Yes, I agree John – although suggest the answer to your question is 1) not to be found in the Auckland Plan but instead in the Unitary Plan and 2) is hidden in your comment.

            More specifically where you say “authors”. That is, we have a situation where the findings of strategic planning documents, e.g. Auckland Plan (i.e. grow up more than out) have not been reflected in operational documents.

            Instead, the latter have – in response to NIMBY pressure – decided to neither grow up nor out. That is the cause of our low elasticity of supply.

            I also think it’s important to note that these things are complex and sometimes it’s hard to get a grip on the overall impacts of a plan from looking at individual sections. Hence, we’re now in a situation where Auckland Council is willingly rolling back some of the more onerous density controls, for example, so as to enable more development. Then you have the Commissioners doing their thing as well.

            So while all parts of the process are somewhat imperfect, I think we’ll get a reasonable outcome in the end. It’ll just take time. And tears. And riska property bubble torpedoing the economy.

          • mfwic

            Yes Stu The Auckland Plan hasn’t made it into the PAUP because the people decided they hated it. Calling it a Nimby view is a bit dismissive when we have a participatory system. What people think and will accept does matter. Part of the problem with going up is there are few examples of low cost housing that has gone up. Or at least few examples people like. There are plentyt of examples of expensive apartments and terraces but few walk up flats as Mark Todd has described them . He sets out why apartments are not going to solve affordability. They come at a considerable cost for the structure to hold them up and the lift and common areas etc.

            So we can sprawl and get on and provide some public transport to new areas or claim we are going up instead but in reality do nothing.

          • Peter Nunns

            Hi John – I’d argue that:

            1. Local government consultation is nowhere near as representative as it needs to be. Respondents are self-selected and often tend to be people with an axe to grind. My intuition is that there is probably a silent majority that would be in favour of / not particularly opposed to liberalised rules. I’ve written about that here:

            2. New buildings will almost inevitably be on the pricey side. However, they can still have a positive effect on affordability by limiting the degree to which demand “spills over” and pushes up prices for existing buildings. I’ve written about that here:

          • mfwic

            Sure Peter consultation is imperfect but that cuts all ways. A few hundred enthusiasts submit and next thing we are spending millions on cycle lanes! But I think the Auckland Plan misread opinion totally. In the past the ARC pushed for a compact city but they had no power and everybody ignored them. (I can’t really think of anything the ARC ever achieved) The same people produced the Auckland Plan and convinced naive politicians it was the way to go and the public bit them on the butt. And yes new buildings even high priced ones will affect the rest of the market but it is never going to work as well as flooding the market with new land opportunities. Despite what is claimed above we actually have a lot of it around the city.

          • Sailor Boy

            ARC bought a wonderful array of regional parks and ARTA got the rail revolution rolling but I also struggle to see much else.

            I think what Peter’s post shows is that we are different than Houston/Atlanta/ Paris in that we aren’t on a flat plain. We are on a very narrow stretch of wet volcanoes, If a plain sit has edge development at the same density and population as Auckland is then it is 10km from the CBD in Auckland it is 40km. This means that spatial constraints are likely to be much more binding on the market in Auckland and require us to use land more efficiently to achieve the same results.

          • mfwic – on cycle lanes – 60% of Aucklanders surveyed have said they will cycle more if there were better separated cycle infrastructure.

            It is the old case of don’t decide whether to build a bridge based on how many people swim the river.

            Funny that attitude never happens with roading infrastructure, only PT and cycling.

  • kelvin

    Building apartments will take at least 3 years, compare to 1 year for house. So the elasticity will be lower if there are more apartments to build, due to higher density.

    • Greg N

      “Building apartments will take at least 3 years, compare to 1 year for house”

      Except if the house is in a SHA, in which case it will take longer than an apartment to build…

    • Stu Donovan

      not necessarily Kelvin. Many apartment buildings can be constructed in ~1 year, it really depends on the site/building. And when they are complete you get a thumping big increase in supply …

      Remember also that a longer lag time for apartments doesn’t mean the final elasticity is smaller (i.e. it doesn’t affect the magnitude of the response), more so the speed.

  • unaha-closp

    In other words, the authors estimate a supply elasticity of around 0.93 for NZ’s urban areas (principally Auckland). This is almost exactly what we would predict [0.91] based on Auckland’s geography. The implication of this is that Auckland’s housing market functions more or less as expected given its geography – we don’t have to assume unusually restrictive planning regulations to explain the observed outcomes.

    What you have shown is that a city built on a narrow isthmus will have a certain supply elasticity. The current Auckland urban area is indeed a long skinny geographically confined city, stuck between two harbours. This causes the observed historical data to match prediction based on long skinny geography. However, as we all know, our geography is not long and skinny in the area immediately beyond our current urban border.

    What you have done is show just how disastrous our MUL is. The MUL constricts us within a long skinny urban area. Yet just beyond our MUL the land opens up before us for development. You have proved that getting rid of the MUL, will dramatically improve housing affordability in Auckland.

    • Peter Nunns

      That’s a weird against-the-text reading of what I’ve written and what the evidence suggests. Here’s an exercise for you. Go to Google Maps and zoom out from Auckland. Now tell me whether you see (a) a narrow strip of land surrounded by lots of water, or (b) a vast land mass with a little bit of water around the edges.

      Furthermore, if the MUL was our main issue, then the NZIER paper I cited would have found that it was more costly. Their model estimated a cost of $860 per household per year – in present value terms, that’s equal to a $14,000 increase in house value. Even if we assumed that estimate was too low by a factor of ten, which seems unlikely, it’s still nowhere near enough to explain Auckland’s high house prices.

      • unaha-closp

        I see an isthmus between two land masses.

        Auckland has expanded 30 km to Papakura on an isthmus 10 – 15 km wide. South of Papakura developable land stretches 50 km wide from Hunua Ranges west to the Tasman Sea (plus there is the Clevedon Valley to the east).

        Even if we assumed that estimate was too low by a factor of ten, which seems unlikely, it’s still nowhere near enough to explain Auckland’s high house prices.

        The constraints of development within the Auckland isthmus itself being the geographical constraints you have covered here, plus the density restrictions, help explain the current situation. The problem with the MUL is its horrible effect on our future, the planned MUL expansion is to have a corridor of development into the land mass – a virtual extension of the isthmus – constraining where no such geographical constraints exist.

        • Sailor Boy

          “The Hunua Ranges”

          Do you know what the word ‘ranges’ means?

          • unaha-closp

            I was referring to the hills to the east of Drury, they might not actually be part of the Hunua’s proper. These form the eastward limitation to the large developable area.

        • Peter Nunns

          While I don’t disagree, I also think you’re missing a bigger point by focusing mainly on the MUL. Auckland’s geographic constraints mean that in the absence of regulatory limits it should be considerably more dense than cities on flat plains, as people have sought to economise on scarce land. You’d also expect it to extend further away from the city centre. This in turn means that the cost of restrictions on density will tend to be considerably higher in Auckland than in flatland cities. (Same deal for other land-constrained cities like San Francisco and San Jose.)

          In addition, a number of research reports that find that Auckland’s historical planning regulations have placed much higher costs on intensive development than on standalone dwellings. The evidence leads me to conclude that the MUL is not the primary issue facing Auckland. I’m willing to be convinced otherwise, but it will take hard numbers rather than assertions that everything would be better if there were a few more subdivisions in Clevedon.

          • unaha-closp

            I agree, the isthmus means greater intensification over a larger distance to incorporate the same area as it would under an more normal geography.

            The restrictions on intensification are causing high value land to have lowered utility. The density restrictions distort the high to medium market range applicable to people who might utilise high value living. The MUL is similar, it restricts low value land to almost nil utility. The MUL distorts the low end market, where people who would utilise low value living are forced to live in higher value locations. They are complimentary feedback loops, distorting value and costing us a truckload of borrowing. Both should be changed.

            And you’re right about the MUL being of minor importance up until now, because up until now we have been on the isthmus and our development was confined geographically to one radian north and one radian south. It is just we have reached the end of the isthmus, our southern potential is now suddenly 2 radians. Also we have acquired by political expansion Pukekohe, a town with 6 radians development potential. Our city is no longer confined by geography.

      • mfwic

        I did that Peter. I see a massive area where we could grow with little constraint for years to come. You are a genius Mr Nunns- the answer is growth around Pukekohe from Clarkes Beach right across to Clevedon. The mistake is focusing any energy on the current CBD.

        • unaha-closp

          The area would be low value, allowing affordable housing for people whose needs are low. The area has low utility, investing money in it to the exclusion of the CBD would be a catastrophic mistake wasting lots of money. However banning development in the area is equally bad, because we are eliminating this great potential for affordable housing.

    • Ak-Sam

      You posted while I was typing my post..but you actually make sense. I am fundamentally anti-sprawl… but if we have to grow maybe we should choose 1 direction and stick to it!

  • Ak-Sam

    I’m puzzled by the fact Auckland is sprawling equally in every direction from the CBD. This sounds logical at first but, due to geography, it actually spreads the city out over the maximum possible distance. If we only sprawled South, for example, far more activity (and therefore density and attractiveness) could be generated. Papakura, Pukekohe and Pokeno would be major metro centres. We would link up with Hamilton before long. At our current rate we’ll fill Waiheke with sprawl before we reach Mercer. I’ve used Southward growth as an example but North would also be sensible (more views & beaches and less wastage of fertile soil). Who is considering the 100 or 200 year growth plan?

  • Dale Smith

    Well put ie constraints increase house prices be they physical or self imposed.

    And since the physical constraint came first, does this cause self constraining behaviour and conversely does Houston’s lack of physical constraints cause a lack of self constraints.

    While this would be true of both Auckland and Houston, it is not a universal rule as if it was Australia would have the most affordable housing.

    What we can say is that the ‘self’ bit has a greater effect on prices than the ‘physical’ bit.

    • hmmm? If you mean we can’t change the physical ones so we should give our attention to the socially imposed ones then yes that’s right. But we really ought to start by being accurate about the given constraints. The physical constraints on Auckland’s growth are real, extensive, and permanent. So we need to stop fantasising about Houston or Atlanta models of development (weirdly people do), and look at our own conditions.

      All cities are specific, but they also all fall to pattern. And one such pattern is that proximity is highly valued and that is clearly apparent in the real estate price spread. Sooooo while new dwelling supply on the narrow fringes will help meet shortfalls in demand, it is unlikely to do so powerfully as it cannot meet the clear current demand for more proximate living.

      Constraints on up look more constraining right now than this on out.

      • Dale Smith

        As you say Peter we need to ‘look at our own conditions.’ Our mental condition that is, because that is what is the cause of the majority of house price increases.

        The physical constraints are a red herring, a convenient crutch for those that are looking for an apology for the out of control house prices.

        Every place has its physical constraints, Houston and Christchurch were built on a swamp, it can cost a $100,000 for liquefaction remediation before foundation in CHCH, Auckland North Shore has slope and clay, much the same as Austin in Texas.

        And if Houston is a fantasy because of how cheap houses are then Australia should be the wet dream of housing affordability considering how much flat land they have and far less population than Texas. So why isn’t it?

        Having developed in Austin, Auckland and Christchurch. the physical constraints are minor compared to the self imposed constraints by way of regulation (both up and out) that are imposed.

        And the proximity thing is the same in Houston as it is in Auckland, the house price pattern from the CBD to the fringe is the same.

    • Peter Nunns

      I recommend you read the first paper I linked to (Saiz, 2010). It has a lot of good data and analysis of the relative role that planning regulations and geographic constraints play.

      Interesting, it observes that tighter planning regulations tend to be positively correlated with geographic constraints. Saiz interprets this as evidence for William Fischel’s “homevoter” hypothesis – that higher starting house prices encourage people to advocate for tighter regulations to protect the value of their major asset.

      • Dale Smith

        Yup, the ‘Homevoters’ Hypothesis is what I was alluding in my first comment, but I would say it’s not the higher price per se that causes this, it is more the reasons why the price is high to begin with.

        Self restrictions allow just that, restrictions, which allow monopolies and hence speculative behaviour. Even people who buy first for the ‘want’ of ownership, start to become accidental speculators.

        Houston homeowners also care about protecting the value of their investment, irrespective of whether it’s in the suburbs or the CBD, but with less restrictions, means less chance of a monopoly and speculators cannot profit just by ownership alone, they have to add value to make a profit.

        But yes constraints beget constraints, so what’s Australia’s excuse?

        • Peter Nunns

          I’ve been meaning to do the GIS analysis on geographic constraints in Australian and NZ cities. Probably won’t happen before the end of the year though.

          However, NZIER’s estimate was that the average big Aussie city still only had ~48% of the surrounding area available for development. Makes sense as they tend to be located right on the coast. Most of them would therefore fall into the top 20% of US cities when it comes to land constraints – on par with Los Angeles. And as you’d expect, they’re a bit more affordable than Auckland but still less so than the flatland US cities.

  • Owen Thompson

    Can we please turn the photo of Auckland at the top round the right way?

    • Stu Donovan

      no it’s a deliberate choice so as to highlight the amount of water there is around Auckland. I think it’s effective.

      As Matt said “Auckland is a portrait city in a landscape world”.

    • Nick R

      Nah, there is no right way to view the surface of a sphere!

      It’s useful to avoid the traditional map view in this case, lets you take a fresh look at the constraints from a different angle.

  • nemisis

    Planning rules, Building rules and the fire code are major blocks to providing housing quickly and efficiently. There is plenty of land within auckland that can be developed if the Council planners stopped playing God by telling us how we should live. Ask any architect ,builder and developer and you will find that the amount of red tape is over the top and just makes the task of meeting the demand impossible. I used to build 4 houses a year, now it is about 9 months for one house. It has nothing to do with geography

  • bbqroast

    I think people get the geography thing the wrong way around. Auckland’s Isthmus is one of the biggest reasons for transit, not motorways.

    A circle is the most efficient shape – it minimizes distance while maximizing area. Auckland can never be a circle. This demands density and better-than-normal transport/

    Most cities have many possible approaches to the CBD, with room for ring motorways. We do not.

    Most cities struggle with transit lines. You need lines radiating out from the center. They need to get more numerous as the circumference of the city gets bigger. You need circle lines to link up these branches, etc, etc. Auckland’s geography neatly puts us into a series of lines. We’re already bottlenecked around the City Center and Harbour Crossing, so we don’t need circle lines.

  • Ak-Sam

    I would like to know if circle cities are more transit-efficient than long skinny cities. Surely there is some research about that.

    Circles are best for cyclists where distance is a factor, so circles offer maximum choice.
    But for all other road uses, distance isn’t as important as travel time.
    Linear cities or hub& spoke cities (like Auckland) have the ability to reduce choice but increase time efficiencies.
    I suspect circle cities (or hubs with lots of spokes) start to become less efficent due to complexity (more intersections & choices = more complex).

    • Angus Robertson

      The majority of jobs aren’t in the central city, but the highest number of jobs are in the central city. In a circular city the majority of commuters can avoid the central city.

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