The Auckland Council and the government have locked horns over the council rejecting three greenfield Special Housing Area (SHA) developments in the North West of Auckland. At the heart of the matter is who should pay for the infrastructure needed to support the development. There is already a lot of pressure on existing infrastructure as well as council budgets and the council have (in my view) rightly chosen to focus on fixing or at least improving the existing transport network first. Increasing rates by the amount likely to be needed is almost certainly not going to impress existing ratepayers and nor is cutting much needed projects in other parts of the region.
Auckland deputy mayor Penny Hulse is defending the council’s decision to reject three special housing areas proposed for the city’s rural north-west under the Auckland Housing Accord.
The council maintains that before there is any further growth in the rural area the Government needs to commit to much-needed transport infrastructure.
The government-driven accord with the council is half-way through its three year life. It has the goal of accelerating home building and creating new residential sections.
The rejection of the three special housing areas is the first manifestation of growing tension between the accord partners over the burden on ratepayers of providing services to large rural housing developments.
Ms Hulse chairs the council’s development committee and told Morning Report that with the Government cool on council ideas such as motorway charges and a transport levy, it needs to help build projects such as a dedicated busway on the Northwestern motorway.
“It’s quite appropriate for us on council’s behalf to stand our corner and our ground for the people of Auckland,” she said. The refusal did not mean future growth would never be allowed.
The council have instead said they will focus on SHA’s in existing urban areas “which already have good levels of infrastructure service”.
The proposed “Future Urban” area around Whenuapai and Kumeu is is shown in yellow
In response Building and Housing Minister Nick Smith is threatening to override the council
“The Government also the power to create special housing areas without the approval of the Auckland Council, if they choose to overplay their cards and demands for money,” he said.
“The legislation makes plain that the Government’s strong preference is to work in co-operation with the Auckland Council, and to work on these issues together and those arrangements are still robust.
“If the Auckland Council overplays its card the legislation does make provision for the Government to approve SHAs without the approval of the Council.”
As reader Liam Winter pointed out on twitter, the legislation states that there needs to be confirmation that sufficient and appropriate infrastructure will be provided to the development.
Nick Smith also said
Dr Smith said the council could recoup infrastructure costs from the developers and once the houses were built $1 million of income is created for every 300 new ratepayers.
He said if the Government was to create special housing areas on it own, under the legislation it too could levy developers for the cost of infrastructure.
“Now I’ve got developers in Auckland who are willing to meet the cost of the infrastructure, who are wanting to get on and build their homes who feel frustrated with the Auckland Council that they won’t get on and deal with them, and that is why we’re going to continue to put the pressure on the Auckland Council.”
Auckland is already getting more than a third of the Government’s capital expenditure for transport infrastructure, but Dr Smith said the Government would consider spending more.
In some ways the government taking on the infrastructure burden and levying developers could be a good way for them to understand the pressures councils (and not just Auckland) are facing. Of course balancing that out is the thought that they would likely push for the cheapest and most auto dependant infrastructure they could.
As for developers willing to meet the costs – I wonder if that’s the full costs or just the ones directly inside their development. It’s an important distinction as developers have always been required to fund infrastructure inside their developments however it is up to the council to build the infrastructure leading to the development. To make matters worse development contributions only cover a small portion of the actual infrastructure costs. As an example the massive Mill Rd project in South Auckland is expected to cost up to $800 million yet there are only planned to be about 24,000 new dwellings in the area. The council’s draft development contributions policy states that in the South they can only collect about $3,500 for transport infrastructure. That means all up to build Mill Rd to support that growth existing ratepayers and taxpayers could end up subsidising the developments to the tune of around $30,000 per dwelling.
It’s that massive subsidy from ratepayers/taxpayers as to why the council is right oppose the government on this issue
Prior to this it also appeared the council were in a no-win situation. The government has long made it clear by their words and actions that they don’t like Len or the council. Further no matter what the council do the government have continued to shift the blame for housing to the council. By fighting back I guess the council see there is a more of a chance of getting a better outcome.
It seems to me that no one (other than the developers) will really benefit from this stouch. As such below are a couple of quick thought experiments as to the outcome.
- If the government do help to fund more infrastructure do they then open themselves up to more calls for assistance not just from Auckland but other regions too. In addition they have recently been focusing on trying to shore up their regional support following the Northland by-election. Giving Auckland more money won’t be too popular with the regions.
- If the council backs down other projects will need to be cut or rates increased to pay for the infrastructure. That’s not going to be popular with ratepayers.
- If the government overrides the council and also forces the council to pay for the infrastructure then not only would ratepayers probably be unhappy but it could affect the next local government election.
After the initial bluster from both sides it’s now likely we won’t hear too much more publicly with both sides likely to take their bickering behind closed doors. I just hope the council continue to have the courage to stand up to the government for what is right for Auckland.
The new suburbia; detached buildings so close you wonder why they bother and every mood from drab to dreary. At least you can no longer hear children play… now they’ve been banned.
For those interested in the divergence of development patterns in New Zealand cities it is hard not to be struck by this page in the weekend’s real estate section. Auckland is still growing out, but it is also growing up. Christchurch not so much, just out. Time will tell which model better suits the demands of this century. This also clearly illustrates how Auckland is an exception in NZ in more ways than just its size:
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
Happy New Year to all our readers. What a great year it’s been for Pohutukawa. Here’s a pic from the Auckland countryside, the type of place that we shouldn’t be ruining with mindless unaffordable sprawl, for a better countryside; grow a better city:
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
We have had concerns about a number of the Special Housing Areas that have been announced. A month ago I looked in depth into the locations and types of SHA’s. I found nearly 10,000 dwellings have been announced outside the urban limits, which will put huge pressure on infrastructure and council budgets. This is in addition to another 10,000 greenfield dwellings inside the existing limits. The total lack of public transport in many of these areas is probably the biggest worry, and projects such as the North-Western busway will need to be brought forward soon to avoid some areas becoming very car dependent. However these areas will also need substantial infrastructure investment in trunk water and sewer mains, as well as social infrastructure.
The individual development that concerned us most was at Helensville, which was part of Tranche 3 and announced in May. While this was only 60 dwellings, it seemed totally opposed to Auckland Council strategy. In the Auckland Plan it was not identified as a satellite town, but a rural/coastal town and therefore only limited development was expected.
Helensville also lacks jobs, with a 30km commute even to the closest major shopping centre at Westgate. The 2013 Census says there were 1077 jobs in Helensville, with a resident population of 2643. It is hard to foresee the number of jobs rising by over 100 to meet the needs of the new residents. To add to this public transport is rather hopeless with only 10 buses a day on weekdays, which take 1.5 hours to get to the city. While people may not wish to travel to the CBD, would still take over an 1 hour to get the nearest job centers in Henderson. On Saturdays it takes 2 hours to the city, and on Sundays their is no service at all!
Therefore we thought some questions needed to be asked about why the SHA was approved, so we decided to send a LGOIMA request asking for information presented on the SHA, and minutes of the meetings where it was discussed.
The information we received was both fascinating and concerning. First there were a number of slides about the development that we presented to council members. SHA’s were first considered by a workshop on March 5. Then they went to the Auckland Development Committee (whole of council) on April 2 and April 14.
So we have a large number of issues outlined. The area lacked potable water and wastewater connections (note WSL is Watercare), flooding, and their would be little demand.
It is now wonder that when the development was presented to the council workshop on April 14, Helensville was not recommended to be an SHA.
The minutes of the April 14 meeting show that the councillors agreed with the recommendation and the SHA was included on the list to be declined. The minutes do show that local councillor Penny Webster was noted as a dissenting voice.
After the initial council vote, the SHA’s then go to the Governing Body for final signoff, which was on May 1. The initial motion moved was that same as that passed by the Development Committee several weeks earlier. However an amendment was put up by Cr Penny Webster to reintroduce a portion of the Helensville SHA.
The motion passed 15 votes to 6. The division is quite interesting, with the mayor and an interesting mix of councillors voting against. The minutes of the meeting do not show any evidence that any extra material was presented to the meeting that suggested the Housing Office has changed their mind. Note the development was smaller, going down from 300 houses to 60. However it will still need council services extending and cause 100’s of extra trips along SH 16.
This is rather concerning as it looks like the Helensville SHA was approved despite official advice that is should be denied. Unfortunately we do not have the minutes of the earlier meetings to see if any other SHA’s were agreed to against official advice, however these minutes show that it just requires a simple majority vote.
The potential for more of this can be seen in the same May Governing Body minutes where Dick Quax tried to add in a development along Point View Drive, which is a rural area adjacent to Botany. This had also been denied at earlier stages of the process.
Interestingly the minutes include the full list of potential Trance 3 developments that were rejected by the Housing Project Office and turned down by the committees. This does show that there is some rigour in the process, however would be interested to know how many were turned down because of infrastructure and planning issues, and how many encountered local board or councillor NIMBY issues.
The fourth Tranche of SHA’s will be considered in the private session of the Auckland Development Committee on Thursday. With some light now shed on the process, I’m hoping councillors will be extra careful when passing further housing areas outside the urban area. Would be great to see no more SHA’s outside the urban limits, given the investment already required by council to deal with the 10,000 already passed. While the session is private, you can still email your local councillor general thoughts about SHA’s beforehand, their contact details are on the council website here.
*Update: Interestingly the part owners of the Helensville SHA (the Kidds, Directors and Shareholders of Hounslow Holdings) have long been lobbying for more growth in Helensville. See these 2013 articles “Fighting to Grow (Rodney Times)” and “Plan lacks up vs out costings (NZ Herald)”. However the articles also show the wastewater treatment plans is a serious issue in terms of growth. The herald article includes this quote:
The main handicap has been the capacity of the existing water and wastewater system. Watercare is spending $5 million upgrading the wastewater treatment plant but has no plans to upgrade it for growth until 2020.
This is further evidence that the SHA should have not been allowed to go ahead.
The company I work for, RCG Ltd, has just released some new research which I’ve been working on over the last few months. It looks at how much Auckland households spend in petrol stations, living in different parts of the city. RCG has released it in a free publication called Constructive Thinking, available here (the PDF is available on that page – subscribing is optional).
I initially presented this research at the NERI Energy Conference in March, but I’d probably suggest reading that second, as it’s a bit more in-depth and may rely on me talking along with the slides to make sense!
I’ve used a data source which I think is pretty neat – EFTPOS spending data, covering all spending in petrol stations by the customers of one of the major banks. It’s an excellent sample of total household driving behaviour, since at least 90% of petrol station sales are made via EFTPOS, and petrol makes up the lion’s share of what households buy at petrol stations.
This research is in a similar vein to that done by Peter Nunns and Mattingly and Morrissey. The major difference is that those studies concentrated on commuting costs – using census data on where people live and where they work. They also consider the entire range of transport costs related to that driving (e.g. car maintenance and depreciation, costs of time), which I haven’t done – I’ve stuck with just the amount spent in petrol stations.
First up, we’ve put together an interactive map, with a full-screen version available from the linked page. This divides Auckland suburbs into five “quintiles”, from low to high spending. As per the image below, the low-spending suburbs have average spending of $2,000 to $3,800 a year, and the high-spending ones are at $5,300 or more.
We used several screenshots from the map in the publication, but I think the one below is especially telling – this shows just Auckland’s growth areas, and how they measure up in terms of spending. Households in Flat Bush, Silverdale and other remote growth nodes are spending plenty on petrol, and of course that’s also got implications for CO2 emissions and Auckland traffic.
Thinking about the whole of Auckland, I was quite surprised at how big the variations were between different suburbs. City fringe suburbs have some pretty high spending, and rural areas are higher again (although not so much for the local towns, i.e. Pukekohe, Warkworth, and Wellsford).
The wealthiest parts of Auckland tend to spend less than $4,000 a year in petrol stations – often much less – compared with the region average of $4,500. The poorest parts of the city, generally in south Auckland, had much higher spending. A back-of-the-envelope analysis would suggest that this is partly due to higher smoking rates (cigarettes being a common in-store purchase), but that hasn’t come through in my regressions, so I’m unsure how big an influence this is. Anyway, this is one of the few topics where you can say that Remuera is lower decile than Mangere…
Another interesting image fits a trend line to average spending in a suburb, based on how far it is from the CBD. There’s a logarithmic relationship, and I note that it’s not necessarily that the CBD is an important factor for households everywhere, but more that distance from the CBD is a good “proxy” indicator of how far households have to drive to access services, employment, shops and so on.
I’ve also done some regression analysis with the data, comparing it against a range of census variables, but I’ll leave that for another post.
Thanks to RCG for supporting this research, NERI for inviting me to present it at the Energy Conference, and Datamine for the underlying spending data.
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.