Links: Key’s Auckland Infrastructure Annoucment

Shortly Prime Minister John Key will be delivering his State of the Nation address at a luncheon being held by the Auckland Chamber of Commerce. It’s been widely expected that he’ll announce the government agreeing to start the main works on the City Rail Link in 2018 – in line with when the council/AT wanted to start them – instead of 2020 like they had announced when they supported the project in 2013. I’ll actually be at the event and trying my best to cover it live on social media so follow us twitter for the latest updates.

Aotea Station Design Platform Oct - 15

But it won’t be the only announcement with Key saying:

“As New Zealand’s largest city, our biggest commercial centre and the main gateway for international tourists, we all need Auckland to succeed.”

He said the Government was already putting billions of dollars into Auckland as it grew and he would highlight some of the priorities for the year ahead.

“It’s a speech that looks very heavily at infrastructure projects, not just in Auckland, but it does look at those issues and gives the Government perspective on next steps.”

….

“We are spending billions and billions of dollars as a Government on infrastructure. So the announcements we make tomorrow will ultimately mean the Government increases even further its expenditure on infrastructure. We are doing that because that infrastructure underpins the efficiency and competitiveness of our economy. We are not doing this because we need to stimulate the economy per se.”

Mr Key said housing in Auckland was a focus for the Government, but it was not the main issue of his speech. “We are saying we need to build more houses faster. It is our expectation the demand in Auckland is going to continue, that the growth in the Auckland population is going to continue and we just need to build a lot more houses between now and the next five to 10 years.”

It’s also been rumoured that he’ll make comments on the East-West Link, Additional Waitemata Harbour Crossing and Penlink. Further while he says housing won’t be a main issue of his speech I suspect that other aspects of infrastructure provision such as funding for water infrastructure that would enable more housing to be developed more quickly might be.

I imagine we’ll see media reports of the announcement coming in fairly quickly after the speech so the main purpose of this post is for somewhere to discuss what’s announced – I’ll have a more detailed analysis tomorrow.

Of course with the CRL getting so much attention it begs the question how many times will the media or some media commentator refer to it as a loop, suggest it’s just about trains going around in circles or that it’s just about Len Brown wanting a toy trainset.

Anyway it should be an interesting few hours. Keep an eye on our twitter account for the latest updates.

The Herald and Housing Affordability

The media are once again going off on the topic of housing affordability, after the release of the latest report by Demographia saying that Auckland is one of the most unaffordable cities in the world.

A survey of the median house prices around the world has revealed Auckland to be among the five least affordable cities to buy a house. The annual Demographia survey, released today, compares prices to incomes in 367 cities. Auckland is one of the worst in the world due to extremely high house prices coupled with moderate wages.

We’ve often talked about the issues with how Demographia produce their results. They take an overly simplistic view of the discussion, and exclude important factors. But while the scale of the issue is likely wrong, that doesn’t mean the general outcome – that housing affordability needs to be improved – isn’t correct.

We also disagree with their proposed solution of unfettered greenfield development. For Demographia, it seems that opening up greenfield land is always the solution, regardless of the question being asked. While land supply is an issue, they like to conveniently ignore the impact of planning regulations on existing urban land that prevents development across most of Auckland. They also like to ignore the cost to tax and ratepayers of providing the infrastructure needed to enable that greenfield development. For example, based on Auckland Transport’s figures it will cost about $67,000 per dwelling to provide the roads needed in the major new greenfield areas that are proposed.

Future Urban Land - North Transport Networks

Many people may want a home with a large backyard on the fringe of town, but many just want a home. A lot are prepared to forgo a large backyard for the added amenity of living closer to the city or other urban centres – but they are unable to do so, as so much development has been restricted.

This brings me to the main point of the post, the media (especially the Herald) who want to have it both ways.

While today they’re lamenting house prices, the Herald has spent much of the last few years championing opposition to one of the key tools that will help address housing supply, the Auckland Unitary Plan. From when the draft plan was released almost three years ago, they’ve given countless space to those opposing any change in Auckland. They’ve deliberately misled the public and recently they’ve even become so absurd as to call two-storey townhouses “Highrise” in their bid to whip up fear and anger over the plan.

Of course politicians of all stripes shouldn’t escape blame. Whether they’re also trying to whip up fear, generally oppose change or just have it happen in some other neighbourhood they are as much to blame. They also seem to me to have less desire to actually fix problems. After all, which of them are really going to stand up to house owning voters and say they’ll enact policies which could result in existing house prices falling or at best stagnating for many years as a result of changes.

Regardless of what you think the solutions are, it still feels like we’re some way off any real changes happening.

On a related note: I suspect we could see John Key include housing announcements in his announcement on Wednesday when he also announces support for the CRL to start in 2018. There have been suggestions the government have been talking to the council and CCOs like Watercare looking at what other big infrastructure projects could be brought forward to help speed up housing supply.

Book review: William Fischel, Zoning Rules! (1 of 2)

Over the holidays, I read William Fischel’s new (2015) book on urban planning, Zoning Rules! The Economics of Land Use Regulation. It’s an important, interesting, and – fortunately for me – readable book on the topic. Fischel draws upon three or four decades of research on the topic, as well as his experience as a member of his local zoning board in New Hampshire.

Zoning, or urban planning more generally, exerts a strong influence on the shape of cities. It influences where people live and work, as well as the housing choices and prices that they face. It is a dull-sounding topic with important ramifications – very similar to transport policy in that regard. And, like transport, it arouses a surprising level of passion.

Fischel Zoning Rules cover

In the book, Fischel addresses two main topics:

  • First, how did zoning / urban planning arise and proliferate? A century ago, cities did not have comprehensive zoning codes that defined how intensely people can develop land and what types of activities can happen in different places. Now, virtually every city has zoning / planning regulations. What changed?
  • Second, under what conditions is zoning economically efficient? Many commentators and researchers have critiqued the cost of planning rules, but there are also benefits – and complex interactions with other policies such as local government property taxation. What ties all this together?

In the first part of this review, I’ll discuss Fischel’s (convincing and well researched) answer to the first question.

Let’s start with a common story about why bad planning regulations exist. Here’s Finance Minister Bill English fingering some suspects in his recent speech on the topic:

Your prospects of being able to buy a house are directly related to the decisions made by planning officials about the availability of land, the environmental standards they apply to building, and the way infrastructure is allocated.

It’s very difficult to understand how planners do that, even though the consequences for the community and the economy are significant.

Central government has had the opportunity to sit alongside councils to understand how they make their decisions.

Some of those decisions appear quite arbitrary.

They can be driven by the tastes of individuals who have the power to make decisions.

English argues that planning rules are imposed in top-down fashion by council planning staff. In this narrative, planning rules exist because local governments have chosen to supply them to us in preference to other models.

Fischel argues that this story is backwards: urban planning rules have generally not come about due to top-down bureaucratic decision-making, but as a result of bottom-up democratic pressure. Politically active home-owners, or “homevoters”, advocate for tighter planning restrictions. Because the majority of the average homeowner’s wealth is tied up in their home, they have a strong incentive to vote to prevent developments that might put the value of their home at risk. In planning, ideas are secondary to self-interest:

Public officials respond to the interests of their constituents, and public ideologies such as city beautification, hearth-and-home, and environmentalism come to the fore when they serve the interests of property owners. [Zoning Rules!, p 215]

There is a significant amount of empirical support for the “homevoter hypothesis”. Saiz (2010) found that US cities with more severe geographic constraints also have more restrictive planning rules – suggesting that people who own expensive property are more likely to vote to limit development. (I recently reviewed Saiz’s paper.) At an international level, Germany and Switzerland have the lowest home ownership rates in the OECD and also some of the most affordable housing. At a hyper-local level, case studies of the great down-zoning of Los Angeles reveal the key role played by a relatively small number of vocal homeowner activists.

But timing also matters, as zoning is a relatively new phenomenon. Fischel identifies two critical periods in the development of urban planning. First, zoning was invented and subsequently spread quickly through America in the 1920s. Second, in the 1970s, zoning was tightened significantly, with increasing restrictions on both density and suburban expansion. Here was the result in Los Angeles:

FrameWORK_Housing_ZoningCapacity

The great down-zoning of Los Angeles (Source: Morrow, 2013)

Synchronised changes of this nature require synchronised causes. Fischel argues that zoning first arose as a result of a transport revolution in the 1910s and 20s:

As trucks, buses, and cars replaced rail-bound modes of transportation, suburban residential districts could no longer rely on nuisance law, informal pressures, control of rail routes, and piecemeal covenants to protect their residential investments from incompatible use. Zoning was a response to potential insults to their homes from near-nuisances transported to their neighborhoods by footloose trucks and buses. [Zoning Rules!, p 216]

The urban planning clampdown of the 1970s occurred as a result of a more complex mix of factors. The backdrop to these changes was the subsidised expansion of home ownership after World War II: governments handed out subsidised mortgages like candy, thus expanding the number of homevoters. Fischel identifies six main factors that increased homeowners’ demand for tighter zoning controls, and made it easier for them to get what they wanted:

…the three demand factors that led to the 1970s growth control movement were (a) the growing suburbanization of employment (as opposed to just residences) resulting from the construction of the interstate highway system and the spread of containerized shipping; (b) the expansion of equalitarian legal principles that derived from the civil rights movement of the 1960s; and (c) the sudden growth of housing values in the portfolio of homeowners [resulting from high 1970s inflation]. The three elements that facilitated the supply of exclusion were (a) the expansion of legal standing to opponents of development; (b) the federalization of the environmental movement that dawned on the national scene in 1970; and (c) state legislation that established multilayered review of many projects that were formerly regarded as entirely local. [Zoning Rules!, p. 217]

The details of the story are different in New Zealand than in the US. Our history with zoning as a means of racial exclusion is nowhere near as shameful as America’s. And planning legislation has followed a different (and, I hope, more efficient) course than in the US. But many of the key elements are likely to be similar. New Zealand cities have experienced the same revolutions in urban transport and suburbanised population and employment to a similar extent. And, of course, we also have a class of stroppy “homevoters” who will advocate for tighter planning regulations to maintain or increase their property values.

If you think that urban planning rules should be changed, it’s essential to understand the bottom-up drivers of those rules. Many critics of zoning are oblivious to the popularity of zoning among a vocal segment of home-owners. As City Observatory’s Daniel Hertz recently wrote:

anyone who thinks there is a “consensus” about the damage caused by too-strict zoning ought to attend the next community development meeting in their neighborhood.

Fischel’s excellent history of zoning is a useful reminder that urban planning policies generally arise as a result of pressure from homeowners, not as a result of a conspiracy of planners. Consequently, the path to reform or liberalisation of planning rules is a difficult one for local government politicians to walk. If they vote for significant loosening of planning rules, they increase their risk of losing the next election. And successful challengers may simply turn around and tighten the rules back up again.

Fischel’s awareness of that dynamic flavours his policy recommendations. Zoning Rules! closes with no proposals for sweeping change. Instead, it proposes various ideas for how a challenging “bottom-up” dynamic could be incrementally improved. At the top of the list is an important long-term play: reduce the demand for strict planning rules by cutting back tax subsidies for home ownership, like New Zealand’s lack of a comprehensive capital gains tax.

Next week: Fischel’s analysis of the economic efficiency of zoning.

Will the proposed Waitemata Harbour Crossing be good for drivers?

There are many reasons to be concerned about the plan to add more road lanes across Auckland’s Waitemata Harbour: from the extreme cost of building such big tunnels and interchanges [$5-$6 billion and four times as much as just building rail tunnels], to the undesirable flooding of city streets and North Shore local roads with even more cars, to the increase in air pollution and carbon emission this will create, the loss of valuable city land to expanded on and off ramps and parking structures, to the impact on the harbour of exhaust stacks and a supersized motorway on the Shore, to the pressure this will put on the rest of the motorway system particularly through the narrow throat of Spaghetti Junction. It is both the most expensive and least efficient way to add capacity across this route, and if resilience is the aim then the double-down on reliance the motorway system rather works against this. This one project will simply crowd out any other changes we could make of scale in Auckland or the country for years; yet it changes almost nothing; it simply enables more vehicles to travel across a short point in the middle of the city, yet this is by no means an obviously good thing: The list of unwanted outcomes from the current proposal is so extensive that the benefits had better be so extraordinary and so absolutely certain in order to balance them all.

But perhaps there is no greater reason to not do it than that it simply won’t improve things for drivers.

Really? How can this be? As well the obvious problem with this project that it will add super capacity for a short stretch of the motorway network and therefore just shifts any bottleneck to the next constriction, particularly the extremely difficult to expand CMJ or Spaghetti Junction, there’s also a bigger structural problem with building more roads to fight traffic congestion. It can’t work. We all have experienced being stuck in traffic on a motorway and sat there wishing if only the authorities had just built an extra lane all would be sweet, well it would, wouldn’t it? However the evidence from all round the world shows that while that may help for a little while it never lasts, especially in a thriving city and especially if these extension starve the alternatives of funding, condemning ever more people to vehicle trips on our roads. Soon we’re stuck again wishing for another few billions worth of extra lanes all over again.

I-10 Katy Freeway

Here’s how it works; each new lane or route simply incentivises new vehicle journeys that weren’t made before; a well known phenomenon called induced demand. Road building is also traffic building, the more we invest in roads the more traffic and driving we get, and not just on the new road; everywhere. Traffic congestion is, of course, simply too much traffic, too much driving. Take for example the I-10 in Houston, the Katy Freeway. In that famously auto-dependent city they freely spent Federal money and local taxes disproportionately on just one way to try to beat traffic congestion, the supply side: ever more tarmac [Houstonians can boast the greatest spend per capita on freeways in the US]. The I-10 which began at six to eight lanes has just had its latest ‘upgrade’ to no fewer than 26 lanes! That ought to be more than enough in a flat city with multiple routes and only half the population Los Angeles. So what happened? According to recent analysis it has made driving this route significantly worse.

Traveling out I-10 is now 33% worse – almost 18 more minutes of your time – than it was before we spent $2.8 billion to subsidize land speculation and encourage more driving.

But hang on, those trips must need to be made, right, or people wouldn’t make them. Well in the absence of direct pricing it is hard to know exactly how valuable these new trips are. So first they really ought to price routes like the I-10 properly to reduce unnecessary journeys clogging up the valuable ones, like the truckies and trades [it is partially tolled now]. But the real problem in cities like Houston is the absence of any useful alternatives to driving [an earlier extension of I-10 took out an existing rail line!]. Providing those alternatives is how congestion is best dealt with. Not completely solved of course, that can only happen by collapse of the city economy like in Detroit, and no-one wants that solution. But traffic congestion can be made both manageable and, for many, no longer an issue, by providing them with attractive alternative options. And in turn this frees up the roads sufficiently for those who have to or prefer to drive. Especially when this is done in conjunction with direct price signals- road pricing; tolls or network or cordon charges.

Houston may be forever too far gone down this hopeless road but that doesn’t mean we have to follow it. Here is a description of the same problem in Sydney, with the solution:

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.

This is called the Nash Equilibrium [I would rather say better than faster; there are a number of variables including speed that inform our choices];

This relationship is one of the key mechanisms that make city systems tick. It is basic microeconomics, people shifting between two different options until there is no advantage in shifting and equilibrium is found. We can see this relationship in data sets that make comparisons between international cities. Cities with faster public transport speeds generally have faster road speeds.

Which brings us to the Waitemata Harbour. It currently has 13 general traffic lanes across two bridges, one walking and cycling lane on the upper harbour bridge, and some ferry services generally not competing with these crossings. The Harbour Bridge carries increasing numbers of buses from the hugely successful Northern Busway, the very success of which exactly proves the theory of the equilibrium described by Dr Ziebots above. In the morning peak the buses carry around 40% of the people without even a single dedicated lane on the bridge itself. And it is all the people using the busway that allow the traffic lanes to move at all. In fact NZTA argue that one of the main reasons for building a new crossing is the numbers and the size of the buses now using the current one.

The Upper Harbour Bridge is about become significantly busier because of the multiple billions being spent on the Waterview connection between SH20 and SH16, the widening of SH16, and the bigger interchange between SH81 and SH1 on the Shore. These huge motorway expansions will generate more traffic of course, but also will provide an alternative to driving across the lower Harbour Bridge.

What is missing anywhere between the North Shore and the city is a Rapid Transit alternative to these road lanes. Like Sydney always has had.

Sydney Harbour am peak

It is its [Sydney Harbour Bridge] multi-modality that makes it truly impressive, some 73% of the people entering Sydney on the Bridge from the Shore at this time are doing so on just one of the train lines and one bus lane; a fraction of the width of the whole structure. So not only does it shame our Harbour bridge aesthetically it completely kills it for efficiency too.

Auckland’s bridge was always only ever designed for road traffic, and should be left that way, the clear way forward is to add the missing Rapid Transit route as the next major additional crossing [after adding the SkyPath to the existing bridge].

In 1992 it  [Sydney Harbour Bridge] was supplemented by a pair of two lane road tunnels that up the cross harbour tally for this mode to match the number coming over by train [bridge plus tunnels = 12 traffic lanes], but that wasn’t done until the population of the city had hit 3.7 million. The high capacity systems on the bridge saved the people of Sydney and Australia from spending huge sums on additional crossings and delayed the date they were deemed necessary by many decades. But anyway, because the additional crossing is just road lanes it only adds around 10% extra capacity to the bridge. To think that the government here and NZTA are seriously proposing to spend multiple billions in building a third Harbour Crossing in Auckland with the population only at 1.5m, but not only that but they are planning to build more capacity for the least efficient mode; more traffic lanes.

The good people at NZTA of course know this, but we just seem stuck in a bad habit of road building in a similar way as Houston is, because the money for motorway building comes from central government some people believe this makes it free, in a similar way that the highways in the US are largely funded by the Federal government, unlike public transport, which is more locally funded [Known as ‘path dependency’ and is well covered in the academic literature: Imran, Pearce 2014]. This means the pressure to evaluate the effectiveness of motorways over the alternatives is much weaker. Here is a slide from an NZTA presentation proudly proclaiming how much more traffic this massive project will generate:

AWHC - Induced Demand

Of course this growth can be met by a parallel Rapid Transit system instead. The success of the Busway here and the enormous uptake of the recently improved Rail Network show that Aucklanders are the same as city dwellers everywhere and will use good Transit systems when they get the chance. And two much smaller and therefore cheaper train tunnels have much greater capacity than the proposed six traffic tunnels. Twice as much in fact: the equivalent of twelve lanes and without adding a single car to city streets. Furthermore converting the Busway to a rail system, which is entirely possible, and depending on the system may even be quick and easy, means that buses can be completely removed from bridge freeing up more capacity there for general traffic; cars and trucks:

  • Removing buses from the existing bridge would free up some capacity. 200 buses per peak hour ~= 1,000 cars ~= 60% capacity of a traffic lane. So a dedicated PT crossing provides car users with an extra lane (once you account for reverse direction). Not huge, but not negligible either.
  • Mode shift: by providing a fast and more direct alternative route you will get mode shift, providing more space to the cars that remain. So you have more vehicle capacity and less demand = a real congestion benefit.

So compared to a new road tunnel where both crossings would need to be tolled, and simply generate more competing traffic for drivers through the whole city, the dedicated PT option would seem to be better even for motorists. The better, faster, and more attractive the Rapid Transit route the freer the driving route will remain; with more people choosing the car-free option: The higher the Transit utility; the higher the driving utility.

Of course while a rail crossing will be considerably cheaper to build than a road crossing it still needs a network either side of the harbour to make it useful. Are there good options for this? In fact there are a number of very good options, all with varying advantages and disadvantages that need serious investigation. And it is important to remember by the time this project is being built the public transit networks in Auckland will be considerably more mature. The City Rail Link will have transformed the newly electrified rail network to a central role in the city, it will quickly have doubled from 2015’s 15 million annual trips to 30 million and more. The New Bus Network will be functioning and with the new integrated zonal fare system meaning people will be used to transferring across routes and modes to speed through the city. The increase in bus numbers and population will make driving in the city less functional. There will certainly many tens of thousands more people in the city without their car, many with business or other reasons to travel across to the Shore.  And importantly there will almost certainly be a new Light Rail system running from the central isthmus down Queen St and terminating downtown.

The quickest and cheapest to build will probably be to take the city Light Rail system through Wynyard Quarter and across the harbour, as outlined by Matt here. The busway can be most easily converted for this technology, as it is already designed for it. Furthermore being the only rail system that can run on streets it can also most easily include branches to Takapuna and even Milford to the east, and from Onewa up to Glenfield. This also has the advantage of balancing the existing city-side routes, unlocking a downtown terminus, not unlike the CRL does for the rail network.

What a North Shore light metro network map might look like.

What a North Shore light metro network map might look like.

Higher capacity and with the great advantage of cheaper to run driverless systems are is Light Metro like the massively successful SkyTrain in Vancouver. As described for Auckland here. However like extending our current rail system to the harbour it would require a more expensive city-side tunnel to Aotea Station for connection to city network. We know work has been done to prepare Aotea station for this possibility. Matt has also explored other variations here.

Light Metro North & Northwest

Perhaps the best answer for both the near term and the long term is to build tunnels that can take our new Light Rail vehicles for the years ahead but are also capable of being converted to the higher capacity Light Metro when the demand builds so much to justify the further investment of the city tunnel between Wynyard and Aotea Station. Bearing in mind the LR vehicles AT are planning for are high capacity [450pax ] and they can run in the cross harbour tunnels and the busway at very high frequencies. And that Light Metro systems can use track geometries much closer to LR than can conventional rail systems.

So in summary, the bane of the motorist and the commercial driver, traffic congestion, is best dealt with on the demand-side as well as the supply-side. We have spent 60 years just supplying more tarmac, and now it is time to get on with addressing the demand side: Building quality alternatives and providing clear incentives to fine-tune peoples choices.

And, just like road building, investing in quality Rapid Transit will grow the demand for more of it. It will also shift land use, incentivising agglomeration economies and greater intensification around transport nodes, as well as individual habits to suit this option more. What we feed, with infrastructure investment, grows. And vitally, inducing this sort of movement instead of driving is entirely consistent with other the demands of this century; especially our country’s new commitments to reduce our carbon emissions, and the use of our own abundant and renewably generated energy.

This project is both so expensive and potentially so valuable or so damaging that it needs a fully informed public debate about the possibilities. Gone are the days that NZTA can just keep building what its used to without real analysis of all alternatives, or that a politically expedient option sails by without serious evaluation. Because it can be transformed into a truly great asset for the city and the nation on this important route from the eye-wateringly expensive and clearly dubious idea from last century that it is now.

What’s clearly missing from this picture, especially once Light Rail fills ‘The Void’, and some form of rail goes to the airport?:

CRL Outline-Train-Plan-31July2014

Body without a head: Official post CRL rail running pattern

Government CRL announcement imminent?

Auckland could be about to get a late Christmas present. It’s appearing more and more likely that the government will agree to start to the City Rail Link in 2018, two years earlier than the 2020 date they set back in 2013 when they first agreed to the project. To go with the what, we also know the where and when, Stuff reports:

Prime Minister John Key is expected to announce the Government will help fund Auckland’s $2.5 billion inner city rail link two years earlier than originally promised.

It’s understood the PM will make the commitment in a speech to the Auckland Chamber of Commerce on January 27.

….

Auckland Chamber of Commerce chief executive Michael Barnett confirmed Key would address its membership on the issue of infrastructure funding for the city.

It would be similar to his announcement in 2013 in that he would outline the government’s future commitment to the city “and I think give some clarity and certainty to some of the investment in infrastructure that needs to be made”.

Asked if that would include a statement on the timing of the CRL funding, Barnett replied: “If they put a stake in the ground and then there’s clarity, then everyone can work around that.”

The Chamber of Commerce supported a 2018 start for the rail project, he said.

CRL - Early Works Jan-16 2

Early works are underway but are we about to get a Go for the rest of the project?

As I pointed out in my year ahead post last week we’ve been hearing noises that an agreement between the council and government is close for a while so it hasn’t come as a surprise that something may be about to happen. In fact I think the main thing stopping it from having been made earlier has been the Christmas/New Year holidays and lead up to them putting a dampener on the level of political credit the government will want to bask in.

Pressure has been mounting on the government to do something for months and one reason has been the stellar patronage growth that we’ve been witnessing. It has risen an impressive 23% over the last year Auckland is on track to reach the 20 million target by 2o20 around three years early.

2015-11 - Rail vs Govt Target

As I also mentioned in my year ahead post, the announcement be the council funding their share from 2018 with the government still not committing any cash till 2020. If this occurs perhaps they’ll off some sort of deal.

Making the announcement to the Chamber of Commerce is significant for a few reasons.

As I understand it, Auckland’s various business lobbies have been quite active behind the scene, pushing the government to commit to an earlier start date. They see the value in the project and also the value in minimising disruption. Waiting till 2020 leaves roughly a two year gap during which many businesses in the city – but particularly those along the route – will be in a state of limbo. Delaying the project also affects more than just the rail network as it also delays other projects to improve Auckland that are dependent on the CRL being completed, one example is the proposed Victoria St linear park but there are a heap of others.

It was to the Chamber of Commerce back in 2013 that the government first announced it would support the CRL after years of bitter opposition to it. Again back then the business lobbies were also a key factor in getting the government to change their position on the project. Of course as part of the same announcement the government also launched their accelerated Motorways package that fast tracked projects such as the Kirkbride Rd grade separation, southern motorway widening and the big package of works planned for the area around where SH18 joins SH1.

It raises the question of whether John Key will announce support for the CRL alongside any other projects. As we know the Reserve Bank of NZ has already said the government should consider accelerating infrastructure projects in Auckland. As such it’s entirely possible any announcement could also contain funding for other projects too (including non-transport projects). The concern would be if the announcement also included a number of projects designed to encourage significant growth on the urban fringe at the expense of enabling greater housing supply closer to the city.

Lastly an announcement would be a significant win for Mayor Len Brown. When he first became mayor the project was in its infancy and he has pushed it as the number one project for the city since that time with the backing of the council. To Len, if the government support the project starting sooner, then thank you.

CRL - Early Works Jan-16

I’ve already been counting the days till January 27 to see just what is announced.

 

2015 – Auckland’s Watershed Year

The more I look at the events and data of 2015 the clearer it becomes that this has been a profoundly significant year for Auckland. It is my contention that this year the city reached a critical turning point in its multi-year evolution back to true city pattern. I have discussed this change many times before on this forum, most notably here, as it is, I believe, an observable process that has been building for years. Generally it has been gradual enough, like the growth of a familiar tree, as to easily pass unobserved, but now I think it has passed a into a new phase of higher visibility. The group who see it most clearly are people returning from a few years overseas. Many ex-pats express surprise and wonderment at the myriad of changes in quantity and quality they find here on returning.

HOPETOUN_6234

Changing City: New apartments with views over the city and harbour, a Victorian school and park, 20thC motorways, and the new LigthPath.

Below is a summary of evidence for 2015 being the year Auckland returned as a city, in fact the year it crossed the Rubicon onto an unstoppable properly re-urbanising path. Later I will add another post on how 2016 and beyond is certain to see the city double-down on these trends, and why this is very good news. This transformation is observable in all five keys areas:

  • Demographics
  • Transport
  • Development
  • Economy
  • Politics

DEMOGRAPHICS. New Zealanders returning in big numbers are one of the key metrics of 2015. Along with new migrants and natural growth, the other change driving Auckland’s demographic strength is fewer people leaving, all of which, of course, are a vote of confidence in the city as a place to want to live and to likely fulfil people’s hopes for a better future. Population growth for the year was at 2.9%, the strongest rate since 2003, the strongest in the nation, and biggest raw number on record. See here for Matt’s [Population Growth in 2015] and Peter’s [Why is Auckland Growing?] posts on these issues.

Auckland LB Population Change - 2015 2And importantly for my thesis many more people are moving into the centre, particularly into new apartments. This is a evidence that the The Great Inversion is happening in Auckland as it is all over the developed world; the return of vitality to centre cities all over. Auckland’s urban form is reverting to a centred pattern; with proximity to a dense centre as a key determinant of value.

City Centre Population - 1996-2015 2

TRANSPORT. The huge and sustained boom in rail ridership way in advance of population growth is the headline transport news of 2015, and is the result of the upgrade in quality, frequency, and reliability of the service brought by the new electric trains. Sustained growth of over 20% is very strong; this year every four months an additional million trips have been added to the running annual total; 13 million in March, 14 million in July, 15 million in November. I am not overstating it to say that these numbers change a great deal: They change the argument for further investment in rail systems in Auckland, and significantly they change growth and development patterns across the city:

2015-11 - Rail Patronage

BRITOMART JULY 15_3388

Elsewhere on our Public Transport systems the news is great too; The New Bus Network is just beginning, and is already showing huge growth in the few areas it is in effect. This year we have also seen new ferry services, including a new private Waiheke service that means there is much more like a real turn-up-and-go service there [started late 2014]. Ferry modeshare is holding its own at 7% which is a strong showing given the explosion in rail and bus numbers.

Importantly AT is now routinely rolling out long overdue bus lanes across the city. And now that they are doing this confidently and more consistently, surprise and anguish about this more efficient re-purposing of roadspace by car drivers has fallen away to nothing- there surely is a lesson there.

So total PT ridership cleared 80 million annual trips this year, for an overall growth of 8.1%, a rate running at nearly 3x population growth, evidence of a strong shift to public transport at the margin. Growth that is certain to continue despite capacity issues becoming pressing at peak times on both buses and trains.

2015-10 - Total Patronage

HOP card use also became strongly embedded this year [except on the ferries] which is another sign of a maturing system.

2015-09 - HOP Use

More population and a growing economy of course means more vehicles and more driving on our roads, [see: What’s Happening to VKT?] but because of the powerful trend to Transit outlined above the per capita number is flat to falling. This is a historic shift from last century when the two tended to move strongly in lockstep.

2014 VKT - AKL VKT + Pop

Another discontinuity from last century is that GDP and employment growth have also separated from driving VKT, as shown in the following chart from Matt’s post linked to above. Another sign that the economy too is shifting on the back of public transport, and not driving as much as it was last century:

2014 VKT - AKL Econ 2

So whereas investment in the rail network has been answered by an extraordinary boom in uptake the multi-year many billion dollar sustained investment in driving amenity has not led to massive uptake. It is hard to not conclude from this that 1. We are far from discovering the latent demand ceiling for quality Transit; only the degree of investment will limit it. And 2. Driving demand in Auckland is saturated; this mode is mature, well served and not the area to invest in for new efficiencies or growth.

2015 also saw the launch of the Urban Cycleways programme; a multiyear government led investment in infrastructure for walking and cycling. This, like the Transit boom is another shape changing departure from the past. Although the active modes are not well counted [what a culture counts shows what it values] it is clear that the shift back to the centre is also accompanied by a growth in active mode transport. This is one of the great powers of Proximity; the best trip is the one that isn’t need because the potential traveller is already there, or near enough to use their own steam:

LightPath_5971

DEVELOPMENT. All over the city investment is going into building projects of various kinds, the retirement sector is particularly strong, as is terrace house and apartment buildings, all three at levels not seen for a decade and together support the argument that Auckland is not just growing but also changing shape into a more more city-like pattern, as John Polkinghorn has kept us up to speed on all year on the Development Tracker:

Auckland Dwelling Consents to Sep 2015

Significantly there is also renewed investment into commercial projects especially in the City Centre, led by Precinct Property’s 600 million plus Downtown rebuild and tower, and Sky City’s massive Convention Centre and Hotel project between Hobson and Nelson. Additionally Wynyard Quarter is also moving to a new level soon with a mix of Hotel, Residential, and Commercial buildings. Somewhere in the region of 10 billion dollars of projects are underway or close to be in the City Centre. And as Peter clearly illustrated recently this is in no small part due to improved regulatory conditions [The High Cost of Free Parking].

ECONOMY. Cities exist simply because of the advantages for humans to be in close proximity to each other for transactions of all kinds; financial, cultural, social, sexual. And Auckland is beginning to show real possibility of opening up an agglomeration advantage over the rest of the country now that it is really intensifying. The latest data on Auckland’s performance shows a fairly consistent improvement over the last five years

GDP Growth Dec 2015 AKL

POLITICS. Two major political programmes begun this year will have profound impacts on Auckland for decades to come. The first is the Auckland Transport Alignment Process. Something we haven’t discussed on the blog because we are involved in it and are awaiting the first public release of information which will be soon. Then we will certainly be discussing the details of this ongoing work. But the importance of this process is already clear; it is a reflection of a new found acceptance but the government that Auckland’s economic performance matters hugely to the nation and that transport infrastructure investment is, in turn, critical to that performance. We are of course striving to make the case for a change in the balance of that investment in Auckland away from a near total commitment to urban highways now that motorway network approaches completion [post Waterview and Western Ring Route] and that the evidence of success from recent Transit improvements, particularly to the Rapid Transit Network, is so compelling. There are hurdles here in the momentum and habits of our institutions and politics but also huge opportunities to really accelerate our cities’ performance across a range of metrics through changing how they are treated.

The other political shift is another we are yet to cover in depth but soon will, and that’s the agreement in Paris on Climate Change. This does indeed change a great deal. The city and the nation will have to ask the question of all decisions around urban form and transport how they fit with the new commitment to reduce our carbon intensity. This will clearly lead to a further push for higher density and greater emphasis on Public and Active Transport, as these are current technology and long term fixes to this global challenge. Unleashing further the urban power of proximity and agglomeration economies. So much of the conversation around New Zealand’s carbon intensity is around the agricultural issue and this tends to ignore the opportunities our cities offer, particularly Auckland, and particularly the Auckland transport systems, to this problem.

Cities are emerging as the key organising level that are most able to react to this problem as discussed here in The Urban Planner’s Guide to a Pst-COP21 World:

In many ways, Melbourne’s experience represents a coming-of-age of the urban sustainability movement. The private sector is listening to cities and responding. Now it’s up to cities and national governments to continue the conversations that began at COP21 and continue the evolution.

“The commentary for a long time has been ‘nations talk and cities act.’ We’ve been part of that dialogue too. That’s changing now,” said Seth Schultz [director of research at C40 Cities]. “National governments are coming to organizations like ours and saying ‘help us. We get it.’ I want to change the trajectory of the conversation. Cities are a vehicle and everyone should be getting in that vehicle and joining in for the ride.”

So in summary 2015 has seen:

  • Completion of Electrification of the Rail Network and the New Trains
  • The start of the New Network
  • New Interchange Stations
  • New Buslanes
  • Improvements to Ferry services
  • Start of the Urban Cycleways Programme
  • CRL start
  • ATAP
  • Paris COP 21

I will follow this post with another looking ahead to what is going to be a huge 2016/17. Here’s a short list to start with:

  • Fare Integration
  • Further Interchange Stations
  • Western Line frequency upgrade
  • New Network rollouts
  • Queen St Buslanes [so overdue]
  • More Cycleways
  • SkyPath underway
  • CRL seriously underway
  • Huge city developments begin
  • ATAP concludes
  • Council elections
  • Progress on Light Rail [it could be closer that many expect]

For all the frustrations and compromises that we’ve highlighted over the year I think it’s very clear that there are many very hard working and dedicated people in AC, AT, NZTA, and MoT and their private sector partners and it is their collective efforts in a very fast moving and changing field go a long to making Auckland the dynamic and exciting city it is fast becoming. I am keen to acknowledge their efforts. Onward.

I also want to personally thank my colleagues here at the blog, as it has been another big year for us, Matt, Peter, Stu, Kent and John, from whom I continue to learn so much, it doesn’t look like we are going to be able to give this up anytime soon…

Also I would like to shout out to colleagues over at Bike Auckland, our sister site, they’ve had a fantastic year, so cheers to Barb, Jolisa, Max, Paul, Kirsten, Ben, Bruce and the rest.

And of course to y’all, the reader, you are what really makes this thing work, so if what we do here makes any kind of difference, ultimately that’s because of you.

Kia ora tatou…

WIRI DEPOT JULY 15_6623

ProdCom calls for Submissions on Urban Planning

The Productivity Commission has put out a paper calling for submissions on Urban Planning, here. It’s a very wide ranging, going right back to first principles where they have discovered that:

Yet even among planners, there appears to be no agreed definition of “planning” or “urban planning”, and writers have struggled with whether a definition can be provided.

Despite this lack of theoretical certainty I think we all know urban planning when we see it, or perhaps more accurately its outcomes. Pleasingly the paper begins with a short history of Petone which is used to illustrate the accretive and accidental nature of city forming:

PETONE

 

  1. The changing nature of urban areas

    Urban areas are dynamic, complex places. Land uses and neighbourhoods can change dramatically in response to economic, technological and demographic forces.

    One example of this evolution comes from Easterly, Freschi and Pennings (2015), who explored how a single stretch of a New York City street changed over four centuries of development. Easterly, Freschi and Pennings concluded that it is “difficult for prescriptive planners to anticipate changes in comparative advantage, and it is easy for regulations to stifle creative destruction and to create misallocation.” (p. 1)

    The town of Petone in Lower Hutt illustrates the diversity of influences that shape urban areas. [Below] provides an outline of its history, although inevitably many important details and events are overlooked. The transition of Petone – from a Māori village, to the intended site of a major colonial settlement, to a working-class industrial area, a run-down town, at various times a retail destination, and a desirable residential neighbourhood – show how unpredictable the evolution of our urban areas can be.

Given this surely accurate observation, shouldn’t any attempts at controlling the form of our cities in fact shy away from control but instead aim for incentivisation? Won’t nudging the direction of individual impulses be likely to be more effective that prescriptive programmes? And much less likely to result in unwanted unintended consequences, like out of control dwelling inflation. After all it appears that even the most egregious of city ordinances are well meant, no matter how much damage they do either indirectly or to other aims. And city building is full of contradictory impulses; for example nothing allows more retention [if not preservation] of older building than economic stagnation, yet surely it is fair to say there are few if any councils that would consciously pursue policies of economic ruin in order to bolster their worthy desire to preserve their city’s built fabric?

Another example is the whole history of auto-priority of the last 60 years across the developed world; so often expensive road and parking infrastructure was built with the very aim of reviving or maintaining the economic life of places, yes these investments simply reinforced their decline and unsuitability of these places for the brave new world of driving focussed city. For example Auckland’s City Centre only really began to recover from the flight of the motorway/sprawl era once Minimum Parking Regs were inverted- replaced with Maximums instead. Thereby nudging development and use of the city towards walkable proximate-focussed more intense land use. In fact MPRs must rank very high up the list of the most destructive yet well meant influences on city development, see this disastrous example from the sadly much governance-abused city of Christchurch; so prioritising ease of parking that the actual destination become untenable and disappears. Mandated parking oversupply is a form of urban self-harm so ubiquitous in mediocre conurbations that it’s become invisible: it’s the teenage cutting of city-management.

The question next becomes what scale of nudge is required to incentivise more productive city building and city using; nudge or shove? Denmark for example, has a 180% tax on new cars and one the highest bicycle usage rates in the world. These two things are surely not unrelated [see here for context, however]. Japan, Singapore, and Hong Kong all have the most widespread and financially successful urban, and in Japan’s case, inter city, Transit networks and all also have significant barriers to car ownership and use, as well as planning rules that enable more efficient land use. See here.

Here is the ProdComm’s quick history of the urban development of Petone:

The evolution of Petone

Prior to European settlement there was a large Te Āti Awa Pa at Pito-one. The New Zealand Company’s surveyor, Captain William Mein Smith chose the Heretaunga (Hutt) river valley for the site of their planned settlement “Britannia”, and the Company ships began arriving in January 1840. Relations between Māori and the settlers were positive in large part due to the hospitality and mana of local chief Te Puni. The grid street plan drawn up in England was soon abandoned. In March the river flooded the settlement, and a fire and earthquake followed in May. Britannia was largely abandoned by the end of 1840, with the settlers having moved to Pipitea/Thorndon, which Colonel Wakefield had long favoured for the settlement.

In 1847 there were probably no more than 20 settler households left, and it remained almost wholly deserted until 1875. The land was poor quality for grazing, and the Hutt River flooded at least annually. Pito-one Pa, with a population of 136, remained the largest and best-fortified pa in the Wellington area. In 1855 a major earthquake lifted the area, draining a portion of the lower valley.

In 1874 the Wellington-Wairarapa train line opened. A large railway workshop was built in Petone. That same year a butcher, James Gear, began to purchase and lease land around the Petone foreshore for a slaughterhouse. It was attractive for the cheap flat land, proximity to the harbour and railway line, and the small size of the local population to be offended by the waste and smell of the facility. In 1883 the company built a 380m long wharf, demolished in 1901. A large wool mill was established in 1886.

Petone grew rapidly, and was gazetted as a town in 1881. A series of factories and breweries were built. Schools, churches, newspapers, sports and social clubs were established in the 1880s, many of which survive today.

A local farmer, Edwin Jackson, sold portions of his land piecemeal with unsurveyed rights- of-way. The result was that by 1885 there was local concern that Jackson Street was an embarrassing series of dog-legs, of varying width along its length. Jackson Street was extended when the land was bought by the borough solicitor on behalf of the Crown in 1888. Blood and offal went straight into the harbour, attracting sharks, so Jackson built a swimming bath near the waterfront. Plans for a gasworks were abandoned in 1897, and the land that had been earmarked for this use was purchased by the council as a recreation ground. But the council declined to buy Jackson’s baths, and a ratepayers poll in 1901 also decided against a purchase, so they were closed.

By the early 1900s Jackson Street was the hub of Hutt Valley commercial activity, with notable stores such as McKenzies, McDuffs and Liebezeits. The Grand Theatre opened in 1916. But Jackson Street’s haphazard alignment was still a problem and between 1927 and 1938 the council widened and straightened Jackson Street, with buildings shifted back on rails or demolished.

New Zealand’s earliest state houses were built in Patrick Street from 1906, although they were sold in the 1930s. Council chambers were built in 1903 and a town clock in 1913. A new wharf was constructed in 1907. Industrialisation continued: Lever Brothers factory opened in 1919, Sunlight Factory in 1924, and a number of car plants in the 1920s and 1930s. Three out of every four cars in New Zealand were said to come from Petone up until the 1950s. The town produced many successful sportspeople and the Petone Rugby Club numerous All Blacks.

Petone, by local standards, was densely populated and heavily industrialised, ugly, grimy, lively and close-knit, more like an English industrial town than a New Zealand one. (Butterworth, 1988, p. 13)

But from the 1950s the area began to decline, as some industries closed and residents moved to the new suburbs of the Hutt Valley. A number of state housing flats were built from the 1950s to the 1970s on the eastern part of Jackson Street. The Borough Council designated an area north of Jackson Street as an industrial zone, and

[t]he result of this was that no one was allowed to improve their properties, which meant many fell into disrepair and were sold off to developers. It was impossible for young Petone people to get a loan to buy property in their hometown so many left for Wainuiomata or Upper Hutt. The town become a place of rented properties owned by absentee landlords. By the mid seventies and eighties Jackson Street was pretty much derelict. (Johnston, 2015, pp. 93-95)

The Council proposed building a ring road around central Jackson Street, to create a mall in the centre of town at a cost of $10 million and the demolition of 80 houses. But significant local opposition stopped the project, and many councillors were voted out.

Petone wharf took its last cargo in 1976. The Gear meatworks closed in 1981. Long- established stores closed and the council chambers were demolished in 1986. Deregulation of the New Zealand economy resulted in many of the remaining factories closing. Developers who were demolishing and rebuilding in Wellington regarded Jackson Street as a place of little commercial potential, so its old buildings were left untended. In turn, “this stagnation ironically preserved the historic CBD as a desirable social and economic centre” (Johnston, 2015, p. 177). Petone recovered in the 1990s as industrial land uses gave way to big box retailing in the west of Jackson Street. Petone again became a retail destination, and this benefited the smaller shops along Jackson Street. A burgeoning bar, café, gallery, and retail sector followed. In 1996 the Historic Places Trust recognised Jackson Street as an Historic Area, but this had no regulatory force. There were a number of battles between local heritage groups, developers and the council over the next decade.

The “character homes” of Petone and its proximity and transport links to Wellington made Petone a desirable residential neighbourhood. A number of apartments were built or converted, consistent with council design guidelines. In 2014 it was announced that many of the state housing flats on the eastern part of Jackson Street were to be demolished, but the Patrick Street cottages survive and are protected. The Grand Theatre, which closed in 1964, was used as an electrical shop, furniture business, and in the 1990s was converted to an apartment complex with boutique shops below. Today, the site of the Gear meatworks is a supermarket, and Petone wharf is a popular fishing location, with fewer sharks than in the past.

Source: Butterworth, 1988; Johnston, 1999, 2009, 2015.

Why I’m optimistic New Zealand can solve its housing troubles

What’s the problem?

Housing is expensive in New Zealand, especially in Auckland, where median house prices have increased fivefold since the early 1990s (in nominal terms). Roughly half of this increase has occurred in the last four years, which is causing quite a bit of concern:

Interest.co.nz Aucklan stratified house price index 1992-2015

Housing markets are complex – prices are influenced by both demand-side and supply-side variables. As a result, it can be difficult to tell a single, simple story about why prices have gone up or down in any given year. Take the recent rise in Auckland house prices. Some people argue that it’s a financial bubble (a demand-side explanation); others blame high migration (demand) or distortionary tax policies (demand); and others cite inflexible planning rules (a supply-side explanation) or low construction productivity (supply).

Although short-term dynamics can be mysterious, elasticity of housing supply is the main long-term driver of housing market outcomes in a growing city. The easier it is to build new dwellings in the right places in response to increased demand, the less upward pressure there will be on prices.

The empirical evidence suggests that housing supply in Auckland is slightly inelastic – somewhere in the range of 0.7 to 0.9. This isn’t horrible, but nor is it sufficient to get housing supply in balance with demand.

Severe geographic constraints – Auckland’s harbours and steep hillsides – appear to be an underlying driver of the city’s inelastic housing supply. In this context, settling for average urban planning policies means getting a limited supply of housing and high prices. Consequently, we have to make it much easier to use scarce land efficiently. That means reforming our approach to planning regulations. In the past, we adopted land-hungry policies like minimum parking requirements or severe building height limits without thinking through their ill effects. That has costs, and we need to do better.

Auckland is not the only city coping with high housing prices and a lack of supply – you see similar problems in places like London, New York, San Francisco, and Sydney. However, I would bet that New Zealand will do a better job sorting out its housing affordability issues than other places. In fact, I am betting on it! I’m renting in Auckland, which means that I bear all of the downside and none of the upside of spiraling housing prices.

There are three reasons for my optimism:

1. Our proven track record of policy reform

Let’s start with a pat on the back. Having lived in New Zealand, the United States, and Nigeria, I’d say that Kiwis are, by and large, pretty reasonable when it comes to public policy. We’re not very corrupt, which removes one major source of inefficiency. We generally recognise that as a small, distant trade-exposed country we can’t afford to do things inefficiently. And, due to New Zealand’s small size, there’s usually no need to over-complicate things.

Policymaking anywhere will always be subject to cognitive and professional biases – people screw things up, and sometimes it takes a while to sort it out – but New Zealanders don’t seem want totally irrational or insane policies. Unlike the US, say:

Possibly as a consequence, New Zealand has a record of reforming policies that aren’t working, either incrementally or in one go. The classic example of this is in trade policy. From the 1930s to the 1980s, the New Zealand government oversaw an extensive set of import controls. Te Ara describes this policy:

Faced with declining export returns and a foreign exchange crisis, a Labour-led government introduced foreign exchange controls and import licensing regulations in 1938. The regulations prohibited the import of any goods except under licence or where exempted.

Importers had to apply to government for both an import licence and the foreign exchange needed for purchases. The quota – the amount that could be imported with a licence – was set on the basis of imports the previous year.

Just as restrictions on the efficient use of land produce windfall gains for landowners while foisting large costs on renters and new home-buyers, import licensing created fortunes for some manufacturers while making most consumers worse off. As a consequence, after experimenting with some liberalisation of trade policy in the 1970s and 1980s, the remaining import controls were swept away in the late 1980s.

Recent changes in transport policy also demonstrate our ability to reform bad policies. Over the last decade, there have been some important, although undoubtedly incremental, moves to reform our inefficient monomodal urban transport system.

For example, last year I reviewed a 2010 research research report on deficiencies in NZ’s public transport planning and operations – and was surprised to find that almost all of its recommendations are being implemented in Auckland, Christchurch, and other places. Since 2010, Auckland has:

  • Established a public agency (AT) that can plan and deliver a PT network and supporting infrastructure
  • Developed and begun implementing a frequent, connected network that satisfies best practice network design principles
  • Reformed bus contract models
  • Implemented integrated ticketing (and soon, integrated fares)
  • Started to build bus interchanges and bus lanes.

New Network Model

This is a big deal, but it’s hardly the only story in town. How about the fact that central and local governments are now coming to the party on urban cycleways? For the first time ever, significant investments are going towards one of New Zealand’s “missing modes”.

We now have an opportunity to take the same approach to urban planning – reform what isn’t working and get better outcomes.

2. The structure of our governments

The current structure of New Zealand’s governments makes it easier to implement reforms and make them stick. We have two key advantages in this area that offer a smoother path to policy reform.

First, New Zealand’s government has a unitary structure rather than a federal one. This means that most powers are concentrated in central government rather than distributed among multiple layers of government. Political centralisation certainly isn’t all good – in the past it’s often led to a perverse situation in which urban transport policy is being designed by rural politicians.

But in this case, it makes policy changes much easier. If central government were to, say, issue a National Policy Statement on urban development or rewrite sections of the Resource Management Act (which governs the development and implementation of urban planning rules), it would lead to changes in the way that local governments regulate. That option isn’t usually available in federal systems.

Because any proposal to liberalise planning rules inevitably creates controversy at local body election time, central government involvement can potentially assist in getting important changes over the line.

Second, the creation of the unified Auckland Council ensures that all growth tradeoffs – and the negative consequences of preventing growth – are internalised within a single council. Gone are the days when councils could simply refuse to zone for growth and assume that it would become someone else’s problem instead. Now a single council is responsible for sorting the region’s problems out.

You can see the results in the Unitary Plan – a document that’s not perfect (no plan is!) but which takes some important steps forward. For example, it removes MPRs from the centre zones, which are intended to accommodate a mix of business and residential uses, cuts back minimum lot sizes throughout much of the city, and creates some midrise residential zones.

Amalgamation does come at a potential cost to Tiebout competition, in which adjacent councils compete for growth. But I suspect that the benefits outweigh the drawbacks. As the San Francisco Bay Area shows, local government fragmentation doesn’t necessarily result in more housing supply – the Bay Area has 93 local governments but building permits have still been falling since the 1970s.

New Zealand’s unitary government structure and the creation of a consolidated Auckland Council create the potential for “virtuous cycles” in which local and central government egg each other on to improve urban planning regulations and processes. To date, this has led to things like the Special Housing Areas, which aims to ease consenting in selected areas, and the Unitary Plan hearings process, which is intended to review the plan and allow it to be implemented faster.

The hearings process, in particular, has encouraged Auckland Council to think carefully about its proposed zoning rules. For example, following instructions from the hearings panel, the council is considering rezoning some areas to enable more housing. This is an important step towards recovering from the ill effects of past down-zoning.

FrameWORK_Housing_ZoningCapacity

Down-zoning in Los Angeles (Source: Re:Code LA)

3. The political agenda

Lastly, housing affordability has hit the political radar at a national level. There is an increasing consensus that reforms to urban planning rules are a key part of the solution. The latest Productivity Commission report on using land for housing outlined some key policy changes, and politicians from several major parties have subsequently endorsed a number of these recommendations. For example:

In other words, there is likely to be cross-party support for sensible reforms to urban planning that build on the good work that’s already been done by central and local government.

Globally speaking, it’s somewhat unique – and fortuitous – to have so much attention placed on urban planning issues at both a local and central government level. For example, in the US, a few economists in the Obama administration are starting to talk about the drawbacks of overly restrictive planning regulations. But President Obama has very little ability to influence zoning in San Francisco or New York.

New Zealand is different. We are generally willing to reform policies that aren’t working for us, we’ve got government structures that can facilitate that reform, and our elected representatives are paying attention to the problems and potential solutions. Those seem like good reasons for optimism!

Phil Goff: For a better Auckland?

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”.

eight_col_PhilGoff

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.

1. Rates

So what is Goff’s position on rates? Well, for starters at least Goff has his figures right: He notes that rates for the average household increased 3.5%, while also observing that some households experienced increases of up to 10%. Basic data analysis is something that seems to escape some journalists.

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.

img_9212

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).

3. Intensification

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.

FrameWORK_Housing_ZoningCapacity

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.

4. Conclusion

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.

Auckland Rapid Transit Network

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.

AT Rapid Transit Network - 2041

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.

UPDATE:

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:

RPTP potential LRT + RTN Map

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….?

Treasury Tweets