The Auckland City Centre is entering a phase of profound change. The rest of this decade it’ll be undergoing a more extensive and disruptive renovation than your average Ponsonby villa. The designers and financiers are at work and the men and machines are are about to start. The caterpillar is entering that difficult and mysterious chrysalis phase; what kind of butterfly will emerge?
Some of the probable additions to AKL’s skyline [image: Luke Elliot]
If even half of what is proposed gets underway almost every aspect of the centre city will be different.
Precinct Property’s 500 million dollar total rebuild of the Downtown centre and a new 36 storey commercial tower is confrmed to start next year. The 39 storey St James apartment tower is also all go [with the re-opening of the ground floor to the public soon]. An apartment tower on Albert and Swanson has begun. There are a huge number of residential towers seriously close to launching some of which are 50+ floors. These are on Victoria St, Customs St, Commerce St, Greys Ave and more. The biggest of them all Elliot Towers is rumoured to underway next year. Mansons have bought the current herald site and said to looking at residential there. On the same block 125 Queen St is finally getting refurbished bringing much needed new commercial space in the city [+ about 1000 new inner city workers]. Of course the Convention Centre and its associated hotel will start too. Waterfront Auckland have announced new mid rise apartment developments and a new hotel beginning as well. This list is not by any means exhaustive. Auckland is now a builders’ boom town. And it will resemble nothing other than an enormous sand pit for the next few years.
Regardless of the forms of these buildings they are going to have profound impacts at street level; flooding the footpaths with people, stimulating more and more retail and especially hospitality services. Add to this the disruption of the works themselves, for example later this year the first stage of the CRL is going to start. Digging up everything from Britomart through Downtown, up Albert St to Wyndam St. If the proposed Light Rail system goes ahead that will mean the [no doubt staged] digging up of the whole length of Queen St and other places, Dominion Rd, Wynyard Quarter. Street space is becoming more and more contested. Driving in the city is going to get increasingly pointless, most will avoid it. But unlike last century that won’t mean people won’t come to the city. One, because it’s become so attractive with unique retail offers, unrivalled entertainment attractions, and a fat concentration of jobs. Two, because people are discovering how good the improving Transit options are becoming, so why bother driving. And three, because increasing numbers are already there; it’s where they live anyway.
And that Transit boom is going to continue, or even accelerate. Britomart throughput is now running at 35 000 people daily, when planned it wasn’t even expected to reach 20 000 until 2021 [see below; the blue line is still growing at that angle; it is now literally off the chart]:
Why is this happening? A lot of people in wider Auckland still think the city is unappealing or unimportant. Aren’t we spreading new housing out at the edges? Aren’t new businesses building near the suburbs in those business parks? Well ironically one of the reasons so much growth and investment is happening in City Centre is because those same people, the ones that prefer their suburban neighbourhoods to the city, don’t want any change near them. The City Centre is one of the few places that it is possible to add new dwellings or offices at scale, and because it is a very constrained area with high land value this can only be done with tall buildings. The more suburban people refuse to have growth near them the more, in a growing city, investment has to concentrate where it can, and in Auckland that means downtown.
Auckland’s first electric tram 1902
Auckland is still spreading outwards and businesses are growing in suburban centres, but these areas are not appealing or appropriate for all people and all businesses, and nor are they sufficient; the City Centre is growing by both these metrics too, and at a greater pace. The 2013 census showed that AKL city is the fastest accelerating place to live in the entire country, growing at over 48% between 2006-2013, and currently the city is experiencing a new shortage of office space and an interesting reshaping of the retail market. The education sector is also still strong there, with Auckland Uni consolidating to its now three Central City sites and building more inner city student accommodation. City growth is strong and broadly based: residential, commercial, retail, and institutional.
There are risks and opportunities in this but what is certain, outside of a sudden economic collapse, is that the City Centre will be a completely different place in a few years, in form, and in terms of how it will operate. And the signs are promising that what we are heading to is an almost unrecognisably better city at street level than it has been in living memory.
What is happening is simply that it is returning to being a city of people. Ten of thousands of new inner city residents, thousands of new visitors in thousands of additional hotel beds each night, hundreds of thousands of workers and learners arriving daily from all over the wider city each day too. All shopping, eating, drinking, and playing within the ring of the motorway collar. Auckland is moving from being one of the dullest and most lifeless conurbations in the world to offering a new level of intensity and activity. Well that is certainly the possibility in front of us now.
Auckland has had boom times before, and each of these leave a near permanent mark on the built fabric of the city [the Timespanner blog has examples in great detail]. So it matters profoundly what we add to the city this time. We are at the beginning of the opportunity to correct the mistakes of the postwar outward boom that came with such a high cost for the older parts of the city. By forcing the parts of the city built on an earlier infrastructure model to adapt to a car only system we rendered them unappealing and underperforming, and the old city very nearly did not survive this era. Only the persistence of some institutions, particularly the Universities, enabled it to hang on as well as it did. The car as an organising device is ideal for social patterns with a high degree of distance and dispersal. It is essentially anti-urban in its ability to eat distance but at the price of its inefficient use of space; it constantly fights against the logic of human concentration that cities rely on to thrive. It not only thrives on dispersal, it also enforces it.
Queen St 1960s
But now the wheel has turned and cities everywhere are booming on the back a of model much more like the earlier one [see here for example: Seven cities going car-free]. This old-new model is built on the understanding that people in numbers both already present in the city and arriving on spatially efficient Transit systems providing the economic and social concentration necessary for urban vitality and success.
This seems likely to lead to a situation more or less observable in many cities world-wide where there is an intense and highly walkable and Transit served centre surrounded by largely auto-dependent suburbs. Melbourne, for example, is increasingly taking this form. And, interestingly the abrupt physical severance of Auckland’s motorway collar might just make ours one of the more starkly contrasting places to develop along these lines. A real mullet city: one made up of two distinct patterns.
Bourke St Transit Mall, Melbourne 2014
Frankly I think this is fine, it could make for the best of both worlds. Those who want to live with the space and green of the suburbs can continue to do so but are also able to dip into a vibrant city for work, education, or especially entertainment, on efficient electric Transit, ferries, and buses when that suits. A vibrant core of vital commercial and cultural intensity sustained by those who choose to live in the middle of it 24/7. The intensity of this core plus any other growing Metro Centres [will Albany really become intense? Manukau City?] meaning the sprawl isn’t limitless and the countryside not pushed so far away that it is inaccessible. Auckland as Goldilocks; not all one thing or the other; neither all suburb nor all city. People will use or ignore which ever parts they want, and soon members of the same households will be able to indulge their different tastes without some having to leave the country.
What are the threats to this vision? Well we do actually have to build the Transit, this means completing the CRL soon as is possible, and ideally replacing a good chunk of the buses with higher capacity and more appealing Light Rail. To connect these two halves; the success of both the centre and the region it serves depend on it. But also we have deliver a much better public realm on the streets and especially at the water’s edge. We have to retain and enhance the smaller scale older street systems to contrast with the coming towers, like we have at Britomart and O’Connell St. All these moves require leadership and commitment and an acceptance that the process of getting there will be contested and difficult.
I have no fear that people in the wider city won’t be happy to choose to leave their cars at home for some journeys, especially into the city, then jump back into them for others across the wider city or out of town. After all it’s happening already. This is not then a bold prediction, merely the extrapolation of current trends. And it is the trend that tells us more about the future than the status quo. More of this:
CPO Lower Queen St 1960s
AKL Grafton Gully 70s
As explained in my last post, Australia is currently in the middle of a major apartment boom. Of course, the picture changes depending on which city you look at. The following graph shows the share of attached dwellings for the “large Australian cities” – the ones which are bigger than Auckland, at 1.9 to 4.7 million people:
Sydney has been building mainly attached dwellings for the last 12 years – 60% to 70% of all dwelling approvals. There’s a lot less of this activity in Perth, where the share of attached dwellings is around 25%, without much change in the trend in the last twelve years. However, Melbourne and Brisbane have seen a real lift over that time, from around 30% of approvals in 2002 to 55% now.
Here’s the share of attached dwellings for what I’ve called the “small Australian cities” – state capitals which are smaller than Auckland, at 132,000 to 1.3 million people (and note Australia has many other cities in this size range which I haven’t looked at):
These percentages fluctuate quite widely, but note the high share of attached dwellings in Canberra (the size of Christchurch or Wellington) and Darwin (the size of Tauranga).
The figures above are for “Greater Capital City Statistical Areas”, which are defined very broadly, and include a large amount of rural land and smaller settlements as well as the main urban area. This tends to bring down the share of attached dwellings, since you’re more likely to get apartments in central Sydney than Campbelltown. In terms of land area, the GCCSAs range from 170,000 to 326,000 hectares for the “small cities” and 642,000 to 1.6 million hectares for the “large cities”.
It’s a little tricky to compare these areas to any New Zealand measurement – they’re probably in between the typical size of a territorial authority and a region – but the Auckland Region, stretching from Wellsford to Pukekohe, is 1.6 million hectares. The graph below compares the attached dwellings share for the Auckland region (in dark blue) to those for the large Australian cities:
So, we’re building a smaller share of attached dwellings than Brisbane, Melbourne or Sydney (which, to be fair, are all larger cities than Auckland), although it’s interesting that we outpaced Brisbane and Melbourne for much of the 2000s. The share of attached dwellings is also tracking up strongly, and I’d expect it to keep heading upwards in the short term at least.
In “absolute” terms, we’re approaching 3,000 building consents a year for attached dwellings – less than we managed during the 2000s boom, but still significant, and continuing to grow strongly.
The upshot of all this is that John Key was absolutely right when he said “If you’re a young person buying your first place in Sydney or Melbourne or Brisbane, in most instances you’ll be going into an apartment.” If you’re wanting to buy in a big city – especially if you’re a first home buyer with less of a deposit or a lower income – an apartment, terrace or flat can be a great option, and they’re a big proportion of what is being built.
Two articles on employment and its relationship to urban form and transport investment turned up, rather fittingly, on Labour Day. They offer interesting international perspectives, but before we get to them here is a fascinating chart derived from Ministry of Transport Household Travel Survey data that puts the focus on journeys to work into an valuable perspective. Remember the New Zealand census question that generates the gross mode share data much loved by government ministers only asks the very narrow question about travel for work. In Australia at least they ask about travel ‘for work or education’. So here is Auckland’s travel for all purposes:
In particular look at that am rush hour [and, quaintly, it is pretty much just an hour] 8-9am. Journeys to work only make up just 22% of the trips that cause that morning congestion.Trips to education is the big one then. The afternoon is very different with a full three hours of workers and learners all coming home. A great shame that trips for education are not counted in the gross mode share question as that would help the real role of PT and Active modes in keeping this city moving from being so easily downplayed by politicians and others. I have seen elsewhere that Auckland University, for example, has a private car modeshare for its students somewhere in the rounding: 1-3% [if anyone has a data source for this please add it in the comments]. *Correction 8% is the best info we have, thanks to Thomas S; source.
I can’t top the title used by The Economist so have repeated it above, here’s the link. The article simply asks the question what role might geography have in unemployment? As it is concerned with cities the geography in question is urban form. So has 60 years of subsidising the dispersal and segregation of living and working in cities in the west made it harder to provide, find, keep, or change jobs? It surveys the research and concludes that western cities suffer from ‘spatial mismatch’ and ‘poor accessibility’ and that these conditions do indeed inversely affect employment effectiveness of these places. Basically the more dispersed, the greater the degree of separation of zones, and the less effective its Transit system the less efficiency there is in its employment market.
What’s to be done? Here is the concluding paragraph:
All this has big policy implications. Some suggest that governments should encourage companies to set up shop in areas with high unemployment. That is a tall order: firms that hire unskilled workers often need to be near customers or suppliers. A better approach would be to help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.
The second article is from the Brookings Institution and is called: Cars Remain King and barrier to Economic Opportunity
This uses a study based on commute data from the US 2013 census to focus on ‘zero-vehicle workers':
The most recent 2013 Census numbers shed additional light on their commuting habits, showing how more than 6.3 million workers don’t have a private vehicle at their home. That’s equal to about 4.5 percent of all workers, compared to 4.2 percent in 2007.
Unsurprisingly decades of building and subsidising car amenity in the US has led to widespread structural auto-dependency for employment. This study also concludes that a shift in both urban form and transport infrastructure investment would deliver positive economic outcomes. And in particular that the focus by professionals, institutions, and policy makers needs to be on accessibility and not predominantly on vehicle speed:
To address this inequity, we need to shift how we plan transportation investments and urban development. Planners and engineers need to think less about mobility—how fast we move—and more about access—how many destinations we can reach. Grounded in the daily experience of commuters, this perspective can help meet the needs of workers and employers, better tying together regional economies.
One thing that would help is broadening the specialists in this field away from a focus on the LOS metric, as advocated by the Victoria Transport Policy Institute here.
Clearly a move away from monotonal places of only work [like how the City Centre used to be], or the pure dormitory suburbs of south east Auckland, are part of the solution here. The move to a greater spread of Mixed-Use suburbs with working and dwelling within easy and pleasant reach, especially by the Active modes or short Transit trips, is desirable. This is after all, along with proximity, one of the features of the inner pre-autodependent sprawl era suburbs that make them so successful and desirable: They were formed pre zoning rules, and can be lived in with minimal travel for work and indeed other needs for most.
Of course committed sprawlists will immediately claim that if only we flatted the centre city and spread all employment out across the city then people would all live right next to their workplace and joy! travel times, congestion, and all human misery would end. Well I’m sorry but the following chart firmly puts paid to that:
Above is that chart from 2013 census showing how those in newer further out suburbs have, on average, longer commutes, regardless of their place of work. It is important to underline that these commute lengths are not about just trips to the centre but to the actual real work trips taken by everyone as recorded in the 2013 census. There is just no way around it; the further out you live the longer, on average, your work journey will be. And if we keep extending the city out the worse this will get for these edge-city dwellers and everyone on aggregate. With the concomitant disbenefits that long commutes bring; higher cost, individually and collectively; plus all the negative health, pollution, and happiness outcomes.
And below the same data flipped to show it by destination. Look how inaccessible the employment around the airport is, despite all that road building. The $140m about to be spent on the Kirkbride Rd intersection will do nothing at all to improve this. Look too at Howick on the two charts, the small number of people that work there are mostly local, which is good, but most locals work much further away. Both charts also show the lack of local employment for people in West Auckland.
Which all goes to show that Auckland conforms to Bertaud’s ‘Composite’ urban form model below, which is of course the most common city type on the planet, and not the dispersalists’ largely imaginary centre-less model of the ‘Urban Village’ with everyone working adjacent to where they live and none working across town.
After all, even as Auckland gets longer [it can’t get wider!] the area most closely placed to everywhere is still the centre. This helps explain why the centre will only continue to grow and thrive despite increasing rents and other barriers, as it remains the most connected and accessible place to be, on average.
Trust you had a relaxing Labour Day.
Yesterday the council and government announced the next batch of Special Housing Areas. These are the areas that are able to use a fast tracked consenting processes and for which the Unitary Plan rules (with a few conditions) come in to effect immediately. The intention is that by the faster consents will lead to developers building more dwellings and therefore helping address housing affordability however it also seems like some developers are just pushing for their land to be an SHA so they can sell it for an easier profit. All up there are 17 new SHAs bringing the total to 80 across the region. The Council say the new SHAs represent capacity for 8,000 new dwellings and that all SHAs combined have a potential of 41,500 dwellings. Below is a map of the new SHAs.
The first thing I noticed is that a decent proportion seem to be brownfield sites which is good however on closer inspection the greenfield sites while fewer in number still represent the majority of dwellings proposed. For example the massive Redhills SHA in the Northwest represents about 3500 dwellings which is almost half of all the new dwellings these SHAs cover. The council’s site has the details and maps of each of the specific SHAs but here’s a quick summary
- Akoranga Drive, Northcote – 107 dwellings however it appears this is a retirement village.
- Barrack Road, Mt Wellington – 40 dwellings – These are within walking distance of the Panmure Station which is good.
- Bellfield Road, Papakura – 350 dwellings, this is the former Papakura Golf Course
- Bunnythorpe Road, Papakura – 10 dwellings
- Coates Avenue, Orakei – 14 dwellings
- East Coast Road, Pine Hill – 39 apartments
- Enfield Street, Mt Eden – 64 apartments over two buildings however interestingly these seem to fall outside the SHA rules by being 5 storeys.
- Corner Great North Road and Walsall Street, Avondale – 36 dwellings
- Harbourside Drive, Hingaia – 200 to 300 new dwellings
- Mokoia Road, Birkenhead – 31 apartments
- Morrin Street, Ellerslie – 138 units in a retirement village
- Racecourse Parade, Avondale – 15 dwellings, this land is owned by the council under Auckland Council Properties Limited who will be looking for a developer to come up with ideas for the site.
- Redhills (Fred Taylor Drive) – Stage 1, Whenuapai – 3,500 dwellings over 10 years.
- St Lukes Road, Mt Albert – 107 apartments
- Takapuna Strategic SHA – this is a Strategic SHA where the rules apply to a large area in the hope that it will encourage land owners to develop. It is thought it could deliver 350 dwellings.
- Tamaki Regeneration Area – 1,200 to 1,500 dwellings
- West Hoe Heights, Orewa – 400 to 800 dwellings
Of the SHAs above three in particular are very large greenfield developments that are likely to be the same type of sprawl we’ve seen so many times already. For the calculations below I’ve assumed about 20% of the land will be used for road access or public space.
Bellfield Road, Papakura – at almost 27ha the 350 dwellings would mean section sizes in excess of 600m². It’s currently zoned as Future Urban.
Redhills (Fred Taylor Drive) – Stage 1, Whenuapai – this is just the first 200ha of a 600ha development and the 3,500 dwellings equate to sections of approx 450m² each. It’s currently zoned Future Urban
West Hoe Heights, Orewa – even larger at over 37ha, the 400-800 new dwellings would be on sites somewhere between 375m² and 750m². It’s currently zoned single house which means sections of a minimum of 500m².
Lastly as here’s a map showing all of the announced SHAs
Peter’s post this morning (written a few days ago) seems extra timely considering news out yesterday about the latest inquiry the government has set for the Productivity Commission. The inquiry is to look at how local authorities regulate to make land available for housing.
The Government has asked the Productivity Commission to investigate ways to improve the way local authorities regulate to make land available for housing.
In 2012 the Productivity Commission completed an inquiry into housing affordability. This new inquiry will build on the 2012 inquiry, focusing on improving the supply and development capacity of land for housing in New Zealand cities, especially in areas of high population growth.
The Commission has been asked to examine and compare the rules and processes of local government to identify leading practices in planning and taking decisions about making land available for housing, and providing for necessary infrastructure. It has also been asked to look at models adopted by cities overseas that might provide valuable lessons for New Zealand.
“Our inquiry into housing affordability identified constraints on the supply of land as a major driver of New Zealand’s housing affordability problems. This new inquiry will delve deeper into how councils take decisions about making land available, as well as decisions about increasing the capacity for housing in existing urban areas through rules around such things as subdivision and intensive development”, said Commission Chair, Murray Sherwin.
“Capacity for more housing is not the single answer for housing affordability, but it is an essential component of a policy response, especially where demand for housing is outstripping supply.
“It is important that local authorities’ planning and development systems are working well to deliver an adequate supply of housing, while balancing the competing social, environmental and economic consequences of development. This inquiry will seek to identify which authorities are effective in making available enough land to meet demand, and have good processes that could be adopted by other authorities.
“We expect that the range of approaches used internationally and in New Zealand will provide valuable lessons for local authorities making decisions about land for housing”.
The terms of reference are now available below and anyone interested in the topic can subscribe to receive regular updates.
The Commission will begin the inquiry with the publication of an “issues paper” that will outline its proposed approach to this inquiry, the context for the inquiry, and a preliminary list of key questions to be addressed. The issues paper will seek submissions from all interested parties and be accompanied by consultation to gather a wide range of views and experience. The Commission’s final report to the Government is due on 30 September 2015.
The press release reads a bit like they are only going to be focused on opening up greenfield land so I hope the actual inquiry takes a more holistic look and also includes issues like land use restrictions e.g. minimum parking, height and density limits.
While it’s not likely I also think there should be a wider scope to look at the total costs of land use planning rather than just the cost and use of land and infrastructure. This should include the cost of providing other local and central government infrastructure, for example the cost of providing and running schools, emergency services, community facilities and a range of other services that should all be being taken in to account when making decisions about how land is zoned. Also let’s not forget one of the biggest costs imposed as a result of our land use planning and that’s transport costs which tend to be considerably higher in NZ than many other countries due to the dominance of private vehicles which his seeing people spending increasing amounts of their incomes on fuel.
As mentioned the next step above is for the commission to create a issues paper, we’ll be looking very closely at that once it has been produced.
The winner of the apartment design competition was announced today as S3 Architects.
There will be 25 apartments on just a 325m² site – something that in some parts of Auckland is smaller than the minimum lot size for a single house. They also say the intention is to have commercial tenancies on the ground floor but I’m not holding my breath for that part just yet.
Interestingly Mike Lee has called the design “cheap and shoddy” as well as saying
But councillor Mike Lee said such apartments were not big enough for families and its exterior was ugly and not appropriate.
“I can just see this getting mouldy. If we’re going to have highrise, they need to make it durable,” Lee said.
So this will get mouldy but a wooden “heritage station” located in a damp valley in Parnell won’t? It has to be one of the weakest arguments I’ve heard against having intensification.
This is the just completed Merchant Quarter in New Lynn, designed by Jasmax, it offers one bedroom freehold apartments from around 250k, as well as larger ones. I believe the new owners are about to move in.
Merchant Quarter is step along the way of the planned revitalisation of New Lynn metropolitan centre begun by Waitakere City Council and continued by Auckland Council. A process to transform a declining and depressed area into a vibrant and more successful contributor to the city as a whole. The apartment tower itself is a privately funded development, the Council, with AT, NZTA, and the [previous] government through Project Dart have invested in the massive transport changes at New Lynn and now it is up to the private sector to develop the built environment. The Council have also invested in the public realm with both streetscape upgrades and open space. Below is a small urban park with works by Peter Lange referencing the area’s long history of brick making.
The plan aims to enable the addition of 20,000 new residents to the wider area by 2031. And right now, apart from the train and bus station, it is pretty empty; it’s not hard to see how ready New Lynn is for thousands more people and what a powerful economic transformation they will bring.
The new apartment building sits directly above a multi level carpark and is connected to a large medical centre by air bridge. It is also, of course, directly adjacent to the New Lynn Train and Bus Interchange Station:
Above is a view of the apartment building from the Train Station. On the other side is the New Lynn Library and of course all the retail glories of LynnMall. Below shows the Medical Centre. At the ground floor spaces are all activated and open to the street with retail.
So not only are the dwellings affordable here but clearly so are their occupants’ likely transport needs. And importantly, this comes with a rich abundance of movement options. The people who choose to live here can buy or rent car parks in their building, and for any experience or service not within an easy walk, they have a huge range of increasingly higher quality movement options. This type of living choice will score very highly not only for walkability but also by any Housing/Transport affordability metric.
This is a very good and important addition to the mix of dwelling options for Auckland. It will not suit everyone just as detached houses at the end of a long drive does not suit everyone, and nor does it need to. It is great at last to see the market being able to diversify beyond the monotony of ever more distant new greenfields developments.
Just as important are the considerable efforts by all parties here to provide as high quality features as possible for the lower end of the market. In recent decades this has been a segment that no one has properly addressed; we have either built luxurious but expensive apartments or cheap and nasty ones. Both types are clearly visible in the central city. It is really important that the both the Council and the private sector close the door on that regrettable chapter, and find way to insist on and enable higher quality at all market segments.
The next stage is for duplex terrace-house style dwellings directly on top of the corten steel clad carpark building. These seem to me a rather strange conflation of the suburban and the urban, rather curiously suspended in space, but I guess that’s one way to deal with such an enormous carpark? They will however provide yet more dwelling variety and with all of the locational advantages of the adjacent apartments.
Update. It seems the internal layout has not worked that well for some. One buyer (only) has apparently objected to a column placement, claiming they didn’t know about it. Gleefully reported in the Herald. We’re sure to hear more on this, I hope it gets resolved.
Several weeks ago I attended the annual New Zealand Association of Economists conference in Auckland. Geoff Cooper, Auckland Council’s Chief Economist, had organised several sessions on urban issues, and as a result there was a lot of excellent discussion of urban issues and Auckland’s housing market. You can see the full conference programme and some papers here.
At the conference, I presented some new research on housing and transport costs in New Zealand’s main urban areas. My working paper, enticingly entitled Location Affordability in New Zealand Cities: An Intra-Urban and Comparative Perspective, can be read in full here (pdf). Before I discuss the results, I’d like to thank my employer, MRCagney, for giving me the time and the data to write the paper, along with several of my colleagues for help with the analysis, and Geoff Cooper for suggesting the topic and providing helpful feedback along the way.
The aim of the paper was to provide broader and more meaningful estimates of location affordability that take into account all costs faced by households. In my view, widely-reported sources such as Massey University’s Home Affordability Report have too narrow a focus, looking only at house prices. However, a range of research has found that transport costs vary between different locations depending upon a range of factors such as urban form, availability of transport, and accessibility to jobs and services. And transport costs are pretty large for many households!
I used two methods to provide a more comprehensive estimate of location affordability in Auckland, Wellington, and Canterbury. First, I used Census 2013 data to estimate household housing, car ownership, and commute spending at a detailed area level within each of the three regions. This allowed me to estimate variations in affordability between areas within individual regions. Second, I used household budget survey data to get a sense of how New Zealand cities stack up against other New World cities.
My main findings were as follows:
- First, rents (a proxy measure for housing costs) tended to fall with distance from the city centre. However, commute costs tended to rise with distance – meaning that outlying areas were less affordable for residents once all costs are included. This was consistent with previous work on location affordability in New Zealand and the United States.
- Second, international comparisons suggest that Auckland and Wellington have relatively high housing costs and that this may be driving some of the affordability findings. While this finding lines up with previous research that’s focused on house prices alone, it’s important to note that the location affordability estimates suggest that a focus on greenfields growth alone may not save households money.
- Third, while I didn’t identify any specific policy recommendations, I’d recommend that (a) policymakers should consider all location-related costs when attempting to address affordability for households and that (b) further research should focus on removing barriers to increasing the supply of dwellings in relatively accessible areas.
And now for some pictures.
These maps show two measures of location affordability within Auckland. The left-hand map shows estimated housing costs (i.e. rents) as a share of median household incomes at a detailed area level. Broadly speaking, this map shows that expected housing costs fall between 20% and 30% of household income in most of the city, although some areas are relatively less affordable.
The right-hand map, on the other hand, incorporates expected car ownership and commute costs. Overall location affordability is lower throughout the city. Expected housing and transport costs rise to 40-50% in areas of west and south Auckland, as well as the entire Whangaparoa Peninsula. The most affordable areas for their residents tend to be in Auckland’s inner isthmus suburbs.
(Click to enlarge)
I’ve also combined this data into a graph that presents location affordability by distance from Auckland’s city centre. The bottom (blue) line shows housing costs as a share of median household income, weighted across all area units within each 2-kilometre concentric circle radiating outwards from the city centre. It shows that, on average, households spend a similar share of their overall income on housing costs in both close-in and outlying suburbs.
The top (red) line shows that combined housing, car ownership, and commute costs increase as a share of household incomes with increasing distance from the city centre. On average, households that live further out of Auckland spend more on location-related costs, as lower lower rents are offset by added commute costs.
The results for Wellington and Christchurch were broadly similar – although with a few interesting differences related to their urban form and transport choices. However, as this is the Auckland Transport Blog, I’m going to suggest that you read the paper to see those results. It’s long, but it also presents a lot of new data on housing and transport costs in New Zealand.
The Housing Accord between the government and Auckland Council, and the Special Housing Areas being created as part of that accord, have been getting quite a bit of press recently. A third tranche of SHAs was approved in May, and another will come through in a few months. The MBIE have released their second monitoring report on how the Housing Accord is going. There’s some excellent analysis in there, and it’s well worth having a read. I’ll start with a couple of MBIE slides showing where new dwellings and sections are being consented.
The MBIE report also mentions that the Proposed Unitary Plan is adding 10,600 hectares of land to Auckland’s urban limits, or “nearly 20% more than the extent of the current metropolitan area”. Incidentally, that’s not far off the 25% expansion NZIER recommended in a recent report, which Stu wrote about here, making that report even more of a non-event.
The Housing Accord is all about targets, and is aimed at helping Auckland deliver more new homes over the next few years. Slide 4 shows the targets over the first three years of the Accord:
When the Housing Accord was announced with gusto last May, I got the impression that the targets were to be based on building consents only, and “year one” of the Accord looked like being the year to June 2014. Building consents are an excellent (and timely, and readily available) near-term indicator of housing activity, so it made sense to focus on those, and most of the media coverage at the time focused on them. Subdivision consents didn’t get much of a mention. However, looking back now, it seems like I got the wrong impression, and no doubt others did as well: looking at the draft Housing Accord, the targets were actually based on “new subdivision consents in greenfield [i.e. new] areas and building consents issued in brownfield [i.e. already urbanised] areas”.
By the time the accord was actually signed, these targets were softened quite substantially. The government and council agreed to include both sections and building consents across the Auckland region (but not “double counting” the two for the same site, of course). It was also the start of October 2014 when they signed it, so the year 1, 2 and 3 targets actually begin from then instead.
Using subdivision consents as well as building consents makes a pretty big difference to the way the targets work. In fact, the MBIE’s first monitoring report shows that in the year to September 2013 – before the accord was even signed – there were 9,975 new dwellings consented and sections created. The accord is about trying to increase the number of homes that get built, and yet the “Year 0″ baseline was higher than the “Year 1″ target! This baseline figure doesn’t appear in the second monitoring report, but I’d suggest to the MBIE that it’d be useful to add it back in – it’s good to have a figure to compare to, even if it makes the Year 1 progress look a little weak.
The latest report from MBIE indicates that, at the current rate, the “Year 1 target of 9,000 dwellings and sections is likely to be exceeded by almost 1,300”, i.e. the city will manage to get to 10,300 consents and sections. Again, this is a pretty minor increase on last year – less than 3%, for all the hoopla surrounding this issue! So, there isn’t a lot of aspiration in the Year 1 target, but no doubt it will give the government a chance to pat itself on the back for achieving these targets in time for the election.
Of course, it’s possible that Auckland will improve a bit on the current rate, with a recovering construction sector, households being more confident, Special Housing Areas possibly starting to kick in, and so on. But we’re hardly going to blow the target, or even last year’s figures, out of the water. And that means we’re still quite a way off being able to provide new homes fast enough for Auckland’s growth.
On Monday night Campbell Live dedicated an entire show to urban issues.
The first segment looked at density in Seattle showing that done well it can be popular and not a blight on the landscape.
Next up was an interview with Janette Sadik-Khan
And lastly a few vox-pops from what appears to be on Ponsonby Rd.
I do find it funny when people slam the central city but then say they haven’t been there for five years. Back then Wynyard Quarter didn’t exist, the shared spaces didn’t exist and places like Britomart weren’t as developed and neat as they are today. It’s easy to forget that they are only really new additions to our urban landscape.
All up it was a great show and I hope more mainstream media start looking at these issues.