Last week the Government announced an interesting scheme to advance housing supply by redeveloping up to 500 hectares of State land. It’s still not clear how the land will be released, what the land tenure arrangement will be, or how affordable units could be delivered. Without knowing the full details of the initiative, this seems like a worthwhile initiative, one that has a lot of similarities with a plan recently proposed in New York City.
To get a feel for the extent of public land across the City, I took a look at ownership data from LINZ. Here’s a look at the public land in Takapuna (Blue = Crown, Yellow = Council). Takapuna is not unique in having boatloads of developable public land. In Takapuna the public is blessed with multiple lawn bowls, a golf course, and parking- heaps of council parking- reminding me of the Shoup-y quote, ‘we have a city where parking is cheap for cars and housing is expensive for people.’
Taking a closer look at the Crown land reveals a crazily undeveloped piece of property at the corner of Anzac Street and The Terrace. The property (below, red) has two old buildings serving the police department and of course more car parking. Besides the disamenity of having sloppy, low density buildings in a town centre. there is a real opportunity cost with having such an unproductive piece of land regardless of property owner.
Because the property is so under-captilised it only contributes $24,306 to the Council’s base rates or $9.44 per m2.
To put how poorly this property is performing in perspective, lets do the math. (See also: Want lower rates cut back on urban sprawl). Below is the new Turing project on Great North Road consisting of 27 apartment of a variety of sizes and bedroooms.
Using the rating data from the Council GIS viewer the property I compiled the CV data for each unit. The 27 dwelling units combined total over $15 million of rateable improvement value on top of $8 million in land value. Applying a .73% tax rate across the site (the ratings data is not showing yet) yields a whopping $168,000 per year.
This site is less than half the size of the Takapuna site but yields more than seven times the ratings base. On a per m2 basis the Turing is 17 times more productive than the Takapuna site.
The Takapuna site is uniquely re-developable since it is has such a low improvement value compared to its land value, but this is no different than the rest of the Council car parks around the town centre, and in fact all over the city. There is no shortage of urban land.
How is it fair that these two properties have such disparate rating values? This is where a land tax would help. Taxing land separately and at a higher rate than the buildings and other improvements that sit on top of that land would help to remove barriers to property being put into more productive uses (housing anyone?), and create a disincentive for what is essentially land banking.
Releasing public land across the city for residential uses is a good start. Ensuring that all property across the city can be more productive by removing the barriers to redevelopment, including the tax regime, would be even better.
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Use the building on government owned parks and reserves as a lever for the NIMBYS, tell them, “allow higher development, or the bowling green gets it”.
That might wake their ideas and priorities up more than anything else done so far.
Good post Kent. One additional point to make is the high intensity housing around urban centres should have good ‘street appeal’. That would be my criticism of the Turing apartment complex. If it was reconfigured so that the ground floor had a mix (or potential mix) of residential and business dwellings that would be best in my opinion.
Affordable businesses -so being able to convert a residential to business dwelling for little cost should be as important as affordable housing in planning thinking.
At the end of the day affordable housing is about maximising amenity value while minimising cost to make a stronger local economy.
Yes, while apartments on Great North Rd are clearly an upgrade from car yards this one offers little to the public realm because of its entirely unactivated ground floor. Good but not great. Of course the developer is reacting to the current street quality rather than building towards it’s future likely condition. Currently it is a motorised strip with insufficient foot traffic, but more apartment devs are coming and the retail value will spill over from Ponsonby Rd. The problem is the transition, and now this is built as it is, it will be very hard to activate in the future. Even one concession, ideally on the corner, would have elevated the Turing closer to its namesakes genius.
Decoration is an insufficient substitute for activation.
I disagree somewhat – activation is great, but there’s a limit or a ratio to how much retail/ business space is sustainable below these developments. On average, it needs more than four storeys of apartments to make the commercial space below work. I’d suggest this means designers need to start thinking a bit more about what other things they can do to improve the ground level streetscape, besides just saying “oh, we’ll have a shop or two”.
I’m recognise where you’re coming from – urban theory does not reality make overnight – but I don’t think it has to be about retail. Office is just as valid and more do-able. It does require developers who can do genuinely mixed use, capable of dealing with different finance, sales, management, technical issues.. I notice Ockham are doing so in their next site, but there are precious few with the balls and know how, and resi only is just too easy right now.
Tim I agree completely. Ideally all three local support systems are present all mixed together: Residential, Retail, and Commercial. For example Ponsonby Rd has plenty of residential and retail, but lacks sufficient commercial space. Happily it’s getting some now. Albany conversely has commercial and retail, but lacks residential, but with the Rosegarden development is to get that too. Get all three plus good connectivity {PT and Active] and some quality public realm and bingo; you’ll have a vibrant and resilient local centre.
The property immediately to the north of Kent’s site features 3 units built in the 1970s. The two and half bedroom unit closest to the street sold at auction last year for $855,000, double what it sold for in 2009. Just for context on how much demand there is for dwellings in Takapuna. That large carpark on the same block as the Sentinel is crying out for development.
There is a good article on why cities need affordable eccentricity from the Financial Times.
http://www.ft.com/intl/cms/s/0/adb20472-d879-11e4-ba53-00144feab7de.html#axzz3bHwAiKvz
A nice analysis, but it is important to remember that the value of any specific piece of land is not only money-based. Value can and should be measured in other ways too.
In general I am very much in favour of lifting urban residential density – IF the local infrastructure (transport, schools, hospitals etc) can cope or is developed in parallel – because of the vibrancy and economic benefits that come with it.
But having more people per hectare means a greater need for green and open spaces and in my opinion it is imperative that a purely financial approach is not allowed to justify building over school playing fields, recreational parks and so on. Their social and quality-of-life value is equally important.
We should learn from other countries’ (I’m thinking UK) dismal record of allowing rapacious property developers to eradicate every green space they can lay their hands on, with supplicant councils so desperate for short-term cash and political votes that they have signed off on it at the expense of long-term common sense. (One suspects a few palms were greased along the way too.)
Quite the contrary – part of a council’s targets should be to ensure that *more* public open land is set aside as local population grows, to maintain a minimum of some kind of “green m2 per person” metric.
So in your specific example, if the corner of Anzac St and The Terrace were developed into flats for say 50 people, that should trigger a question in the consent process: where is the extra park/recreational space to be provided? (Clearly it wouldn’t be so specific for each property and it would have to be aggregated for designated areas, but you get my point.) Perhaps the park on the other side of the street has be enlarged?
People’s preferences for public and private open space differ considerably. What works for one person may seem too cramped for another. In that context, I’m not sure whether a standardised “public open space” requirement would make sense.
There are a lot of houses with reasonably-sized yards around Takapuna, and a fair few open spaces for recreation around the beaches and Lake Pupuke. People seem to have the option to buy space in the area if they want it.
I take your point elsewhere in the city – the CBD is particularly short of green space. However, for this site there’s a park across the road, a 2km long beach and a failry large lake 3 blocks away
There is plenty on the CBD we just hide it behind ludicrously wide roads. There is the Domain, Albert Park, Vic Park, Myers park, St Patrick’s reserve (I think that’s the name), Emily Park, Wakefield Square. We just need to make it more accesible.
At this starting density point I think that simply adding more people into the area adds quite a bit of amenity and services (both public and private). For example maybe the bowling clubs could now have enough members to be open more than one day mid-week? Also, generally I find most Auckland parks vastly underutilised – like a Twilight Zone episode.
Yes, at the moment that’s probably true, and we can cope for a few years. But what about in 20 years’ time. 50 years? And when the whole of Takapuna is full of tower blocks and it’s become like any other concrete jungle around the world? By then it’s too late and it will be an irreversible situation that our descendants will curse us for.
The time to make long-term decisions around development parameters is as early as possible. Look at old pictures of suburbs all around Auckland and see how much space there was and compare ‘the good old days’ with today. What level of density is an acceptable target/limit? What ratio of green to built-up makes for the best ‘liveability’ outcome? Which cities around the world can we learn from? Some of this is addressed in the Auckland Council’s master plan but personally I am sceptical that the plans are long-term enough and I am sceptical of how robust they will prove in the face of money.
Parks is a hard one. I understand what you mean when you say ‘underutilised’ but the mere fact of them being there adds amenity to an area, not least a visual amenity of the streetscape. There’s also their contribution to air quality to consider.
Large buildings should/can/have room for their own internal gardens, pools etc which helps with this. Could form part of the ratio.
Why is it taking so long for anything to happen in Takapuna? There’s space for literally 1000’s of apartments but nothing seems to be happening. The old gasometer site has been empty for 20 years,
The old gasometer site would have been the perfect place for the Takapuna Metro station when rail is extended from Aotea Station to the North Shore as per the Congestion Free Network, but I fear that it has been captured for commercial purposes already.
Enabling works anyone??
If that’s a great place to put it, why not future proof when the build happens?
All the soil around and underneath it is toxic waste so needs to be dug up and disposed of in a toxic waste dump, so its not a simple job to remediate the site.
Having said that, digging the crap out of it for an underground train station is about 80% of the sort of work work needed anyway.
Yes the council should really look at future proofing the gasometer site for future rail unless the plan is to use the more central car park space which is in a better location (closer to the beach, Bruce Mason Centre, Bars, shops, restaurants, mall etc). The gasometer site could be a handy construction site for it though. Takapuna needs to allow unrestricted height in the main areas (actually a minimum 5 level height should apply there). I think another big office tower, another couple of big apartment towers too would really boost Takapuna (not too mention having rail to Takapuna – linking with the NEX at Akoranga).
I’m of the opinion our parks and reserves are basically empty all the time, and could do with more people in them. The takapuna rose gardens are empty almost all the time, except when the market is on, while something like like the Domain.. well you could let fly with a shotgun just about any time of day and you wouldn’t disturb a soul.
You could argue that the valuation on the Takapuna land is wrong (should be greater than $8m) but that only partially addresses the issue.
Also think of the potential for high rise ontop of the Shore city Mall site. Takapuna has so much potential for density.
Pretty sure this site is zoned for <12 storeys too.
And it’s not just Takapuna. Look at other low rise havens like Ellerslie, Newmarket and Greenlane town centres. All with easy access to the Southern Line. Much of the Ellerslie centre buildings are single story.
Is there a KML file (or similar) available for Crown & Local Government land in Auckland available?
I have one. Let me check with the copyright terms, but I’m happy to share it. I tried to make an interactive map but it was too many features for MapBox!
Send me an email at kentslundberg at gmail.com
It’s interesting to see just how much the land value goes up if it is allowed to build apartments.
For instance, the land at 130 Anzac Street (Shoalhaven) is worth much more per m² than the surrounding plots.
Good post. Definitely high time for a land tax.
So, excitement and desire for yet another tax? Where does the money go and what is the payback to those whom you wish to tax? Hasn’t the archaic ‘just tax them more’ thinking gone yet? Incentives rather than punishments otherwise we will become another socialist eastern block country. One of the wonders of this country that attracts so many to our shores over the years has been the relative freedom to exercise choice, buying what you want, where you want and simply enjoying life. What one person thinks all others should have or settle for, could be completely different to the next person’s equally valid view.
This is a poor argument. All views are not equally valid; some are well informed, some are bigoted nonsense. Yes everyone is totally welcome to their view, but should not just expect it to be given the same respect as every other view simply because someone has it. All views are subject to evaluation and analysis.
You got a view; make a case, bring evidence, argue it well. But you can’t expect automatic validation just cos it’s there.
“One of the wonders of this country that attracts so many to our shores over the years has been the relative freedom to exercise choice”.
Except where someone champions choice in PT at the (minor) expense of the motor car. Then you are not so keen on choice. ‘Cause it differs from yours.
Ricardo who’s says a land tax means more tax it could just be tax reform. At the central government level we could remove the inefficient corporation tax and lower the income tax. In the local government level land taxes would replace property taxes (Rates). We could create an efficient broad based tax system with easy collection and low evasion as well as help the economy and help with housing affordability.
Preeeecisely. +1 to this excellent comment.
So all views are equal. Except the view that we should have a land tax.
Not quite, “All views are equal, except the view that anyone’s view is equal, or heaven forbid, superior to, Ricardo’s”
Hey I have heard mention that you can guest post on here, how do you do that and what is the criteria, does anybody know?
We’d welcome proposals for guest posts! What did you have in mind?
The best thing to do would be to drop a line to one of the editors – contact details are here http://greaterakl.wpengine.com/about/contact-us/ – and suggest an idea.
Email the mods and pitch your story 🙂
Higher density housing may be a good thing in some areas, but why does it have to be an ugly box?
Can’t they design some more imaginative high-density houses (even looking traditional)?
That Turing apartment looks like an eyesore to me. I actually don’t know if it is better than having a car park regardless of economic productivity.
Ugliness aside, the point remains that council may not be making best use of its land in the economic sense but should it? If it isn’t making best use of some land, what does it do with it? It certainly has no money or expertise to properly exploit it commercially so does it sell it off to developers? How much do we sell off? Where do you draw the line?
A land tax to encourage better use of land would make sense as long as there is a tax reduction in other areas. Council and government are generally poor at spending other people’s money. Just look at our transport spending by the national and local government. There is no sense in giving them more to waste.
Well I guess beauty is in the eye of the beholder……
$8 million for less than 1000m2 of land is completely crazy! No wonder the apartments along there are so expensive.
A similar piece of land (slightly larger and better residential sopt) just off the brow of the hill 7 Beaconsfiled st is $1.9m. What a difference a zone makes…
There is a relationship between what is ultimately built and what is calculated as a land value. I don’t understand how the CV valuation works in this regard.
At the time of the GFC there was a $180 million tower proposed for the old Takapuna gas site. (Merge building)This site is still a great opportunity.
A metro station makes more sense where the Council car park is -more central, closer to the beach. It might even rescue the Bruce Mason Centre although I would bowl this for apartments.
A site on the corner of Anzac and Auburn sold this year with an 18 storey development postulated for it. Land accumulation is occurring on Anzac, Klllarney and Lomond at ever increasing prices. Development is going to come, but it is taking time because with increasing land prices the projects are going to be undertaken by those with very deep pockets.