Over the last couple weeks, I’ve been taking a look at the economics of publicly owned golf courses. Unfortunately, I still haven’t managed to work in a reference to one of my favourite Big Lebowski quotes, so I’ll just have to drop it in here without preamble. In the words of the Dude: “Obviously, you’re not a golfer.”

Last week, I took a quick look at the costs and benefits of publicly owned golf courses, arguing that we would be considerably better off if we freed up the land for public parks and new neighbourhoods. After looking at the potential value of the land for housing or business use, which far exceeds the value for golfers, I asked: “Why isn’t the opportunity cost of using lots of land for golf being recognised the prices charged by golf courses?

To start answering this question, we have to look at how golf course land is valued for rates and other purposes. As I argued when looking at the economics of applying rates to all government-owned land, rates can serve as a “market signal” that encourages productive use of land. Owners of valuable land can expect to pay higher rates, and hence know that they need to get enough revenue from the land to cover them. Conversely, distortions in the rating system can encourage wasteful and unproductive uses of a scarce resource.

So with this in mind, I used Auckland Council’s GIS Viewer to compare the rates being charged on Chamberlain Park and surrounding properties. As the following screencapture shows, there are two overlapping rating units on Chamberlain Park, one for the course and one for the clubrooms:

Chamberlain Park rates assessment

The following table summarises data on the two rates assessments. In total, the golf course pays about $97,000 in rates. At first glance, this seems like a lot, but it’s actually pretty paltry considering the spatial expanse (expense?) of the golf course.

Rates assessmentGolf CourseClubroomsTotal
Land area32.3 ha
2014 Land Value$12,000,000$9,100,000$21,100,000
2014 Improvement Value$1,500,000$1,900,000$3,400,000
2014 Capital Value (LV+IV)$13,500,000$11,000,000$24,500,000
2015/16 total rates$26,876$69,956$96,833
Average land value ($/m2)$65

The land under the golf course is valued at $21.1 million – or around $65 per square metre. This is a comically low valuation. It’s probably been decades since land in Mount Albert was actually that cheap. (I wish it was possible to find buy land that cheaply on the isthmus. I’d buy acres!)

For a comparison, I’ve also looked at the land valuations for five randomly selected residential properties in the immediate vicinity of the golf course. That data, summarised in the table below, indicates that residential land in the area is valued at around $1,100 per square metre – or 16 times higher than Chamberlain Park’s valuation. (As property prices have risen since valuations were conducted, this is likely to understate current prices.)

Rates assessmentABCDETotal
Land area (m2)6586877086378543544
2014 Land Value$770,000$630,000$700,000$720,000$1,000,000$3,820,000
Average land value ($/m2)$1,170$917$989$1,130$1,171$1,078

Here’s a chart showing the comparison:

Chamberlain Park land valuation chart

The practical consequence of this is that Chamberlain Park only pays a fraction of the rates that it should pay. If the land were valued fairly, the golf course would have to pay around 16 times as much in rates – around $1.6 million. As the golf course only pays $97,000 in rates at present, this amounts to a massive public subsidy.

In fact, the rates subsidy granted to Chamberlain Park is roughly equivalent to the annual value of greens fees, which I estimated at around $1.65 million. (Most greens fees go towards the cost of running the golf course.) People golfing at Chamberlain Park are only paying a fraction of the cost of providing the course, leaving other rate-payers to cover the foregone rates income from the land.

As the average residential rates bill was around $2636 in 2014, and around $214 higher in 2015, this means that roughly 530 Auckland households must pay rates to cover the subsidy for Chamberlain Park (i.e. $1.5m foregone rates from Chamberlain Park / $2850 rates per household = ~530 households).

In short, quite a lot of people are being taxed to pay for this golf course-shaped hole in our ratings system. And because the ratings system under-values the land under Chamberlain Park, the golf course is operating without any clear market signals that it needs to use that land differently.

Now, as I discussed in part 1 of this series, there are legitimate reasons for Council to provide public parks, even if it means foregoing some dwellings or some rates income, as they are open to all visitors and thus provide broader social benefits. So I don’t think that this argument applies to (say) Albert Park or Maungakiekie.

But golf courses are very different, as they can only be used by a small number of people at a time. Golf courses are businesses serving paying customers, just like supermarkets and hairdressers and hotels, and they should be expected to pay their own way. We wouldn’t arbitrarily slash rates sixteenfold for the Mount Albert Pak-N-Save, so why do we do that for the golf course just up the road?

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88 comments

  1. I’m not a great fan of golf as a sport (as once said, golf is a nice walk, ruined), and I’ve been following your anti-municipal-golf-rant through the last few articles, but I think you have perhaps missed the main point. Auckland is a great city not because of its architecture, or because of its seamlessly effortless public transport system, but because of its unique outdoors nature. It is a city with massive amounts of seafront, and beaches, and trees, and open spaces, and that includes things like ridiculously cheaply priced, under-used golf courses. It may make no economic sense, but it is part of what makes Auckland special. Delete it at your peril.

    1. So you’re suggesting over-investing in golf courses and under-investing in housing (and other public services) makes Auckland special?

      I think that’s ridiculous. If it did NZ would be an socio-economic powerhouse – as I believe we have more golf courses per capita than any other country in the world. And as Peter has repeatedly pointed out, you cannot cast golf courses as similar to other public investments which deliver significant positive spillovers, e.g. environmental and amenity benefits.

      The only way an abundance of Council subsidised golf courses makes Auckland “special” is that it is increases rates and the cost of land for everyone else, and does so to benefit few people. It is indeed a very special place that decides to burden everyone with higher rates and land costs so as to deliver benefits to a very small number of people. That’s about the most “special” public policy I can think of!?!

      Here’s an alternative view-point: Auckland’s “special” in terms of it’s housing costs, which are extraordinarily high relative to incomes. This is partly due to the fact that we use land much less efficiently than other cities. And one of the more inefficient ways that Auckland uses land is to get the Council to own lots of it and dedicate it to benefit relatively few people with *no good policy rationale*.

      Would Auckland be better if it had fewer golf courses and more (cheaper) houses and lower rates? Yes, in my opinion. And admidst all the plaintive claims of “ohh but you’re overlooking issues” I have not seen any tentative counter-analysis to suggest the benefit-cost equation with regards to golf courses is different from what Peter has presented above.

      Finally, I want to mention an important consideration with regards to public policy: In general, the onus is on those who support public investment (such as Council owned golf courses) to justify that investment in terms of the benefits it delivers to wider society. Emotive pleas about slippery slopes “doth butter no policy parsnips.”

      1. “I have not seen any tentative counter-analysis to suggest the benefit-cost equation with regards to golf courses is different from what Peter has presented above”

        Honestly, that’s because you guys won’t listen to any argument that isn’t presented in black and white economist’s terms.

        1. Scott, “Honestly, that’s because you guys won’t listen to any argument that isn’t presented in black and white economist’s terms.”

          Or alternatively, include for the straight out economists – a cost benefit analysis on the SROI – Social Return on Investment.

          An interesting, and increasingly recognised tool, that allows economic figures to be placed on social and community values.

          Often, as you point out – the ignored reality particularly when discussing commonly owned properties or amenities.

        2. Hi Scott

          I don’t think that economists necessarily see things in black and white – at least no more so than any other group of human beings. In fact, I’d argue that I’ve got the exact opposite of a black and white view. My conclusions depended on the data rather than prior assumptions about the goodness of badness of publicly owned golf courses!

          I’m grateful to Molly for pointing out that there are frameworks such as SROI that aim to incorporate social and environmental values into economic analysis. (Although I’d tend to see SROI as a form of CBA.)

          So here’s a challenge: If you can identify some specific benefits of golf courses that I’ve failed to account for, I’ll do my best to gather data to incorporate them into an expanded assessment. The catch is that if I do, we both have to accept the results.

        3. Scott, that’s not a particularly helpful line of reasoning. It’s easy for either side to say “you’re ignoring our arguments” and walk away. What I tried to say was “show me the evidence”.

          Let me be more specific:
          Point #1: Peter has done some research on this issue and put forward an analysis of the economic benefits/costs of publicly owned golf courses.
          Point #2; In my opinion, Peter (and others for that matter) have engaged constructively with those people who have advanced arguments as to why golf courses should be retained. Most of these arguments amount to either 1) amenity or 2) option value. This engagement has included providing more analysis and more research. Peter argued option values were rather low, while in a previous post, for example, I provided evidence (from Queensland Health) to suggest that higher density did not necessarily equate to reduced physical activity.
          Point #3: I have not seen people who oppose Peter’s position providing any countering analysis or evidence.

          So what I am saying to people who oppose Peter’s position is “show me the evidence”. At the moment, the balance of evidence seems to lie with the other side. Granted, I am not independent and this happens to be the side I agree with. But from memory I can’t think of anyone opposing this view supplying substantive analysis or evidence to support their view.

          Finally, in terms of what I do or don’t believe, you’re dead wrong. Both myself (and I know the same is true of Peter for that matter) hold firm personal views that lie outside the ambit of economic analysis. This includes many ethical, social, political, and environmental values, e.g. I believe we have a moral obligation to maintain biodiversity for several reasons that are largely related to imperfect information about eco-systems and future generations. This means that an economic assessment of the value of biodiversity today may not be accurate. I also don’t see economic analysis as a definite indicator of what “should” happen, just a tool for informing discussion.

          In this case, it just so happens that the results of economic analysis suggests that publicly-owned golf courses are a particularly unwise (i.e. ineffective) use of public funds. And my conclusion is the Council should get out of owning them. I haven’t seen any convincing extenuating reason as to why this conclusion is not sound.

          Feel free to try and change that!

          1. If economists ran things Auckland would be the most inlivable city ever. You are falling into the trap of placong dollar values on everything. For Auckland to be a livable city there has to be a social ( no calculators requird) value.

          2. If economists ran things Auckland would be the most inlivable city ever. You are falling into the trap of placong dollar values on everything. For Auckland to be a livable city there has to be a social ( no calculators requird) value. And no. I am not a golfer but I do appreciate that this is not about me or Peter or Stu. It is about Aucklanders from all walks.

    2. I have to agree with Guy. Your tiresome and boring crusade against golf courses and in particular Chamberlain has become quite boring. I would have hoped you were old emough and wise enough to know and appreciate that when a green space is gone it is gone forever. Someone in the Golfing world has upset you somewhere along the way and you seem hellbent on destroying this asset and turning it into more of the faceless concrete jungle that contributes to make Auckland more unlivable each year. This isnt about money. Delete away.

  2. There you go again Peter, droning on about land value and productivity as if nothing else matters. And pretending golf courses aren’t parkland or green fields because they are going inaccessible to people other than golfers. To which the solution is to turn them into parks. Not build on them. How does your economic logic protect Albert Park or Maungakiekie.. or any cricket pitch or local reserve?

    This inner urban sprawl agenda is putting me right off transportblog.

    1. If it’s a park, then why can’t I have a picnic on it?

      As others have explained repeatedly in previous threads:
      1. Albert Park and Maungakiekie are different because they are open to the public and hence provide benefits to many more Aucklanders. As a result they have to be valued differently.
      2. Cricket pitches and local reserves are much smaller than golf courses – they take up perhaps 1/20th as much space – and hence do not pose the same challenges.

      Finally, as I’ve pointed out to you before, this isn’t a knee-jerk reaction against golf (or open space) – it’s a piece of analysis that would have produced a different result if things were different. If housing prices in the area were lower, or if demand for golfing was higher, then the same analysis would have supported the retention of Chamberlain Park as a golf course. And I would have written that instead.

      1. Hi Peter
        Have just read your reply re Chamberlain Park GC, and disagree with some of your figures and facts. If you look at the revenue that the Park generates for COUNCIL, now that it is now longer privately leased, you will see that this far EXCEEDS your very low figures of RATES gathered by the Park.

        What you have not taken into account is that it is the BUSIEST golf course in the SOUTHERN HEMISPEHERE for rounds played per year – in excess of 80,000 rounds – closer to 100,000 rounds! It is and has been utilised by more than locals, but overseas visitors alike. All of the visitors that call the course are amazed at the location – close to the city, the low cost in fees only around $30/round and the availibility of games for EVERYBODY.
        For those astute enough, you can quickly calculate that it generates a GROSS income of $3,000,000.00 (100000 x 30 = $3 billion!) a lot more that MOTAT and the ZOO combined. It is now THE ONLY PUBLIC GOLF COURSE IN AUCKLAND (Takapuna is on the “Northshore”) so services a larger variety of players especially those casually.

        So take a break, have a kit kat and have no fears that C Park is now lonly paying for itself and then some, but also probably paying for a lot of council tea and coffees to boot.

        Simonne – Ex C Park employee

        1. Is that 3 million or 3 billion?

          No one has said that the golf course doesn’t provide value for those who play rounds. The question is whether this is the best use of that land.

          1. Thanks for that Nik, Slight typo – yes $3 million – however, i thought Peter’s argument was that the council is not getting a good “return” in rates for the land that it occupies….. It is more than that too though – this being the only public golf course in Auckland City (excluding Takapuna as this is under water in winter) and adds value to those who play golf.

          2. My reading of the article is that rates was one measure, but there is always more than one way to look at these investment/disinvestment decisions.

        2. Hi Simonne – thanks for commenting! My understanding was that there were more like 50,000 rounds played a year at Chamberlain Park, not 80-100,000. Furthermore, I understand that most golf courses in Auckland have to spend most of their user fees on operating costs, leaving little if any profit. (Ironically, Chamberlain Park’s accounts aren’t public, so I can’t say how it performs in this area.)

          The bigger issue, which I’ve been trying to highlight, is that publicly owned golf courses have large, hidden “opportunity costs” that are not recognised in greens fees. Foregone rates revenue is one such opportunity cost; foregone returns on leasing/selling the land is another. In the particular case of Chamberlain Park, these costs are considerably larger than the greens fees earned from golfers.

          1. How do you feel about people accessing Auckland domain or Albert Park without paying a fee? Just imagine the rates revenue if it was converted into housing…

          2. Hi Peter
            Definitely more like 90k rounds a year – although this was a little while ago and perhaps you have more up to date numbers info, but it used to average out at about 250/day over the year. That’s the ones that used to walkt throught the door, not accounting those who jumped the fence, this is why it is open 365 days a year from dawn til dusk.
            While i appreciate that you are looking at other “opportunities” for this land that may be better on the balance sheet, i re-iterate that this is the ONLY course in Auckland that is fully open to the public, and as such is a bit of an icon – surely that is worth something! 🙂
            I for one, hope that this course continues to be open for a lifetime to come yet.
            Enjoy the debate – i can see that it is a healthy one – mostly

      2. “it’s a piece of analysis that would have produced a different result if things were different.”

        Another factor that could produce a different result is Auckland’s geography. The sea severely limits the supply of developable land, especially land easily accessible to the centre. 39% of the area within a circle of 30 kilometers of Auckland’s city center is occupied by water. http://urbanizationproject.org/blog/housing-affordability-and-building-regulations-in-new-zealand#.VgCZRd-qpBc

        The coastline also provides an abundance of open space with beaches and coastal reserves, and the sea means we don’t have the air quality problems that landlocked cities may have.

        So if it wasn’t for the sea we would have more developable land, and without the open space function of beaches we would need more parks to compensate.

        1. That’s a good point Frank – Auckland’s narrow geography does mean that it has to work a bit harder than other cities when faced with growth pressures. But overall I’m grateful for the surroundings – not a lot of places where you can see the sun rise and set over water in the same day!

    2. How can inner urban development be sprawl? It is precisely the opposite. Have you considered that developing this land in a real urban area saves having to develop farmland or forest at the edge of the city?

      1. How can inner urban development be sprawl?

        When greenfields are taken for development ahead of brownfield sites and we lose the very spaces that make our urban environment so liveable.

        The scale of those spaces matters but is hardly a secure basis for their protection. Not when over zealous economic rationalism is heading the charge above all else.

        I would happily have apartments next door but don’t want to see my local reserves get concreted (or even the golf course (whether I can have a picnic in them or not).

    1. yes, Auckland would be greater if it had fewer golf courses and Council instead used its capital to invest in public facilities that delivered wider social and environmental benefits.

      1. P.s. But to answer your question, I understand the future of “Greater Auckland” is to raise topical urban issues, some of which may be controversial. In doing so, disagreement is to be expected, and encouraged. Even the editors disagree among themselves on some issues. But we respect each other’s right to publish arguments even when we disagree so as to stimulate debate. As it happens I *suspect* all the Editors are agreed on this issue: Golf courses seem to be a particularly unwise use of public funds. It wouldn’t matter, however, if we weren’t in agreement: The point of the Blog has never been to seek consensus among the Editors, but to instead foster more informed debate. On this front I think Peter’s posts have been a raging success, and even if Council decides to retain ownership of golf courses at least they will have more information on which to base their decision.

      2. In your opinion. Anyone can play the numbers game. Stats can be used to ‘prove’ anything as well you know with cycleway benefit vs costs I see on here which would probably fail the most simple audit.

      3. In your opinion. Anyone can play the numbers game. Stats can be used to ‘prove’ anything as well you know with cycleway benefit vs costs I see on here which would probably fail the most simple audit. In business we all use stats facts and figures to get things across the line, often deviously.

  3. 1) How much would it cost the council (ie ratepayers) to maintain this space as a park/fields? A LOT! (leaving it completely unkempt is not an option)
    2) How much would it cost in future to purchase this land for a park/green space/sports fields? A LOT! (this would be needed when the population grows).
    3) There are plenty of brownfield sites to be redeveloped and plenty of privately owned greenfield sites being held by landbankers. Rather than focusing on golf courses and other public spaces, the focus should be on encouraging (either carrot or stick) these landbankers to develop while at the same time removing a lot of the restrictions to developing medium/high density sections.
    So to summarise; developing this land into housing is a short sighted idea and will cost more in the long term.
    Using this land with the current levels of population demand for sports fields/parks would be an expensive and unnecessary cost. Using the land as a golf course preserves the green space for future (when it can be converted to parks/sports fields) whilst at the same time not having large maintenance costs as the golf course pays for these.

    This is a transport blog not a space for your personal vendetta against golf courses! (oh and btw no I do not play golf at these public courses and am lucky to play perhaps 1 round every other year at a private course so I don’t have a conflict of interest).

    1. Bruce – I think you need to untwist your undies, get some perspective, and not make this into something personal. This is simply a battle of ideas, and may the best idea win – even if it’s not necessarily the idea I agree with. For the record, I support Peter’s position. But the person who wrote the article is irrelevant; it’s the ideas that matter.

      As pointed out above, the Blog is a forum in which the Editors (and guests for that matter) can raise topical urban issues, some of which may be controversial. In doing so, disagreement is to be expected, and encouraged provided that it is expressed in a respectful manner (hard sometimes I know, and some degree of frustration is to be expected). Even us Editors disagree among ourselves on some issues, and sometimes we call each other names like “donkey head”, for example. As it happens I *suspect* all the Editors are agreed on this issue, i.e. we consider golf courses to be a particularly unwise use of public funds. Of course it wouldn’t matter if we weren’t in agreement: The point of the Blog is not to seek consensus among the Editors, but instead to foster interesting and informed debates.

      With regards to your conclusion that developing this land for housing would end up costing more, you’d have to demonstrate that the net present value of the benefits of developing the golf course exceeded the costs of holding it. You seem to assume that we’d have to buy an equivalent amount of open space in this location if we were to develop the golf course at some point in the future. That’s an interesting assumption, and is different from the assumptions Peter has made in previous posts. I think he assumed something like half of the golf course was developed as housing, and the remainder was preserved as publicly accessible open space. So that’s something to be discussed. Would 50% of this space developed as open space be sufficient to sustain future development? I don’t know how much this area is expected to intensify so can’t answer that question.

      For what it’s worth, Amsterdam (where I’m currently living) has far fewer parks than Auckland. The ones they do have, however, are of far higher quality and far more intensively used. As such they are a joy to be in – much more of a pleasure than most of Auckland’s parks, including the Domain.

      1. Peter has already made this personal by his obvious attacks on Chamberlain which go beyond simply his having an opinion and is now more of a rant. What has golfing done to him.

    2. If the cost of maintenance is to be met by the public should the land be converted into a public space at some point, how would this be funded and what are the costs and benefits associated with the transition?

      I think your point about removing restrictions and controls on development before the conversion of existing parkland is a more sensible approach than wholesale conversion of current green space. Rushing into ill thought through policies is never a good way of developing things.

      How subsidies either through low rating values or the hidden subsidies associated with road building and SOV are valued and discussed is something I’m more interested in than golf courses, but I think the discussion needs to be had.

  4. I hear what you are saying Bruce loud and clear:

    An extract of my own reply I wrote just now

    We have enough existing urban land in Auckland to take the intensification needs of a growing Auckland through the life of the Unitary Plan. The Auckland Council Development Capacity Model (ACDC15) has been run now several times using different variations of the four urban residential zones (Single House, Mixed Housing Suburban, Mixed Housing Urban, and Terraced Housing and Apartment Zones) and has illustrated that with some more upzoning and getting the Centres (especially the 10 Metropolitan Centres (or rather 8 and the two Super Metro Centres as I have proposed)) better prepared we have more than enough existing urban land to develop on before cutting into our green spaces.

    Green spaces which become even MORE important as the City intensifies and more people move in over the next thirty years.
    Full post: http://voakl.net/2015/09/22/the-case-for-golf-courses-well-actually-case-for-urban-forests-aklpols/

    1. Hi Ben, interesting proposal. Thanks for engaging with the topic!

      As I said in the second post, I don’t think that it would make sense to convert 100% of the golf course land to housing – my assumption was that 10 hectares would remain as a park. To my mind, this could be a win-win – more public parks _and_ new neighbourhoods. (Of course, it could also be a bad thing if the new neighbourhoods were planned badly.)

      Your point that the development of open space is irreversible and thus locks out potential future benefits is an interesting one. Unfortunately, I don’t think you’re analysing this in a consistent fashion:
      * On the one hand, you argue that population growth in adjacent areas will raise the value of public parks and sports fields, which makes intuitive sense.
      * On the other hand, you fail to acknowledge that population growth will _also_ raise the value of using the same land for housing.

      As an empirical matter, it’s not clear to me which of the two effects will be larger. But it is clear to me that it’s necessary to acknowledge both, which you haven’t done.

      All that said, I do think we agree in principle but arrive at different conclusions for practical/empirical reasons:
      * I agree that using the land for public parks or other non-exclusive uses would be better than the status quo (although probably not quite as good as a mix of housing and public park)
      * I agree that biodiversity and sustainable ecosystems are important, but question whether 32 hectares of land in the middle of an urban area has a big impact on those outcomes
      * I agree that it would be desirable to focus new development within the existing urban limit by enabling intensification of brownfield sites, but point out that there will be _some_ level of demand for greenfield sites that will manifest as further sprawl unless we find places like Chamberlain Park for it to go.

    2. Also, I find your views on publicly owned golf courses very much at odds with your position on expanding the Ports of Auckland. In the latter case, you strongly favour economic values (i.e. lower freight costs to warehouses and industries in South Auckland) over environmental/social values (i.e. the aesthetic and ecosystem value of the Waitemata Harbour). However, in this case you’re backing the aesthetics over the economic values (i.e. increased housing supply).

      When I wrote about the costs and benefits of relocating the Ports of Auckland you weren’t at all worried about the environmental and social costs that I hadn’t addressed in the analysis. In fact, you said something about how we needed to take a pragmatic approach rather than pursue some kind of environmental utopianism.

      Why the difference, Ben?

      1. The difference is there in your answer Peter:
        Pragmatic approach.

        Or more specifically I have applied a Geography lens to both the POAL and the Golf course-Green Space debate.

        Meaning I have not looked at this in a pluralistic economics vs environmental debate point but rather as a Geographer (as I am) put the entire lot together in which I will come out with an answer.

        Ultimately this will result in two differently perceived positions like the Ports and the Golf courses but the position is essentially the same.

        A pragmatic approach to the urban geography of Auckland where sometimes the economic answer will come to the fore other times the physical and social environmental.

        While I do not speak for her I have noticed Deputy Mayor Hulse often does this as well.

  5. Great reply Ben here is mine
    You may like to have a look at HCC approach to its St Andrews golf course. They see this as an asset and are encouraging invest around it, in a way that more people can see it, have access its edges and hopefully increase club member ship, without losing what attracts affluent citizens to the area. Here is link to more information. http://hamiltonurbanblog.co.nz/

  6. If the golf course need to pay 1.6M of rates, and given 50,000 rounds of golf has been played,
    Then they should start charging $32 for each round of golf to breakeven.

    Oh, actually 1.6M is just rates, we forgot staff salary, maintenance and land capital cost.

    If we take account for actual (not undervalued) land cost, 32ha x $1000 per metre = 320 millions.

    If the interest rate to finance this land is 5%, the capital holding cost is 16 millions. (If we own this land, we can rent it out to private companies and get 16millions ground rent)

    So the actual costs is something like 18millions. That means each round of golf should be $360.

    Yes, if you have time to play 3 rounds of golf there, you are subsidised for $1000 dollars.

  7. If anything, they should be using that land taken up by Chamberlain for schools. Increased intensification will place heavy demand on already overcrowded schools in the area.

      1. Of course but unless they build a retirement village with minimum age for entry the demographic profile is unlikely to differ too much from the existing profile of the area.

        In fact intensification in the Grammar school zones has provided an opportunity to buy into the Grammar zone at a lower entry point putting immense pressure on those school rolls.

    1. It will be impossible to introduce infill schooling in high decile areas as long as the current law on educational zoning stands. Any attempt to reallocate households that are currently in highly prized zones will result in class action lawsuits.

        1. The MoE bought land on the Alexandra Park site for a new high school 15 years ago, however this project is in limbo because of ferocious resistance every time even minor steps toward making it a reality have been attempted.

  8. Is it not fair that a golf course pay less rates than an equivalent sized residential development, as the cost to provide services to it is only a fraction of the cost of services to a residential development, eg. sewer, water supply, wastewater, rubbish collection, transport…?

  9. Peter. It is a park. It is council owned land zoned for open space. It is leased to a golf course operator. The council can decide what open space uses it wants on the land (as they have done for Chamberlain Park by reducing it to 9 holes and adding in sports fields etc).

    Question, if there was a 9 hole course in the Auckland Domain would you be campaigning to have this sold for housing or simply put to a better open space use?

    1. My understanding is that the council has taken back the lease on this – the previous lease holder is no longer there – it is now under council control and therefore the council has all the profit from this venture.

  10. The problem with this style of economic analysis is that any park is going to fail it. We have parks in cities because of the value they bring to the people living in the rest of the city, not because the park itself can somehow outbid commercial property developers for the site. Golf and bowls are the among the few recreational purposes that manage to fund themselves commercially when they need to compete with housing developers – but this is only available to those wealthy enough to belong to those sorts of clubs. Parks need to be there for the non-monied as well.

    It’s a red herring that golf courses are only open to golfers. That’s true of many possible park uses. We have specialised parks for golf, soccer, mountain biking, basketball, cricket, shooting, bowls, and often they contain a museum, or an observatory, or a model farm, or an artificial beach. You can only use them for the specific purpose they are designed for. But there’s something for everyone, even if no one activity is one a majority of people enjoy. We even have parks that are preserved natural areas, not open to the public at all. Should we sell off the Kermadec Islands? No-one is allowed to visit those at all, unless they work for DoC.

    We can certainly analyse competing recreational uses of the site. Would several rugby fields serve people better than 9 or 18 additional golf holes? Do we need more playgrounds, or picnic spots, or gardens? Should we have golf courses as a park use anywhere? (My opinion is that yes, we should have golf, but not at inner city sites like Chamberlain Park). But that’s a very different issue to deciding whether we should have a park at all.

    This is one of the reasons we have urban planning in the first place. We, through our elected government, reserve land for parks not because they’re a commercial success but exactly because they are not commercially viable at all. They bring value to the people of the city that is not reflected in their own land value, and may be very difficult to quantify in precise dollar terms.

    While it’s possible in principle for a city to have too much parkland, I don’t think you can sensibly argue that about Auckland. We’ve traditionally reserved 10% of our space for parks and reserves, which seems about right, and our parkland is only going to become more important as the city intensifies. We’ll be able to afford to build better parks and make more effective use of park sites, but we’re still going to need the raw space to put them in.

    1. I think where you’re going wrong, Peter, is that you’re assuming that because at least one commercial golf course exists somewhere, every golf course must inherently be a commercial enterprise, and can only be socially valuable in as far as it makes money.

      Most rugby fields are not commercial enterprises, even if Eden Park does try to run at a profit. Even most commercial golf clubs are not strictly commercially viable – they only keep operating because they bought their land decades ago when they were then on the rural fringe of the city, and land was cheap. Even some of those are selling out to developers.

      Golf is just a sport like any other (even if it’s a land-hungry one, and on a more personal note, incredibly boring). While there may be professional golf, just as there is professional rugby, that does not mean that amateur golfers do not exist, and that non-profit golf courses should not exist.

    2. It is a fair question to ask what utility we get from owning golf courses and charging private clubs a pepper-corn rental. Gold by its nature (small missiles) means others cant use the space. A soccer field by me gets used for games, coaching, kids running around, people jogging, kids learning to ride a bike, softball, and that weird Chinese posing thing. Golf courses give back very little to a community and can easily be located outside the rural urban boundary as you are going to drive there anyway. Golf courses are probably the lowest value community use you can establish but transfer a massive subsidy to golfers. In effect a regressive form of taxation or wealth transfer. And no not all parks are like that, some provide open access and some cater for large numbers of people on very little space.

        1. Sorry I don’t understand your point. Are you suggesting we should keep a bunch of publicly owned golf courses in town because in theory you could walk, cycle or ride the bus with golf sticks in tow?

          1. My point is that you won’t necessarily drive to a golf course, so the comment that they can go outside the RUB because everyone drives to them reminds me of the logic of Cr Quax.

            Whether golf courses are the best use of the land within the RUB is a different question. My personal opinion is that it’s probably not the best use of land, but the alternatives had better have a BCR that’s pretty good and that treats Wider Economic Benefits consistently across the options considered.

          2. Sorry I understand now. You were referring to those hundreds of people who go on the bus or train with their trolley and golf bag or maybe their bike changes into a golf cart like a lame version of Maximus Prime.

    3. If we calculated the opportunity cost of parks – it would be huge. But just because the opportunity cost is huge that does not mean we should pretend it doesn’t exist. Given how much the public values these spaces, the opportunity cost of most parks would be worth it. Obviously public facilities don’t need to be commercially viable – that’s why they’re public facilities. But if something is going to be paid for by the public it should provide clear public benefits, and the costs of providing these should not be greater than the public benefits they provide.

      It would be very difficult for a golf course to provide public benefits that exceed their costs because:

      1. The uniquely space hungry nature of golf + high urban land costs make it an extremely expensive sport to provide.
      2. Most of the benefits of the sport are privately realised.

      Other sports are different in that they are either cheaper to provide or they provide greater public benefits. For example the local rugby pitch can be used when a game is not on, and there is a public health benefit from children getting into the sport.

      If any other sport is as expensive to provide in Auckland as golf, and offers as few public benefits (not private ones) then I would argue that it shouldn’t be provided by the public either.

    4. Hi Stephen

      You raise some interesting points that seem to fall into two broad categories:

      1. Questions of value judgments. When you say that we should “analyse competing recreational uses of the site” but not analyse whether or not Council-owned open spaces should be developed, you’re making a value judgment. You’re judging that open space is *universally* preferable to urban uses.

      It’s perfectly fine to have that value, although others will have different viewpoints. As you noted, politics is how we attempt to reconcile differences in values. (For what it’s worth, I’d expect my view on publicly owned golf courses to lose at the ballot box! I can live with that.)

      2. Empirical questions. When you say that “The problem with this style of economic analysis is that any park is going to fail it”, that is to my mind an *empirical* question that could be answered with the right data and the right analytical toolkit. For example, here’s a paper that analysed the magnitude of “spillovers” from public parks in Dutch cities and concluded, on that basis, that public parks were oversupplied in Amsterdam, undersupplied in the Hague, and about right in Rotterdam.

      Finally, you make a pretty big empirical claim about public park provision in Auckland: “While it’s possible in principle for a city to have too much parkland, I don’t think you can sensibly argue that about Auckland.”

      I wasn’t arguing that Auckland had too many parks – and nor would I without having done some serious analysis to back it up. But given that you’re fairly certain that Auckland *isn’t* oversupplied with parks, do you have any evidence other than a gut feeling that 10% parkland “seems about right”?

      1. > Questions of value judgments. When you say that we should “analyse competing recreational uses of the site” but not analyse whether or not Council-owned open spaces should be developed, you’re making a value judgment. You’re judging that open space is *universally* preferable to urban uses.

        I don’t suggest that parks are universally preferable to development land, but analysing the worth of the parks based on the income they bring in is simply flawed. You can, in principle, put a dollar value on parks and compare it to the dollar value of allowing development, but that dollar value is far in excess of what people actually pay to use parks. (That is, usually zero, or in the case of golf courses and the like, merely covering the operating costs).

        If you were sufficiently motivated, you could probably even put a dollar value on that feeling of wellbeing people get when they know that not every single aspect of their life must be justified in terms of profit and loss.

        > For example, here’s a paper that analysed the magnitude of “spillovers” from public parks in Dutch cities and concluded, on that basis, that public parks were oversupplied in Amsterdam, undersupplied in the Hague, and about right in Rotterdam.

        That paper seems flawed in a number of ways: it assumes that the value of parks is merely what people are willing (and able) to pay for them in terms of cold hard cash. It assumes that every household has an equal income (!). It assumes that parks are merely a substitute for private back yards, and have no value as communal, social spaces.

        But ultimately, that paper (and your logic) simply misses the point. The purpose of parks are not to raise the price of land around them. The purpose of parks is to enhance the lives of the people around them. To provide a non-commercial space, a place of freedom and escape, a celebration of our cultural and personal connection to the land. A romantic place, and a social place, if you will, rather than a practical, utilitarian one.

        Sure, you can put a dollar price on that. (ultimately, you must always make tradeoffs, and whenever you make a decision you’re implicitly putting a dollar value on something). But ultimately, it comes from making a tough decision about how much you need to bend in dire straits, not gleefully looking for every saleable morsel. Auckland, for example, has plenty of infill opportunities available, or rural outskirts, which we should use long before we start dismantling parks.

        > Finally, you make a pretty big empirical claim about public park provision in Auckland: “While it’s possible in principle for a city to have too much parkland, I don’t think you can sensibly argue that about Auckland.”

        I’ve never visited a city with too much parkland, per se. I’m just saying that conceptually one could exist. (Plenty of cities in the New World underuse or misuse their “park” space, though, because the city itself has poor form, leading to unreasonably low density).

        Central Wellington (the flatlands of Te Aro and Pipitea), for example, has too little public space, especially since losing Manners Mall. Whereas the southern suburbs certainly gain hugely from a relatively generous provision of reserve, in the form of the two Green Belts. Certainly, every square inch of it would be needed if Wellington was a significantly denser city.

        Yes, this is a personal judgement, an instinctual judgement, an aesthetic judgement. We are always human first, and economists second.

        1. Stephen, while I acknowledge your broad point I don’t think you’re debating in good faith.

          My posts on golf courses (and on everything else) are based on analysis. That is, I’ve identified a trade-off that exists in urban policy, looked for a way of putting some numbers to each side of it, and made an estimate of what the best course of action would be. There are inevitably limitations to any such analysis, and I’m pretty transparent about that.

          Your response has been to criticise that analysis without offering any of your own analysis to demonstrate what I’ve got wrong. You haven’t, for example, put a figure to the value of parks for “enhanc[ing] the lives of the people around them”. You’ve asserted it, but you haven’t put up any actual evidence to show how important that is relative to other things that humans value, such as housing.

          When I pointed you towards a paper that used adjacent property values as a “revealed preference” indicator of positive spillovers from public parks, you criticised it as incomplete without making any concrete suggestions about how to do a better analysis.

          It’s all well and good to criticise economists for being narrow-minded, but if you don’t bring along some evidence you’re effectively conceding you can’t do any better.

        2. One of the big factors in judging the value of communal spaces is cultural inclination to leverage them. I would argue that an Anglo-culture, suburban-sprawl, auto-dependent milieu is unlikely to maximise the potential benefits. As roads are transport corridors, our tendency is to use parks and other public spaces as recreational and health “corridors” with each participant focused solely on their own objectives.

          I thought there was now consensus among city planning theorists that eliminating pedestrian congestion by creating too much space kills the life of a city, and people need to be a bit more crowded together in common spaces? Southern Europeans are able to live the admired “life on the street” at a glorified intersection mostly devoid of vegetation.

  11. I whole heartily agree. Public grounds that are fenced off to stop the general pubic having access need to be rated the same as private property.
    reserve land with free public access any time of the day/night should have reduced rates.

  12. Probably a similar case is cemeteries for their lack of return and voracious use of land. On addition they effectively permanently sterilise the land.

    1. The land area of Waikumete is 107 hectares with a land value of $15million. So its square metre value is $14 a square metre or about a fifth of Chamberlains. Yes land values will be lower out west compared to Mt Albert but it is in a similar boat with a lot more land I would have thought. Obviously we cant sell the plots already “used” but we could try to hive off unused sections of our existing cemeteries or start charging market rates. I understand the costs charged dont even cover the direct costs associated with burial let alone the capital cost for the land and the ongoing maintenance costs.

      1. This is in fact very common. Many cities relocate or build over cemeteries (e.g. we and Wellington did with our motorways, Melbourne built a market and apartments on theirs), and even more commonly cities will close cemeteries in the inner city and use the land formerly allocated to future grave sites for other uses. We also did this in Auckland. Going way back the Symonds St cemetery used to cover right to K Rd and Upper Queen St. But as the city grew around it the decision was made stop interring any further, er, residents, and to use the land for a park (old jewish section) or buildings (old catholic section).

        That Auckland established Waikumete on the edge of the urban area can simply be attributed to the fact that the land there was cheap l while the land of inner city cemeteries was expensive and highly demand. So they stopped allocating the land for burials and sold it off, in effect.

        1. Interesting, I wonder how prepared we would be to do this now – we don’t seem to be. The Waikumete plan is for it to remain as a cemetery indefinitely.

        2. Is rememberance really an externality? Intra family effects aren’t generally considered externalities. I find it hard to see this, but even if we accept it was, a plaque is presumably sufficient, or even a publicly maintained website.

      2. This is an interesting one, especially as cremation is on the rise: https://en.wikipedia.org/wiki/List_of_countries_by_cremation_rate

        Costlier land seems to be driving this trend. For example, cremation is significantly more common in Paris than in rural France, and highest in densely populated countries like India, Japan or Taiwan. However, cultural practices also play a big role – e.g. I’d expect cremation rates to be lower among Maori than pakeha.

        While I’d personally expect to be cremated (or better yet, buried in a shroud to fertilise a tree) I do respect people’s desire to have a “place” to go where they can respect and honour their ancestors. And I can see that there could be some broader social value in doing so – “externalities” from remembrance / whakapapa?

        1. Curiously in east asia the cultural tradition is to both bury and cremate. Often a recently departed person will be buried in a family tomb in a dense urban necropolis for some years, then later relocated to another remote burial site or cremated. The tomb remains the memorial shared by many generations, even if they aren’t physically interred there forever.

  13. There seems to be a black and white perspective to the potential use of golf course land. “Keep them as golf courses”. Or “Convert to housing”

    Why not convert 40-50% of some of these golf courses to housing, and keep the balance for recreational use, including environmental enhancement?

    Win Win. No?

    Do 4-6 storey development and you can get an awful lot of housing on half a golf course.

    1. Good idea! I suggested a variant of that in last week’s post on the topic: keep 10 hectares for a new urban park and develop the rest with a mix of medium-density housing, shops, and commercial spaces a la Wynyard Quarter. It seemed like a win-win to me too but not everyone agreed…

  14. shouldnt this series of posts be renamed “the case against chamberlain park being a publicly owned golf course”? its not exactly a good proxy for the other courses on council owned land.

    1. I think of it as a case study that has wider applicability. There’s many other Council-owned golf courses which have much higher land values than Chamberlain park, e.g. Takapuna.

  15. This comment has been deleted as it violates user guidelines 3 and 4. Readers are encouraged to refer to the “About the blog” page, which states:

    “the opinions expressed in posts are solely the opinions of the individuals writing, at a particular point in time. They are not the opinions of Greater Auckland, or of any other organisations with which the authors are affiliated or of the employers of the authors.”

    1. That is true, but the quantum is different. Swimming pools, halls, churches are the size of a couple of houses at most. Golf courses are the size of small towns. The peppercorn rates lost on every swimming pool, church and hall in Auckland put together wouldn’t equal one golf course.

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