Development update: January 2016

2015 was a good year for the retail sector, and early indications are that stores had a good Christmas too. December is the busiest time of the year for retailers. They’ll move mountains to make sure that new shops (and shopping centres) are open in time for Christmas trading.

Up until 2007, the retail sector was on a roll, and new shopping centres were being built all over the place. That changed when the recession hit in 2008 (and online shopping has no doubt had a big influence as well).

Retail development has been coming back to life over the last couple of years, and 2015-2016 sees the biggest expansion since the GFC. These centres are all shown on the RCG Development Tracker page (not to mention apartments, terraces and a host of other things).

In Auckland, we’ve already had the NorthWest Shopping Centre open out in Westgate. This was the first “new build” regional mall since Westfield Albany opened in 2007. At a more urban level, Lynnmall opened its new Brickworks precinct.

IMG_4183

The Brickworks at Lynnmall. Source: Kiwi Property

 

On a smaller scale, there are the centres that consist of a supermarket and a few small shops, usually of the ‘day-to-day’ shopping variety. The new Countdown-based centre in Hobsonville falls into this category, and even the first stage of the Ormiston Town Centre (based around Pak ‘N Save) for that matter. In Christchurch, there were two new ones, Spitfire Square at the airport, and The Landing at Wigram.

2016 will be a reasonably big year for retail too, with new centres like Tauranga Crossing and (in Westgate again) Zone 7, a large format centre.

Although the Christchurch CBD rebuild still has some way to go, three of the largest retail/ office developments – The Crossing, the BNZ Centre (aka Cashel Square) and The Terrace – will have their first stages open in time for Christmas.

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The Crossing – soon to be the largest shopping centre in the Christchurch CBD. Source http://www.rebuildchristchurch.co.nz/blog/2015/3/vision-for-the-crossing-unveiled

 

Last August, I wrote:

With ongoing population growth, and some niches emerging, there will be more opportunities for retail – but with fewer new centres than last decade. And if the economics of new malls don’t stack up, could we see renewed interest in the “high street”?

Rhetorical question that one, the answer is “yes”.

As for residential development, December/ January has been a bit quiet in terms of new launches – real estate agents try to get these launched at least a few weeks before Christmas, otherwise they’ll leave them until the new year. Summer is obviously a busy time for builders, with long days, so it’s all go on various building sites around the place (I can hear one out my window right now). There’s a few projects finishing up this summer as well – Summit on Symonds, The Orange, The Seddon or Parkview Residences to name a few. More on that next month.

The high cost of free parking

The announcement of the Commercial Bay development last week got me thinking about minimum parking requirements.

MPRs were removed from the city centre back in the late 1990s. Prior to that point,all new developments were required to provide parking at roughly the same rate as suburban developments. After that point, individual developers, businesses, and residents got to choice how much parking they wanted.

I’ve always thought that this was a strong factor in the downtown revival we’ve seen since then. If they hadn’t been removed, money that has gone into developing housing and space for businesses would have been diverted into unproductive parking spaces instead.

City Centre Population - 1996-2015 2

Precinct’s new 39-storey tower on the waterfront shows what a difference MPRs make to development. Commercial Bay will ultimately have 39,000 m2 of commercial office space, 18,000 m2 of retail space, and 278 carparks. It’s going to be a big, bold addition to the waterfront. But it simply wouldn’t be possible if MPRs were still in place.

Tower 1

To get a sense of the difference that MPRs would make, I went back to the Auckland isthmus district plan, which will soon be replaced by the Unitary Plan. For developments outside the city centre, it required:

  • one carpark for every 40m2 of office space, and
  • one carpark for every 17m2 of retail space.

In other words, if those MPRs still applied to the city centre, Commercial Bay would have required over 2000 carparks. That’s seven times as much parking as the developers actually want to build. Effectively, it would mean constructing the equivalent of AT’s Downtown Car Park at the bottom of the tower. Say goodbye to ground-floor retail. Say goodbye to laneways through the building. Say hello to bad air quality and inhospitable accessways cutting up the footpath.

Furthermore, MPRs would have dire financial implications for the project. According to Precinct, Commercial Bay will cost $681 million to build. If MPRs required the development to include another 1750 carparks, at a cost of $30-50,000 apiece, it would add $50-90 million to the cost of the project. That suggests that MPRs would impose a “regulatory tax” of  7-13% on downtown development.

But would all those extra carparks have any value? In a word, no. The fact that Precinct chose not to build them suggests that they don’t see the value in providing parking spaces rather than office or retail space. And, as a corollary, it’s likely that their tenants and customers don’t see the value in having seven times as much parking, either.

It’s not as though there are any pressing social requirements for another 1750 carparks, either. Three six-car electric trains can deliver the same number of people to the city centre. At present, Britomart can do that every ten minutes at peak times. After the City Rail Link is constructed, it will be possible to double rail frequencies through the city centre. And our public transport system can do all of this without adding to road congestion – which you can’t say about people driving into the city centre.

AT Rail Capacity Image

The high costs of minimum parking requirements aren’t limited to the city centre. Down in Christchurch, for example, a neighbourhood bar and restaurant is having to shut up shop due to MPRs:

Two Christchurch business owners are “disgusted” by the city council’s ruling they need to create 62 extra car parks to continue operating as is, saying they will likely close their bar.

Dwayne and Tiffany Vaughan, who run Kaizuka Eatery and Garden Bar in Cashmere, have been engaged in a year-long stoush with the Christchurch City Council over its licensing arrangements.

The council said the owners changed the scale of the business operating under the on-licence. The cafe was initially a small part of a garden centre but had grown to take over the premises.

The owners needed an on-licence variation that would in turn trigger resource management and building consent requirements.

According to the City Plan, 10 carpark spaces were required per 100 square metres of public floor area, but reductions could apply. The 800sqm bar had 18 car parks, meaning it would need another 62 to meet the requirements.

Setting aside the complete insanity of even having MPRs for bars – why on earth would we want to encourage people to drive to the pub? – this requirement imposes large costs for parking spaces that don’t seem to be necessary for the business. (After all, it’s been operating since March 2014 with the current number of parking spaces.)

It would probably cost over $1 million for the bar’s owners to comply with MPRs, assuming that they would have to spend around $20,000 to buy land and build carparks. The benefits of this policy are vaguely defined and potentially negative, if abundant parking encourages more people to drive and drink.

All of which begs the question: Why do we still have this costly and useless policy?

Development update: December 2015

This is the last “development update” post for the year, so I want to look back on some of the big news from the year (and things which weren’t ‘news’ in the media sense but which I think are important). Christchurch gets special attention, because of the massive changes that have had to happen down there.

Housing

This was the year that Christchurch started to get on top of its post-earthquake shortage. Consents peaked at around the start of 2015 on an annualised basis, and have started to decrease slightly. The housing situation is starting to return to normal. Rents went up hugely after the quakes, and that has eased off; it’s a similar story with house prices. People’s lives are still being disrupted by the rebuild, and there are ongoing insurance battles and the like, but most people (not all) are now living in repaired homes.

Annual Homes Consented

It’s going to be a much bigger challenge for Auckland to get its housing shortage under control, but I’m sure we all knew that. Auckland building consents have kept increasing, albeit more slowly than anyone would have liked. Much of the gain has come from “attached” dwellings, not detached houses.

Other parts of NZ haven’t had quite the same growth pressures, and have seen a much smaller rise in construction.

We’ve given particular attention to apartments and terraces in Auckland. There have been about 1,000 completed this year, and the Development Tracker is showing 5,325 under construction (up from 3,177 at the start of the year), and 2,255 in the pre-sales stage (up from 1,566 at the start of the year). Things ramp up in 2016 – I’m expecting more than 3,000 units to be complete next year, and even more in the years to come.

Christchurch CBD

After a long wait, some of the biggest projects in the city began this year. In the “Retail Precinct” identified in the CBD blueprint, those projects include The Crossing, The Terrace, BNZ Centre (aka Cashel Square), and the ANZ Centre. These are major developments; this will be the densest part of the CBD, with the most foot traffic. They’ll be finished in the next 1-2 years, so by December 2017, it should be possible to walk around downtown Christchurch in much more buzzing surrounds.

In the “Innovation Precinct”, a number of buildings are underway, including new headquarters for Vodafone (South Island HQ) and Kathmandu. Most of these will be complete in the first half of 2016.

These are all positive things, and will bring people back to the Christchurch CBD – workers, shoppers, hopefully to be joined by tourists and residents.

However, the Cathedral itself, and most of the sites surrounding the square, remains painfully barren. Many other parts of the CBD are still home to empty, damaged buildings, or gravel carparks. It will take years more to sort this all out.

7 ChristChurch Cathedral(1)

Source: http://gg.govt.nz/sites/all/files/images/7%20ChristChurch%20Cathedral%281%29.jpg. Image from 2012, but the Cathedral looked much the same when I was there this year.

Some of the “anchor projects” the government announced have been stalled or delayed. The bus interchange is complete, the justice precinct well underway, and funding has been agreed for the sports facility – but the convention centre is still up in the air, the performing arts precinct lagging, the stadium looking unlikely, the Breathe Urban Village now on hold. No doubt we’ll hear more on these next year, and perhaps some plans will have to change.

Auckland Retail

The NorthWest Shopping Centre opened in October, the first new mall in Auckland for eight years. The Herald called it a “monster mall”, which seemed a little overblown – it’s either the 9th or 10th largest enclosed shopping mall in Auckland, not counting ‘bulk retail’ centres. Taken as a whole, though, the Westgate area is indeed a retail monster – it’ll be roughly the size of Albany when it’s done.

Much of the retail action, though, was on main streets and in town centres, rather than in shopping malls. Farmers reopened on Queen St. Topshop opened for the first time.

Farmers Queen St

The new Farmers, with the new version of Santa. RIP the previous creepy version.

Here’s an interesting stat I read a few months ago – according to Whillans Realty, rents at the lower end of Queen St went up 30% in six months. These increases, in what was already the most expensive retail precinct in New Zealand, really show the value of foot traffic (and tourism too).

Auckland Offices

As we heard earlier this year, there’s a real shortage of high-end office space in Auckland. 151 Victoria Street West (occupied by NZME and various other media businesses) was the only major building completed in 2015, but more are on the way: Fonterra and Bayleys buildings in Wynyard Quarter, which should be ready in the next few months, a refurbished and reoccupied 125 Queen St not long after that, and so on. 1 Mills Lane, on the site of the old Herald headquarters, was also one of the big announcements this year: an office tower, billed as Auckland’s highest, with a hotel and shops too.

Downtown redevelopment, aka Commercial Bay

Lastly, what better way to finish than with the announcement last week that the Downtown Shopping Centre redevelopment will be going ahead – the area will be branded as Commercial Bay, with the new building to be known as the PwC Tower.

Precinct Properties New Zealand Limited (Precinct) (NZX: PCT) announced today that it will proceed with a $681 million development including a new 39 level commercial office tower and a world class retail centre at its Downtown Shopping Centre site on Auckland’s waterfront.

A construction contract for the development has been entered into with Fletcher Construction. Reflecting Precinct’s development agreement with Auckland Council, construction will also include works to complete tunnels under Commercial Bay for the City Rail Link.

Commercial Bay will integrate the adjoining Precinct owned towers’ PwC Tower, AMP Centre, HSBC House and Zurich House, to create a new central business, entertainment and retail destination. On completion, Precinct estimate 10,000 workers will occupy space within these five towers, each of which will have direct access to the retail centre.

The decision to proceed had been taken as the tower had achieved 52% pre-commitment, with Precinct delighted to welcome another four businesses as foundation clients. The retail leasing has recently commenced and negotiations are advancing with a range of mini major retailers for the flagship stores.

Work is expected to begin with the demolition of the existing Downtown Shopping Centre in June 2016. The Commercial Bay retail centre is expected to open by October 2018, with the office tower completed in mid-2019.

Commercial Bay

Precinct Properties have confirmed that they’ll proceed with the $681 million redevelopment of the Downtown Shopping Centre – which includes the construction of a 39 storey office building – after reaching their target of having 50% of the development pre-leased.

Tower 1

Precinct own the current mall, along with the HSBC, Zurich, PWC and AMP towers and are grouping them all into a precinct they’re calling Commercial Bay which is the name originally given to the area before the land was reclaimed. Combined they say the area will be occupied by 10,000 workers. The new tower itself will be named PWC tower with PWC moving from the tower across Albert St.

Commercial Bay workers

The project includes

  • 39,000 m2 of commercial office space including a 1,400m2 sky terrace on level 7
  • 18,000 m2 of retail space over three levels with ~100 retailers – they are saying they have a big name international retailer not currently in NZ already lined up.
  • Along with the CRL tunnels there will be additional parking which I imagine will be primarily used by commercial tenants as there 278 carparks all up.
  • There is a 6m wide east-west lane through the development located on centreline of Britomart. It will be open 24/7 and link the train station to the new bus interchange being built on Albert St.

Work is due to start on demolishing the current mall in June and they will build this section of the City Rail Link through the site – linking it to the separate works along Albert St and at Britomart. They say they expect the retail to open in October 2018 and the office tower will be completed in mid 2019

Here are some more images they’ve provided

Corner of Queen and Customs Streets

Combined with the CRL Lower Queen St outside Britomart will be pedrestrianised. With the development occurring over QE Square which was sold by the council.

Lower Queen Street - public space and facade

The retail part of the development certainly has a boxy feel to it.

Lower Queen Street - East-West Laneway

And a video of it all.

Fletcher Building on housing

Fletcher Building is the biggest construction company in New Zealand, and a major home builder, so it’s worth keeping an eye on what they say about their residential business and the market. They recently gave a presentation on this.

Fletchers are now established in the “high density” market, having built several apartment buildings at Stonefields in a joint venture with Todd Property. There’s still more to come, both at Stonefields and Three Kings – where the first building, on Mt Eden Rd, is already going up.

As for their “low/ medium density” offerings, Fletcher’s “product range [is] increasing in density and will include light-weight apartments”.

Slide 18 of their presentation is interesting, showing the journey from raw land worth $80-$200/sqm, to subdivided sections at $600-$800/sqm, to completed houses, with a “build margin” of $50,000-$100,000 or more.

Slide 18

This is obviously based on detached houses, with the model a bit different for higher density homes. But the gap between raw land and sections is a big one – it has to accommodate infrastructure (including local roads), development contributions and GST, among other things.

 

Slides 20 to 22 show how Fletchers want to scale up the number of homes they build, from 200-400 a year over the last decade to 1,500 in the future – although it will take them a while to get there, beyond their 2018 forecast horizon.

Slide 20

This would make Fletchers the biggest home builder in New Zealand, although of course other companies will also be aiming for growth.

These slides indicate that Fletchers are moving back into being a developer, not just a house builder, and that they’ll be building more ‘attached’ homes – those are a major focus of most of their Auckland and Christchurch projects.

 

Lastly, Fletchers have an interesting slide looking at the market overview, saying “There is a structural shortage of housing in Auckland”, and “on current estimates this will take 10-30 years to reverse”.

Slide 37

I agree with them, although I note that this doesn’t mean we’ll have rapidly increasing house prices for 10-30 years. We simply need to get to the point where people have confidence that housing supply is increasing, and that we’ll be starting to chip away at that shortage, and that should help to reintroduce some sanity to the market.

The Herald have covered the presentation here, mainly in relation to Three Kings locals opposing Fletcher’s plans for the old quarry. I’ll just quote one comment here:

Garry Bryant, Three Kings United president, said… “Why does Three Kings, which is the smallest in land size [than plans for three other sites] have the most residential density which is 50 per cent more than Whenuapai which has a land size of 31ha? The very area that needs the most open space has next to nothing compared to the other three sites where land is abundant”.

It’s pretty obvious to me why Three Kings (brownfields, 8 km from the CBD along Mt Eden Rd) will have much higher density than Whenuapai (greenfields, 24 km from the CBD). The density planned there will also enable better quality, better utilised public open spaces. Putting my economist hat on, why is the community group trying to regulate what other people do with their land? What’s the externality they’re trying to solve? Surely the density of the site is a question for the developer and the eventual residents?

Panuku priority development areas confirmed

The council’s Development Committee have confirmed the areas where Panuku Development Auckland will focus on with Manukau and Onehunga the first to be focused on. This should hopefully see some of the great place making that is making Wynyard a fantastic place spread to more locations.

Manukau and Onehunga are set for significant long-term improvements as part of 19 locations across the city that have been identified by Auckland’s new urban regeneration agency. The Auckland Development Committee this morning approved the list of urban locations from Whangaparaoa in the north to Pukekohe in the south that were recommended by Panuku Development Auckland (see map attached and video link below).

The metropolitan centre of Manukau along with the Onehunga town centre and port were approved as the flagship projects. These locations will undergo a transformation similar in scale to the award-winning regeneration of the Wynyard Quarter, while retaining their unique identity so that the collective aspirations and needs of their communities are achieved.

In Manukau, Panuku will work with Central Government to create more housing, including affordable housing located close to employment opportunities. We will also make better use of council-owned sites in the centre – all of which will leverage off existing investment in the area.

In Onehunga, Panuku will use available land holdings in the town centre, along with the Onehunga Port in the future, to attract and enable developers to build high quality, mixed style housing close to public transport and the water’s edge. Changing the port to more public use is seen as the key to unlocking the economic, recreation and transportation potential of the Manukau Harbour. There is also an opportunity to work with the Government on more housing in the wider area.

Mayor Len Brown says the breadth of the locations will see benefits delivered right across the city – from additional housing to revamped town centres for Aucklanders to enjoy.

“These developments are just one of a number of ways we are dealing with the record growth Auckland is experiencing. We must all work together with a shared vision to make more of what we’ve got.”

In addition to the major transformations of Manukau and Onehunga, town centres in Northcote, Takapuna and Henderson have also been approved for revitalisation, with Panuku working with Government and private developers to unlock the full business potential of these locations.

Deputy Mayor and Committee chair Penny Hulse says communities in a number of the selected locations have been eagerly awaiting these developments.

“Residents have been telling us through the Auckland Plan and their Local Board plans that they want to see thriving town centres, as well as housing and commercial developments that strengthen the community and reinforce the local character.”

“They’re ready for change and now that the selection process is completed and the objectives are clear, it will be the role of Panuku to get on and work with the local communities to roll out these developments.”

Panuku Interim Chief Executive John Dalzell says while work is underway on a number of existing locations such as Hobsonville, Papetoetoe and Whangaparaoa, for the likes of Manukau and Onehunga it may well be future generations who enjoy the fruits of these developments.

“Panuku will take a long-term view of suburbs and town centres to ensure what is built today stands the test of time.

“We need a transformational shift in the way that urban development is delivered and our approach will focus on customised solutions for each location as we recognise their unique character and the specific wishes of the local community.

“Through careful planning we will invest in initiatives which leverage public sector land and bring to market opportunities that can be led by private developers.”

The Panuku Board used feedback from key stakeholders such as Iwi and Local Boards to confirm the final selections at its November Board meeting, with the selections going to today’s Auckland Development Committee for final approval.

Panuku categorised the locations (seven of the nine identified by council as well as those inherited from Waterfront Auckland and Auckland Council Property Ltd*) as follows:

1. Transform: create change through urban regeneration

Approved new locations: Manukau metropolitan centre and surrounds, and Onehunga town centre and port.

Existing locations: Wynyard Quarter and Tamaki regeneration (in partnership with the Government).

2. Unlock: act as the facilitator to create opportunities for others

Approved new locations: Takapuna central, Northcote town centre and surrounds, and Henderson metropolitan centre.

Existing locations: Hobsonville, Ormiston town centre and nearby Flat Bush sites, Old Papatoetoe and City centre.

3. Support: enable development of council-owned land

Approved new locations: Avondale and Otahuhu

Existing locations: New Lynn (Totara Avenue), Pukekohe, Stonefields (Morrin, Merton and Donnelly roads), Howick (Fencible Drive), Mt Eden (Dominion and Valley roads) and Whangaparaoa (Link Crescent).

The criteria used to categorise the locations included:

  • critical mass of Council land holdings (scale) and the ability to stage quicker wins with long term goals (impact). A key part of this is community readiness for change.
  • partnership opportunities, particularly with the Crown, but also within the Council family
    ability to leverage off previous public and private investment and consider future investment
  • commercial proposition of the site and market attractiveness
  • access to public transport.

The two locations provided by Council that were not included were Newmarket, where at this stage Panuku sees no clear benefit in getting involved, and Mt Eden Station which is part of the City Rail Link project. The station will be a future project once the City Rail Link is further progressed physically.

Panuku will now produce high level project plans for the selected locations which will outline the key milestones for each development.

Screenshot_2015-12-08-13-32-09~2

Development update: November 2015

Spring is usually a busy time in the residential property market. I’ve always thought that the best time to check out a house is winter, so you can get an idea of whether it stays warm or not, but what do I know?

This spring has also been a very busy time for launches of new residential projects – i.e. they’ve started going on sale, whether or not they’re actually being built yet. Since September, 13 apartment/ terrace projects have launched by my count, with 810 homes between them, and there’s still half of November to go.

Launched in spring 2015:
West Edge (stage 1)
Atelier
Daisy apartments
Juliette Lofts
Wyndham Residences
The Maritime Apartments
The Antipodean
Connect Anzac Apartments
St Marks
Stonefields – Verto Apartments
Whitaker Park Central
Stonefields – Bellus Apartments
Merchant Quarter MQ2

It’s a pretty big ‘pipeline’ of potential new apartments, most of which will be completed in 2017, assuming they sell well. You can take a look at these, and another 500+ projects around the country, over on our RCG Development Tracker page. It’s quite amazing how much is going on around the CBD and the fringe suburbs like Ponsonby, Grey Lynn and Eden Terrace.

There’s not much to report this month in terms of building consents. Some news articles said that consents for Auckland had dropped, which they had relative to the previous month – but not the same month of the previous year. So, like the are-house-prices-going-up-or-down stories this month, it depends on how you want to look at the data.*

Building consents are a good ‘leading indicator’ of how many homes are going to get built in the next year, because when the consent has been approved, the builder is free to get on with building them, and the consent lapses if work isn’t started within a year.

Auckland Dwelling Consents to Sep 2015

The graph above looks at consents on a “moving annual” basis, so it’s showing how many homes are consented in each 12-month period – in this case, the latest data is for October 2014 to September 2015. There’s only been a small rise vs last month, driven by detached homes (4,966 consented in the last year). However, I think we’ll see apartment consents heading upwards in the next few months.

* Similar issue there – REINZ were looking at Oct 2015 vs Sep 2015, QV were looking at Oct 2015 vs Oct 2014

Gentrification and heritage buildings

K Road is changing. The city’s long-time boho heart is, in a way, sitting between a rock and a hard place. On the one side, there’s a city centre that’s bursting at the seams with university students and suit-clad professionals; on the other, post-gentrification Ponsonby.

A recent post on Public Address by Tina Plunkett took a look at the potential impact that some new developments on K Road might have on the area’s culture:

The shutting down of cultural institutions across Auckland to make way for towers of small, shoebox apartments is becoming almost epidemic – but at the same time we need growth of quality, spacious, inner-city living areas.

In the past year Karangahape Road has lost every single one of her original sex shops – but is this a bad thing? The landmark Las Vegas Girl is the last to succumb to closure. K Road is definitely in the throes of switching over.

But there are shimmers of hope popping up. In recent years we’ve had additions to this strip that are community focused, culturally aware and importantly, kind. Coco’s Cantina and Flying Out records are both prime examples of new businesses that are wholeheartedly embraced by our  community, and by their own cultural communities. We need to support them. By supporting them, we keep our dream alive.

But what is next on the chopping block? The King’s Arms? Whammy Bar? The Old Folks Ass?  Can they survive in a market of growing rents, amid the sound of the developers’ diggers?

This is an interesting and important issue. There isn’t necessarily a single right answer, but there is the possibility of a useful conversation.

Tina asks the following question about the trade-off between culture and growth:

We need to ask at what point we draw a line and stop sacrificing the culture for accommodation. The outer wings of our city highlight our relationship with heritage, history and culture.  K Road has been a haven for ideas, community, music, arts, freedom and a shitload of fun for successive generations. Are we happy to toss that aside?

What’s worth more to us in Auckland? Our identity in our music, culture and arts – or six more flats?

This is a good question to ask, but I think we have to re-phrase it to get a meaningful answer.

In particular, I think it’s important to distinguish between two things that people often conflate:

  1. The buildings that exist (or no longer exist) in a place, and
  2. The social and economic function of a place, which is mainly about the people that use it.

There’s a relationship between built environment and social and economic functions, of course. Run-down warehouse space with high ceilings is famously amenable to starving artists in search of live/work space and punks in search of squats. But it’s not as direct a relationship as you might think.

That’s because buildings change uses over their lifetimes, and cycle through periods of high rents and low rents depending upon when they were built, vacated, depreciated, renovated, etc. Think of Ponsonby – twenty years ago, many of the pre-war wooden houses in the suburb were run-down and quite cheap. As a result, they provided housing for people on lower incomes.

203-209 Ponsonby Rd in 1960s

Terraced houses on Ponsonby Road in the 1960s. (Source)

Today, the buildings are largely the same from the outside, as heritage preservation rules and changing aesthetic preferences have kept people from demolishing them. But they now serve a totally different social and economic function: housing rather well-off people at a premium price. In the process, the old Ponsonby society has been displaced – or simply melted into thin air.

203-209 Ponsonby Rd in 2010s

The houses remain the same… but the place has changed. (Source)

Apply these lessons to K Road. What do they tell us?

The first thing is that we should be less concerned with the buildings on the street (and the ownership of the buildings) than we are about the social and economic function of the place. Old buildings can be important and interesting and there are valid arguments for their preservation.

But if the aim is to preserve K Road (or any other place in Auckland) as a place for culture and creativity, only focusing on the buildings will result in failure. The buildings may not be demolished, but if there’s demand for the space rents will rise, the spaces will be renovated with sleek Danish interiors, and culture will be priced out in the process.

So what can be done?

Tina’s post offers a few insights about what might work.

We need to start by recognising that some degree of change is inevitable and probably beneficial. New buildings will be constructed, and some old ones will be torn down in the process. This is good for several reasons.

First, as Tina notes, Auckland’s got a shortage of affordable living space at the moment, so more apartments would be helpful. More small, affordable dwellings will make it easier for the people who make K Road what it is to keep living in the area.

Second, although it would obviously be bad for K Road if it were all dynamited and rebuilt in one go, a steady trickle of new construction tends to support the ongoing cultural vibrancy of an area. It means that there will always be some buildings that are getting a bit shabby and thus providing a low-rent place for various creative endeavours.

In short, new buildings are probably alright. But, as Tina notes throughout her article, we need to ask whether they will function in a way that reinforces (or undermines) the existing culture.

The existing community can influence this process for the better by engaging with developers and new entrants to help them to understand what makes the place tick. This obviously works best when a place already has a strong community and identifiable values – as K Road does. It’s certainly encouraging to see examples of new businesses in the area that want to enhance K Road rather than replace it.

What do you think about what’s happening on K Road?

Development update: October 2015

The RCG Development Tracker page has just been updated for October, and there’s plenty of new stuff in there. There are a few areas which are getting major makeovers in the next couple of years – Sale St is one, and Beach Rd/ Anzac Ave is similar with three sizeable apartment projects just about to launch (technically they’re only doing ‘expressions of interest’ at the moment, not actually selling the apartments off the plans). That’s The Maritime, Connect Anzac and The Antipodean, all of which are down around lower Anzac Ave. Several hundred new residents and a few new shops could really help to rejuvenate the area, tidying up a few of the more run-down sites in the process.

On a smaller, more local scale, Browns Bay has seen quite a bit of development recently. The Norfolk Apartments were marketed in late 2013, with the building completed in late 2014. The developers bought the neighbouring site as well, and that’s now under construction as The Pines apartments.

true-commercial-19-21-bute-rd-containing-retail-unit-2-browns-bay

Norfolk Apartments, with the site to the lower left now under construction as “The Pines”. Image source: http://truecommercial.nzherald.co.nz/news/property-articles/competitive-price-expected-for-browns-bay-unit/

The Anzac Lofts terraces are currently being marketed, and the former New World supermarket has been designated as a Special Housing Area. Of note, the SHA mentions:

“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”.

Overall, that’s about 170 new homes being added to the town centre, which will give it a boost. I’m sure the ‘wanting to downsize but stay in the same area’ point will be on the minds of a lot empty nesters over the next few years.

The Development Tracker also shows some changes at retirement villages in Browns Bay – new units at Aria Bay, and a comprehensive redevelopment of the 55-bed Maureen Plowman Rest Home into a integrated facility with 62 retirement village units and 40 rest home beds.

In retail, there’s a range of things happening – too small to show in the Tracker (I don’t show retail developments smaller than 5,000 square metres), but there’s a brand new New World supermarket which replaced the old one, and the old Palmers garden centre has been redeveloped for convenience shops, and I’m sure I saw another new convenience block somewhere (Inverness Rd? Maybe a local can help me out here).

It’d be great to see this kind of thing replicated around the city, or the country for that matter. I’m sure there would be lots of town centres which would love to see new investments there, whether it’s new homes, new shops or better public spaces.

Development update: September 2015

I didn’t manage to get a “development update” post out last month, but I’ve now finished doing a pretty major update to the RCG Development Tracker page. Among other things, there’s been a new tranche of Special Housing Areas, a bit more info on things happening around Westgate, and I’ve updated a lot of apartment projects around the city (which ones have begun construction, expected completion dates, etc). Plus there’s been the usual array of new projects being announced.

The Tracker does actually cover the whole country, but taking a “Greater Auckland” perspective, there are currently 4,605 apartments or terraces under construction, with another 1,541 completed since 2012, and 2,694 currently selling off the plans but not yet being built.

On the Special Housing Areas front, since I don’t think we’ve mentioned it before, the council will now be focusing on getting brownfields SHAs approved in the remaining 13 months of the Housing Accord. In the first two years of the Accord, there’s been a massive amount of greenfields (i.e. urban fringe/ sprawl) land granted SHA status, which we’ve been quite critical of. It’s good to see that the focus, and hopefully the resources, will now be shifted to making development easier within the existing city. That’s the goal of the Auckland Plan, after all.

Also in positive SHA news, a recent Herald article announced who the developers would be at two Special Housing Areas which had already been announced. Ockham Residential will be developing the site at Avondale Racecourse, and Avanda Ltd will be tackling a large site on the edge of the New Lynn town centre, including the Monier brickworks factory.

In both cases, it now seems that the sites are going to get more homes built than previously thought. For Avondale, Ockham are planning 52 dwellings, up from the “at least 15” mentioned when the site was initially identified as an SHA. For New Lynn, the master plan aims to create 1,800 homes, up from 600.

Building Consents

July was a good month for consents, with growth across the board. The problem with looking at “moving annual” figures, which is what I usually focus on, is that each month you’re only changing one figure out of twelve – so changes in the trend can take a while to show up. That said, it seems like Auckland is starting to build more homes of all kinds – consent numbers are up for detached houses, apartments and other housing types.

In the last year (the year to July, at least, which is the latest data available), there were 8,567 dwellings consented in Auckland.

Auckland Dwelling Consents

We’re still not building enough homes, though. With three people per household in Auckland, we’re building enough homes for 25,000 people a year – but our population is growing by at least 40,000 people a year. This is not something that can be solved overnight, and we need to keep growing supply to provide adequate housing for the city.

Christchurch, in Cashel St I Wait

We haven’t talked much about Christchurch recently, but it’s an important part of this fair nation and we should all be keeping an eye on what’s happening there. Four and a half years on from the February 2011 earthquake, the Christchurch rebuild still has many years to run. The video below, posted by Cera last month, shows progress on some sites (including some of the government’s “anchor projects”) while much of the CBD is still vacant.

This video shows the progress at various anchor project sites such as the Innovation and Retail Precincts as at the end of July. There is significant development happening on the Avon River Precinct, the Innovation Precinct, and the Retail Precinct with several more anchor projects moving along. This footage also shows the huge changes on the Margaret Mahy Family Playground site, which is well under construction now and will be opening in December.

The “Retail Precinct” is actually a major office precinct as well, and is made up of several large developments by the private landowners. That includes Antony Gough’s The Terrace, which began construction in 2013 – the first of the big projects to do so – but then stalled until July this year. It’s now back in action. In the mean time, some other big projects nearby – the BNZ Centre, aka Cashel Square, and the ANZ Centre – are also under construction.

Then there’s the Bus Interchange which opened a few months ago, the Justice Precinct which is well underway, and a range of other things which you can explore in the Development Tracker map (or Cera’s Progress Map). However, there are still many sites which don’t seem to be making progress, and developments which were announced to great fanfare but have now stalled – this includes a Cathedral Square site which was to have been known as ASB House, but ASB has now pulled out.

The city continues to evolve and grow, and it’s good news to see things moving forward in the private-led Retail Precinct and the public sector ‘anchor projects’. On the other hand, it’s tough to look at the Cathedral Square area, and the Cathedral itself which you can see right into via a missing wall, and not be able to find many visible signs of rebuilding. As for the Cathedral, church leaders and the government have agreed to appoint a consultant who will review the situation, and a final decision on its future could be made by the end of the year.