Below is a schematic of current apartment development in a small area of Melbourne just north of the City Centre, next to the Victorian Markets. These are pretty tall; one already under construction is 88 stories.
And here is a blog post from our Melbourne friends OhYesMelbourne on another City Centre adjacent development site; Docklands. And I thought Auckland is experiencing a building boom. Well it is, and this growth is impressive, but of course Auckland is a small city by global standards, and the current boom is well in proportion. Across the world it looks like we are in a phase that is concentrating development pressure in primary cities. So while urbanisation is widespread it seems to be especially concentrated in the cities that dominate their regions, like the Australian State capitals and Auckland in the South Pacific. It’s not just in the new world either; that classic primary city; London, is building up at a new rate too.
Aside from issues of about the balance of this growth from a nationwide perspective or architectural style [blingy is the term that springs to my mind], what is the likely impact of this kind of additional dwelling supply coming onto the market in these cities? Currently Melbourne is getting about 1500 new residents a week [1838 per week last calendar year, in fact]; which at current household sizes means there is fresh demand for about 500-1000 new residences each and every week; pretty hard work to satisfy that demand you’d think?
Well think again; the boffins at the Reserve Bank of Australia are worried about oversupply according to this report from Business Insider. Here’s the recent apartment supply growth:
So while the RBA couches this situation as a warning to financial stability, or at least risk to property developers loosing their shirts in a saturated market, isn’t this exactly the sort of quantity of new supply that overheating urban property markets need, like Auckland?
Price growth is already slowing for inner city apartments in Melbourne and Brisbane, and there are signs that activity in the Sydney property market is beginning to slow after two years of breakneck activity. Supply and demand in all three regions appears to be nearing equilibrium, with significant more supply scheduled to come. It’s clear that downside risks to prices are building.
It seems there is a lesson from the cities across the Tasman that supply/demand equilibrium in cities can be achieved most effectively by building up, although at the risk of supply overshoot. But then isn’t that always the case in any attempt to rebalance a market? So what are the barriers to this sort of solution occurring in Auckland? Is it even possible? One problem is inner city land supply, is there that much available space? Melbourne certainly has a lot of city proximate available land. Auckland is likely to need this sort of growth to also occur in metropolitan centres as well as the Central City simply from a space perspective; given how tightly bound our City centre is. But in that case we will also need to complete the Rapid Transit Network in a timely fashion to make that model function properly. But then we have to do this however we grow; or we are just planning traffic gridlock.
Then there are our planning regulations, especially height restrictions and view shafts, limiting spatial efficiency, and Minimum Parking Regulations adding unnecessary cost to construction [as well as feeding traffic congestion]. I’m sure some will argue that Aucklanders won’t live in apartments, but recent growth in inner city living shows that we have yet to find the limit of those happy to make that choice. It seems likely that out of 1.5+ million there still more willing to live this way, especially as the quality of city amenities and distractions improve [especially public transport, the cycling and pedestrian realm, street quality and waterfront spaces]:
And this is even more likely to be the case if new supply is sufficiently scaled to affect property price growth; then these dwellings will become even more attractive; more affordable as well as proximate. Perhaps, if the RBA’s handwringing is prescient, at the cost of one or two over-ambitious property developers’ businesses…?
Is it happening already? Certainly all the growth in dwelling supply in the last couple of years has been in attached structures: Stand alone houses used to completely dominate Auckland’s housing supply; at three-quarters of the market four years ago to around half now.
The evidence from these nearby cities suggests that ‘up’ may well be a more immediately effective solution to rampant dwelling inflation in Auckland than distant, hard to service, and slow to deliver detached houses out on the periphery. Certainly in as much as it is a supply-side issue.
Sometimes something as simple as looking at things from a fresh angle can help clarify an issue. Here is a wonderful image from the International Space Station that really should help people understand the profoundly real geographical constraints that bind Auckland. Beautiful blue water and rugged green ranges:
Anyone who claims Auckland can have or does have the same pattern as Houston, or Atlanta, or London [like MP Judith Collins did recently], needs to go back to Geography 101. The physical geography of a city’s site is always the first determinant of its urban form. Technology, culture, wealth, history and infrastructure are all important, but still secondary, to those first facts of the place and its climate. And as we try to shape it; it shapes us too.
Doesn’t the privilege of seeing our city from this distance reinforce the responsibility to take greater care with what we do build, and to leave as much of the remaining wilder parts of this limited land in as unmolested a condition as possible?
Auckland needs to be able to accommodate up to 1 million more people over the next 30 years, that’s a lot of growth and means the city needs around 400,000 more dwellings. The Auckland Plan set the high level strategy of having up to 70% of that growth occur within the existing urban area while up to 40% would be outside that. The Proposed Auckland Unitary Plan (PAUP) identified large swathes of land outside the existing urban boundaries for future urban land – some of which is already being developed as Special Housing Areas.
The council is now consulting on a Draft Future Urban Land Supply Strategy which will show how that release of land will actually occur over a 30 year period including specifying where and when bulk infrastructure will be built. They say specifically it will
- help to inform Auckland Council infrastructure asset planning and management and its infrastructure funding priorities and sequencing. It will feed directly into the Council’s future Long-term Plans and the Annual Plans
- help to inform central government, such as the Ministry of Education, with medium to long-terms projections, location and investment decisions
- help to inform private sector infrastructure providers with forward planning and investment decisions
Overall this seems like a good idea, concentrating development in areas where it is able to be accommodated rather than developing land completely ad-hoc which could create funding issues for the council and other infrastructure providers. As the document points out, a consequences of ad-hoc development could be that it sucks up enough resources that it affects the ability to improve the rest of the region. What is most interesting about the strategy is this comment:
The analysis done for this Strategy is of sufficient scale and specificity to broadly determine bulk infrastructure requirements.
In other words this is more than just drawing some lines on a map and pulling out the colouring in pencils. The council have actually put work into determining just what bulk infrastructure will be needed to enable the predicted future growth and the result is actually quite scary and raises the question of just how affordable any new dwellings will be – more on this soon. It’s also important to remember that the bulk infrastructure talked about is really just the core of the networks provided by the council and other agencies. In addition to it developers would need to add all of the local infrastructure such as the local street and water networks.
The PAUP identified six large general areas and a few small standalone areas where future urban growth would occur. This covers about 11,000 hectares which they say could accommodate around 110,000 dwellings. The six main areas are:
- Silverdale, Wainui East, Dairy Flat
- Kumeu, Huapai, Riverhead
- Whenuapai, Redhills
- Takanini, Opaheke, Drury, Karaka
- Pukekohe, Pareta,
The strategy splits up the areas into five year intervals based on a suite of principles. The map below shows these areas along with the key bulk infrastructure they need.
As mentioned above, the part of the strategy that is most interesting is the high level costs to provide the bulk infrastructure which is done to a decade level. The table below shows this along with how many dwellings each time interval delivers. In total the council have estimated that around $13.7 billion of bulk infrastructure is needed over the 30 year period, this is made up of
- Transport – $6,700 million
- Water -$2,250 million
- Wastewater – $2,200 million
- Other – $2,500 million
These cost are further broken down by decade along with the number dwellings expected in the table below.
Breaking that down we have
- 1st Decade – $111k to $140k per dwelling
- 2nd Decade – $179k to $234k per dwelling
- 3rd decade – $93k to $120k per dwelling
Those seem like some crazy high costs, especially if you consider them on a per house basis. Next imagine what the land prices for these new sections would have to be to cover the costs if the council were able to pass the full costs. Combine that with the costs to the developer of providing the local infrastructure and these areas are not going to be cheap, losing one of the supposed advantages of greenfield developments. The reality is only some of these costs are likely to be passed on meaning that existing ratepayers will effectively be subsidising this greenfield growth.
This outcome actually that much of a surprise, research as part of the Auckland Plan looked at potential growth scenarios and found sprawly land use patterns were the most expensive outcomes for the council due to the need to provide so much new infrastructure.
Of course none of this to say that intensification isn’t without its costs however many often those costs are ones which would still be needed for the sprawl development too.
Consultation on the draft strategy closes on 17 August.
We get frustrated today at the amount of auto-dependant development that continues to happen in Auckland (and other places around NZ). This is especially as we know the impacts this form if development has on communities and individuals. Many might think that we’re only now realising the impacts however that’s not the case. This video (two parts) from 1978 sounds like the sort of thing we still say today.
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