Auckland Conversations: The Future of Housing in Auckland

Postcard from Denver

Greetings from the United States, where I’ve been helping a friend get married and generally visiting friends and family. Along the way, I got to visit Denver, where one of my two brothers now lives. Here’s a picture of all three of us hiking in a state park near the city. I’m the one in the middle:


A few weeks ago, I wrote a bit about Denver’s relatively new and expanding light rail system. The city seems to be growing and changing. It’s also seeing a fair amount of spillover from the overheated Californian real estate market. So I was interested to see what the place was about.

A couple of random impressions.

Like most other American cities, Denver is built around the car. It’s big, and there are a whole lot of big roads like this:


This is a pretty typical American suburban landscape, but there are some Colorado-specific elements to it. Due to the fact that the state legalised marijuana in 2014, marijuana dispensaries seem roughly as common as liquor stores. Here’s one tucked between a brunch place and a Mexican restaurant in a neighbourhood shopping centre – the “Lucy Sky” dispensary:


At least in the older parts of the city, Denver’s residential suburbs are about as pleasant as American suburbs get. Lots of street trees, modestly-sized, attractive standalone houses, decent sidewalks, and an extremely functional street grid system. (Once you get to the places that were developed in the last few decades, it all dissolves into cul-de-sac mush, unfortunately.)

Here’s what it looks like from the air:

Denver street grid

And here’s what it looks like on the ground. Note the absence of driveways at the front of houses – cars are either parked on-street or in driveways off rear lanes. That’s smart:


We went to Washington Park, the big park in the map above, one afternoon. It was packed full of people playing pretty much every sport imaginable. It’s a very fit city by US standards – Colorado has the nation’s lowest obesity rate – and so it was a bit surprising that cycling wasn’t better catered for on streets. I saw a few sharrows and painted bike lanes, but no serious effort to make it safer to cycle.

That being said, the street grid creates a lot of low-traffic back streets, so it’s probably possible to cycle around without spending much time on high-traffic arterials.

Lastly, the rail system. I was kind of curious to see how this worked, so I took the train to the airport when leaving. Basically, it does seem to be working. Even though I was travelling after the peak, a reasonable amount of people seemed to be riding.

One of the weaknesses of the system, I think, is that it often runs alongside motorway corridors. Although rights-of-way can be cheaper here, the ambiance is somewhat lacking. This was where I caught the train: In a darkened cave next to a motorway trench:


However, on the inner stations, where the rail lines deviate from the motorway, it is very apparent that Denver’s light rail system has been a catalyst for redevelopment. There are midrise apartments clustered around a number of stations. I particularly liked these ones a few blocks away from Union Station, which sits off to the side of downtown:


And these, immediately around Union Station and the underground intercity bus terminal (!!!).


The transfer to the airport line was pretty straightforward, and the train passed through the city’s industrial belt and then a whole bunch of empty paddocks before arriving at the airport. Which is, incidentally, home to a terrifying statue of a demon horse that killed its own creator, along with a variety of other conspiracy theories.

denver blucifer

Source: Slate

Do motorways inevitably generate economic growth?

There were a number of odd things in the report released several weeks ago by the New Zealand Council for Infrastructure Development (NZCID), a lobby group. Matt has already reviewed the report in detail. Perhaps the oddest part of it was this sentence:

Motorway capacity is essential because motorways generate economic activity.

NZCID presents this as a factual statement – or perhaps an article of faith? – but does not attempt to justify it or offer much supporting evidence.

From an economic perspective, this is an odd statement because transport infrastructure does not and can not generate economic activity. Roads are a means to an end, rather than an end in themselves. They can enable some economic activity, by allowing people to make journeys that otherwise wouldn’t have been possible, but they can’t actually generate it themselves. (Unless you think that the roads physically lift themselves up off the ground and start moving around and working in factories and stuff, in which case I recommend a psychiatric evaluation.)

Consequently, we must ask: Is there evidence that past motorway investments have raised productivity elsewhere in the economy?

Although the NZCID hasn’t cited it, there is relevant empirical research that addresses this question, including in New Zealand.

Before I get on to that, here’s some macroeconomic data. The top graph, sourced from OECD data, shows New Zealand’s investments in roads in dollar terms. Observe how it started to rise sharply after 2003 – that’s approximately when we started building more motorways.

The bottom graph shows Statistics NZ’s labour productivity index for the measured sector – a measure of changes in GDP produced per worker. Observe how there has been absolutely no change in the productivity growth trend, in spite of a threefold increase in the amount of money being spent on roads.

Correlation is not causation, but an absence of correlation is often evidence for a lack of causation.

NZ road spending and productivity chart


This graph makes me doubt NZCID’s assertions about motorways and economic activity. For one thing, if building motorways truly was an economic panacea, shouldn’t tripling roads spending since 2003 be observable in the data by this point?

Fortunately, we don’t have to guess at the effects of motorway spending on economic output. Three OECD researchers, Balázs Égert, Tomasz Koźluk, and Douglas Sutherland, have taken a look at the issue. In a 2009 paper entitled “Infrastructure and growth: empirical evidence“, they examined the impact of infrastructure investment on economic growth using data for 24 OECD countries from 1960 to 2005. They looked at how investment (or disinvestment) in roads, motorways, rail, electricity generation, and telephone networks flowed through into subsequent economic growth.

Importantly, Égert et al found that the effects of infrastructure investment varied between countries – investments that had a positive impact on growth in one country can have a negative effect on growth in another. This could reflect differences in, for example, economic structure or quality of investment decisions.

Their key findings for New Zealand (from Table 1) were that:

  • Road investment had a positive impact on economic growth throughout the period
  • So did rail investment, although the effect was not quite as strong
  • However, motorway investment had a negative impact on economic growth.

This is, again, the exact opposite of what NZCID have asserted. Transport investment in general appears to have had a positive impact on economic growth, but motorway investment in particular was a drag on growth.

Moreover, the authors considered the possibility that the returns from further investment changed over the course of the period. This is a reasonable hypothesis – after all, in 1960 many OECD countries were undergoing rapid economic change, and trying to build new infrastructure networks to keep up with it. Today, they are largely investing in incremental improvements to existing road and rail networks.

When Égert et al modelled the effects of infrastructure investment over the last decade or so of the period – around the time New Zealand was thinking about ramping up road spending – they found that:

“…in a number of countries the effect became stronger, suggesting for example that further increases in electricity generation capacity can be related to a decrease in output in Australia and Austria, similarly to motorways in Austria, New Zealand and Switzerland and rail tracks in Ireland and the Netherlands, whereas increases in road capacity may be associated with an increase in output in Greece, Ireland and the United Kingdom and additional electricity generation capacity in Portugal may support growth”

Again, not great news for NZCID’s argument that motorways generate economic activity. If the OECD researchers had simply found that past motorway spending in New Zealand had an ambiguous or negligible effect on growth, I’d be willing to accept the possibility that we could achieve more positive outcomes from further spending. But their finding that past motorway spending has been a drag on growth makes me worried about NZCID’s policy prescriptions.

There is, in short, a risk that NZCID is confidently recommending the wrong strategy for New Zealand. A strategy that has little robust empirical evidence to back it up, and which could easily backfire and reduce our growth prospects.

What could a responsible lobby group do differently?

First, rather than arguing for an increase in the quantity of investment, it could argue for an increase in the quality of investment. We know that this is a challenge for current transport spending. For example, a Ministry of Transport review that I covered last year (parts 1, 2, 3, 4) found that benefit-cost ratios for new and improved state highway have fallen significantly over the last decade:

MoT state highway BCRs 2005-2012

Second, it could consider the role of transport investment in improving the choices available to people. As I’ve argued in the past, cities are diverse places, and the people living within them don’t all want the same thing. Some people love the big car and the big house – which is great, as long as they pay for the carbon pollution and don’t run anyone over. Others would be happier living in an urban neighbourhood and getting around on foot, bicycle, or public transport – and that’s also great.

Having more choices raises individual and social wellbeing. Unfortunately, transport policy has historically been “one size fits all” rather than “made to measure”. As there’s no real evidence that motorway spending has a positive effect on economic growth in New Zealand, wouldn’t it make more sense to invest in improving transport choices instead?

Motorways and economic growth: What do you think?

The high cost of fossil fuel subsidies

One challenge in writing about hyper-local issues like transport infrastructure and urban planning policies is that it’s easy to lose sight of the big picture.

Planet-wise, the big picture is climate change. As California Governor Jerry Brown said in a recent interview, our environmental impact increasingly has an “uncompromising gravity”: climate change is a potential extinction event for the human race. This is difficult to comprehend:

The trouble with climate change is that you can pass tipping points, and down the road it is going to be enormously difficult and expensive to change with all the embedded infrastructure. Enormously difficult. Even though today it’s relatively trivial. To de-carbonize the economy, even though it’s massive and would take trillions of dollars, it could be done. But it would take a real mobilization….

And there’s an industry of denial, of manufactured skepticism, all for short-term gain, or because of an ideological fear of more regulation that will curb unfettered market behavior or individual consumption. So people don’t want to believe there’s an absolute out there called the environment, called the climate system. But we know there is. We didn’t make the sun shine today. It was raining for a couple days. We didn’t do that. So what made that? What made that is the whole atmospheric chemistry.

Now, can 7 or 9 billion people, can several billion cars and coal plants affect that? Most of the scientists say yes. And if they can, how are we going to un-affect it? See, that’s the simple-minded thing. Up until 1850 you never had more than a billion people. And what did they do? Run around in their little clothes and with a little bit of gunpowder here and there.

Now we have massive technology. The human impact is multiplied, is unimaginably greater. But the human capacity for wisdom has not improved an iota. So there’s the problem.

The impact of anthropogenic greenhouse gas emissions can readily be observed in the temperature record. For example, climate scientist Ed Hawkins recently made this mesmerising and worrying animated gif of 156 years of temperature deviations:


As Jerry Brown notes, durable investments like transport infrastructure, electricity generation, and the built environment in general lock in future emissions. The things we build today will shape our behaviour and constrain our options in the future.

That’s one of the reasons why it’s so important to build cities that give people the opportunity to live in proximity to jobs and urban amenities, and which offer people abundant and attractive transport choices. The alternative is travelling ever-longer distances by car, and emitting ever-more carbon dioxide.

In the long run, electric vehicles might make this tenable for the climate, but it ain’t going to happen quickly. The NZ government’s current expectation is that EVs will make up at most 2% of the fleet in 2021. (I would love to be proven wrong about this!)

However, sticking with the “big picture” theme of this post, urban form isn’t necessarily the biggest problem we face – or the biggest opportunity to do better. A consistent global approach to carbon pricing would be fantastic. More rapid uptake of carbon pricing at a national level would be almost as fantastic.

Or how about a really radical idea: Stop subsidising fossil fuel extraction and use.

The costs of fossil fuel subsidies are large, and probably outweigh the total value of carbon taxes levied on burning them. New research from UK economist Radek Stefanski suggests that subsidies for fossil fuels cost a total of 3.8% of global GDP, or $1.82 trillion per annum.

Because consistent data on fossil fuel subsidies is hard to come by – many subsidies are buried in obscure expenditure categories, or disguised as distortions in the tax code – Stefanski develops an innovative estimation technique. He observes that emission intensities – carbon emissions per dollar of GDP – follow a predictable “inverted U” shape, as shown in the following chart.

Stefanski emission intensity chart

But some countries deviate from the trend: their emissions are higher than predicted by their development level. Stefanski uses that to identify the degree to which governments must have intervened in order to make fossil fuels artificially cheap.

Interestingly, this results in a lower estimate than previous studies using alternative methods, e.g. focusing on variations in prices for fossil fuels. This suggests that, if anything, Stefanski’s estimate of $1.82 trillion in fossil fuel subsidies is on the low side.

The disturbing thing is that there has been an increasing trend towards subsidising fossil fuels over the last 15 years, in spite of the fact that the evidence on the ill effects of burning them is increasingly clear. That’s illustrated in the following chart, which illustrates variations between countries that “tax” fossil fuels and those that subsidise them. Essentially, the taxes have grown smaller and the subsidies larger.

Stefanski global fossil fuel subsidies chart

The Oceania region has also moved towards offering substantial net subsidies to fossil fuels. As Stefanski doesn’t provide a country-by-country breakdown, it’s not clear whether this trend is driven by Australia’s fetish for coal mines, or whether New Zealand also participates in the madness. But it’s not good.

Lastly, it’s worth considering what the optimal tax on fossil fuels might look like in the aggregate. (It’s almost certainly not a $1.82 trillion subsidy!)

Credible estimates of the social cost of carbon dioxide emissions range from around US$37/tonnne to US$220/tonne. (There is significant uncertainty about exactly how bad climate change will be for human civilisation.) Globally, we emit around 35.7 billion tonnes of CO2 from burning fossil fuels.

That implies that burning fossil fuels imposes a social cost – which will be experienced primarily by young people and future generations – in the range of $1.3 trillion to $7.9 trillion.

Basically, instead of subsidising fossil fuel extraction and use to the tune of 3.8% of global GDP, we should tax it a similar amount. That’s a measure of how bad current global policies on climate change and fossil fuel use are.

Something to keep in mind…

Mid-week reading: strategy games, housing politics, fossil fuel subsidies, and the benefits of bike lanes

Welcome back to mid-week reading, which is (happily) becoming a more intermittent feature. One of the most interesting things I’ve recently read was Jonathan McCalmont’s exploration of anarchist scholar James C Scott’s arguments about the way that governments interact with their people: “Seeing like a state: why strategy games make us think and behave like brutal psychopaths“:

Cloaked as they were in the trappings of religion and medieval warfare, it was all too easy to overlook the morally dubious nature of the games’ relationship between players and in-game characters. Indeed, it was not until the release of Bullfrog’s Syndicate (1993) that the political savagery of the strategy genre became fully apparent. Stripped of the moral fig leaf of historical context, Syndicate asked us to assume to role of a corporate CEO who used cybernetically enhanced slaves to battle rival CEOs for control over a virtual environment that enslaved the entire human race. For the first time, players were asked to embody not mythical beings or historical princes but ruthlessly exploitative capitalist tyrants. The fact that playing a corporation was no different to playing a god or a warlord merely served to drive home the moral message: You are a complete bastard

What all of these games have in common is a tendency to make even the most liberal of gamers behave like brutal tyrants. For the player of strategy games, little computer people serve only as a means to an end. We do not care about whether or not our little computer people are happy, we only care about whether or not they are productive. If they are not productive then they are in our way and little computer people who get in the way of their players tend to wind up brutalised, enslaved and dead.

Second, on a different note, Tim Watkins (Pundit) reflects on the government’s reaction to the Auckland housing crisis. While the article’s a few weeks old at this point, Watkins’ points are still worth considering:

What’s become clear is that Auckland’s problem is no longer a land supply problem, it’s a house supply problem. The Special Housing Areas have opened up over 50,000 sections according to the government, but only 1000 houses have been built. Even Auckland Council estimates six and a half years worth of land is ready to build on. What’s missing is a will (or requirement) to build, tradie capacity and, arguably, a government commitment to a mass building programme.

Instead, what we’ve got from National seems to be an admission any fix on Auckland house prices is years away and what matters to them now is spreading the blame.

Watkins also highlights infrastructure as a key problem:

Auckland Council is in a bind on infrastructure. Not that you’d know it from most of the debate, but it’s willing to sprawl somewhat. It’s problem is the lack of roads, rail, sewers, footpaths and the like on the outskirts of the city and an inability to pay for it.

Auckland Council is maxed out on debt; if it borrows more it suffer a credit downgrade and the local government authority that borrows on behalf of councils simply won’t let it do that, as I understand it. It can’t raise rates, because they’re already high and they’d suffer a revolt. Thy want to introduce congestion charges, but the government won’t change the law to let them.

Third, the Economist offers a good analysis of the opportunity that current low fossil fuel prices offer for policy reform:

The most straightforward piece of reform, pretty much everywhere, is simply to remove all the subsidies for producing or consuming fossil fuels. Last year governments around the world threw $550 billion down that rathole—on everything from holding down the price of petrol in poor countries to encouraging companies to search for oil. By one count, such handouts led to extra consumption that was responsible for 36% of global carbon emissions in 1980-2010.

Falling prices provide an opportunity to rethink this nonsense. Cash-strapped developing countries such as India and Indonesia have bravely begun to cut fuel subsidies, freeing up money to spend on hospitals and schools (see article). But the big oil exporters in the poor world, which tend to be the most egregious subsidisers of domestic fuel prices, have not followed their lead. Venezuela is close to default, yet petrol still costs a few cents a litre in Caracas. And rich countries still underwrite the production of oil and gas. Why should American taxpayers pay for Exxon to find hydrocarbons? All these subsidies should be binned.

What a better policy would look like

That should be just the beginning. Politicians, for the most part, have refused to raise taxes on fossil fuels in recent years, on the grounds that making driving or heating homes more expensive would not only annoy voters but also hurt the economy. With petrol and natural gas getting cheaper by the day, that excuse has gone. Higher taxes would encourage conservation, dampen future price swings and provide a more sensible way for governments to raise money.

An obvious starting point is to target petrol. America’s federal government levies a tax of just 18 cents a gallon (five cents a litre)—a figure that it has not dared change since 1993. Even better would be a tax on carbon. Burning fossil fuels harms the health of both the planet and its inhabitants. Taxing carbon would nudge energy firms and consumers towards using cleaner fuels. As fuel prices fall, a carbon tax is becoming less politically daunting.

Lastly, new evidence from New York shows that protected cycle lanes, in addition to being safer and more enjoyable for people on bikes, can also improve life for people in cars:

When New York City first started adding new protected bike lanes in 2007, some drivers made the usual argument against them: Taking street space away from cars would slow down traffic. After years of collecting data, a new report from the city shows that the opposite is true. On some streets redesigned with protected bike lanes, travel times are actually faster. And it turns out the new lanes have a range of other benefits as well.

For pedestrians, the bike lanes make walking safer by shortening crosswalks and making crossings more obvious to drivers. Pedestrian injuries have dropped an average of 22% on streets with bike lanes. Not surprisingly, cyclist injuries have also decreased; on 9th Avenue, for example, even though far more bikes are on the street, cyclist injuries have gone down by 65%.

For cars, a better traffic flow comes partly as a side benefit from a safety feature added with the bike lanes. Cars turning left now have pockets to wait in—so they’re less likely to hit a cyclist riding straight, but they also stop blocking traffic as they wait.

“Having that left turning area, where you’re able to get out of the flow, you can see the cyclist, the cyclist can see the turning vehicle, you can pause and not feel the pressure from behind to make a quick movement,” says Josh Benson, director of bicycle and pedestrian programs for the New York City Department of Transportation. “That’s a major major safety feature of these type of bike lanes. But it also helps the flow.”

Mid-week reading: California uber alles, road tolls, apartment design, and election reviews

I’m back to a mostly normal post-writing schedule, but mid-week reading will continue as an intermittent feature.

One of the most interesting things I’ve read recently was Jim Newton’s long interview with California Governor Jerry Brown (in UCLA Blueprint). Brown served two terms as governor in the 1970s and 80s, left politics for a while, and ultimately returned to serve another two terms as governor. In the 1970s, he was known as a prescient environmentalist (“Governor Moonbeam”); today, he’s had to address major long-term challenges, including a brush with fiscal meltdown in 2008-2012, responses to climate change, and a poorly functioning housing market. He also inspired the Dead Kennedys’ song California uber alles.

Blueprint: Environmental issues have been very important to you for a very long time. What first captured your attention about this area?

Jerry Brown: The idea that there is an environment that we’re a part of and can’t be separated from, and that this environment can be degraded, impaired and altered in a very negative way, more than aesthetically but actually having to do with the vitality of living things and the whole way living beings all function, that this could be affected by decisions.

That was a rather startling thought to me…. Before the notion of ecology and environment, there was the notion of resource conservation. That’s a very different idea. That’s a partial idea: Let’s protect the forest; let’s protect Yosemite.

BP: And a lot of that was conservation for future use, right?

JB: Conservation, yes, but not just conservation for future use — conservation as applying to a very particular and limited piece of land or river or mountain. The environment is a different concept. Ecology is an encompassing idea. “Eco” comes from the Greek word ekos, “house.”


BP: And climate change is potentially as devastating?

JB: Climate change is slower. The trouble with climate change is that you can pass tipping points, and down the road it is going to be enormously difficult and expensive to change with all the embedded infrastructure. Enormously difficult. Even though today it’s relatively trivial. To de-carbonize the economy, even though it’s massive and would take trillions of dollars, it could be done. But it would take a real mobilization….

And there’s an industry of denial, of manufactured skepticism, all for short-term gain, or because of an ideological fear of more regulation that will curb unfettered market behavior or individual consumption. So people don’t want to believe there’s an absolute out there called the environment, called the climate system. But we know there is. We didn’t make the sun shine today. It was raining for a couple days. We didn’t do that. So what made that? What made that is the whole atmospheric chemistry.

Now, can 7 or 9 billion people, can several billion cars and coal plants affect that? Most of the scientists say yes. And if they can, how are we going to un-affect it? See, that’s the simple-minded thing. Up until 1850 you never had more than a billion people. And what did they do? Run around in their little clothes and with a little bit of gunpowder here and there.

Now we have massive technology. The human impact is multiplied, is unimaginably greater. But the human capacity for wisdom has not improved an iota. So there’s the problem.

One of the reasons I keep a close eye on California is that it’s often at the forefront of change. And while that throws up occasional perversities, like Los Angeles’ car-based sprawl and congestion or the San Francisco housing market, it also tends to develop solutions to those problems.

Speaking of technology and solutions to long-standing problems, The Age transport reporter Adam Carey reports on a pilot programme for road pricing. Transurban, a major Australian toll-road operator, has been gathering data on the behavioural implications of road tolls. They recognise that existing funding sources – principally petrol taxes – will come under pressure as electric vehicles enter the fleet… and, furthermore, that this will offer opportunities to price to manage congestion:

Mr Clarke was one of 1200 motorists in Melbourne who had been recruited, and whose every move behind the wheel was being tracked in a bid to find the best model for a switch to user-pays roads.

The matchbox-sized device plugged beneath Mr Clarke’s steering wheel was a GPS-enabled geolocator, recording his journeys so Transurban could tally up a monthly road user charge.

The charge would be entirely fictional, for the purpose of exploring the best payment model for a system of user-pays roads.

Mr Clarke also had a virtual bank account – or “piggy bank”, as Transurban cutely coins it – with regular statements he could view online and three options for how they would like to pay to drive.

Pay $1 a trip, pay 10c a kilometre, or pay a flat rate each month.

Mr Clarke chose the third option, and was given a notional monthly balance of $92, which bought him the right to drive 926 kilometres. If he exceeded the cap, the charge would double from 10c a kilometre to 20c.

As it happens, Australia’s already got a funding problem – petrol taxes haven’t kept pace with roads spending:

Infrastructure Australia published a major audit of the condition of the nation’s transport networks last year and reached the same conclusion, that Australia is increasingly unable to pay for the infrastructure it needs.

“This deficit will, on a business-as-usual basis, continue to worsen as a growing population and economy increases demand for infrastructure networks,” the federal advisory authority found.

It also found the way roads are paid for is “unfair, unsustainable and inefficient”, because taxpayers pick up most of the bill, rather than the heaviest road users.

It is a time of transition, here and elsewhere. In Idealog magazine, architect Blair Johnston writes about “how higher density is Auckland’s destiny“… and how design must respond in order to enable that.

Every successful city has at some stage experienced this growth and a similar intensification process, including places like Melbourne and Sydney where the lifestyle values are much like our own. The advantage is that we can appropriate these international models – the trees of Brooklyn streets, the construction system of Amsterdam, the vibrant low-rise laneways of Tokyo, the density of Sydney’s Paddington – and adapt them to our local conditions.

The first Auckland-specific factor to consider is our climate, and our love affair with the outdoors. And that does make development in this part of the world somewhat distinctive. All buildings in Auckland require good orientation and cross ventilation; in short, ample natural light and the ability to open windows. It may sound obvious, but it’s surprising how often this is forgotten in building developments. Creating sustainable apartments should begin with a north-facing aspect and supply of fresh air from both sides of the building. No arguments.

Johnston goes on to identify four other ways in which design must be tailored to the Auckland context, in response to our desire for privacy in our private spaces; our need for usable public spaces; our demand for flexibility in our living spaces; and the affordability challenge.

He concludes:

The truth is that four- and five-storey buildings provide a comfortable threshold of density; we can use land more efficiently than cellular homes, while still creating great streets and vibrant public places. Extrapolated out, this makes for better environments and cities everyone wants to live in. In New Zealand, our personal living spaces are integral to our social construct – we entertain, relax, work and live in our homes. We need to ensure that the apartments we develop are appropriate to these living conditions, to our climate, to cultural expectations and to budgets.

Lastly, I highly recommend reading lawyer Andrew Geddis’ summary of Parliament’s 2014 election review (on Pundit). As local body elections are coming up, we must consider how our democratic processes work, and how they don’t. The election review is a good place to start.

The Committee started where recent Justice and Electoral Committee inquiry reports always start – lamenting the continued decline in voter participation. Sure, the 2014 turnout was up a small tick from 2011 … but at 72.1% of those eligible to enroll it still was the second lowest since universal suffrage was brought in in 1893. In particular, the voting rate of younger electors is dire – less than 65% of eligible 25-29 year-olds cast ballots (and for those on the Māori roll, the figure is even worse at just over 50%).

[Incidentally, if you want to understand why the policies offered and pursued by New Zealand’s political parties look the way they do, the graph of turnout-by-age-group on page 13 of the Committee’s report will take you a long way toward doing so … but that’s a topic for another post!]

The Committee was united in thinking this declining turnout, especially amongst younger voters, is a real problem. It mirrored previous Committee reports in saying so. So what to do about it?

Unfortunately, as Geddis notes, the Parliamentary committee didn’t reach any agreement on concrete actions to overcome the youth turnout problem:

…compulsory civics classes for the youth seems to be the only solution going. Because the majority of the Committee weren’t having a bar of any more radical proposals for combating the decline in voting, such as lowering voting age to 16 (“a major change to the electoral system, requiring broad public consultation and a high level of political consensus”) or making voting compulsory (“if such a move were contemplated, the public must be consulted and a high level of political consensus achieved before any such change is implemented”).

[…] Note also that the pilot test of online voting in this year’s local body elections has been canned, meaning we won’t have even a practice run at it until 2019 at earliest – and no full roll-out for local body elections before 2022. I suspect that MPs won’t be comfortable setting it loose on parliamentary elections until they’ve seen it working without a hitch at the local level … meaning that it could well be another decade before our smartphones or tablets or neural implants begin to replace pen and paper ballots at the local school hall.

That’s it for the week. Post any other articles of interest in the comments!

The strange side effects of parking subsidies

Parking policies are frequently bizarre. Parking is, after all, a private good – it is both rivalrous (two cars can’t park in the same space at the same time) and excludable (if you don’t want someone parking in your space, you can keep them out). In that respect, it is more like a refrigerator than a public park.

But unlike a refrigerator, there are all sorts of public subsidies and regulations affecting parking. Although refrigerators are arguably more of a necessity of life than parking, councils don’t impose minimum refrigerator requirement for homes and offices. Central government doesn’t provide a tax subsidy for employer-provided refrigerators. And councils don’t invest in (or subsidise) public refrigeration facilities.

And if they did, it would almost certainly result in some perverse outcomes.

A recent NZ Herald story provided an example of how parking subsidies can lead to odd outcomes. (It was also a fine example of meaningless “gotcha” journalism, but never mind that!)

They are the crack team of economic and planning experts charged with sorting Auckland’s future growth.

But a member of the Unitary Plan independent hearings panel has fallen foul of the city – after sneakily parking a jetski in a central city council carpark for almost a month.

The mystery jetski appeared three to four weeks ago, taking up a Queen St park reserved for the panel listening to submissions on the future of the city.

Here’s the jetski in question:

IHP jetski

The article implies that the panel member in question is rorting the system or acting unethically by using their employer-provided carpark to store a jetski. But, if you think about it, it’s actually a good illustration of the poor logic behind many existing parking subsidies.

Let’s back up a step: what subsidies are we talking about, exactly?

In the Auckland city centre, carparks have a market value, which is a good thing. The removal of minimum parking requirements in the 1990s led to an increase in the price of parking – and also to increased development as new buildings weren’t encumbered by the need to provide unnecessary but costly carparks. At present, Auckland Transport is leasing downtown carparks for between $110 to $490 a month – although the cheapest ones are fully sold out. Private operators seem to be supplying them at around $250-$300 per month.

So an employer-provided carpark in the city centre is likely to be worth somewhere in the range of $3000-$6000 per annum. Because fringe benefit tax isn’t levied on carparks, this is worth the equivalent of $4500-$9000 in salary for people paying the top marginal tax rate (33%). (As the panel members probably do.)

That’s a large public subsidy for a small bit of concrete!

In theory, the rationale for the tax subsidy on employer-provided carparks is that it makes it less costly for people to commute to work, and hence encourages people to enter the workforce. But the panel member’s jetski illustrates the absurdity of that approach.

For one thing, people have (or should have) a range of choices about how to commute. Some prefer to drive. Others may take the bus, train, or ferry, or walk or cycle to work. Consequently, a significant share of commuting trips don’t end in a carpark. Based on Census data, around half of the people working in the city centre in 2013 didn’t drive to work. A bit over one in four workers throughout Auckland didn’t drive to work.

Census journey to work Auckland mode share chart

Consequently, trying to subsidise commuting by subsidising parking is likely to be a distortionary and inefficient policy. Some people will change transport modes in response to cheaper parking, resulting in additional road congestion in peak periods. Others will be left with a subsidised parking space that isn’t much use to them.

The panel member who used their parking space to store a jetski probably falls into the latter category. They might walk to work, or take the bus or train. This leaves them with a bit of costly concrete that they don’t need to store a car – so why not use it to store another vehicle instead? I can’t blame them for that.

The jetski has apparently been removed from the parking space, but the policy distortions that led to it being there in the first place remain. So what could we do about that?

The key is to realise that our ultimate aim is to enable mobility, not to simply provide carparks, and make policy accordingly.

For some people, mobility means a monthly public transport pass, or a bicycle and access to a shower at work. But current fringe benefit tax policies discourage employers from offering those solutions to their employees – an employer-provided PT pass would be taxed as regular income, while a carpark is exempt from tax. We need to level the playing field.

The best way of doing so is by removing the fringe benefit tax exemption for carparks, but if that’s not political possible then a good alternative would be to exempt PT passes from FBT, as the Green Party has proposed.

Another alternative would be to offer people the option to “cash out” employer-provided carparks. It’s especially bizarre that employers aren’t required to offer this choice, as the current government changed employment law to allow people to exchange one week of annual holiday for the equivalent in cash. Why not adopt the same approach for carparks, which could easily be worth more than holiday pay for many workers?

Lastly, we also need to make some choices beyond how we price and subsidise parking. Getting a great range of transport choices will often require us to use existing road space differently. Sometimes the only way to get a dedicated bus lane or a safe, separated cycle lane is to remove a few on-street carparks. We need to look at those choices in a holistic way – i.e. do they improve overall mobility and access to destinations – rather than simply insisting that all carparks must stay in place.

How do you think we should address parking subsidies?

AT confirm move to city

Auckland Transport have confirmed they’ll move into the current Vodafone building on Fanshawe St at a saving of $1 million per year

Auckland Transport to save money by being under one roof

Auckland Transport has signed a Heads of Agreement with the landlord for 20 Viaduct Harbour (Vodafone Building on Fanshawe Street).

This agreement, which is subject to further detail being agreed and documented in a lease, is expected to be completed by 31 May.

Auckland Transport’s Chief Financial Officer Richard Morris says this location will give AT a cost effective solution for its accommodation requirements with expected savings of close to a million dollars in the first year alone.

Auckland Transport’s staff are currently spread across 19 buildings with multiple leases, some of which are about to expire.

Mr Morris says the Fanshawe St building has 14,000 square metre open plan floor space spread over six levels and that offers flexible and efficient work spaces. “It is not expensive compared to a new building or other existing offices in or around the CBD. The building is 12 years old.

“We will be reducing our overall space requirements by around 2500 square metres as well as making savings in areas such as cleaning, electricity, IT and maintenance.”

Mr Morris adds that leasing rather than purchasing space reduces the organisation’s financial risk.

In addition to the CBD location AT will have a presence in three smaller regional offices in the north, Manukau and Henderson. This will enable teams with operational requirements to work in their local area such as parking officers.

The move to Fanshawe St will be completed by November 2017.

I know a lot of their city based staff catch PT in to the city and due to the distance most would probably want to transfer to a bus to get to the office. As such I wonder if this will move will expedite improvements in transfers in and around Britomart as well as pedestrian facilities on Fanshawe St. And with their buddies at the NZTA in the HSBC building the move will make perhaps they could even have a fleet of bikes for staff moving between the two locations making use of their new Quay St cycleway.

It will also likely be a good llocation for them if they build light rail as planned

LRT - Fanshawe St

Sunday reading 15 May 2016


Hi, and welcome back to Sunday reading. Starting off here is an interview with one of my favourite urban observers, Christoper Hawthorne with the Los Angeles Times. Hawthorne has been actively documenting the transformation Los Angeles has been going through over the last decade. Hawthorne has framed the story in a historical perspective calling the current era, the ‘3rd Los Angeles’. Here he is interviewed by Jon Christensen for Boom magazine.

Mayor Garcetti recently talked about this as being a “hinge moment” in the city’s development. That idea that the city is navigating this transition has become part of the popular, broader discussion about the city. But the more that I wrote and thought about the history of Los Angeles, it occurred to me that a lot of the elements that we’re struggling to add—whether it’s mass transit, places to walk, more ambitious public architecture, innovative multifamily housing, or more forward-looking city and regional planning—we actually produced in really remarkable quantities in the prewar decades. In the DNA of the city’s history is something before the car and the freeway.

…But there are other ways that this emerging city is completely different. First LA and Second LA are both driven by huge growth. And the Third LA is really a kind of post-growth city. Population and immigration have both slowed really dramatically in Los Angeles. Manufacturing is a shell of what it once was. So, in some ways, we have the first chance since the 1880s to really catch our breath and think about how to consolidate our gains—and about what kind of place we want to be. So that’s the basic framework.

As part of the public conversation about the future of Los Angeles Hawthorne runs a lecture series at Occidental College that seems comparable to our Auckland Conversations. It’s admirable to see a writer having the range and latitude to contribute so meaningfully to the public conversation.

It seems the urban conversation is not as sophisticated in New Zealand and Australia as it could be. Here is an interesting study that looks at how newspapers cover local intensification projects in Australia. The findings conclude that writers sensationalise the issues with dramatic references and emotive language. Katrina Raynors, “Media picture of urban consolidation focuses more on a good scare story than the facts“, The Conversation.

Media reports predominantly capture the drama of consolidated development with references to warfare or natural disasters. Articles commonly refer to floods of development or a city under siege.

Local politicians opposed to consolidation are characterised as saviours of the people. These white knights stand strong, benignly offering their constituents protection from the destruction of over-development.

Dramatic physiological language is used in articles discussing high-density apartment buildings. Such places are characterised as choking the city or ripping the heart out of its suburbs. Increasing urban densities are presented as threatening the overall health of the city.

Apartments are depicted as “shoeboxes”, “rabbit hutches” and “charmless chunks of brick”. The people who choose to live in them are routinely portrayed as outsiders. They are the unwelcome intruders who are taking over the city and corrupting traditional suburban values.

Speaking of rolling back decades of past mistakes, Matt had some great posts this week on the recent NZCID policy dump. This comment on road pricing by MFWIC is worth mentioning:

“You are absolutely wrong Hamish. The value of tolling has little to do with the cost of collecting the toll. You need to stop seeing it as harvesting cash and start to understand the concept of economic externalities. The value of congestion pricing is to ensure people include into their decision of how and when to travel the impact they have on others. The correct price is the marginal cost including the externality. If you gather more than it costs to collect (which you will) then you get an opportunity to use that money to further improve transport by either improving public transport or if it makes sense to build additional capacity. The problem is every time congestion charges are raised the infrastructure lobby jumps in like a robbers dog to try and claim the cash. The public then see it as a cash grab with them being fleeced and the whole debate is over before it starts. Congestion charging is the only chance to actually ‘fix’ transport and the best thing the infrastructure people could do is point out that pricing a public good with negative externalities is in everyone’s interest.”


Jane Jacob’s 100th anniversary was celebrated this weeks with lots of adoration, some critiques and a fair amount of misunderstanding.  Biographer Peter Laureance provides a useful summary of what was debated last week over the innertubes with  links to several articles. Peter Laureance, “How best to use, abuse, and criticize Jane Jacobs”

I found this bit particularly interesting:

Moses wasn’t behind the scheme to redevelop the West Village; and the Lower Manhattan Expressway, which received support from picketers who saw short-term gains in construction jobs, among others, it was bigger than Moses and outlasted him. Fueled in part by the anger that activism took away from writing her second book, The Economy of Cities (1969), Jacobs described LoMEx as a beast that had to be killed three times, in 1962, ’65, and ’68, by which time Moses’s political power had been also fatally wounded.

Sir George Grey Special Collections, Auckland Libraries, 580-10204

While Jacobs was battling motorway expansion and superblock modernism a quite distinct history was unfolding in Copenhagen. Athlyn Cathcart-Keays, “Story of cities #36: how Copenhagen rejected 1960s modernist ‘utopia’“, The Guardian.

Copenhagen’s lack of funds led to the city’s modernist visions progressing at a painfully slow pace. It did get a small taste of a car-oriented future in the shape of the six-lane Bispeengbuen expressway, which rips through its northern neighbourhoods directly in front of second-storey windows.

“That was a real eye-opener. People could see that this would change Copenhagen – that this is what the plans mean,” Elle says. “Inside people’s heads, they found out that they were not happy with these [modernist developments]. By the 70s, they could experience how it was to live in it … you have to feel it in your body to know it’s not good.”


How Can Cities Move More People Without Wider Streets? Hint: Not With Cars (NACTO via Streetsblog)

The US Feds took a fact-finding tour of the Netherlands to figure out how they have achieved such a high level of bicycle use. The report concluded, surprise!, that “much of the Dutch design approach can be adapted to US context”- US Bicycle Network Planning & Facility Design Approaches in the Netherlands and the United States, FHWA. Here are some takeaways from the report:

There is an implicit assumption in Holland that on roads with higher volumes of cars traveling at faster speeds, it is always preferable to separate bicycle and motor vehicle movement because it is safer and more comfortable. Specifically, in the Netherlands when motor vehicles are traveling faster than around 19 miles an hour, it is assumed that separation is needed.

Motor vehicle speed is controlled by visual narrowing techniques and grade differences and less emphasis is placed on signage and striping. With cars and bikes traveling at slower speeds, there is greater ability to allow for informal mixing, for example on shared streets and at points where two bike routes cross each other.

Informal mixing strategies require greater trust in the users of the transportation system and rely more heavily on eye contact, active awareness of all travelers, and high bicyclist skills levels (achieved in part by bicycle safety education and training provided at a young age). It also helps that people driving often have a history of bicycling themselves and so prioritize watching for bicyclists while they are driving or opening car doors. Dutch approaches to traffic laws also provide more protection for bicyclists than is typical of the U.S.

Of course we can’t so easily translate best practice cycleway design in NZ. Here Bike Auckland raises the serious issue of our current road rules and standards of practice. Tim Duguid, “Ride, Interrupted – the Stop-Start Bugbear“, Bike Auckland.

After 10 years in New Zealand there’s one thing I still can’t get used to: having to stop and start to cross side streets while I’m out for a run. Where I used to live, England, this scenario is barely cause for a second thought: a casual glance over your shoulder maybe, but your reasonable expectation is that you can keep going at the same pace. Which is incredibly helpful for running after dark, when main roads are often your best bet for smooth pavements and decent street lighting.

Please share your links in the comment section.

Time for a footpath parking campaign?

I’ve written before about the increasing problem of cars parked on footpaths, often completely blocking them and forcing pedestrians out on to the road to get past. From what I can tell a couple of common reasons seem to be

  • the presence of yellow no park lines where it seems that some drivers think that if they mount the kerb it doesn’t really count as parking
  • trying to take up less space on the road, perhaps trying to give other drivers more space to reduce the chance of their vehicle being side-swiped (I can’t imagine this happens often).

Yet while we have campaigns telling pedestrians to be careful, we’ve never had one about this menace. So perhaps Auckland Transport could copy this idea from the UK highlighting some of those who suffer the most from when people park on footpaths.

How about it AT?