Aucklanders (and, I suspect, people in general) complain about high and rising property taxes. But are our rates actually too high? Compared to what?
An article last year reported on what ratepayers are paying in each of New Zealand’s territorial authorities:
Not surprisingly, rates in the most sought-after areas are also high. Those living in Auckland, where the average household income is around $76,000, face annual bills of $2636. The average house price in Auckland was $678,533 in February.
But residents in Christchurch face comparatively low bills. At $1706 a year, they make the top 10 for cheapest rate bills.
In other words:
- In 2014, the average Auckland ratepayer paid rates equal to 0.39% of their property’s value ($2636/$678,553). This year, of course, that figure will be lower as property values have increased much, much, much faster than rates bills.
- In Christchurch, the average ratepayer paid rates equal to 0.37% of their property’s value ($1706 divided by the average home price of $462,086).
The article didn’t bother comparing New Zealand’s rates bills with property taxes in other countries, so I went out and gathered some data on property taxes in the US and Canada, two countries that are frequently cited as examples for New Zealand to follow. (Albeit sometimes for very different reasons.)
Before getting into the figures, I should say that this isn’t a perfect comparison, because:
- There are more layers of government in Canada and the US, due to their federal systems
- Local governments in Canada and the US have more fiscal responsibilities – schools are funded by local governments in the US and provincial governments in Canada, for example
- But they also have more options for levying taxes – in the US, local governments can impose income taxes, sales taxes, and business taxes. In Canada, provincial governments can do the same.
Overall, the Canadian data is likely to be much more comparable than the US data, as municipal governments’ responsibilities and tax powers are more similar. With that in mind, here’s how Auckland stacks up to the major Canadian cities. The data is from a 2014 Globe and Mail article:
Basically, Auckland (and Christchurch) has quite low property taxes relative to most Canadian cities. The only city that pays a lower property tax rate is Vancouver. (More on that below.)
And here’s how Auckland’s residential property tax rates stack up to the five most-taxed and least-taxed American states. The data is from tax-rates.org:
In keeping with American states’ reputations as “laboratories of democracy”, different states seem to be testing out very different property tax policies. If Auckland and Christchurch were in the US, they would be among the most lightly-taxed places in the country. Certainly much less so than that bastion of high property taxes, Texas.
Wait a minute, Texas?
Here’s what tax-rates.org had to say about Harris County, which contains Houston:
Harris County has one of the highest median property taxes in the United States, and is ranked 152nd of the 3143 counties in order of median property taxes.
The average yearly property tax paid by Harris County residents amounts to about 4.26% of their yearly income.
Here’s a chart comparing property tax rates between a selection of major US cities. Houston is head and shoulders above the rest, in terms of property taxes. And, nonwithstanding the disclaimers, Auckland seems to be relatively lightly taxed:
Perhaps the lesson is that if we want to be more like Houston, which some people cite as an example for Auckland to follow, we should start by raising property taxes. The median Houston homeowner pays US$3,040 in property tax. That’s roughly equivalent to NZ$4,100, or 50% more than Aucklanders pay.
Houston needs the cash to pay for all those roads, of course. But its relatively high property taxes are also likely to be one of the hidden causes of Houston’s relatively affordable housing. This is because high property taxes tend to discourage people from bidding up house prices – the more they pay for houses, the more they pay in taxes!
On the other side of the coin, literally, Vancouver offers much lower property taxes. Another analysis of Canadian property tax data shows that the average Vancouver homeowner pays CA$2,322 in property taxes. That’s roughly equivalent to NZ$2,500 – or slightly less than Auckland rates. It seems like Vancouver’s compact, transit-oriented urban form is quite cheap for local taxpayers.
And finally, there’s no evidence that rates are especially high in Auckland or other New Zealand cities. If anything, it’s the opposite – property is taxed unusually lightly in New Zealand.
What do you make of this data?
One of my favorite aspects of Vancouver urban design is the way that buildings meet the street. This reminds me of classic urban neighbourhoods of New York and Philadelphia with their stoops or the humble porch of bungalows and cottages across California.
Great attention is paid to the interface between public and private realms. The tension and interaction is resolved through a variety of design patterns and features both in the vertical and horizontal plane. Individual unit access is located immediately from the footpath and private space is provided overlooking the street both from the steps and also from small porch-like terraces.
Here is an apartment building built in the 1990’s in the Downtown South neighbourhood next to the Roundhouse Community Centre. This is how people experience the street. This street, like most in the neighbourhood, take the famous Vancouver form of point and podium where the street level maintains a modest height and narrow towers extend to great heights (10 to 38 storeys) to achieve the desired neighbourhood densities while maintaining view corridors across the water.
Street facing townhouses, Roundhouse Neighbourhood, 2-story podium, 9 and 17 story towers
The ultimate height and form of the the building is not as important as how the first several stories frame and address the street. Regular, closely spaced street trees and dwelling entrances reinforce the townhouse character of the street. Landscape amenity (for lack of a better word) is provided both along the public street but also within the private boundary creating a sense of a shared public realm.
A slight elevation change brings residents a degree of authority and ownership over the street and the steps reinforce the transition from public to private space. In conjunction with low fences and landscaping, this elevation change provides clear views of the street from the townhouses but restricts direct views into the living spaces.
Increasingly this podium and point form of Vancouverism is being updated in a more mid-rise form with more consistent but lower heights across the block. Below is a very similar street level response but the building takes a more consistent mid-rise scale (8 storey). This is a new residential building on East 7th Avenue. Conveniently a small brewery has opened up across the street adding to the half dozen others in the vicinity (talk about the benefits of intensification!).
New mid-rise apartments near Broadway and Main St, Vancouver, 8 storeys. Main Street Brewery left.
Street trees play a significant role in modulating the vertical space and creating a scale that is feels comfortable along the street. Like neighbourhoods in the West End and along 7th Avenue, these mature street trees create a very subdued, almost suburban feeling.
Recently I stumbled upon research on the subject of street facing units by Elizabeth Macdonald the urban scholar famous for her co-authorship of The Bouvelard Book with Allan Jacobs. The research, Street-facing Dwelling Units and Livability: The Impacts of Emerging Building Types in Vancouver’s New High Density Neighbourhoods documented the design guidelines that shaped these outcomes and made observations about street activity, sociability and value/desirability of street facing units.
It turns out the main rules governing the interface are quite simple. While they vary a bit across the city depending on the context, they have the following key components (source: Macdonald, 2005):
- Individual entries for all ground floor dwelling units,
- Terraces or gardens at ground floor dwelling unit entrance,
- Individual dwelling units must be raised 1 meter above ground level,
- Maximum and minimum setbacks along street frontages.
In some cases the guidelines require more detailed consideration including:
- Articulation of building massing so that individual units are expressed in the building’s facade,
- Specific design elements within the setback area (eg additional row of street trees as shown in images above).
Example of guidelines for ground floor direct entry units. (Source: Street-facing Dwelling Units and Livability, Elizabeth MacDonald)
Macdonald’s research consisted of surveying both residents and people walking along along the street. She found that that the regular and close spacing of front doors, ranging from between 6 to 10 meters apart, contributes to the visual interest along the street-from their individualised terrace gardens and stairs that attract the attention of passers-by.
Both residents and people on the street felt that the direct entry units provided a sense of “eyes on the street’. Personalised gardens, windows, and regular entries give the impression that people care abour the transitional public-private space along the street. And 80% of the ground floor residents felt that they paid more attention to the street activities than their neighbours on the upper levels.
Macdonald also found that the ground-floor direct access units contribute to social interaction and street-oriented activity on the street. Most of the residents use the front door as their primary method of access, though this is diluted somewhat from the direct access provided from the parking structures located underneath most buildings.
This simple formula seems to have been adopted recently in Seattle as well (which is the inspiration for the post). Seattle is experiencing a massive building boom. By some accounts as many as 25,000 units have been developed over the span of two years most of which are in central locations. Below is a photo showing the ground floor interface of a new building in Capitol Hill on Broadway, I also saw a similar technique being used in the downtown Queen Anne neighbourhood.
New perimeter block building Capitial Hill Seattle (8 storeys)
I wonder if it is possible to build like this in Auckland? Can street trees of a form, scale, regularity ever be (re) introduced along a street? Are there places that haven’t seen so carved up and compromised by the roading network that we could recreate a traditional Street-Building-Block typology where people would want to live on the street? Will the Kiwi the obsession with indoor-outdoor flow ever include the street?
Vancouver Cycle Chic documents the emerging bike culture in Vancouver. In addition to the rich imagery of their website there is also a series of amazing videos produced by Chris Bruntlett. Spoiler: the videos aren’t about bikes, transport, or other narrow subjects but about people, their stories, and how the city meets their lifestyles and aspirations.
This is my favourite.
Chris and Melissa Bruntlett will be in New Zealand this week. They are speaking at 2 Walk Cycle conference in Nelson and an Auckland Conversation next Tuesday. (RSVP to this event soon as it is filling up.)
There is also a bike ride organised by Generation Zero, Frocks on Bikes and TransportBlog this Sunday – Blend with the Bruntletts. More details, including the route will be published shortly.
It seems like the relationship between planning controls and housing affordability is not going to go away any time soon, with Deputy Prime Minister Bill English noting recently that he thinks planning rules are a major contributor to inequality.
Planning policies have probably increased inequality amongst New Zealanders more than any other policies through higher housing costs, Finance Minister Bill English says…
…Mr English used the briefing to again emphasise the Government’s focus on addressing housing issues which featured in Prime Minister John Key’s Cabinet reshuffle yesterday.
However, when asked about his comment suggesting inequality was increasing — something he and Mr Key have previously refused to acknowledge — he said what he meant was that rising housing costs due to land supply constraints had prevented inequality from abating.
Mr English said the Government would “persist with housing reforms to make housing more affordable for more New Zealanders particularly low income New Zealanders”.
The issue of ‘land supply’ is somewhat of a red herring, as we know from valuation data that prices are rising quickest in inner areas and unless Mr English plans on filling in half the Waitemata Harbour for housing, increasing land supply is unlikely to have much impact on the increasing desire of Aucklanders to live centrally. What that requires is simply more housing, which in these areas means more terraced houses, more apartments, more townhouses, more granny flats and so on.
Yet we also know from looking at many apartment buildings underway at the moment that they’re not cheap. Decently sized apartments in many of the buildings going up in Grey Lynn or Herne Bay (admittedly high end suburbs) are pushing the million dollar mark. We’ve also been able to build some pretty cheap low end apartments like can be seen in places like the Hobson/Nelson St corridor. While at a macro-level providing more high-end or low end housing will at some point provide an affordability benefit, it seems like Auckland is yet to figure out how to build large numbers of affordable apartments that aren’t crap and/or that might be suitable for families.
Of course we are not the only city to struggle with housing affordability. Most highly liveable cities have expensive housing, it’s a sign of their attractiveness as a place to live. However, it does seem in other places there is more progress in providing relatively affordable housing in areas which aren’t way out on the urban edge.
Let’s take Vancouver for example, which regularly publishes statistics about average house prices for different housing typologies. Vancouver has very expensive housing on average, for a number of similar reasons to Auckland (an attractive place to live, strong immigration, growing population etc.), but that doesn’t mean all housing in Vancouver is expensive:
The average price for a detached house in Vancouver is pushing close to a million Canadian dollars, which is huge. However, the average price for attached houses or apartments is way lower than this, showing that there is plenty of housing supply in Vancouver at much cheaper prices than the overall average. Furthermore, unlike Auckland, it’s pretty likely that these more affordable places aren’t way out in outer suburban areas requiring us to spend huge amounts of money on transport.
So how has Vancouver managed to generate a supply of fairly affordable apartments and other attached housing typologies? Well without digging into it too deeply, it seems that critically they’ve built heaps of them. Let’s look at how the composition of housing types in Vancouver has changed over the past 20 years:
The graphs are a little confusing as the vertical axis is total dwelling numbers rather than percentages, but you can see that in 2011 two thirds of dwellings in Vancouver were not single detached houses. There were over 350,000 apartments. It’s not 100% the same but this shows similar data for Auckland broken down by Single Dwellings, Attached dwellings (flats/units/townhouses/apartments/houses joined together) or other dwellings (motor camps, baches, dwellings as part of a business or shop etc.).
Next look at the comparison from Vancouver between new housing starts for apartments compared to detached dwellings:
Consistently it seems like 75-80% of new dwellings built in Vancouver in recent years have been apartments, terraced houses or other attached typologies. This ongoing supply seems to be holding prices for these typologies at reasonably affordable levels. Again by comparison for over the last year just 27% of new building consents were for apartments an attached dwelling type.
It also seems like Vancouver doesn’t have an irrational fear of building heights like Auckland, especially in its regional centres where major apartment developments seem to be proposed or occurring frequently – like this one:
While this scale clearly would only be appropriate in certain locations, it’s worth some consideration in areas along the rail network that will benefit a lot from City Rail Link and may not have typical heritage concerns – I’m thinking Morningside, Avondale, more at New Lynn, maybe Onehunga.
It seems that one lesson we can learn from Vancouver quite clearly is that if you build enough apartments it does seem like you can ensure they’re fairly affordable. Plus they’re likely to be within walking distance of rapid transit and a whole pile of key services. Sounds better than an “affordable” house out the back of Papakura or Silverdale where you need to drive 50km a day to do anything.
The 2013 Census results showed very strong population growth in Auckland’s city centre. The four census area units of Auckland Harbourside, Auckland Central West, Auckland Central East and Newton grew from 19,116 usual residents in 2006 to just under 28,000 in the 2013 census. However, the number of people under 15 years of age living in these four census area units is still pretty low – with only 1,068 being recorded in the 2013 census – just 3.8% of the population. This is far below the proportion of under 15s across the whole of Auckland, which sits at 21%.
This situation is not unusual internationally, with many cities struggling to attract families with children to live in their downtown cores. The reasons for this are – to some extent – fair obvious: a lack of schools, a lack of space for outdoors play (at least private space) and I imagine a bit of remaining stigma around downtown as an appropriate place to raise children.
Yet there are good reasons why we should want families with children to live in the city centre. Strong communities need a wide variety of residents, people downtown have a huge active transport modeshare to work and therefore take pressure off the transport network, people and families living in the city centre give it a liveliness that continues 7 days a week, not just in business hours. But how can families with kids be attracted to living in a part of the city which seems so unusual and (to some) seeming unnatural?
Vancouver is an excellent model here, as over 5,000 kids now live in their downtown and the proportion of the downtown population that is under 15 is on the up:
The CityLab article linked to above explores some of the deliberate steps Vancouver has taken to increase the downtown area’s attractiveness for families with kids:
Units: For starters, Vancouver required developers to set aside of share of high-density housing units for families—typically 25 percent, according to Langston. That means at least two bedrooms, one of which should have play space for toddlers designed into it. (Oh, and thick, thick walls.) Since families might not want to live on the 16th floor, the city suggested grouping family units closer to street level, often in multilevel townhouse-type structures that form the base of more traditional residential towers. This ground-level clustering makes coming and going easier and gives children peers in neighboring units.
Buildings: Family-friendly buildings need a few architectural quirks that towers for singles might not: bulk storage space for things like strollers or toys, better nighttime lighting in common areas, corridors that can fit a tricycle. They also need secure, safe play spaces—ideally ones that can be seen from inside the units or from a designated supervision area. The spaces should maximize sunlight and be made to withstand “the rough and tumble of children’s play,” according to Vancouver’s guidelines. You have to love a government document with lines like this: “Opportunities for water and sand play are especially important.”
Surrounding areas: Vancouver also realized that not all parts of the city were as family-friendly as others. It instructed developers to choose sites within half a mile of elementary schools, daycare centers, and grocery stores, and within a quarter mile of transit stops. Safe walking routes—ideally separated from high-traffic arterials—were also important. Langston writes that the city went a step further and actually required some developers to build or fund community facilities (such as daycare centers or parks) if none already existed, and even to designate sites for schools.
It seems like creating a more family-friendly city centre requires a number of pretty active interventions on behalf of the Council. Partly through its investments in public realm improvements, safe walking routes and community facilities but perhaps more so through clever regulations and incentives for developers to provide housing typologies and facilities themselves which attract a wider range of households to the area.
Streets safer for kids to play – Photo by oh.yes.melbourne
The city centre part of the Unitary Plan contains some provision for bonus floor area provisions – based around heritage protection, encouraging residential dwellings, public open space, artworks and through-site links. Perhaps, to truly encourage families with children into the city centre these rules over time need to be further expanded to deal with issues such as the provision of childcare or other family-focused facilities.
The Ministry of Education also need to raise their game by providing a Primary School within the city centre, which along with the City Centre Master Plan‘s vision of a people-focused city centre would go a long way towards increasing the diversity of the population and really bringing families and kids into the heart of Auckland.
Wynyard is one of the few places designed to let kids play in the city – Photo by oh.yes.melbourne
Wynyard includes lots of family friendly features – Photo by Patrick Reynolds
Auckland has the goal of becoming the World’s Most Liveable City – a goal that is highly achievable given many of our current advantages (natural setting, low crime rates, mild climate etc.) But what makes a truly liveable city? This is something various agencies like Mercer, the Economist and Monocle try to figure out in their annual surveys. Monocle magazine has explained, in the video below, key features that it considers when determining its liveability rankings (their 2014 survey placed Auckland 12th):
Some key matters that stand out for me are:
- The importance of reliable public transport (the very first thing mentioned)
- The mix of both “soft” and “hard” measurements
- The importance of a vibrant heart to a city, and for that heart to be a place where people live
- The ease of undertaking entrepreneurial activity
- Access to quality public spaces
It’s also very interesting to see Tokyo – the world’s largest city – excel and reach number two on the list. It seems that cities which embrace their urban-ness, rather than hide from it, are increasingly being seen as particularly liveable locations.
Maybe once CRL is built, the new bus network implemented, the city centre revitalisation advanced further, mass cycle lanes built across Auckland and the numerous other things in the plans made a reality, Auckland will be number one.
When it comes to intensification one of the things we have long supported is the idea that it’s critically important that density is done well. It’s no use just building high density on its own and it’s the access to local amenities that will determine just how liveable a place is. As the amenities in an area increase it helps to make development much more viable and transport is one of the most important in that regard. Build a motorway through an area and it’s not going to be very conducive to residential development, build a rapid transit line and you can get quite the opposite. Vancouver is one of the best examples of this and this video from last year shows the impact over 30 years that the initial Skytrain line has had on the area it passes through.
In 2009 Vancouver built the Canada Line which is another line on their Skytrain network. This article from The Atlantic Cities is about some of the impacts that have occurred along the route.
But the light rail line is also becoming a model for spurring environmentally responsible growth around stations, where people will ride transit more and drive less. The Canada Line has sparked a development boom unlike anything in the region’s history.
The most striking transformation is happening in Richmond, a suburb south of Vancouver. Richmond was a bedroom community for decades. Since the late 1990s, it’s turned into the region’s primary settling point for Chinese immigrants. However, Richmond has still retained the look of a North American suburb, with a highway-like main street pocked with large malls and parking lots on either side.
Now, Richmond is the southern terminus of the Canada Line, with easy transit access to both Vancouver and the international airport. The train runs on an elevated track above the main street, No. 3 Road. Since the rail line opened in 2009, clusters of mid-rise apartment towers have gone up around stations. More are in the works. By 2040, Richmond expects to see 30,000 more people living around the line in its city center, and all the parking lots covered with buildings.
It would be interesting to hear how the local retailers near train stations are doing. But it’s not just Richmond benefiting from the Canada Line:
Vancouver is also seeing a development boom around the Canada Line. Near one station, a 1950s era indoor shopping mall called Oakridge is being redeveloped with 13 new apartment and office towers and more retail space. Oakridge is owned by a subsidiary of the Quebec credit union that is one of the main investors in the Canada Line project.
Elsewhere on the line, Vancouver currently has 12 projects approved, 13 applications underway, and 10 more inquiries. If everything gets built, that will add another 4,100 housing units to Cambie Street, whose previous life was as a sleepy row of single-family homes.
“The province and the city made a significant transit investment and now what we’re seeing is that people are greatly attracted to it,” says Brian Jackson, Vancouver’s general manager of planning. “It’s been a magnet for new development.”
Vancouver got to its planning work a bit later than Richmond did. A Cambie Corridor plan was not finalized until 2011. But even before that happened, land values along the line soared and properties started trading hands.
The city’s major developers say they have one priority when they look at project sites these days – access to transit. “It used to be about location, location, location,” says the city’s most influential real estate marketer, Bob Rennie. “Now it’s transit, transit, transit.”
One of those is this development I talked about a few months ago. Clearly the Skytrain has been immensely successful on many fronts in reshaping the city.
Over the next few years I think we’re going to increasingly see similar activity along parts of our rail network – although not likely as high and we won’t truly see any major change on the western line until the CRL is built dramatically reducing travel times to the CBD and elsewhere. The only thing that will hold this back is going to be the Unitary Plan however I suspect we will likely be on to a second version by then which will hopefully address some of these issues. Morningside is a good example of where there could be substantial changes if the zoning allowed for it.
On the issue of development Kent has kindly created this map which shows the location of the apartments in our development tracker and also shows how they would relate to the Congestion Free Network which would further open up large areas to vastly improved transport options.
Former City of Vancouver Chief Planner Brent Toderian was in Auckland last week and spoke at a very well attended Auckland Conversations event on a range of planning issues that Auckland has much to learn from. We will elaborate on some of the key messages for Auckland coming out of this event during the next week, but for now here’s a different presentation given by Brent back in 2012 which touches on many of the same issues:
While the Unitary Plan does enable some level of increased intensification and certainly places a far greater emphasis on requiring good urban design, the jury is probably still out on whether it truly enables the future that Auckland desperately requires.
This is the kind of development that Auckland desperately needs more of, dotted around some of our key rail stations. It’s interesting how sophisticated the marketing of transit oriented developments is in Vancouver. Detail is provided about how close the building is to other areas by train even before the focus shifts to the proximity of available retail or even the views over the adjacent river:
In any transport system there are routes which perform much better than others. In Auckland for example we know that the Northern Express, and Dominion Rd buses are incredibly successful while I’m sure there are other routes out there in the spaghetti like network we have today that carry almost no passengers and probably a very bad use of resources. As the public we normally don’t get a chance to see that level of detail though.
In Vancouver they have come up with a great way of showing what makes good routes as part of their annual bus service review. The info-graphics below shows just the really high and low performing routes along with the characteristics that affect their performance.
It would be great if Auckland Transport could start producing stuff like this once they have rolled out the new bus network.
H/T: Human Transit