On the weekend Phil Goff announced his bid for the Auckland mayoralty. Several interesting articles on Goff’s bid have been published, for example ones by the Herald and Radio NZ here and here respectively. A more recent article by the Herald is available here, which suggests Goff may be the favourite and exhorts him to “exert control”.
In this post I’ll discuss and interpret some of Phil Goff’s comments on local government in Auckland. The post is split into three juicy topics: 1) Rates; 2) Asset sales; and 3) Intensification. I should note that it’s relatively early on in the campaign, so in some ways this post raises more questions than answers. I hope you enjoy it nonetheless.
Now don’t get me wrong: 10% increase in one year is a big jump.
However, one of the things that got lost in the recent clamour is that some of the increase in household rates was associated with adopting single rating system for all of Auckland. This required harmonizing quite disparate rates across Auckland. Naturally, some people found their rates went up, while others found their rates went down.
The good news for Goff, and any other mayoral candidate, is that the difficult process of harmonizing rates is now largely complete. Len Brown has borne the brunt of that central government hospital pass. As such, the incoming mayor – whoever they are – will benefit from this issue dropping off the radar. So how will Goff seek to keep rates under control in the future?
Well, in his interview on Radio NZ Goff talked “prioritizing” projects, i.e. less important things give way to more important things. This really was the thrust of this recent post which I wrote on the effectiveness and efficiency of local government in Auckland.
Unfortunately we don’t know yet what Goff’s priorities are, so it’s hard to assess the size of the potential savings. There are however a number of poorly-performing transport projects which could be ditched, such as PenLink and Mill Rd. Right there Goff could save the mighty taxpayers of Auckland several hundreds of millions of $$$.
One issue Goff didn’t discuss is Auckland Council’s desire to shift the burden of rates away from businesses and onto residents.
This shift, as I understand it, is designed to reduce the costs faced by businesses, so as to 1) reduce prices for goods/services and 2) increase employment, both of which ultimately benefit residents. While this is a policy direction that I happen to support, it has also contributed to some of the recent increase in residential rates. We don’t yet know where Goff stands on this issue, but it’d be interesting to find out because it is one factor that will cause residential rates to rise faster than inflation.
2. Asset sales
Now we start to get into the nitty gritty about how to keep rates under control. One of the more controversial ideas that has been in the media lot lately is the subject of asset sales. It’ll be interesting to see where the mayoral candidates fall on this issue, because it really is the primary opportunity to find more money to invest in things that will make the city better.
In his interview on Radio NZ Goff distinguishes between what he calls “strategic” and “non-strategic” assets. He says no to the latter, especially in the context of Watercare. Auckland Council’s shares in Ports of Auckland and Auckland Airport, for example, also appear to be in the “not for sale” basket.
Now I can appreciate the need to distinguish between strategic and non-strategic assets, where the former are deemed to provide efficient support to Council’s strategic direction and the latter do not. However, I think there’s a need for Goff to outline not only which assets he considers to be strategic, but *why*. This would help shed light on his underlying values, and mitigate against the “slippery slope” arguments that are advanced by some people in discussions of asset sales.
On the other hand, it should be noted that from the interview it seems that Goff’s views on golf courses are relatively well-aligned with our own views here at TransportBlog. I’ve paraphrased the most relevant parts of the Q&A as follows:
Interviewer: What about flicking some of the golf courses?
Goff: Remuera golf course is worth $560 million and the subsidy for every golfer is $11,500 per year.
Interviewer: So we could expect some golf courses to be sold for housing?
Goff: I’m going to look at the facts before I make a commitment on that. But I don’t think it’s fair for Aucklanders to be subsidising those people who are lucky enough to be members of a golf course …
FYI here’s what a subsidy of $11,500 per golfer per year buys them.
Or here’s another fact just to ram it home: The annual subsidy for golf courses in Auckland is approximately equivalent in value to the annual cost of operating Auckland’s rail network. So when someone tries to tell you that asset sales will not have a meaningful impact on Council’s ability to deliver other goods and services, you should tell them they’re dreaming.
Personally, Goff’s views on rates and asset sales seemed fairly reasonable to me, even if more details are needed (NB: The same goes for all the mayoral candidates of course).
Now let me present one psuedo-question in the Radio NZ interview and the subsequent response from Goff:
Interviewer:There’s more talk today about intensification in some of those inner-city suburbs, such as Mt Eden.
Goff: I don’t see us putting up tower blocks in some of those really nice areas. What I see us doing is working down the main arterial transport routes, looking at places like New Lynn and Panmure. Those are the ideal places where you might want to put 3-4 storey intensive housing, plenty of public open space and making sure it’s good urban design. I don’t think that you start to encroach on the most beautiful parts of the city, before you, say, let’s follow the transport routes so that people can be close to where they are moving to.
There’s some good stuff in what Goff says, e.g. on concentrating development in areas where transport infrastructure exists and the need to focus on urban design, both of which have been somewhat lacking in earlier iterations of Auckland’s development.
There are also, however, some very unfortunate words and attitudes underlying Goff’s comment. Here’s the part I was most concerned by: “I don’t see us putting tower blocks in some of those really nice areas“.At this point my little red alert warning signals started to go whoop whoop. More specifically, in this comment Goff strays into very dangerous territory my friends.
Let me explain why.
First let’s consider what Goff is trying to say. From where I’m sitting, it seems that Goff is saying let’s not intensify in areas that are “nice”. Why? Well, the obvious implication is that intensive development is not nice?!? Goff meet Ockham. More specifically, if Auckland is to progressively change the discourse around housing, and thereby lance the housing boil that threatens our entire economy, then we need large numbers of apartments and town houses to be built. And we need them to be built all across Auckland’s central suburbs, where people want to live, not just in a few places like Panmure and New Lynn.
Second, in this sentence Goff implies that he will seek to undermine normal market forces. More specifically, if an area is “nice” then people are going to want to live there right? Goff seems to be saying that as soon as an area becomes “nice” then Council is not going to allow development there. By extension, Council will presumably only allow intensive development in location that are not nice? Where there is no demand to live? Great, Council can zone away its heart’s content, but it won’t ultimately change anything, all we’ll get is higher property prices in areas that are unable to be developed further.
Which brings me to the third issue with Goff’s seemingly innocuous statement: Goff’s use of the word “nice”. What does this imply for the areas of Auckland that are not like Mt Eden? Goff seems to think Council can identify a couple of not nice places and direct all the “poor” people (who can’t afford to buy a nice big ol’ villa on a large section in Mt Eden) to live there. Think again. Question: What if people all over Auckland come forward and argue their neighbourhood is nice just the way it is?
Answer: Goff either has to 1) tell them that they’re wrong or 2) roll back the intensification planned for those areas. That’s right: In arguing that we shouldn’t intensify certain areas because they’re “nice”, Goff has unwittingly created a rod that any NIMBY anywhere can use to beat back proposed intensificatio – on the grounds that their area is already “nice”. End result? Whole-sale down-zoning in response to self-interested parochial interests.
Now, in Goff’s defence, he is not alone in slipping down this slippery slope.
In fact, the interaction between planning regulations and political economy has been studied elsewhere. This interesting article from Los Angeles, for example, discusses how their planning regulations prevented intensive developments from occurring in areas where there was demand. Sound familiar?!? These regulations were found to have a massive negative impact on development capacity in Los Angeles, as illustrated in the figure below.
For this reason it is not surprising that Los Angeles has had the “fastest increase in home values since 2000” and “has become the least affordable major city in the country“.
In a nutshell: The more Goff is inclined to pick “winners” and “losers” when it comes to what types of housing can be developed in which areas of Auckland, then the more expensive and segregated Auckland is likely to become. Personally, I struggle when residents and politicians effectively say “we want the kinds of people who live in apartments to live over there, because this area is too nice for them“. That’s the definition of snobbery.
The discourse surrounding this issue is even more farcical when you realise that many of Auckland’s older suburbs are already peppered with 3-7 storey apartment buildings. Like my apartment building, which is over 100 years old. Like many apartment buildings in Auckland that were built before regulations and locals made it too difficult.
And let’s be honest: The debate we’re having is not about “tower blocks”: It’s about whether you should be able to build a 3-7 level building in Auckland’s extremely valuable and desirable central suburbs. You know, like the kinds of development that one finds Sydney and Melbourne. To which I say abso-bloody-lutely.
End result? I think Goff needs to think more subtly about intensification.
Overall score for Goff’s initial foray into local government issues? Well, I’d give him a 2/3. When it comes to rates and asset sales, Goff stated some reasonably coherent positions, while also appearing open to debate and discussion. Which is good, because after all he’s only one vote on Council so at the end of the day we shouldn’t overstate his importance.
While Goff is shaping up to be a good centrist mayoral candidate, it looks like housing and intensification may be areas for improvement.
At this point it’s worth mentioning that Goff naturally wants to win, and winning involves appealing to people from across the political spectrum – many of whom like Auckland the way it is and don’t want it to change. But allowing more housing, and more intensification in particular, is the single most important issue facing Auckland right now (yes bigger than transport).
For this reason, Auckland’s next mayor needs to champion Auckland as an integrated city, not a collection of self-interested suburbs.The reason we should sell Remuera golf course is the same reason we should allow for more development in Mt Eden: Because it’s in the best interests of Auckland as a whole. Both now and into the future.
I would like to elect a mayor who doesn’t apologise for the need for intensive development in central areas. A mayor who engages with the concerns of existing residents, but doesn’t compromise on the underlying reality facing Auckland and the city’s growth. Development is not a disease that needs to be quarantined in not so “nice” places. Multi-storey buildings already exist in Auckland’s inner-city suburbs, like they do in Melbourne and Sydney and almost any city of similar size.
Indeed, I’d personally argue that Auckland’s lack of density, and the consequences for civic life, is a primary reason why Auckland struggles to retain its young people. The life of cities like Melbourne, Sydney, London, and Amsterdam is what attracts young peolpe like me. I think our approahc to housing needs to be framed in that context: If you want your grandchildren to live in this hemisphere, then you’ve got to allow for more intensive development in Auckland.
Goodbye, goodluck, and godspeed to you my fellow Auckwooders. May Goff be with you.
This is AT’s official future vision for the Rapid Transit Network in Auckland. I feel the need to show this again in the context of a number of uninformed views about the CRL popping up again, as one of the chief misunderstandings is to treat the City Rail Link as a single route outside of the network it serves.
All successful transport systems are designed through network thinking and not just as a bunch of individual routes, this is true of our existing and extensive motorway network just as it is true for our rapidly growing Rapid Transit one. The Waterview tunnel is not being built just so people can drive from Mt Roskill to Pt Chev, and nor is the CRL just to connect Mt Eden to downtown.
The CRL is but one project on the way to a whole city-wide network, as is clearly shown below, and as such it doesn’t do everything on its own.
But then having said that because it is at the heart of the current and future city-wide network it is the most crucial and valuable point of the whole system. That is true today and will continue to true for as long as there is a city on this Isthmus. In fact it is hard to overstate the value of the CRL as by through-routing the current rail system it is as if it gives Auckland a full 100km Metro system for the cost of a pair of 3.4km tunnels and a couple of stations. This is simply the best bargain going in infrastructure in probably any city of Auckland’s size anywhere in the world and is certainly the best value transport project of scale in New Zealand. Because it is transformational* for the city and complementary to all our existing systems, especially the near complete urban motorway network.
Additionally the capacity it adds to the region’s whole travel supply is immense: taking up to 48 trains an hour this can move the equivalent of 12 motorway lanes of car traffic. All without flattening any place nor need to park or circulate those vehicles on local roads and streets. And all powered by our own renewably generated electricity. This is how the city grows both in scale and quality without also growing traffic congestion.
This map will evolve over time as each addition is examined in detail. For example I expect the cost-effectiveness and efficiency a rail system over the harbour, up the busway and to Takapuna to become increasingly apparent well before this time period. In fact as the next harbour crossing, so we are likely to see that in the next decade, otherwise this is that pattern that both the physical and social geography of Auckland calls for. Additionally Light Rail on high quality right-of-ways, although not true Rapid Transit, will also likely be added in the near term.
Welcome to Auckland: City.
* = transformational because it substantially changes not only our movement options, the quality of accessibility between places throughout the city and without the use of a car, but also Auckland’s very idea of itself; we have not been a Metro city before: It is doing things differently.
Matt suggested adding this more recent version. I agree this is a good idea, it shows just how quickly ideas are changing in Auckland right now. This is a very fluid and exciting time for the city as the new possibilities are becoming acknowledged by all sorts of significant players. It remains my view that extending our existing rail system is better for Mangere and the Airport, but that taking AT’s proposed LR across the harbour in its own new crossing is a really good option:
And just this morning we get wind of these very big changes for those making plans for Auckland. It looks like the funding roadblocks [pun intended] for the necessary urban infrastructure that the growing and shifting Auckland needs may be melting away….?
Yesterday Mayor Len Brown announced that he would not stand again for the mayoralty next year.
Len Brown has announced that he has decided not to seek another term as Mayor of Auckland.
Mr Brown says: “It has been my absolute honour to be given the privilege to be able to serve our people as the first Mayor of a united Auckland.
“I was proud to be inaugurated as the first Mayor of the super city in 2010 and humbled to be re-elected for a second term three years later.
“However after discussions with my wife Shan and our daughters, I have decided nine years as Mayor, first of Manukau and then Auckland, are enough.
“Our opponents wrote us off from day one, but the achievements during the first five years of the new Auckland have been extraordinary.
“Auckland is more confident and positive about its future than it has been in decades. We are becoming a true international city and the symbols of our optimism are all around us.
“Electric trains, double decker buses, a growing network of cycleways, new ferry routes and most of all construction is about to begin on the City Rail Link – the most important piece of infrastructure to be built in Auckland in decades.
“Auckland is working better with government than it has in years with the Housing Accord enabling thousands of extra homes to be built and the Auckland Transport Alignment Project focussing on building vital transport infrastructure.
“We have opened up the waterfront and award winning civic amenities have been built and are now being enjoyed by people across Auckland.
“Our swimming pools are free for our kids, people will be able to cycle and walk across SkyPath on the Harbour Bridge, we have saved iconic heritage landmarks such as the St James, and that most iconic of Auckland landmarks, Maungakiekie/One Tree Hill will soon have a tree back on the summit.
“All this while the council remains committed to low rates increases, the sale of non-strategic assets, capping council debt and keeping our credit rating remains at a level many sovereign states would be jealous of.
“Aucklanders have my assurance that my commitment to this job will continue until the last day of my mayoralty. There is still enormous amount we need to achieve during the coming year.
“My best wishes to those who decide to stand for what is one of the most all-consuming jobs in the nation. Tamaki Makaurau is an extraordinary place which will place extraordinary demands on whoever takes up the challenge.”
Given the way Len and many council decisions have been portrayed in the media over – especially over the last few years – he has clearly made the only sensible choice available to him.
As the first Mayor of an amalgamated Auckland I think the Len and the council often faced some very unique challenges and ones that won’t exist for any future mayor. These include the creation of the first Auckland Plan, the Unitary Plan, the standardisation of services across the region and of course combining eight separate rating systems in to one. All of these areas were some of the key drivers behind the creation of a single council and the process of making the new council omelette was always going to require a few eggs to be broken.
On rates where Len and the council are most heavily criticised, the move to a single rating system – where everyone properties rates are determined by the same criteria – the changes have been taking place gradually over around four years. That has seen rates for some increase above the regional average (new property valuations have had an impact here too) while they have actually decreased or stayed about the same for others. With the migration out of the way there aren’t likely to be the level of increases the media have portrayed in recent years.
Simply by virtue of all of these disruptive changes having already taken place any future mayor and council is going to look much more stable and in control of what’s going on even if they carried on exactly as things are. Also let’s not forget that Len had only one of 21 votes on the council for decisions. If all of the other councillors didn’t agree with the changes then they could have voted against them.
Right now Len is seen as a lightning rod for those upset with change to focus on however I do think that history will much kinder to him. The city has come a long way in just five years and we’ve probably witnessed some of the most dramatic change the city has seen. We’ve seen
the city become more walkable through developments like the Shared Spaces
an internationally award winning waterfront development at Wynyard Quarter
electric trains have been rolled out across Auckland’s network and over the five years of the council rail patronage has increased by 65%
bus patronage has increased by 22% and double deckers have started to be rolled out
ferry patronage has increased by 24% with new routes rolled out to Hobsonville Point and Beach Haven.
the start of good quality cycling infrastructure e.g. on Beach Rd
the government and council now working together on actually aligning views on transport with the recently announced ATAP process.
Of course some of those changes were already under way before the council came into being and so perhaps even more important is to also think about the next few years to see what the council have achieved.
By far the biggest achievement has to be the City Rail Link. Len has consistently pushed for the project since elected in 2010 despite the government not being supportive of it. After they agreed to the project back in 2013 he has continued to advocate for it to start earlier. The council have backed that and Albert St will be a hive of activity from about May next year as digging starts on the first section. Further we’ve had lots of suggestions from various people that the government might soon be ready to announce earlier funding.
In addition to the CRL we’ve lots of other big changes coming in the next few years. This includes:
Over $200 million of new investment in cycleways over three years (combined with government funding).
Over 50 double decker buses will be on road over the next year or so to increase capacity on already busy routes.
The new bus network which will dramatically improve buses for most people.
Integrated fares making most public transport trips cheaper and easier.
Auckland Transport is looking at Light Rail for many routes on the isthmus as a direct response to the need to make public transport better and the city more people friendly
The council have combined two CCOs to form Panuku Development Auckland which should see the council more involved in urban development across the region.
This is far from an exhaustive list but certainly the future looks positive thanks to the work and focus that Len and the council have had.
In saying all of this not everything has been great. Perhaps the biggest concern I’ve had and continue to do have is that Len has spent a lot of time trying to please everyone. He’s tried to do it all, for example in the Auckland Plan instead of making some tough calls as to which projects get included as priorities the council have opted to just do everything.
Still on the general balance of things I think Len has done a fairly decent job and pushed a vision for Auckland that has been positive. His legacy will be that Auckland will end up in much better place than it was when he became mayor and many future generations will benefit from the push to make Auckland a more liveable city.
In the last few months we’ve published several posts which have, in various ways, touched on some important issues facing local government in Auckland. In this post I seek to summarise some key concepts that have emerged in these posts, and consider some broader implications for Council policies, especially relating to transport.
For a self-confessed policy wonk it’s been heartening to see posts on seemingly arcane policy matters such as rates, transport levies, golf courses, and heritage policies attract passionate and oftentimes informed debate. This is not to say we’ve been able to reach agreement on the issues. Indeed many people disagree, for example, on whether Auckland Council should continue to own golf courses.
In the face of such disagreements should avoid posts on these topics? Should stick to puppyhood and apple pie posts about Amsterdam, which everyone can either get behind or comfortably ignore – by virtue of the fact that it doesn’t challenge anyone’s pre-existing notions? I don’t think so. To do so would be to rest lazily back in incomplete hammocks haphazardly woven from our own subjective experiences.
Rather, it is primarily through debating controversial issues that we can begin to understand our own values, and those of others. Even if we don’t start with the same values, we might reach agreement on relative priorities. This post is written in such a spirit. Or at least that’s my intention.
Of course the “DNA” of the post was born from my own incomplete hammock. For this reason I encourage you to tear it apart and splice it back together. Democracy often works best when people with different values work together to breed superior mutant hybrid policies.
Just so we’re on the same page: I define “policies” as things that local government either invests in and/or or regulates. And when I say “invest”, I am referring both to operational investment, e.g. public transport subsidies, as well as capital investment, e.g. owning golf courses. Without further ado …
Opportunity costs. The issue of opportunity costs has popped up frequently in our posts on rates and golf courses. That is, when Council decides to invest in something, then this will reduce the money available to invest in other things, i.e. investment has an opportunity cost in the short-term.
Some Council assets, such as Ports of Auckland, generate a direct income stream. Moreover, this income can be generated at a rate that is higher than Council’s “cost of capital”. Such investments actually increase Council’s ability to invest. Other assets, e.g. golf courses, do not generate (net) positive revenues. By continuing to own golf courses, Council’s has less ability to invest in other things, including public transport and walking and cycling.
Now, many people have argued Council’s investment in golf courses is worthwhile despite their (high) opportunity costs. I’m OK with this provided people are clear about the fact that maintaining investment in golf courses will reduce Council’s ability to invest in other areas. Put another way, I want the opportunity cost associated with golf courses, and all other Council investments, to be made explicit – so we can formulate some relative priorities.
As I discuss in more detail below, Council’s ability to increase rates to fund improvements in services is constrained by our democratic “willingness-to-pay”. Opportunity costs are important and they are not something we can simply sweep under the carpet.
In Peter’s last post on golf courses, for example, it was suggested that the opportunity cost of Council’s investment in golf courses amounted to mere “pennies”. My quick back of the envelope calculation suggests Council ownership of golf courses amounts to an additional ~$100 in rates per household per annum (NB: This primarily reflects their capital value). This cost arose simply because Council has debt, on which it must pay interest. Hence owning golf courses increases the debt, and by extension the amount of interest that must be paid. This is the opportunity cost of owning golf courses.
Now, $100 per household per annum may not sound like much to some people, but it is worth keeping in mind that it’s approximately equivalent to the temporary transport levy that was recently adopted by Auckland Council (to howls of outrage from some quarters). Moreover, in just 3 years the revenue from this transport levy will enable Auckland to pursue a much more ambitious transport investment programme, especially for public transport and walking/cycling.
This is all just to highlight the importance of opportunity costs, and the potential gains that might follow from optimising Council’s investments. Which brings me onto the topic of …
Level of investment. It is useful, I think, to think about the “level”” of Council’s investment somewhat separately from the “mix” of investments.
In my previous post on rates I suggested that we should measure the level of Council investment in terms of $ per capita. The figure below highlights some broad possibilities in Council spending. We can either increase, maintain, or reduce government expenditure. Those are your options – and your homework for next week is to find out where your local Councillors stands on these issues.
Notwithstanding what you hear in the media, Council is currently holding rates constant in real terms. But because the population of Auckland is growing, holding rates constant in real terms equates to less spending per person, i.e. we’re in the blue box in the above figure.
The blue box requires either 1) cutting services and/or 2) improving productivity. If Council wishes to hold services per capita constant, then productivity improvements will need to be equal to or higher than the rate of population growth. In Auckland, the latter is humming along at 3-4% p.a. That gives you a feel for the scale of the fiscal challenge Council is currently operating under.
Productivity improvements are one area where the public sector may be able to learn a bit from the private sector. For example, Air New Zealand has committed to identifying cost savings that are sufficient to offset inflation. This is discussed in the slide below (NB: Source).
It’s key to note that Air New Zealand are, in general, looking to realise these savings not through one-off “slash and burn” type changes, but instead through sustained, incremental improvements that are made across all areas of their business, i.e. they seek to leave “no stone unturned”.
I think Council needs a similar approach. It’s better to identify efficiencies consistently, rather than wait until major cuts are required. In this context, I think it’s reasonable for people, like Peter, to identify areas where savings might be made, such as golf courses. Other people may disagree. That’s fine, provided they have alternative ideas on how to either 1) find savings and/or 2) increase revenues.
Finally, I should say that I place “user charges” under the general rubric of “cutting services”. This is because if something was previously provided free, and we change it such that people now have to pay, then this is effectively a cut in service. This is *not to suggest* that user charges are necessarily a bad thing. I support, for example, user charges for things like wasterwater, parking, and development where they encourage the right kind of efficiencies. Which brings us nicely to the next topic …
Effectiveness and efficiency. This is an important distinction, which I think is frequently conflated – probably because the concepts are not always easy to separate.
From a public policy perspective I think of “effectiveness” as a question about whether a policy contributes to wider strategic objectives, including consideration of (potentially unintended) consequences. Efficiency, on the other hand, considers whether policies are well implemented. It may be, for example, that a particular policy supports strategic objectives, i.e. is effective, but nonetheless is implemented in an inefficient manner, such that the benefits are not as high as they could be.
While I tend to despise wish-wash diagram spam, I do think the following figure illustrates the distinction between effectiveness and efficiency quite nicely for y’all.
Let’s say, for example, that Aucklanders collectively decided that Council ownership of golf courses was an “effective” policy, insofar as it contributed to wider strategic objectives. The next question people like Peter and I would ask is whether Council was delivering golf courses in the most efficient manner?
We might then put forward questions such as:
Do we own the right number of golf courses and are they in the right location?
Are Council golf courses priced/sized appropriately? E.g.:
Should we increase green fees so that the users covered not just operating costs but also some of the opportunity costs?
Should we convert 18 hole golf courses to 9 hole golf courses? And If so then should we create public parks and/or residential/commercial development?
So even if we conclude that continued Council investment in things like golf courses is effective, we might still want to consider ways to make that investment more efficient. And that latter in turn would realise savings to invest in other Council services, and/or lower rates …
Focus on public transport. How might these concepts relate to public transport? Most Aucklanders, myself included, appear to be of the view that public transport is “effective”, i.e. our aspirations for the city see a larger role for PT.
But is Auckland’s public transport system efficient? Well, no not really. Or at least not yet.
It is true that sustained capital investment in public transport has started to flow through to “the bottom line” in terms of higher farebox recovery. For the uninitiated, farebox recovery measures the percentage of operating costs which are covered by fare revenues. Recent trends in Auckland’s farebox recovery over time are illustrated below.
You can see that in the last year or so it’s increased from ~46% to ~48%. This is heading in a positive direction, but is still quite low in comparison to many high performing cities overseas (with the notable exclusion of Australia – which is something of an outlier in terms of its operating costs, mainly for rail). Amsterdam, for example, achieves 75%, while Edinburgh, London, and several German cities achieve closer to 100%. The implication? All other factors being equal, these cities will have more money available for other things.
So how might we improve the efficiency of public transport in Auckland?
Well, the first thing I think we should do is to remove subsidies for cars where it is effective/efficient to do so. Cars are currently subsidised in terms of the parking they use, as well as the externalities they generate, such as congestion, noise, and air pollution. By charging people more to use cars, we would increase demand for public transport and hence generate increased revenue from the existing system. Such actions are, however, relatively slow to bear fruit, so we need to also look elsewhere.
In terms of the public transport system itself, we know AT is currently working on a range of things like growing HOP uptake, implementing PTOM (i.e. new bus contracts), rolling out bus lanes, reducing rail dwell times (and possibly staffing), the New Network, and the CRL. I am optimistic about these changes and their collective potential to improve the efficiency of our PT system. For those who are interested, my colleague Jarrett Walker has written some interesting stuff about making PT more efficient.
As mentioned above, improving the efficiency of PT is a means to an end, not necessarily an end in itself. More specifically, reducing PT operating subsidies frees up money within the existing PT budget to invest in efficiency-enhancing infrastructure, such as more bus lanes. In this way, improving the efficiency of our PT system gives us the opportunity to reinvest in the system, and thereby make it more useful and more abundant.
Key message? Operating PT efficiently allows us to provide it more abundantly. And abundant PT is what many of us want. For this reason, if you’re keen for PT to become more widely available and/or more widely-used, then you should also support initiatives that seek to make it more efficient. These measures may make trade-offs that involve cutting services in some areas, simply because the “opportunity cost” attached to those services is too high. I don’t think we should shy away from such decisions; we can’t make a great PT omelete without throwing away some bad PT eggs.
In short, if we can improve the effectiveness and efficiency of Council spending across all areas, then we can all look forward to more abundant public goods and services. This applies to golf courses, public transport, libraries, and indeed everything else that Council invests in.
Now I think I’ve said enough and it’s time to hear what others have to say …
Minimum parking requirements have been getting some long-overdue attention at central government level after the release of the Productivity Commission’s report recommending their removal from district plans.
Finance Minister Bill English has also expressed his support for binning minimums. So last week Green Party transport spokesperson Julie Anne Genter – a longtime advocate of removing MPRs – asked Housing Minister Nick Smith whether the government had any plans to legislate to remove them from district plans:
Smith’s responses were a bit evasive but there were still a few interesting points raised in the back-and-forth:
He also said that the government was developing a National Policy Statement on Urban Development, presumably to encourage better, less costly rules. That’s the first we’ve heard of that – I wonder who they’re consulting?
Smith also criticised heritage protection rules as a barrier to intensification, which he described as “part of the answer”.
Overall a pretty interesting exchange, and it’s good to see the issue getting more attention.
Many journalists and central government politicians (mainly the ones who sleep in blue or yellow pajamas) have recently promulgated the view that local government rates in Auckland are “out of control”. In the video below, Paul Henry gives you a flavour for the fervour emanating from these corners.
Henry’s video segment contains a lot of heated rhetoric, but precious little data. Like Henry, I am also a rate-payer. And I was genuinely interested in what the data says about historical trends in rates in Auckland. In this post I consider Henry’s central claim, i.e. that rates are “sky-rocketing”, and try and hone in on some interesting questions relating to local government rates, and in particular what people mean when they talk about trends in local government expenditure. I finish by discussing my preferred measure of local government expenditure, and also provide some comments on some interesting issues that Paul Henry does not discuss – but which underpin many of the issues he is interested in.
Now, from Henry’s segment it’s not immediately clear to me how he defines “rates”, so let’s approach the topic using a couple of indicators.
In the figure below I have plotted total rates (indexed to 1996 levels) collected per annum for the period from 1996-2014. This figure illustrates trends in Auckland versus other local governments in New Zealand (NB: Data on local government expenditure and consumer prices is sourced from Statistics NZ). Note that because the local government definition of “Auckland” changed in 2010, I’ve followed the convention of defining “Auckland” prior to this point as the seven TAs plus the regional bodies (ARC and ARTA).
A couple of things emerge from figure C1. First, we find that the total amount of rates collected in Auckland has declined in real terms since 2011, i.e. about the time that Auckland Council was formed. The total amount of rates collected in 2014, which is the last year for which data is available, was approximately the same as that collected in 2009. Second, the flat-lining in total rates collected since 2011 is in stark contrast to trends for the 15 years prior to this point, in which time rates increased in real terms by approximately 75%. Third, during the last five years local governments elsewhere in New Zealand have increased their rates by about 10%, while rates in Auckland have declined.
Conclusion #1: The amount of rates collected by Auckland Council in 2014 was 5% lower than when the super-city was first formed, i.e. total rates have reduced in absolute terms since Auckland Council was formed.
The previous figure considered total rates collected. However, in this period the population has generally been increasing, both in Auckland, in particular, and New Zealand, in general. To control for this fact, in figure C2 I have plotted rates collected per capita per annum.
Factoring population growth into our analysis accentuates the trends identified in figure C1 . First, we see that in 1996 rates per capita in Auckland were at a level that was very comparable to the rest of NZ. Since 1996, rates per capita have increased more slowly in Auckland than elsewhere in New Zealand. We find Auckland’s per capita rates peaked in 2010, since which time they have declined by approximately 8%, or ~2% p.a. In contrast, during the last five years other councils in New Zealand have increased rates per capita by approximately 9%. To put it another way, had rates in Auckland risen at a similar rate to the rest of the country since Auckland Council was formed, then they’d be approximately $200 per capita per year higher than what they actually are.
Hmmm. The “super city” appears to be at least as effective as local government in the rest of New Zealand. It’s not looking very good for Mr Henry?!?
Conclusion #2: Rates per capita in Auckland peaked in 2010, and have since fallen by 8% to now be 20% below the New Zealand average. Both local and central government expenditure is lower in Auckland than the New Zealand average.
Not only have we found no evidence to support Henry’s central claim, but we have actually found evidence to the contrary: Rates in Auckland have declined in both absolute and per capita terms, such that rates in Auckland are now 20% below the New Zealand average. Why did this freely available and highly relevant data did not feature in Paul Henry’s 10 minute segment? It’s notable that in this same segment, Paul Henry claims that rates under Auckland Council are “sky rocketing” and goes on to accuse Len Brown of being a “liar” for not keeping rates increases in line with inflation. Claims that are made without presenting any data, and which contradict the data that I have been able to find.
From what I can tell, Henry’s claims about rates are incorrect (NB: Some might use the phrase “shitistics” to describe Henry’s analysis).
More generally, the data suggests Auckland Council has maintained rates at or below historical levels. And in amidst all of Henry’s operatic soap-boxing about rates rises, he seems to have overlooked some interesting questions that are worth discussing. The first is that the increases in rates that are levied on residential activities (which I think is actually what he means when he refers to “rates increases”) has come about because of a strategic decision by Auckland Council to reduce rates levied on businesses. The rationale for what effectively amounts to a ‘rates switch’ is discussed here on Auckland Council’s website. This important issue does not feature in Henry’s segment.
Put simply, it’s important to remember that the rates collected by Auckland Council is sourced from both business and residential activities. Moreover, Auckland Council has previously made a strategic decision to shift the burden of rates away from businesses and instead onto residents (NB: Arguably residents end up paying for the rates levied on business activities anyway, through either 1) higher costs for the goods and services that they consume and 2) reduced employment and/or lower incomes).
Nevertheless, it is important that conversations about residential rates in Auckland are considered within the broader context of reductions in business rates. Now Henry may think businesses should pay higher rates, and I’m interested in having that debate. But it doesn’t change the fact that rates (by both aggregate and per capita measures) have fallen since Auckland Council was formed. Which brings me to my final point …
Conclusion #3: While total rates and rates per capita have decreased by 5% and 8% respectively since Auckland Council was formed, the rates paid by residential activities have increased so as to fund even larger reduction in the rates paid by business activities.
I’ll say from the outset that this policy direction is one that I support at least on a high level, for reasons that hope to discuss in more detail in future posts. In my opinion, such a move is not just desirable because it is likely to promote “business and employment growth”, but also for creating a level playing field for land use investment decisions, as well as more direct democratic accountability. However, I’m interested in other views on the topic …
I’m also interested in a wider discussion on how we measure relative levels of government expenditure.
Personally, I’m a fan of per capita per annum metrics. This applies to both local and central government, where the latter has been previously analysed by Brian Fallow at the Herald. In a country with a growing and ageing population, such as New Zealand, maintaining total government expenditure at or below inflation effectively amounts to spending cuts for the average person. In my view, the default position would be for government spending per capita to remain constant over time, with deviations from this level then being justified by whoever is in government at the time. I note that even this more mild type of fiscal constraint would likely result in government expenditure as a proportion of economic activity reducing over time, as real per capita GDP increased in response to productivity growth.
Finally, this discussion of rates in Auckland is all the more interesting given Peter’s recent post on central government expenditure, which showed that – compared to other regions in New Zealand – Auckland receives slightly less central government expenditure per capita than what you’d expect based on its proportion of the population and GDP. I’m personally comfortable with this transfer because the Auckland population is, on average, wealthier, healthier, younger, and more productive than New Zealand as a whole. However, given the relative lack of expenditure by central government you might expect Auckland Council would need to spend more than average. But the reality is quite the opposite: Total government expenditure per capita is significantly lower in Auckland than the NZ average.
To sum up: In response to the question of whether Auckland Council is “out of control”, this computer says “no”. And in the eloquent words of hospital receptionist Carol Beer, I hope people like Paul Henry would rate this information as “ff’ing helpful“. Perhaps next time Henry feels like doing a hatchet job on Auckland Council, he might first spend at least five minutes doing some elementary research. Like, you know, finding at least one reliable piece of data that doesn’t contradict his claims.
New Canadian PM Justin Trudeau has wasted no time in clearly positioning himself as pro-city and pro-Transit with the release a series of shots of him using the Montréal Metro on election night.
First Turnbull now Trudeau. Transit is obviously seen by these new leaders as a marker for broader policy; climate change, energy, infrastructure, and, no doubt, their accessibility to the people they represent. Only travelling in big-arsed fossil fuelled BMWs looks decidedly dated in this context.
We look forward to real policy and budgetary change consistent with these images to be clear this isn’t just PR, and we also look forward to our politicians catching up with this trend, and in a real way: Key, Bridges; your move….?
It has been encouraging to witness the change of PM in Australia to the pro-city and Transit using Malcolm Turnbull following significant elections at state level in both Queensland and Victoria going quite dramatically the same way. Now the Liberals have been returned to power in Canada what does this mean for city policy and transportation policy in particular?
It is tempting to feel that there may very well be a significant shift in the zeitgeist in the Anglophone world on these issues, especially including climate change. And I don’t mean on the old blunt left/right polarity, after all Turnbull and Cameron clearly don’t fit when viewed through that lens. Rather I see a different forces at work. The Abbott/Harper backward looking anti-change and fearful world view increasingly seems dated and no longer credible. It looks like no party can convincingly run, red or blue, without real responses to environment, energy, and city infrastructure that aren’t significantly updated from last century’s norms. Welcome to the 21st Century proper, Canada.
Every now and then you see comments that make you want to laugh, cry or just bang your head against a wall at the stupidity of them. Yesterday there were a couple of such comments from Judith Collins in an opinion piece talking about the Auckland mayoralty. They aren’t really the key part of her opinion but present a good opportunity to bust a few urban myths and concern trolling.
First up one of those old urban legends.
A sprawling city the size of London with a population the size of Perth’s.
There’s couple of interesting aspects to this statement in the comparison of London and Perth.
I’m not quite sure where the comparison with London came about, possibly it was one of those ones from the 50’s and 60’s that was used to justify investing in roads and not in public transport. Regardless of its origin it’s false and presumably only came about by including much of Auckland’s rural hinterland. If we’re talking about cities then we should be comparing the urban area and in that regard London at around 1,738km² is over three times the size of Auckland at 559km². You can clearly see the difference in the image below which shows the two cities at the same scale.
Auckland is a long relatively narrow city due to its geography and would look considerably smaller if it too was on a river plain.
It’s also odd that she chose Perth to compare Auckland too. Perth’s population is now estimated to be over 2 million, a level Auckland is not expected to reach for roughly another 15 years. Of course we’ve already kind of been following Perth for some time when it comes to transport, not least of which included using their old rolling stock until we too electrified our rail network. If we want to continue to follow Perth then more investment in our public transport network and in particular rail will be needed which brings us to the second comment of hers.
Auckland needs roads first and foremost. The Central Rail Link is a good idea and would be a lot better if it included stations at the University of Auckland and AUT. The fact that it won’t include Auckland City Hospital is a lost opportunity. But, then again, Auckland’s hills and gullies make this extremely expensive. Therein lies one of the other issues that London, for example, doesn’t face. Auckland is not flat. It’s built around 60 volcanic cones after all.
The good news for Judith is we have done exactly what she suggests. We’ve spent decades building roads first and foremost and with the exception of a few bits here and there, our road network is largely complete. Once Waterview opens little over a year there will not be any significant gaps in our roading network and all projects after that are tinkering with what we already have. That means for Auckland to move into the future it needs to start focusing on its missing modes, its high quality public transport and active modes networks.
It’s the comment about the CRL not including the Universities and the Hospital that is what really drove me to write this post. It’s classic white anting and the suggestion the CRL route be changed to include these two locations along with Wynyard has been pushed by the NZCID for some time – they are also pushing for a longer and more expensive road tunnel under the harbour. It all reminded me of a document I received from an OIA request over a year ago but never posted. The document is a presentation by the then Minister of Transport to the Cabinet Strategy Committee and is dated 23 August 2013 and I assume Collins was on that committee while she was a minister.
In explaining the CRL it states the CRL is Key infrastructure project for meeting forecast growth in demand for access to Auckland’s city centre It also notes that 14 options for route alignment, number and location of stations were considered in the Options Evaluation Study before determining the preferred route and that the preferred route was endorsed by Auckland Transport, Kiwirail and Auckland Council.
It says the confirmed route is 3.4km long and has the old cost of $2.86 billion.
Fairly straight alignment, consistent with rail planning principles
Central route covers both sides of CBD
Significant travel time savings for Western Line passengers.
It then looks at the NZCID route. Notice it is about 800m longer and costs about $800 million more
The stations proposed would obviously have an impact on patronage, the page below doesn’t show the Hospital or Wynyard but as you can see there is little difference in how many people would use alternative route for the Universities.
Modelling of the overall impact of PT patronage out to 2041 shows that in the AM peak there would be a difference of just 150 trips. This is likely because the longer less direct route for some journeys will put a number of people off using PT.
If the small difference in patronage wasn’t bad enough it also turns out the route isn’t feasible as it would require a 9% grade when the maximum for trains is 3.5%. Just eyeballing the graphics also suggests that it would involve some very deep stations.
As for connecting Wynyard, they say AT modelling suggests that on its own it isn’t enough to serve with rail. It doesn’t mention it but to me Wynyard seems much more suited to being a station on a route that connects to the North Shore.
The presentation notes the following conclusions
And the last part of her comment
And we Aucklanders love our cars. Many Aucklanders work in south Auckland and live in west Auckland. That’s the nature of Auckland. Buses travel on roads. Rail is useful and needed but it’s not the only solution.
As I’ve said in the past Auckland’s love affair with cars is more of an arranged marriage due to a lack of quality options.
Yes many people do live in West Auckland and travel to South Auckland for work. However have a play with Statistics NZ interactive commuter map and you’ll see it’s not super significant numbers. Once the new network is in place it will be easier than ever to commute between the two areas. For those that want to drive – which is likely to remain the fastest option – if only there was a road that would let them bypass having to travel through the city to get to the south. Perhaps we could call the road the Western Ring Road. The example below is of commute patterns to the area unit that includes the Airport. Around 1,200 of the nearly 16,000 people who commuted there came from West Auckland
Lastly of course buses travel on roads but they generally do so on local roads, not state highways like the government is prioritising. I look forward to seeing Collins tell us all what roads for buses she is proposing be built.
As of today it is exactly one year away till the end of voting for the next local body election. That means talk about who will and won’t stand is only going to increase in coming months.
Unlike in central government elections, transport tends to be one of the key issues at the local body level which in many ways is unsurprising because voters see and experience the issues locally and it’s an area that councils actually have a large influence over – unlike topics such education, health, the economy or welfare.
For the next election we expect transport to continue to be one of the key topics and as such want to see candidates better informed about transport and what’s happening regardless of their political views. Our hope is to raise the level of the debate higher than it has been in the past. To do that we want to create a resource that all candidates can use to learn more about what’s happening with transport in Auckland and what’s being done overseas. Given the amount of issues to discuss this will be a multi part series.
The last decade has seen fundamental shifts in how Aucklanders travel. For many decades Auckland has developed in a way that has made it very difficult to get around without driving. As such metrics like vehicle ownership and how much we use private vehicles showed a near constant increase. The increase was such that transport planners and engineers felt confident in predicting this would continue indefinitely into the future.
Around 15 years ago the way Auckland developed started to change as proximity to the city centre returned to being valued. Changes in our urban form combined with a number of key transport strategic investments as well as cultural changes – particularly from younger generations – are completely upending transport models that predict how Aucklanders travel.
The distance we travel in vehicles has flat-lined despite a rapidly rising population and on a per capita basis is the same as it was over a decade ago. The chart below shows how this has changed over time compared with the results per capita.
A good example of just what impact the change in demand is having is seen on the Harbour Bridge. Traffic volumes today are lower than they were a decade ago. This means they’re well short of the growth predictions the NZTA made as part of the last assessment into another harbour crossing. One strong factor in the change in demand has been the Northern Busway which I’ll cover off later in the post.
The change in demand for driving is something that has been seen all over the world and has thrown out transport models. The example below from the Ministry of Transport shows how we’ve continued to predict growth in travel that hasn’t been realised.
As a result of the changes being seen the MoT have started to think about what might happen in the future. Below is a brief summary of the four high level scenarios they think could expect. As you can see the modelling in three of the four scenarios expect driving to decrease over time.
The changes in driving trends raise questions about whether we’re investing in the right projects for the future.
Over the same time that growth in vehicle travel has stalled, travel via public transport has increased dramatically – albeit off a much lower base. In the last decade the number of trips on PT have soared from 50 to 80 million and a large chunk of that growth has come from some of the key investments that the council and government have been making.
On an average weekday there are now over 200,000 bus trips and around 50,000 rail trips
Patronage growth is occurring at levels well ahead of population growth which also has meant that the number of trips taken per person per year has risen from around 37 in 2005 to over 51 in 2015. This is a significant improvement however it remains well short of many of our comparator cities.
One of the stars of the show over the last decade has been rail patronage which has risen from less than 4 million to around 14.5 million. This growth has been generated as a result of investment in Britomart, double tracking, station upgrades, service improvements and most recently electrification. It is currently growing at over 22% per year and on track to reach the 20 million target set by the government for the City Rail Link in around 2017/18.
Another huge success has been the Northern Busway which didn’t exist a decade ago. Figures from Auckland Transport show it now carries at least 3.5 million trips per year with many others benefiting from the investment. Now during the morning peak up to 40% of people crossing the harbour bridge are doing so on a bus which is more than double what it was in the early 2000’s.
One area the growth in public transport use been considerably noticed is in the city centre. Research conducted in 2014 showed that the number of people accessing the city centre in the morning peak had increased considerably however the number doing so by car had remained the same. The two biggest contributors to the growth in PT trips to the CBD have been the work to improve the rail network and the creation of the northern busway.
These results are also similar to the census data from 2013 which shows that the modeshare of cars is slowly declining. The question only asks about trips to work however we would expect the change to be more pronounced if it also compared others such as those travelling for education purposes.
What is clear is that transport trends are changing and it’s already having a profound impact on the way Aucklanders choose to get around.
In addition to this there are also changes in trends of what people want to see invested in. In numerous surveys and consultations from council and independent organisations including the AA the general public have strongly supported much greater investment occurring in public transport and cycling. One example is the feedback from the council’s recent Long Term Plan consultation where a huge number of people made it clear they wanted more investment in alternative modes.
In future posts I’ll look at aspects such as what’s currently being done in transport, what the current plans for the future are and what are some alternative ideas including case studies from overseas.