Last weekend I did a post about a Herald article on possible changes to policies that currently restrict urban sprawl in the Auckland region. Now ARC councillor Joel Cayford has done a lengthy blog post illustrating his take on the matter. It’s well worth a read. Some good extracts:
Like many large Western cities enthralled by the American Post War motorcar and motorway miracle, Auckland has battled with the consequences (eg escalating travel demands and congestion), and struggled to plan its way out of the trap we all find ourselves in. My research suggests that Vancouver – while I agree it’s not perfect – found itself in the same trap around 20 years ago – and after adopting a growth strategy – has managed to change the direction of its development to one which more strongly supports compact development over the taking of rural land for edge urban development. But it has been hard, and there is always that temptation and pressure from those seeking the quick returns of new subdivision.
A few years ago I was invited by Connal Townsend to attend an informal meeting of the Property Council. I was asked to share my ideas and thoughts about the Growth Strategy and Public Transport investment. A number of major players in Auckland’s property development industry were present. Some were very direct in their criticisms of Councils when attempts were made to progress “brownfield” redevelopment within existing urban environment. “Too hard”, was the catch- phrase. “Not worth the candle”.
But probably the most honest was the comment, “Joel, if you ask me to choose between buying an investment block just outside the MUL, or buying a CBD block for redevelopment, I’m going to buy the rural block everytime. You guys are going to fold….”
Around the same time I found myself sitting next to back-bencher Phil Heatley in a plane. He spoke of the frustration of being in Parliament all those years, but without the ability to influence anything. I talked about Auckland and its development. He made no secret of his distaste of the MUL, but he seemed very uniformed about Auckland issues. He left me with the clear impression that: “the MUL would be gone by lunchtime, when National gets into Government.”
I accept that Auckland’s planning has needed change and improvement, to provide stronger incentives around compact development and urban regeneration projects, as well as lining up the funding institutions to assist where holding costs become a major stumbling block. It was never enough just to have a tight strangle hold on the metropolitan urban limit.
Councils have been reluctant to rezone urban land to allow for greater densities and building heights. The rhetoric of “dog boxes” and “rabbit hutch apartments” has been enough to make local communities take fright, and take to the streets to stop any change in their neighbourhoods. NIMBY’ism can be a very powerful thing. But it also stands in the way of a city region fighting to provide the range of housing types and sizes and environments, to meet the very diverse needs of Auckland’s cosmopolitan community.
These failures and problems are among those that led to calls for Auckland’s local governance to be strengthened, so that its plans and strategies could be actually implemented. Then there was a change of Government. And the reins of change have been seized by those with rather different priorities. The recession has added urgency to Central Government’s determination to deliver short-term growth and productivity. Public funded infrastructure is a big part of its program to generate jobs and keep unemployment from getting above 7% (but it is).
And now we have Nelson’s very own Dr Nick Smith (Minister of Environment), working with Whangarei’s Phil Heatley (Minister of Housing), and pushing a very strong pro development, pro growth, pro “affordable housing”, program, which appears to have at its heart the goal of doing away with Auckland’s Metropolitan Urban Limit.
I certainly think that councils have to assume a lot of the blame here for making “brownfields” development so difficult that we’ve ended up effectively choking off housing supply in both the ways it can occur – through the urban limits and through making intensification so damned difficult developers seem to want to avoid it if at all possible.
Councillor Cayford also comments on a few key quotes from the article that were made by Nick Smith and Phil Heatley:
Smith: “Smith linked restrictive zoning and consent laws to NZ’s poor productivity and economic growth…”
(My Comment: In fact the major cost drag on Auckland’s economy is the sheer energy and time cost of transport. A full 13% of Auckland’s GDP is expended in transport. This compares very unfavourably with modern Asian cities (6%), and European cities (8%). Smith is really only speaking about the gold rush that comes from new land being released. Developers love that gold rush profit, but for a long time afterwards those who buy into it pay excessively for transport and other costs. I suspect Smith is only interested in short term gains – not long term development. Smith has never understood Auckland.)
Heatley: “our drive comes from the fact that property proces have increased hugely … locked out first time buyers… the biggest propertion has been the land cost, not the cost of building…”
(My Comment: This is the classic case of Heatley wanting to externalise infrastructure costs. Land costs today – because of developer levies – now include some of the related infrastructure costs – roading, 3 waters. For North Shore these “land development costs” can be up round $30,000/housing unit. And even thenm this figure does not adequately cover the full costs of new infrastructure. BTW these developer levies are much less for a new lot built in the heart of existing urban setting.)
In an ironic way, this part of the debate shows why it’s a bit disappointing the recession depressing oil demand so significantly, thereby resulting in petrol prices dropping dramatically from the $2.20 a litre they were in the middle of July 2008. One would probably look rather silly promoting urban sprawl with petrol north of $2.50 a litre – for example.
His blog post also includes a pretty useful table, showing the arguments for and against sprawl/intensification:
It seems to me as though “the provision of affordable housing” is certainly the strongest argument for removing, or at least changing, the metropolitan urban limits. However, it is debatable whether that would do much more than create a bunch of cheap houses on the very edge of the city. It is also debatable whether that’s the only thing we can do to improve housing affordability. I tend to think that we have a whole toolbox of options to improve housing affordability. Like how about making Housing New Zealand a requiring authority, how about allowing Housing New Zealand to develop more dwellings for the market, how about making the provision of affordable housing a matter of national importance under section 6 of the RMA, how about changing District Plans to allow for intensification easier, how about providing more effective incentives to encourage intensification… the list goes on. Maybe some sensible extension of the MUL should form a part of that toolbox, but I doubt it’s the big bang solution many hope it will be.
Furthermore, if someone’s housing is cheaper than it was before but their transport costs have gone up by the same amount, are they really any better off?
Processing...
I believe that the spatial plan required as part of the super city legislation will determine where the growth will be in Auckland. As part of the creation of that plan if Auckland ultimately decides that sprawl is the answer then there is not much that can be done. If we decide that sprawl is not the answer (better in my opinion) then these developers will have to live with that. My major concern is what will happen in the interim until the spatial plan is created. Is there anything to stop developers or will it become open season. If it is open season then I imagine that there will be a few developers who will be trying to have the diggers lined up for the day after the current councils are gone.
In the interim we still have the Auckland Regional Policy Statement, which is where the MUL is actually enshrined in law. So don’t worry too much quite yet.
Interesting, if the major component in the increase in housing cost is the land, then does it not make sense to produce more land intensive housing rather than develop greenfields sites that consume large amounts of new land?!
It just sounds like an argument for better medium density development to me, not for more sprawl.
Joel Cayford is excellent, I hope he makes it on to the new Council…
I don’t think that he is standing in the first term. I talked to him about it an he said the first term of Auckland Council will be a nightmare. He might stand for a local board I suppose though.
Probably smart best to throw stones at a poorly constructed house from the outside…
I’d put the housing where the employment is. In Auckland at present most of the jobs are South, Central, North Shore and Albany. If an area has employment shouldn’t we be encouraging people to life close by- regardless of where the MUL is. Then we can start solve our transport problems.
In areas like Waitakere, where there aren’t enough jobs we shouldn’t be building housing until we are able to get the employers moved in. Here we need to zone for light industrial uses. I’m all for getting rid of the MUL, but we need to be smarter than we are in deciding what to replace it with. We need more mixed use developments, better connectivity between suburbs (Auckland is terrible at this), more cycleways, better town centres (our current ones are either too traffic dominated, too small or simply big block car parks like Albany). Te Atatu Peninsula is the ideal sized town centre for mine. Then we could look at ways to link up our centres through cycleways, public transport etc..
Forget about the ideological battles and think about what sort of principles make for a good physical enironment to live in.
TopCat, one problem with trying to put the employment where the people are (and vice versa) is that you end up with very dispersed employment patterns. This makes it very very difficult to serve the city with public transport.
Interesting article on the sprawl & housing affordability issue in Melbourne: http://www.theage.com.au/victoria/home-truths-dash-hopes-of-firsttimers-20100219-olxn.html
Interesting to see they have an infrastructure tax on greenfield development…
So do we… development contributions. Except they’re very crudely worked out in my experience (ie. on a per unit basis).
Hmmm, I didn’t know that… Learn something everyday…
Ours aren’t just applied to greenfield developments though, they’re applied to all developments. The intention is for the development itself to “offset” the increased demands it will have on infrastructure. I think that development contributions could be used far more cleverly to encourage or discourage development from certain areas. For example, you might waive them altogether for a townhouse redevelopment around New Lynn, because that’s what your growth strategy might be promoting, or you might double them for a sprawling subdivision out past Takanini as that might not be what your growth strategy is encouraging.
Spatial plan submission..!
Indeed. Hopefully by the time we get around to making submissions on the Spatial Plan we might have some ideas about how it fits in with all the other legislation guiding planning and other local government functions. At the moment it sits in isolation, potentially being as useless as the infamous Auckland “One Plan”.
I haven’t seen that before, oh the things I am learning today..! Who did that..?
Interesting article, thanks for putting that up Josh so essentially building sudivisions out the arse end of Papakura may bring the average price down on paper but does not actually bring the price down in the areas most people want to live it seems which is central and middle suburbs will good acess to transport shops etc. I certainly wouldn’t move all the way down there regardless of what house prices there are.
This is something i don’t have a huge amount of knowledge on so it’s interesting to read more about it. Bernard Hickey has written an article this morning slamming the MULs, he can’t seem to make up his mind on whether the boom is caused by a lack of disincentives on property investors (something he often wrties about)of a physical lack of supply. Then again this is the guy who said the electrification of Auckland’s rail network should not go ahead because it did not make economic sense. Probably best not to put too much stock in his opinions. Article here:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10627446&pnum=0
That’s an interesting article, thanks Cam. At least Hickey recognises that there’s plenty of land available for development within the existing urban area, and he recognises the perverse incentives for developers to not actually develop their land.
I think this gives us some ideas about how to improve housing affordability problems. We clearly need to make development easier within the existing urban area, and to tackle the incentives for developers to not develop. Both won’t be easy problems to solve though.
Yeah although i’m not sure his argument about wealthy inner suburbs homeowners liking the MULs because it keeps their house values up. That does not make a lot of sense to me. It’s not like people who are looking to buy in Ponsonby and St Heliers are suddenly going to go “hey there’s a whole lot of new housing down south of papakura lets go there instead because it’s cheaper and will be just as good” demand for housing in those prime inner city suburbs will not decrease because of new subdivisions outside the MUL surely?
I think the stronger argument is that owners in the wealthy inner suburbs oppose intensification in those areas because it might bring down prices.
“That does not make a lot of sense to me. It’s not like people who are looking to buy in Ponsonby and St Heliers are suddenly going to go “hey there’s a whole lot of new housing down south of papakura lets go there instead because it’s cheaper and will be just as good” demand for housing in those prime inner city suburbs will not decrease because of new subdivisions outside the MUL surely?”
Did house prices get cheaper in Ponsonby, Mt Eden and Remuera as Auckland sprawled relentlessly from 1960 to 2000..?
Heh, good point.
“Heh, good point.”
Easily countered though: “If we HADN’T sprawled in those years, Auckland would either be about the size of Wellington, or house prices in Ponsonby would now be as high as in Tokyo.”
The problem with discussing “How it could have been” scenarios is that it is always easy to create a counter-scenario.
Yes Max, the same counter-argument used against the concept of induced traffic. I don’t buy it in both circumstances.
Of course if we had built nothing from 1960 to 2000 then house prices would be higher than they are now. However, if we had intensified more throughout that period then one would think prices in the inner suburbs would be lower, because there’d be more house supply in those inner suburbs.