The ACT party – or at least its biggest funder – was in the news last weekend for expressing some of his views for the party at their annual conference. Of note was this line
“I’d privatise all the schools, all the hospitals and all the roads,” he told the conference.
Now obviously we’re not in the habit of talking about schools or hospitals (unless it’s about how to get to them) but roads are something on our list. Now in reality I can’t see it happening here – at least any time soon – but it raises the interesting question of what would happen if we were to privatise roads? This post is really just a thought exercise as to some of the impacts of doing so.
I suspect that if we were ever privatise the roads the impact would how we get around and our views on transport would change dramatically. There would be some overall impacts across the entire network but also more local impacts due to there likely needing to be different forms of privatisation.
The key impact would be across the entire network and the true cost of operating, maintaining and building roads would become much clearer regardless of how that’s passed on to the public. A better understanding of just how much roads cost, especially if charged for through forms of road pricing would lead to changes in how people travel. People would likely reduce the amount of driving they do in favour of more walking, cycling and PT use.
Private road owners would also likely seek to reduce their maintenance costs while users of lighter vehicles would likely demand that costs are more fairly distributed to those that do the most damage. That in itself could have large impacts. It would likely see the vehicle fleet get smaller and lighter over time i.e. less people would be driving around in large SUVs unless they absolutely need too (or want too). Truckies would be even harder hit. Due to their weight, trucks cause substantially more damage to road surfaces and so would likely be charged substantially more than other vehicles which in itself would have far reaching impacts by pushing up delivery costs. Those increased costs would of course be passed on to businesses and ultimately consumers.
Perhaps one of the areas most impacted would be in road construction. In short it would kill it dead. Most transport projects simply don’t make sense financially and the toll road troubles in Australia are proof of this. Traffic volumes often don’t stack up and most projects are only able to be justified based on the benefits to the wider economy from improved travel times. Faced with paying for a journey in time through congestion or paying a monetary cost to avoid congestion, many choose the former. What all of this means is that road construction would dry up almost immediately and the costs would shift to making the best use of the infrastructure that exists. That could have some negative consequences as there might be little attention paid to improving roads through projects like this. The flip side of this is that the private road owners would likely become liable for road safety and therefore be a push to improve crash black spots.
Regardless of whether privatising roads is a good or a bad thing, one thing that isn’t so clear is just how it could be done. The real benefit from roads comes from the fact they are an extensive network. Very few trips begin and end on the same road and a trip might commonly involve travelling on quieter residential streets, arterial roads and motorways. Each of those would present vastly different opportunities for privatisation.
Motorways would probably be the easiest roads to privatise due to the fact they have limited access and all journeys that use a motorway begin and end somewhere else. Motorways also carry large amounts of traffic each day. This is also why groups like the NZCID who have been pushing for the council/govt to find additional ways to fund ever more and larger transport projects have suggested charging for access to the motorways. If we were to privatise roads there would likely be a big temptation to do the easiest ones first and so motorways would be at the top of the agenda. The problem with that though is that it would likely have a huge impact on but still publicly owned roads.
The next easiest set of roads to privatise would actually be quiet suburban streets, particularly those post 1950′s suburbs full of cul-de-sacs. There we would probably do something similar to what is likely to happen later this year in the small sprawly village of Long Grove (north of Chicago). They are looking to privatise many of their currently public suburban roads because it simply can’t afford to maintain them due to their pyramid scheme like system of how roads were funded where the money to pay for them was only raised through development contributions which dried up as a result of the GFC. They are simply going to turn over the ownership of the roads to the owners of the houses on the street and leave it up to them to maintain.
Some typical post 1950′s street patterns
That could put big strains on neighbourly relations in many places as people work out who will pay for what i.e. does everyone on a street pay equally or do those at the end of the street pay more? In some parts of Auckland there could be interesting changes in the stance taking on intensification. More people living on a street means more people to share the cost of a road with and so some of the suburbs that were most opposed to intensification in the Unitary Plan discussions might quickly change their mind. Going further some residential neighbourhoods might start imposing restrictions on vehicle use in their streets – particularly truck movements – in a bid to lessen the damage vehicles do to the roads. Gated communities might also become more common to stop others from passing through.
On the positive side these communities are likely to become much more pedestrian and cycle friendly as those two modes cause much less wear and tear on roads which equates to less maintenance.
Privatising arterial roads are likely to be the hardest to do because not only do they serve a movement function but they serve a place one too, people live, work and play along arterials. To be honest I don’t even know how you could privatise them as due to their function they can’t just be turned over to locals to maintain but their connected nature means they would be prohibitively expensive to charge for. Who would really want the cost and hassle of owning them?
Overall I don’t think the idea of privatising roads is necessarily a bad one from an ideological perspective and doing so would certainly change how we use roads, including what modes we use but overall it simply isn’t practical. Roads are such a key part of our everyday life that changing our relationship with them – however flawed it currently is – would have radical and far reaching consequences for society, probably far more so than the privatising of many other government functions. As such I would suggest the likelihood of it happening is very very low. Far more likely and practical would be the introduction of proper road pricing.
Bill English has provided a fairly blunt but accurate explanation of the issues with urban development in Auckland. Interest.co.nz reports
With respect to so-called urban sprawl, I think that’s a nonsense. If you’re against urban sprawl and that means lower to middle income Kiwis can’t buy a house and you can’t build an apartment in the middle of Auckland for less than NZ$600,000, then that’s too high a price to pay. And if it means driving up house prices in a way that wrecks the economy then that’s too high a price to pay,” he said.
“Funnily enough the people who are most worried about urban sprawl live in the middle of the city. They don’t get to see it. How much time to they really spend out the end of the Western motorway or Botany? None actually. They think you should be able to walk to the countryside. Well…welcome to Gore. If you’re really mad, that’s where you should go. But they don’t. They stay in Auckland Central,” he said to laughter from the audience.
“What’s actually happened is that the local authorities were keen for a denser city, but the inhabitants weren’t, so they’ve jettisoned a fair bit of the densification aspect,” he said.
“So if Auckland wants to grow now, it has to grow out because you don’t want it to grow up. Now that’s a fair choice, but please don’t stop it from growing out as well, otherwise we’ll get another few years of 15% house price growth and you get a real mess when it crashes,” he said, adding the special housing areas agreed under the Housing Accord with the Auckland Council “do spread the city because the planning rules don’t let you do anything else.”
“We’re indifferent as a government as to whether you grow up or out. But you said don’t grow up, so we expect to help you grow out.”
I don’t think that all government ministers were indifferent as to whether Auckland develops up or out but from I’ve seen Bill didn’t seem too concerned with either option. As for his other comments though, he is quite correct, if intensification isn’t allowed then the only option would be to sprawl. I think it’s a message that many of those opposing intensification completely ignored.
What I don’t agree with him on is that an apartment can’t be built for less than 600,000. Many of the projects on our development tracker are certainly well under that price.
Don’t forget to make a submission on the Unitary Plan if you haven’t already they close tomorrow afternoon.
In my post yesterday about the AT board meeting I omitted discussing one crucial agenda item – although I’m sure some of you picked up on it. It was
Presentation by Cycle Action, Generation Zero and Transport Blog on cycling Auckland
Both we and Cycle Action Auckland were invited late last year by the board to present to them on the Congestion Free Network and on Cycling. Both us and CAA believe there are huge synergies to be had between PT and cycling and so we agreed to combine our presentations into one (for which we were also given additional time than had we done them separately).
I also have to say a huge thanks to Lance Wiggs and his wife Su Yin for heroically helping us last minute to vastly improve the presentation.
You can see the presentation here (7MB) but as you will see it has a lot of photos and not a lot of text.
The general thrust behind the presentation was that
- Auckland has the right ingredients to make it one of the best cities in the world. What we need to do now is make that a reality and make Auckland more liveable.
- On top of that there are a lot of great things going on already with the likes of Wynyard, shared spaces, electrification, integrated ticketing/fares, new bus network etc.
- That we are at a tipping point, we’re seeing trends change with less people choosing to drive and more opting for PT, walking and cycling.
- That investments in a more liveable city are already paying off e.g. in Fort St where Hospitality spending is up 400% since the shared spaces were created.
- That the CFN builds on what AT is doing and does so primarily by re-prioritising the projects they already have.
- That the CFN is much cheaper than what is currently planned which will reduce/remove the need for much of the funding shortfall that the council will need to find.
- That the impact of the CFN can be greatly boosted by improving cycling (not just about feeding the CFN though).
- That improvements to PT, walking and cycling can make it easier for kids to get to school, thereby helping to improve traffic.
- That this is also what other cities are doing. As Patrick says, if a city like New York can do this stuff with the demand for space that they have then we certainly can.
- That it doesn’t have to be done with expensive road widening.
- That the boards leadership is needed to help make these improvements and that ultimately they are the ones responsible for/have the control to make Auckland the world’s best city.
The presentation was well received and we had a number of comments from board members afterwards saying they thought it was done very well. I could also definitely see a few of them nodding in agreement with what we were saying.
Perhaps one of the funnier moments was that we had talked about how parking needs to be addressed and that in some cases it should be removed. At the end of the presentation it was mentioned that a group from Freemans Bay were in the audience and who might disagree with us however they also approached us saying how much they agree. They could see that by improving the PT network we have that less people would want to or need to drive to inner suburbs to park their cars on residential streets (also known as hide and ride).
All up we were very happy with the outcome and the main thing is it is something that will be in the back of the minds of AT board members who will shortly be having internal discussions about their future strategy.
Now we just need to work out who we should talk to next, perhaps we should also try to present to the NZTA board (I know at least some have already heard about it).
Update: Google Drive doesn’t seem to be playing very nice with the images so have used Dropbox instead. Links updated or click here.
It seems Len Brown is trying to rebuild his image in part by being a man of action and getting things done. Now that in itself isn’t necessarily a bad thing, especially if focused in the right direction and while Len is pushing some things well, like the City Rail Link, in other areas I think he seems almost desperate to do something that he could end up doing more harm than good. His “Transforming Auckland’s Economy: State of Auckland” speech this morning had a number of interesting points, some I thought were good, others not so. Bob Dey has the full speech here.
Thirdly, we need to build a reputation as a modern, wired city. In this regard, there have been too many excuses & delays in rolling out ultra-fast broadband and providing decent wi-fi.
Auckland Council will be developing a Digital Auckland – kick start programme so we are playing an active role in picking up the pace in this area. My intention is that this will include working with business partners to roll out free wi-fi in public places & public transport and finding commercial partners to help expedite the rollout of ultrafast broadband.
I see connectivity is increasingly important and rolling out wi-fi to more areas, especially in public areas and on PT is a good idea. Already increased communication is being seen as a critical element in some of the changes we are seeing with transport as young people who want to spend more time online can do that on a bus/train much easier than they can behind the wheel and was cleverly picked up for this AT ad.
Fourthly, we need to begin to make public-private partnerships part of how we deliver largescale projects. At the end of last year the council & I agreed a way forward for the SkyPath project – a walk & cycleway across Auckland’s harbour bridge.
The SkyPath will be Auckland’s first PPP, and will eventually enable a great vision – a cycle & walking path stretching from St Heliers to Devonport. This will act as a real game changer for building pedestrian & cycleways around our city. This is a chance to cut our teeth on PPPs and show that we can deliver real value for money and better outcomes for ratepayers.
PPPs are not a free ticket to be clipped by the private sector. We need to use our considerable scale & position to nail down the best possible deals for Aucklanders, learning the lessons from international experience and retaining public ownership.
Beyond the SkyPath, there will be major opportunities for transport projects, including the city rail link, better waste management & other major transport projects.
This is where I have the biggest concern with Lens push. Many of the projects he’s talking about like Skypath and the City Rail Link are critical but the reality is most of the funding shortfall is going to require additional funding sources is being created other large roading projects. Just because you could build them as a PPP doesn’t suddenly make them a better project. That’s one of the reasons behind why we are so focused on the Congestion Free Network. Before we consider how we fund projects it’s important that we go through a process and actually work out what we need to build i.e. what will work. After we have done that we can start looking at how to fund stuff and PPPs might be part of that. In fact of all of the projects on the list perhaps the one most likely to succeed as a PPP would be the CRL as it does allow private business to work in with the construction through activities like additional retail.
In all of this it is pleasing to see Len becoming increasingly positive about Skypath, something he had been a bit quite on for a while.
Julie Anne Genter questioned Steven Joyce in Parliament today about the City Rail Link. Perhaps the most laughable comment is when Joyce claims they are speeding up the project, not slowing it down. If they were speeding it up then at the very least they would be looking to have it started at the same time the council is wanting for it to happen.
As I discussed yesterday the debate on big urban issues of housing and transport far too frequently descends into left/right debates and today I’m looking at transport.
One of the reasons this has come up is that we’ve had some interesting conversations on Twitter in the last few days with a couple of Nationals MPs, which apart from highlighting a scary lack of understanding about transport, inevitably touched on the issue about whether the transport policy that we generally advocate on this blog fits into the traditional “left-right” political spectrum. Here’s what the fairly new National MP Paul Foster-Bell said on Twitter:
We have a fairly diverse range of bloggers on this site: a couple of economists, a transport planner, an urban designer, an architectural photographer, a planning student etc and of course myself who most recently working in banking and from our discussions I think we have some reasonably broad political viewpoints.
Furthermore, many of the key changes to transport and planning policy that we have advocated for strongest over the past few years hardly align with any traditional definition of a “left worldview”. Let’s take a look a few of our most common arguments:
- Cut back or cancel some of the Roads of National Significance that do not provide value for money. This seems to me like basic fiscal conservatism – as some of the RoNS projects are simply a huge amount of money being spent on a problem that really doesn’t warrant such high investment. Puhoi-Wellsford could be replaced by Operation Lifesaver, Transmission Gully is just overkill for a city that’s hardly growing in population, the Kapiti Expressway has a cost-benefit ratio of 0.2, the Hamilton bypass will carry fewer vehicles in 20 years time than the Kopu bridge did when it was a single lane… and so on. This seems like cutting wasteful spending, something that those on the right of the political spectrum say they want to do?
- Built the Congestion Free Network instead of the Integrated Transport Programme. Ultimately the CFN proposal is at least $10 billion cheaper than the current transport programme for Auckland. It probably has a much higher chance of achieving the many targets that Auckland has set for its future transport outcomes than the ITP is able to meet (although that’s not hard as the ITP failed to achieve just about any of its targets). Similarly to above, this is achieved through chopping out an enormous amount of wasteful spending on unnecessary projects (both road and rail) – yet again, something that those on the right of the political spectrum say they support?
- Built complete Streets. Democracy equality and choice are meant to be good things aren’t they? Most of our roads focus solely on the task of moving as many vehicles as possible and give scant regard for anyone not in a car. Building complete streets that treat each user equally and allow people to have a real choice in how they get around is the ultimate form of transport democracy.
- Improve walkability. We’ve seen both locally and internationally that when there is a focus on improving the walkability and the pedestrian environment (that includes wheeled pedestrians) a couple of significant things happen. One is that people shop more boosting local retail, perhaps the best example of this is the upgrade of Fort St to a shared space which has seen the hospitality retailers revenue increase by a staggering 400%. The second thing is that people walking (and cycling) more is good for them, improving health and therefore reducing long term costs to the health system. This is further enhanced as often these improvements also see a reduction in traffic crashes. So once again we see a case where we can lower costs while also increasing revenue and therefore tax at the same time.
- Get rid of Minimum Parking Requirements. This key proposal is to get rid of a current regulation that causes more harm than good, that adds significant cost onto developers (thereby discouraging development and growth) and often just adds regulatory churn cost for no gain (as it seems most applications for parking waivers appear to be granted). I would have thought this aligns quite well with a “right of centre” political ideology where reducing regulation (especially regulation that harms economic activity and growth) is a very very good thing.
- Relax Planning Rules to give people more Housing Choice. This was covered yesterday but worth repeating again. Most planning rules limit development potential in existing urban areas: whether that’s through height limits, yard setbacks, density controls, parking requirements, minimum unit sizes or whatever. Through the Unitary Plan process we have advocated for (and will continue to do so) the relaxation of planning controls – particularly in areas where it makes good sense to allow high density developments to make best use of existing infrastructure. Similarly to parking controls, this is a relaxation of current regulation that significantly limits development potential and the prospects of economic growth through making better use of inner parts of the city. The relaxation/elimination of economically damaging regulation should be music to a right-wingers ears you’d think.
There are probably many more examples than above, but they give a good overview of why transport policy (and land-use policy) really doesn’t fit well into a traditional “left-right” ideological spectrum. We could easily point out how bizarre it is that our current supposedly centre-right government has significantly increased petrol taxes to spend on a series of very dubious mega-projects in the form of the RoNS. That seems rather more “tax and spend” than fiscal conservatism.
Furthermore, if you look internationally there are many examples of centre-right political parties taking public transport seriously. In Britain, the current Conservative government is making a big contribution to the £15.9 billion Crossrail project in London and is also likely to spend even more money on the High Speed 2 rail project. That government seems to understand the economic importance of having good rail infrastructure. For example, Crossrail massively increases the residential catchment of the Canary Wharf employment area – somewhat similar to how the CRL vastly increases the residential catchment of the city centre. London Mayor Boris Johnson is a big champion of not only Crossrail but also getting more people to ride a bike and is planning to invest huge amounts of money in cycle infrastructure. In Australia, the centre-right New South Wales government is championing and making a massive funding contribution to the North West Rail Link project. Even in Auckland we have business groups who politically are considered “right of centre” supporting projects like the City Rail Link and improved cycling infrastructure.
It’s interesting to try to understand this political divide through other lenses than a traditional “left-right” spectrum. Pro-urban and suburban/anti-urban is perhaps a better lens in my opinion – particularly because it seems to explain better why some right-wing parties (like the Republicans in the USA, the current Liberal Government in Australia and the National government here in NZ) appear to be sceptical at best about public transport, while others (e.g. NSW government and UK government) seem to really understand the importance of public transport.
Perhaps this “pro-urban” and “suburban/anti-urban” divide even exists within the current National Party. It was interesting that John Key (an Aucklander who has lived in big overseas cities for much of his life) was the person who changed the government’s position on City Rail Link while Steven Joyce (grew up in New Plymouth and now lives on a lifestyle block in Auckland) and Gerry Brownlee (from Christchurch) were apparently the biggest opponents of that change. Or how we get current Associate Transport Minister Michael Woodhouse saying this on auto-dependency:
From Dunedin, in case you were wondering.
We’re increasingly seeing two of the biggest urban issues – housing and transport – unnecessarily turned into ”left/right” debates – most significantly in the USA but also in New Zealand, particularly in recent times it seems. Over the next few days I’m going to be looking at how this is playing out and how when you actually look at the arguments being put forward that traditional left/right ideology just doesn’t fit.
Today I’m focusing on housing – or perhaps a better description is urban development. There are generally two extremes talked about when discussing how the urban area should develop, one is that allow unlimited urban growth on the edges of cities – commonly known as sprawl, and the other is that we should intensify the existing urban area often through policies that seek to contain the urban area – in the US this is commonly called Smart Growth. In a political world that likes to see things through a “left/right” lens sprawl is associated with the right while smart growth is with the left.
Asking the question of why Conservatives seem to hate Smart Growth - James Bacon explores this issue in a useful article that also touches upon some of the hypocrisy in many of the positions taken.
Why is conservatism’s intellectual elite so hostile to the idea of smart growth? I hoped to find out why.
The answer, I discovered, is pretty simple: Conservatives equate smart growth with intrusive government intervention in the economy, with regulations, subsidies and boondoggles. They look at out-of-control spending on mass transit projects that will never pay their own way, and they see smart growth. They look at urban growth boundaries in Portland, and they see smart growth. They look at California land use plans designed to substitute single-family houses with apartment complexes, and they see smart growth. They listen to environmentalists who want to re-engineer the economy to stave off global warming, and they hear smart growth. They listen to “social justice” advocates who want to use urban planning to redistribute wealth, and they hear smart growth.
If spending big bucks on environmental and social engineering is bad, then the opposite must be good. Conservatives find themselves defending auto-oriented development patterns in suburbia. What other people refer to derisively as “sprawl” they see as the American dream.
I guess this makes some logic – although it’s a bit strange to see people from the right-wing side of the political spectrum who supposedly dislike government intervention proposing very restrictive land-use planning rules in existing built up areas or opposing the removal of other intrusive rules like minimum parking requirements. It’s this double-standard that the article then picks up on:
But I part ways in two important regards. First, while conservative intellectuals are spot-on in their critique of mass transit subsidies, they are blind to subsidies for roads and highways. While they hit the bulls-eye in their critique of land use restrictions, they ignore the systemic subsidies for green-field development. Their critique runs only one way. Second, I take issue with the way they identify intrusive government policy with smart growth, rather than calling it what it is — intrusive government policy.
We have extremely intrusive government policy in the form of planning rules that restrict building heights, require setbacks from boundaries, require the provision of parking even when people don’t want it, apply maximum site coverage restrictions, minimum site sizes for density, minimum sizes for houses and even minimum sizes for particular rooms of houses. Pretty intrusive stuff that we generally see otherwise anti-interventionist politicians completely lapping up.
Furthermore, while some proponents of smart growth and what we might call a more “balanced” approach to transport may be pushing particular liberal of leftist agendas, many aren’t. This is further explored:
There is no denying that many leftists and liberals have hitched their agendas — from saving the planet from Global Warming to redistributing wealth from affluent suburban jurisdictions to poverty-stricken inner cities — to the smart growth wagon. But smart growth covers a wide spectrum of views. Take, for example, the New Urbanists who espouse compact, walkable human-scale development reminiscent of the early 20th century. New Urbanists have suffused the broader smart growth movement with much of their thinking. Yet they are agnostic about where to build — the suburbs, exurbs, inner city, wherever. As architects, builders and developers, they’re all in favor of growth and development. Building stuff is how they make their money and how they see their visions fulfilled. Their prescriptions apply to inner cities, aging suburbs and green-field development alike.
Andres Duany, one of the leading lights in the movement, is perfectly comfortable with the idea that a third or so of all Americans have no interest in New Urbanism communities. He is happy to let them live their lives in peace. What he asks for is a roll-back of zoning codes and other restrictions that prevent him from building the kinds of communities that other people want. Sometimes, he sounds remarkably like a conservative complaining about intrusive, regulatory government.
Conservatives make a strategic error by conflating the smart growth movement with leftist social engineers. They arbitrarily classify potential friends as their enemies. Instead of attacking the smart growth movement, which includes many like-minded people, conservatives should direct their scorn to wasteful subsidies and counter-productive regulations, wherever they may be found.
We’ve made the case repeatedly that when it comes to planning, we probably over-regulate on balance. Like the reference to Andres Duany notes, Smart Growth is as much (or more even) about the removal of bad planning rules as it is about adding in additional rules. So it often is surprising how this is opposed by the very people you would think should support it.
Similarly with transport, the balanced approach that we suggest is about giving people greater transport choice or in areas like parking creating a more market focused system. I’ll be talking much more about how this “left/right” issue is affecting transport tomorrow.
Canadian journalist Charles Montgomery’s Happy City is an attempt to understand the various forces at work in our built environments through one over-riding idea. And what a great and important idea it is: Happiness. After all isn’t that really the ultimate aim of all effort around urban change; the pursuit of greater Happiness for all?
In many ways the book can be seen as a extension of previous work that have all been trending in this direction by like Ed Glaeser’s analysis of the economics of cities in Triumph of the City, David Owen’s slamdunk on urban sustainability in Green Metropolis, and Walkable City, where Jeff Speck showed that in the end almost all urban benefits can be summed up by the degree to which a place is walkable.
The difference here is that Montgomery takes an even higher altitude view by viewing places, their histories and effects, though the lens of what is understood to produce happiness in people. To do this he analyses ideas about happiness from philosophy, psychology, and neuroscience, and applies them at detail to different living environments all over the world.
And the great news is that he find evidence from all sorts of places that very real improvements can be gained by simply changing our priorities in how we shape the built environment. He starts and ends with the man he calls the Mayor of Happy, Enrique Peñalosa, who revolutionised the quality of life for the citizens of Bogota, but he also seriously considers the views of those for the city is a hell that is only there to be escaped:
“The modern city is probably the most unlovely and artificial site this planet affords. The ultimate solution is to abandon it… We shall solve the City Problem by leaving the city.”
-Henry Ford 1922
An attitude that persists to this day not only in the minds of many denizens of that ubiquitous demi-monde that Ford’s industry did so much to invent, suburbia, but also in the escapist utopias of both back-to-the-land Greenies and armed-to-the-teeth Survivalists.
Perhaps for me the best chapter comes at the end of the book and is simply called: ‘Everything is Connected to Everything Else’. Which is summarised like this:
“In fact, just about every measure I’ve connected to happy urbanism also influences a city’s environmental footprint and, just as urgent, its economic and fiscal health. If we understand and act on this connectedness, we may just steer hundreds of cities off the course of crisis.” -p258
This interconnectedness means that positive change has a multiplier effect. The evidence is mounting for the effectiveness of the measures and priorities of what, for the want of the a better term, is know as New Urbanism, going way beyond their own area. In a kind of virtuous vortex it seems the every time any one New Urbanist measure is undertaken then the improvement ripple just keeps expanding. And when done quickly, consistently, and with vigour these changes can have hugely transformative effects. The changes Peñalosa enacted in just three years in Bogota, for example, not only improved the access of the people near the new busways and cycleways, but also increased school enrollments [by 30%], significantly improved conditions for drivers [despite taking money earmarked for new roads and spending it on transit and active modes], reduced crashes, injuries, and deaths, even the murder rate fell by half!, air quality of course improved, and real estate values picked up. The health of the citizens improved with all the new walking and cycling, and, crucially, just plain made people happier: “Twelve years ago 80% of us were completely pessimistic about our future. Now it’s the opposite. Most are now optimistic.”
This chapter also has my favourite sentence in the book: “There is no such thing as an externality.” This is an argument for breaking down the artificially siloed thinking of the modernist era. Transport planners and traffic engineers, for example, must not be allowed to only consider the outcomes of their work within narrow confines of ‘level of service’ or ‘travel times’ but also must include all the other factors that they influence and that are too easily dismissed with the idea that they are mere ‘externalities’. Nothing is external.
The culmination of this literature on urban life means that we now know how to improve the lives of millions and millions of the earth’s inhabitants, and the great news is that it doesn’t involve sacrifice or self-denial, the old dialectics of economy versus the environment, building for people or for business, equity or wealth, are gone.
In other words doing the right thing for either the health of citizens, or for growing employment, or the improving living conditions, or the quality of public space, or building the most efficient transport systems, or making a great businesses environment, or reducing pollution, revitalising depressed precincts, or attracting young talent, or reducing crime, improving cultural activity, increasing visitor numbers, spreading democracy, improving education, or increasing equality, are all the same thing. And this can, in short, be captured by the idea of the Happy City.
If you feel sceptical about this conclusion then you need to: Read This Book.
“The right to the city is far more than the individual liberty to access urban resources: it is the right to change ourselves by changing the city.”
-David Harvey 2008
Tomorrow is already going to be a fairly big day at council. Councillors will debate the much needed Skypath, the error ridden Annual Plan and of course plenty of discussion about Len Brown. However there is yet another topic on the agenda that I think needs some attention. It relates to Mission Bay footpaths and in a “planets must be oddly aligned” type of situation, it even sees me agreeing with the Orakei Local Board.
At the heart of the matter is the streetscape. The local business association have realised that the footpaths outside of the business areas are not ideal, both in width and finish and want them upgraded. Apparently they first asked for this back in 2007. In terms of width, part of the problem comes from the businesses that use the footpaths for outdoor dining. That helps activate the street and make it more interesting but narrows space for pedestrians to get past. As more and more people visit Mission bay this issue is likely to get worse. As you can see from these images courtesy of oh.yes.melbourne there is only really enough width for about three people between the kerb and tables.
The business association want to fix this so the proposal is to:
- Replace the existing asphalt footpaths with stone in areas A, B and C as shown in the map below
- Extend the footpath out over the carparks on section D which is between 81 and 97 Tamaki Dr. It would be done by one of three options (more on this soon).
Yes you read that correctly, a local business association and the local board are supporting that carparks be removed outside of their shops so that there is more space can be created pedestrians. Considering how hard some of the other business groups fight to retain parking this is a very positive step. As mentioned there are three different options for section D that have been suggested which range from shifting the existing kerb out and changing adjusting the cross fall of the footpath through to a parklet type solution.
It all sounds pretty good to me but I hear you asking how much will it cost? Well the cost over 10 years including capital costs, interest costs and operating costs (above a normal footpath) for the most expensive option (Option 1) is just over $1 million. Based on other comments it seems Option 1 is the preferred one.
$1 million is not exactly break the bank type spending considering how much we can put into other transport projects but that doesn’t mean money grows on trees and is just lying around waiting to be spent. Also I’m sure there are a heap of other local centres that would love that kind of money to be spent on them and so working out priorities is probably quite difficult. However the business association have a way around that too and are proposing that businesses in the area be charged a targeted rate to pay for the upgrade. This seems like one of those win, win, win type deals with the potential benefits being listed as:
- a wider and more attractive public streetscape for the large and increasing number of domestic and international tourist that visit the area
- an enhanced setting for hosting regional events along Tamaki Drive
- enhanced economic development opportunities for local businesses in the area
- an improved town centre for local residents, at no extra cost to residential and other business ratepayers within the Orakei Local Board area.
It all sounds good but there’s a problem. Council Officers don’t like the idea because it seems they don’t want to go through the process of doing formal consultation and setting up a targeted rate. They say that targeted rates are usually charged to businesses improvement districts (BID) but due to much of the land in Mission Bay being owned by the same company, the business association doesn’t qualify as a (BID). They also say that Retail Holdings Ltd – the main land owner in Mission bay and the primary beneficiary of the upgrade – can easily afford the upgrade on their own right and so should just talk to Auckland Transport directly. The council officers say that the businesses are just trying to use the council as a new source of capital. That might very well be true but at the end of the day this is about upgrading a publicly owned footpath and business association should really be treated in the same way as they would should each building be owned separately. A targeted rate in this instance seems fairly appropriate.
The Orakei local board have ignored the recommendation not to support the targeted rate and so are now asking the governing body to add the rate to the 2014/15 annual plan. They have even noted that Retail Holdings Ltd have agreed not to pass on the targeted rate to their tenants.
As mentioned, to me the project looks like a win, win win type deal. The footpath would be upgraded and widened by removing car parks while the businesses are putting their hands up to pay for it as they obviously see the value of the idea. The council should approve the targeted rate and get the upgrade done now, before the businesses change their mind.
Len Brown has announced that the city will be looking at using Public Private Partnerships (PPPs) to help fund building some of Auckland’s infrastructure. Here’s the press release.
Public-private partnerships an option for Auckland
Auckland needs to take a good hard look at public-private partnership models for funding infrastructure says Mayor Len Brown, to relieve the financial burden on ratepayers and taxpayers.
Len Brown today released a position paper on PPPs that may be suitable for civic projects in Auckland.
“As the country’s largest and fastest growing city, we have the need for both major investment in infrastructure and finding new, innovative and fiscally responsible ways for this to be delivered,” says Len Brown.
“Every dollar we invest in capital projects – and there will be many billions – needs to make economic sense and be backed by a robust business case. But the traditional procurement and delivery models cannot deliver the infrastructure Auckland needs, which is why I am not inclined to rule out any options that will help us.”
The Mayor says one of the benefits of the Auckland amalgamation was creating the scale to make PPPs at a civic level possible for the first time, and with the Government pursuing greater private sector involvement in infrastructure and services, the public also have a better understanding of PPPs, and why they are distinct from privatisation.
“We have a large and growing body of international experience to draw from – many successful, some not so successful. While PPPs seek to take advantage of private sector expertise and efficiency, a key difference – and a lesson learned early on in the UK’s experience – is that in most successful PPP models, ownership is retained by the public sector, while the risk falls to the private sector.
“That is important for a city like Auckland, where we are seeking to deliver on social as well as economic aspirations through our infrastructure investments.”
Len Brown says with his position paper he aims to kick-start a process of looking at options that might work for Auckland, that would clearly define PPP models and what they can – and can’t – deliver.
“I wanted a realistic, warts-and-all assessment of PPP models. I wanted to know exactly what value PPPs can deliver – both so that we don’t miss opportunities, but also so we don’t trip up.
“PPPs will seldom if ever deliver lower capital costs. We can borrow money at least as cheaply as the private sector. For a PPP to make sense, the prerequisite equation is the value that it delivers – whether it be through applied expertise, commercial synergy, improved service delivery or risk allocation – is greater than any additional cost of finance.
“If Auckland is to be ambitious and prudent, we need to be smart too. While our balance sheet is strong, it cannot sustain the pressure of the magnitude of investment Auckland needs. And the same is true of the Government.”
The position paper includes international examples of where PPPs have or haven’t worked and why. It also lists dozens of projects in Auckland as large as the City Rail Link and as small as the upgrading Auckland’s parking meters that might benefit from PPPs.
Len Brown will now ask council staff to use the framework presented in his position paper to create a work programme through which the council and wider community can have a good hard look at all the options and apply the ones that will deliver real benefits for Aucklanders.
And the position paper is here.
Now I obviously haven’t had time to go through the entire position paper however here are just some initial thoughts on it and the press release.
1. Work out what we actually need
Yes if Auckland is to grow as expected then it will obviously need to invest in more infrastructure and I don’t think anyone doubts that. This isn’t just from a transport point of view but also covers other infrastructure like water and community facilities. However on the issue of transport I think that before we start rushing ahead and working out how to pay for the massive wish list the council is proposing we first need to actually work out what projects re needed.
The list of projects and in the Auckland Plan and their priorities were largely decided at the political level and the modelling in the ITP showed that despite spending $68 billion that measures like congestion would still get worse. So let’s start by actually working out what projects and priorities will deliver the best outcomes for the city. I’m almost certain that if we did that, there would be some substantial changes to what is current planned and of course this is one of the key ideas behind the Congestion Free Network.
2. Different types of PPP
While we work out what is needed in 1. we can of course have a discussion about funding options and I guess that is where this release from Len Brown comes in. The press release does at least acknowledge a couple of key points in that building with PPPs will almost always be more expensive and risky. The question really becomes if the private operator is able to deliver other benefits that would not normally be available to the council/government.
Further not all PPPs are the same and there are different types and it’s important to marry the right type to the right project. The main types of PPP are shown in the chart below.
I have had a number of people from within different parts of the industry tell me that when it comes to just building infrastructure, that pretty much all of the benefits associated with a PPP from private sector innovation can be obtained through an alliance that sees risks shared. That type of model is already used in New Zealand on a number of projects including the likes of Waterview. An example of the type of innovation often talked about is that with more traditional contracts the client (e.g. council) may award a contract to a company that offers the cheapest price. As the project goes one and cost pressures come in they may substitute some materials for cheaper ones but that have higher maintenance costs. By comparison the alliance model apparently allows the builder and client to work though the longer term implications as issues invariably come up.
In short it’s incredibly important that if we go for a PPP that we get the right model for the right project (or part of the project).There may be opportunities for PPPs in some specific parts of projects but if it is just to build infrastructure then our existing contracting methods can likely do that much better.
As an example with the City Rail Link you might find that the council/government pay for the tunnel portion and the basic station box but do a PPP for actual station construction and operations. That might allow for the private partner to buy surrounding properties and integrate that with the station itself to maximise its use through the likes of providing retail and office space, similar to what is done in places like Hong Kong. If that were an option and the council structures the deal right it could significantly reduce the long term costs of building that part of the CRL.
Of course the council or government could do that itself however over the last few decades we have them shift away from these kinds of activities.
3. Demand Risk
Of course when it comes to transport the biggest issue of all is that of demand risk. In Australia the high profile failure of numerous toll roads due to woefully wrong projections on traffic volumes – especially when a toll is involved – has burnt the PPP sector strongly and now it seems they aren’t prepared to take on the demand risk. As such they have ingeniously worked out that they can push that risk back to the public sector which is why we are now seeing projects like Transmission Gully about to be built using an availability contract. That effectively means the private company builds it and the client (NZTA in this case) pays a fee to use it providing it is up to a certain standard. This kind of project is almost certainly a waste of time and money as it presents virtually no risk to the private sector yet is being paid for by more expensive private sector debt. The table below shows where the risk would site under a PPP with the council
It’s also worth considering what the shifting of the demand risk says about various projects. It basically confirms that we are in a period of change and we can no longer just assume traffic growth will always happen. If the private sector isn’t prepared to take on the risk on motorway projects themselves then perhaps it’s a good indication the government shouldn’t be either.
4. Deal Structure
When a PPP deal is put together the banks financing it will go through each aspect and work out how much risk it creates. Just like insurance the more risky you are to the company, the higher they charge you just in-case something goes wrong.
That means if we put out to tender vague documentation, we could end up paying a lot more over a 30+ year period compared to if we had just used more traditional methods. Any variations to the contract along the way can also lead to much higher costs. It also needs to be noted that the private sector can be incredibly tricky and will do anything to find loop holes to get out of deals. The paper notes the case of the Araat Prison in Australia where there were two building companies who set up a joint venture to build the project. However as the project hit difficulty the joint venture split up leaving little opportunity to tie any recourse back to the two parent companies.
Lastly it will be really important for the council to consider the reputational risks and its citizens expectations. For example if we were to build the CRL as a PPP and that involved the operation of the trains too then if something were to go wrong the trains would likely stop running. That could have serious impacts for the economy until the issue is resolved.
I think that in conclusion there might be some specific cases where a PPP might actually work for some projects but we are going to have to be extremely careful about how we do them. I have to imagine the NZCID has been pushing extremely hard for this announcement behind the scenes. Their members list contains most, if not all of the organisations involved in PPP industry in NZ. There is probably a lot more to talk about but I’ll end it with this.
At the end of the day PPPs are just another form of debt which is a way of spreading the costs out over a long period of time. It means those that get benefit in the future also contribute towards the cost. The millennials (1980-2000) like myself are the generation that will still primarily be paying for this infrastructure in 30 years-time. So perhaps we should also be considering a focus on the projects that enable the kind of city this group wants to be living in, not the infrastructure that reinforces the ideals of their parents.