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.
This blog has often written about Auckland’s 1950s-era motorway development plan, which transformed the city in fundamental ways. New Zealand painter Robert Ellis was one of the first to grasp the significance and character of that transformation. His Motorway/City series, painted in the 1960s and 1970s, shows roads invading and dividing urban space. (As they proceeded to do in real life.)
The Auckland City Gallery is about to host an exhibition of Ellis’s paintings that will run from 9 August 2014 to 15 March 2015. From the press release:
Opening on Saturday 9 August at Auckland Art Gallery Toi o Tāmaki, Robert Ellis: Turangawaewae | A Place to Stand is the first solo exhibition in a public museum by senior Auckland artist, Robert Ellis in his ‘hometown’. Including many of his most important paintings, the exhibition will present Turangawaewae Maehe 1983, painted in 1983, a gift from the Friends of the Auckland Art Gallery to mark their 60th anniversary this year.
‘Together with Auckland artists Colin McCahon, Milan Mrkusich, Pat Hanly and Gretchen Albrecht, Ellis is nationally regarded for producing ambitious paintings on a large scale,’ says Auckland Art Gallery Senior Curator New Zealand and Pacific Art, Ron Brownson. ‘As a major figure, Ellis’ art addresses many cultural issues. His subjects range over tensions between transport and urbanism, contrast ecology with spirituality and look at the on-going nature of Māori-Pākehā relations.’
Here’s one of the more well-known works from Ellis’s Motorway/City series, which can usually be seen in the City Gallery:
Now, I’m an economist rather than an art historian, but Ellis’s vision of the city seemed to be something new in New Zealand art. New Zealand artists had not tended to focus on cities – think of all the attention Colin McCahon lavished on New Zealand landscapes – and when they did, it was to present vague, idealised scenes. Ellis was different. He showed the city in the process of expanding and mutating, and in the process creating a different New Zealand.
Here’s number 15 from the Motorway/City series. It contrasts New Zealand’s stereotypically bucolic rural space (below) with the encroaching city (above). The latter is dynamic, disordered, vaguely sinister. (What was it that Allan Ginsberg wrote about “Moloch whose love is endless oil and stone”…) And it is ceaselessly growing into the countryside.
In other paintings, Ellis depicts the city not as the invader of a rural landscape but as an invaded space. Motorway/City number 22, for example, appears to show an existing urban fabric, complete with a more or less rectilinear street grid, that has been overwritten by the smooth curves of the motorway. The pre-existing city has rendered incomprehensible in the process – notice how the lines of the motorway draw in your attention instead.
I’m often struck by how quickly artists and writers grasp emerging truths, especially when compared with technical experts of various stripes. Robert Ellis’s art was an especially prescient view of New Zealand cities – painted at a time when New Zealand had barely begun to think of itself as an urban country and when the promise of the motorway was still novel enough to be seductive. I highly recommend going to see the upcoming exhibition.
A few days ago I looked in depth into the locations of the Special Housing Areas that have been released so far, allowing for over 33,000 new houses. The locations of these are not spread evenly around the city, or evenly amongst the greenfield areas. Therefore this should cause the council and Auckland Transport to rethink some of their priorities for transport investment. Firstly this should give further impetus to the need for some important Congestion Free network projects, which will benefit existing areas and new developing areas.
There are nearly 9,000 dwellings to be built to the North-West of the city, in areas like Kumeu. This area is currently hopelessly served by public transport. For example it takes nearly 1.5 hours to get the bus into town at peak times, and on weekends it is not much better as bus operates a hopelessly windy route, diverting through Henderson on the way from Westgate to the City! The extra development planned adds extra emphasis to the case for the North-Western Busway, which would provide a very quick link from the North-West into the city. While some would call for a diesel rail shuttle to be provided, this has been investigated by Auckland Transport but found to be poor value for money. The busway would result in a much higher frequency and much faster services than the rail shuttle, which would take over an hour. The proposed frequent bus network only shows 15 minute frequency to Westgate, however the scale of development should mean the frequent service should soon be extended to Kumeu and Huapai. The developments in this area are likely to be low density, so sites for several park and ride stations need to be investigated. These types fringe areas are the right type of areas to expand park and ride, not valuable urban sites. The busway would not just benefit new developments, but also existing suburbs along the North-Western like Massey and Te Atatu.
This 9000 houses also covers areas like Hobsonville and Whenuapai. Again the only route between the North-West and the North-Shore is an infrequent and wandering service that takes well over an hour for a 20 minute car journey. The new network offers some improvement, with a slightly more direct service, however still designed for local traffic rather than trips between West Auckland and the North Shore. This is where the Upper Harbour busway we proposed in our Congestion Free Network comes in. This will also be useful for people living in the Kumeu and Westgate areas as not all these people will be working or want to travel to the CBD, so quality links to centres in the North Shore are important too. Again the form of development is likely to mean that several busway stations with park and ride will also be required at the major motorway interchanges.
Through the southern corridor over 4800 dwellings will be built. 2200 of these are in the Addison area, which hugely strengthens the case for the Addison station that has long been proposed to serve that growing area. Another 1800 of these are in the Franklin area, which further builds the case to ensure the electrification extension to Pukekohe proceeds soon. 1000 of these are at a totally new greenfield site as Wesley, north of Paerata. As this is 5km north of Pukekohe a new station at Paerata/Wesley should proceed here with some urgency.
The 5000 dwellings to be built in the Flat Bush area will further add to congestion is the already car dependent south-eastern suburbs. While Flat Bush is in an awkward location in relation to potential rapid transit routes, the Te Irirangi Drive busway would help connect residents to the closest centre of Manukau with its brand new station and tertiary institute, and also to the mall at Botany.
The need to invest in transport projects which benefit these areas, should also show the need to rethink lower value projects across the city. First of all there are less than 900 dwellings north of the existing urban area at Albany, and these are at Silverdale. Note that means there are none on Whangaparoa Peninsular, Warkworth or Wellsford. First on the deferral list should be Penlink, which has a very high cost, high environmental impacts and low economic and transport benefits. It is difficult to see why this project should proceed when there is little growth in the area. A few extra ferries to the city seem like a much better idea to improve transport for people of this area. Deferring Penlink would free up $200 million to spend on much more high value projects. The lack of new development north of Orewa is yet further ammunition against the need for the Puhoi – Warkworth Highway to proceed. The $760 million required for the project should be reallocated by the government to serve areas of Auckland that are actually growing, rather than further delaying or canceling important infrastructure like busways. Across the city there are various other low value roading projects than should be deferred or downsized to free up money for more transformational public transport investment.
We now have had 3 tranches of the government Special Housing Areas announced over the past year. The first tranche in October 2013, second in December 2013 and the third in May 2014. In brief these are defined areas that allow developments to be fast tracked through special consenting procedures, and the zones and rules from the Proposed Unitary Plan are applied. So far there are 63 individual SHA’s, collectively allowing 33,486 houses. The latest monitoring report shows that 18 of these developments have received a Resource Consent, 4 more applying for a Resource Consent, and another 36 at various pre-application stages.
However the location and typology of these houses really matters for a variety of reasons. While fringe housing may appear cheaper, once transport costs are taken into account this is not always the case. Housing in existing areas also utilise existing infrastructure and public transport, while this must be added from scratch in fringe areas. Then of course there is market demand and changing trends, over the last few years prices have appreciated most rapidly in the inner suburbs, though this is now starting to spill out all over the isthmus.
Therefore I have looked at the SHA’s using several different measures. Firstly a classification that looks at the type of development land. ‘Brownfield’ means inside the existing built up area. “Greenfield - within the MUL” are developments that are within the Auckland Regional Council’s urban limits. They are new developments from bare land, however will adjoin the existing urban area. Importantly these areas have undergone substantial planning, such as for infrastructure, as there has been an expectation that these sites will be developed within the near future. “Greenfield – outside the MUL” is land that is within the Rural Urban boundary in the Unitary Plan, however outside the MUL. The only planning that has gone on in these areas would be broad brush work during drafting of the Unitary Plan.
|Greenfield- within MUL
|Greenfield – outside MUL
The Auckland Plan set a goal of up to 70% of development to be infill, and up to 40% greenfield. However crucially the plan set the current MUL as the boundary from which to measure from, so these greenfield developments are counted as infill! Therefore this is spot on with the Auckland Plan target, though not really the long term intent of where growth should be.
Within the Brownfield developments, these can be further classified into Strategic, Housing NZ led, and private or community led. Strategic areas were identified only in the 3rd tranche. These were wider scale areas that did not have any specific developer interest, however were identified by the council as being well suited for future development and having good existing infrastructure. A large amount of the SHA’s identified in the 2nd and 3rd tranches were led by Housing NZ, which were redevelopments of areas of state housing into higher intensity. However this only leave 3037 developments led by the private sector inside the existing urban area, which is only 9% of the total.
It is useful to look at the general geographic area of each of the SHA’s, so to do this I have looked at which former council area they would have fallen in.
This shows up some interesting aspects about the locations of the SHA’s. Very few are in North Shore City, while over a quarter of them are in Waitakere. Also only 16% are in the former Auckland City area which seems to be have the highest housing demand. This area also has the best access to jobs and tertiary education so increasing housing here needs to be a high priority.
Within the Greenfield developments I have looked further into the locations, and classified into general geographic areas.
|North-West (ie Kumeu, Westgate, Hobsonville)
|North (north of Albany)
|Southern Corridor (Takanini, Papakura, Pukekohe)
Once again the large number of developments in the North-West really stands out, while there is only a small number to the north of the city. While this does not cover all the development underway, is does give a good idea where major development will occur over the next 5 years and more.
Another tranche of SHA’s are currently under consideration by the Council’s Housing Project Office, with the timeline as follows.
While their is no opportunity for direct public input, both local board members and councillors have substantial say over which areas get approved. Local board members are able to scrutinize local projects, and all SHA’s have to pass votes in the Auckland Development Committee and the Governing Body.
Looking at the numbers above there seem to be enough sections approved outside the MUL for the time being, but not nearly enough in areas of high demand. Therefore it would be great to see the 4th tranche being focussed on existing urban areas, with nothing outside the MUL.
The locations of these developments should help shape where infrastructure and transport investment is focussed coming into the next Long Term Plan. Areas of little growth should see projects move down the priority list, and sometimes disappear from the 10 year plan altogether. The speed of development in land outside the MUL is likely to cause the council and other infrastructure providers some issues. The effects of these SHA’s will be the subject of my next post.
The New Zealand Initiative last night released a think piece on the trade-offs of urban form – entitled “Up or Out“. Given the extensive recent debates in Auckland over the Auckland Plan and the Unitary Plan, plus the ongoing issue of housing affordability, it’s helpful to have further analysis and research in this area. Unfortunately, it seems as though some ideological assumptions behind what the NZ Initiative has come up with mask many of their conclusions – somewhat ironic given that one of the key thrusts of the piece is (valid argument) that we need to step back from assumptions and look at the data.
The general approach of the paper is reasonably logical – it analyses some of the benefits of a compact city approach, questions whether they hold true and then compares those benefits to some of the costs. Firstly, looking at agglomeration:
Part of this debate has centred on the agglomeration benefits that come from urban proximity. This is an important discussion point because agglomeration is often cited by planners as the clincher in their argument for compact cities. We do not reject the economic advantages to situating businesses and consumers closer to one other. After all, people and firms in urban areas tend to be more productive than their counterparts in less well-populated areas.
However, these advantages are only detectable as agglomeration benefits when the positives of proximity outweigh the costs of density. This is a balance that any city, regardless of urban form, has to strike if it is to survive. And yet this report shows that the restrictive planning regulations required to deliver the utopian vision of a compact city often tips the balance towards the cost side of the urban ledger.
You can tell from the use of the phrase “utopian vision of a compact city” that they have started out from an ideological position that density is bad.
It does make some sense that agglomeration benefits would have a limit. Yet if we look internationally there are much much larger cities and much much larger urban cores than Auckland – and we find that often it’s the larger cities and larger urban cores which are growing the fastest. The paper even references the significant agglomeration benefits from the CRL’s business case before going on to counter-intuitively suggest that agglomeration benefits in central Auckland appear to be on the wane.
However, the main argument is that the two main negatives of congestion and higher land prices need to be balanced against agglomeration to work work out whether building “up” or “out” is the right approach. Let’s work through the arguments made by the paper on each individually:
Congestion is one of these costs. Traffic congestion data from the United States shows that the most congested metropolitan areas are often the ones that have chosen to pursue compact development. Additionally, quantitative research into transit investments over a 26- year period using data from 74 US metros shows public transport had no long-term impact on road congestion. This stands at odds with the perception that high transit penetration is the solution, not an aggravator of gridlock.
Digging a bit deeper into how they arrived at this conclusion, it seems as though the same methodological mistakes around the measurement of congestion are being made as occurs with the Tom Tom surveys – focusing solely on congestion severity and ignoring issues like congestion exposure. The key point here is that low density car dependent cities may have less intensity/severity of congestion (because they’re so spread out) but whatever congestion there is has to be experienced by everyone because there are no alternatives. In a place like New York, the roads may be congested but to the vast bulk of people this doesn’t matter because they’re walking, cycling or using the subway.
The other gigantic flaw in the paper placing so much emphasis on the issue of congestion is the inconvenient analysis undertaken a couple of years ago which shows the most congested US cities are actually the most economically productive. While it’s more likely economic success causes congestion than the opposite, the congestion doesn’t seem to be holding these places back.
The key takeaway from this is that while congestion is annoying and perhaps theoretically should hold back economic performance, if we look at different cities across the USA it doesn’t seem to be doing this. It’s also interesting to compare how we view congestion on the transport network to other areas of society. For example people will choose to go to a restaurant that is busy, even if it involves waiting rather than go to an empty one next door. The crowded and congested restaurant is successful while the empty one is not. If we expand that to a city scale, many people would prefer being in a busy and interesting place with lots of other people than an empty city.
Moving on to land prices, this is seen as the other main negative resulting from a compact city approach that should be balanced against the agglomeration benefits:
Another cost is land. From the perspective of local government in New Zealand, compact cities are desirable because they limit the amount of roading, water and social infrastructure that will need to be provided. Yet by limiting the supply of land, city officials are inadvertently putting a scarcity value on housing in this country, which ranks among some of the least affordable in the world. Equally, the onerous regulations and zoning restrictions required to steer development along the compact model add to the scarcity value of housing. This scarcity value is not limited to housing, and businesses facing higher property costs will pass these on to customers in the form of higher prices, and where they cannot, firms will look to relocate to cheaper areas – a process that is already happening in Hamilton, a beneficiary of fleeing Auckland firms.
We’ve covered off this debate many times before in the past few years as the Auckland Plan and then the Unitary Plan were hashed through in great detail. While limiting the supply of land will theoretically drive up its price, when it comes to housing affordability the issue is the cost of housing more than the cost of land. Furthermore, it’s the cost of housing in particular areas that’s the issue – there’s plenty of affordable housing in Papakura, Clendon, Pukekohe, Waiuku and other far flung parts of Auckland. The huge price escalation is happening in the inner areas – and I can’t quite see how it’s possible to create more land in Grey Lynn or Mt Eden (although of course it’s possible to get more housing out of that land through intensification).
Going back to the paragraph quoted above, what’s particularly odd is the sentence “…the onerous regulations and zoning restrictions required to steer development along the compact model”. Given that enabling intensification is about the removal of zoning restrictions so people have more flexibility to do as they choose with their land, I wonder whether the NZ Initiative has completely misunderstood what planning does and does not do. One is not forced to build terraced houses in the Mixed Housing Urban zone – contrary to popular belief!
The other crazy thing that the paper completely ignores is the gigantic amount of sprawl that has been enabled in Auckland through the Auckland Plan and the Unitary Plan. In one big bang the restrictions on land supply in Auckland have been pushed outwards – even though the result of this is likely to be extremely expensive and not actually what people want anymore. Have the authors been completely ignorant of the Unitary Plan by accident or deliberately?
The paper then briefly touches on health issues – it seems to be cherry picking data and making assumptions based on how cities were in the 19th century to come up with conclusions that seem strangely at odds with what books like “Happy City” suggest. I’ll leave those details to a future post though.
Overall, the paper thinks that it’s come to some grand conclusions:
We have shown through academic research and the historic record that compact cities are not a panacea for the social, financial and infrastructural problems gripping modern cities today. There is no ‘one size fits all’ solution to urban costs, and the sooner we abandon ideology, the sooner we can start developing nuanced solutions to issues like congestion and skyrocketing property prices.
The aim of this report was not to generate specific policy recommendations but to unpack the highly technical argument surrounding urban form changes for the average citizen to participate in the discussion. Still, it is evident at a high level that overly centralised planning and decision making structures are one of the major contributing factors driving urban costs in New Zealand and further afield.
The conclusions are not completely wrong – in highlighting that cities are complex and any ‘one size fits all’ approach is likely to fail. However, in both key areas of critique (congestion and land prices) the paper has made some fundamental oversights – like ignoring the complexities of congestion and its seemingly minimal impact on economic performance, like ignoring the huge amount of additional land supply provided by the Unitary Plan and like ignoring that a key part of the compact city approach is liberalising planning rules within existing urban areas.
Perhaps unsurprisingly, but certainly disappointingly, the paper promises much but inevitably fails to deliver beyond repeating a simplistic ideological perspective on forms of urban growth – falling into the very trap it so merrily accuses others of doing.
An article on Planetizen a few months back highlights an issue often missed in the debates over roads versus public transport or sprawl versus intensification – the fact that for the last century most government spending and policy has supported car use and lower density development. Yet this is seemingly often ignored by those moaning about how planners are supposedly ‘forcing’ people into dense living environments while transport planners are supposedly ‘forcing’ people onto public transport.
Michael Lewyn, the post’s author, asks an interesting hypothetical question to set up his argument that really public investment and policy (essentially public sector intervention) has for an incredibly long time been tilted towards urban form and transport outcomes epitomised by car dependent urban sprawl:
After reading yet more blather about the “war on cars” or “density-pushing planners” I recently had a thought: what if government really did favor transit and compact development as aggressively as they had favored sprawl in the 20th century? How different would planning and transportation rules be?…
For example, in the first half of the 20th century, government at all levels spent public money on roads for automobiles, while giving limited or no support to streetcars (which at first were private). As transit providers began to lose money, government took them over, and the federal government started to support public transit in the 1960s. Today, the federal government spends about four times as much on highways as on public transit. As a result of these policies, many cities have weak public transit systems, while many people and jobs have moved to suburbs served by highways.
This cartoon from Andy Singer springs to mind (he has a heap of other great cartoons on many of the issues we talk about on the blog)
Some examples are then outlined to give us a bit of an idea about how extremely pro public transport and urban intensification policies would need to go in order to truly counter-balance what has existed for around a century in the USA (and in New Zealand). For transport funding:
So if government completely reversed course in the 21st century, it would reverse funding ratios: that is, spend half a century spending several times as much on public transit as on highways, and then spent another half century completely defunding highways (much as it ignored transit in the early and mid-20th century).
For how mortgages for greenfield development were subsidised:
In the 1950s, government heavily subsidized suburbia, through Federal Housing Administration (FHA) lending criteria that favored suburbs. For example, FHA refused to subsidize mortgages in racially diverse urban neighborhoods, and favored new single-family homes (which tended to be in suburbs) over renovating existing homes- a policy that encouraged middle-class homeowners to move to suburbs. So to completely reverse course, the FHA would have to spend a couple of decades refusing to insure mortgages in any neighborhood built after the New Deal, while subsidizing mortgages in older neighborhoods.
For density controls:
Since the 1920s, most American zoning codes have mandated that huge swaths of land be limited to low-density residential use, ensuring that many Americans do not live within walking distance of public transit. To truly reverse this policy, government would have to spend the 21st century mandating that new development be at densities sufficient to support transit, and would require a mix of residential and commercial uses to the extent possible.
And how about parking?
Since the 1950s, most zoning codes have also required that commercial landowners and multifamily dwellings provide visitors with parking lots and garages, thus effectively subsidizing driving by making parking more abundant. And because zoning codes also required buildings to be set back from the street, these parking lots were usually in front of buildings, thus ensuring that pedestrians must waste time walking through ugly parking lots in order to reach their destinations. To reverse this policy over the next 60 years, government would have to establish maximum parking requirements (as a few cities have in fact done) and require buildings to be in front of sidewalks so pedestrians could reach them more easily.
Of course this is just a series of hypothetical questions, which highlight that many of the changes to land-use and transport planning that we promote on this blog: things like removing parking minimums, removing/lessening controls that limit development density and promoting a better balance between public transport and road spending are really pretty mild and attempt to shift planning policy and transport spending back much more towards a ‘neutral’ situation. If we really were promoting bias towards intensification instead of sprawl, public transport instead of road spending, that was to the same extent (but opposite direction of course) as what has happened in the past century – we’d have to be WAY more extreme.
Last week’s post about how considering transport costs is an important consideration when really understanding housing affordability has led to a fairly epic comments thread. This is perhaps because many sprawl advocates are so used to hammering the “sprawl is the only way to improve housing affordability” line that they feel quite threatened by a more comprehensive analysis of the situation.
To summarise many of the points made by blog authors within the comments thread:
- The research validly highlights that transport costs rise as you get further from the centre of Auckland and this counter-balances – to some extent – the higher housing prices experienced in some inner areas.
- We think it’s highly hypocritical for people to bang on about the need to remove urban limits while maintaining strong support for the majority of planning rules that limit development potential in already urbanised areas. Councillors such as Dick Quax and Cameron Brewer are particularly bad when it comes to this hypocrisy – surely height limits, building setback requirements, parking minimums, density controls and the like are just as much “social engineering” as urban limits.
- In places where sprawl has resulted in affordable housing (Texan cities are often given as the example) there has been huge (billions upon billions) spending on highways and other infrastructure to support that growth. Hardly the ‘market outcome’ that the proponents suggest.
We have supported urban limits in documents such as the Auckland Plan and the Unitary Plan. In fact we support stronger control over the release of greenfield land in the Unitary Plan compared to what’s currently proposed. The reasons for this are obviously multi-faceted but basically come down to the significant public cost of providing new areas with sufficient transport, water, wastewater, stormwater, schools, parks, medical facilities etc. With so much public investment required to make new development areas liveable, quality communities it’s critical for there to be a carefully staged plan of what areas will be developed when. Not having an urban limit makes this process extremely difficult and potentially undermines the efficiency of public investment because you often see “leap frog” development or a mismatch between where development happens and where public investment has occurred.
Putting that never-ending debate aside though and returning to the issue of how transport costs change our understanding of housing affordability, there are some additional maps in both the journal article referenced in our original post and in the thesis the article is based upon, which provide interesting further information. Please note that we have been asked by the thesis author Kerry Mattingly to not publish the thesis online.
The first interesting map looks at the proportion of household income that is spent on rent across different parts of Auckland. The author provides a number of reasons for using rent rather than mortgage repayments, which appear sound and supported by previous academic studies.
Perhaps what’s most interesting about this map is the lack of a clear pattern, with proportions being high in some areas (North Shore, southeast and parts of the isthmus) but low in other ‘patches’ – generally areas that appear to correspond to concentrations of Housing New Zealand property.
One map that does show a clear pattern is the mean annual commuter variable cost – which broadly tracks the amount of money each household annually spends on commuting.
Even though the methodology for preparing this map obviously didn’t assume everyone worked in the city centre, we still get a clear pattern that indicates the further you live from the city centre the more you spend on transport. Relatively employment-rich South Auckland sees lower commuting costs than employment poor west Auckland, but still generally not as low as the commuting costs for the inner isthmus.
The upshot of comparing these two maps is simply that when you add transport into the mix, the true ‘affordability’ of different areas changes quite significantly. That’s perhaps best illustrated in this third map – which shows how much (as a percentage of housing cost) transport adds onto the cost of living in a certain area.
This map is a little bit challenging to interpret initially, but basically it shows what proportion of housing cost would need to be added on to reflect the additional cost of commuting in that area. For most of the inner isthmus it’s less than a quarter of the housing cost that’s added on – so the housing costs make up most of the “combined housing and transport cost” that would be faced by someone living here. For areas further out – particularly it seems in the south (despite its relatively large number of jobs) – the proportion is much higher, often meaning that someone may need to add half again to the cost of housing to truly recognise the combined housing and transport cost of that area.
As a final point, I’ve overlaid (just roughly) the approximate location of land zoned future urban in the proposed Unitary Plan on top of the map above (excluding Warkworth as it was too far north to fit for me).
The concerning conclusion from the map above is that most of the land we’re proposing to urbanise over the coming years lies in areas where transport costs will be a huge added burden. In essence, even if the additional greenfield land does provide cheaper housing costs (and the high costs of Flat Bush give reasonable reason to be skeptical of that outcome), that ‘gain’ will probably be significantly undone by the high transport costs experienced by those living in these new parts of Auckland.