Additional Harbour Crossing ill-considered and over-rushed.

We are increasingly concerned that Auckland is in the middle of very poor process where by far the nation’s biggest ever infrastructure project is being forced along and at ill-considered speed without anything like the level of public participation nor detailed analysis that it should have.

AWHC Sulhur Beach

NZTA are relying on a 2008 study into possible future harbour crossings to just get on with designing and designating a road only crossing. This study started with the assumption that any additional crossing would be a road lane crossing. No kind of comparative analysis of all options like the Centre City Future Access Study that was done to be certain that the City Rail Link is the right mode and route for that need has ever been undertaken.

Looking at the current options across the harbour it is clear that the highest capacity urban transport mode is what’s missing. There are 13 general traffic lanes across two bridges, and some passenger ferries, but no dedicated Rapid Transit route. We hold that it is absolutely necessary to do a proper comparative analysis between modes for the next harbour crossing before any designation or final design work is undertaken, and have been consistent in requesting it. We are not claiming to know what the outcome would be but that it is frankly irresponsible to proceed any further without such a study.

Particularly as a great deal has changed since 2007 when that report was commissioned. Aucklanders have proven that they are just like city dwellers everywhere else in the world and are very keen to use good quality Transit systems when they get the chance. Since the upgrade and electrification of the existing rail network we have been piling onto our new trains at a rate well in advance of expectations. The Northern Busway too has excelled expectations even though it has to share lanes with general traffic on the bridge and therefore is not as Rapid as a dedicated route would be. These two top tier systems are attracting riders at a rate of 20%+ year on year, and while there is relief ahead for the rail network with at last the CRL underway, there is no plan to deal with an ever rising flood of buses into the city centre with this hugely expensive project.

The line that ‘Aucklanders just love their cars’ as an excuse to not provide quality alternatives to driving has been forever proven to be the nonsense it always was. Aucklanders are the same as everyone else; we love what ever works well for our needs. So when we get options like the example below from Panmure for reliable fast travel we take it.

Pete Clarke Panmure

Furthermore it is well understood that it is the quality of the alternatives that govern the speed and reliability of the surface routes. So that in this example the car and bus speeds and reliability would be much worse without the separate Rapid Transit alternative. The same will be the case for across the harbour; a great alternative means freer roads, another driving route means more cars everywhere; more congestion See here for a discussion on this:

There’s good science to back up the commonsense view. It goes like this: public transport operates to a fixed speed, a timetable. Most people will take whichever transport option is fastest. They don’t care about the mode. If public transport is quicker they’ll catch a train or a bus, freeing up road space. If driving is quicker, they’ll jump in their car, adding to road congestion. In this way, public transport speeds determine road speeds. The upshot is that increasing public transport speeds is one of the best options available to governments and communities wanting to reduce road traffic congestion.

Additionally the commitment to this road only crossing is made before the completion of the Western Ring Route, the current multi-billion dollar bypass for cross harbour traffic. It is also being made without any kind of business case. Existing estimates are up to $6Billion dollars for a return of 30-40 cents on the dollar. This desperately needs proper and thoughtful analysis, without the ridiculous haste from politicians.

All over the world cities are kept moving by building high capacity spatially efficient Transit systems. Auckland is simply at the point where it can no longer delay adding this essentially weapon to its arsenal of movement options. From statements by NZTA they agree that a Rail crossing is required but they insist, without any analysis or study, that this must come after another road crossing.

Three road crossings, and no more spatially and energetically efficient option? We would like to see analysis of what reversing this timing could achieve. What if the next crossing is high capacity electric rail? Especially driverless low operating cost rail.

  • What are the outcomes for traffic congestion across the wider city?
  • For land use?
  • For the local environment?
  • For Carbon Emissions?

We know that the people constantly say they want extension of quality Public Transport:

AA LTP Survey - PT v Roads

Survey of Automobile Association members

The public deserve to have a say in what is being done in their name and with their money. There are so many questions. NZTA know that this project will flood the city centre with cars and that there is simply nowhere for them to go. They also quietly discuss levels of tolling on both the new crossing and the old bridge. This massive project will not only soak up huge sums of investment funding closing off opportunity to make other decisions across the city and nation, but also induce more traffic everywhere on Auckland’s roads. It is also the reverse of future proofing as it commits us all to more driving:

AWHC - Induced Demand

The road only crossing is a huge Traffic Inducement scheme, as NZTA explain in this slide.

To claim all environmental and traffic congestion concerns can be waved away because of future technology is very weak. That argument suggests that the time to build this kind of infrastructure is when we all do have electric cars, not on the prospect of their arrival some time in the future. And if driverless cars are to be that revolutionary then perhaps all this expensive additional road space will not be required? Meantime there is current electric and driverless technology that can be invested in right now.

In Vancouver the SkyTrain mass transit system shifts 117m people per year, at frequencies often down to a train every 2 minutes, running from 5am to 1:30am daily and all at an operating surplus. Driverless, Electric Light Metro. North Shore people have already shown they are not too posh to bus, they certainly won’t be reluctant to use a quicker, quieter, cleaner, more direct, 21st century movement system like this.

skytrain-millennium-line-wide

 

The end of Auckland’s old growth model

The New Zealand Council for Infrastructure Development’s public shark-jumping exercise the other week got me thinking. While their flagship policy of a new megabillion eastern tunnel project is a bit mad, their report does a reasonable job of diagnosing one of the core problems facing Auckland. That is, the city’s land-use and transport plans are not always well aligned.

That’s illustrated nicely in their maps of intensification opportunities around rail stations – red circles indicate places where apartment and townhouse development is generally discouraged under the draft Unitary Plan.

NZCID - ATAP response - Land Use Train

In short, we’re fixing our city’s rapid transit network – and it’s long since time we did that! – but we may need to do more to get the best out of the investment by enabling intensive development around train stations.

As a point of contrast, I recently visited Sydney on the way back from a work trip to Australia and spent a day wandering around the city looking at stuff – it’s a great walking city. And I’ve got to say: they don’t waffle around with upzoning there. When they choose to redevelop a brownfield area, the debate isn’t between whether two or three storeys should be allowed. The question is whether to go ten, twenty, or thirty storeys. And they’re willing to back that up with new rapid transit where needed.

Auckland is different. We build rapid transit infrastructure haltingly, in fits and starts, and when governments choose to accelerate road projects, busways are left to progress through the queue. And while the Unitary Plan is a fine step forward, it’s really just the start of the conversation about how we should modernise our planning rules for a 21st-century city.

But change is needed. Because, as NZCID’s report unintentionally illustrates, Auckland’s arrived at the end of its growth model of the past 50 years. It’s kaput. We may be able to kludge it back into action for a bit, but make no mistake: it will seize up again. And so we need to design a new growth model.

The old growth model was as follows:

  • Build some roads and water pipes out into the countryside
  • Build some houses on the paddocks this opens up for development
  • Repeat when necessary.

This isn’t necessarily a bad model. It’s simple, and it works reasonably well provided that some schools and shops and jobs move outwards as well. But it’s got some subtle pathologies – e.g. street networks that preclude future transport choices, environmental impacts, etc.

And, more importantly, this growth model is inherently self-limiting in a location like Auckland. There are two reasons for this:

  • First, geographic constraints. Auckland is situated on a narrow isthmus between two harbours. We run out of proximate land for housing much more rapidly than other cities – which means that we must build up much more rapidly than other growing cities.
  • Second, the spatial cost of road transport. Geography gives Auckland many pinch points – over the Waitemata Harbour and across the portages at either edge of the isthmus. It’s intrinsically challenging to keep pumping cars through narrow pinch points. Adding motorway lanes will only get more costly in the future – as NZCID’s eastern motorway proposal demonstrates.

We can’t avoid the consequences of these constraints by metamorphosing into a polycentric city… because that’s already happened. Only one in five jobs is located in the city centre and fringe. The rest are elsewhere. If there are major gains to be had from dispersal, we have already achieved them. We can’t count on more of the same to help us escape the geometric realities.

And here’s the thing: If we insist that we must keep on doing more of the same, we will instead do nothing. If it is truly necessary to build something like NZCID’s eastern motorway tunnel to enable urban growth in Auckland, we probably won’t grow. It’s not feasible to spend a decade of Auckland’s transport infrastructure budget on a single road. (And it’s not ethical to borrow the money from future generations, who don’t have a say in what gets built.)

So we need a different growth model. I don’t have all the answers – who does? – but here are a few thoughts on what that might look like, focusing on the transport infrastructure part of the picture. (Elsewhere, I’ve discussed the role of pricing and the need to rethink policies that limit housing choice.)

First and foremost, we must recognise that this growth model is self-limiting due to its reliance on a single transport mode – cars. Cars are great for lots of things, but they occupy a lot of space both when in motion and when sitting around. This is not an advantage in a city as geographically constrained as Auckland.

If we invest in a way that ensures that all new entrants to the city must use cars for most travel, then it will come back to bite us. If people know that new housing in their neighbourhood will inevitably mean more people parking in their preferred spot on the street, they will oppose it. (No matter how mindlessly hypocritical it is to claim a property right over a public street!) If they know that a new suburb on the edge of town will mean more cars jostling for space on the road during their morning commute, they will oppose it.

And if they’re presented with the bill to build all the new roads needed to keep the cars flowing, they’ll vote against it. Roads are expensive, and people don’t like it when their rates go up.

Second, we must recognise that there are alternatives. Public transport and cycling can offer great mobility at a much lower spatial cost than cars. If we want to increase mobility in a growing city, we need to make much greater use of these transport modes.

Litman-space-required-by-mode

It can be challenging to make the transition, as developing these networks means thinking about infrastructure and transport services differently. It means paying much more attention to how humans may behave out there on the street – i.e. what will make them feel safe in a cycle lane, or what will make it possible for them to transfer painlessly between buses. But it’s fundamentally possible.

Third, one key consideration when building these modes is that they should be built in advance of growth, so that they can lead and shape development rather than trying to catch up with it. At present, we very much take a “roads first” philosophy to greenfield areas – i.e. building lots of lanes on day one, and coming back years later to retrofit public transport to address the resulting congestion.

The perverse consequence is that this locks in a largely car-dependent urban form on the edge of the city, exacerbating the self-limiting features of our current growth model. Unwinding that is costly and difficult. A “rapid transit first” approach would save us a lot of that trouble.

Fortunately, as Matt highlighted in a recent post on Auckland Transport’s consultation on transport for future urban growth, that’s a realistic option. We’ve got the ability to develop rail stations in Drury and extend busways to Silverdale and Northwest Auckland.

TFUG - Draft Preferred Plan - South

But change doesn’t happen of its own volition: policymakers have to choose to change. So here’s a simple message: If you start a sentence by saying “we need more land for housing…” the next words out of your mouth should be “… and therefore here are some rapid transit investments we should make to support it.”

Removing the RUB won’t necessarily work as planned

Yesterday Phil Twyford announced that it would be Labour’s policy to abolish Auckland’s Rural Urban Boundary (RUB), as part of a policy to improve housing affordability.

Labour wants the Government to abolish Auckland’s city limits to get people out of cars, caravans, garages and tents.

Labour housing spokesman Phil Twyford said the urban growth boundary had to go because it has fuelled the housing crisis and people would not be forced into bad circumstances if the Government acted.

“The Government should rule out any possibility of an urban growth boundary in Auckland Council’s Unitary Plan if it is serious about fixing the housing crisis,” Twyford said.

“Over 25 years the urban growth boundary hasn’t prevented sprawl, but it has helped drive land and housing costs through the roof. It has contributed to a housing crisis that has allowed speculators to feast off the misery of Generation Rent, and forced thousands of families to live in garages and campgrounds,” Twyford said.

“Labour’s plan will free up the restrictive land use rules that stop the city growing up and out. It will stop land prices skyrocketing, and put the kibosh on landbankers and speculators.”

There’s no doubt Auckland has a housing crisis at the moment, with house prices increasingly dramatically over the past five years. Rents rose more slowly but the impacts for some families are still alarming. There’s also no doubt that planning restrictions have played their part in creating this crisis – by making it too difficult to build the required number of houses that Auckland has needed.

Addressing regional scale issues like housing and transport was one of the key reasons Auckland Council was amalgamated in the first place and why one of its first tasks was to rewrite the city’s planning rulebook through the Unitary Plan.

But will abolishing the Rural Urban Boundary help? To answer that question it’s important to understand what the boundary is, and what it isn’t. As its name suggests, the RUB is the boundary between land where urbanisation is anticipated and provided for over the next 30 years and land which is intended to remain rural over that time. If you take a look at the map below, it is the black dashed line that separates the yellow-coloured “future urban” zoned land from the brown rural zones:

rub

It’s also important to recognise that the RUB doesn’t exist yet as it’s part of the Unitary Plan being decided by the Independent Hearings Panel. It’s quite a different tool to the old metropolitan urban limit (MUL) that was typically set up against the edge of the existing urban area and made any urban expansion a significant challenge.

The RUB, by contrast, isn’t designed as a permanent boundary. It provides for a substantial amount of greenfield growth – enough to meet 40% of Auckland’s growth over the next 30 years.  The scale of the areas in yellow is highlighted in an Auckland Transport video that looks at the future transport requirements to enable their urbanisation:

The main argument against the RUB is that it creates a scarcity of land where urbanisation is possible, which drives up the price of that land. Over time the high price of land translates into higher house prices and reduced affordability. Fair enough. But what can we actually do about that?

As Auckland Transport’s consultation video above shows, the RUB isn’t simply a line on a map: it’s a plan to provide publicly-funded infrastructure to new urban areas. If you wanted to expand the yellow future urban zoned areas on the map, you’d also have to find the money for additional infrastructure.

In other words, greenfield land is in scarce supply because it’s currently farmland that requires roads, pipes, train stations, parks, schools, hospitals and a myriad of other infrastructure investment to take place before development can actually happen. Making a dent in the housing shortfall by enabling more urban expansion to occur is therefore entirely about speeding up infrastructure, rather than whether or not there is a line on a map.

As we’ve talked about before, the costs of supplying bulk infrastructure to greenfield areas are large. It is time-consuming to investigate, design, consent and build these projects. There’s no quick and cheap way to make a whole heap more greenfield land “development ready”.

In fact, removing the RUB could easily disrupt existing infrastructure plans and slow down overall development. If you take a look at the work that’s been done on transport for future urban growth, the networks are optimised around the location of the RUB. Scattering small developments around the region could force AT and NZTA to react to piecemeal development rather than taking a more strategic approach to infrastructure development.

I suspect that the first thing to get cut due to funding pressure would be the city’s rapid transit plans, which have already been delayed long enough. This would have the perverse effect of putting a damper on the 60-70% of development that’s intended to occur within the existing urban area.

TFUG - Draft Preferred Plan - Northwest

In short, abolishing the RUB isn’t a straightforward proposition. It’s not actually obvious that you could abolish it, as infrastructure plans would simply turn into a de facto RUB.

Ironically, Twyford acknowledges as much in his press release, where he says:

There is a smarter way to manage growth on the city fringes by properly integrating land use with transport and infrastructure planning. There should be more intensive spatial planning of Auckland’s growth areas in the north, north-west and south. Land of special value can be set aside, like the northern coastal strip or Pukekohe’s horticulture soils. Corridors should be acquired and future networks mapped for transport and other infrastructure

Let’s unpack this. First, he says that he’d like to see “intensive spatial planning of Auckland’s growth areas” with “future networks mapped for transport and other infrastructure”. That sounds a lot like the process that Auckland Council and Auckland Transport are currently undergoing for the yellow-coloured future urban land.

Second, he says that “land of special value can be set aside, like the northern coastal strip or Pukekohe’s horticulture soils”. That sounds a lot like some sort of boundary between urban land and non-urban land, which is exactly what the RUB is intended to be. Basically, if you read beyond the headline soundbite, Twyford’s policy starts to sound a lot like Auckland Council’s current policy, just under a different name.

That shouldn’t be a surprise. After all, the current government has been looking at this issue for half a decade now, and they’re pretty critical of restrictions on land supply. If it was a simple matter to abolish the RUB, they probably would have done it by now.

So what could we do differently?

There aren’t necessarily any “magic bullet” solutions to land supply. Greenfield land needs infrastructure to be useful, and infrastructure is expensive and slow to build. Shifting some of those costs onto developers, either through development contributions, targeted rates, or design rules that reduce the need for hard infrastructure (e.g. stormwater pipes) can allow more of it to happen. But the problem is that the developers push back, which limits the gains that can be had in this area.

Consequently, other policies are also needed to enable housing supply. That means relaxing or removing restrictions on building height and density within the urban area. While Tywford and Labour have also said they support this approach, they devoted only a single sentence to it:

Freeing up growth on the fringes needs to go hand in hand with allowing more density – so people can build flats and apartments in parts of the city where people want to live, particularly around town centres and transport routes.

That’s a great aspiration, but to be useful it needs to be backed up by specific policies to limit the use of height limits and other density-killing rules like minimum parking requirements. For example, would Labour lift building height limits throughout the urban area? If so, how high?

Lifting building height limits and density controls would have some immediate benefits for housing supply. For one thing, the transport networks and water pipes have mostly already been built, meaning that there’s no lag time waiting for the infrastructure providers. For another, it would make the housing market a hell of a lot more competitive by opening up lots of new development opportunities in the places that people most want to be.

This would also have the benefit of allowing people to avoid the high transport costs associated with sprawling development patterns. Even given Auckland’s dispersed employment patterns, the further out from the centre people live, the further they need to travel to work. This map from a Ministry of Transport analysis of the 2013 census data which shows how far people travel to get to work based on where they live:

This trend is repeated around the world, with more spread out cities requiring a greater amount of travel and, consequently, a higher proportion of income being spent on transport. In some cases this can end up outweighing any savings in housing costs. If we’re going to lift restrictions on housing construction, it makes sense to prioritise lifting the ones that also pose a barrier to efficient travel patterns.

Locked Out

6:45pm tonight at the AMI Netball Centre Northcote there is a housing affordability debate with some interesting speakers, head along:

Locked-Out-twitter-image

 

Subsidies for Electric Vehicles – How do you like them lemons?

*** Note: This post has been updated to correct errors in the initial version. Correcting these errors has not, however, affected the conclusions ***

Imagine, for a moment, that I was trying to sell you a bag of organic lemons. Now imagine that my bag of organic lemons costs 25 times the normal price. They’re very good ***organic*** lemons, I would say, while flashing a Simon Bridges smile. Well-fertilized by a lovely labradoodle called Lexie, I might add.

When confronted with such a scenario, I imagine (hope) that most of you would tell me to stick my organic lemons somewhere nice and dark. Like Norway.

P1000993

View of Bergen, Norway

How is this relevant to EVs? Well, the Government has just announced policies to subsidize uptake of electric vehicles (EVs). The Government is subsidizing EVS so as to reduce carbon emissions. A noble objective, you might think. Except for one small problem: My analysis suggests the Government’s is paying 25 times more to reduce emissions via EVs than what it’d cost to reduce emissions via other channels. Put another way, if we took the money being used for EV subsidies and instead used it to offset carbon emissions elsewhere in the economy, then we’d be able to buy 25 times more for our money.

Doesn’t sound like a very good deal does it? Let me first present some numbers to support this conclusion.

First, let’s consider the benefits side of the EV subsidy equation. Information available on the MoT website suggests (from my reading) that the main objective of the Government’s EV subsidies is to reduce emissions from transport. To achieve this outcome, the Government is proposing a suite of measures (subsidies) that are designed to increase the number of EVs on New Zealand roads from approximately 5,000 now to 64,000 in 2021. Of course, under a counter-factual (do-nothing) scenario the number of EVs on NZ roads would also be expected to increase, simply because EV technology is improving over time. For the sake of this analysis let’s say that under the counter-factual scenario (i.e. in the absence of the Government’s subsidies for EVs) we’d see an additional 10,000 EVs on NZ roads. From this we can deduce the Government’s subsidies cause a ***net*** increase of 50,000 EVs.

Second, on the cost side of the equation we find that two of the nine policies are costed at $42 million per annum in 2021. However, we’d expect the cost of the subsidies to start off low and ramp up progressively over the five year period, as more people buy EVs. Let’s assume the subsidies amount to an average of $20 million p.a. over 5 years, or $100 million in total. Let’s also keep things simple and use undiscounted monetary values. To sum up, the Government’s subsidies for EVs amount to spending approximately $100 million over 5 years, which is expected to result in an additional 50,000 EVs on NZ roads. This subsidy can be broken down further: $100 million divided by 50,000 EVs equates to $2,000 per EV, which over five years amounts to $400 per EV per annum. If we further assume an individual EV will be driven an average of 12,000km p.a., then we find the subsidies amount to approximately $0.03 per kilometre travelled.

So what do New Zealand taxpayers get for this investment? Or more specifically, how much of a reduction in CO2 emissions do we get from this investment? The Government’s analysis suggests that EVs will save 0.15 kg CO2 per kilometre traveled compared to a normal car. At 12,000 km p.a. this equates to 1.8 tonnes of CO2 saved per vehicle per annum. If we then apply the current carbon price of NZD $10 per tonne, then we find the Government’s EVs subsidies cost approximately 25 times more per year than the market value of the carbon emissions that they save.

I want to pause for a second to let this sink in: The Government’s EV subsidies cost 25 times more than what it would cost to reduce emissions in other ways. Oh. Dear.

Some of you may argue that a carbon price of NZD $10 per tonne of Co2 is too low – and I’d most definitely agree. Recent research suggests a carbon price closer to $200 per tone would be more accurate. However, I think it’s worth keeping in mind that the current carbon price is the direct consequence of deliberate policy decisions implemented by this Government over the last 8 years. Specifically, the Government has chosen to give out large volumes of free carbon credits, which have suppressed the price of carbon. Hence, I’d argue that the current carbon price at least reflect the Government’s views on how much New Zealanders should be paying to reduce carbon emissions.

Other people who are reading this may be thinking that I simply can’t be right. That somewhere I’ve missed out some zeros, or got a decimal point out of place. Perhaps I’ve been doubling-down on a few too many space-cakes here in Amsterdam, and/or skipped a few too many economics classes.

To try and get an independent perspective on my calculations I undertook some further research into the impact of EV subsidies in other countries. In doing so I stumbled across a very interesting paper titled The Norwegian support and subsidy policy of electric cars. Should it be adopted by other countries?, which was published in 2014 in Environmental Science and Policy.

This paper evaluates Norway’s subsidies for EVs and concludes (pg. 167; emphasis added):

Our main conclusion is that the Norwegian EV subsidy policy should be ended as soon as possible, and that this policy certainly should not be implemented by other countries. The solution to the GHG problem of the transportation sector in the next few decades in a world in which the GDP and population growth are the main drivers of the road traffic volume (Bosetti and Longden, 2013) is not to offer subsidies making it cheaper to buy and run EVs, or other alternatives, but to introduce more taxes and restrictions on car use. There are simply too many social costs associated with car transportation (Sterner, 2007). The subsidization idea, which informs so much of environmental policy today, not least within Europe, is ineffective, has several unintended consequences and will in many cases be counterproductive (Helm, 2012). The Norwegian policy for the support of EVs is an example of this.
Reading further, one finds that the authors have reached this conclusion based on an analysis of emissions savings from Norway’s EV subsidies. And guess what? They find the cost of the subsidies was approximately 2,700 times higher than the equivalent cost of offsetting the same amount of carbon (pg. 167; emphasis added):

Under certain reasonable assumptions, we then find that the EV subsidy package that the single EV owner gains amounts to about 13,500 USD/tCO2. As pointed out, this is about 2700 times higher than the current CO2 emission price. Therefore, under similar assumptions, subsidizing 20,000 EVs adds up to the value of more than 50 million permits, or about the present yearly GHG emission in Norway. Rather than supporting EV owners, the Norwegian Government could have bought emission rights in the same amount in the quota market and kept these rights unused, meaning that the quota supply would actually have shrunk. This would have driven the quota price up and possibly contributed to a technology push along different lines. At the same time, this measure would have made Norway ‘carbon neutral’.

Also contained in the paper is some interesting information on who seems to benefit from EV subsidies (pg. 167; emphasis added), with the authors commenting as follows:
It is widely believed that this EV policy will result in less energy consumption based on fossil fuels and a reduction in the local emission and noise problems. However, our discussion and analysis show that unfortunately the issue is not that simple. One of the most worrying aspects of the current EV policy incentives in Norway is that they motivate high-income families to buy a second car. At the moment, two-car households make up a minority. However, if two cars per household become more common, they will pose an environmental challenge across several dimensions and will doubtless mean that the EV policy as a GHG emission reduction instrument is totally missing its point.

“Totally missing its point” is not something you read in academic papers everyday. It’s worth mentioning that political parties in Norway recently reached consensus on rolling back EV subsidies, by removing EVs’ ability to use bus lanes and lifting their exemptions from tolls.

If you’re looking for a sound-bite from this post then this is it: The Government is proposing to spend $100 million to subsidize wealthy households to buy electric cars in order to achieve a relatively paltry reduction in emissions.

At this point I should point out that the Government is not alone in proposing that the New Zealand taxpayers subsidize EVs. The Green Party, for example, has also proposed removing FBT from EVs. While I haven’t evaluated their policy in any detail, on the basis of the numbers I’m seeing here I’d be ***extremely*** skeptical about the effectiveness of such a policy, especially when considered from an environmental and social justice perspective.

To finish, I want to make two moderating comments in relation to my criticisms of EV subsidies.

The first caveat is that I think EV technology is really cool and has a lot of potential to make our lives better. However, observing something is a “cool technology” is not sufficient reason to implement subsidies. Call me square if you will, but I personally believe that good policy should try to 1) achieve its stated outcomes and 2) to do so in an effective manner. Spending $100 million for what appears to be little gain seems to fall outside of this definition of “good policy”..

The second caveat is to acknowledge that EVs have benefits which extend beyond carbon emissions, and include things like air quality and noise benefits. These benefits should definitely be considered as part of a detailed benefit cost analysis. However the onus for demonstrating these benefits, I would argue, lies with the Government / MoT – not some strawberry-blonde punk blogger like myself. Specifically, the Government should really be doing detailed benefit cost analysis before announcing policies. For this reason I think it’s fair for us to evaluate Government policies in terms of their stated objectives.

Notwithstanding these moderating comments, my conclusion is that the Government’s is spending about 25 times more on EVs than they should.

Personally, I feel like this is a shame because I would love to see New Zealand take some serious steps towards reducing carbon emissions. The EV policies announced by the Government, however, do not qualify as a serious step. I’m left with the distinct impression that these EV subsidies are a superficially attractive way (“greenwash”) designed to distract New Zealanders from what is a very real problem: Our carbon footprint is too damned high.

P1000846

NZCIDs Transport Report

Yesterday I highlighted the crazy road obsessed plans of the infrastructure lobby that were hinted at in a report they were about to release. That report has now come out and so I thought I would look at it in a bit more detail. While there is much to be concerned about, there are some things we agree with too. First a few general comments

The press release talks about the report as being a way to provide independent input into the Auckland Transport Alignment Project (ATAP). This is quite funny as the majority of the graphs, and figures they quote come are cut and pasted from the Auckland Council, Auckland Transport, NZ Transport Agency or the Ministry of Transport, the four agencies at the centre of ATAP. Some of the information even comes directly from the ATAP foundation report.

There also seem to be a lot of contradictions within the report, they’ll make a fairly accurate statement (often similar to what we may say) about a project or piece of analysis but they’ll then hand wave that away and ignore it when coming up with their conclusions. I’ll cover some of these within the post.

On Public Transport

Throughout the report there is a lot of discussion on the role of public transport and the NZCID make a number of astute observations about PT and how it is assessed. Examples include how odd it is that for processes like ATAP that PT is treated differently to cars in the modelling, as if PT users time don’t consider their time as important.

Also significant is the fact that public transport accessibility is modelled on a 45 minute door-to-door commute. Cars, on the other hand, are modelled on a 30 minute door-to-door commute. The need to assume an additional 15 minute or 50 per cent travel time for public transport is understandable in light of the need for users to get to and from services, but there is no evidence that it meets user expectations. It is not clear that the majority of transport users consider an additional 15 minute or 50 per cent travel time to be a truly viable alternative.

A common refrain from many is that building more carparks at train/busway stations is needed to significantly boost patronage and it’s also something mentioned in their press release. However this is actually a bit at odds with their report itself which while enthusiastic on PT, notes that it isn’t cheap to more capacity, that people should be charged to use carparking spaces through their HOP card and also doesn’t add all that much to PT usage.

Doubling park-and-ride capacity region-wide will only yield an additional 2,200 spaces, likely adding no more than 4,400 trips per day, or around 2 per cent to existing patronage

Given the conclusions they’ve come to over P&R it’s amazing that they then say it should be vastly increased.

Equally odd is that they seem to come to the overall conclusion of “it’s crap so we might as well invest in roads instead”. If the investment in PT is as poor as they suggest then why has almost no effort has been made to look and see if there are any better was to invest that other than through more roads.

The levels of service required to lift public transport patronage by attracting users away from private vehicles are unaffordable and will deliver less value for money than extensions of the road network.

On Land Use

The report’s discussion of Land Use is perhaps one area where I’m in quite a bit of agreement. They quite rightly note that through the Unitary Plan, not enough growth has been enabled in areas with the best planned public transport such as along some of the train lines and the busway.

Figure 36 shows Unitary Plan growth provisions on the Auckland isthmus and rail stations. Circle sizes indicate an approximate 10 minute walk to rail services. Development should, if Auckland’s very significant sunk investment in rail is to be maximised, be permitted inside these circles as a means to improving the convenience and attractiveness of public transport.

In reality, significant land use change around the majority of stations on the isthmus – the area where demand for land is highest and where most growth under a compact model should in theory be accommodated – is not permitted under the Unitary Plan. The type of development activities which would benefit from access to rail, such as residential apartments and town houses, are only substantively permitted around 11 of the 24 stations on the isthmus (indicated in green). Development change is generally prohibited around 6 of the stations (indicated in red) and a further 7 permit some degree of change (indicated by orange circles).

NZCID - ATAP response - Land Use Train

They also highlight the relative lack of development allowed around the proposed light rail routes

NZCID - ATAP response - Land Use LRT

 

The lack of high quality PT up the Pakuranga Rd corridor

NZCID - ATAP response - Land Use AMETI

The lack of development allowed around the Northern Busway stations with more development allowed along the Onewa and Glenfield Rd corridors.

NZCID - ATAP response - Land Use Northern Busway

In the south they suggest Greenfield industrial land could allow for current industrial land around stations to be redeveloped, one example sited is around Te Mahia where they say the “low value industrial land around the station” could have been rezoned to tie in with improvements to the station and the golf course development which they criticise as not being dense enough.

They say (like we have before), that only the West has significant levels of growth permitted around stations and elsewhere like on the Te Atatu Peninsula. But they also say that the growth there is poorly aligned with the priority of transport projects (i.e. Northwest Busway) and the business cases for the investment in the PT needed will be undermined by the lack of development allowed closer to the city.

 

Ultimately they say that if we want more people to use PT we either need to go down one of the following land use/transport options

  1. Growth distributions remain the same, infrastructure and services change
  2. Growth distributions change, most infrastructure across city remains the same, new infrastructure concentrated in dense new public transport-oriented centres

On that second point they suggest building a new dense city for 100,000 people and 30,000 jobs on greenfield land somewhere in South Auckland

Build more roads

Ultimately much of the NZCID’s suggestions come down to the mantra of build more roads, even going so far as to suggest that we’re too auto-dependent so should just keep building more roads anyway while also claiming that will stop congestion getting worse.

Aligning land use provisions with current and future transport investment will go some way to alleviating pressure on Auckland’s congested road network. Integrated policy cannot, however, undo 70 years of investment and development, nor can it completely remove the need for road travel. Capacity in the road network is the only means to stop congestion expanding further into the interpeak, impeding commercial movement, and emerging through weekends and the off-peak, undermining liveability, social opportunity and the attractiveness of Auckland as a destination for labour and investment.

And that motorways are magic economic machines.

Motorway capacity is essential because motorways generate economic activity.

That then leads to a number of projects they think need to be built, most of which are associated with the Eastern Ring Route we highlighted yesterday. These projects include

  • Making the Mill Rd project bigger and grade separating it so essentially a motorway.
  • The Additional Waitemata Harbour Crossing to longer connecting to the east of the city
  • The Eastern motorway which they say would need to be underground (to avoid angering the locals)
  • Linking in the Eastern Motorway with Te Irirangi Dr and turning that into a motorway using money destined for the AMETI busway.

Here’s what they say about the AWHC and Eastern motorway. They are quite correct that the AWHC as it stands is a poor outcome but doubling down and making it bigger it is definitely not the answer. Also providing new links between Northland and the Waikato is exactly the purpose of the Western Ring Route that isn’t even finished yet.

The proposed Additional Waitemata Harbour Crossing is throttled at both its northern and southern termination points, constraining its potential. It cannot connect new businesses and communities and it cannot lift the opportunities for the region, as its predecessor, the Auckland Harbour Bridge has done. Consequently, it cannot deliver economic and social benefits consistent with its high cost and these limitations are highlighted by conventional cost benefit analysis which shows a return of 40 cents for every dollar invested.

An Additional Waitemata Harbour Tunnel landing to the east of the CBD may be able to do better. Connecting with State Highway 16 south of the Port of Auckland and continuing underground to protect environmentally sensitive estuary habitats around the Orakei Basin, an Additional Waitemata Harbour Tunnel can become the new lynchpin for an entire network linking Northland and Waikato, Albany and Penrose, Glen Innes and the CBD.

Lastly they blame some of Auckland’s issues on the fact we never fully completed the 1960’s motorways plan from consultants De Leuw Cather which included projects such as the Dominion Rd motorway and a New Lynn to Henderson motorway

NZCID - ATAP response - De Leuw Cather

Of course they forget to mention the corresponding PT network that De Leuw Cather said should be completed first

De Leuw Cather Report 1965: Rapid Transit plan for Auckland

De Leuw Cather Report 1965: Rapid Transit plan for Auckland

They extend that and superimpose motorway networks from other cities to say that Auckland’s motorways aren’t extensive enough. Of course in most of those cities the motorways are rural roads and not driven through the heart of the city

NZCID - ATAP response - cities motorways

Overall there are a few things in the report we agree with but it’s mostly just about trying to justify a heap of roads. If PT isn’t good enough then they should be proposing to dramatically fix that rather than just accepting it and saying build roads instead.

 

Congestion prices, carbon taxes, and the art of the possible

If you ask an economist about transport policy, it’s a certainty that they will mention congestion pricing at some point. It’s easy to see why. Currently, we manage our roads like a Soviet supermarket: access is rationed by queues rather than prices. As a result, we get inefficient outcomes.

latvian-bread-line

The New Zealand transport system?

The theoretical and empirical case for congestion pricing is strong. In places where it has been implemented, such as London and Stockholm, it has increased vehicle speeds, improved accessibility, cut pollution, and improved safety. Not bad.

Because congestion pricing works, it tends to become quite popular once people can see the results. Although a majority of Londoners and Stockholmians opposed tolls at the outset, around 70% of residents in both cities now support them. But all of this raises a question: why haven’t more cities implemented congestion pricing?

I was thinking about this when reading a pair of articles that David Roberts (Vox) recently wrote about carbon taxes – and why they may not necessarily be the best policy for preventing climate change. Many of the points that he raises are also relevant to a discussion of congestion pricing.

In the first article, Roberts discusses the benefits of carbon taxes (efficiency) and the problems associated with applying them to complex markets. He argues that:

Believing a single tool will accomplish everything requires seeing the economy as a frictionless machine, a spreadsheet, not what it is: a path-dependent accretion of past decisions and sunk costs, to be tweaked and unwound.

As a result, it may make more sense to intervene more directly in specific markets – say, by regulating coal-fired power plants out of existence or subsidising alternatives. The equivalent in the transport space would be to manage congestion by cobbling together a raft of policies that look unrelated at first glance – e.g. transformative investments in rapid transit and cycling, bus lanes or high-occupancy-toll lanes on more roads, and higher parking prices.

In the second article, Roberts addresses a more challenging issue: politics and the art of the possible. He argues that carbon taxes are seldom effective in practice due to several factors that make implementing them and raising the tax to an effective level a risky proposition. These include concerns about distributional impacts, or the degree to which poor people will bear the impact, and low willingness to pay to avoid harms. Both of these factors seem potentially relevant to congestion pricing as well.

Roberts points out that many of the policy recommendations made for carbon taxes are economically sensible but respond poorly to political constraints. For example:

Many conventional economists, along with some of the few conservatives who take climate policy seriously, favor a “tax shift”: using the carbon tax revenue to reduce other taxes, preferably “distortionary” taxes like payroll or income.

The idea is that you double your impact: You get less of what you don’t want (carbon) and more of what you do want (work) — more efficient markets on both sides. Harvard economist Greg Mankiw is a big proponent of this perspective, as is Bob Inglis, one of the few conservatives actively working on climate change policy.

The main thing to note about tax-shift schemes is that they address few of the political barriers facing carbon pricing.

A carbon/income tax swap would be doubly regressive — raising a regressive tax to lower a progressive one. Reducing payroll taxes might have a net progressive effect, but it is very difficult to imagine the politics working.

In the past, I’ve taken a similar view on congestion charges. I’ve argued that we shouldn’t raise money from tolls. Rather, the revenues should be distributed back to households, and especially low-income households who might be most adversely affected.

But, Roberts suggests, offering to return the revenues will not necessarily make carbon taxes (or congestion pricing, I suspect) popular with the public. Instead, a more popular approach might be to tax something bad – e.g. carbon emissions or road congestion – and reinvest the revenues in something good, like renewable energy or better transport choice:

On the 2014 National Surveys on Energy and Environment, a carbon tax with no specified revenue use polled poorly. But things changed when different uses of the revenue were offered alongside the tax.

USA Today describes the results:

[A] different picture emerges when survey participants are asked about three possible uses of the tax revenue. If used to fund programs for renewable power like solar and wind, 60% back the tax overall, including 51% of Republicans, 54% of Independents and 70% of Democrats.

A smaller majority supports a tax if the revenue is returned to them via a rebate check. While 56% overall favor this idea, support ranges from 43% for Republicans to 52% for Independents and 65% for Democrats.

The third option — using the tax revenue to reduce the massive U.S. fiscal deficit — is not popular with any political group. It is opposed by the majority in each.

The same seems to hold true in the case of congestion pricing. In their excellent textbook on transport economics, Kenneth Small and Erik Verhoef cite surveys that find that people prefer toll revenues to be either reinvested in better road infrastructure or used to improve public transport.

This points to a paradox. The best way to get people to support such a scheme may in fact be to promise to put some tolls in place (albeit tolls that they can avoid by making different choices about how and when to travel) and then spend the revenues on giving them more transport choices.

Incidentally, I would stress the word choice in that sentence. There’s a reason why people want carbon tax revenue to be put towards renewable energy projects: it promises to give them options to avoid the tax altogether. In New Zealand, where 80% of electricity is generated from renewable sources, even a high carbon tax would have a small impact on households’ power bills. People in other countries would like to be in that same happy similar position.

The same is likely to be true for transport. If we implement congestion pricing, it might make sense to pair that with investments in public transport, walking, and cycling to allow more people to avoid the tolls. That will be more likely to lead to a win-win situation: People who value being able to drive on uncongested roads will get to pay a small price to do so, while everybody else will get to choose whether to pay the toll or travel differently.

What do you think about the politics of congestion pricing?

Government Neuter Bus Lanes

The government want to increase the currently dismal uptake of electric vehicles, increasing the numbers on our roads from about 1,200 to 64,000 in just 5 years. To do that yesterday they announced a package to encourage more people to buy an electric car. Most of the initiatives, such as extending the Road User Charges exemption on light vehicles and introducing an exception for heavy vehicles, are probably fine but one of the initiatives is completely nuts – letting electric vehicles us bus lanes and busways.

Northern Busway

Enabling electric vehicles to access bus and high occupancy vehicle lanes

Access by electric vehicles to bus and high occupancy vehicle lanes (lanes where a vehicle must have more than a certain number of occupants) will be of value to households and businesses. Access to such lanes will mean electric vehicles will be able to travel more quickly than vehicles otherwise held up in traffic.

At the same time, the changes will also empower road controlling authorities to allow electric vehicles into special vehicle lanes (such as bus lanes) on their local roading networks.

The Government will make changes to the Land Transport Act and Rules to allow electric vehicles to drive in bus and high occupancy vehicle lanes on the State Highway network, which it controls. One example is the Northern Busway in Auckland.

This is madness. The whole point of busways, bus lanes and to a lesser extend transit lanes is to make buses, which are much more spatially efficient, more viable and work better. They can make buses:

  • faster, making them more attractive to use and can also make them time competitive with driving.
  • more efficient, because buses are faster they can run more services can be run for the same cost or alternatively fewer vehicles and drivers may be needed
  • more convenient as if they allow more services to be run it means higher frequencies so less time waiting at bus stops.
  • more reliable as they’re more likely to arrive at stops and the final destination on time.

The introduction of bus lanes meant that far more people have been able to be moved along many key corridors than they would have otherwise. For example, the Northern Busway carries about 40% of all traffic crossing the Harbour Bridge during the morning peak – five lanes of traffic and 40% of the people are in fewer than 200 vehicles. On other corridors like Dominion Rd more than 50% of people are on the bus yet in both situations the lanes can look empty. But a bus lane that looks empty normally means it’s actually doing its job and allowing buses to flow, uninterrupted by congestion.

Adding electric vehicles to this, which will mostly be carrying only a single occupant, will undo some of the benefits and make buses less efficient. That’s because there’s a greater chance that buses will be held up or miss lights etc. It means a double decker carrying 100 people have the same level of priority as a single person in an electric car. And this isn’t just theoretical, back in 2010 the old Auckland City Council trialled changing the then Tamaki Dr bus lanes to T2. As the results of that showed, it actually had the effect of slowing other road users, especially the general traffic. One of the reasons for this is the T2/3 drivers would push back in to the general traffic queue to get around buses at bus stops..

tamaki-person

table5-1

table5-2

I believe the same situation would apply to electric vehicles allowed in bus lanes.

At this point its worth noting that when the Northern Busway was first designed and approved it was it was done so with the idea that high occupancy vehicles (HOV) could potentially also be allowed to use it. This was because at the time they were worried not enough people would catch a bus and is why for example that there’s a blocked off access at the Constellation Station. Of course as we know not a single HOV has used the busway because it’s performed above expectations.

There are other reasons this is a bad idea too. This includes:

  • Bus lanes are also often considered cycle lanes too. Allowing electric vehicles into those lanes could increase the risk for people on bikes. We also know from the recent Grafton Bridge trial (that has now ended) that many drivers simply don’t follow the rules. This would be no different with electric cars.
  • Getting single occupant vehicles back out of bus lanes in the future will be difficult. It’s also worth noting that other parts of the announcement had sunset clauses on them of either time or a once a percentage vehicles went electric. There was nothing mentioned for access to bus lanes.
  • Enforcement will be much harder as it is difficult to tell which vehicles are electric and which ones aren’t. In addition, many drivers seem to exhibit a bit of a herd mentality and if they see a couple of drivers getting an advantage they’ll start to copy. This would exacerbate the issues of cars in bus lanes.
  • Currently electric vehicles are more expensive than their fossil fuelled counterparts and the biggest buyers of them seem to businesses for fleet cars. It means the benefit of driving in bus lanes will likely be exclusive to a small(ish) group of early adopters.

 

Perhaps to help address this issue, Auckland Transport now more than ever need to fast-track the conversion of key bus routes to Light Rail. Perhaps they should also consider building it where they can with a grassed track.

Light Rail grassed track

In seriousness, a key reason for looking at light rail on the isthmus is about trying to relieve bus congestion on some corridors. Allowing electric vehicles to this mix will likely only mean Light Rail will have to happen sooner.

Overall this is a terrible idea, unless of course you drive an electric car already or are planning on getting one. The busway is owned by the NZTA but most of the other bus lanes let’s hope that Auckland Transport are able to say no to his idea on local roads at least. If they can’t then the government have managed to neuter bus lanes and possibly set them back years.

Let’s ban everything dangerous, like walking

This week, the Herald on Sunday published an article calling out a dangerous new practice: walking under the influence of a smartphone. According to them, careless walking causes literally dozens of injuries a year and should possibly be criminalised:

Now legislation has been introduced in New Jersey that would slap a US$50 ($72) fine and possible jail time on pedestrians caught using phones while they cross. And in the German city of Augsburg, traffic lights have been embedded in the pavement – so people looking down at their phones will see them.

The Herald on Sunday carried out an unscientific experiment at the busy intersection of Victoria and Queen Sts in central Auckland during the lunchtime rush to discover the scale of the problem here. Observing one of the corners, between 1pm and 1.30pm, we spotted 39 people using their cellphones while crossing.

Some people looked up briefly while crossing. Others kept their heads down, oblivious to what was going on around them.

In the past 10 years, the Accident Compensation Corporation has paid out more than $150,000 for texting-related injuries to a total of 272 Kiwis.

About 90 per cent of injuries were a result of people tripping, falling or walking into things while texting.

Incidentally, I have to admit some guilt here. While I don’t usually walk under the influence of a smartphone, I will often walk around reading a book – a habit I picked up during university. In over a decade of distracted walking, I’ve never fallen over, walked into anything, walked in front of a car, or walked into anybody else.

Anyway.

Let’s take the Herald’s suggestions seriously, and ask whether there is a case to ban other activities that risk injury to participants. Their threshold for “enough harm to consider regulation” appears to be around 27 injuries a year costing ACC at least $15,000.

What else fails that test?

I went to ACC’s injury statistics tool to get a sense. Helpfully, they break out injury claims (and the cost thereof) by cause, activity, and a range of other characteristics.

Here’s a table summarising some of the sports that should be considered for a ban. Rugby and league are obvious candidates, of course, as they result in tens of thousands of claims every year and a total cost in the tens of millions. But would you have suspected that humble, harmless lawn bowls was so hazardous? The sport of septuagenarians injures over 1,000 people a year and costs ACC $1m. Likewise with dancing, golf, and fishing. They’re all too dangerous to be allowed. It’s a miracle that we’ve survived this long with all of this harmful physical activity occurring.

Sport Average new claims per annum (2011-2015) Average annual cost (2011-2015)
Rugby union 56,842 $65.4m
Rugby league 12,556 $15.3m
Lawn bowls 1,134 $1.0m
Dancing 6,972 $5.1m
Golf 5,797 $4.5m
Fishing 2,431 $3.2m

But it doesn’t stop with sports. Your home is full of seemingly innocuous items that are eager to kill or maim you. Your stove, for example. Boiling liquids cause almost 5,000 injuries a year, costing ACC $1.9 million. We should definitely ban home cooking. Leave it to the professionals, for pity’s sake! Lifting and carrying objects at home is even more dangerous – over 100,000 claims a year. So don’t pick up that tea-tray or box of knick-knacks: call in someone who’s suitably qualified for handling such dangerous objects.

And let’s not even mention the toll taken by falls, except to strenuously argue for a ban on showers, bathroom tiles, and private ownership of ladders.

Cause of accident Average new claims per annum (2011-2015) Average annual cost (2011-2015)
Boiling liquids (at home) 4,680 $1.9m
Lifting / carrying objects (at home) 103,798 $95.1m
Falls (at home) 310,292 $323.4m
Driving-related accidents (on roads/streets) 13,322 $173.2m

Finally, it’s important to remember an important bit of context that the Herald doesn’t mention: Distracted walking is a far, far lesser danger than driving cars (distracted or not). In the average year, ACC receives 13,300 claims for driving-related accidents and pays out a total of $173 million for people who have been injured or killed. That far, far exceeds the injury toll associated with texting while walking.

On the whole, you’re more likely to be killed or injured while in a car than you are while walking. This chart, taken from a Ministry of Transport report on “risk on the road”, shows deaths or injuries in motor vehicle crashes per million hours spent travelling. Drivers experience 8 deaths/injuries per million hours. The two safest modes are walking (4.6 deaths/injuries per million hours) and public transport (0.7).

Because different travel modes are substitutes, measures to discourage walking – i.e. by penalising people who combine walking with smartphone use – may have the unintended consequence of killing or injuring more people.

MoT risk on the road chart

[As an aside, this chart presents a somewhat misleading picture of cycle safety. People on bicycles experience 31 deaths or injuries per million hours – considerably higher than driving. However, drivers, not cyclists, are at fault in the majority of cycle crashes. According to another recent MoT report, cyclists were primarily responsible for only 22% of crashes. Drivers were partially or fully at fault in the remaining 78% of crashes.

MoT cycle crash fault chart

Consequently, if we provided safe cycle infrastructure that kept people on bikes away from people in cars, cycling would get a lot safer. If we could completely eliminate the risk of people on bikes being hit by cars, cycling would be about as safe as driving.]

To conclude, there are two things that the statistics teach us.

The first is that although injuries and ACC claims are bad, it’s essential to put risks in perspective. And the relevant perspective is this: Walking is a safe mode of travel. It’s remained safe in spite of the invention of the smartphone and the existence of hoons like me who walk around with their nose in a book.

It’s always worth looking for effective ways to improve safety. That’s why Transportblog’s advocated for safe, separated cycleways, and also why it’s taken a positive view on cost-effective investments to improve road safety, like the recent announcement of safety improvements to SH2. But it’s also important to remember that the best way to improve safety is to make it easier to travel in comparatively safe ways. Like walking and public transport.

The second lesson is that there are many activities that can injure us, from rugby to lawn bowls to cooking. Walking while texting is a recent invention, so it may seem newsworthy. But it’s only one of the many hazards that people choose to expose themselves to. If you’re not living in a padded room, you’re probably risking your life in some way or another.

As humans, we’re very prone to focus on risks from new activities while ignoring the effects of things that are already common. Status quo bias is a very real thing – and it doesn’t just apply to transport reporting. It’s the reason why people can, say, oppose new three-storey apartment buildings while being perfectly comfortable with the three-storey houses next door to them.

What risks do you think we should pay more (or less) attention to?

Urban form and agglomeration economies – the impact of “edge cities”

Last week, I took a look at the contribution of agglomeration to Auckland’s recent economic growth. Based on observed changes to employment density over the period, plus agglomeration elasticities calculated by David Maré and Daniel Graham, I estimated that 11-12% of Auckland’s recent productivity growth was due to increased urban scale and density.

The gains from agglomeration since 2000 are significant: Auckland’s GDP is approximately $1.4 billion larger as a result. Ultimately, productivity gains are good for everyone. If you’re retired, they help to pay your pension. If you’re in school, they help pay your teachers and living costs. In between, they help fund your health care and pay for your neighbourhood library.

But is agglomeration simply a consequence of urban scale, or does urban form also matter? In other words, are there any reasons that we should prefer one distribution of employment within cities to another?

Interesting question.

There are a couple of ways we can address it. One would be to gather data on the spatial distribution of employment in a range of cities, and examine the impact on productivity. This is, implicitly, what Maré and Graham (and other economists studying productivity) have done by measuring effective job density and productivity at a highly detailed level and comparing outcomes within and between cities.

Other papers use a slightly different methodology but also come up with suggestive results. For example, a 2014 paper by Daniel Chatman and Robert Noland finds that public transport provision can encourage agglomeration economies in dense city centres. From the abstract:

Using data on US metropolitan areas, this paper traces the links from transit service to central city employment density, urbanised area employment density and population; and from these physical agglomeration measures to average wages and per capita GMP. Significant indirect productivity effects of transit service are found. For example, in the case of central city employment density, estimated wage increases range between $1.5 million and $1.8 billion per metropolitan area yearly for a 10 per cent increase in transit seats or rail service miles per capita. Firms and households likely receive unanticipated agglomeration benefits from transit-induced densification and growth, and current benefit–cost evaluations may therefore underestimate the benefits of improving transit service, particularly in large cities with existing transit networks.

Another approach would be to simulate the impact of alternative employment distribution on effective density and hence on productivity. Last week, I looked at how Auckland’s job density had changed from 2000 to 2015. This week, I’m also going to consider a simple simulation: What if the city had grown in a different way between 2000 and 2015?

According to Stats NZ’s Business Demography data, Auckland added approximately 174,000 jobs – a 33% increase – over this period. Here’s a chart showing how they were distributed at a local board level. Waitemata local board added the most jobs (almost 41,000) followed by Upper Harbour (22,000) and Howick and Maungakiekie-Tamaki (both around 19,000).

By contrast, the rest of the isthmus and lower North Shore saw exceptionally low rates of change. (A pattern that is matched in population growth: high growth in the city centre, Howick, and Upper Harbour, where planning rules have enabled growth, and low growth in other areas where they’ve prevented it.)

Auckland employment change by local board 2000-2015 chart

But what if Auckland’s recent employment growth had followed a different pattern? For example, what if we’d chosen to decentralise employment growth to a new “edge city”?

Let’s set aside, for a moment, the fact that creating new employment centres by planning fiat tends to disappoint. (As demonstrated by Manukau’s underwhelming history, and possibly also the new NorthWest mall.) If businesses don’t see an advantage in locating there, it won’t happen.

As a benchmark, consider a new “edge city” in Drury, which is currently a set of paddocks that are conveniently located along the Southern Motorway and the unelectrified portion of Auckland’s Southern Rail Line. Let’s assume that we succeeded in relocating a bit over 25% of Auckland’s recent employment growth to Drury – creating a new employment centre with 50,000 jobs. (Around half the size of the Auckland city centre.) All other areas of Auckland would have seen proportionately lower rates of growth.

What would that do to the city’s potential for agglomeration?

Here’s a map comparing the effective density of employment under this “edge city” scenario with the actual effective density of employment in 2015. (Remember, effective density is a measure of an area’s potential for agglomeration economies, as areas that are accessible to more jobs are likely to be more productive.)

Areas shaded in yellow would experience reductions in agglomeration potential, while areas in green and blue would be more accessible to jobs under the “edge city” scenario. Notice how most of the city is coloured yellow. The only places to benefit from this change are the areas immediately around Drury.

Auckland effective density edge city scenario

Overall, the job density gains around Drury are far outweighed by the “deglomeration” experienced by the rest of the city. Shifting employment growth to an “edge city” in Drury would have reduced the city’s overall job density by 9%. (In 2015, the average Auckland employee was accessible to around 92,000 other jobs. Under the “edge city” scenario, they’d only be accessible to around 84,000 jobs.)

This would in turn reduce the city’s economic productivity. Based on Maré and Graham’s measured agglomeration elasticity of 0.065, I estimate that Auckland’s productivity would be 0.6% lower under the “edge city” scenario. (Again, using an arc elasticity formula: (92,000/84,000)^0.065-1.)

Because Auckland’s GDP was $88.3 billion in 2015, the productivity losses from deglomeration would equate to roughly half a billion dollars a year. That’s a lot of money. For comparison’s sake, $0.5 billion is roughly equivalent to:

Of course, more centralisation is not always optimal. In a large city, there are good reasons for businesses to spread themselves around a bit. Retailers want to be close to local shoppers, warehouses want to be on cheap land close to transport infrastructure, and so on and so forth. And, from a policy perspective, adding peak transport capacity to enable existing centres to grow may be costly.

But, as this simulation of a Drury “edge city” shows, forcing decentralisation is likely to be highly sub-optimal. Auckland would be less productive if it had chosen to push employment growth into outlying centres, rather than accommodating it in the city centre and other locations throughout the city. Over time, that would translate into lower competitiveness for local businesses, lower wages for Auckland workers, lower living standards for residents, and worse public services and infrastructure.

Do you think urban form can contribute to a productive, happy city?