I get pissed off at housing affordability debates a lot of the time. There’s just something slightly nauseating about right-wing commentators who usually couldn’t give a stuff about poor people suddenly caring a great deal about housing affordability because they think it’s a way to do away with pesky planning controls like urban limits and make an absolute killing out of that speculative land they bought on the urban periphery a while back. Equally, left-wing commentators who think that borrowing zillions of dollars to build a crap load of state housing will solve everything also need something of a reality check.

Yesterday the NZ Herald reported that the government isn’t too far away from releasing its response to a typically ideological report on housing affordability, prepared by the Productivity Commission. While the Commission’s report focused on the supposed need to allow more urban sprawl, the government isn’t giving away much around what its thoughts on the report might be:

Mr English told Parliament today “housing affordability remains a deep-seated, complex and serious problem,” and the Government would respond to a Productivity Commission call to tackle the problem.

The Government response to the Productivity Commission report will be approved by Cabinet before the end of the month.

He said said a multi-pronged work programme will be issued in response to the report.

The Productivity Commission called for more land to be opened up for housing in urban areas.

Auckland Mayor Len Brown has said the Council has the land available to build 18,000 houses in Auckland.

He was seeking a partnership with Government to provide capital to building the houses.

Mr English said the Government were working with the Tamaki redevelopment but were not likely to be able to stump up capital to fund housing.

The report proposed improvements to building consent processes to speed up service and reduce costs; improvements in the way local council development charges for infrastructure are calculated and applied, and improvements in the construction sector.

The fact that there are 18,000 vacant lots available on the urban periphery which nobody is taking up is a very interesting indication of perhaps that not being what people actually want anymore. As this recent post noted, property prices has grown most strongly on the isthmus in the last few years – in the inner suburbs with good access to public transport, amenities and a more urban lifestyle. Plus most houses built on the periphery in the last decade have been giant McMansions selling for big bucks, whereas the actual problem is a chronic shortage of relatively cheap new houses being built:

“Despite demand for low cost houses, relatively few are being built – in part because of the very high cost of land, particularly in Auckland,” said Mr English.

Over the course of a number of previous posts on this blog we have highlighted a number of ways in which housing affordability can be improved in a real way, not just a way that subsidises sprawl and shifts the cost from housing to transport. These include:

  1. Getting rid of completely stupid minimum parking requirements
  2. Allowing the construction of small, but clever, units
  3. Learning from Vancouver and making it easier to build apartments and other attached housing typologies
  4. Getting rid of density limits in the upcoming Unitary Plan
  5. Focusing much more on “middle density” housing, such as terraces or other small-scale intensification methods

Essentially all of these boil down to one major point – we’ve got to make intensification easier. That doesn’t mean getting more of the crap that’s been built over the past decade or two, but it means focusing on controlling what is important and letting go of what isn’t. People care about things like height, sunlight controls and the environment cares about things like permeable surface coverage. So leave your rules at just those – the bare minimum. Any density controls for urban areas just destroy opportunities to provide affordable housing, yard setback requirements ignore much of the best housing typologies being located right on the street and the myriad of other rules and regulations seem to create more problems than they’re worth.

The Unitary Plan engagement process has begun, with civic forums and we all look forward to seeing a first draft of the Plan in March next year. If you care about improving housing affordability the one thing you’ll be wanting out of the Unitary Plan is comfort that it’s going to make intensification easier. Sure the NIMBYs will scream, but unless we want to pave from here to Hamilton, we’ve simply got to make it easier to “grow in”.

That would be something constructive to improve housing affordability. Far more constructive than opening up more land in areas people don’t want to live.

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    1. One problem with medium/high density housing are the banks lending policies. Try getting a mortgage for a unit development, Kiwibank won’t lend on anything with more than 4 units and most banks want a 20-40%deposit (When you can buy a stand alone house with only 5% through some banks). If we want people to live in affordable medium density housing they need to be able get finance both to build, and to buy.

      Another problem is the body corporate politics can be an absolute nightmare…

      1. My experience was 25% deposit required for any unit title over 40m2, and 50% for under 40m2. I wonder how many singles we have living in quite large houses and flats simply because it is impossible to get finance on a one bedroom apartment?

  1. “There’s just something slightly nauseating about right-wing commentators who usually couldn’t give a stuff about poor people suddenly caring a great deal about housing affordability because they think it’s a way to do away with pesky planning controls like urban limits and make an absolute killing out of that speculative land they bought on the urban periphery a while back”

    I think that might just be your own prejudices coming through somehow. You see people on the right (not all I am sure) do care about other people. Maybe what you find nauseating is them prodding at your cognitive dissonance?

  2. I wasn’t really paying attention so maybe someone here could fill in the details about what happened with the apartment blocks proposed for Milford. One moment, an unappealing shopping complex was going to be redeveloped (or built on top of?)… the next moment the proposal seemed to be stopped. Who cancelled the project and why? To me, it seemed like a perfect place for apartments… Close to the beach, reasonably close to town, and it didn’t involve building a multistory block next to someone else’s suburban home.

    1. The local blue rinse brigade where fighting it tooth and nail, simple nimbyism. People who couldn’t comprehend living in an apartment so didn’t wan’t them there. They had a (dis)information booth set up outside one day and spent twenty minutes telling me how horrible it was going to be, and how only beneficiaries and drug addicts and people who were too unfortunate to live anywhere else would but the apartments. They just wouldn’t accept that I quite liked the idea of an affordable 55m2 apartment above the shops near the beach with a nice view, they actually accused me of lying on purpose to make them angry!

      1. I don’t think it is acceptable to build a multistory block next to small detached houses. I think everyone has the right to a bit of privacy in their back yard and shouldn’t have their sun taken away. But a shopping center is already a compromised site with vehicle movements, late night noise, and a large amount of concrete.

        I understand there is a reasonable amount of brownfield land available in the CBD for intensified development. But at some stage this is going to have to happen further out. If you can’t redevelop a shopping center in Milford, then what chance is there of redeveloping anywhere other than an ex-industrial area?

        1. I agree, and that is what pissed me off the most about Milford. It isn’t a suburban area, it is a huge mall wrapped in parking, with the town centre main street in one edge and a wetland on the other. The apartments were going above the big concrete box on the wetland side, while the whole lot was to be ‘sleeved’ in townhouses. Goodbye ugly mall, hello view of nice homes. It’s perfect.

          Still, the local nimbys don’t see it that way, they just don’t want anything to be different ever.

        2. I think it is acceptable to build a multistory building wherever. There should be no height restrictions whatsoever.

          I agree, it is a bit rubbish at first glance because there is a negative externality when one building blocks your building. But regulating against this comes at a much greater cost to society than the sunshine that is lost for one family. Perhaps the building owner can be re-compensated for a perceived loss of value. Don’t forget that high density development creates higher demand for land also! So there are quite possibly greater positive externalities than negative for next door neighbour.

      2. Talking about nimby’ism, there are mutterings that Te Atatu Peninsula town centre will be changed from 4 story max to 10 story max. Indications from the locals is that they will fight it (happy with 4 story – not so much 10). Happy to be part of the crowd 🙂

  3. A correction. The council has not said that there are 18,000 vacant lots on the urban periphery. They have estimated that around 18,000 lots could be built in greenfield zoning on the periphery (i.e. not subdivided yet – a big difference). You need a lot of zoning to ensure there is enough competition to discourage land banking. Perhaps, if the housing market bounced back you could see 5,000 a dwellings built a year in these peripheral places (flat bush – hobsonville etc), but there is unlikely to be enough land to see that happen (when there isnt much supply and land prices are high it makes sense for developers to drip housing onto the market at the higher end of the market such as we are seeing in Hobsonville etc). So I dont think it is correct to say we have loads of greenfield land sitting there idly – arguably, from a housing supply perspective at least, we dont have enough. That said, I agree that a focus on enabling intensification is as important (if not more) if we are going to get serious about enabling housing supply.

  4. Will something be done about housing affordability? Nope.

    The issue politically with improving housing affordability is that there are only really two ways to do it. First is to increase what people can afford such improving incomes. Very desirable but it’s pretty hard to actually achieve a dramatic difference in the short to medium term. Otherwise housing can be made cheaper. Politically this will be unpopular as every home owner will become poorer/less wealthy. Some will end up with a home worth less than there mortgage. Some people will lose their homes and still be indebted.

    A dramatic drop in dwelling prices could trip NZ back into recession and could even compromise the stability of our banking system.

    Not the kind of things any political party will want on their record at election time.

    1. That’s the elephant in the room with housing affordability. Improving housing affordability requires a reduction in house prices. With kiwis focusing so much ‘mom and pop’ investment in housing making it more affordable would have serious implications.

      1. Nick- you’ve spotted my pet peeve. The generous tax rules make second and third property owning the best investment. The Gummint was going to crack down on this in an effort to get Kiwis into investing in Kiwi companies- but they wimped out.

        On what is possibly the simplest way to slowly deflate our property bubble…

        1. What generous tax rules?? You can only claim losses on property if you make a loss you know. Anecdotally a lot of people break the existing tax laws, but that is not the same as generous tax rules.

          No, the issue is on the supply side.

          1. Short term cash flow loss (with safety net of tax offset) vs long term untaxed capital gains? I think we all know what the real effects of this is.

    2. A dramatic drop in dwelling prices could trip NZ back into recession and could even compromise the stability of our banking system.

      It’s the banking system that causes recessions and pushes house prices higher for real gain. I agree that no present political party will touch it though and thus we really need to ask WTF they’re working for because it doesn’t appear to be society.

  5. But… but … if we get rid of yard setback requirements, how are we going to widen our roads without demolishing buildings? 😉

  6. Apartments are bloody expensive to build. They’ve got their place, but better to focus on low scale group housing, terraces, granny flats, duplexes, new houses with accessory flats (basically building two dwellings in what “reads” as a mid/large scale house), small townhouses on small lots etc.

    1. I would qualify that, smallish blocks of apartments are reasonably cheap to build provided you stay under about three stories and have a favourable site (particularly if you aren’t forced to provide large amounts of underground or elevated parking). On the other side massive tall blocks of hundred of apartments are very cheap to build (per unit of course, but you need plenty of capital to start with). What is bloody expensive is the ‘sweet spot’ between them, Blocks between about four and eight stories. There you get all the extra costs of a full size apartment building (elevators, fire control systems, underground parking etc) with none of the economies of scale.

      Terraces and townhouses are the key to “middle density” in Auckland as far as I am concerned. Terraces could go four abreast on a typical Auckland residential frontage. With a 5m x 30m site, you could have a two story house with 200m2 floor area covering two-thirds of the site, and a very usable back yard covering the other third. You only need to look to Syndey and Melbourne to see people are very willing to live in a well designed house on a site a quarter the size of what we are used to (mostly because they don’t waste heaps of space on setbacks from the street and other properties)

      Best of all, you can do a reasonable row of houses on only one property. That makes it feasible for existing owners to redevelop their own land without having to buy neighbouring properties to assemble large parcels. Also the capital requirements wouldn’t be huge, no more than that needed to build one large luxury house. That means intensification would actually happen, and relatively quickly. Plenty of baby boomers out there rattling around in a large house on a big plot of land with ready access to capital. If we want to make it affordable to live in well located areas, then lets make it reasonable for people who live in those areas to turn their one house into four.

      If we set constraints on lot size larger than a typical section only two things will happen:
      1) very little redevelopment will actually occur.
      2) The redevelopment that does occur will necessarily need to be very large to be profitable for the developer.
      The main outcome would therefore be a sea of largely untouched single dwelling suburbia with sporadic apartment blocks shoehorned in wherever a large site could be had.

      1. Absolutely agree there – terraces and townhouses are the way to go.

        Small set back from the road to accommodate a small area of “public” garden. Handy plot of land at the back which can accommodate the “private” garden, washing line and laundry lean to, BBQ and deck, vege garden. If people so need, there is also scope to make that the place to put a car, and/or place to put the trailer for toys such the sea kayak! Concealed right of way between the back gates of the back gardens performs role of additional pedestrian access (and sea kayak access) and shared car access right the way down behind the block of terrace houses.

        The houses themselves – easily two stories but could go to 3 with that extra top bedroom tucked away within the roof gable. I’ve stayed in a very roomy 3 bedroom place of exactly this sort of design. For Sydney and Melbourne, benefits of shared outside walls are of huge benefit in the summer heat. In typical northern hemisphere countries, of course the benefits of minimising exposure to the cold because of the fundamental characteristics of terrace houses is equally apparent. Both situations would apply to some degree in Auckland.

        1. It’s quite strange, it’s not unusual to have right of way driveways down the side of multiple houses, but no one ever seems to manage running them along the back.

          Rear access to yards is a real boon of the street network in Melbourne (Initially it was in lieu of a sewerage system, the lanes were primarily for nightsoil cart to come and collect the contents of your outhouse). They are frequently used to access a carport at the back of the property, or a shed for bikes (and kayaks) and in some cases just a handy shortcut to the main road.

          1. Ah yes, of course for the night cart man…..ah ha that’s why they are such a feature of the classic terrace street landscape.

            And yes that back lane is still important. Using the boat example – having the lane at the back means that you can wheel that boat into the yard, and then hose it down after use in the ocean. It also means you can park a trailer – right beside – the australian (or kiwi) bloke’s shed. This could be an important factor in getting terrace homes into the mainstream housing market.

            We own a townhouse and have lived in it with young family. Real education in the good and bad of existing town-house living. Great sense of neighbourly security – good sense of community with nice neighbours too.

            Things that could be improved are a real lack of storage space for “stuff”. The townhouse does not have an attic and the yard is biased toward being larger in front, and smaller at the back. The carport is on the street frontage of the home, so totally impractical for storing gear in. So – to emphasise, not a space issue, but an architecture and planning one.

            We have rented it out several times. It is very interesting to see the profile of tenant we have had, always solo women, often solo mums. The men (whether single or as half of a couple) generally took one look at the lack of garage/shed/attic and you could see they were totally disinterested from that point. No doubt a huge generalisation on my part, but it is an indication of our personal experience.

            So yes – I think some thought could provide vastly improved terrace house/town house guidelines that is much more appealing to a wider cross section of the voting public.

            One other thing – you would want to be very careful in how the blocks of terrace homes were laid out in relation to the position of the sun.

          2. This site doesn’t have an edit function darn it – above email needed some finessing and editing, hope you got the gist of it anyway!

      2. totally agree with your views Nick R. Minimum site areas for medium density development eg. 1500 square metres, can be really problematic, in terms of assembling 2 or 3 parcels. I’ve heard through the grapevine that the council might be considering such a minimum development block size – if they do, they simply won’t get the amount of medium density development that they need. As you say developments need to work on single lots.
        Look, its going to be hard either way. The economics work best in higher land value areas, and typically those areas have a lot of heritage or sloping land with sea views, or moneyed NIMBYs!!!.
        For me, one of the key approaches will be to allow more back of section infill. yes I know its a dirty word, but if you have plot ratio controls then you can get 2.5 bed two storey townhouses on 250 sq m net sites fairly easily (say 70 sq m at ground level, 40 sq m above). Have daylighting (2.5m + 45 degrees) and privacy standards etc to minimise impact, and away you go.
        I also think that it will be impossible to avoid a reasonable amount of greenfield. To me the question is not whether we do greenfield, but how. There ARE good examples of greenfield residential development

  7. I think it has been said already, lack of supply, the cost of land, the cost of building and council charges are all driving prices.
    Increasing density could reduce all of these by enabling more houses to be built in desirable locations with smaller portions of land. Standard structural design and floor plans should reduce building costs by reducing design, enabling bulk purchase and production line or kit-set style construction. This should then require less council checking, and services wouldn’t need to be run over such extensive areas (per dwelling, relatively shorter water, storm-water, sewerage, telephone, power, cable/fibre, road, PT networks).

    I agree that this practically means we need to focus on building 3-4 story terrace houses and apartments. Overseas I have two relatives each living in 5 story terrace houses (garage, guest bed & laundry on ground floor, top floor 1/2 deck and a bedroom, deck is good for BBQ & drying clothes) this is 1 story too far in my opinion, just so many stairs.

  8. Lets get real here. Mmp is the cause of this issue, you can write off the people without losing votes. Len brown has been tailoring this plan from the start. Why? Because he wants national out and he loves job. Well I say give the people a sustainable future, otherwise in not so many years we’ll be sitting here thinking how can I holiday when $1 buys me nothing!.. Good on you John, a panel for submissions run by non council members is the best idea I’ve heard so far. Votes for you!

      1. How much debt does this plan add to the city books over the next 30 years?… And let’s just say it fails and Aucklands prices drop 10%, that’s 60billion dollars worth in mass deflation. Goodbye NZD, goodbye OCR, and believe me, once we hit 0% there is nothing left we can do.
        Please think before you pass some ballsy plan developed over the last year or so. It’s not just aucklanders who stand to lose!

  9. There seems to be a reluctance to tackle the demand side as well – a large number of people from Auckland are from overseas and this is a broadly controllable factor. There is obviously a natural population increase, but when 40% or so are from abroad and the country has one of the fastest OECD population growth rates per capita, this has a big impact and is an obvious solution which certain political parties do not want to look at. Also, the construction types need to change. Quality terraced housing does not seem to really have caught on in Auckland, unlike Sydney http://news.domain.com.au/domain/real-estate-news/date-with-density-20121005-272×3.html. The approach in the UK would be interesting to see applied further in Auckland, in terms of affordable housing within large developments e.g. http://www.edinburgharchitecture.co.uk/quartermile_housing.htm.

    1. Yes but especially when most of it will be internal migration, you can’t stop it from happening unless you start putting some pretty draconian rules in place to dictate where people live.

      1. Auckland’s migration is mainly external actually, see http://www.stats.govt.nz/browse_for_stats/population/Migration/internal-migration/trends-in-migration.aspx. Internal (domestic) migration in the last ten years has been negative.

        But yes migration is swamped by natural increase, based on current trends. Immigration will help the city grow but the biggest factor will be people having babies.

        Mr Bean, I can’t see any reason why we would want to control migration more strictly than we do at present. I’m all for skilled migrants coming to Auckland.

        1. Of course you need skilled migrants, but the rate of this population growth (8% between 2001 and 2006, 93% migration) and the lack of associated infrastructure catch up (either market or state provided) is an issue. Logic would say the infrastructure should improve, but as this has not happened, a cap similar to what the UK have implemented could be put in place.

      2. Auckland’s internal migration patterns also contribute to the natural increase being quite high. That is, people come to Auckland in their early 20s for employment or study, have kids here, then move back to the regions once they’re quite a bit older. Obviously not necessarily the same people doing this, but as an overall trend.

  10. A solution in Auckland, stop people being allowed locate car yards in the inner city. Force Giltrap to develop his land bank along Great North Rd, the nicest ridge in the city, which should be full of apartments, offices, restaurants and bars.

    Land Value Tax would help this also.

    1. That entire stretch- from Newton rd to Hadlow Tce (anyone know where that is?), is ripe for it. Central sunny millions of buses close to all m ways close ish to K Rd CRL station on a potential tram route library and shops or K Rd each end stop me now!

  11. Equally, left-wing commentators who think that borrowing zillions of dollars to build a crap load of state housing will solve everything also need something of a reality check.

    A number of points:

    1.) Governments have no need to, and in fact shouldn’t, borrow money. They should be creating it and then using taxes to destroy it.
    2.) Here’s what the left actually think about sprawl.

    If you want rational city design them you need to talk to the left as they’re the only ones listening.

  12. The moment I read the nonsense in the first paragraph about “teh evil right wingers wanting to profit” I knew this was heading off on the wrong track. Firstly, you claim that because there are 18,000 vacant lots on the periphery this shows people don’t want to live in fringe suburbs. What you neglect to mention is price. People might want them for $25-50,000 (as they can get in the affordable North American markets) but they certainly don’t want (or can’t afford) them at $200,000+.

    However, if the Auckland Council gets its way and is allowed to build a wall around the city then these people will have no choice but to pay these inflated fringe prices, rent for the rest of their lives or live elsewhere (probably overseas). You bemoan the fact that ‘McMansions’ are being built in these suburbs rather than affordable housing, but as Bill English correctly pointed out, this is due to the artificially high cost of land. If you have to spend $200,000+ on a section it eliminates the “affordable” option straight away.

    I agree with you that restrictions on density should be removed (if landowners want such restrictions they can make voluntary covenants). However, why is it okay to do that but not to release the restrictions on the pejoratively used term “urban sprawl”? Are you afraid that “the market” will actually ‘McMansions’ to inner-city apartments? I have no skin in the game other than as a renter who would love to see the cost of ALL housing come down, giving Aucklanders a diverse range of affordable housing options rather than forcing them to live the way Len Brown wants them to.

    Finally, I note you are looking to Vancouver for inspiration. Considering Vancouver is the second most unaffordable city in the English-speaking world (after Hong Kong), at 10.6 times household incomes, I suggest you look at the cities that actually have affordable housing. You might find that these cities (Indianapolis, Atlanta, Houston, Dallas etc) have done the opposite of the pro-density, pro-public transport policies you advocate. You might also find that these cities tend to have shorter commute times than cities that follow your model. But don’t let actual documented results get in the way of your fantasy.

    1. You might want to learn to better understand how banks create money through credit if you really want to understand the inflated price of property. A house is worth as much as a bank will lend you to buy it. You want to fix housing / land affordability, implement a LVT and take bankers ability to create money away from them.

      You’ll find the US has had a correction since it’s bubble burst, we haven’t and you’re right, Vancouver hasn’t either. It’s not density at play here, but global capital looking for safe havens and a return, Europe isn’t safe (except Switzerland and Germany where people have been paying to store their money) and USA is returning 0%. And so our – and Canada’s and Australia’s – banks are full of cash that they need to do something with. Might as well inflate a bubble on top of the bubble eh!!

      A house on my Central Auckland street that sold for 570k last year just flipped for 810k last week, know anybody who’s had a pay rise recently?

      But at least density allows us to create a dynamic modern city, stimulating our local economy by allowing us to spend on something other than petrol on our way home, allows us to move ourselves efficiently from home to work to play, to interact with one another.

      1. No! This is not a demand side issue. People don’t want to spend any more on housing than they have to. It is only because of constraints on supply that people are willing to pay right up to the limit of what they can afford.

        1. Of coarse demand is at play, but people will pay whatever they believe they have to in the irrational phase of the cycle, and are only enabled in this through a banks willingness to create the money (debt) for them. We no longer have a cycle, rather a bubble being blown on top of an un-popped bubble. Have we not learnt the lessons of America’s or Spain’s sub prime lending? Banks make profit through endogenous money creation and the interest they charge you on your debt, the bigger the debt the bigger the profit. Supply & Demand are not the only game in town.

          I’d like to see more supply, especially within the city, but it’s not the whole story. We’ve seen the same discussion around a lack of supply in Australia, yet their prices have started to fall – http://www.debtdeflation.com/blogs/2012/08/02/australian-house-prices-update-june-2012/ – eventually as liquidity in our banks slows and Australia feels the effects of China’s mineral slowdown, we’ll find our prices becoming more sane. Or do you think we’re immune from the cold the most prosperous countries in the world have caught?

          I’ll say it again, a house is worth as much as a bank will lend you to buy it. Asset inflation is an Economics and Banking issue also. Neo-classicism has been disproved for all but the faithful by the events of the last five years and the 30 years of exponential debt creation that occurred post Breton Woods and which delivered us here.

          Perhaps you’ll consider some of these articles, the first rounds it up most succinctly;






        2. “Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?”


    2. Of coarse it’s also worth noting, our young talent isn’t only leaving Auckland for Melbourne, Berlin, London et al in search of jobs and pay, but to live IN (not on the fringe of) exciting – dense – cities full of apartments and public transport.

  13. AAMCommons, I do understand how banks create money out of thin air via credit expansion (largely enabled by central banks). Mises.org has plenty of material explaining how this works and the consequences of it. Loose monetary policy can obviously lead to increased demand for housing.

    The difference is that in cities without artificial limits on the land supply, this increase in demand leads to an almost immediate increase in house building, which keeps prices down. Just look at Atlanta where there was a considerable overbuild: prices dropped to under two times household incomes! They have now risen to to a multiple of about 2.2 as the city’s economy improves and migration picks up.

    However, in ‘smart growth’ cities such as Auckland, the increased demand feeds into higher prices. Any increase in house building happens years later (usually just in time for the bubble to burst) if at all. What is more destructive for a city and an economy: an overbuild of houses that takes a couple of years to clear (with houses staying in the affordable range) or house prices that are so expensive people are forced to take on huge mortgages, leaving them with tiny disposable incomes?

    You also make the claim that “density allows us to create a dynamic modern city, stimulating our local economy by allowing us to spend on something other than petrol on our way home, allows us to move ourselves efficiently from home to work to play, to interact with one another.” This is wishful thinking. International research shows that density increases traffic congestion because for every extra person getting on a train about 10 more people drive, meaning more cars on the same roading network. The supposedly gridlocked Houston has a lower average work commute time than “progressive”, “smart growth” Portland, for instance.

    As for the article you linked to that wistfully reminded us of the good old days back in 1952 when houses cost £2000, what it didn’t mention was that this was only five years after the passing of the Town and Country Planning Act 1947. This piece of legislation, which enshrined ring-fencing cities with “green belts”, has led to the horrid housing conditions many Brits now found themselves living in. Despite ostensibly opposing the class system (which this Act protects by preventing the uppity poor from escaping their housing estates), New Zealand followed suit. Another unfortunate consequence of these policies is they have opened up a chance for fruitcake funny money advocates to push their “solutions”.

    Finally, you claim New Zealanders are leaving to live in “dense cities full of apartments and public transport”. However, most of them are going to Australia where densities are lower (Auckland is the densest city in Australasia) and the transit share of work trips is much the same. Oh, and Sydney (which has the highest use of public transport in Australia) has longer average commute times than Los Angeles. Basically, New Zealanders are moving to a country with higher wages, higher costs and most of the same stupid policies we cling to despite the damage they are doing.

    1. No, I’m talking about credit creation separate to Central Banks, they create credit at a keystroke as an electronic deposit without any reserves required by the central bank. As you’ll note from the recent IMF paper (The Chicago Plan Revisited) calling for 100% reserve banking. Austrians, at the likes of mises.org, tend to steer away from that debate as it contradicts their demonizing of central banking. Although I’ll grant, as we’ve discovered, the Central Bank will step in and underwrite them when the bubble bursts. It’s a convenient mechanism of Kleptocracy and wealth concentration. The “fruitcake funny money” emanates from private money creation, and the capture and privatization of central banking. Let’s remember who owns the Fed.

      I’ll quote again the most telling figures in that article, not harking back to the 50’s but to a much more recent bubble. “Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?”

      My comments about those leaving our shores are purely anecdotal, the vast majority of people I’ve worked with over the past decade have left Auckland in the last two years, I’ve had conversations with them about why they’ve gone. Wages and jobs play a part, but mostly those I knew were relatively well paid in NZ terms ( although not relative to our astronomical cost of living, food, housing et al ), but have left increasingly because they see this country as a dead end, dominated by conservatism. They went to participate as I said, in more dynamic cities. Which is why I won’t continue in this debate, my focus now is not getting drawn into blog debates – just couldn’t help pointing out the tragedy of Giltrap’s Landbank – rather, my focus is on looking for property in Barcelona, exiting this bubble, leaving the farmers to squabble and buying freehold in a city with density and transport and life.

      “demand is income plus the change in debt” > http://debunkingeconomics.com/2012/10/endogenous-money-and-effective-demand/

      I suggest you have a look at some of those other links.

    2. Kleefer – Do you have any evidence for any of your claims? I have seen people like Wendell Cox at Demographia make similar claims so I am interested to see where you get your stats from. I thionk you will find that pretty comprehensive facts and figures have been out together by people on this blog who are traffic planners and urban planners that are completely different to the “facts” you have put forward. Frankly I have read the same view and seen the same “evidence” you are putting forward so many times, and seen it shot down so many times, that it is getting a little repetitive.

      Also, how do you explain the fact that so many cities are looking to move towards denser cities with better public transport? The exceptions are of course the South Western United States cities you are referring to, although even most of them are starting to build PT systems. Is everyone else living in a fantasy world?

      Also, what is your view on Peak Oil? I assume you think it is all nonsense? If it isnt and we let our cities sprawl out, what will happen when all those people in the South Western United States (and Auckland) can no longer afford to drive to work from their sprawling suburbs.

      I have lived in many dense cities with excellent public transport and Auckland, Auckland being one of the most auto-centric cities in the world. I certainly know what I prefer and I will do everything I can to make Auckland more like the dense, PT oriented cities I lived in. The people in those cities were healthier, wealthier and, from what I could see, enjoyed an urban environment that Aucklanders can only dream of.

      I cant think of anything worse than living in cities like Dallas or Houston. If you love those cities then your world view is completely different from mine and I think most of the people on this blog.

    3. Kleefer – Also what are the “stupid policies we cling to”? Do you mean the way we keep building motorways even though not one motorway has ever reduced congestion for more than a few years? If so, I agree whole heartedly.

      There are certainly no decent PT policies in NZ (other than not building any) so you cant be referring to that.

    4. “You also make the claim that “density allows us to create a dynamic modern city, stimulating our local economy by allowing us to spend on something other than petrol on our way home, allows us to move ourselves efficiently from home to work to play, to interact with one another.” This is wishful thinking.”

      ‘New York: taking away a car lane for cycle track supports a 49% increase in retail sales.’


    5. I don’t have any figures for urban densities, but I can definitely say that I have preferred living in cities which are dense and have a good PT network. They may not be denser than Auckland overall, but they certainly feel denser and probably are in parts. I’ve lived in three cities in the UK, including London. I loved that I didn’t have a car, and that I could walk to the bus stop (or tube or train) and know that I’d only have to wait a few minutes. I definitely wouldn’t have wanted to order a vehicle. I also loved that I could walk to the local pub or supermarket or movie theatre. Or could walk around town to meet friends or go shopping, without having to constantly wait at traffic lights to cross 6 lane roads.
      In Auckland, the houses I have liked living in best were one close to a train station, and one near Great North Rd – because all the West Auckland buses go that way, it’s almost a proper frequent service in rush hour (i.e. don’t have to look at a timetable, can just get to the stop and know there will be a bus soon).

      Your driverless car utopia also seems to conveniently overlook a few points:
      – Not everyone has a smart phone, or can afford one. Even if they can afford one, they may not want one. Driverless cars booked through smart-phones would disadvantage the elderly, children, visitors, and poorer people.
      – Trains are nicer than cars. There is more room, less stop-starting, less turning. It’s much easier to work on a train than in a car.
      – There is no guarantee that driverless cars will be safe from crime or vandalism, whereas at least on a train or a bus there are other people and usually a driver. Mini-van type vehicles have been suggested, but I for one would refuse to get into a driverless car with people I didn’t know. It wouldn’t feel public enough.
      – On PT you can ask a driver, or other passengers, for help if you need directions or assistance.
      – It’s not a bad thing to be surrounded by other people. Sure, sometimes someone will sneeze on you or be rude, but other times you can help a fellow passenger, or bump into an old friend, etc. Let’s stop locking ourselves away in little metal boxes.

      If we want to reduce car ownership then we need to improve PT, and perhaps have alternatives such as the zipcar-style model – i.e. cars for short-term hire. These could well be driverless in the long run, but for now we can start with the cars that are already available.

      1. Ugh, reading two posts at the same time and have commented on the wrong one. Or possible amalgamated my answers somehow… The first part relates to this post a bit. Maybe an admin can delete the whole thing though and I’ll try again..?

  14. AAMCommons, you have failed to explain why mortgage lending expansion causes price increases in the UK but in Houston etc it feeds into increased housing construction and the median multiple stays more or less the same. Your comment about “dynamic” cities is interesting. How do you define “dynamic”? Houston, Dallas and Atlanta have all added more than a million people to their respective urban areas in the past decade with virtually no effect on house prices. That seems pretty “dynamic” to me.

    Goosoid, you ask, “Also, how do you explain the fact that so many cities are looking to move towards denser cities with better public transport?” The answer is simple: people (or at least central planners) think this will work. These are the supid policies I was talking about. I suggest you try Newgeography.com, which has some revealing statistics on commute times. With few exceptions, those with the longest commute times are those with high density and a relatively high share of public transit.

    However, I think the burden of proof is on you, given you are the one proposing massive restrictions on personal freedom and huge subsidies to the few who use public transport, in order to achieve your agenda. Find me some evidence that increasing density reduces house prices, traffic congestion and commute times. Len Brown wants to spend billions of dollars so a few hundred wealthy businessmen living in the inner suburbs can get an easy and heavily subsidised ride to work. I am opposed to that.

    As for “Peak Oil”, my answer is simple: I’m not an expert on oil supply but I’d much rather leave the response to innovators in the market than to governments. You claim people won’t be able to drive to work from the sprawling suburbs, but this assumes that everyone works in the CBD when CBDs usually account for only about 10% of a city’s employment. Most jobs are in the suburbs. I’d also like to point out that sitting stuck in traffic (as people in high-density cities do regardless of how much public transport they have) isn’t great for fuel economy.

    There is a big element of elitism running through this thread. AAMCommons talked about his high-income friends wanting to live in “dynamic cities”. But what about the plight of the poor and middle class in these cities? Just look at New York: it’s a playground for billionaires but young families with children can’t afford to live there, so they’re moving to places like Raleigh, North Carolina. A number of major companies have left California and moved their operations to states like Texas and Utah where they can pay their staff 30% less because the cost of living is so much lower. Adjusted for cost of living, people in Houston have the highest incomes in the USA:http://www.forbes.com/sites/joelkotkin/2012/07/09/the-cities-where-a-paycheck-stretches-the-farthest/

    With low incomes and a high cost of living, New Zealanders are finding it increasingly hard to make ends meet. But our “leaders” have no concept of how tough it is out there for many Kiwis, because they have high salaries and own their own homes which have inflated in price in the past few years. In a country that is only 0.6% urbanised, restricting land supply to force high-cost “density” on people who don’t want it is criminal.

    1. p.s. the links I provided have ample evidence to support my assertions of the change in Debt – the byproduct of private money creation – being a driving force in asset inflation.

      Watch Steve Keen’s presentation at INET on YouTube for the graphs and data. But my expectation is you’ve already arrived at your conclusions and have no room for new data.

    2. Having just watched Key on breakfast I need to add one thing to question your and his outskirt logic.

      4 houses have sold on my Arch Hill Street in the last month, each was flipped within a year and each gained 200k in value during a global Depression.

      At the same time ainhave a friend trying to sell a property on the periphery, two dwellings, acreage, cheaper than a shoebox I’m the city, it’s say on the market for almost a year.

      You’re right we have an issue with supply which in addition to the change in debt and our banks full of hot money is driving up prices. And that shortage of supply is close to the city, where Aucklanders want to live.

    3. Kleefer – I am only really replying as I dont want you to think you have presented any arguments or evidence that has swayed me in the least. As for my evidence, I will just point you to the dozens of excellent posts on this blog that completely refute everything you say. I am convinced you are not.

      I believe that in NZ this is purely an ideological debate and not a technical or evidence based one. It is also about a vision of what cities should look like. I cant believe you claim that PT is “elite” while cars are somehow the preserve of the working class. Only someone living in a completely auto-dependent country like NZ could hold that opinion. I can only assume you have never lived in a city the size of Auckland with excellent PT. I have (Prague) and it was fantastic, probably the best system I have ever used. Auckland’s density and shape are ideal for PT and it is nothing to do with getting people to the centre. The existing train line could easily be used to work in Manukau and live in New Lynn once the CRL is built.

      Good luck withn your views which I believe are a minority in Auckland. I will do everything politically and personally to see that the policies you advocate never happen. If you succeed, I will just take my tax dollars elsewhere as Auckland will be an awful place to live and I dont want my children growing up in a city like that.

  15. As far as taxis and small buses go, this sounds like a good idea. I have just come from living in a city of 3m people where the taxis were incredibly cheap. I could travel across the whole city for about $15. It was a great alternative but the problem of course was the if people can afford to buy a taxi they can afford to buy a car, so the roads were clogged just the same. Even worse than Auckland.

    Fundamentally though the technology misses a big point of public transport. Reclaiming lost roads for pedestrians and more human scaled transport that allows cities to be destinations. Not just somewhere you try and get in and out of as fast as possible and avoid.

    I suspect that most of the people who want something like this are not really city people, they are rural people living in cities who want the best of both worlds’ The opportunities and vibrancy of the city but the ease of getting around and independence of the rural community. This sems to me where the National Party sits.

    I can see the good sides of both those worlds but I think if we try and have both in a big city (and Auckland will be 2.5 million in 30 years time) it will be a disaster and by the time we go to fix it when we have no choice, the cost of doing so will make it prohibitive.

    If this is the revolution of transport, why is it not being embraced and talked about more openly? Are all the leaders of all the cities in the EU, Hong Kong, Singapore, Australia and the East Coast of the US deluded in investing in rail, walking and cycling? If so, that seems like a massive oversight by a large group of intelligent, well informed people who have no vested interest in pushing that agenda. They dont own rail companies or cycle manufacturers and there is far less profit in PT and cycling than traffic infrastructure.

    On the other hand car manufacturers have a massive vested interest in making sure cars remain vital to transport along with the road construction industry and oil companies.

    I am not against this technology, I just see it as a nice cheery on the top of a well integrated, rail based PT system.

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