Population-weighted densities in New Zealand and Australia

Urban population density is a hot topic – some people complain that it’s getting too high in Auckland, while others worry that it’s too low to get the urban outcomes we want. Either way, density matters – it can have a big impact on:

  • The efficiency of infrastructure provision and public transport services
  • Urban productivity and levels of competition in industries like retail
  • Amenity for residents – higher density can support cultural institutions and local vibrancy, but some people may prefer more open space
  • Preservation of open space and agricultural land on the urban fringes
  • Cities’ energy efficiency and use of resources.

However, we seldom ask: What is population density and are we measuring it correctly?

With the support of my employer, MRCagney, I’ve just written a short working paper that looks at this issue: Population-weighted densities in New Zealand and Australian cities: A new comparative dataset. It can be read in full here (pdf) and comes with an interactive spreadsheet that allows easy comparisons between cities.

This paper presents a new, more robust measure of density: population-weighted density. In contrast to simple average density measures, which basically measure the number of people living in the average hectare of land in the city (which is generally found in a low-density fringe suburb), this measure estimates the density of the neighbourhood in which the city’s average resident lives. As a result, this measure is much more representative of the lived experience of a city’s residents. The US Census Bureau has used a similar approach in their recent population density profiles.

While a wider range of results are available in the full paper, some of the most interesting findings actually relate to Auckland. In short, there have been some massive changes to the city over the last decade:

  • Auckland’s population density has increased 33% since 2001 – the city’s population-weighted density is now around 43 people per hectare after a decade of infill development and intensification
  • As a result, Auckland is now the third-densest city in Australasia – behind Sydney (76 people/hectare) and Melbourne (45 people/hectare) but significantly ahead of Wellington (38 people/hectare), Perth (30 people/hectare), and Brisbane (34 people/hectare).
  • There is no geographic reason why good public transport will not work in Auckland. Cities that are less dense than Auckland have successful, high-patronage PT systems.

And now, some visualisations!

Here are maps of Auckland’s population density in 2001 and 2013. As you can see, the city’s gotten incrementally denser throughout its entire area – look at the slightly darker shades of blue appearing all over the isthmus, on the North Shore, in the West and in Manukau.

Auckland density 01-13 v2

If we zoom into centres of New Zealand’s three largest cities, we can see that there have been big changes in city centre density in both Auckland and Wellington. Christchurch, on the other hand, as suffered from the effects of the 2011 Canterbury Earthquake, which demolished much of the city centre and reversed the city’s tentative moves towards apartment living. In spite of rapid demographic transition in Auckland’s city centre, rising density hasn’t really spilled over to surrounding suburbs.

Akl Wgtn Chch city centre comparison v1

Comparisons between cities also provide some interesting insights. The following chart, from the interactive spreadsheet, compares population density profiles in Perth and Auckland. Perth has frequently been cited as an example for Auckland due to the success of its electrified rail network, which now carries over 60 million annual boardings. However, Perth’s less dense, and significantly more sprawling, than Auckland. Clearly, low density isn’t holding back Auckland’s PT system.

Auckland Perth density profiles

The following chart makes that point even more clearly. It shows population-weighted densities and annual public transport ridership in eight large Australasian cities. Although Auckland is the third-densest city, it’s got the lowest PT boardings per capita.

Density and PT ridership

In short, Auckland is in an especially good position to benefit from a virtuous cycle in its transport system. Recent increases in density throughout the urbanised area have contributed to rising ridership on public transport, strengthening the case for further investment in projects like the City Rail Link, the AMETI busway, and the city’s New Network. Delivering a better public transport system will, in turn, encourage further land use change.

If you’re interested in this topic, take a look at the working paper and the interactive spreadsheet. What do you think about Auckland’s changing urban form?

Better cities mean a wealthier New Zealand

Last week I took a look at whether government policy to support regional economies could divert growth away from Auckland. Based on the historical evidence, the answer seems to be no – people want to live in Auckland and start businesses here, and it’s senseless to try and stop that.

Today, I want to look at this issue from a different angle, and ask: If we somehow succeeded in stifling Auckland’s growth, would we be better off as a result? Would New Zealand be richer if it cancelled the City Rail Link, banned any new dwelling construction in Auckland, and told newcomers to bugger off to Timaru (or, more likely, Melbourne)?

Once again, we don’t have to speculate, as we can examine the results of previous “natural experiments”. Paul Krugman suggests that we could learn from recent population growth in the United States. (In between gaining academic renown for his work in new trade theory and public notoriety as a harsh critic of the second Bush administration, Krugman helped develop the new economic geography literature, which explains why cities form and grow.) He takes a look at the rapid growth of the “sunbelt” states, including Arizona and Texas, and finds that it has probably reduced economic growth in the US:

It turns out, however, that wages in the places within the United States attracting the most migrants are typically lower than in the places those migrants come from, suggesting that the places Americans are leaving actually have higher productivity and more job opportunities than the places they’re going. The average job in greater Houston pays 12 percent less than the average job in greater New York; the average job in greater Atlanta pays 22 percent less.

So why are people moving to these relatively low-wage areas? Because living there is cheaper, basically because of housing. According to the Bureau of Economic Analysis, rents (including the equivalent rent involved in buying a house) in metropolitan New York are about 60 percent higher than in Houston, 70 percent higher than in Atlanta.

In other words, what the facts really suggest is that Americans are being pushed out of the Northeast (and, more recently, California) by high housing costs rather than pulled out by superior economic performance in the Sunbelt.

But why are housing prices in New York or California so high? Population density and geography are part of the answer. For example, Los Angeles, which pioneered the kind of sprawl now epitomized by Atlanta, has run out of room and become a surprisingly dense metropolis. However, as Harvard’s Edward Glaeser and others have emphasized, high housing prices in slow-growing states also owe a lot to policies that sharply limit construction. Limits on building height in the cities, zoning that blocks denser development in the suburbs and other policies constrict housing on both coasts; meanwhile, looser regulation in the South has kept the supply of housing elastic and the cost of living low.

In short, restrictions on population growth in productive places – i.e. large, relatively dense cities – force people to move to less productive places, and earn less. A recent working paper by American economists Chang-Tai Hsieh and Enrico Moretti put a figure on the economic cost of these restrictions: housing supply restrictions in high-productivity cities like New York and San Francisco over the last three decades has lowered the US’s GDP by an estimated 10-14%. That’s absolutely huge.

This is agglomeration at work – or rather, “deglomeration”. The economic literature has identified a strong relationship between the scale and density of cities and the productivity of firms that locate within them. But rather than recognising and taking advantage of this phenomenon – for example, by allowing more office space to be built in San Francisco for the expanding tech industry and more apartments to be built in Silicon Valley for urbanophile tech workers – some American cities have chosen to reject it.

So could the same thing happen in New Zealand? In a word, yes. It’s definitely a risk and one that we should be careful to avoid.

First, the facts. Firms based in Auckland are more productive than firms elsewhere in New Zealand, after controlling for industry and firm characteristics. And firms in the Auckland city centre are even more productive. The table below, compiled from data in Dave Mare’s great 2008 paper on the topic (“Labour productivity in Auckland firms”), shows that there is a substantial “productivity premium” in Auckland:

Area Employment density (2006 jobs/sq km) Value added per worker (2006) Productivity relative to non-Auckland
New Zealand excl. Auckland 6.7 $45,550 -
Auckland urbanised area 518 $68,435 +51%
Auckland city centre 13,584 $106,873 +139%

I just want to say a brief word about the “productivity premium” of the city centre. A lot of people say that New Zealand’s an agricultural exporter, earning its way off the sheep’s back (or, more recently, the cow’s teats), and that downtown jobs are just an unproductive drain on farm revenues. However, service exports from urban businesses play an underappreciated role in NZ’s international trade picture. The two companies I’ve worked for in the Auckland city centre are both exporters of professional services. I’ve personally exported to Hong Kong, Australia, Fiji, and Papua New Guinea; my colleagues have also worked in Indonesia, Uganda, Canada, Saudi Arabia, the UK, and a whole host of other places. If we want to grow our exports in a smarter way, we need to encourage this sort of thing rather than deny that it’s happening.

As a result of the urban productivity premium, policies that stifle the growth of Auckland are likely to put a drag on New Zealand’s economy. In the US, a reluctance to let productive cities grow caused people to move to lower-wage cities like Phoenix, Houston, and Atlanta. Down here, the results are likely to be even worse, as New Zealanders are much more internationally mobile than Americans. If we put a lid on Auckland’s growth, some people will go to Hamilton or Tauranga instead, but many others will head to Australia or the UK.

Fortunately, we’ve got a much better option: Improve New Zealand’s cities rather than trying to smother them. Moreover, we’ve got some great opportunities to do just that. In Auckland, that means:

  • Making cost-effective investments in more transport choices, including better walking and cycling
  • Building the City Rail Link to unlock access to the city centre and allow firms to grow and benefit from the knowledge spillovers floating around
  • Preserving and improving our parks and public spaces – Waterfront Auckland is a truly world-class waterfront development agency and we should build on its success
  • And, as Krugman and Glaeser point out, it’s absolutely vital that we allow dwellings to be built in the places where people want to live – which increasingly means building more in places like Ponsonby and Mount Eden that are close to jobs and amenities.

We shouldn’t limit our vision to Auckland, either. While Auckland’s larger and faster-growing than Christchurch or Wellington, those cities also support agglomeration economies and interesting urban lifestyles. Investments in better cities will pay off there as well. Some of the same policies can also make small cities more liveable – although Hamilton will probably never need a CRL, look at the difference that NZTA’s Model Cycling Communities programme has made to Hastings and New Plymouth.

Why don’t we get on with it then?

Urban Change: Evolution or Revolution?

“Change is the law of life and those who only look to the past or present are certain to miss the future”

-JFK

Life is nothing but change, and cities being concentrations of human life manifest this fact in their physical fabric: They are constantly changing, always incrementally, sometimes abruptly. Positively and negatively. Investment versus entropy. Governments, local and central, are charged with understanding the forces at work behind this law of life and responding wisely with our taxes to attempt to maximise the potential positive outcomes within this reality for all citizens.

DRESDEN 1945

Dresden 1945: Catastrophic change

There is plenty of evidence that suggests there is a need for substantial change in transport infrastructure investment now in Auckland. This evidence is broad based and essentially adds up to the fact that the conditions that set the policy of the last 60 years no longer hold:

  • It is clear that demand growth is shifting away from driving towards the Transit and Active modes
  • It is clear that spatial arrangements are shifting including a substantial revaluing of the centre
  • It is clear that demographics of the city are changing to smaller households and denser communities
  • It is clear that the city’s growth path is continuing; Auckland now is already city sized and getting bigger
  • It is clear that environmental and geographical constrains are tightening; resource constraints in Transport sector ever more pressing
  • It is clear that the urban motorway programme of the previous era is nearing completion; we are in a new phase
  • It is clear that newer generations just don’t share the older ones’ ideas of what is important in urban form and how to move

It is in this context that we have developed our Congestion Free Network summarised here.

However while there is clear evidence that we live in a period of discontinuity from the previous era this does not mean that what was built up during this era should be abandoned or not maintained. Quite the contrary in fact. One of the primary aims of shifting our capital investments away from the urban highway network is to build up the complementary networks to such an effective and attractive level that will keep the highways functioning well and with more efficiency. And in this our programme is not only low risk and high value but also very different from the late 20th Century revolution that it builds on. If there is one lesson to learn from the last great shift in transport investment in Auckland it is to be sure to keep what you already have and build on it; not to disregard the last system in order to focus totally on the next one.

Let’s have a look back.

The decision last century to invest in a system of urban highways for Auckland became over time a total commitment. We not only invested nearly every penny of new investment into this system starving any alternatives we also actually removed existing alternatives.

Here is a view of the leafy and desirable old suburbs of the Auckland Isthmus:

Old 'tram built' suburbs of Auckland, from Mt Eden

Old ‘tram built’ suburbs of Auckland, from Mt Eden

And here is a map of the system that made this urban form:

Auckland Isthmus tramlines

After the second world war Auckland faced the three interrelated problems. It was growing, there had been little investment in infrastructure for decades, and it lacked financial resources. To that can be added that capital investment was dependent on a suspicious government that faced, as ever, competing demands. One critical area that this came to a head was our electric tram system. While by any measure it was a huge success, carrying huge numbers of people and at around a net operating profit, it was in desperate need of catch up investment both in the machines themselves and extension to new areas.

In the context of the times the car offered a way out of this problem. There were very few of them in the 1950s, and while their uptake was expected to grow this was also expected to remain manageable. It was argued that buses could replace the trams with the advantage of operating without fixed routes and be more easily extended to new areas and at lower capital cost to public finances. All true. But really this was a way to give Auckland’s relatively narrow roads over completely to private vehicles, as no priority was allowed for the tram-replacing buses. Contrast with Melbourne: where they not only kept the more appealing trams but took advantage of wide boulevards allowing separation of trams and traffic on many routes, plus tram priority systems at intersections where they are mixed.

Relying on the car could be rationalised as cheaper too, simply because the machine and fuel costs were privatised, and that petrol taxes were to be the source of road funding. Lost in the reasoning was the fact total reliance on driving is the most expensive way of ordering a city’s movement. So while the car/road system had a good funding mechanism [fuel excise] this does not mean it is the best system economically, and this is still true today . It would require ever more enormous sums and in fact add to the ratepayer burden and not relieve it as road taxes have never covered all road costs. Let alone other burdens of this system like parking and the loss of rateable land etc.

And motorways are subject to the laws of inverse success over time: they are best when they’re new, they never get better as they attract more users. Below, rural Penrose with new motorway 1963- nice flow.

Road traffic, new Southern Motorway, Penrose, Auckland. Whites Aviation Ltd :Photographs. Ref: WA-59290-G. Alexander Turnbull Library, Wellington, New Zealand. http://natlib.govt.nz/records/23080156

Road traffic, new Southern Motorway, Penrose, Auckland. Whites Aviation Ltd :Photographs. Ref: WA-59290-G. Alexander Turnbull Library, Wellington, New Zealand. http://natlib.govt.nz/records/23080156

Part of the world view of Modernism was a faith in the completely fresh start: The Brave New World. This is evident in art movements, new philosophies, individual building projects, but also at the urban planning level. That there was a huge desire for new beginings is not surprising after the experience of the first half of the century with two extremely destructive world wars and a devastating Depression. Auckland, although it didn’t come out of the war with whole areas of the city wiped clear by bombing it did have plenty of proximate bare land, and in the city itself the buildings and structures of the colonial era were now ageing and dated compared to what seemed possible in the new American-style future. It was ripe for this ideology of ‘rip it up and start again’.

We took our lead from the zeitgeist, and the zeitgeist was all California [well, the Autobahn, actually, but no one was admitting that].

Furthermore the beginning of this new project coincided with a rise in prosperity, price controls being lifted from private car sales, and the price of crude oil fell every year from 1947-1970 in real terms. Driving boomed in New Zealand as it did all across the western world and use of the new bus network declined proportionately. And then fell into a downward cycle of falling investment, declining quality of service, and uptake. The buses were never as accepted as much as the trams and nor could they ever command the control of the road as well either.

So when in 1976 Prime Minister Robert Muldoon exploited the divisions in the many local authorities in Auckland to kill Auckland Mayor Robinson’s ‘Robbie’s Rapid Rail’ Auckland was committed, by central government, to a bold ‘double-down’ on an urban motorway centred road only transport network.

What had began as a just part of the city’s movement systems as advised by North American consultants in the 1960s became an extreme and monotonal driving-only all-in bet. Bold, ambitious, and in terms of the communities and places in its path; pitiless. All directed by central government, with local concerns overruled.

CMJ

Whole areas of the city have never recovered from the burden of hosting this land hungry and severing system; in the most affected areas land value still remain low and land use poor. They have been sacrificed for the convenience of those from other, further out parts of the new city. Around 50 000 people were relocated and 15 000 buildings removed. This was a revolution, with winners and losers.

Newton then and now

Meanwhile investment in complementary systems froze. The bus network was stuck in aspic; even though it began carrying ever more people from the mid 1990s as the city grew and began to exhibit the kind of urban realities that make driving less optimal for more and more citizens. Each time the rail network won hard fought and tiny investments; second hand trains from Perth, Britomart Station, ridership leapt in response. But still no meaningful investment in extending these parts of systems into an actual Rapid Transit Network has been able to be wrestled from successive governments this century. Although important steps towards such a system were undertaken first by the last Labour led government by funding Project Dart, a long overdue upgrade of the rail network, and the construction of the Northern Busway, and the current National led government by enabling electrification to follow through a mixture of grants and loans to Auckland Transport. And, critically, AT and AC’s multi year overhaul of the bus system and introduction of the integrated ticketing.

Yet the future still looks no different, in fact central government’s programme is one of an aggressive return to the ‘revolution’ of the late 20th Century with no new Public Transit infrastructure funding at all, just enough to contribute to operate what’s already there: [chart of spending categories for the whole country 2015-2025]

2015 GPS - Spending graph

Proposed transport spending distribution in millions.

Yet despite the huge sums spent on more lane space the growth in driving has stalled, in contrast to uptake in the underfunded Transit mode: [VKT: Vehicle Kilometres Travelled].

VKT vs PT Trips per Captia 4

 

So it is very hard to understand this policy in terms of evidence, is its based on a nostalgia for the driving boom years of last century?, or perhaps it is simply an inability of our institutions to understand change and adapt to it?, or worse are the huge sums of public money in this sector subject to capture and control by special interests?: Big Trucking, Civil Construction, Consultants and Financiers, and Land Development Interests?

It is time to build balance into our city’s movement options and to do this we need a change in where spending is directed. And properly understood this is not another revolution but rather a return to moderation and balance and away from the current orthodoxy which is lopsided in the extreme. The current policy of investing so disproportionately in the driving mode is a revolutionary policy, but not seen as such because it has become an orthodoxy. We shouldn’t be surprised with its extremity as it is a 20th Century programme, from that age of extremes and extreme ideologies. Which while at times exhilarating, it also meant much was lost, like Auckland’s tram network.

Our position is that this kind of lurch is not what Auckland needs now but instead we should build on what we have by adding to the underdeveloped Active and Transit modes while maintaining and more efficiently utilising the mature driving resource.

Green GPS Funding graph

Above is a comparison of the proposed Green Party and National Party transport policies [for the whole country]. Note that the major difference is about what to build next, and that both plan to maintain current assets. We can change from extremity to balance without losing what we have. And it is long overdue:

Robbie's Rapid Rail MW

by Architect, Cartoonist, and National Treasure: Malcolm Walker

Is the baseline transport programme actually OK?

In the Mayor’s proposal for council’s 10 year budget, there is discussion around how two transport programmes will be consulted on early next year once a draft budget has been fully formulated:

  1. A programme which is based on the funding envelope possible with a 2.5-3.5% rates increase. This is referred to as the ‘baseline proposal’ in the document
  2. A larger programme that relies on additional funding, either from higher rates increases or from alternative funding options (like a network charge or congestion charge)

The paper highlights that what falls within the baseline proposal will be the subject of ongoing discussion between the Council and Auckland Transport, based around a system of ranking projects. However, a number of key projects that can be funded within this programme are listed:

  • City Rail Link
  • North Western Growth Area Projects (presumably this means new roads in Westgate and Hobsonville)
  • Warkworth SH1 intersection improvements (an odd one to include as I thought this was an NZTA project)
  • East West Connections (the new name for the East West Link)
  • Lincoln, Te Atatu and Dominion Road upgrades

Later in the document, when each of the transformational shifts in the Auckland Plan are discussed, there’s some further information on key projects which are included in both scenarios:

Whichever transport programme we eventually include in this LTP, there is no doubt that it will reflect the ongoing shift to public transport that this council has been committed to since its inception, with $700 million spent on public transport in the four years of Auckland Council.

The City Rail Link is fundamental in both scenarios. The baseline programme in addition, incorporates significant investment in bus lanes and bus infrastructure to support the new public transport network. Projects such as AMETI include walking and cycling provision. The city centre transport budgets include funding for Wellesley Street bus infrastructure and the Wynyard bus interchange.

One thing that’s really important to note here is that the CRL is no longer dependent upon finding alternative funding sources. It’s in both scenarios, which makes complete sense as the project is listed in the Auckland Plan as the number one priority. Even if the alternative funding options go nowhere, CRL is still budgeted to happen (when it happens is mainly down to central government).

Projects essential to the success of the new bus network’s rollout are also included in both programmes – a big programe of bus lanes, the Wellesley Street bus infrastructure, Wynyard bus interchange, the Dominion Road project and AMETI are all mentioned above, while Te Atatu bus interchange is listed (along with some rail grade separations) as a project that’s come out of some work on spatial prioritisation.

So a lot of the really good stuff we need council to focus on building – both to kick start implementation of the Congestion Free Network (i.e. CRL and the AMETI busway) and to ensure the new bus network is implemented successfully – appear possible in the baseline programme.

If we turn to what’s highlighted as being excluded from the baseline programme – but could be funded if extra money was available from network charges or some other funding source – there’s a rather strange mix of projects listed:

  • A majority of local and arterial roading projects across the region
  • Almost all of the park and ride projects currently programmed
  • The North-Western busway
  • Strategic projects such as Penlink and rail electrification to Pukekohe

Looking back in the project list from the Integrated Transport Programme, most of the arterial roading projects seemed like a huge waste of money, so I doubt we’d miss them. We had things like:

  • Mill Road – $239 million
  • Albany Highway upgrade – $665 million (likely a typo)
  • Lake Road Upgrade – $120 million
  • Great South Road (Otahuhu-Manukau) – $820 million (another possible typo

There was also another $2.5 billion budgeted for “other arterial road upgrades” over 30 years, excluding anything in the new greenfield areas as they were a further budget line item. So while we may miss having some of the arterial roading programme cut back, it seems like there was an enormous amount of waste in it. In terms of Penlink, well I think that was covered off last week in quite a bit of detail – in short, it won’t be missed too much.

In terms of park and rides, we’ve highlighted on many occasions in the past that these are not a panacea for improving public transport and in many cases may be both poor value for money and could undermine other goals such as cost-effective feeder buses or development opportunities around train stations. A small park and ride development programme is probably appropriate, focusing on stations that serve areas where feeder buses just aren’t viable (i.e. rural areas). Beyond that, however it’s hard to see a major programme being fundamentally essential.

That leaves the Northwest Busway and Pukekohe electrification. While these are both critical projects – particularly if Auckland is going to sprawl to the northwest and south over the next 10 years – it’s debatable whether they are projects that should be mainly funded by the Council. It is central government which owns both the rail network that would be electrified between Papakura and Pukekohe as well as State Highway 16, which the Northwest Busway would be built alongside. Sure there may be some costs to the Council in relation to stations, new trains and bus interchanges, but I would have thought the bulk of both projects should be paid by government.

In summary, it seems like it may well be possible for the council to proceed with a pretty good transport programme in the near future without relying on additional funding sources – including making significant effort towards implementing the Congestion Free Network. This is essentially what we’ve been saying since the CFN came out over a year ago, so it’s nice to finally see. Of course the devil will be in the detail of what projects are and are not in this “baseline programme”, but at the very least it’s great to see CRL’s in – and therefore no longer requires alternative funding options to be approved before it can proceed.

Is Petrol cheap?

I don’t tend to look at the motoring section of the Herald much however every now and then something stands out – often for its comedy value – and that was the case yesterday in an article titled Motoring Mythbusting. The article covers off a number of areas but two in particular deserve some attention. The first one talks about the cost of petrol.

It’s easy to see why petrol is a grudge purchase for so many people: you keep pouring the stuff into the tank and then it just disappears as you drive around. With the cost of filling a 50-litre tank currently at about $108, it’s a big drain on your wallet.

But think of the wonderful things that mobility and the private motor vehicle bring us: that sense of control, the freedom to be in different places as we choose. Failing that, remember that New Zealand still has the fifth-lowest fuel tax in the Western world. Petrol is actually cheaper than a 750ml bottle of Pump water from the supermarket ($3.99 per litre as this is written), despite having more complicated packaging and distribution demands.

Something else to consider for new-car buyers. If you have a humble Toyota Corolla GX, it will cost you $5600 per year to fill it up every week. Given that 55 per cent depreciation over three years is a realistic figure for a new car, it’s costing you $5800 just to have the thing in your driveway (that’s before you even consider finance or insurance). So petrol is not necessarily even the most expensive part of running a car.

Almost not quite sure where to begin so this is basically just a dump of my various thoughts about the comments above.

Paying over $100 to fill a tank on a regular basis might not be a big burden for the author but for many households it is a significant cost and it’s a cost that’s been rising with the price now sitting firmly over $2 per litre. The impact of the rises in fuel price are being reflected the spending from peoples wallets. The Electronic Card Transaction data from Stats NZ shows that over the last 11 years the percentage we’ve spent on fuel compared to other retail activities has gone from 10.5% to 16.5%.

Card Spending on Fuel - Aug 14

For families on low incomes the percentage of their income spent on private vehicles is likely to be even higher which leaves them with less money to spend on other things, like food. But more often than not it’s not just about filling one car but multiple ones. In the 2013 census 257,856 households in Auckland out of the 469,500 (55%) had two or more vehicles. In many cases families simply have no choice but to have multiple vehicles due to the dispersed nature of jobs in Auckland and lack of viable alternative options, all of which means higher household fuel costs.

Access to Vehicles

The author then claims that petrol for a car isn’t really that much when you compare it to depreciation, insurance, licencing and other transport costs. Of course he compares the depreciation on a brand new car while many people buy cheaper second hand cars for which the amount of depreciation is less however it is an important point that the cost of fuel is just one part of the overall picture in owning a car. He’s also right that mobility and the ability to get to many places is a really important thing. I would suggest though that it isn’t just a car that can improve mobility and open up the places you can travel. A well designed PT network with frequent services and integrated fares can do that too. Combined with riding a bike or walking such a network can provide mobility options in the city and where PT priority exists can also do so free of congestion.

newnetwork

What’s more travelling on such a network can be comparatively quite cheap. For example a monthly pass covering the entire urban area is $190 a month or a maximum of $2300 per year. That’s less than half the cost of petrol mentioned in the article and combined with the abundant access the new network will provide will become ever more compelling for people. To me the huge benefit of the PT investment that’s happening or that we’re pushing for is not that it will force everyone out of cars but that it allows some people to reduce their level of car use. Perhaps a two car family will be able to go to a single car, or a three car family down to two cars.

The myth in the article that caught my attention was the last one.

SPEED KILLS

The late LJK Setright was arguably the most erudite motoring journalist of his time. Not to mention often quite mischievous.

According to the great man in one of his 1990s columns: “Speed does not kill. Speed saves time, which is life.”

I wonder how long it will be before the government start using this line?

Yet as Peter pointed out the other day, many people don’t value speed and choose to pay for travel with time, does this mean they value their life less or just differently to a motoring journalist.

What is the CFN? Transport Debate Summary

1.AUCKLAND THE CFN

At the 2014 Election Transport Debate organised by the Campaign for Better Transport I was charged with summarising our Congestion Free Network as an introduction to the candidate’s speeches. Here is that short speech:

What is the CFN?

The CFN is a deeply considered answer to the question of how Auckland, our only city of scale, can best compete at all levels this century.

It is a world class Rapid Transit Network to go with our world class Highway Network.

1. It is designed for maximum economic efficiency; evaluating capital costs, operating costs, and long term value. It is a fully integrated top tier network; using busways where they are best option and extending the existing rail network where that adds more value, and ferries where they offer their particular advantage.

2. It builds on what we already have; it extends and complements our existing systems. It is the key to getting the highest value from earlier investments, especially our widespread road and highway networks. And it unlocks hidden capacity in the existing legacy rail network, and enhances its operational efficiency. It is about working our physical infrastructure harder and smarter as the city grows.

3. It facilitates better quality of urban form and supports higher quality of life and therefore the international competitiveness of the city, the nation’s gateway. It also complements the growth in Active travel; cycling and walking.

4. It greatly strengthens the city’s resilience through diversifying movement options in ways that are consistent with changes in technology and social trends and helps protect the city’s functionality against shocks in price or supply of imported fuels.

5. It greatly enhances freedom and choice for businesses, residents, and visitors alike. It supports the entire city, not just inner areas, including future growth areas on the urban fringe. It will make the choice to not partake in congestion in Auckland a truly viable one for more people, at more times, and for more trips.

It essentially is the answer to the question of what is needed next?

And it is not just a ‘nice to have’ but rather a carefully costed and highest value complement to the last sixty years of investment in motorways. It will unlock the motorway system for higher value users, in particular freeing it up for its vital role in the freight supply chain. In short to gain the next level of value from the urban state highways we need to invest away from them to keep them flowing efficiently. It also is what is needed to gain the agglomeration economies that flow from city shaped development.

And wonderfully It does not require anything other than a reprioritising of projects already identified for Auckland, and is achievable well within existing budgets. It takes no money away from other parts of the country’s transport share nor is it dependent on novel sources of revenue. It does however require an understanding that Auckland is at a new stage of development. One that requires more than just the single mode of movement and therefore while maintaining the existing road systems, investment in new infrastructure must be strongly directed to completing and optimising the missing modes. And this programme shows just how within reach this is.

In short it’s genius.

But because of how we control our transport spending it does need government to be willing to partner the city in investing differently than we have been. Nothing short of the success of our biggest city and the level of its contribution to the whole nation is at stake.

5.CFN v ITP cost

Starting with where Auckland’s nascent Rapid Transit network will be once the current upgrade of the legacy rail network is complete, the following maps show, in broad terms, how we can efficiently leverage off this resource to build a world quality and right sized extremely efficient Rapid Transit Network for Auckland over 15 years. Please note this only shows the top tier, separate right of way and high frequency Rapid Network. It is supported by and integrated with the New Bus Network, and other services. And of course it is designed to complement and operate separately from our widespread driving systems. Freeing them up for more efficient use.

CFN 2015

CFN 2020

CFN 2025

CFN 2030 South-Grafton

For more detail on each route see under Our Proposals above.

Airplane fares reveal the value of time… and the importance of choice

High airplane fares are in the media this week, as Air New Zealand is about to pay a special dividend after a 45% increase in profits. Some people have suggested that the airline should cut fares on regional routes instead. But how high are the fares, really?

The NZ Herald investigates the question of high fares in an article on airplane fares. As it turns out, their analysis is a quite good illustration of a central issue in transport evaluation – the value that people place on their travel time.

The Herald has compared the cost of Air New Zealand, Naked Bus and private car prices between North Island regional centres and Auckland or Wellington after Air NZ faced criticism this week for the price of its regional airfares. It found travellers could be paying more than 10 times more for the convenience of flying.

You’ll have to go read the article to see their summary table, but it looks as though airplane fares are generally competitive with the cost of driving – a bit higher on some routes, a bit lower on others. Intercity buses, on the other hand, can be up to ten times cheaper, but often take half a day to get to the destination.

The Herald finds that some people are willing to trade off time for money, but to my mind their examples don’t exactly prove that airfares are excessively high:

Massey University student Lauren Cornish is one of many who opt to drive because of what they see as unaffordable airfares.

The veterinary science student has been studying in Palmerston North city for six years but returns home to Auckland regularly.

In that time she has taken no more than five flights – instead opting for a seven-hour drive home more than 20 times.

“It is never economically viable to fly, ever,” she said. “If I get Grabaseat deals, they can be okay, but they are obviously very inflexible and it is still around $120.” Instead she pays $90 in petrol to drive one way.

Now, to me, spending $30 to save five hours in a car sounds like a fantastic deal! If I’m travelling on business, my time’s worth much more than that, so it’s highly economically viable to spend a bit more money on a plane ticket. However, there have been times when I’ve placed a lower value on my time – for example, when I was a student, I would go to great lengths to avoid spending my limited money. (Except on beer, for some reason.)

In short, comparing airfares to bus fares and the cost of driving doesn’t tell us much about whether Air New Zealand’s fares are too high, but it does nicely illustrate the way that different people may value travel time savings. For some people, it will make sense to spend more on airfares to save time; for other people with tighter budgets, cheap bus tickets are the way to go.

The important thing is that there are choices in the transport market. For intercity travel, different options are available to people who have different needs. But, oddly, we don’t offer a very good travel choices within our cities. In Auckland, it is easy to travel by car, which works well for people who prefer relatively fast, point-to-point travel and who can afford the up-front costs of owning a car. But much of Auckland is missing public transport, which is better for people who don’t want to (or can’t) pay the up-front costs of car ownership and don’t mind waiting for the bus. Similarly, we’ve made walking and cycling really hard, although walking is just about the only free travel option we’ve got.

In economese, the intercity travel market caters for heterogeneous preferences, but urban transport seems to have been planned on the assumption that we’ve all got the same preferences. So: what’s your value of time?

New Zealand can’t put the urban genie back in its bottle

Although the majority of New Zealanders have lived in towns and cities for almost a century, it sometimes seems like we’re in denial that we live in an urban nation. This unease came to the fore during the debate over the Auckland Plan and the Unitary Plan. As it turns out, some people are uneasy about Auckland’s emergence as a large and increasingly sophisticated city.

At that time, the NZ Herald published several articles calling for a “national population strategy” to forestall further growth in Auckland. Here’s one example from May 2013:

Redirecting people away from settling or living in Auckland would be a positive step. A good example is in Invercargill where students pay no fees. The fees at Auckland learning institutes should be increased and those elsewhere removed or reduced significantly.

[...]

As so much of the population increase is likely to come from an increase in births, a decrease is urgent. Incentives need to be provided such as free contraception, especially to those under 20 years of age. The provision of family benefits regardless of whether you have two or 10 children should be looked at.

Here’s another one from June 2013:

Short of putting contraceptives in the water supply we are unlikely to do much about our rate of natural increase – so realistically any policy needs to focus on migration patterns, particularly within New Zealand – the so-called “northward drift”.

Realistically we cannot talk about Auckland in isolation from the rest of New Zealand. We have no national population strategy – though some useful work has been done in the past. Neither do we have a regional development strategy, an essential mechanism for achieving a more equitable sharing of economic and population growth.

This is a seductive idea, but it won’t work. Developing policy to redistribute growth is bloody hard without spending massive amounts of money and tightly controlling economic activity. If we seriously tried to subsidise or regulate growth away from Auckland, we’d probably just end up misallocating resources and reduce our wellbeing. As urban economist Edward Glaeser is fond of pointing out, good policy should aim to help poor people rather than poor places.

Fortunately, we don’t have to speculate about the consequences of regional growth policies, as we have a real-world historical example to draw upon. From the 1930s to the 1980s, NZ tried a massive policy experiment – it invested heavily in regional development and used regulatory controls to spread investment and employment around the country.

Looking back on it, the reach of these regulations and investments is extraordinary. So, for example, you had:

  • Economically costly production and export subsidies for farmers were propping up uneconomic farms. By 1984, subsidies accounted for almost 40% of the average sheep and beef farmer’s income.
  • The Transport Licensing Act 1931, which banned trucks from moving goods more than 150 kilometres before its repeal in 1982. This imposed high costs to distance, encouraging small-scale local production rather than centralising plants.
  • Regulations that virtually prohibited the opening or closing of meatworks and other rural processing plants between the 1930s and 1980s. When the Patea meatworks closed in 1982, they were the first meatworks to close in half a century – which is bizarre when you realise how much cheaper refrigerated shipping got over this period.
  • A policy of distributing major industrial facilities around the country – an aluminium smelter for Bluff, a steelworks for Glenbrook, a pulp and paper mill for Kawerau, etc.
  • The use of the Railways Department and Forest Service as rural employment schemes.

So it’s worth asking whether these policies worked. We know that they were economically costly – but did they actually succeed in redistributing growth from Auckland to the regions?

The data suggests that the answer is no. Here’s a graph of population growth in New Zealand’s major cities from 1926 to 2006 from Grimes and Tarrant (2013). As it shows, Auckland’s population growth began diverging from Wellington and Christchurch early on – probably after World War II.

NZ city population growth 1926-2006

Furthermore, the almost total removal of rural subsidies during the 1980s doesn’t seem to have accelerated Auckland’s divergence. In fact, Auckland’s annual per capita growth rate seems to have fallen after deregulation, although growth slowed more in other places.

In short, we should accept the reality of urban growth: People want to live in Auckland and start businesses here for good reasons, and we can’t (and shouldn’t) try to stop them. The idea that we can put the urban genie back in its bottle is sheer fantasy. If we try, we’ll only make ourselves worse off.

Our only choice is whether we will have a good city – an interesting and prosperous place – or a crippled, unsuccessful city. Given that, our focus should be on making the best urban places we can. We need Auckland to be a dynamic and liveable city rather than an overgrown small town. And that means investing and planning in a city-like way: getting ambitious about rapid transit, celebrating our mixed-use public spaces, and accepting that density and amenity aren’t mutually exclusive.

Is this Auckland 2040?

Is this Auckland 2040?

 

Mayor’s Long Term Plan proposal released

This morning the mayor released his proposal for the Long Term Plan, which outlines the 10 year budget for the city. This is the first stage in a 9 month process.

Long-term Plan timeline

  • August 2014 – Mayor’s LTP proposal
  • December 2014 – Auckland Council adopts draft LTP
  • January and February 2015 – Public consultation on the draft LTP
  • April 2015 – Public hearings
  • June 2015 – Local boards adopt local board agreements and governing body adopts final LTP.

The proposal is available on the council website here. The proposal does not have a huge amount of detail, and more based around funding outlines with some major projects mentioned. Today I will just do a quick outline of the document, and we will follow up with more analysis tomorrow.

Screen Shot 2014-08-28 at 11.42.39 AM
Rates increases are 2.5% for the first two years, and 3.5% after that.
Screen Shot 2014-08-28 at 11.44.35 AM

Screen Shot 2014-08-28 at 12.29.40 PM Screen Shot 2014-08-28 at 12.29.56 PM

 

Here is what the document has to say about transport. Note that capital expenditure of $469 million, compared with $826 million in the 2014/15 Annual Plan. However this is going to be cut back by $150 million as we noted yesterday. This seems to be a mixed bag. Great to see City Rail Link still included. On the positive side good to see Penlink, other arterial roads and most of the oversized Park and Ride strategy cut back. However difficult to see how Lincoln Road is such a priority for upgrading, it is hardly lacking traffic lanes at the moment! Disappointing to see the North-Western busway pushed back even outside the 10 year timeframe. I’m sure this can be staged appropriately so we can see some good progress over the next few years.

Screen Shot 2014-08-28 at 11.45.24 AM

Transport represents the most significant proportion of our total budget – almost a third of our operating costs and over 40% of our capital budgets. The funding envelope in the baseline budget is a significant reduction in the capital programme in the current LTP and has an even more significant shortfall on the aspirations reflected in the Auckland Plan.

This baseline proposal includes major projects such as:

  • The City Rail Link
  • North Western Growth Area projects
  • Warkworth SH1 intersection improvements
  • The East – West connections
  • Lincoln, Te Atatu and Dominion Rd upgrades.

The full detail of the list will be the subject of discussion between Auckland Transport and ourselves over the next couple of months as part of fleshing out the draft LTP for consultation. The basis of that discussion will be the criteria by which we rank projects and getting a shared level of comfort with that process. Naturally I would want to see our strategic shifts towards public transport active modes strongly reflected in those criteria. However, the basic transport option is not what I believe Auckland wants or needs. It is an investment programme that will not solve our existing transport problems and in fact will see them get worse. Under current funding arrangements what we can afford involves foregoing a significant amount of transport investment that Aucklanders have told us they wanted through the Auckland Plan. We wouldn’t be able to deliver a range of projects including:

  • A majority of local and arterial roading projects across the region
  • Almost all of the park and ride projects currently programmed
  • The North-Western busway
  • Strategic projects such as Penlink and rail electrification to Pukekohe. I beleive Aucklanders want all of these projects and have an expectation that the entire transport programme contained in the Auckland Plan be delivered in the 30 year timeframe.

 

The plan also outlines a number of projects that will proceed as are needed to support growth including Special Housing Areas. That is something we have noted previously so is good to see this mentioned. Seems to be a little bit of a grab bag of projects though. Will need more than the Te Atatu busway station to support growth in the North-West, and not sure Drury station is a priority amid other capital cuts as will only be served hourly when Papakura station is so close and will have 10 to 15 minute frequencies.

Some examples of these projects are:

  • Watercare’s central interceptor project
  • Grade separation at Avondale
  • Tamaki Drive shared walking and cycling path
  • Work with mana whenua on redevelopment of Ruapotaka marae
  • Otahuhu aquatic centre and library
  • Improved public transport between Mangere/Otahuhu/Sylvia park
  • New Takanini library
  • Grade separation at Walters Road, Takanini
  • Te Atatu bus interchange
  • Westgate stormwater ponds
  • Lake Road, Takapuna streetscape
  • Train stations at Drury and Paerata
  • Manukau transport interchange
  • Ormiston library and community centre. 

Grade separation at Walters Road has been the hold up for Addision/Glenora station so hopefully that should allow that station there to proceed.

Overall I think need to wait for more detail to see effect of transport projects, and it will be interesting to see if Auckland Transport prioritises public transport within this reduced spend or keeps building lots of lower value roading projects.

Deferring Transport Projects

So what do you do when you’re told you have to cut some of your $826 million budget for capital projects and that in choosing what to cut it can’t apply to public transport projects?

Well it seems if you’re Auckland Transport you start by cutting PT and active mode projects.

Back in May when the council was discussing their budget for this year it was decided that Auckland Transport should reduce capital expenditure spend. At the time Chris Darby managed to get this amendment passed saying that the cuts won’t impact on PT.

MOVED by Cr C Darby, seconded by Cr PA Hulse:
Cr Darby moved by way of amendment, seconded Cr Hulse.
That the Budget Committee:
i) agree that the $5.1 million transport opex increase is dedicated to public transport and the $50 million reduction in transport capex will not be applied to public transport.

But it seems the $50 million isn’t enough if the council wants to keep to Len Brown’s goal of having rate rises next year average 2.5%.

  • On 26 March, staff provided the results of financial modelling in response to the mayoral direction for the LTP 2015-2025. One conclusion from this analysis was that it is not possible to reduce the average rates increase for 2015/2016 down to 2.5 per cent solely by reducing or deferring capex in that particular year.
  • The lagged impact of changes in the capital programme on operating budgets means that reducing or deferring capex in 2014/2015 will have a greater impact on rates for 2015/2016. The Budget Committee therefore agreed on 8 May 2014 to request the Chief Executive undertake an immediate review of 2014/2015 capex programme with a target of reducing or deferring $300 million of capex.

The cuts mean Auckland Transport has to find $100 million (which goes up to $150 million once NZTA subsidies are included). They don’t say all the items they’ll cut but the ones named are all PT projects.

The targeted reduction can be achieved via the reduction of budget across all transport activities. Projects such as Parnell Station, the Pukekohe Station upgrade and bus and transit lane improvements may have to be deferred to the LTP period. The Auckland Transport Board will consider the current capital programme to confirm which projects may be stopped, reduced or deferred to the LTP in order to minimise negative impacts on Auckland Plan outcomes. An updated 2014/2015 capital programme will be provided to the CCO Governance and Monitoring Committee in November.

It seems the only projects specifically named as being deferred are those that PT projects which goes against what the council asked for in the first place. Further projects like bus and transit lane improvements are often some of the cheapest and highest benefit projects. An example of this is the recent extension of the Fanshawe St bus lanes resulted in lots of full buses being sped up in the evening for what I understand was a fairly minor cost. In saying that I can live with the Silverdale Park and Ride (which is having issues of it’s own to sort out first) and can also live with Parnell to a degree.

Here’s the total list of capital projects in the current annual plan.

AT Funding - 14-15 - PT

AT Funding - 14-15 - Parking

AT Funding - 14-15 - Roads 1

AT Funding - 14-15 - Roads 2

It seems to me there are a lot of other projects on the list that should be being cut before $2.5 million bus lane improvements, for example Lincoln Rd or Penlink.

For their part the council passed a (much weaker) resolution saying that AT should take into account the councils priorities around PT and active mode outcomes however based on past performance I wouldn’t hold up hope of AT actually listening to that.