The Productivity Commission has released a draft report called Using Land for Housing which looks at options for how more land can be made available for development. At first blush that may sound like code for “open up lots of greenfield land for development” however the report appears to actually look at many of the issues in a holistic way giving a fairly balanced outcome. On a first skim through I agree with most of the changes the commission has suggested.
Before I go into the recommendations I think it’s useful to highlight that the commission start off by showing a good understanding of why cities are important. This is from a short summary document however there is a more detailed discussion in the draft paper. I think this is important as far too often if feels like many see and treat cities – particularly Auckland – like some kind of unnatural aberration sucking the value out of the rural areas.
Cities are national assets. They provide a wide range of jobs, higher incomes, generate higher productivity and raise the prosperity of surrounding regions. Cities also offer access to amenities not available elsewhere, such as specialised health and education services. Allowing cities to grow and accommodate new residents can help improve the wellbeing not just of the people who live there, but also those elsewhere in the country.
The main recommendations revolve around a few key categories, namely: planning/regulation, infrastructure and overcoming existing barriers/behaviour.
The recommendation that’s probably gained probably the most attention so far falls into that last category and is the suggestion of setting up Urban Development Authorities (UDA) – much like Auckland Council is already doing by merging Waterfront Auckland and their property CCO. They say a UDA could assemble, rezone and prepare for development large parcels of greenfield or brownfield and then partnering with private developers to build at scale. This seems pretty much identical to what’s being going on at Wynyard Quarter.
What’s gaining attention though is a suggestion that these UDAs could have powers of compulsory acquisition which would help in assembling suitable land and address issues such as land banking. It’s worth noting that compulsory acquisition was possible in the past and I believe is partly how the former Waitakere City Council was able to buy up large amounts of the town centre – although the government has currently removed the ability to do so in future.
They also suggest these UDA’s could help capture some of the increased value that occurs from the development. Overall I think the idea of a UDA is a good one although I can certainly understand the concerns about giving so much power to them.
Planning/Regulation
Looking at the other parts of the report, they say that one of the current issues is that existing homeowners have a disproportionate influence on local political processes as they are the ones who benefit the most from restricting supply in their area – thereby inflating the value of their own property/s. This then gives those homeowners greater incentive to be more politically active and push for regulations that restrict development opportunities. This is of course exactly what we saw happen in the Unitary Plan discussions.
To counter this the commission suggest that councils engage in more sophisticated consultation processes and giving the government more say in planning processes. I do agree with the first point but the second I’m not so sure about given the past comments from the likes of Nick Smith.
The commission specifically call out a number of planning regulations that have been imposed – often by the processes above – that have made it much more difficult and costly to develop urban land thereby reducing density. They make the following recommendations in this regard saying we should:
- remove District Plan balcony / private open space requirements for apartments;
- review minimum apartment size rules in their District Plans, with a view to removing them (once the MBIE has completed planned work on updating Building Code rules and guidance related to air quality, lighting, acoustics and access in multi-unit dwellings);
- remove District Plan minimum parking requirements and make more use of techniques for managing traffic demand;
- lift current building height limits where it cannot be demonstrated that the benefits outweigh the costs; and
- undertake robust cost-benefit analyses before considering the introduction of building height limits.
We have addressed all of these points in the past, especially the minimum parking requirement issue so it’s great to see the commission pick up on these points.
Infrastructure
There is quite an extensive amount of discussion on the issue of the provision of infrastructure and how it is funded. In short they suggest funding constraints – often from the political processes mentioned earlier – makes it difficult for core infrastructure such as water and roads to be built in advance so it is done piecemeal which adds extra costs to the process.
They suggest that councils need additional tools to both help manage demand on existing infrastructure and to help fund new infrastructure that supports growth. They particularly point out that the government need to allow for road pricing on existing roads where it can be justified.
They also want to see more variable pricing in things like water connections. The example of Watercare is used which charges a flat fee for any new connection however they say that distorts costs and reduces transparency. Instead they think the charge should be influenced by local conditions i.e. if connecting a new dwelling an area has excess capacity in the network then that could be cheaper to connect to the network than a house on the edge of town in a new subdivision that needs new pipes installed.
Interestingly the specifically call out as not practical a few finance methods often suggested by those pushing greenfield growth such as Tax increment financing (TIF) and Municipal utility districts (MUDs). They do call for greater use of targeted rates to pay for local infrastructure though, for example the costs of the core infrastructure to new developments mentioned above could perhaps be paid off by a targeted rate levied against that area so it doesn’t impact on the rates of the rest of the city.
A few other recommendations around rates are made. This includes that council rates should be based on land values not capital values as it would encourage “land to flow to its highest value use”. It also suggests that the government should pay rates on core crown land including hospitals and schools. This is for the same reason as having rates based on land values, to encourage the best use of it. It’s one recommendation that I’m sure won’t be implemented. I would like to see rates paid by other organisations too such as churches. An example I highlighted the other day on twitter was this one up around Oteha with huge amounts of land dedicated to parking that pays almost nothing in rates due to being a church. Note: this is not a debate about or an attack on religion.
There are a number of other recommendations and in the interests of space and time I won’t cover them all. All up it seems like a fairly well balanced report that importantly recognises that cities and density are important. If you want to make a submission, you need to do so by 4 August.
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I’ll be trying to read the report itself over the next couple of week (it’s pretty long), but from reading a few articles on it so far, and checking out the presentation at http://www.productivity.govt.nz/inquiry-content/2060?stage=3, I’d give it 4.5 stars as an early review. Lots of great suggestions in there and in their 38 recommendations.
I don’t have a problem with churches, hospitals, schools, conservation lands or other community groups not paying rates. The whole thing is a can of worms. These places aren’t businesses to make profits, they are for community benefit. How do you decide what is of benefit and what isn’t? I was homeschooled so I never benefited from schools. I don’t walk around in crown parks so I don’t get any benefit. I’ve never been to hospital so I never benefited there. I hardly go to church so again I get hardly any benefit from any of these organisations. It is very difficult to determine value, but I see the value that the rest of the community gets from these organisations. In the case of that mega church, if they weren’t required by the council to have that many carparks, then their parishioners would just use all the public streets which would be a council problem. Why do you think AT owns so many car parks? Because previous councils had to deal with car parking issues and that is the legacy.
If we take a pure market capitalist approach and charge on land value without subsidies/distortions, then all these groups would probably have to shut down or reduce services and the community would suffer as a whole.
I agree with your point that schools, hospitals, parks, churches, etc are there to serve a social role rather than turn a profit. And although I’m not religious myself, I know that religion plays an important role in other people’s lives and communities. It seems like there might be a role for a subsidy for these activities.
However! From an economic point of view, not charging these organisations rates is not likely to be an efficient way of delivering that subsidy. Removing tax on one input – property – while leaving it on others – e.g. labour – will distort their decision-making. So, for example, schools may use too much land (as it’s not taxed) and hire too few teachers (as they must still file PAYE taxes for teachers).
In addition, this approach to property taxation also creates an unbalanced playing field. Schools and churches that locate in areas with higher property values attract a much higher rates subsidy than those in areas with lower property values. In other words, Auckland’s ratepayers are spending more money on Auckland Grammar than Hillary College in Otara.
All in all, I would prefer to deliver subsidies in a nondistortionary way, which generally means a lump-sum payment linked to a transparent funding formula.
I should add that the same principle holds true for other subsidies, like welfare payments and foreign aid. Generally speaking, in-kind support (e.g. food stamps) tends to be less useful than just giving people money and letting them make up their own mind about what they need the most.
TL;DR: Undistorted markets ensure allocative efficiency (but there is usually also a need to redistribute some money to ensure that everybody has at least some means to enact their preferences).
Peter, do you have a position on the fringe benefit tax on parking situation?
I would ideally see FBT applied evenly to everything, for the reasons you state, but given the Govermnent ran scared from this I see a removal of FBT on public transport as a good and practical compromise.
This is a slippery slope – should we exempt shoes from FBT for people who walk? – so do you recommend continuing to push for applying the tax and stay pure or push for a compromise?
I wouldn’t favour excluding employer-provided carparking from FBT – it’s an unnecessary distortion in the tax system. However, if that’s not possible I’d be open to adopting a “second best” option of equalising the subsidy across modes.
The big-picture thing that I try to keep in mind when thinking about tax policy – and I am by no means an expert – is that we would prefer to tax “bads” rather than “goods”. In this case, having no FBT on carparking means that we have to have higher taxes on incomes and consumption. That’s totally backwards – we want to be encouraging work and disincentivising commuting, especially car commuting during congested peak times.
Thank you for your reply, Peter, that is a good way to think about it.
It’s a shame politicians are so illogical at times.
Except what the recipients need and what the state needs are very different things.
The solution is obviously to nationalise them all, so they can be funded from the exchequer and then pay all rates/taxes etc.
This avoids the possibility that they may not get enough revenue to pay the rates/tax (enabling them to continually produce social utility) and also makes it transparent
Churches should pay tax. They are a business like any other.
Schools and hospitals are businesses too. What is your point and what does it have to do with valuing land use?
Private schools and hospitals pay tax though right? So if a church is a private organisation…but charity status etc.
PS, Sanitarium are exempt from many business taxes also. Wonder if they pay rates.
I can accept the argument for public good on schools, universities and hospitals.Churches aren’t really my thing, but each to their own, so for the sake my of real question, I can see their public good.
What do people think about transport infrastructure, particularly ports, inland ports and airports? Public good, taxable business or some sort of hybrid monster?
On the issue is whether churches should pay rates, what about other community groups like sports clubs. Could end up being quite a blurry line.
That’s why I wanted to talk about ports, in all their forms, as these are transport infrastructure with an element of public good.
City Impact Church, like any other new church, would have been obliged to follow the applicable parking minimum. Quite possibly they didn’t / don’t actually want or need to provide that amount. Rather than making churches pay rates based on land value that they can’t actually use productively, how about waiving the parking minimums so they can sell off or otherwise make better use of part or all of their car parks.
The sports clubs paying rates thing is a really big deal in Orakei at the moment.
No they are not.
With a user name like that – I now realise that you are an obvious troll and I shouldn’t engage.
You do not pay a flat fee to connect to Watercare services.
It is a flat charge within the metropolitan area, $12,075. The charge is higher in satellite towns and rural areas though, and varied depending on the location.
Before we go making wholesale changes to apartment regulations, such as size, height, balconies etc, let’s remember that those rules were not produced by someone sitting down and saying to himself “let’s make new rules so I can justify my salary”. They were formulated in response to situations that existed at the time, tiny shoebox apartments, etc, One of the worst examples of what happens when rules that had been formulated over many years being suddenly relaxed was the leaky houses phenomenon which everyone is paying for and will continue to do so for some time to come. The reason we live here is because it is great place in which to live, but we have to be careful we don’t suddenly destroy those things that makes the city great, simply to squeeze more people in that are attracted to what the city has to offer. It is a juggling act between open fields and replicating the Calcutta slums, but it is a juggling act that we ned to get right because if some developers have their way we will be ringed with Calcutta slums.
“It is a juggling act between open fields and replicating the Calcutta slums…”
Having written my MA on housing problems in Indian cities, I can confidently say that Auckland is at no risk of turning out like Kolkata, no matter the regulatory environment. The underlying issues there are (1) low incomes leading to material deprivation, (2) a political system that is not responsive to the needs and interests of slum-dwellers and rough sleepers, many of whom migrated in the aftermath of the partition of India and Bangladesh, and (3) confusion about land ownership and land rights.
Yeah I love seeing people comparing anything in NZ to a developing nation. I can only conclude those people have never been to a developing nation because we are about as far away from that as it is possible to be.
Pretty sure Evan has never set foot in India with a comment like that!
Well those shoebox apartments are renting for $300+ per week due to the shortage of properties. If there were enough alternatives then they wouldn’t attract a decent rent and people would thing very carefully about building/buying them.
However remember that you do need lots of lower end properties. Imagine somebody on the minimum wage (Around $600/week) and living alone. Realistically you need to be able to build something that they can rent for 1/3 of their pay so $200/week which means you probably want to be able to build/buy if for $100-$200k. At this sort of price level a “nice to have” live a carpark or balcony is going to blow the budget.
Outlawing cheap properties doesn’t mean people all get nice 3-bedroom 1/4 acre houses in the suburbs. It just means they get to squeeze 4 families into a 40 year old state house on a cross-lease.
Yeah, I have one of those so called shoeboxes rented at over $300 a week. The people that rent it don’t care that it is a shoebox, in fact most of them prefer it that way. They are singles or couples who don’t spend a lot of time out of the house and don’t want a big house to clean or look after. They don’t have a lot of furniture or stuff to put places. They want a comfortable bedroom to sleep in, a functional kitchen and bathroom, and a place for a sofa and table or desk.
They don’t care about a balcony, because if they want to go outside they have Mt Eden or the Domain within walking distance. They don’t need a second living room because they meet with friends in restaurants or cafes.
If you didn’t have these ‘shoeboxes’ you’d just have a bunch of people in sharehousing instead. Let’s not forget that slightly more than half of Auckland housholds only have one or two people in them, we need small affordable housing for one or two people.
“… let’s remember that those rules were not produced by someone sitting down and saying to himself “let’s make new rules new rules so I can justify my salary””. PM2 in CBD in response to “shoebox” apartments pretty much was produced like that according to one author – no regard to affordability and quick flick through Sydney’s DA rules as a guide. With the GFC planners had no consents to process – so there was a coincidental Plan Modification writing frenzy from 2006.
“One of the worst examples of what happens when rules that had been formulated over many years being suddenly relaxed was the leaky houses phenomenon”. Myth. Building regulations before 1991 needed less than 10cm’s of bookshelf. The equivalent documents since 1991 need about 10 times that. NZS 3604 pre-leaky buildings was thickness of a metro magazine stapled at the spine. It now needs a ring binder to hold the 5cm wad of rules.
The problem I have with compulsory acquisition is you would use the law to appropriate someone’s property in a Mugabe type of way. Someone has invested in land near the city and waited for a return. Just when owning it becomes profitable it gets whipped out from under them by an aggressive arm of the state. Land bankers hold their land because it is going up in value faster than the holding costs. When it stops going up quicker than their opportunity cost they unload it or develop it. Surely the answer is to stop Council’s using stupid regulations that transfer economic rents to them in the first place. There is plenty of land so make the owners compete on price as they develop. But no the anti-sprawlers create a situation where some land rockets in price then they want the Government to seize private property.
The report was written by the same Productivity Commission that has called for more greenfield land supply in their last report on the issue. I suspect they’re probably thinking of these policies as “both/and” rather than “either/or”.
Yeah I get that Peter. Murray Sherwin brings a Treasury view to things. My rant is more the disappointment at policy intervention stuffing things up so the solution is even stronger intervention- she swallowed a fly so now she has to swallow a spider, bird, cat, dog, goat and a horse.
I haven’t thought through the issue in great depth, although I’m definitely skeptical of some of the outcomes of eminent domain cases in the US. I wonder if a UDA with eminent domain powers could serve a role in discouraging land-banking or arbitraging away windfall gains from rezoning.
For example, you could have a multi-stage process for land release, as follows:
* Stage 1: UDA compulsorily acquires a considerable swathe of greenfield land outside the MUL – say 10-20% in a given location
* Stage 2: MUL is extended over a larger area
* Stage 3: UDA gets on with developing the land that it acquires, with the intention of using the profits to pay for infrastructure and/or fund further land acquisition
* Stage 4: Other land-owners in the area make some windfall gains, but they are smaller in magnitude due to immediate competition from the UDA.
The same basic process could also be used to manage windfall gains / holdouts from upzoning within the urbanised area.
Of course, I could equally well see this all ending up in court, with the landowner who got compulsorily bought out complaining that they should have been paid a higher price that reflected the subsequent rezoning of their land.
Peter your description of how a UDA could develop affordable housing using eminent domain (US term) or compulsory purchase (NZ term) is how I see it potentially working. With the objective being to stabalise the urban land price curve so agglomeration economic gains go to the various economic players -households, workers or businesses who are driving the gains not to some ‘lucky’ land owners.
Compulsory purchase is commonly used for various public and network goods -roads, motorways, transmission lines, data cables etc. The legal process is well established regarding compensation for existing landowners. I believe it is based on existing use not some potential use.
Compulsory purchase for sub-division and on selling of the land has been used in NZ. The first Liberal government in the 1890s used it on a few cases to break up large farming estates. But in most cases the estates were purchased voluntarily -over 1 million acres. These ‘voluntary’ purchases were encouraged by land value taxes.
The sub-divided land had more economic value in total because it supported more intensive dairy and lamb production farms compared with large estates that mainly farmed for wool. So smaller farming units was the best economic use of the land.
Compulsory purchase under the Public Works Act, or whatever it is called nowadays, may not be the panacea that it appears to be on the surface. For many years now any land purchased has to be bought at whatever that land would receive on the open market – that came in when the Southern Motorway was being extended through Ellerslie and Remuera, and the money being offered left land owners hopelessly out of pocket. So, in the case of Chamberlain Park, with houses in the neighbourhood now selling in the vicinity of $1m plus, it could price that land right out of the market. There are also other designs on that land some of which have received publicity and some not, which would probably mean that that use of the land for housing would come down the bottom of the list.
Evan the UDA would need to act strategically. By making land purchases in low value areas and turning them into high value areas with good infrastructure provision. Once the Urban land price curve is stabilised then they could then look at more intensive development in the closer in areas, without paying a fortune in inflated land values to compensate existing land holders. Land value taxes and competition from UDA’s earlier developments should help this process.
The economic flaw in the Public Works Act is the land is sold on the basis of a willing buyer and willing seller valuation. That specifically ignores the obvious point that the seller isn’t willing. If the seller valued their own land at that price they would have it on the market already. If we personally value our own land at higher than the current market price then we choose to continue to own it and keep the difference as a consumer surplus. It is the consumer surplus that gets stolen when the Councils and Government agencies take land by fiat.
So given that Councils are trying to stiff people out of value the best advice is to get them to apply immediately for a resource consent for the highest value land use they can get approved. ie boarding kennels, service station office block whatever really. But never never cooperate with the Council.
Mfwic. Yes I am not sure there are any ‘saints’ in the land development game.
Sure you could argue that compulsory purchase is ‘theft’ and open to abuse but what about land holders who have done nothing except being lucky to hold land title amongst a growing community. There land is increasing in value, which at some point they will convert to untaxed capital gain but it wasn’t their actions that created that wealth? They didn’t create/expand the community, they didn’t create the create the agglomeration economic gains. Why should the ‘landed gentry’ be the beneficiary while others have to pay?
I think I favour LVTs and MUDs with the occasional use of compulsory purchase to stabalise the urban land price curve when the property market is out of control like it is now.
Agree. Either we nationalise everything or we stop interfering with private property rights (I prefer the former).
If we forcibly acquire land for housing then that housing HAS to remain under state ownership
Well that is one option. Given they way that has worked out for countries that tried nationalising everything maybe we should start casting around now for the cruelest man in the country now and put him in charge. He will end up in that position anyway under that system.
The law exists now and is used regularly by AT. There are problems with AT using consultants who can pressure small land owners into selling at below market prices. Property valuation is not an exact science in my experience. A UDA would have the ability of buying whole blocks and so remove NIMBYs as it would own all the backyards.
what is the town centre that watakerie cc bought up? new lynn? henderson? westgate? did they do much good redevelopment of the land they aquired?
“To counter this the commission suggest that councils engage in more sophisticated consultation processes and giving the government more say in planning processes. I do agree with the first point but the second I’m not so sure about given the past comments from the likes of Nick Smith.”
I know this government has a terrible record with planning but I think the only way that NIMBYism can really be busted open is by the government placing limitations on what restrictions local governments can place on development. Local government is always going to be susceptible to capture by NIMBYs but central government is a step removed from these political pressures and so could attack NIMBYism with a lower political cost.
Countries with a responsive housing supply, such as Japan and Germany, use central government direction to limit the ability of local government to restrict housing supply.
Overall a great report from the productivity commission and a huge improvement from their lazy blinkered efforts in the past.
But right now the opposite is true. The Council is trying to remove restrictions and the central government is not helping at all.
I know you could argue that the Council shouldn’t give in to NIMBYs but they are politicians after all.
>> “I know you could argue that the Council shouldn’t give in to NIMBYs but they are politicians after all.”
Caving to NIMBYs is inevitable to some extent, but does it have to be as bad as it is now?
For one thing, Frank’s suggestion is a general approach not specific to the government of the day. Of course its nature and significance will vary with the quirks of successive governments, but that goes for any policy. It could be a meaningful overall improvement anyway. Suppose that the city’s interest was protected from NIMBYs by statute today; it would shift the onus on Government to do something to actively oppose development rather than just not helping by passively doing nothing. Isn’t that worthwhile?
Having said that, I think there is greater potential in the report’s recommendations for better consultation:
“Community consultation can and should influence the outcome, but the ways and means of consulting with the community need to be carefully considered to ensure that the needs of the entire community, including the needs of future generations, are being met … Consultation and engagement processes that seek to understand the wider community’s perspective on land use regulation can help overcome these drawbacks [of NIMBYism].” [emphasis mine]
It goes on to highlight Brisbane’s neighbourhood-scale planning as an example. But there is a wealth of international options to choose from, and they are not necessarily as expensive as the report seems to conclude. The basic idea is to include voices for wider community interests than just a noisy, self-selecting group of incumbent squatters. It’s similar in spirit to escalating decisions to Government, but gives a more fine-grained sliding scale to work with (home, complex, blockface, block, street, neighbourhood, suburb, etc., up to region, district and nation). This goes for housing development as it does for streets and infrastructure — if we had a modernized consultaton toolkit, even Auckland Transport, Watercare and the gang could use it.
Another phrase for NIMBYism is “a group of people who care about their city”.
Transport Blog (the community) are also NIMBYs. (no pointless motorways, no poor planning rules, no minimum parking requirements in my back yard)
I think it’s very valid for citizens to have and express views about how their government spends their tax dollars and regulates them. I’d say that Transportblog tries to achieve a balance between opposing some things, supporting others, and suggesting new ideas.
On the other hand, I’m more skeptical when people try to dictate to their neighbours what they should build or how they should live. That, to me, crosses the line from democratic oversight of common resources to meddling in the affairs of other individuals.
Personally, when writing on the blog I don’t like to use terms like NIMBY as they’re pejorative and not great at fostering reasonable debate.
Government involvement would all come down to method for me. Direct meddling without some formal structures would be a nightmare. Use of simple tools like National Policy Statements would be a step forward, but I’ve seen plenty of suggestions in that direction and zero action from this government. Not holding my breath on that front.
Looks like the person writing this report knows stuff.
Pity about the minsters and councillors it’s aimed…
Is it possible to move planning into a separate non-elected CCO like Auckland Transport? I know it seems very undemocratic, but the current system of politically driven planning just can’t work.
I’m not keen on that as a solution, it’s possible for it to be captive to external influences and difficult to get back on track afterwards. The example I point to is Ports of Auckland.
I’m not saying that this will be the outcome, but you’d need to think about how you set the boundaries before unleashing the monster.
The reason I used the slums of Calcutta was because there was a person being interviewed on television, who gave the appearance of being from that part of the world, who decried the fact that there were golf courses in Auckland and that the land should be used for high density housing. However, whether we like golf courses or not, and view golfers with disdain, the fact is that those courses are part of the reason people come to live here in the first place.
Let’s not forget we live in a democracy and we elect the politicians who control our lives every three years, whether they be local or national. So anyone who ignores the views of NIMBYs could face a loss of job after election time. By the way, I will proudly put my hand up to being a NIMBY on certain subjects.
I don’t see what the ethnicity of someone you saw on television once has to do with anything.
With regards to the golf course issue, I believe we can think through the issue in an analytical way rather than an emotive one. There are definitely two different values at play. On the one hand, some people want to play golf. On the other hand, some people want housing and can’t get it due to a lack of supply.
Here’s one way of weighing up these different demands. Take a look at the publicly owned Chamberlain Park course. It’s 32 hectares in size. Now, current residential land prices in that area are on the order of $1000/m2, indicating that people would be willing to pay a total of $320 million to buy the land and convert it to housing. (This is probably a conservative estimate.)
That’s obviously a lot. But how does it stack up against people’s demand to golf there? If we assume an interest rate of around 6%, we find that the annual “rental” on the land should be around $19m (i.e. $320m*0.06). Now, Chamberlain Park seems to offer 35 tee times a day, 365 days a year. In order to earn $19m from their golfers, they would have to charge approximately $1500 per tee time.
By way of comparison, current greens fees are $30, with discounts for off-peak times. Furthermore, the course allows people to turn up and golf without a reservation, which indicates to me that these prices exceed people’s “willingness to pay” for golf. As the value of the land for housing exceeds the value of the land for golfing by a factor of at least 50 ($1500/$30), it seems like it would make a lot of sense to redevelop Chamberlain Park.
If you disagree with this analysis, you should put your money where your mouth is and offer to pay more to golf on publicly owned land.
Chamberlin Park is the one I had in mind simply because it is in my neighborhood. But it is one of the assets that attracts people to live in Auckland in the first place. I chose to live here because I chose to be close to Western Springs, both the lake and the stadium where I can walk to watch speedway. Other cities jealously protect their green belts, but here we seem to have a new phenomenon where some people want to destroy them. So how do you put a value on recreation and the land needed for it.
“Other cities jealously protect their green belts, but here we seem to have a new phenomenon where some people want to destroy them.”
This isn’t an accurate or fair description of the issue. As I said, we have a case of competing desires for the same space – golf or green space versus housing. You might disagree with other people’s priorities, but I’d encourage you to try and understand their values rather than simply assume that they are mindlessly destructive.
“So how do you put a value on recreation and the land needed for it.”
In the case of golf courses, you ask people to pay green fees. As I observed, they’re not willing to pay very much.
Its a golf course, not a park. You could fit 40 rugby fields in the same space. Even ten percent of that as a public park would be infinitely more useful as community green space than a golf course.
We don’t even charge people to use Campbell Park or One Tree Hill reserves, so by this logic we should sell that land off for housing tomorrow.
My only comment about golf courses, in public reserves, is that they preclude almost every other activity from being able to take place because of flying golf balls.
So any golf course is by the nature of the beast a large, single purpose facility. Compare to many parks where multiple activities can take place at once
But it is part of the Councils remit to provide facilities for a wide range of sports and activities, and golf is just one of those sports. So its not out of bounds for there to be a public golf course.
Whether the entire park it occupies should be given over to that activity however is another discussion.
And whether any of that park should be sold off for a short term gain of housing is something else entirely.
There are undoubtedly limits to this kind of analysis. As you observe, there is not always a market in which we can observe the prices that people are willing to pay for amenities. However, there are sometimes other ways to estimate the value that people place on amenities – e.g. by looking at whether people pay higher prices to live near parks, or travel long distances to enjoy scenic beaches or reserves.
Personally, I wouldn’t want to live in a city without open space and trees. But here’s the rub: if we want to preserve green in some areas, we have to be willing to allow more buildings elsewhere in the vicinity. Otherwise, the temptation for some future government to flog off the land, regardless of the political consequences, will continue to exist.
Shamubeel Eaqub’s suggestion on The Nation to sell off Chamberlain Park and/or other golf courses in Auckland to build houses really is a silly nonsense. Housing supply is a big issue to Auckland, but getting rid of all open spaces to squeeze in wall to wall housing would make Auckland an unpleasant place to live. Certainly it wouldn’t make achieving an aim of being a livable city very easy.
Economic assessments of the land don’t really stack up either as they miss out the social and environmental benefits of these public spaces. We don’t charge for public park access at all as these places have value above and beyond just sticking an apartment building or house on the land. We need places to play and enjoy the outdoors in a city. Moreso as people have less or none of their own backyards with more intense living.
“Economic assessments of the land don’t really stack up either as they miss out the social and environmental benefits of these public spaces.”
I agree with this point, and note that a proper cost-benefit analysis should account for (or at least acknowledge) those values.
However, I don’t think that all the responsibility should be on the analyst. People who claim that social and environmental benefits are large enough to outweigh economic costs have to come to the table with some data too. So if I estimate (on the back of a figurative napkin) that it costs ~$320 million to leave Chamberlain Park as a golf course, and you disagree with that assessment on the basis of environmental/social benefits, it’s your responsibility to put up a estimate of large those benefits might be.
Otherwise, we’re just talking past each other…
Why does everything come down to dollars and cents. Of course an open space in the middle of own isn’t going to stack up money wise against covering it with a dense layer of high rise buildings. However, I suppose by doing that will relieve the housing problem somewhat simply because the qualities that brought the housing problems in the first place – that is, Auckland being a great place in which to live – will no longer apply because those amenities will be gone.
“Why does everything come down to dollars and cents.”
It doesn’t have to. Money is just a convenient unit of account. I’d be equally happy to denominate all of these values in minutes of people’s lives, or square metres of living space, or contented smiles, or pineapples, or whatever. (Provided that we could determine the appropriate exchange rate.)
At the end of the day, we’re both talking about people’s wellbeing – the things that make us happy or sad. I guess my fundamental observations would be:
1. We face trade-offs – we can’t always get all of the nice things we’d like, and
2. Some of our needs and desires are more pressing than others.
Also, if Shamubeel’s suggestion really is “silly nonsense”, it should be easy for you to demonstrate how he’s screwed up his sums.
“Shamubeel Eaqub’s suggestion on The Nation to sell off Chamberlain Park and/or other golf courses in Auckland to build houses really is a silly nonsense.”
I am not sure your definition of silly nonsense, but this is actually happening in Auckland. For example: Manukau Golf Course, Peninsula Golf Course, Papakura Golf Course, The Grange.
I find it interesting the Productivity Commission decided on UDA’s with the power of compulsory purchase combined with land value taxes as the method to stabalise the urban land curve rather than MUDs. They have basically backed the more centralised government interventionist route as opposed to a more decentralised route.
In the US MUDs have been an instrument for car dependent urban sprawl but I think it is possible to devise more balance urban development. MUDs for instance as part of their consent/financing process could be encouraged to work with a transport providing agency. This agency could agree to extend say a bus expressway to the development and in return the MUD develops the sub-division in a more intensive fashion.
MUDs and compulsory purchase could also be combined. The government or even a UDA could tender out the provision of housing on compulsory purchased land -say around a new or upgraded train station to MUDs. Housing prices could be fixed in value, like KiwiBuild with a small number (say 10%) being allowed to be sold for any price by the MUD developer. This being after the other builds are completed/sold. This would encourage the developer to complete the sub-division in a timely and high quality manner.
The use of the words “high quality” is interesting considering an article recently about the quality of work that is going into some of the recent builds around Auckland. It seems that because of the sheer amount of work that is going on and the lack of qualified builders to do it, there has been a trend to use unqualified and poorly supervised subcontractors, and the council is very worried they could be heading to another leaky homes disaster. And let’s cut this “landed gentry” crap. In most cases if there is farmland in around the city it is productive land that probably has been in family hands since way before the city started expanding. We have seen recently where land has been bought by overseas interests to be sat on until the market comes to them – Murphys Road is an example – but that is the exception rather than the rule.
Evan James take up the ‘land gentry’ crap argument with Sharmubeel Eaqub. As he describes it here http://www.3news.co.nz/tvshows/thenation/interview-shamubeel-eaqub-2015060610#axzz3dYkqawrK or in his and his partners book “Generation Rent”. Note Sharmubeel is the principle economist for NZIER which has been an established economic analysis organisation in NZ for over 50 years.
I can use the rentier class, or the FIRE (finance, insurance and real estate) industry as alternative descriptions if you don’t the description ‘landed gentry’.
The term “landed gentry” gives the impression this is a good old fashioned British styled class war, which it isn’t, and never has been. New Zealand’s farmers have never been “landed gentry” in the British sense as portrayed in the comedy tv show “To The Manor Born”, and most of those that own houses on largish sections in the older suburbs of Auckland certainly don’t fit into that category. Do I detect a sense of jealousy here?
Evan you are right that culturally kiwis have never accepted the ‘landed gentry’ class system but that doesn’t mean we are not drifting into a patrimonial system of wealth transference. That is Sharmubeel argument.
Personally I think there should be more equal opportunities to develop wealth. So I am coming from a fairness and equality of opportunity place not a jealousy place.