On the weekend Phil Goff announced his bid for the Auckland mayoralty. Several interesting articles on Goff’s bid have been published, for example ones by the Herald and Radio NZ here and here respectively. A more recent article by the Herald is available here, which suggests Goff may be the favourite and exhorts him to “exert control”.
In this post I’ll discuss and interpret some of Phil Goff’s comments on local government in Auckland. The post is split into three juicy topics: 1) Rates; 2) Asset sales; and 3) Intensification. I should note that it’s relatively early on in the campaign, so in some ways this post raises more questions than answers. I hope you enjoy it nonetheless.
So what is Goff’s position on rates? Well, for starters at least Goff has his figures right: He notes that rates for the average household increased 3.5%, while also observing that some households experienced increases of up to 10%. Basic data analysis is something that seems to escape some journalists.
Now don’t get me wrong: 10% increase in one year is a big jump.
However, one of the things that got lost in the recent clamour is that some of the increase in household rates was associated with adopting single rating system for all of Auckland. This required harmonizing quite disparate rates across Auckland. Naturally, some people found their rates went up, while others found their rates went down.
The good news for Goff, and any other mayoral candidate, is that the difficult process of harmonizing rates is now largely complete. Len Brown has borne the brunt of that central government hospital pass. As such, the incoming mayor – whoever they are – will benefit from this issue dropping off the radar. So how will Goff seek to keep rates under control in the future?
Well, in his interview on Radio NZ Goff talked “prioritizing” projects, i.e. less important things give way to more important things. This really was the thrust of this recent post which I wrote on the effectiveness and efficiency of local government in Auckland.
Unfortunately we don’t know yet what Goff’s priorities are, so it’s hard to assess the size of the potential savings. There are however a number of poorly-performing transport projects which could be ditched, such as PenLink and Mill Rd. Right there Goff could save the mighty taxpayers of Auckland several hundreds of millions of $$$.
One issue Goff didn’t discuss is Auckland Council’s desire to shift the burden of rates away from businesses and onto residents.
This shift, as I understand it, is designed to reduce the costs faced by businesses, so as to 1) reduce prices for goods/services and 2) increase employment, both of which ultimately benefit residents. While this is a policy direction that I happen to support, it has also contributed to some of the recent increase in residential rates. We don’t yet know where Goff stands on this issue, but it’d be interesting to find out because it is one factor that will cause residential rates to rise faster than inflation.
2. Asset sales
Now we start to get into the nitty gritty about how to keep rates under control. One of the more controversial ideas that has been in the media lot lately is the subject of asset sales. It’ll be interesting to see where the mayoral candidates fall on this issue, because it really is the primary opportunity to find more money to invest in things that will make the city better.
In his interview on Radio NZ Goff distinguishes between what he calls “strategic” and “non-strategic” assets. He says no to the latter, especially in the context of Watercare. Auckland Council’s shares in Ports of Auckland and Auckland Airport, for example, also appear to be in the “not for sale” basket.
Now I can appreciate the need to distinguish between strategic and non-strategic assets, where the former are deemed to provide efficient support to Council’s strategic direction and the latter do not. However, I think there’s a need for Goff to outline not only which assets he considers to be strategic, but *why*. This would help shed light on his underlying values, and mitigate against the “slippery slope” arguments that are advanced by some people in discussions of asset sales.
On the other hand, it should be noted that from the interview it seems that Goff’s views on golf courses are relatively well-aligned with our own views here at TransportBlog. I’ve paraphrased the most relevant parts of the Q&A as follows:
- Interviewer: What about flicking some of the golf courses?
- Goff: Remuera golf course is worth $560 million and the subsidy for every golfer is $11,500 per year.
- Interviewer: So we could expect some golf courses to be sold for housing?
- Goff: I’m going to look at the facts before I make a commitment on that. But I don’t think it’s fair for Aucklanders to be subsidising those people who are lucky enough to be members of a golf course …
FYI here’s what a subsidy of $11,500 per golfer per year buys them.
Or here’s another fact just to ram it home: The annual subsidy for golf courses in Auckland is approximately equivalent in value to the annual cost of operating Auckland’s rail network. So when someone tries to tell you that asset sales will not have a meaningful impact on Council’s ability to deliver other goods and services, you should tell them they’re dreaming.
Personally, Goff’s views on rates and asset sales seemed fairly reasonable to me, even if more details are needed (NB: The same goes for all the mayoral candidates of course).
Now let me present one psuedo-question in the Radio NZ interview and the subsequent response from Goff:
- Interviewer: There’s more talk today about intensification in some of those inner-city suburbs, such as Mt Eden.
- Goff: I don’t see us putting up tower blocks in some of those really nice areas. What I see us doing is working down the main arterial transport routes, looking at places like New Lynn and Panmure. Those are the ideal places where you might want to put 3-4 storey intensive housing, plenty of public open space and making sure it’s good urban design. I don’t think that you start to encroach on the most beautiful parts of the city, before you, say, let’s follow the transport routes so that people can be close to where they are moving to.
There’s some good stuff in what Goff says, e.g. on concentrating development in areas where transport infrastructure exists and the need to focus on urban design, both of which have been somewhat lacking in earlier iterations of Auckland’s development.
There are also, however, some very unfortunate words and attitudes underlying Goff’s comment. Here’s the part I was most concerned by: “I don’t see us putting tower blocks in some of those really nice areas“.At this point my little red alert warning signals started to go whoop whoop. More specifically, in this comment Goff strays into very dangerous territory my friends.
Let me explain why.
First let’s consider what Goff is trying to say. From where I’m sitting, it seems that Goff is saying let’s not intensify in areas that are “nice”. Why? Well, the obvious implication is that intensive development is not nice?!? Goff meet Ockham. More specifically, if Auckland is to progressively change the discourse around housing, and thereby lance the housing boil that threatens our entire economy, then we need large numbers of apartments and town houses to be built. And we need them to be built all across Auckland’s central suburbs, where people want to live, not just in a few places like Panmure and New Lynn.
Second, in this sentence Goff implies that he will seek to undermine normal market forces. More specifically, if an area is “nice” then people are going to want to live there right? Goff seems to be saying that as soon as an area becomes “nice” then Council is not going to allow development there. By extension, Council will presumably only allow intensive development in location that are not nice? Where there is no demand to live? Great, Council can zone away its heart’s content, but it won’t ultimately change anything, all we’ll get is higher property prices in areas that are unable to be developed further.
Which brings me to the third issue with Goff’s seemingly innocuous statement: Goff’s use of the word “nice”. What does this imply for the areas of Auckland that are not like Mt Eden? Goff seems to think Council can identify a couple of not nice places and direct all the “poor” people (who can’t afford to buy a nice big ol’ villa on a large section in Mt Eden) to live there. Think again. Question: What if people all over Auckland come forward and argue their neighbourhood is nice just the way it is?
Answer: Goff either has to 1) tell them that they’re wrong or 2) roll back the intensification planned for those areas. That’s right: In arguing that we shouldn’t intensify certain areas because they’re “nice”, Goff has unwittingly created a rod that any NIMBY anywhere can use to beat back proposed intensificatio – on the grounds that their area is already “nice”. End result? Whole-sale down-zoning in response to self-interested parochial interests.
Now, in Goff’s defence, he is not alone in slipping down this slippery slope.
In fact, the interaction between planning regulations and political economy has been studied elsewhere. This interesting article from Los Angeles, for example, discusses how their planning regulations prevented intensive developments from occurring in areas where there was demand. Sound familiar?!? These regulations were found to have a massive negative impact on development capacity in Los Angeles, as illustrated in the figure below.
For this reason it is not surprising that Los Angeles has had the “fastest increase in home values since 2000” and “has become the least affordable major city in the country“.
In a nutshell: The more Goff is inclined to pick “winners” and “losers” when it comes to what types of housing can be developed in which areas of Auckland, then the more expensive and segregated Auckland is likely to become. Personally, I struggle when residents and politicians effectively say “we want the kinds of people who live in apartments to live over there, because this area is too nice for them“. That’s the definition of snobbery.
The discourse surrounding this issue is even more farcical when you realise that many of Auckland’s older suburbs are already peppered with 3-7 storey apartment buildings. Like my apartment building, which is over 100 years old. Like many apartment buildings in Auckland that were built before regulations and locals made it too difficult.
And let’s be honest: The debate we’re having is not about “tower blocks”: It’s about whether you should be able to build a 3-7 level building in Auckland’s extremely valuable and desirable central suburbs. You know, like the kinds of development that one finds Sydney and Melbourne. To which I say abso-bloody-lutely.
End result? I think Goff needs to think more subtly about intensification.
Overall score for Goff’s initial foray into local government issues? Well, I’d give him a 2/3. When it comes to rates and asset sales, Goff stated some reasonably coherent positions, while also appearing open to debate and discussion. Which is good, because after all he’s only one vote on Council so at the end of the day we shouldn’t overstate his importance.
While Goff is shaping up to be a good centrist mayoral candidate, it looks like housing and intensification may be areas for improvement.
At this point it’s worth mentioning that Goff naturally wants to win, and winning involves appealing to people from across the political spectrum – many of whom like Auckland the way it is and don’t want it to change. But allowing more housing, and more intensification in particular, is the single most important issue facing Auckland right now (yes bigger than transport).
For this reason, Auckland’s next mayor needs to champion Auckland as an integrated city, not a collection of self-interested suburbs.The reason we should sell Remuera golf course is the same reason we should allow for more development in Mt Eden: Because it’s in the best interests of Auckland as a whole. Both now and into the future.
I would like to elect a mayor who doesn’t apologise for the need for intensive development in central areas. A mayor who engages with the concerns of existing residents, but doesn’t compromise on the underlying reality facing Auckland and the city’s growth. Development is not a disease that needs to be quarantined in not so “nice” places. Multi-storey buildings already exist in Auckland’s inner-city suburbs, like they do in Melbourne and Sydney and almost any city of similar size.
Indeed, I’d personally argue that Auckland’s lack of density, and the consequences for civic life, is a primary reason why Auckland struggles to retain its young people. The life of cities like Melbourne, Sydney, London, and Amsterdam is what attracts young peolpe like me. I think our approahc to housing needs to be framed in that context: If you want your grandchildren to live in this hemisphere, then you’ve got to allow for more intensive development in Auckland.
Goodbye, goodluck, and godspeed to you my fellow Auckwooders. May Goff be with you.
This is AT’s official future vision for the Rapid Transit Network in Auckland. I feel the need to show this again in the context of a number of uninformed views about the CRL popping up again, as one of the chief misunderstandings is to treat the City Rail Link as a single route outside of the network it serves.
All successful transport systems are designed through network thinking and not just as a bunch of individual routes, this is true of our existing and extensive motorway network just as it is true for our rapidly growing Rapid Transit one. The Waterview tunnel is not being built just so people can drive from Mt Roskill to Pt Chev, and nor is the CRL just to connect Mt Eden to downtown.
The CRL is but one project on the way to a whole city-wide network, as is clearly shown below, and as such it doesn’t do everything on its own.
But then having said that because it is at the heart of the current and future city-wide network it is the most crucial and valuable point of the whole system. That is true today and will continue to true for as long as there is a city on this Isthmus. In fact it is hard to overstate the value of the CRL as by through-routing the current rail system it is as if it gives Auckland a full 100km Metro system for the cost of a pair of 3.4km tunnels and a couple of stations. This is simply the best bargain going in infrastructure in probably any city of Auckland’s size anywhere in the world and is certainly the best value transport project of scale in New Zealand. Because it is transformational* for the city and complementary to all our existing systems, especially the near complete urban motorway network.
Additionally the capacity it adds to the region’s whole travel supply is immense: taking up to 48 trains an hour this can move the equivalent of 12 motorway lanes of car traffic. All without flattening any place nor need to park or circulate those vehicles on local roads and streets. And all powered by our own renewably generated electricity. This is how the city grows both in scale and quality without also growing traffic congestion.
This map will evolve over time as each addition is examined in detail. For example I expect the cost-effectiveness and efficiency a rail system over the harbour, up the busway and to Takapuna to become increasingly apparent well before this time period. In fact as the next harbour crossing, so we are likely to see that in the next decade, otherwise this is that pattern that both the physical and social geography of Auckland calls for. Additionally Light Rail on high quality right-of-ways, although not true Rapid Transit, will also likely be added in the near term.
Welcome to Auckland: City.
* = transformational because it substantially changes not only our movement options, the quality of accessibility between places throughout the city and without the use of a car, but also Auckland’s very idea of itself; we have not been a Metro city before: It is doing things differently.
Matt suggested adding this more recent version. I agree this is a good idea, it shows just how quickly ideas are changing in Auckland right now. This is a very fluid and exciting time for the city as the new possibilities are becoming acknowledged by all sorts of significant players. It remains my view that extending our existing rail system is better for Mangere and the Airport, but that taking AT’s proposed LR across the harbour in its own new crossing is a really good option:
And just this morning we get wind of these very big changes for those making plans for Auckland. It looks like the funding roadblocks [pun intended] for the necessary urban infrastructure that the growing and shifting Auckland needs may be melting away….?
In the last few months we’ve published several posts which have, in various ways, touched on some important issues facing local government in Auckland. In this post I seek to summarise some key concepts that have emerged in these posts, and consider some broader implications for Council policies, especially relating to transport.
For a self-confessed policy wonk it’s been heartening to see posts on seemingly arcane policy matters such as rates, transport levies, golf courses, and heritage policies attract passionate and oftentimes informed debate. This is not to say we’ve been able to reach agreement on the issues. Indeed many people disagree, for example, on whether Auckland Council should continue to own golf courses.
In the face of such disagreements should avoid posts on these topics? Should stick to puppyhood and apple pie posts about Amsterdam, which everyone can either get behind or comfortably ignore – by virtue of the fact that it doesn’t challenge anyone’s pre-existing notions? I don’t think so. To do so would be to rest lazily back in incomplete hammocks haphazardly woven from our own subjective experiences.
Rather, it is primarily through debating controversial issues that we can begin to understand our own values, and those of others. Even if we don’t start with the same values, we might reach agreement on relative priorities. This post is written in such a spirit. Or at least that’s my intention.
Of course the “DNA” of the post was born from my own incomplete hammock. For this reason I encourage you to tear it apart and splice it back together. Democracy often works best when people with different values work together to breed superior mutant hybrid policies.
Just so we’re on the same page: I define “policies” as things that local government either invests in and/or or regulates. And when I say “invest”, I am referring both to operational investment, e.g. public transport subsidies, as well as capital investment, e.g. owning golf courses. Without further ado …
Opportunity costs. The issue of opportunity costs has popped up frequently in our posts on rates and golf courses. That is, when Council decides to invest in something, then this will reduce the money available to invest in other things, i.e. investment has an opportunity cost in the short-term.
Some Council assets, such as Ports of Auckland, generate a direct income stream. Moreover, this income can be generated at a rate that is higher than Council’s “cost of capital”. Such investments actually increase Council’s ability to invest. Other assets, e.g. golf courses, do not generate (net) positive revenues. By continuing to own golf courses, Council’s has less ability to invest in other things, including public transport and walking and cycling.
Now, many people have argued Council’s investment in golf courses is worthwhile despite their (high) opportunity costs. I’m OK with this provided people are clear about the fact that maintaining investment in golf courses will reduce Council’s ability to invest in other areas. Put another way, I want the opportunity cost associated with golf courses, and all other Council investments, to be made explicit – so we can formulate some relative priorities.
As I discuss in more detail below, Council’s ability to increase rates to fund improvements in services is constrained by our democratic “willingness-to-pay”. Opportunity costs are important and they are not something we can simply sweep under the carpet.
In Peter’s last post on golf courses, for example, it was suggested that the opportunity cost of Council’s investment in golf courses amounted to mere “pennies”. My quick back of the envelope calculation suggests Council ownership of golf courses amounts to an additional ~$100 in rates per household per annum (NB: This primarily reflects their capital value). This cost arose simply because Council has debt, on which it must pay interest. Hence owning golf courses increases the debt, and by extension the amount of interest that must be paid. This is the opportunity cost of owning golf courses.
Now, $100 per household per annum may not sound like much to some people, but it is worth keeping in mind that it’s approximately equivalent to the temporary transport levy that was recently adopted by Auckland Council (to howls of outrage from some quarters). Moreover, in just 3 years the revenue from this transport levy will enable Auckland to pursue a much more ambitious transport investment programme, especially for public transport and walking/cycling.
This is all just to highlight the importance of opportunity costs, and the potential gains that might follow from optimising Council’s investments. Which brings me onto the topic of …
Level of investment. It is useful, I think, to think about the “level”” of Council’s investment somewhat separately from the “mix” of investments.
In my previous post on rates I suggested that we should measure the level of Council investment in terms of $ per capita. The figure below highlights some broad possibilities in Council spending. We can either increase, maintain, or reduce government expenditure. Those are your options – and your homework for next week is to find out where your local Councillors stands on these issues.
Notwithstanding what you hear in the media, Council is currently holding rates constant in real terms. But because the population of Auckland is growing, holding rates constant in real terms equates to less spending per person, i.e. we’re in the blue box in the above figure.
The blue box requires either 1) cutting services and/or 2) improving productivity. If Council wishes to hold services per capita constant, then productivity improvements will need to be equal to or higher than the rate of population growth. In Auckland, the latter is humming along at 3-4% p.a. That gives you a feel for the scale of the fiscal challenge Council is currently operating under.
Productivity improvements are one area where the public sector may be able to learn a bit from the private sector. For example, Air New Zealand has committed to identifying cost savings that are sufficient to offset inflation. This is discussed in the slide below (NB: Source).
It’s key to note that Air New Zealand are, in general, looking to realise these savings not through one-off “slash and burn” type changes, but instead through sustained, incremental improvements that are made across all areas of their business, i.e. they seek to leave “no stone unturned”.
I think Council needs a similar approach. It’s better to identify efficiencies consistently, rather than wait until major cuts are required. In this context, I think it’s reasonable for people, like Peter, to identify areas where savings might be made, such as golf courses. Other people may disagree. That’s fine, provided they have alternative ideas on how to either 1) find savings and/or 2) increase revenues.
Finally, I should say that I place “user charges” under the general rubric of “cutting services”. This is because if something was previously provided free, and we change it such that people now have to pay, then this is effectively a cut in service. This is *not to suggest* that user charges are necessarily a bad thing. I support, for example, user charges for things like wasterwater, parking, and development where they encourage the right kind of efficiencies. Which brings us nicely to the next topic …
Effectiveness and efficiency. This is an important distinction, which I think is frequently conflated – probably because the concepts are not always easy to separate.
From a public policy perspective I think of “effectiveness” as a question about whether a policy contributes to wider strategic objectives, including consideration of (potentially unintended) consequences. Efficiency, on the other hand, considers whether policies are well implemented. It may be, for example, that a particular policy supports strategic objectives, i.e. is effective, but nonetheless is implemented in an inefficient manner, such that the benefits are not as high as they could be.
While I tend to despise wish-wash diagram spam, I do think the following figure illustrates the distinction between effectiveness and efficiency quite nicely for y’all.
Let’s say, for example, that Aucklanders collectively decided that Council ownership of golf courses was an “effective” policy, insofar as it contributed to wider strategic objectives. The next question people like Peter and I would ask is whether Council was delivering golf courses in the most efficient manner?
We might then put forward questions such as:
- Do we own the right number of golf courses and are they in the right location?
- Are Council golf courses priced/sized appropriately? E.g.:
- Should we increase green fees so that the users covered not just operating costs but also some of the opportunity costs?
- Should we convert 18 hole golf courses to 9 hole golf courses? And If so then should we create public parks and/or residential/commercial development?
So even if we conclude that continued Council investment in things like golf courses is effective, we might still want to consider ways to make that investment more efficient. And that latter in turn would realise savings to invest in other Council services, and/or lower rates …
Focus on public transport. How might these concepts relate to public transport? Most Aucklanders, myself included, appear to be of the view that public transport is “effective”, i.e. our aspirations for the city see a larger role for PT.
But is Auckland’s public transport system efficient? Well, no not really. Or at least not yet.
It is true that sustained capital investment in public transport has started to flow through to “the bottom line” in terms of higher farebox recovery. For the uninitiated, farebox recovery measures the percentage of operating costs which are covered by fare revenues. Recent trends in Auckland’s farebox recovery over time are illustrated below.
You can see that in the last year or so it’s increased from ~46% to ~48%. This is heading in a positive direction, but is still quite low in comparison to many high performing cities overseas (with the notable exclusion of Australia – which is something of an outlier in terms of its operating costs, mainly for rail). Amsterdam, for example, achieves 75%, while Edinburgh, London, and several German cities achieve closer to 100%. The implication? All other factors being equal, these cities will have more money available for other things.
So how might we improve the efficiency of public transport in Auckland?
Well, the first thing I think we should do is to remove subsidies for cars where it is effective/efficient to do so. Cars are currently subsidised in terms of the parking they use, as well as the externalities they generate, such as congestion, noise, and air pollution. By charging people more to use cars, we would increase demand for public transport and hence generate increased revenue from the existing system. Such actions are, however, relatively slow to bear fruit, so we need to also look elsewhere.
In terms of the public transport system itself, we know AT is currently working on a range of things like growing HOP uptake, implementing PTOM (i.e. new bus contracts), rolling out bus lanes, reducing rail dwell times (and possibly staffing), the New Network, and the CRL. I am optimistic about these changes and their collective potential to improve the efficiency of our PT system. For those who are interested, my colleague Jarrett Walker has written some interesting stuff about making PT more efficient.
As mentioned above, improving the efficiency of PT is a means to an end, not necessarily an end in itself. More specifically, reducing PT operating subsidies frees up money within the existing PT budget to invest in efficiency-enhancing infrastructure, such as more bus lanes. In this way, improving the efficiency of our PT system gives us the opportunity to reinvest in the system, and thereby make it more useful and more abundant.
Key message? Operating PT efficiently allows us to provide it more abundantly. And abundant PT is what many of us want. For this reason, if you’re keen for PT to become more widely available and/or more widely-used, then you should also support initiatives that seek to make it more efficient. These measures may make trade-offs that involve cutting services in some areas, simply because the “opportunity cost” attached to those services is too high. I don’t think we should shy away from such decisions; we can’t make a great PT omelete without throwing away some bad PT eggs.
In short, if we can improve the effectiveness and efficiency of Council spending across all areas, then we can all look forward to more abundant public goods and services. This applies to golf courses, public transport, libraries, and indeed everything else that Council invests in.
Now I think I’ve said enough and it’s time to hear what others have to say …
Many journalists and central government politicians (mainly the ones who sleep in blue or yellow pajamas) have recently promulgated the view that local government rates in Auckland are “out of control”. In the video below, Paul Henry gives you a flavour for the fervour emanating from these corners.
Henry’s video segment contains a lot of heated rhetoric, but precious little data. Like Henry, I am also a rate-payer. And I was genuinely interested in what the data says about historical trends in rates in Auckland. In this post I consider Henry’s central claim, i.e. that rates are “sky-rocketing”, and try and hone in on some interesting questions relating to local government rates, and in particular what people mean when they talk about trends in local government expenditure. I finish by discussing my preferred measure of local government expenditure, and also provide some comments on some interesting issues that Paul Henry does not discuss – but which underpin many of the issues he is interested in.
Now, from Henry’s segment it’s not immediately clear to me how he defines “rates”, so let’s approach the topic using a couple of indicators.
In the figure below I have plotted total rates (indexed to 1996 levels) collected per annum for the period from 1996-2014. This figure illustrates trends in Auckland versus other local governments in New Zealand (NB: Data on local government expenditure and consumer prices is sourced from Statistics NZ). Note that because the local government definition of “Auckland” changed in 2010, I’ve followed the convention of defining “Auckland” prior to this point as the seven TAs plus the regional bodies (ARC and ARTA).
A couple of things emerge from figure C1. First, we find that the total amount of rates collected in Auckland has declined in real terms since 2011, i.e. about the time that Auckland Council was formed. The total amount of rates collected in 2014, which is the last year for which data is available, was approximately the same as that collected in 2009. Second, the flat-lining in total rates collected since 2011 is in stark contrast to trends for the 15 years prior to this point, in which time rates increased in real terms by approximately 75%. Third, during the last five years local governments elsewhere in New Zealand have increased their rates by about 10%, while rates in Auckland have declined.
Conclusion #1: The amount of rates collected by Auckland Council in 2014 was 5% lower than when the super-city was first formed, i.e. total rates have reduced in absolute terms since Auckland Council was formed.
The previous figure considered total rates collected. However, in this period the population has generally been increasing, both in Auckland, in particular, and New Zealand, in general. To control for this fact, in figure C2 I have plotted rates collected per capita per annum.
Factoring population growth into our analysis accentuates the trends identified in figure C1 . First, we see that in 1996 rates per capita in Auckland were at a level that was very comparable to the rest of NZ. Since 1996, rates per capita have increased more slowly in Auckland than elsewhere in New Zealand. We find Auckland’s per capita rates peaked in 2010, since which time they have declined by approximately 8%, or ~2% p.a. In contrast, during the last five years other councils in New Zealand have increased rates per capita by approximately 9%. To put it another way, had rates in Auckland risen at a similar rate to the rest of the country since Auckland Council was formed, then they’d be approximately $200 per capita per year higher than what they actually are.
Hmmm. The “super city” appears to be at least as effective as local government in the rest of New Zealand. It’s not looking very good for Mr Henry?!?
Conclusion #2: Rates per capita in Auckland peaked in 2010, and have since fallen by 8% to now be 20% below the New Zealand average. Both local and central government expenditure is lower in Auckland than the New Zealand average.
Not only have we found no evidence to support Henry’s central claim, but we have actually found evidence to the contrary: Rates in Auckland have declined in both absolute and per capita terms, such that rates in Auckland are now 20% below the New Zealand average. Why did this freely available and highly relevant data did not feature in Paul Henry’s 10 minute segment? It’s notable that in this same segment, Paul Henry claims that rates under Auckland Council are “sky rocketing” and goes on to accuse Len Brown of being a “liar” for not keeping rates increases in line with inflation. Claims that are made without presenting any data, and which contradict the data that I have been able to find.
From what I can tell, Henry’s claims about rates are incorrect (NB: Some might use the phrase “shitistics” to describe Henry’s analysis).
More generally, the data suggests Auckland Council has maintained rates at or below historical levels. And in amidst all of Henry’s operatic soap-boxing about rates rises, he seems to have overlooked some interesting questions that are worth discussing. The first is that the increases in rates that are levied on residential activities (which I think is actually what he means when he refers to “rates increases”) has come about because of a strategic decision by Auckland Council to reduce rates levied on businesses. The rationale for what effectively amounts to a ‘rates switch’ is discussed here on Auckland Council’s website. This important issue does not feature in Henry’s segment.
Put simply, it’s important to remember that the rates collected by Auckland Council is sourced from both business and residential activities. Moreover, Auckland Council has previously made a strategic decision to shift the burden of rates away from businesses and instead onto residents (NB: Arguably residents end up paying for the rates levied on business activities anyway, through either 1) higher costs for the goods and services that they consume and 2) reduced employment and/or lower incomes).
Nevertheless, it is important that conversations about residential rates in Auckland are considered within the broader context of reductions in business rates. Now Henry may think businesses should pay higher rates, and I’m interested in having that debate. But it doesn’t change the fact that rates (by both aggregate and per capita measures) have fallen since Auckland Council was formed. Which brings me to my final point …
Conclusion #3: While total rates and rates per capita have decreased by 5% and 8% respectively since Auckland Council was formed, the rates paid by residential activities have increased so as to fund even larger reduction in the rates paid by business activities.
I’ll say from the outset that this policy direction is one that I support at least on a high level, for reasons that hope to discuss in more detail in future posts. In my opinion, such a move is not just desirable because it is likely to promote “business and employment growth”, but also for creating a level playing field for land use investment decisions, as well as more direct democratic accountability. However, I’m interested in other views on the topic …
I’m also interested in a wider discussion on how we measure relative levels of government expenditure.
Personally, I’m a fan of per capita per annum metrics. This applies to both local and central government, where the latter has been previously analysed by Brian Fallow at the Herald. In a country with a growing and ageing population, such as New Zealand, maintaining total government expenditure at or below inflation effectively amounts to spending cuts for the average person. In my view, the default position would be for government spending per capita to remain constant over time, with deviations from this level then being justified by whoever is in government at the time. I note that even this more mild type of fiscal constraint would likely result in government expenditure as a proportion of economic activity reducing over time, as real per capita GDP increased in response to productivity growth.
Finally, this discussion of rates in Auckland is all the more interesting given Peter’s recent post on central government expenditure, which showed that – compared to other regions in New Zealand – Auckland receives slightly less central government expenditure per capita than what you’d expect based on its proportion of the population and GDP. I’m personally comfortable with this transfer because the Auckland population is, on average, wealthier, healthier, younger, and more productive than New Zealand as a whole. However, given the relative lack of expenditure by central government you might expect Auckland Council would need to spend more than average. But the reality is quite the opposite: Total government expenditure per capita is significantly lower in Auckland than the NZ average.
To sum up: In response to the question of whether Auckland Council is “out of control”, this computer says “no”. And in the eloquent words of hospital receptionist Carol Beer, I hope people like Paul Henry would rate this information as “ff’ing helpful“. Perhaps next time Henry feels like doing a hatchet job on Auckland Council, he might first spend at least five minutes doing some elementary research. Like, you know, finding at least one reliable piece of data that doesn’t contradict his claims.
As part of the works for the City Rail Link, Queen Elizabeth Square will be completely dug up however as we know it won’t be replaced, instead the square has been sold to Precinct Properties and will be developed. In its place the current road area of Queen St between Customs and Quay Streets – with the exception of a small access to Galway St and from Tyler St – will be created.
The council have also said the proceeds of the sale of QE Square would be used to go towards at least two of three new public spaces proposed along the waterfront and that the spaces should be delivered by 2018. An update to the council’s Auckland City Centre Advisory Board a few weeks ago gives an update on that with some useful information about what we’ll get. The three potential public spaces are
- new/improved space west of Queens Wharf on the water’s edge at the foot of Lower Albert Street
- improved space around the historic ferry building and at the base of Queens Wharf
- new/improved space east of Queens Wharf in the Admiralty Steps area.
Of the spaces the third is tied up in what is currently the operational area for the port so relies on the outcome of study into the ports future. That means the two spaces being focused on are 1 and 2. The report says that within the ferry basin the plan will deliver a total public space of 4,700m² of which 2,100m² will be brand new space. To put that in comparison the area being lost from QE Square is about 1,800m². As you can see that will obviously require some changes to the current ferry piers.
The report highlights a few major issues related to budgets.
- The council won’t receive the money from Precinct for QE Square till at least February 2018 which is about 6 months later than when they estimate they need to start construction and of course money is needed immediately for design, planning and consenting works.
- A pre-requisite for the works is the seismic upgrade to the Quay St seawall however that isn’t budgeted to occur till after 2020.
- It requires redevelopment of the downtown ferry terminal however that isn’t currently budgeted for in the 10 year Long Term Plan.
The minutes aren’t available to confirm what was agreed however the City Centre Integration team were looking for an agreement in principle to use funding from the CBD targeted rate to progress the investigation and design of project.
The council is hailing the fact that just over one quarter of the slip lanes in the city centre have been removed over the last few years. This is excellent news for pedestrians as it will make many intersections much safer.
Pedestrian safety and access in the city centre has taken another step forward with the removal of three ‘free left turns’ at intersections as part of the upgrade of Beach Road.
More than a quarter of the turns (11 out of 40) have now been removed from the city centre since 2012, when the City Centre Masterplan (CCMP) advocated their removal. A free left turn is one where traffic is regulated by lights when going straight or turning right, but vehicles can turn left without a signal.
Local Board chair Shale Chambers says: “These turns can make crossing a road unsafe and unpleasant for people on foot, especially for younger or vulnerable pedestrians, so it’s great to see this progress in such a short space of time.
“The city centre is rapidly becoming a much more pleasant place to walk, with these improvements adding to the creation of a laneway circuit. This helps the centre buzz, which in turn attracts people and – crucially – business investment. “
The completion of stage 2 of the Beach Road project removed the free left turns at the intersections with Britomart Place and Tangihua Street. The first stage of the Beach Road upgrade removed two others, while more have been removed along Mayoral Drive and at the bottom of Albert Street.
Council design champion Ludo Campbell-Reid says “Free left turns tend to create over-sized intersections that encourage vehicles to travel too fast, compromising pedestrian safety. Instead, the focus needs to be on creating a vibrant and pleasant walking, shopping or browsing environment, where people can walk with confidence.
“Rather than being anti-car, removing these slip lanes can be a win for everyone. If people can cross more quickly, this can also reduce waiting times for cars.”
The remaining 29 include four along Symonds Street, eight along the Grafton Gully and five surrounding Victoria Park.
Here’s a map of the status of all slip lanes in Auckland. It’s worth noting that this only includes ones where there is a free left turn, so situations like the intersection on Nelson St and Fanshawe St where the slip lanes are signalised are not counted.
Here’s one example of slip lanes that have been removed. This is the intersection of Beach Rd and Tangihua St, and with the slip lanes traffic would travel at speed through the slip lanes.
And now that the Beach Rd project has removed the slip lanes.
One of the reasons slip lanes are so dangerous is that they can shift drivers’ focus away from what’s in front of them, and instead they focus on what traffic may be coming from the right to see if they can get through the lane without stopping. Depending on the situation, that could result in them speeding up to get ahead of approaching traffic or braking sharply to avoid a crash, but almost always the last thing on their mind will be the person on the left who may be trying to cross the road. This isn’t surprising, as if you’re in a metal box you’re much more at risk from other metal boxes than you are from squishy humans.
There are a few questions from this, including how long until we can get the rest of the slip lanes removed, why aren’t we removing them from suburbs all across Auckland, and why are we still letting engineers design them into projects?
Transforming an entire city centre is no quick and easy task. In 2012 the council adopted the fantastic City Centre Master Plan (CCMP) which laid out the vision for Auckland’s city centre over a 30 year period and identified a huge number of potential projects. The Council’s City Centre Integration Team (CCIG) which is made up of staff from across the wider council family have been tasked with turning that vision in to a reality. As such they are creating frameworks for a number of areas within the city centre which are intended to bridge the gap between the strategies and reality. Almost exactly a year ago we saw the first of these frameworks – The Downtown Framework – emerged looking at the area north of Customs St. Now it’s the turn for the core of the city centre – Aotea.
The area surrounding Aotea Square is home to some of Auckland’s most prominent art, civic and cultural and entertainment buildings – many of which have played a big role in the cities heritage. The map below highlights some of these
The core of the plan seems to focus on the area within the solid red line on the map above the wider framework area looking at how the Aotea Precinct interfaces with the other frameworks that will be developed over time.
One of the big drivers for change over the coming decades will be the huge level of public transport investment that will be going in which will make it easier for significantly more people get to or pass through the area as part of their journey. The key PT projects are highlighted below and Aotea will be one of the best connected locations in Auckland.
In addition to the big transport investments is a recognition of the need to improve walking and cycling connections. Just where those will be are better shown on some of the detail below.
Within the area four general areas have been identified as having development opportunities and all around the edge of the precinct with Mayoral Dr and Albert St. They are shown below
Site A: Aotea Station/West Bledisloe
Once the CRL has been finished this is likely to be one of the hottest pieces of land in Auckland. Currently it’s a carpark for which the entrance combined with the entrance to the Civic Carpark it totals up six lanes of driveway that pedestrians need to cross. As the document correctly says “this prominent site fails to contribute to the public realm quality of the area or the growth node ambitions”.
The framework is proposing two new buildings plus the CRL entrance could go on the site with new lanes between the buildings and alongside the western edge of the Bledisloe building. The document says developing the site could provide up to 28,000m² of lettable space.
Site B: Aotea Centre
This site has already been in the news this week as one of the Council’s CCO’s want to re-clad the building in bronze coloured stainless steel. In addition there is talk of expanding the building itself to provide more studio space and practice rooms. The aspect most interesting to me is the creation of a new pedestrian link direct from the Cook St/Mayoral Dr intersection through the centre and into Aotea Square.
Site C: Civic Administration Building and Surrounds
The Civic building was originally meant to have additional wings on its western and eastern sides but they were never built. That has left a lot of space surrounding the Civic building with potential for development.
Site D: South Town Hall
Ever since Mayoral Dr was ploughed through the area in the 70’s this area has been a carpark. The desire is to better improve connections between Aotea Square and Myers Park so it is proposed to build a courtyard along with a 5-8 storey building. The courtyard will tie in with plans to improve the Mayoral Dr underpass which are expected to be completed mid to late next year. With the courtyard there would be a series of linked public spaces all the way from K Rd though to Victoria St. The council also own the site up to the corner of Mayoral Dr and Queen. They suggest either another building could go there or something else like Spanish-style steps up to Queen St.
The map below shows the potential development of the area along with some of the new pedestrian/cycle links that have been proposed. Through all of them you can see there is a desire to finally start activating the edge of Mayoral Dr, something that’s long overdue and likely to help in over time making Mayoral Dr less of the mini expressway it acts like.
Consultation on the draft framework is open till 22 October.
A road no longer runs though it – that’s just one of the things we’ll be able to say about Freyberg Square if the council’s proposal to upgrade it and the adjacent Pioneer Women’s and Ellen Melville Hall goes ahead. This is great news as both the square and the hall are well used despite being a bit run down, an upgrade on both are well overdue.
I think it is also good that both the hall and the square are being upgraded at the same time and integrated together. The upgrade to the ground hall will see the ground floor become a flexible community space. Combined with the removal of the road which clumsily bisects the square and which offers little to the overall transport network the works should enable the area to perform much better as a people space.
The work will also tie in nicely with the fantastically upgraded O’Connell St by way of extending the shared space south partly though Courthouse Lane. This section of Courthouse lane itself will further be changed by only allowing traffic to travel uphill towards Albert Park meaning we will no longer see cars travelling at speed downhill. It should also mean a reduction of vehicles that need to travel down O’Connell St as currently O’Connell St is the only option for drivers who come down Chancery St. Of course all this work will once again serve to highlight how poor the environment in High St is.
In total the upgrade is expected to cost around $7 million with it being paid for by the Waitemata Local Board and the City Centre Targeted Rate.
Here’s are the overarching design objectives for the projects
- the design of Freyberg Square as a world-class place that is a distinctive, safe and popular destination, where locals and visitors choose to frequent and linger
- creating a community facility within the central city with greater user flexibility
- providing greater pedestrian priority and connectivity and a more usable and child-friendly public realm
- providing better pedestrian connectivity between Freyberg Square and the surrounding network of streets
- creating a high quality, attractive and durable public open space that contributes to a sustainable and maintainable city centre
- designing an improved integration between Freyberg Square and the Pioneer Women’s and Ellen Melville Hall, to create a vibrant inner city hub which will become the community and cultural heart of the city
- enhancing and redeveloping the Pioneer Women’s building while maintaining the heritage of the building and meeting current seismic and building codes
- creating a versatile and fully accessible community centre that can be configured to accommodate a greater number of uses and users
- honouring Ellen Melville and pioneering women of New Zealand, and continuing to honour Lord Freyberg
And some images of what’s proposed (click to enlarge)
Aerial perspective view of Pioneer Women’s & Ellen Melville Hall and Freyberg Square showing the removal of the Freyberg Place roadway to create an integrated public space and community hall. Concrete seating terraces and steps extend up the bank towards the Metropolis, interspersed with native tree and shrub plantings and an interactive water feature, creating a destination public space in the city.
Plan view of the Pioneer Women’s & Ellen Melville Hall and Freyberg Square showing the removal of the Freyberg Place roadway to create a fully pedestrianised public space with seamless integration between the upgraded community hall and square. Stone paving, public seating and native street trees create a pedestrian prioritised environment in Courthouse Lane, with vehicular traffic restricted to one-way traffic up-hill towards Albert Park.
This view from Courthouse Lane shows the re-instated verandah and relocated glazing line set back 3 metres from the columns, which honours the heritage of the building and better connects the building with Freyberg Square. The entrance is reinstated under the verandah, providing a more generous and welcoming foyer. The original brick wall is re-instated, reflecting the heritage of the original design.
This view over Freyberg Square shows how the removal of Freyberg Place roadway and the upgraded building will enhance the interface with Freyberg Square, creating a visual and permeable connection allowing the building to flow out in to the square and activities in the square to flow in to the building. There placement of the building’s current blue glass to a cast glass similar to that used originally, combined with the use of a lighter, warmer material palette will create a more inviting community facility.
This view shows how the proposed ‘Urban Living Room’ will help integrate the building in to the local context, encouraging activation of the spaces and interest in the community facilities available. This flexible ground floor community space can be re-configured to suit various activities such as conferences, market stalls and art exhibitions.
Overall it looks like a great upgrade that appears to really add to the area. Your move High St retailers.
The consultation is open to Sunday 27 September and there are details on the consultation page about public sessions on the plans that are available.
The council yesterday announced the seventh tranche of special housing areas and for the first time, all are redevelopments of existing sites within the urban area. They say that all up this could allow for up to 1,600 new dwellings in Auckland – if they actually get built. So here are the new SHA’s along with the previous ones announced.
Bute Road, Browns Bay
The site at 4 Bute Road, Browns Bay will be developed for retail at ground level with four levels of apartments above, comprising 54 residential units plus accompanying car parking.
The residential units are a mix of one-bedroom (77m2) inclusive of balconies and two-bedrooms (88m2) inclusive of balconies.
The relocation of the former New World supermarket has allowed for the development.
The proposed scheme has been developed in close liaison with local real estate agents who have identified significant demand, particularly from older residents seeking to downsize and remain in the suburb.
College Hill, Ponsonby
Mansons TCLM Ltd plans to develop 99 College Hill, Freemans Bay into approximately 40-50 new homes over two-to-three years. The proposed residential development will consist of apartment style dwellings, to supplement the current shortages, including a combination of two-bedroom units and larger three-bedroom units.
The site is zoned a combination of Mixed Use and Single House zone under the Proposed Auckland Unitary Plan.
Mansons TCLM Ltd has been progressing a consent for the development of the land. This will include earthworks, construction of a basement level and development of the residential units and associated areas.
Mansons TCLM Ltd intends to complete the entire development and have it ready for habitation by late 2017.
This one is interesting as one half of the site has mixed use zoning while the other half is listed as single house zone.
Corner Cornwall Park Avenue and Great South Road, Greenlane
Golden Key Development (NZ) Ltd plans to develop 65 new apartments at 115 Great South Road, Greenlane.
The development will include one- and two-bedroom units. The land is zoned Terrace Housing and Apartment Buildings under the Proposed Auckland Unitary Plan.
Golden Key Development is progressing the preparation of the resource consent for the apartment development, which it plans to complete by January 2018.
Great South Road, Manurewa
DJI Limited plan to develop 309-311 Great South Road for approximately 24 two-bedroom apartments over two years.
The affordable homes within the development will be priced between $450,000 and $500,000.
Some of the features of the site include the Te Mahia Railway Station – 200 metres away, Beaumonts Park – 700 metres away, Manurewa South School – 15-20 minute walk, and the Manukau Golf Club – 400 metres away.
The land is zoned Mixed Use Zone under the Proposed Auckland Unitary Plan.
DJI Limited has been progressing a consent for the initial development of the land. It plans to have the first residential housing ready for habitation by late 2017, with the entire development completed by mid-2018.
But will any of the residents use the station?
James Road, Manurewa
DJI Limited plans to develop 9 and 11 James Road, Manurewa into approximately 39 new dwellings over two years.
There will be a mix of housing types, matched to current shortages, including smaller one-bedroom units and larger two- and three-bedroom units. Half of the units will be built as affordable homes; these will be priced at between $450,000 and $500,000.
The land, which is currently occupied by homes, is zoned Terraced Housing and Apartment Building under the Proposed Auckland Unitary Plan. The site features a train station less than a 3 minute walk away, a bus stop 50 metres away, schools 250 metres away, a hospital 1 kilometre away, and a shopping centre (groceries, gas stations, food outlets) in close walking distance.
DJI Limited intends to have the first residential housing ready for habitation by the last quarter of 2016, with the entire development completed by mid-2017.
Kingdon Street, Newmarket
New Investments Limited plans to develop 10 Kingdon Street, Newmarket for approximately 60 new apartments over two years.
The development will provide a mix of apartment types, matched to current shortages, including smaller one-bedroom units and larger two-and-three bedroom homes. The affordable homes within the development will be priced at between $325,000 and $350,000.
The Kingdon Street property is well located in a desirable part of Auckland, with innumerable state and private schools nearby, and Auckland University being a neighbour. The development is well located to amenities including parks and reserves. It is well serviced by bus and train transport, providing easy access into the CBD for workers.
The land is currently largely undeveloped with a 2-storey retail building on half the site. It is zoned Mixed Use under the Proposed Auckland Unitary Plan.
New Investments has been progressing a consent application for the initial development of the land. This will include ground floor retail, two levels of car parks, as well as residential apartments. It intends to have the first residential housing ready for habitation by August 2017.
Kirkbride Road, Mangere
Austin Management Limited plans to develop 8 Kirkbride Road, Mangere Bridge for approximately 54 new residential sites.
The development will provide a mix of housing types, matched to current shortages, including larger three-and-four bedroom homes. The affordable homes within the development will be priced at between $480,000 and $550,000.
The land is currently zoned Mixed Housing Suburban and Single House under the Proposed Auckland Unitary Plan.
Austin Management plans to lodge a qualifying development consent application as soon as practicable to enable the redevelopment of the site. It intends to ready the first residential sections for houses to be established on them by spring 2016. Associated house plans will be established by the end of 2016.
Layard Street, Avondale
Redevelopment of the former Avondale Returned Services Association site and adjoining land will soon commence to provide for more than 150 new dwellings, townhouses and terraced homes of various sizes and configurations.
The development, located between 1 and 7 Layard Street, Avondale, will be known as Rosebank Ridge in recognition of the elevation and views offered by the site.
It will feature a mix of housing types matched to current shortages including smaller one-bedroom units and larger three- and four-bedroom terraced homes. The apartments, terraces and townhouses will be affordable and likely to be priced between $350,000 and $800,000.
The building’s design will assist in the growth and rejuvenation of the Avondale precinct. The developer is currently progressing with a resource consent application.
It is hoped the development will be in part complete and ready for occupation by December 2016.
With a number of other developments planned for Avondale the area is going to see a lot of growth in the next few years
Pacific Events Centre Drive, Manukau
Gaze Property Partnerships plans to develop 834 Great South Road and 10 Pacific Events Centre Drive, Manukau into more than 800 news homes including retirement living, potential student accommodation and/or hotels.
The development, called 8 Pacific, will comprise a comprehensively master-planned area of 9.2 hectares. It’ll provide a mix of housing types, matched to meet current shortages and affordable housing requirements, from smaller 2-bedroom terraces, townhouses and apartments through to larger 4+ bedroom homes.
The development is well placed next to the Manukau CBD, well serviced by public transport and servicing infrastructure is already in place. There is significant nearby employment opportunities including the growing Wiri industrial area, the new Wero Whitewater Park and Vodafone Events Centre directly to the north. As well as the parks, reserves and a community hub to be included in the development, being in close proximity to the Auckland Botanic Gardens and the national cycleway will provide strong community and open space amenity.
The land is currently vacant. Construction is targeted to commence as early as possible in the 2016 earthworks season.
Gaze has already lodged resource consent for total land development along with Stage 1 of housing to include 18 apartments and 20 terraced and townhouses. This will include earthworks, roads, parks, a community hub and around 12 super lots for subsequent subdivision and development.
Beyond the land development, Gaze intends to have the first residential housing ready for habitation by the end of 2017. The entire subdivision development will be complete within 2–3 years and housing will continue to be delivered rapidly after that.
Sunnybrae Road, Hillcrest
Sampati Holdings Ltd plans to develop 3 Sunnybrae Road, Hillcrest over three years.
The site will yield approximately 125 new homes, which will be part of a larger new urban village of commercial and residential that will occur over the next decade.
The affordable homes within the first stage of the development will be priced at around $455,000. The development will provide a mix of housing types, including one-, two- and three-bedroom homes. The development is adjacent to major recreation areas, near good public transport links and has many education facilities within an easy walk.
The land, which is currently being used as a car park, is zoned Mixed Housing Urban under the Proposed Auckland Unitary Plan.
Sampati Holdings has been steadily progressing the required documentation for the resource consent with the intention to have the first residential housing ready for habitation within 18 months.
Takanini Road, Takanini
Glenora Developments Ltd plans to develop 62 to 66 Takanini Road, Takanini for approximately 125 new homes over the three years.
The affordable homes within the first stage of the development, known as Glenora Park Village, will be priced from $350,000 upwards. The development will provide a mix of housing types, including terraced homes and walk-up apartments, and comprise one-, two- and three-bedroom homes.
The development is adjacent to a major shopping centre, near good public transport links and an easy walk from a railway station, schools, a major park and recreation facilities. The land, which currently has a vacant factory with a large yard, is zoned Town Centre under the Proposed Auckland Unitary Plan.
Glenora Developments has been steadily progressing the required documentation for a resource consent application and intends to have the first residential housing ready for habitation within 18 months.
Auckland needs to be able to accommodate up to 1 million more people over the next 30 years, that’s a lot of growth and means the city needs around 400,000 more dwellings. The Auckland Plan set the high level strategy of having up to 70% of that growth occur within the existing urban area while up to 40% would be outside that. The Proposed Auckland Unitary Plan (PAUP) identified large swathes of land outside the existing urban boundaries for future urban land – some of which is already being developed as Special Housing Areas.
The council is now consulting on a Draft Future Urban Land Supply Strategy which will show how that release of land will actually occur over a 30 year period including specifying where and when bulk infrastructure will be built. They say specifically it will
- help to inform Auckland Council infrastructure asset planning and management and its infrastructure funding priorities and sequencing. It will feed directly into the Council’s future Long-term Plans and the Annual Plans
- help to inform central government, such as the Ministry of Education, with medium to long-terms projections, location and investment decisions
- help to inform private sector infrastructure providers with forward planning and investment decisions
Overall this seems like a good idea, concentrating development in areas where it is able to be accommodated rather than developing land completely ad-hoc which could create funding issues for the council and other infrastructure providers. As the document points out, a consequences of ad-hoc development could be that it sucks up enough resources that it affects the ability to improve the rest of the region. What is most interesting about the strategy is this comment:
The analysis done for this Strategy is of sufficient scale and specificity to broadly determine bulk infrastructure requirements.
In other words this is more than just drawing some lines on a map and pulling out the colouring in pencils. The council have actually put work into determining just what bulk infrastructure will be needed to enable the predicted future growth and the result is actually quite scary and raises the question of just how affordable any new dwellings will be – more on this soon. It’s also important to remember that the bulk infrastructure talked about is really just the core of the networks provided by the council and other agencies. In addition to it developers would need to add all of the local infrastructure such as the local street and water networks.
The PAUP identified six large general areas and a few small standalone areas where future urban growth would occur. This covers about 11,000 hectares which they say could accommodate around 110,000 dwellings. The six main areas are:
- Silverdale, Wainui East, Dairy Flat
- Kumeu, Huapai, Riverhead
- Whenuapai, Redhills
- Takanini, Opaheke, Drury, Karaka
- Pukekohe, Pareta,
The strategy splits up the areas into five year intervals based on a suite of principles. The map below shows these areas along with the key bulk infrastructure they need.
As mentioned above, the part of the strategy that is most interesting is the high level costs to provide the bulk infrastructure which is done to a decade level. The table below shows this along with how many dwellings each time interval delivers. In total the council have estimated that around $13.7 billion of bulk infrastructure is needed over the 30 year period, this is made up of
- Transport – $6,700 million
- Water -$2,250 million
- Wastewater – $2,200 million
- Other – $2,500 million
These cost are further broken down by decade along with the number dwellings expected in the table below.
Breaking that down we have
- 1st Decade – $111k to $140k per dwelling
- 2nd Decade – $179k to $234k per dwelling
- 3rd decade – $93k to $120k per dwelling
Those seem like some crazy high costs, especially if you consider them on a per house basis. Next imagine what the land prices for these new sections would have to be to cover the costs if the council were able to pass the full costs. Combine that with the costs to the developer of providing the local infrastructure and these areas are not going to be cheap, losing one of the supposed advantages of greenfield developments. The reality is only some of these costs are likely to be passed on meaning that existing ratepayers will effectively be subsidising this greenfield growth.
This outcome actually that much of a surprise, research as part of the Auckland Plan looked at potential growth scenarios and found sprawly land use patterns were the most expensive outcomes for the council due to the need to provide so much new infrastructure.
Of course none of this to say that intensification isn’t without its costs however many often those costs are ones which would still be needed for the sprawl development too.
Consultation on the draft strategy closes on 17 August.