The Tamaki area is one with so much potential yet so far has failed to live up to that. There have long been talks about redeveloping the area and it seems that something might finally be about to happen. Almost a year ago the government and the Auckland Council formed an urban redevelopment company to oversee the transformation of the area. Today the company is released a draft strategic framework for how they plan to do this. The herald reported this morning.
Auckland’s low-income suburbs of Glen Innes, Pt England and Panmure will roughly double in population under a draft plan for more intensive housing to be unveiled today.
The urban “regeneration” project, which could add up to 6000 new homes to an existing 5050, is expected to be one of the first “special housing areas” with fast-tracked resource consent processes under a housing accord signed last month by Housing Minister Nick Smith and Auckland Mayor Len Brown.
The target of 6000, included in the accord, makes it the biggest housing development scheduled in Auckland and twice as big as the 3000-unit Hobsonville development.
It covers the area between West Tamaki Rd in the north and the Panmure Basin in the south, including 2880 Housing NZ homes, about 1160 owner-occupied houses and just over 1000 private rental properties.
The area covered in the Tamaki area is huge, to show the size of it and its relation to the city the transformation company have produced these maps
The Herald continues:
Unlike other developments, the draft Tamaki strategy also includes 11 other social, economic and environmental elements, as well as housing, designed to make the area more liveable despite doubling the population density.
The area is among Auckland’s most deprived, with a 2006 median income of only $20,000 and an employment rate of only 52 per cent, compared with 65 per cent across Auckland. Sole parents make up almost half the area’s families.
But the strategy sees opportunities for more jobs and training by attracting new businesses, redeveloping under-used land along the existing railway and encouraging training agencies such as Manukau Institute of Technology, Unitec and Te Wananga o Aotearoa to take over parts of Auckland University’s Tamaki campus, which the university plans to sell as it develops a new campus in Newmarket.
The strategy says private investors have expressed interest in redeveloping an area next to the railway line where containers are stored, including possibly reopening the former Tamaki station between Glen Innes and Panmure.
The plan proposes a mix across the redevelopment area of market and affordable housing, likely to be developed by private developers, community and iwi organisations.
I’ve said before that I’m not keen on the idea of reopening the Tamaki station, to me it is just too close to both Panmure and Glen Innes and I think it would be good to avoid turning the inner parts of the eastern line into a slow crawl like the inner western line is.
I have only read through a few parts of the document so far however like most things, it sounds good but will really come down to the implementation. For example the strategy talks about redeveloping housing to provide better quality dwellings and more housing choices but gives no firm indication as to just what that means i.e. I assume they mean a mix of dwellings from standalone houses through to terraced houses to apartments in the town centres but there isn’t really an indication of what mix they are aiming for. You can read the entire thing is here.
I think it’s also worth pointing out some of the history behind the area. It was one of the first post war suburbs built and was done so right at the start of our period of our auto dependency, at a time when cars were promoted as the future. Thinking that is highlighted so well in this video from 1960.
One chart for all you Sprawlistas out there that keep arguing that Houston is some kind of role model for Auckland’s growth:
From Wiki, here. I figure this is self-explanatory. The dispersed spatial pattern of Houston is the single most expensive and inefficient type of urban form possible, but it can function there because of a set of specific local factors, including that Houston is at the centre of a largely flat plain without geographical constraints like, you know, two harbours. But especially because of economic conditions that are pretty unique to Houston compared to other cities in the OECD.
Houston is at the centre of a petro-state. It is energy rich, especially in hydrocarbons; oil and gas, for all that driving. But also, and this may surprise some, Texas is home to the largest concentrations of wind turbines in the US. Something’s got to keep all that aircon running. Solar is growing very fast too, it being both sunny and windy there, and large areas of land are available throughout the state with few other competing uses, especially as increasing droughts threaten the large agriculture business. Texas is energy rich and Houston is the capital of the US energy industry.
From the Houston Wiki page:
Houston is recognized worldwide for its energy industry—particularly for oil and natural gas—as well as for biomedical research and aeronautics. Renewable energy sources—wind and solar—are also growing economic bases in Houston. The ship channel is also a large part of Houston’s economic base. Because of these strengths, Houston is designated as a global city by the Globalization and World Cities Study Group and Network and by global management consulting firm A.T. Kearney.
The Houston area is a leading center for building oilfield equipment. Much of Houston’s success as a petrochemical complex is due to its busy ship channel, the Port of Houston. The port ranks first in the United States in international commerce, and is the tenth-largest port in the world. Unlike most places, high oil and gasoline prices are beneficial for Houston’s economy as many of its residents are employed in the energy industry. [my emphasis]
The predominant form of transportation in Houston is the automobile with 71.7 percent of residents driving alone to work This is facilitated through Houston’s freewaysystem, comprising 739.3 miles (1,189.8 km) of freeways and expressways in a ten-county metropolitan area. However, the Texas Transportation Institute‘s annual Urban Mobility Report found that Houston had the fourth-worst congestion in the country with commuters spending an average of 58 hours in traffic in 2009.[my emphasis]
But perhaps there’s some hope because:
Houston has the largest number of bike commuters in Texas with over 160 miles of dedicated bikeways. The city is currently in the process of expanding its on and off street bikeway network. A newBicycle sharing system known as Houston B-Cycle currently operates 11 different stations in the downtown area and 7 in other parts of Houston.
But really, Houston’s conditions are so distant from Auckland’s that it is not realistic to point to its urban form as an answer to our situation. Even if we were agreed that Houston’s pattern is is even desirable:
Houston HW3 During the evacuation from Hurricane Katrina
Brady Nixon, the Development Manager at Progressive Enterprises [yup, the supermarket biz] and the force behind the upcoming Vinegar Lane development in Ponsonby has written a very detailed response to key aspects of the Draft Unitary Plan. His approach is particularly interesting because it is grounded in market practicalities and focused on design quality outcomes through intensification. It is also good to see a discussion around the built environment with some visual sophistication. The fully illustrated PDF, Market Responsive Intensification, is available here.
The inspiration for his approach is an urban renewal project from the 1990s on some disused docks in Amsterdam, called Borneo Sporenburg:
At Borneo Sporenburg there are some 2500 separately titled four story dwellings with a pretty handy density of 100 units per hectare. The key to their appeal is the variety of appearance within a consistency of massing of the resultant blocks. This richly textured outcome is a result of each building being designed and built to the tastes of each owner rather than by one developer but all within a very tight master plan and a design control process.
There are also two larger more traditional blocks that throw the regularity of the pattern on each pier and a couple of fancy foot bridges. And of course all the joys of being right on the water, largely car free, and close to the centre of old Amsterdam. Focusing on the ‘row houses’ their defining characteristic is that each dwelling has a relatively small footprint and therefore the whole site offers a comparable density to apartment blocks but they can still be organised more like detached buildings with independent ownership rather than needing systems like Bodies Corporate to operate them. Furthermore by subdividing valuable land into small lots the cost barriers to entry come down, so this is a way to involve ordinary people in development and not just leave it to developers.
Which brings us to Auckland. Nixon argues that the market is more accustomed to ‘Fee Simple’ ownership structures than to more collective models such as renting or co-governing whole buildings.
He has two other observations from local market condition.
One, that we are a nation of small scale builders; our building industry is predominantly structured around putting up one dwelling at a time, with a straightforward builder-client relationship [or builder-architect-client] with relatively small amounts of venture capital . He claims that the proportion of single dwelling construction compared to higher volume builds is 80%. Therefore however the city is to grow then that change must be deliverable through this cottage industry model in order to happen.
Two. He argues that the resultant structures are more acceptable to those fearful of the idea of intensification. He asks:
Where communities oppose intensification the question is not do they oppose intensification but in what form do they oppose intensification?
Going on to use the example of his own development, Vinegar Lane, comparing his new fee simple individually designed but dense small footprint model with the previous developer controled monolith:
The solution engaged at Ponsonby is in fact denser than the previous Soho scheme. But it is lower in bulk, scale and height than what was proposed and it is able to be delivered within the framework of the Mixed Use Zone rules.
So all is good then? Nixon and others can happily offer this typology to the market, and if he is right that sites in developments like this should be lapped up, as indeed they have in Ponsonby?
Not so fast, there are a whole lot of road blocks in the way of this model in the DUP, most notably minimum lot size, but also set-backs, height in relation to boundary, and, of course, those great place killers; minimum parking regulations. In Nixon’s view the DUP primarily imagines two main routes to intensification; large scale apartment buildings, or infill in residential zones ['garden gobbling'].
The former he claims is often unworkable because of the difficulties of site amalgamation, insufficient numbers of well funded development companies, and a luke warm demand. The latter neither supplies sufficient increase in density nor protects popular old neighbourhoods so is arguably likely to be even less successful.
For the solution to this problem Nixon’s next inspiration is Tokyo, a city with high density but often not high rise, here’s an example:
But only if subdivision is possible, and other regulations that restrict these kind of tight typologies on appropriate sites are removed.
Vinegar Lane will supply about 110 units per hectare, comparable to Borneo Sporenburg, way above the 15-25 that new greenfields subdivisions offer, and even better than the densities of nearby Grey Lynn which is around 35-40.
The sites are all intentionally varied in size and the smallest is 72m^2. So you can see why Nixon sees the DUP’s minimum lot sizes of 200m^2 in urban zones to be a problem
Here’s what the DUP proposes for the very zones that are ideal for more intensive construction, Nixon’s commentary on the right:
Here’s another example, this time from Sydney:
So here is Nixon’s summary of his small footprint argument:
And below are his overall UP recommendations, which are probably best summed as saying that the Council should concentrate on Quality controls and be less proscriptive with Quantity ones. If a Quality city is sought then compact one will follow so long as the barriers to achieving this morphology can be removed for appropriate locations. I would love to see these types of buildings in all their variety going up along Great North Rd as well as apartments and other mixed use buildings. I’m sure the old light commercial parts of Onehunga would be enlivened by this sort of owner built environment.
And the key to achieving it allowing greater subdivision than is currently planned.
Earlier this year, Auckland Transport formally launched the process to obtain designation for the City Rail Link. Submissions closed back in March and those that submitted will know that commissioners have been appointed and the hearings for the notice of requirement (NOR) will be held in August. All up there were 258 submissions on the NOR and I have been keen to find out what was submitted. Last night, the council released the report that has been prepared for the commissioners that examines the various NOR documents as well as the issues raised by submissions and it gives a glimpse of where the key points of contention will be.
The report starts off explaining about the project, how it is proposed to be constructed and how it fits in with some of the existing plans. The report then goes on to note the principal issues that have been raised are.
The following principal matters raised by submitters are relevant across the geographic span of the CRL project:
- Impact on Built Heritage
- Impacts on the traffic network, both during construction and once the CRL is operational
- Pedestrian and vehicular access to property
- Noise effects, both during construction and once the CRL is operational
- Vibration / settlement effects associated with cut-and-cover and tunnel boring excavation methodologies
- Effects on property rights
- Social impact of displacement
- The proposed 20-year lapse date
Importantly it also notes that issues around funding and economic risk are out of scope for this process.
However, these factors need to be distinguished from decisions on the cost and economic viability or profitability of the CRL. In terms of the RMA, case law has confirmed that:
- Decisions on project funding and viability are business decisions, which the decision maker should not be drawn into making or second guessing.
- The cost, economic risk and profitability of a project are business / policy decisions for the promoter or developer of a project, and should not be challenged.
A key requirement of the RMA is that alternatives sites, routes and methods of undertaking the work be considered if certain conditions are met (which the CRL project does). The report then goes on to list some of the numerous studies that have been done on the project since 2004 before getting to the specific objections to the assessment of alternatives. Of these objections I found the one from the NZCID the most interesting as they have been suggesting for some time a route similar to what I discussed in this post. In the end though the authors of this report state that current case law indicates that AT only needs to show that they have assessed alternatives routes that meet the specified aim, which in this case is a rail line from Britomart to Mt Eden. In fact of all of the submissions that related to alternatives, only that by Precinct Properties which relates to the use of the Downtown Shopping Centre for a construction site is considered to need to be addressed.
The report then goes on to address the various issues mentioned above as well as others. Unsurprisingly construction noise seemed to raise the most concern from submitters with 46 submissions specifically commenting on it. I’m not going to summarise the rest of the issues and responses as much of it is highly technical (and would take a long time to read through) so after briefly skimming through them, I went to the end to see the issues that the authors say that AT still need to address before consent be granted. They are:
While I’m no expert, these issues don’t seem too catastrophic. Perhaps some of you planning experts can share some of your thoughts. While this report gives a glimpse at the issues, I’m very keen to see the summary of each submission which I imagine will show up some interesting views, particularly which submitters have explicitly stated either support of opposition to the project.
The Auckland Council have announced just how much feedback they received about the Unitary Plan.
Thousands of Aucklanders have taken the opportunity to have their say on the draft Auckland Unitary Plan.
Around 22,700 pieces of feedback have been received via forms, emails and letters, as well as an additional 6,540 comments and posts gathered from social media and the Shape Auckland website.
Deputy Mayor Penny Hulse says council chose to release the plan as a draft ‘draft’ so Aucklanders could help shape the proposed rules in the plan before it goes out for notification.
“The numbers clearly show our communities have embraced the opportunity to be involved at this early stage. Their views, comments and feedback will all be used to ensure the plan we notify for formal consultation is the best plan possible,” said Penny Hulse.
“Over the coming weeks we will be working through the feedback to identify what topics in the plan need further work and where changes need to be made to ensure that we get the balance right.”
The Auckland Unitary Plan is due to be notified later this year. This is when formal consultation will begin starting with formal submissions.
Wow, 22700 pieces of feedback and over 6500 comments gathered from social media is an absolutely massive number. I actually feel sorry for the council staff who are now having to wade through it all, although I imagine much of it will be pro forma submissions like form the likes of the opposition group Auckland 2040. Our friends from Generation Zero who made an excellent online form have said that more than 1300 people used it.
While there is still a lot of noise in the media about the plan, we have purposefully been trying to avoid covering it too much but that will obviously change as more details start emerging as to what changes might be made to the plan. It will also be interesting to see if the council sticks to its current time frame and notifies the plan before the local body elections or if they wait till after them. There are a lot of advantages and disadvantages for both options but I will leave those to discuss at a later date. To put things in perspective, the council has frequently said that they received around 15,000 pieces of feedback for the entire Auckland Plan process which covered both the first draft and the notified plan.
Unfortunately there is a tendency in discussions on housing affordability to remain quite siloed. The government seems to be only concerned with land supply as the key to addressing affordability, financial commentators privilege access to loans and other financial instruments, and developers stress construction overheads and compliance costs. Other observers, like this blog, are keen to point out city regulations that inhibit compact and attached building typologies as barriers to better dwelling affordability. It is clear that all of these are important contributors to the problem and it is not my intention here to dismiss any of the above, but rather I want to add another that I think gets even less attention but that is just as important. Location specific overheads.
People aren’t stupid. When looking for somewhere to live they automatically calculate all the costs and benefits of any possible dwelling and the biggest single cost after the direct property costs [mortgage, rates, rents] is transportation. In fact consideration of transport costs is really indivisible from direct dwelling costs in calculation of affordability. Any analysis that fails to understand locational costs in addition to land, construction, and financing costs is likely to remain deeply flawed.
The Victoria Transport Policy Institute’s Todd Litman describes this as Affordable-Accessible Housing and discusses it throughly in this paper. What follows is a quick summary of this work.
These figures are from Canada but there isn’t too much reason to believe that the general thrust wouldn’t also hold for Auckland. Vancouver like Auckland is doing well so therefore has a growing population and pressure on its existing housing stock. Also while Vancouver’s Public Transit systems are much better than Auckland’s it remains true for Auckland that service is better the closer to the centre you get, and it is therefore more possible and cheaper to get around using Public Transit in the inner suburbs and city. This balance is clearly reflected in dwelling prices too. People are clearly willing to pay more to avoid life on the motorways.
You can see that the construction costs are basically constant for each type but that the land and the transportation costs vary depending on the location. Land is more expensive as the location becomes more desirable, but transportation costs increases as the location moves further out. But also note that the biggest cost determinant is building size and type. So even the most expensive 100m^2 apartment is cheaper than the cheapest townhouse or detached house. Size does matter, as does type.
It is also important to note that both housing and transport costs form a greater proportion of people’s expenditure the poorer they are:
Perhaps because the costs of car ownership are either minor or born by employers or absorbed as a business overhead by many players and commentators in the property field that the reality of these costs for those on lower incomes are too easily overlooked. When vehicle cost is either insignificant or not born directly then car ownership can is likely to be viewed as a source of pleasure and an opportunity for expression of status and individuality. This personal experience muddies the appreciation of the burdens of car ownership on many in an auto-dependant society. Car ownership and all its attendant costs are just assumed to be covered for ‘normal’ people. This is how locational overheads can be ignored.
This analysis is supported by the existence of available and keenly priced dwellings in fringe and distant locations. Why else do they remain undesirable? They are not in practice as affordable as they seem because their location is expensive to operate from. Isolation while sought after by those with the money and preference for lifestyle blocks is an expensive burden for those at the other end of the socio-economic scale.
Even if a dwelling is built cheaply on cheap land and comes with supported financing, it may still fail to be affordable in practice because of its separation from employment, education, medical, and other social amenity, particularly if it is underserved by Public Transport.
Experts recommend spending less than 32% of total household budget on housing (rents or mortgages, basic utilities and maintenance) and less than 18% on transportation, or 45% on housing and transport combined. Many lower- and middle-income households exceed these levels (Figure ES-1).
The most expensive form of transport for poorer households are private vehicles. If a dwelling is poorly connected to public services and employment then in order for adults to get to work, as well as for the elderly, children, and infirm in those households to function will be dependant on buying, maintaining, and running multiple vehicles. This section of society often gets into debt with private lenders over vehicles and over-extension on these loans can often be the source of default and failure to meet other commitments. High transport cost due to the dispersed nature of habitation, employment, and services is a very real contributor the problem of people remaining trapped in negative income.
Careful consideration of the location of affordable housing as well the continued improvement in Public Transport services and attention to barriers to its use [cost, frequency and suitability of services] are two vital tools in improving the lives of all Aucklanders and the economic performance of the whole city. Transport poverty is a drain on productivity.
People who live or work in more accessible, multi-modal areas have better access to goods, services and activities, tend to own fewer vehicles, drive less, and rely more on alternative modes than in more automobile- oriented, sprawled communities.
Housing with more affordable locational attributes enable people to turn up to work more regularly, are more able to meet their housing payments, and are more likely to get family members to medical services earlier and whose children are more likely to arrive at school having had breakfast or at all.
Communities must respond to changing demands and conditions. Current demographic and economic trends are increasing demand for affordable-accessible housing, and increasing the benefits to society of accommodating this increased demand.
So in summary: To truly address the problem of housing affordability we need to address all of the following:
Construction and Compliance cost
The types of dwellings that are best suited to meeting all of these criteria are more likely to be smaller, attached dwellings on brownfields sites well served by public transport and local community services and facilitated by a fast tracked consenting and funding programme.
We talk quite a bit on this blog about the importance and value of agglomeration, which is the additional level of productivity which comes from locating activities close to each other. Agglomeration is why Auckland growing will be good for all New Zealanders, and at a smaller scale why central parts of Auckland growing will be good for all of Auckland. While agglomeration economies are well studied in terms of observing that they most definitely do actually exist, it has been a little less certain exactly why they exist.
A recent article in The Atlantic Cities reports on research done by MIT (Boston version, not Manukau version) on this question – with some perhaps unsurprising but at the same time interesting results:
There have been plenty of theories. Adam Smith famously figured that people become more productive when we’re able to specialize, each of us honing a separate area of expertise. And when lots of us elbow into cities, we’re able to specialize in ways that we can’t when a rural farmer must also double as his own butcher, accountant and milkmaid. Other economists have suggested that cities become great agglomerators of industry when factories cluster together around economies of scale and communal access to transportation.
“We think there’s an underlying completely different way of thinking here, which is very different from the economist’s way of thinking,” says Pan, a doctoral candidate in computational social science in the MIT Media Laboratory’s Human Dynamics Lab. Previous work by researchers at the Santa Fe Institute has proven the math behind the power of cities: As they grow in population, all kinds of positive outcomes like patents and GDP and innovation (and negative ones like STDs and crime) grow at an exponential factor of 1.1 to 1.3.
This means that all the benefits (and downsides) that come from cities don’t just grow linearly; they grow super-linearly, and at roughly the exact same scale, with a growth rate that looks on a graph something like this blue line (a linear relationship is shown in red):
As for why this happens, though, Pan pushes aside theories about the location of manufacturing or the specialty of trade. “It’s more fundamental than that,” he says. “Cities are about people. It’s just that simple.”
We have discussed the work of the Santa Fe Institute in before in this post with a video presentation by theoretical physicist Dr Geoffrey West.
The full paper in which the study is published highlights that fundamentally it’s the density that we’re able to form social ties which generates the super-linear increase in outcomes. As noted, “the larger your city, in other words, the more people (using this same super-linear scale) you’re likely to come into contact with.”
However, unlocking the potential of cities is dependent upon ensuring that sufficient transport infrastructure is available for the city to effectively function as a large connected entity, rather than just a series of smaller disconnected placed which just happen to be next to each other. This is detailed further below:
“What really happens when you move to a big city is you get to know a lot of different people, although they are not necessarily your ‘friends,’” Pan says. “These are the people who bring different ideas, bring different opportunities, and meetings with other great people that may help you.”
Maybe this doesn’t sound like a novel discovery – that the inherent power of cities lies in our individual connections to each other. Other researchers have nipped at a similar idea, calculating, for example, the “social interaction potential” of place. But until recently, most economic thinking sidestepped the sheer value of human interaction in favor of explanations about the proximity of manufacturing, or the processes of production.
This explanation for the power of cities also raises some curious questions about those places that remain an exception to the model. In some African cities and Eastern mega-cities, innovation and productivity don’t grow super-linearly. Populations grow, but the benefits don’t accrue with them as we would expect. This is likely because transportation infrastructure in those places is so poor that people aren’t able to connect across town to each other. “To live on the west side of Beijing,” Pan says, you never go to the east side.”
What I find fascinating is to analyse whether the internet has the ability to change this fundamental relationship – because it’s now so easy to be in instant contact with a huge number of people no matter where you are. Yet none of the recent research seems to suggest that technological advances make agglomeration less important – in fact it seems like as employment specialises more and more, agglomeration actually becomes more critical than ever.
We already know that people are driving less and owning fewer cars. As we have shown before, since the mid 2,000s both vehicle ownership and the number of kilometres travelled (VKT) have plateaued and then fallen in recent years on a per capita basis (VKT has fallen in real terms too). Even the Herald picked up that the vehicle ownership numbers were are dropping a few days ago.
We also know that there are similar trends occurring in many other western countries with a lot of the evidence pointing to young people driving less. However while we are fairly sure that there generational changes occurring, so far we haven’t had much solid evidence about it. Of course the economy over the last few years hasn’t helped things so this made both Stu and I very interested in looking at other data which may help to confirm the trends we were seeing.
Both Stu and I had actually both been looking at this separately and both come to the conclusion that one of the important bits data that was missing was driver licences. For me the first port of call was to the Ministry of Transport where I found information on how many people in each age group held licences
However having only the total number of licences in each age group at one point in time didn’t really help me. I really needed to see how the figures were changing over time so I put an OIA request into the NZTA who manage the licencing system. I recently received the information back however the data only goes back to 2003 as that is the oldest data available that the agency is confident of the accuracy of. It is also important to note that data is only for those applying for Class 1 (car licences) and that the numbers are for a full calendar year (1st Jan – 31st Dec). Most importantly the minimum age as raised on the 1 August 2011 and that has some significant impacts on the numbers. The changes were:
- Learner licence stage increased from 15 years to 16 years
- Restricted licence stage increased from 15½ years to 16½ years
- Full licence stage increased from 16½ years to 17½ years (with completion of an approved advanced driving course) or 17 years to 18 years (without approved advanced driving course).
Since the minimum age being raised, the restricted tests have also been made harder and I have seen numerous stories about how the pass rate has dropped which is putting some teenagers off driving altogether.
With that out of the way, onto the data. First of all, here is the total number of licences issued by type. The drop over the last few years is partially attributable to the changes in the minimum driving age so I do expect it to come back a bit as those who were not 15 by August by August 2011 become old enough to apply. This should show up in the 2013 numbers.
Things get more interesting when you start to break down the number of licences issued by age group. For this I’m just going to look at learner licences as it indicates a willingness to learn to drive. I’m not sure what happened in 2010 but it was effectively the low point in the number of learner licences issued. Perhaps the discussion around changing the minimum age in 2011 prompted people in older age groups who hadn’t yet got their licence to get one. This is shown in the graph on the left. Further while many of the age groups saw an increase in the total number of licences issued up until 2007, when comparing the numbers to the total population in each age group for each year, it actually represents a decline. This is shown in the graph on the right (I dropped off the older age groups from this graph).
Lastly, the changes might not look that dramatic however when indexed to 2003 there is a definite downward trend with the notable and understandable exception of the 16 year olds. Once again I have removed some of the older age groups due to the noise they add to the graphs.
On its own this information is useful, but when combined with the trends we are seeing in the number of vehicle kilometres travelled and the number of vehicles owned it is clear that there is definite a shift occurring within our society. I guess what surprised me with this data the most is that it isn’t just young people who are applying for fewer licences but also the older age groups too.
For those that want the data, it is here.
Whether or not having a ‘limit’ around the edge of Auckland (call it a MUL or a RUB of whatever) drives up the cost of housing is a fairly long-running debate. The argument in favour of this assumption is encapsulated by an opinion piece in the NZ Herald a week or so back by Don Brash:
At the moment, less than 1 per cent of New Zealand’s area is urbanised. We are one of the least densely populated countries in the world. The council has quite deliberately chosen to make land expensive.
And the consequences of that decision are disastrous, socially and economically.
It’s disastrous socially because for most low and middle-income families, buying a house in Auckland is now not even remotely possible, and for those families who do make the attempt, it almost inevitably means both parents working outside the home. Most low and middle-income families can’t even make the attempt, and often live in over-crowded, poor quality rental accommodation.
At the moment, the median house price in Auckland is some seven times the median household income. It should be about three times, as it was 20 years ago and is now in many of the fast-growing cities in, for example, the United States.
Why is it possible to buy 500sq m sections on the outskirts of Houston for $40,000, whereas 400sq m sections on the outskirts of Auckland cost $400,000? The answer lies simply in the fact that in Houston there are relatively relaxed attitudes towards using land on the outskirts of the city, whereas in Auckland that has been prohibited.
We’ve recently discussed the question of whether or not sprawl is a good idea, and I think that’s largely a separate debate to this one. What’s particularly worth testing here is the question of whether opening up large amounts of greenfield land will improve housing affordability or not. The Auckland Housing Accord and its accompanying (although rather contradictory) legislation means that we may well be testing this question in the relatively near future – but recent evidence suggests that standalone housing built on the urban periphery is generally very expensive. Let’s take a look at what was noted in a Central Government report on housing and affordability recently:So standalone houses on the urban periphery generally aren’t that cheap to build, whereas most higher density housing types are comparatively affordable to construct on a per unit basis. And it seems that the availability of affordable housing units is very much linked to the number of higher density units being built:Now one of the reasons why recent standalone houses might be so expensive is because there’s (apparently) not a lot of greenfield land going around – which means that it’s fairly scarce and therefore high value. Expensive land means that a developer needs to put a big house on the site (or two or three smaller ones, which is generally banned through planning rules) in order to make a profit. So maybe opening up more greenfield land could lower the price of that land (more supply leading to lower prices at a set level of demand) and therefore result in it being “economically sensible” to build cheaper standalone dwellings on that greenfield land.
An interesting question then, however, is “how much extra greenfield land would be needed to make a difference?” Plus, perhaps, also a question around whether there really is a shortage of greenfield land being supplied. Let’s refer once again to the Central Government report, this time in relation to land supply:
The key ‘takeaway’ point from the above slide is that only a small proportion of land which is zoned for development and served with infrastructure has actually taken the next step to being developed. As “boosting housing supply” requires a lot of extra houses to actually end up being built, we find ourselves with two further questions:
- If we want to go from around 2,000 sections being “ready to go” (i.e. subdivided) up to around say 10,000 – does that mean we need five times as much land zoned and serviced as we have now? In other words, is the market always going to drip-feed the subdividing of zoned and serviced land into sections, no matters how much land is available?
- Do we instead need to focus on what’s holding up the 15,000 sections worth of land that is zoned and serviced from actually being split up into subdivided sections and eliminate those barriers?
Option 1 may well lead to achieving the desired amount of increasing housing supply, but at a truly staggering cost to ratepayers and taxpayers in the form of new roads, new schools, new water pipes, new wastewater pipes and so on. Furthermore, if it’s only around 13% of zoned and serviced land which is actually going to be split up for development to occur on it, then we’re going to be building an absolutely vast amount of roads, pipes, schools and all the rest which are totally surplus to requirements – at least in the short term.
Undoubtedly this post raises far more questions than it has answers, which is unsurprising. There just doesn’t appear to be much evidence that the best way to improve housing affordability is by building more houses on the edge of the city. Or that it’s a lack of zoned and serviced land which is holding up the release of new greenfield sections onto the market. Or that increasing the supply of land zoned for greenfield development will actually do anything – especially not in the short or medium term, to improve housing affordability.
It’s all a bunch of questions, a bunch of very expensive questions if the Auckland Housing Accord does decide to open up greenfield land in the vague hope of improving housing affordability.
Ok so while the Unitary Plan submission period is over and I intended on not writing about it for a while, I really couldn’t go past a piece in the Herald today from Fran O’Sullivan. She seems to have picked up many of the points that we, and others have made.
The so-called debate on Auckland’s draft Unitary Plan has become disconnected from the big-picture narrative that it serves: that contained in the overarching Auckland Plan, which aims to transform Auckland into the “world’s most liveable city”.
Deputy Mayor Penny Hulse admitted as much when I challenged her about this at a lunchtime discussion on the plan this week. Hulse was adamant the council would respond to the formal consultation when the plan is notified around September-October.
“It’s simply the first draft, or a draft draft plan,” are the words Hulse and Mayor Len Brown are using as they explain there is a great deal more formal feedback to come this year before the Unitary Plan is finally bolted down. And even then there will be an evergreen aspect to it, as the plan must be responsive to changing conditions in years to come.
But Hulse is also pledging to be “robust”. I read this as shorthand for not allowing the council to be bullied by the ill-informed and those spreading misinformation into backing down on plans for Auckland to be a compact city and caving in to the lobby that advocates for increasing urban sprawl by pushing the city’s limits to gobble up more prime farmland.
Good stuff. After weeks of listening to and reading self-interested Nimbyism masquerading as objective concern, it was a relief to hear some common sense from Hulse.
This is Auckland’s chance to get it right.
Yes, the council will give way a bit on the margins to accommodate more housing. But there is an additional infrastructure cost to this which proponents overlook: more roads, more rail links, more sewerage, water, electricity and phone lines and more schools. It’s not simply a matter of plopping down new cookie-cutter houses on vacant farmland.
She even notes an important point missed but many of those who complain as well as making a surprising and almost out of context comment on supporting the CRL although I’m not to sure about the comment on paying for it by selling assets.
The great irony is that much of what the Nimbyists complain about can already take place under Auckland’s existing planning rules.
As a CBD dweller, I welcome the added vibrancy Auckland will enjoy as more people make the city their home in coming years. The CBD and inner suburbs in particular could do with a massive injection of people. Auckland needs a beating heart. It would be terrific if there were more inner-city dwellers – young and old.
There are three issues that concern me: first, the insane way that central Government continues to throw roadblocks in the path of Brown’s CBD rail loop plan. Brown could settle it once and for all by flicking council shares in other assets and reinvesting the equity in the new rail kit and borrowing the difference.
And finally she even gives a nod to our friends at Generation Zero including:
Their argument for intelligent density and against sprawl is compelling. Couple that with their insistence on giving the urban design rules statutory weight and Auckland would be on to a winner.
A nice refreshing piece from the Herald. Only shame we didn’t see it earlier to help inform the debate.
While on a similar topic, another article in the herald caught my attention. This one was on land prices, specifically how some people/companies are land banking huge chunks of land within the existing urban boundaries to get massive profits.
A land banking business with a big piece of residentially zoned real estate on Auckland’s outskirts has made more than $6 million a year for almost two decades – doing nothing.
QV records shows Yi Huang Trading Company owns 39 Flat Bush School Rd, which it bought in 1995 for $890,000.
Now, this 29ha block is listed on the market for $112.6 million, promoted as “the land of opportunity, vacant but close to Barry Curtis Park”.
Now we obviously can’t force anyone to develop land if they don’t want to but before we go opening up the cities urban boundaries it would probably be a good idea to start being smarter with what land we already have. We know that there are potentially 15,000 sections that could be developed within the existing urban limits and without addressing the issue of land banking, we are likely to see similar behaviour happen with the opened land as owners drip feed sections to the market to maximise the return they are able to get.
Out of interest, the section mentioned above is listed in the unitary plan as a mixed housing zone allowing sections down to 300m². Assuming around 25% of the land would be used for the likes of roads and parks that leaves enough potential space for over 700 dwellings.