Our open, innovative economy increasingly craves proximity and extols integration, which allows knowledge to be transferred easily between, within, and across clusters, firms, workers and supporting institutions, thereby enabling the creation of new ideas that fuel even greater economic activity and growth. – Bruce Katz, The Metropolitan Revolution.

A while back I took a look at CBD land value and discovered how extreme it is compared to cbd-adjacent property. Taking a cross section look those land values also reveals some interesting anomalies on the western side where land values seems to be compromised. Elevation and historical land use activity were suggested as an explanation, but it is more likely influenced by the motorway-scaled one way systems of Hobson and Nelson Streets which create a barrier to movement and accessibility.

Comparing land values on either side of Queen St

The fundamental function of a city is to facilitate exchange- social, economic and cultural. Urban land value is created by accessibility and centrality; simply, how many people can access the site, or inversely what can people access within close proximity from the site. While useful for shaving a few minutes off a commute, streets designed to prioritise vehicular access such as the one-way couplets of Hobson and Nelson Streets destroy urban land value. Here are couple of images from a dystopic tour of the CBD.

Hobson Street
Hobson Street
Cook St
Cook St
Fanshawe St
Fanshawe St

The prioritisation of automobiles repels human activity. So while it may be easy to access offices and places in the CBD from the motorways, this access comes at a cost. In urban settings automobility limits personal mobility (walking) both by creating repulsive environments (see photos above) and by the spatial requirements of moving and storing cars, resulting for example in having to wait for two minutes to walk across a street. Here is an illustration of the spatial requirements of moving a car through an urban area.

Space required to move vehicles at particular speeds. (Modified from Happy City, Charles Montgomery)
Space required to move vehicles at particular speeds. (Adapted from Happy City, Charles Montgomery)

To put it another way, the prioritisation of the long distance car trip with motorway-style infrastructure may save time on one trip, these designs severely obstruct other short trips or more spatially efficient PT trips.

This returns us to the value of a city- its ability to facilitate exchange (or as some spatial economists obliquely say ‘to minimise transport costs’). Today we continue plan our transportation systems based upon the objective of minimising motor vehicle delay, but this is seriously flawed, especially in urban contexts.

The most valuable trips in urban areas are not the motor vehicle  trip, but the ones buried in the ecosystem of city life which go unmeasured.  Critically these “trips” are enabled by highly efficient transport modes.

These trips enable the phenomenon of cityness – the messy, complex, dense convergence of the physical environment at multiple scales. Increasingly these spatial properties of cities are being recognised for their value in fostering innovation and productivity. In the recent book Metropolitan Revolution,  Bruce Katz  documents how cities are radically adapting to the new realities of proximity that are required for businesses and cities to compete on the global scale.

The hunger for knowledge and the imperative to collaborate has spatial implications. Partners want to be near partners for the simple reason that proximity enables constant interaction and knowledge sharing.

…The proximity effect can be staggering: Gerry Carlino has found that the number of patents per capita increase, on average, by 20 to 30 percent for every doubling of employment density, with the greatest  increases expected within the most densely populated portions of a metropolitan area. Stuart Rosenthal and William Strange find that intellectual spillovers that drive innovation and employment drop off dramatically as firms and people move more than a mile apart.” At a distance of just over a mile, the power of intellectual ferment to create another new firm or another new job drops to one-tenth or less of what is in closer in.

Here is a map of the Auckland CBD showing this mile metric.  Coincidentally it fits nicely within the motorway collar.

"Intellectual spillovers ...drop off dramatically as firms and people move more than a mile apart." Bruce Katz. Auckland shown with 1-mile wide circle
Auckland shown with 1-mile wide circle “Intellectual spillovers …drop off dramatically as firms and people move more than a mile apart.” Bruce Katz.

On a finer scale Katz refers to the often cited work of Arzaghi and Henderson who found that the value of clustering for advertising industries is highly dependent on proximity to other agencies and thus being “close to the center of action.” The value gained from proximity for this industry outweighed the rent premiums. In fact they found that these spatial advantages (information spillovers and frequent contact) to be so narrowly focused geographically that they dissipate over a short distance if walking to a meeting place becomes difficult… “and are gone by 750 meters.”

Katz’s bigger point here is that it is not just media companies that require this spatial fix now,  but a broader range of knowledge-intensive sectors such as science and technology heavy fields.

Lets consider that 750m metric for a moment. This distance generally represents a 10-minute walk. Add a hill, throw in an intersection or two (or just Fanshawe St) and very quickly that employment-dense catchment that firms would pay a premium for is now marginalised. Here is an illustration of  750 meter (radius) catchments across the CBD. Consider if these circles having the depth that is required to support a job dense environment in this economy. Now chip away at these circles with a motorway, a one-way couplet, a two-minute wait at a traffic signal, some hills, and even the water’s edge. What’s left?

Benefits of clustering for some industries “dissipate very quickly with distance… and are gone by 750 metres”

Here is a more sophisticated version of the first image. I have extended the study area across the motorways. The blocks represent capital value (land value + improvement value) by area. This value has then been extruded using the building footprint in a relative proportion of height (ie. a tower tower 30m is 3X more valuable than a tower of 10m).

Auckland’s struggling CBD sand castle.

Some things jump out from this image. Like from my original post, the premium for city centre land is impressive. Also, the motorway system seems to radically constrain the cbd like a noose. This also has the effect of concentrating capital values excessively in the very centre (near Queen Street) since this is where the abundant proximity remains. Firms locating on the edge, or cbd-adjacent (outside the motorways) have limited access to the concentration of people in the city centre.

As a single fix the CRL has the potential to span the motorways and create “centre of action”-like proximity to places like K Rd, Newmarket and Eden Terrace. In addition to the massive mobility efficiency of underground rail, it will also critically bring a degree of scale to our CBD which is currently chopped into an archipelago by the motorways. The CRL however, will not address the street-level barriers that repel movement and proximity. This will require a major shift in the way people see the value of the city and recognition that  there are real trade offs associated with applying outdated transportation objectives in urban areas.

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  1. Just crossing Nelson St to my office on Cook Street this morning I noticed almost every car AND TRUCK down that “semi motorway” travelling way over 50kmph. An unmarked speed camera van would do well there.

    But, as I was waiting to cross the road I was actually thinking about this blog. And yes, it is ugly, 4 semi motorway lanes in the city just does not seem right at all. It certainly does not make this neighbourhood attractive at all.

    I would like to see Nelson and Hobson street as two way streets, mainly to calm the traffic to 50 or even better, 40 kmph. One must consider the thousands who live in appartments on these two streets. They deserve safe roads, not motorways outside their doors.

    1. That’s the irony isn’t it, the desire to shave a few minutes off someone’s commute who drives in from a far flung suburb at present trumps any right of people living in the city to be able to easily move around said city. Billion dollar projects like the second harbour crossing that National it would seem are intent on progressing (if they get a 3rd term) will simply make this worse, and in my opinion quite likely seriously destroy the innercity. I’m not really sure it’s a project that Auckland will easily ever recover from. And I’m guessing if it proceeds it will be the final straw for a lot of people considering moving to places that actually value urban life.

      1. Yes urban motorways are a massive and concrete expression of a policy of privileging of outer places and people [suburban, ex-urban] at the expense of inner ones. And are, therefore, essentially contra-Urbs. Anti-city.
        The built result of a favouring of auto-dependant dispersal over independent agglomeration.

  2. Great post – it’s interesting to wonder about the extent to which the CMJ “collar” and poor PT to the city centre over decades has undermined Auckland’s economic prosperity by forcing a relatively weak CBD and taking away the spillover fringe areas that are often hotbeds for innovation.

  3. +1 The great visuals really explain the issues at a glance. The CMJ “collar” really does seem to have had a detrimental effect over decades. The CRL has the potential to become the “horizontal elevator” to “hard-wire” those outer CBD zones back into the core (and therefore improve the cultural and economic heart of Auckland). No doubt in future years this evidence based analysis will record property values increases in those currently dis-connected outer CBD zones starting from Ellerslie/Great South Road and running through Newmarket, Grafton, Eden Terrace, Kingsland. I presume that the CRL business case has used forecasting tools to factor in increased property values?

    It will take a lot to repair the damage done when the CMJ was installed. Hobson and Nelson Streets really are very ugly and quite a contrast to the widespread and interesting CBD fringe environment that Sydney, for example has.

    1. Great visuals. Some low value buildings really stand out.. check the massive very low flat space in Newmarket where the Lion Nathan brewery used to be. You’d expect that to shoot up once the University Sci / Eng faculties build up.

      1. Yes, and to have a transformative effect on the Grafton area too. I could see a university/Grafton/Hospital triangle thriving in the not too distant future. The degree of success will depend on the CRL, and other factors.

  4. Great post – I continue to be impressed and informed by the high quality of the posts on this blog, and the thoughtful and considered discussion that ensues. Thanks heaps to the authors – it takes a lot of time to research and write on these topics, and we get to read and comment for free! My only hope now is that our policy and decision makers in Government, NZTA, AC & AT are also reading, considering, and actioning.

    Keep it up – your expanding reader base really appreciates it.

    1. @SteveS – excellent comment. And my thanks to the regular contributors to this blog for raising ideas and furthering the debate on urban issues.

    2. Yes and you have to wonder why the policy and decision makers in Government, NZTA, AC & AT arent able to produce this kind of thinking themselves. Blind adherence to an ideology is an incredibly effective way of ignoring good ideas and staying firmly inside the box.

      1. When I briefly worked for the Ministry of Works and Development in the early 1970s, as well as the people building things, they had a group of planners who looked at issues like this. Some of the ideas came out of there had major delusions of grandeur (80,000 people around Paremata Harbour), others were more prescient (satellite city at Rolleston). When MWD got dismembered in the 1980s, anyone who thought about the results of buildings roads etc. beyond pushing more cars through was cast aside. I can’t actually think of any branch of Government thinking about city issues, there may be someone in the depths of MBIE, but I doubt it.

  5. Yeah, it’s definitely an anomaly, thanks for identifying it so clearly. There’s loads of interesting businesses out that way, some of which struggle to attract public because of the shitty nature of the surroundings and car-centric environment (the sale st area, the house of rugby…). And it’s unsafe for cyclists. I think the lack of onramp to the southern, northwestern and port motorways from the viaduct is part of the problem too.

  6. School Zones is also something to consider when talking about property prices… For boys, East of Queen Street = Grammar zone, West of Queen Street = Western Springs College. I might be wrong.

    1. Yes but Western Springs is now quite a good school – certainly nothing likie itw as even 10 years ago. I ahve two cousins who went there and it is excellent for developing more diverse and creative people. More likely Green voters than the National/ACT voters at Auckland Grammar. Look at the suburbs that feed it now, westmere, Grey Lynn etc.

      Not so great if you are very sporty maybe and want to be in a top 1st XV but since hardly anyone in Auckland seems to be interested in Rugby anymore (at least from the persepective of a Cantabrian) I doubt that is a massive factor.

  7. Very very good post Kent, Thanks…. The best demonstration I have seen in a long time that poorly designed streets bring down commercial property values. And reduce the economic benefits of a city centre i.e. the agglomeration of business.

  8. Lets cap the motorways and reclaim some living space. Your post essentially provides the evidence for how this can be paid for – local government contributions from targeted rates, and central government contributions from a capital gains tax.

  9. Great post! I have hated what happened to Nelson and Hobson Streets for 50 years – very people unfriendly!

  10. I’m continuously surprised how anti the CBD National’s policies are (roading, CRL etc) given that this is the so-called ‘engine room of NZs economy’.

    Aren’t they supposed to be the business party? Or have they regressed back to being the farmer’s party again?

    And if that’s so, why aren’t Labour regressing back to being the urban party again? I don’t see any leadership at all from them on these sorts of matters.

    At this stage of the game I’d be hoping for National / Green coalition after the election (as long as Greens are in a strong enough position to not end up being lapdogs like Lib Dems did in UK this term).

    1. Politically, that’s on the short side of impossible. (At this point in time). What you can look forward to however is the Greens progressing policies through the political cycle to the extent that they become popular or acceptable enough for National to adopt them, or at least drop their hostility.

  11. If proximity is so important then presumably there must be a hell of a lot of new innovative companies forming in the existing CBD. More than are forming in other areas of Auckland or in the provinces. Can we test that with data? Maybe in NZ it is cheap rent that matters more, perhaps given that companies like Google and Hewlett Packard started in garages we should build more garages! Excellent let’s have a rule requiring them as part of other development!

    1. I can give a few examples in IT – Vend, GeoOp and Xero are in Parnell, GrabOne is in Newmarket. It looks like mature startups prefer to be just outside the CBD. Oracle, HP, telcos etc. are all in a cluster near Victoria park.

      For startups access to new capital is very important. Being physically close to other mature startups and big players helps a lot so that’s what they do, if they can. Why would otherwise so many relocate to San Francisco?

  12. Cook St. Hugely overbuilt for existing traffic volumes. NZTA Cook St off ramp – 8719 AADT AT – Cook St/Sale St (both lanes) 10707 AADT

  13. Really interesting post. I’m not sure though that the way the highways constrain the CBD is such a bad thing. Christchurch is currently putting in place artificial constraints to their CBD (though using a much more pleasant green frame) because without constraints it just sprawled out far too big. The 750m and 1600m scales you use are interesting to compare to the Christchurch situation: pre-earthquakes the CBD within the 4 avenues was some 2000m across, whereas the new CBD is only about 750m across.

  14. Changing H&N to two-way would cause several issues. Firstly, it would DRAMATICALLY increase the pedestrian delay at these intersections. This is a fact, not an opinion. It is a result of adding in an extra 3 phases to cater for all the extra vehicle movements. Secondly, you would need to increase the total cycle time to allow more phases which delays everyone(bad) and causes more congestion(not a bad thing). The design would still probably include 2 lanes each way, retain huge intersections, parking on both sides of the road, no cycle lanes (because they are always the first thing to go in designs) and a solid median with some trees which would be a huge waste of public space which no one will enjoy. Lastly, NZTA would never allow something that would increase congestion on the motorway. It is a serious safety issue.

  15. Changing H&N to two-way would cause several issues. Firstly, it would DRAMATICALLY increase the pedestrian delay at these intersections. This is a fact, not an opinion. It is a result of adding in an extra 3 phases to cater for all the extra vehicle movements. Secondly, you would need to increase the total cycle time to allow more phases which delays everyone(bad) and causes more congestion(not a bad thing). The design would still probably include 2 lanes each way, retain huge intersections, parking on both sides of the road, no cycle lanes (because they are always the first thing to go in designs) and a solid median with some trees which would be a huge waste of public space which no one will enjoy. Lastly, NZTA would never allow something that would increase congestion on the motorway. It is a serious safety issue.

    “Streets designed to prioritise vehicular access such as the one-way couplets of Hobson and Nelson Streets destroy urban land value.” I would definitely agree with this to a degree. It all depends on what sort of street you are talking about. I have read a report that showed an increase in property values in the US when a one-way was put in, but it was only 3 lanes wide. So I would argue that a one-way street designed to prioritise pedestrians would be superior in most respects to any two-way street. You just need to design the one way street with pedestrians being the priority.

    I would argue that a better option is to narrow most of Nelson to 3 lanes only from north of Cook st and all Hobson St until Cook st. Parts of those roads are 7 lanes wide which is a crazy waste of space for most of the day.
    1. Take out 4 lanes and make it pedestrian space with a segregated cycle lane down one side.
    2. Narrow all the intersections on the north and south to 3 lanes which would reduce crossing distances for pedestrians.
    3. This would shrink the intersections to such a degree you could easily run barnes dances at all of them without impacting vehicles or needing a higher cycle time.
    4. To address speeding: Keep the lanes as narrow as possible ~3.2m or less.
    5. Raise all the intersection to footpath level and colour the intersections. But don’t have speed bumps because it sucks to be on a bus and have to go over those all the time. Just use a gradual slope. This will reduce speeds and emphasise pedestrian priority.
    6. Outside of peak times run double ped phasing.
    7. Outside of peak times have H&N sit on red to eliminate anyone trying to speed up and down there. This would also allow the buses on Wellesly/Victoria to not get held up on red all the time.
    8. Traffic lights are the most powerful tool we have to influence driver behaviour and speed but we fail to use them.

    This is an unorthodox option which would free up huge amounts of pedestrian space on both of these roads and allow segeregated cycle ways on both which would simply not be possible with a boulevard type arrangement because of width constraints.

    1. That would be a lot cheaper than 2 waying the STROADS. The left turn lane on Hobson St is very under utilised from what I’ve seen. You could build a protected 2 way cycle lane there and create a very minor disturbance.

    2. For Ari: http://www.citylab.com/commute/2013/01/case-against-one-way-streets/4549/

      Anyway ‘flow’ is not the most important role for a city street. These are currently just motorway extensions and we need to turn them back into streets. If drivers then find them frustrating to use then that is no bad outcome; as this will help them to consider using alternative modes as we improve them at the same time. The Centre City cannot thrive on increased or even current vehicle access. That is rather the point of the post.

    3. It is opinion Ari, you can improve pedestrian crossing phasing at the same time, for example double phase scrambles. Yes that might impact further on traffic, but it’s not a fact you have to automatically give pedestrians the minimum time and phasing possible.

  16. Patrick, I don’t disagree with the theory around that research, but it isn’t proven and is beside the point. The reasons stated for conversion in that article are flawed. None of those cities have produced reports of the crash stats before and after the conversion. Trust me, I have looked. I would very much like to know because I am confident that there would be an increase in pedestrian/cylist accidents in all those cases. Despite urban planners sticking to the claim the conversion was for safety reasons, they are decieving the public. The fact is there is no conclusive evidence that comparing like for like roads shows 1-way roads as less safe. There are many conflicting studies and I remain skeptical of all of them. But certainly 1-ways are less pedestrian friendly. No solid evidence that they decrease economic factors either. The problem is that these conversions usually happen at the same time as many other urban development projects. So the actual outcomes of the conversion is clouded.

    We have NOTHING like the network they do in many US cities(or CHCH) with confusing crisscrossing of a dozen one-way streets. I can’t think of any good reason to build more in Auckland. Except maybe part of customs/quay, and only to create more pedestrian space and room for cycling lanes. Other than that part of the CBD. Using 1-way streets to increase vehicle capacity is a 1950’s approach. But using them to take back road space from the car and create pro-pedestrian streets is surely better than boulevarding and still ending up dominated by vehicles? Besides, Montreal and New York do just fine with some very vibrant one-way roads.

    I totally agree that we shouldnt improve vehicle access in the CBD and that we should improve pedestrian access, ammenity and accessibility in the CBD. But I totally disagree with using a compromised boulevarding that may only result in the loss of a SINGLE vehicle lane. It wont improve pedestrian safety, wont reduce pedestrian delay, won’t cater much for cyclists, will increase congestion for vehicles and delay for all road users, waste valuable land on a solid median and waste a lot of our rates in the process. With little real gain except planting some trees and a more clogged up CBD. It just seems like a no-brainer lose-lose for everyone.

    1. Why do you assume we have to remain dominated by vehicles, and have long pedestrian delays, and not cater for cyclists, with boulevarding? The whole point is to detune traffic capacity in favour of better pedestrian phases, cycle lanes etc.

      Yes, I would rather cross a two way street with a median than cross three lanes going in the same direction. The former is less lanes to cross in one go, which also suggests that traffic will probably be slower without a three lane unidirectional runway to blast down. I would also like to cycle on a two way street, assuming that on occasion I might want to cycle in both directions or get to places on both sides of the street. Likewise if I am driving, I quite like to be able to drive in either direction rather than have to make big looping journeys around the CBD.

      Two way is normal, it’s standard. One way with three or more lanes lanes gives the geometric conditions for high speed traffic and difficulty for non traffic users.

  17. I particularly loved the research that shows patents increase with employment density. Presumably they had a data point for oceans- no patents, desert -few patents, forest and farmland some patents, cities- lots of patents. There must be a situation where research becomes common sense.

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