Every week we read more than we can write about on the blog. To avoid letting good commentary and research fall by the wayside, we’re going to publish weekly excerpts from what we’ve been reading.
Bernard Hickey, “Opinion: A city unmoored“, Hive News:
…the Government and the Auckland Council have to consider more aggressive measures on both sides of the ledger, including supply and demand. Prime Minister John Key has always left open the option of tweaking migration settings if the pressure on infrastructure and the economy generally becomes too much. Auckland’s housing pressure cooker is getting closer to that point.
The Reserve Bank is likely to force banks to progressively hold more capital to back rental property mortgages within a few months, which could push up interest rates for landlords. It is also expected to keep agitating quietly behind the scenes for more Government action to reduce the tax advantages for rental property investors. A brave Reserve Bank would be much louder.
Ultimately though, the bigger fixes on the supply side will take much longer. They could include introducing new types of leasehold agreements and long-term tenancies that make long term rentals more attractive for tenants and institutional investors alike. They could include removing many of the restrictions around building heights, parking and view shafts that reduce the density of housing in the ‘leafy’ suburbs around the centre of Auckland such as Grey Lynn, Ponsonby, Mt Eden, Remuera and Parnell.
Kristy Wang, “Getting to Know Your In-Laws“, SPUR:
Since the Department of Lands and Buildings erected 5,610 “refugee cottages” in camps all around the city after the 1906 earthquake, San Francisco has often relied on flexible housing types to meet the needs of residents, families and workers. Accessory dwelling units (or ADUs; also known as secondary units, in-laws or granny flats) offer a way to increase density while respecting neighborhood character. [1] Given the Bay Area’s housing crisis, in-law units are an important strategy for helping increase the supply of “naturally affordable” housing…
Jolisa Gracewood, “7 Ways E-Bikes May Surprise You (They Definitely Surprised Me“, CAA:
You don’t have to go fast on an e-bike, of course. You can just use the motor for that little bit extra when going uphill. But this was a revelation: at certain times of day, an e-bike can get you there in half the time.
Not just half the time of a regular bike – half the time OF A CAR. Or even a bus. Not to brag or anything, but: the other day I had a meeting in Ponsonby. I was running late, and set off only five minutes before the meeting was due to start. I got door to door from the Pt Chev shops to Ponsonby (4km) in ten minutes.
Angie Schmitt, “Calculating the Big Impact of Sprawl on Cities Bottom Line“, Streetsblog:
When someone builds a new home, does it make the city stronger and more fiscally sound? Or does it drain public resources? The answer depends a lot on where it’s sited and, more specifically, where it lies in relation to other homes and businesses.
Smart Growth America has developed a fiscal impact model that helps predict how developments will help or hurt the municipal bottom line. The tool they developed [PDF] takes into account how density affects the cost of delivering city services, from streets and sewers to fire protection, school busing, and garbage collection…
According to SGA’s model, the higher density development scenarios would have a far better effect on the city’s budget [PDF].
Glen Koorey, “Neighbourhood Greenways: Invisible Infrastructure for Walking and Cycling“, paper presented at 2012 2 Walk & Cycle Conference:
Neighbourhood greenways (aka “bicycle boulevards”) are a form of street treatment where simple measures such as lower speeds, traffic restraints, wayfinding and crossing treatments are used to create an environment that is friendly for walking and cycling.
They are particularly useful for connecting people to community facilities such as schools, parks, shops and other key destinations in a neighbourhood and beyond. Neighbourhood greenways (NGs) are a popular tool in North America (especially on the west coast) but have yet to catch on here in New Zealand, despite many similarities in street environment…
Enrique Martinez, “American cities are designed for cars – which makes life worse for everyone“, Quartz:
Walking, one of the most natural of human activities, has become shockingly rare in the lives of many Americans: Only two-thirds of adults report walking for more than 10 minutes at any time in the previous week...
Our choices about how to get around are largely shaped by our environment and our perception of what it will be like to get from one location to another on foot, in a car, on a bicycle, or via some other vehicle. The main geographic factors that influence people’s transportation decisions are proximity—how close the start and end points of their journey are—and connectivity—how fast and convenient it is to move from one to the other…
Proximity requires a compact mix of a variety of buildings types, so that the spaces for living, working, shopping, entertainment, and other activities are close together.
While proximity is about the location of places in relation to one another, connectivity is about the routes for traveling between those places.
Connectivity increases as there are more—and more efficient—transportation and route options for moving from one point to another. Grid street layouts (i.e. sets of parallel vertical and horizontal roads that intersect at right angles) are ideal for connectivity, since they offer numerous short segments, in the form of city blocks, and frequent intersections for moving from one segment to another. On the other hand, the “suburban spine” pattern common on the outskirts of many sprawling cities—with major roads connecting enclosed residential areas cut off by cul-de-sacs and dead ends—makes moving from place to place more complicated.
Sam Judd, “Opinion: Aucklanders are bad drivers“, NZ Herald:
Never have I seen so many aggressive drivers as here in the city of sails. I agree more with the Danish consultant who called it a ‘City of Cars’. So much of the infrastructure is set up for cars, rather than pedestrians or cyclists, that drivers think that they own the road…
Auckland averages about 50 injuries to cyclists from vehicles each year and the memorial white bikes that are dotted along Tamaki Drive in particular pay homage to wasted lives at the hands of accidents. It is no surprise at all then, that aggressive driving is to blame for the lack of uptake of cycling as transport.
The stupidity of this situation is that (as I have said before) we suffer from road rage, from air pollution and our waterways receive heavy metal pollutants from car use, but if Auckland drivers weren’t so bad, cycling would be an excellent solution.
The fact is that on average, over two thirds of car journeys are less than six kilometres and a third of them are under two.
Colin Marshall, “Subway station toilets: a surprisingly accurate measure of civilisation“, The Guardian. Even if our driving’s bad, our public toilets seem to be pretty decent:
The size of the economy, the quality of the architecture, the activity on the sidewalks, the cleanliness of the streets: we can evaluate a city in any number of ways. But in my travels through North America, Europe and Asia, I’ve found no more telling indicator – and at times, no more important one – than the state of its subway station toilets, the true measure of urban civilisation.
Of course, to use this marker at all presumes a certain degree of development: not only must the city in question have a subway system, but that system must have toilets…
Ambrose Evans-Pritchard, “Global solar dominance in sight as science trumps fossil fuels“, The Telegraph:
Solar power has won the global argument. Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies.
Roughly 29pc of electricity capacity added in America last year came from solar, rising to 100pc even in Massachusetts and Vermont. “More solar has been installed in the US in the past 18 months than in 30 years,” says the US Solar Energy Industries Association (SEIA). California’s subsidy pot is drying up but new solar has hardly missed a beat…
For the world it portends a once-in-a-century upset of the geostrategic order. Sheikh Ahmed-Zaki Yamani, the veteran Saudi oil minister, saw the writing on the wall long ago. “Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil,” he told The Telegraph in 2000. Wise old owl.
[John, who suggested this article, also gives it credit for teaching him the word “ineluctable”. This means exactly the same thing as “inevitable”, but people will probably be impressed when you use it.]
Noah Smith, “Bigotry is expensive“, Bloomberg View. Not about transport or urbanism per se, but it makes some excellent points about how a society that offers people more equal opportunities can be a wealthier society as well as a fairer one:
So if a society bases its decisions of who gets which job on race and gender, it’s going to be sacrificing efficiency. If women aren’t allowed to be doctors, the talent pool for doctors will be diluted, and wages will be pushed up too high, choking off output…
Just how big of a difference does this make? A team of top economists has recently studied the question, and their results are pretty startling. In “The Allocation of Talent and Economic Growth,” economists Chang-Tai Hsieh and Erik Hurst of the University of Chicago Booth Business School and Charles Jones and Peter Klenow of Stanford estimate that one fifth of total growth in U.S. output per worker between 1960 and 2008 was due to a decline in discrimination. From their abstract:
In 1960, 94 percent of doctors and lawyers were white men. By 2008, the fraction was just 62 percent. Similar changes in other highly-skilled occupations have occurred throughout the U.S. economy during the last fifty years. Given that innate talent for these professions is unlikely to differ across groups, the occupational distribution in 1960 suggests that a substantial pool of innately talented black men, black women, and white women were not pursuing their comparative advantage.
And finally, for the Auckland-based readers, the inchoate hivemind on Reddit has compiled a list of Auckland’s secret urban treasures. Full of stuff like:
Yesterday I took the train out to Te Papapa to this ridiculous/amazing Japanese warehouse with hundreds of silk kimono for about $25 a pop, as well as amulets, antiques, etc. (This place, in case you wondered: https://www.facebook.com/asiagallerykimonomegastore)
It was insane, and made me wonder what other bits of Auckland beyond the city centre most people who don’t live in your area don’t know about.
Got any secrets to share about your neck of the woods?
Matt and I can second the recommendation for the Mahurangi Cement Works, a flooded quarry / popular swimming hole near Warkworth.
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“Matt and I can second the recommendation for the Mahurangi Cement Works, a flooded quarry / popular swimming hole near Warkworth.”
Just be careful when diving in head first aye Peter 😉
Two interesting interviews on intensification this week. The view of the Treasury secretary is that Auckland’s current housing market was a supply issue and that calls from the Reserve Bank for demand policies wouldn’t work. Very much ‘on song’ with government policy.
I also could see the anger rising up in Bill English at the idea of an increase in housing supply through intensification on a CNBC interview earlier this week.
Supply-side policies, which could include changes to regulatory policies or direct government investment in housing, are probably more important in the long run. But short-term outcomes, such as price movements in a single year, are much more dependent upon demand. So it’s possible that demand-side policies, ranging from limits on migration or capital inflows to different bank lending policies to taxation of capital gains, are necessary to manage the market right now.
Ultimately, though, politicians have really, really poor incentives to control house price inflation. If prices in Auckland fell by 20% – i.e. back to the level they were a year ago – National would lose votes over it. They certainly wouldn’t be talking about how good their policies have been for housing affordability!
Peter land value taxes got a pretty good hearing by commenters on interest.co.nz http://www.interest.co.nz/opinion/75022/reserve-banks-decision-press-government-action-overheating-auckland-house-market
As a way to encourage the outcomes that the Reserve Bank was hoping for, more intensification,decreasing land banking…..
What is your opinion?
I agree Peter, the problem is probably not that Key and co don’t know the solution, but that they are afraid to implement it. What I can’t understand is why Hickey, who mostly bangs on about how the baby boomers are screwing the younger generations, does not even mention the restriction on the availability of new land for building when that is the primary means by which the land owning baby boomers are transferring wealth from his poor X and Y gen to themselves.
Is it the Reserve Bank that insists on a higher equity for loans for apartments than for stand-alone houses ? Is so, then surely they only have themselves to blame. Had they not had this rule, there would have been many more apartment blocks built over the last few years.
LVR’s are a recent thing, and therefore the lower loan to value ratio for apartments over standalone houses is a bank specific thing not Reserve Bank policy.
But you are right, not putting apartments on houses on equal footing will not help fix the supply side issues with housing.
The treasury dude will probably get a promotion for that or maybe even a list seat later. As you say he was ‘on song’ with his masters. The thing to remember about the reserve bank is they have a conflict of interest that so far no body has called them on. They are responsible for monetary policy with the main aim of price stability. But their main goal is to protect the banking sector. The two have similar aims in some matters- you cant have price stability if banks are collapsing. But they have some conflicts. The Bank has opted for protecting the profits of banks each time they have meddled in the housing market and we can expect that approach to continue. Each intervention they make will be aimed at ensuring banks don’t have to compete too much and to make sure banks don’t get burnt by a housing correction. They wont focus on supply and demand too much, that isn’t their remit.
What this guy said. he’s not too good in transport but understands policy fuckups quite well
Gee thanks. I think.
The solar article is the Sunday reading for me…..
‘Solar power has won the global argument. Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies.’
Yet in NZ we are now taking down Wellington’s trolley bus infrastructure and may be about to do the same for rail freight. Clearly NZ will be able to very comfortably go 100% renewable electricity with capacity to spare.
Looking at large-scale solar in the Australian desert, the stock answer from the business establishment was that it was unfeasible due to the on-going maintenance to deal with dust. Looks like Israel have now solved this according to the article. When will Australia’s political-business dinosaurs accept the inevitability of solar electricity as the replacement for brown coal?
Wellington needs quite a bit more investment ($15 million+) to improve the overhead wires. Even though I am saddened to see them go, I believe that it makes a bit of sense as the diesels are far more reliable and faster than the trolleys. To be honest, I would like the trolley bus network downsized a bit and upgrade those bits as reliability would improve and we still get to keep them
But that $15m is but a drop in the RoNS ocean.
It is. For a regional council, $15 million is a heck of a lot of money. However that money would be better spent buying hybrid or diesel buses as they are far more reliable, doesnt come off the wires every time I ride in one, and is faster.
As for spending money in the best way possible, I’ll use a Melbourne example. Rather than spend $18 billion on the East west link, the state government could build Melbourne metro (hopefully not in its current form as the most overcrowded stations would get more packed) and finish the half completed ring road (no1 priority for the racv, which is kinda like the aa). But I’ll leave that debate for another day
How many existing buses will $15m allow to stay on the road? And how many new Hybrid Diesel buses will that same $15m buy? about 30 at $500K each bus I reckon.
Surely the economics of the former will trump the latter in terms of bang for buck?
I’m just going to leave this here: http://www.gw.govt.nz/assets/Transport/Regional-transport/RPTP/GWRC-Bus-Fleet-Configurations-Final-version.pdf
Some of the figures and assumptions in the report could be refined, but it does pretty comprehensively look at the trade-offs between different options for the Wellington bus fleet. In my view, there are several plausible alternatives for the fleet, including re-investing in trolleybuses or transitioning to a hybrid bus fleet, which come with different types of costs, benefits, and uncertainties. (Full disclaimer: I did a lot of the modelling for this report.)
The cost I read in the Dominion Post of removing them was 40 million alone, so the cost of upgrading is less than the cost of removing, Seems like the removal is ideologically driven.
Once Tiwai point goes we’ll have plenty of renewable power available. NZ Aluminium Smelters has to tell the government by July this year if its planning on closing down Tiwai after the current contracts for power run out in 2017.
Be interesting to see which way that will go. I think that the smelter will stay for a bit longer, as NZAS will “mysteriously” find that the Tiwai Point smelter is not actually the basket case after all that they told this Government it was, a few years back.
Wellington is just a shortsighted move by myopic regional councillors.
As they’re finding out now, the cost of actually removing the overhead wires will dwarf (and thus eliminate all of) the supposed savings they we told they’ll make by ditching electric powered transport.
And as the likes of Bombardier are showing in Europe, “burst” charging of electric battery powered buses is a perfectly feasible technology to use now. So you don’t need to have continuous wiring, but you still need to have something in place.
So ripping out the system before you decide on its proper replacement is very shortsighted. Better to leave the syste as it is for a few years to let the technology mature even further then place your bets.
Because one thing is for sure, one you buy a fleet of buses, you’re stuck with them for at least 20+ years.
http://www.bombardier.com/en/media-centre/newsList/details.bombardier-transportation20140327worldsfirstelectricbuswithbomba.bombardiercom.html
http://www.metro-magazine.com/sustainability/news/293814/bombardier-wireless-electric-bus-charging-to-power-berlin-fleet
Can’t believe KR is considering ditching electrification, still they do have an ageing fleet of electric locos that no doubt need modernising – so the short term economics of currently cheap diesel to run Chinese freight locos on must be attractive to them.
That is however, merely mistaking a short reprieve of fine weather during early Winter as evidence that Winter is not coming this year or any other year from now on. Its simply a bad call to make no matter what time of year.
Helping KR invest in modernising its network such as by buying new Electric Locos for the next 30 years is exactly what the “Future Investment Slush Fund” was supposed to be all about right?
Looks to me that the FISF is all going to be handed out as Rent subsidies instead to private landlords and PPPs for new schools in lieu of a proper state funded housing/school programs instead, so in 10 years time the FISF money will all be spent.
The country will then have nothing left to show for it.
As for solar generation, the main issue with Solar uptake here and lots of places around the planet is not making the power from sun. It is being able to store it at peak generation times for later use during peak consumption times.
When prices for energy storage come down (whether Flow based battery tech or solid state battery tech like Lithium Ion), storage coupled with Solar has the easy potential to make every NZ home with a north facing roof, pretty much self-sufficient in electricity. Where will that leave the likes of Contact & Genesis with their big thermal plants? And it might even give MRP and Meridian a big fright too.
They all might find like Saudi Arabia predicted with oil, that the end of the Big Dam Age comes – not because free falling water is too scarce to “burn” (put through turbines), but just because nobody except big Aluminium Smelters and other big industrial users actually need to buy their power from them any more.
If Tesla (and presumably others) have their way, the notion of being ‘grid connected’ may soon be a thing of the past. I see this as a much bigger change than driverless cars.
http://www.businessinsider.com.au/this-is-going-to-be-teslas-new-product-line-2015-3
Agreed local generation and storage will be a bigger thing that driverless cars.
I think most houses and building in general will still be grid connected (after all, a big apartment block can’t generate all its residents power needs from its roof alone – yet anyway), and not sure if we actually want apartment buildings festooned with bulky solar panels all down their sides yet). one day when building products including windows come with the solar stuff inbuilt so it generates power without looking any different from what it does now then you won’t notice it and it will be everywhere.
Even if Tesla’s product announcement is a battery storage device for home use. It has a way to go still to become mainstream. Tesla if they survive will become known as an “energy products” company, not a car company or a battery maker. Those things are just waypoints on the road to a radical rethink of how electrical energy is made, distributed and used. In the Tech. world those things would be called “reference designs” – a way of showing the rest of the world how to use the technology.
But I see the power lines to your house becoming more like a road – a two-way thing where you can buy **and sell** your power on an open market and through the benefits of “crowd sourced” energy generation and control, which is what home solar connected to a smart grid becomes, you can easily displace the existing “one way” relationship we all have with our retail power companies now.
If NZ Inc can transition to this future, then we a lot of other countries won’t be spending vast sums each year on fossil fuel imports.
Yes we’ll still have trucks and buses and cars, but they will burn a lot more electrons – that are generated locally – right next to where they are consumed in fact, meaning that we don’t have great long distances to ship all the electrons we need from one end of NZ to the other. No matter how efficient or otherwise that process is, it costs money to build and maintain big energy grids especially for a “long and stringy country located in the roaring 40’s”.
Power retailers will morph from simple resellers of electrons, to become “managers” of our electrons – a different role, for which they will receive a small fee for doing so not the outrageous markups like they and the generators all do now.
It says a lot about our inefficient retailing of power system that I pay way more annually to maintain my connection to the retailers power grid than I pay in water usage or roading charges in my rates.
Yes but NZ is lucky to have large hydro capacity. What is needed is a slight change in mindset. 1) upgrade the physical generation capacity ie turbines to allow higher peak generation. 2) reduce the use of these hydro plants during the day when solar is generating. Then in the evening crank them up.
Exactly – with hydro, NZ has the perfect means to store solar energy until its needed. And yes, there are huge changes coming to the electricity market. One thing that the government may have got very right, was in fact to sell down its stake in old school large scale industrial electricity generators….they’ll still be needed in future as mentioned to store power, and maintain the grid, but surely their days of monopoly are over.
And, yes the trolley bus decision in Wellington smacks of an ideologically driven contractual dispute with NZ Bus, owners of the trolley fleet. Literally a power game between GW bureaucrats and NZ Bus.
Greg, I agree with your analysis. Abandoning the trolley buses and wires does look premature and as you say not without cost, and Bombardier is by no means the only supplier of electric buses with battery back-up and “top up” charging points or intermittent overhead wires. As an aside, inductive charging of EVs including buses is of course a technology in which NZ is a genuine world leader.
Waiting for further maturity not a bad idea: path of least regrets perhaps, but then again I would think the city could drive a very hard bargain to be a lead customer of one system or another.
I note from the PWC report that Electric and Hybrid buses were within cooee of diesel buses at face value economically.
But the report doesn’t appear to consider properly either the risks inherent in the 20-year ownership of a fleet of FF powered vehicles, or the NZs strategic imperatives. For example, the National Infrastructure Plan quoted in the report mandates “a flexible and resilient transport system..”
In a NZ context, I struggle to reconcile a choice to run 100s of FF powered vehicles in the 2030s with “resilience”.
Interestingly, the Wellington bus contractual relationships mentions “electricity provision” but fails to mention “diesel provision”. Presumably because it’s not contracted to a sole supplier (although at the end of the day it is, indirectly, via NZRC).
More bizarrely, the report fails to list “greenhouse gas emissions” as a disadvantage of diesel, other than to note that the diesel buses comply with some Euro standard. Why not quantify this?
This is important: 80% of our electricity is generated from renewable sources. We are better placed than almost any other country to develop and exploit clean and renewable energy for transport. Wellington, with its experience of electrically powered trolley buses, should be well placed to lead the charge.
I’m afraid I find the PWC report wholly inadequate and superficial, and deeply frustrating. Incredibly, the consequence is that we will actually increase further our FF emissions. Well at least it’s consistent with our shocking +42% record since 1990 (against a notional and frankly pathetic target of -5% by 2020).
The CO2 emissions is a relevant point (but only to a point). the Bombardier PR link says this:
“Berlin’s new fleet of e-buses will save around 260 tons of CO2 per year. In order to achieve the same effect, around 250 private cars in Berlin, on the basis of normal driving behaviour, would have to be switched to electric mode.”
I assume that they mean by that each bus removes 260 tonnes of CO2 emissions per bus (per year), which is presumably what a Euro 5 diesel bus or 250 Euro 5/petrol cars would emit now, and the existing Electric trolley buses do not.
So a fleet of Diesel buses would increase net CO2 emissions of Wellington and NZ.
As for resilience, yes in 2035 Diesel may be in short supply – not because oil it comes from is too expensive, but simply because no one is making it much any more.
So yes betting your transport farm on FF for another 20 years does seem to be a bit of a higher risk than the alternatives.
If the transport minister wants NZ to become a leader in renewable fuels, making the GWC upgrade to/tiral a fleet of new generation induction charging buses like the Bombardier model seems like the best way forward right now.
Well that’s exactly the kind of leadership I’d like to see from the transport minister.. or, absent such leadership, from Wellington City Council, “absolutely positively”.
If NZ implemented a fleet of 1,000 buses (spread over multiple cities), the effect on CO2 level emissions and other positive benefits would be the same as making 250,000 private cars all electric.
We don’t have a shit show of getting 250,000 electric cars on the road anytime soon, but we could deliver 1,000 electric buses way more easily, and for less import costs to the economy too.
(Based on the quoted figures on modern Electric buses versus modern Euro 5 standard buses.)
And remember most of the NZ Bus fleet (in both senses of the phrase “NZ Bus”) is not Euro 5 standard its usually much earlier Euro standards or for many “old smokers” on the road still, they even precede the Euro standards for diesel buses.
Thats the kind of leadership that the minister needs to show and have put in place. And with in-ground charging you don’t need overhead wires everywhere which was the big argument for not doing it before now.
The trolleys are a lot more pleasant to those around them, diesel buses basically spoil the golden mile from the point of view of a diner attempting al fresco. let alone the noise factor.