Part 5: Is there an alternative model to re-developing a city centre?
The fundamental problem is how to increase amenity value without increasing property prices? How to return the amenity value created by the presence and enterprise of the community back to that community rather than to some passive site owner benefiting from increased land prices due to the efforts of others?
Obviously this is a big issue that has troubled theorists for a long time.
I will not suggest any general solutions but I will suggest a model different from Fletchers or even Mike Greer’s might have been more effective for re-developing Christchurch’s earthquake damaged inner core, in particular the Eastern Frame.
I think there was some logic for a government agency in buying up large blocks of land to ensure there is some consistency in what was rebuilt. Although it could be argued the fairest, fastest and simplest way for inner city Christchurch to rebuild would be to let the original owners to rebuild as they saw fit, but with a modern earthquake code buildings. This is what London in the most part did after the Great Fire of London. All the grand plans were eventually rejected by the Crown because of disinterested uncooperative locals and due to the fear of rioting. The major difference between the new and old London being the dictate to build in stone not wood. I believe the major flaw in the Christchurch CBD rebuild is the monopolistic nature of the process.
The eastern side of Christchurch CBD has always been the low cost, alternative, hippy and creative side of the city centre. Enterprises like start-up photography companies had premises in this part of town. Rod Donald the former co-leader of the Green party had his offices at 16 Bedford Row, which is now part of Fletchers Eastern Frame development. The interests of this ‘smaller’ end of town have not been considered in the rebuild model.
If the Crown had repackaged/planned the sites in some sort of logical way and released them back onto the market at cost for hundreds of local site owners/developers (original site owners getting the first right of purchase) to rebuild for their needs I think the community would have been better served.
Something similar to this proposal was done in Amsterdam when they redeveloped an old industrial wharf for housing and commercial space.
This being the Borneo Sporenberg project. This project was discussed in the Transportblog article Multiplication through Subdivision in 2013, as it is the inspiration for the Auckland development Vinegar Lane and some suggested changes to the Unitary plan.
Another way to look at the Borneo Sporenburg development is it is a modern version of the traditional Euro-bloc.
These are efficient high density residential building spaces because they create about 100 residential units per hectare – comparable to apartment buildings. But without the need for the same height and expensive infrastructure such as elevators. Further because each site is developed independently, each site has its own stairs and every floor has lighting and cross ventilation to the street and courtyard. This is important because if there is only one set of stairs for a group of sites and a long communal corridor it would break each floor in two, limiting light and ventilation.
The CCDU has a list of settled Crown purchases in Central Christchurch. This includes scores of purchases for the Eastern Frame. Prices ranged from $1829sqm for a 267–271 Madras St address down to $330sqm for 7 Liverpool St. With the typical prices being around the $1000sqm level. Unfortunately we don’t have the price that Fletchers pays the Crown or the details of the profit sharing agreement. So we cannot know if the Crown is making a profit or loss on land sales, if the Crown paid too much or too little for the land, although Brownlee assures us the Crown will not realise a loss.
With the CCDU purchase price figures we can do some back of the envelope calculations for our Euro-bloc build.
Let’s say the Euro-bloc courtyard developments are divided into sites that are between 7 and 10 metres wide and 10 metres deep, with a further 6 metres deep of internal courtyard space for car parking or other uses. With a height of 3 stories and the possibility of roof-top terraces.
For a 7 metre wide Euro-bloc site.
- The whole site is 7 x (10 + 6) =112sqm
- The building envelope would be 7m x 10m x 3 stories high = 210sqm.
- Set the selling price for the sites at say $2000sqm, thus allowing for $1000sqm in development costs to construct paths, cycle-ways, parks etc. This means site cost is $224,000 for the 7m wide site. Note this is a comparable price to a suburban Christchurch section but at 112sqm it is one fifth the size i.e. five times more expensive –so consistent with the standard city land price curve.
- Building cost for this sort of site could be expensive –maybe $3000sqm so $630,000 in building costs.
- Total land plus build cost being $850,000.
- For this you would get 210sqm of floor space, easily 4 bedrooms and multiple living spaces, a large rooftop terrace and parking in the courtyard. Alternatively you could break the space up to a ground floor commercial space. A small middle floor apartment and another top floor apartment with a roof top terrace. It is easy to imagine other ways of dividing the space between large to small residential versus commercial spaces.
- The total build would be beyond a young nurse’s wage, but one floor, at a third of the cost, so $300,000 for a 60sqm (10sqm is lost to communal spaces –like stairs) being a large one bedroom apartment would not be.
Would this sort of Euro-bloc development be better than the Fletchers/Crown partnership CBD development?
I think it would for the following reasons.
- Although land plus build costs are comparable to what Fletchers proposes, I doubt Fletchers apartments and townhouses will offer 210sqm of space, with parking and a large outside space.
- Hundreds of site owners competitively completing their own builds with no ‘monopoly’ incentive to delay would likely build faster than 8 or 9 years. Some sites could probably have been started to be developed before now – 5 years after the first earthquake.
- A modern version of the Euro-bloc would have street appeal that would attract people to the area. A fast developing, dynamic, low cost inner city residential/commercial area would add amenity value to the city.
- The Euro-bloc proposal would be more responsive to the market/communities changing demand or preferences for inner city space –being able to flexibly change between small (60sqm) to large (210sqm) residential spaces and to switch from residential to commercial space.
- The Euro-bloc proposal would allow original inner city landlords a way to be part of the rebuild, thus discouraging capital flight. It would maintain a large locally engaged productive capital base as opposed to encouraging passive ‘capital gains orientated’ absentee ownership of property.
In conclusion I think there is serious flaws in the Christchurch rebuild model because it only considered the needs of a limited number of property developers and the Crown, whilst ignoring the opportunity to create a broader community of beneficiaries.