Last month, I took a look at the costs and benefits of publicly owned golf courses (Part 1, Part 2, Part 3). A few key findings from that analysis:

  • Golf courses are different from public parks, as they can only be used by a small number of paying customers
  • The benefit of redeveloping golf courses to offer a mix of new neighbourhoods and public parks could be as much as nine times higher than the benefit of the status quo to golfers
  • Publicly owned golf courses don’t pay their fair share of rates, meaning that the rest of us have to pay higher taxes.

A key concept running through this analysis is the idea of an “opportunity cost“. We often face mutually exclusive choices – i.e. if we choose one thing, we can’t have the other. In those situations, the “cost” of getting one thing is giving up the opportunity to have the other.

Calvin and Hobbes illustrate the concept of mutually exclusive choices quite nicely:

calvin-and-hobbes-chain-reactions

In the case of publicly owned golf courses, our choices are fairly simple: If we keep them open for golf, we give up the opportunity to have public parks, other sports fields, or housing on them. And if we convert them to other uses, we give up the opportunity to golf now, and the option to choose a different set of uses at some future date.

However, there are other ways to think about the opportunity cost of publicly owned golf courses. For example, what happens when a local government wants to sell down assets, e.g. to free up capital for new investments? If they refuse to consider selling the golf course, what else do they sell instead?

(This isn’t to say that asset sales are necessarily a good idea – that’s really an issue that must be assessed on a case-by-case basis. When politicians propose to sell assets, I think that it’s essential that they are specific about (a) exactly how a sale would lead to better outcomes in the affected market, (b) exactly why they need the money – no vague promises of wish-fulfilment slush funds please! – and (c) how they will avoid losing money on the sale through poor timing.)

In 2002 the former Auckland City Council decided to sell down some of its publicly-owned assets, including some of its shares in the Auckland Airport and its entire public housing stock. The proposed sale of the public housing, most of which housed elderly Aucklanders on low incomes, stirred up opposition. As a result, central government got involved, and purchased the properties through Housing New Zealand:

The Government has offered to buy Auckland City Council’s pensioner and residential property portfolio.

On Monday, 30 September 2002 Cabinet approved an agreement negotiated between Housing New Zealand Corporation and the council.

Housing New Zealand will pay a total of $83 million for the Council’s two portfolios:

1542 pensioner rental units, on 50 sites, with a book value of $101 million. 129 residential units, with a book value of $31 million.

This reflects the full market value for residential housing and a discount for pensioner housing – which takes into account the fact that these sites will always be retained for social housing and that Housing New Zealand Corporation is committed to a fast tracked redevelopment programme.

In short, Auckland City Council earned $83 million for the sale of 1671 public housing units. The deal didn’t increase the total amount of housing in the city, as it didn’t release any land for new development or more intensive redevelopment. Furthermore, although Housing New Zealand was able to keep the units available as social housing, it probably had a bit less money to build new social housing in Auckland that year.

However, as I found when I looked at the benefits of alternative options for Chamberlain Park, the Council could retain a third of the golf course as a new public park and still earn more from selling the land for housing development. Even accounting for the fact that house prices have approximately doubled since 2002, it’s not even close – the golf course is worth about 50% more than the council housing ($240m vs ~$160m).

In 2002, when Council decided to sell some assets, the “opportunity cost” of not considering selling a golf course was having to sell the council housing instead. But the same choice also applies in reverse in the present day. If Auckland Council wanted to get back into the social housing game, to alleviate the impact of the city’s current housing affordability challenges, perhaps it could fund it with the proceeds from golf course sales?

1600 council flats or a single golf course: which do you think has a greater social value?

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84 comments

  1. Here we go again – what has golf ever done to you? Lets get rid of school playgrounds and put flats on them as well as Eden Park? Peter what will it take for the envious to realize that once ANY green space is gone it is gone forever? This tirade against public golf courses is getting obsessive by you. And I say it again – I am not a Golfer, never have been and unlikely to be so – but a lost green space is a lost green space – and you will never get it back..

    1. You would need about 150 school playing grounds to get the same area as one golf course. Likewise with Eden Park, that plus Mt Smart and Albany stadium still wouldn’t equal one golf course.

    2. I don’t particularly care about golf courses. If you read the post carefully, you’ll see that I’ve been using them to illustrate the concept of opportunity costs, which is an important idea in economics.

      Looking back on your comments on these threads, you haven’t done anything but restate the same points and fallacious comparisons, and complain about the post topics.

    3. Exactly! Talk about flogging a dead horse! I really don’t know what Peter’s beef is or why he feels we need to have this repeatedly rammed down our throats.
      “Publicly owned golf courses don’t pay their fair share of rates, meaning that the rest of us have to pay higher taxes.” – WRONG! If they were converted to Parks then ratepayers would be having to pay for their maintenance while receiving no rates. Golf courses maintain themselves and do pay some rates (sure not as much as their land is worth but at least the land is being reserved for future parks etc).
      There is so much more land that could be easily redeveloped in Auckland with a relaxation of height/density restrictions that we don’t need to go removing our green spaces.

      1. from my reading Peter would suggest converting 1/3 of the golf course to parks, while the remainder would be developed. I imagine rates earned from the latter would more than cover costs of maintaining the former, so rate-payers would benefit from lower rates.

    4. Yeah but to my mind golf courses don’t count as green space because there isn’t public access. Green space that can only be accessed by paying a fee and then can only be used for playing a particular game isn’t any use to most people.

      Imagine that a council built some large buildings in prime locations, filled them with thousands of great books at huge expense, charged $20 for the public to enter but didn’t allow them to do anything apart from research battles of the Napoleonic wars. It’s still a library though, just like a golf course is a green space.

      School playgrounds are a public good as they benefit kids and are often available to be used by the community in general.

      1. 1 person researching the Napoleonic wars is as valuable as 10,000 larrikins lounging about in libraries as happens today

    5. I agree that we should be very cautious when turning over green space to housing, however I don’t think you’ve made a fair assessment of Peter’s position. The question is not whether we should give up green space for housing, but instead it’s whether we are using our green space as effectively as we could be. And I think that’s a perfectly valid question to ask – and we can’t stick our head in the sand and avoid the debate. Could these spaces be better used as general park land? Urban forest? A mix of high density development, with the rest of the space remaining green? All very valid options, imo.

    6. I agree Ricardo. I don’t play golf but I reckon keep the golf courses. Some open unbuilt space is like white space around a piece of art. It’s beautiful. And feel safe. And is part of good design. And second. I noticed the golf course were on the list to consider for the axe, but the multi acre pony club that houses only 12 ponies (including spin doctor to local mp) and free community orchards in one of our wealthiest and most politically connected neighbourhoods was overlooked. I wonder why those neighbourhoods didn’t get hit with the rural rates rise since those on large acreage provide their own farms, but the hipsters in the weatlhy neighbourhoods have their rate free , cost free fruit trees provided for them? Complete with some doofus from mount eden who comes with a scythe to tend them. Just a bit of consistency would be nice.

  2. I think a golf ball must of hit you in the head or something? The fact we have these affordable golf courses is a huge attraction to tourists, yet alone kiwis. Not sure why we want to follow Japan’s footsteps and end up paying over $200 a round for an average course with a waiting list of up to 6months?

    Even if you are not a golfer you might morn the lost green space?

    Although housing may have a higher social value, golf courses have a higher environmental value.

      1. That is a specious argument Peter and you know it. Please calculate the difference in rates on a typical house in Auckland if golf courses were developed. Pennies. And if you add up all similar opportunities, it’s still pennies. If you can’t monetise the benefits of golf for a population, the tourism value, the higher land values adjacent to the course, or the value of the open space, that’s a flaw in methodology. (Don’t feel bad. It’s a flaw that’s always been there and always will be. Some things cannot and should no be monetised.) It also takes a short term view of an issue, whereas preserving open space comes from a long-term view, and we should be incredibly grateful to our forebears who had the wisdom to set aside a little land to be “the lungs of the city”, as some smart person put it.

        On a larger point, let’s get a little more rigorous with analysis. Instead of positing that every public decision has to reduce housing costs as its first principle, good policy analysis anticipates all likely outcomes. Auckland is only one of many cities with high cost-housing and they are all struggling to figure out what to do about it. As we all know, there are many things that contribute to housing costs and the sensible thing would be to actively address at least half of them. I would put developing open space very near the bottom of the priority list. Or, more likely, not put it on the list at all. Unfortunately, the ultimate set of solutions will require considerable market intervention, and the political and economic climate simply won’t allow it. We’re stuck with the market forces we have until that time.

        And why must we talk about golf courses, housing, and privatisation of public assets on a transportblog? Yeah, it’s interesting but it’s not transport.

        1. Pennies? Don’t be so sure.

          Let’s assume Auckland has a population of about 1.5 million and 600,000 households.
          – The direct effect from the extra 1,600 households would be to spread existing rates across 0.3% more households. So for the average household paying say $3,500 per year that’s equivalent to a $9 saving per household per year.
          – The indirect effect is that the capital earned from the proceeds would reduce Council borrowing. If we assume the Council would earn $240 million, and assume 5% cost of capital, then this equates to $20 per household per year.

          Adding it up we have ~$30 per household per year simply from developing the Chamberlain Golf Course. Then you consider the wider portfolio of golf courses. Let’s say that similar efforts to optimise this portfolio enabled Council to realise savings that were 3 times larger than what we calculated above for Chamberlain Park, or $90 per household per year.

          Then step back and consider what Council has been able to achieve from imposing an additional transport levy of $100 per household per year for *just 3 years* (NB: It’s shedloads http://greaterakl.wpengine.com/2015/05/01/a-transport-levy-for-a-more-balanced-transport-plan/).

          Then you start to realise that we’re not talking about pennies. We may actually talking about an amount of new capital and development that has the potential to transform the city.

          Maybe placing Council’s golf course investment in this context helps you realise why 1) it’s an important issue and 2) how it’s relevant to transport. The key message that Peter is making is that every poor investment Council makes, e.g. golf courses, reduces the capital that is available to fund transport improvements, or any other improvements for that matter. That’s the opportunity cost.

          1. “The direct effect from the extra 1,600 households would be to spread existing rates across 0.3% more households. So for the average household paying say $3,500 per year that’s equivalent to a $9 saving per household per year.”
            You’re assuming that those houses wouldn’t be built anywhere else which is of course ridiculous.

          2. Fair point. Yes could argue those houses would be built elsewhere. What % woukd you assume? Probably not 100% id guess … so there would still be some benefit.

            Note also that two-thirds of the savings i estimated are associated with capital proceeds. You haven’t addressed this point, so my overall point stands: the fiscal impacts of managing golf courses efficiently could be significant in the context of the city.

            So ultimately the point stands: these are important discussions to have and describing the impacts as “pennies” is not credible.

        2. “On a larger point, let’s get a little more rigorous with analysis. Instead of positing that every public decision has to reduce housing costs as its first principle, good policy analysis anticipates all likely outcomes.”

          Re-read the first three posts. In those, I:
          * Identified the likely outcomes of developing (or not developing) on golf courses. In particular, I observed that golf courses aren’t open-access and thus principally benefit the people golfing on them. Other than some rather wooly arguments about how we *might* convert golf courses into parks in the future, I haven’t heard any great arguments that other benefits are really large in magnitude.
          * Estimated and compared the costs and benefits of converting a golf course to a mix of housing and *a new 10ha public park*, and observed that the proposal would probably raise wellbeing substantially. Nobody else has produced any alternative figures, so I can only conclude that my estimates are reasonable.

          ” As we all know, there are many things that contribute to housing costs and the sensible thing would be to actively address at least half of them. I would put developing open space very near the bottom of the priority list.”

          Housing markets are definitely complex, as I’ve written before. There’s no silver bullet. However, I think it’s foolish to casually dismiss a policy option with a benefit-cost ratio of 9. What’s your evidence that the other (unspecified) options have a higher BCR?

  3. Peter is putting up an argument that needs to be had. You might not agree entirely, but there is no need to play the man not the ball. Go to Kiwiblog if you want to play that game.
    I have played golf, off and on for 50 years. But Auckland is over supplied with courses, which is why a couple of them are merging. Why not discuss the future of the others?

  4. That is a pluralism question at the end Nunns. As for someone who is an Urban Economist who has given evidence on behalf of the Council for the Proposed Auckland giving such a pluralistic question would have not gone down well with Judge Kirkpatrick and the Unitary Plan Panel.

    The correct question is:
    What does Auckland want?
    A) Golf courses
    B) Urban Forests and/or Parks
    C) Residential or commercial development.

    Given the Council through the Unitary Plan is following a Centres-Plus policy with intensification I would focus on the Metropolitan Centres and the Town Centres before even touching golf courses for and if for urban development….

    1. There’s a difference between blogging and work, Ben. This is blogging.

      This post isn’t really about golf courses – it’s just using them as a mechanism to explore the idea of opportunity costs. So while you’re right that it’s actually a multiple choice question, it’s still relevant to ask _which_ public asset we’d prefer Council to own.

      Also, having read your proposal I don’t think it would work. I just don’t think that the development sector could switch overnight from supplying mostly standalone houses, often on greenfields, to mostly high-rise apartments. So we’ll need more land – the question is: where?

  5. Interesting that the public golf courses in areas with lower land value aren’t being made a target for public housing. Yet houses built on them would be able to house lower income owners, which is where the housing crisis is being felt. Unfortunately the developer dollar is more attracted to central city land e.g. Chamberlain Park than Maungakiekie golf course, which is really close to the huge Keith Hay park recreational facilities. But is not attractive to developers? The unitary plan provided us with apartments on Great North Road on the basis that intensification would solve Auckland’s housing crisis. Hardly likely at the prices these developers are charging.

    1. Maungakiekie would be great to develop into something better for the community. You have Titiranga and Akarana both within a short drive already as well

  6. The Auckland Council did not sell social housing to maintain golf courses. It sold social housing because as a result of hard right ideological views it fundamentally disagreed with the council providing social housing (“The council resolved this year that providing social housing is the responsibility of central government, not local government”). There was no meaningful trade-off made, and the golf courses do not represent any kind of opportunity cost in this context. Even if the council had had the money from the golf courses, they would have sold the council housing, because as a hard-right ideologue, John Banks didn’t like social housing and didn’t want anything to do with it.

    1. Absolutely – sheer ideology fuelled by the Birch Report. Fortunately a Labour led government stepped in and bought the social housing. Interesting reading the Birch Report if you want to see what the C&R types really want to do with local government.

    2. If he was a hard right idealogue, why did he sell it to another social housing provider? Would he not have sold it into the private sector? I know it was 2002 but it doesn’t look like they got much money for them and sold them at a hefty book value discount. Strange moves from an ideologue.

      1. It was quicker to sell them as one package to Govt as they took over the existing tenancies as well. If sold separately there was the room for lots of political fallout as tenants were heavied out or moved around smaller and smaller complexes that were still Council owned. Banks had promised no evictions.

        1. But selling it to central government for use as social housing didnt achieve anything that could be described as advancing a far right agenda?? So if it was ideological it didnt have anything to do with a left/right ideology.

    3. I appreciate that historical sales of public housing decisions were driven more by ideology than ideas … and I don’t think that’s necessarily something Peter would support. Indeed I think that’s relatively clear from the post?

      1. My point isn’t about whether or not the social housing sales were a good thing or not, or whether Peter supports them – my point is that they were primarily driven by a political process around what kinds of things the Council should be doing, and not really driven by economic considerations. Therefore it’s not really very useful to apply an economic trade-off analysis to that decision, because it wasn’t that kind of decision.

        I have a general dislike this kind of “sell the golf courses or the kitten gets it” argument, and here it’s particularly egregious because there was no such choice at any point — there was never any suggestion that if the Council had released other capital through some other process, the housing portfolio would have been retained.

        You might argue that in future we should make a trade-off between social housing and golf courses, but that wasn’t how that Auckland City Council approached it, and it’s historically inaccurate and misleading to suggest that it was.

        (The fact that the sale was made below book value is precisely why it was ideological, if you think about it!)

        1. Hi Keir – I think you’ve got a good point about the political process that led to the sale of Auckland’s council housing. And for what it’s worth, I agree with you that economic efficiency did _not_ seem to be the core objective of the policy.

          However, I’d also argue that divestment of council housing is _reversible. If council decided to put some money in, they could build more. The problem is that they’ve got a constrained capital budget, so it becomes a question of: where could the money come from? Once you ask that question, it becomes clear that retaining public ownership of golf courses has a cost for council budgeting – it means less money that could be spent on infrastructure or council housing. And, as I’ve demonstrated in previous posts, it’s unlikely that the benefits of publicly-owned golf courses exceed the costs of holding them.

  7. I’m normally not a fan of asset sales but I’d have no problems if Council sold off golf courses and parking buildings and focused on the further redevelopment of urban centres instead.

  8. Just a reminder about teh first banks Council – The first step was to spend $ 56,250.00 on a report from William Birch Consulting Limited on how to give effect to the political directions from their manifesto. Some items from this report probably remain in the popular memory: selling the Airport shares and Council housing, gradually exiting from pensioner housing, and completing the motorway network. Unfortunately some more subtle and not so “headlineable” changes probably have not but resonate today. These went to the nature of the Council’s relationship with voters and staff. They included:

    • Reducing the influence of elected representatives by restructuring the Council’s financial management systems.
    • Removing the concept of partnership with Council staff by emphasising a corporate model of “purchase” of services from the CEO.
    • Reducing the number of Council committees and removing most of the community partnership and advocacy functions.
    • Restructuring the working of Council to enable it to be done in conjunction with other business work.

    With the prospect of an official NACT Local Body team for the 2016 Aucklnd Council election – rather than the closet collections of the past – it is worth looking at what they wanted to do when they last had the unbridled power.

  9. When politicians talk about selling assets the first thing I think about is how the public purpose of the asset, the reason it was government-owned to begin with, will be guaranteed. So often, privatisation is a false promise.

    Every investment has an opportunity cost. If that’s the only criterion, or the deciding factor, then we might as well have not moved beyond the cities of the 1870s. Those were expressions of pure market forces. Tenements, slaughter houses, and sweat shops paid better than parks or golf courses, or museums.

    1. I completely disagree. Arguing that opportunity costs are relevant to public investment is not equivalent to arguing that pure market forces to reign supreme.

      Opportunity costs simply require that we attach a value to the assets that Council owns, and are aware that owning an asset (and hence incurring the opportunity cost) reduces Council’s ability to invest in other things.

      Peter’s not arguing for market forces, he’s arguing for Council to invest wisely.

    2. What is the public purpose of a publicly-owned golf courses? What is this accomplishing that couldn’t be done equally well (or better) by the private sector?

      It’s not as though there aren’t any privately-owned golf courses in the country.

        1. Milton and Rose Friedman told us there are 4 ways to spend money. 1/ Your own money on yourself- you care about the cost and about the outcome. 2/ Your own $ on other people, you care about the cost but not the outcome. 3/ Other people’s money on yourself, you don’t care about the cost but you do care about the outcome. 4/ Other people’s money on other people. You don’t care about the cost or the outcome. Managers and type 3 spenders, politicians are type 4 spenders. Only the first is truly efficient.

          1. In that theory you could say that having houses built by type 1 spenders is pretty much outlawed in Auckland by the zoning laws.

            And what about that big development in the Christchurch CBD, that would be a type 2 or type 4 spender?

      1. ‘What is the public purpose of a publicly-owned golf courses?’ Peter that is a good question. And the answer, in essence, is; land-banking. Public golf-courses were all set up when land was abundant but infrastructure wasn’t. One of the effects of the courses was to soak up large plots of land in order to protect new sections from suffering from low value through over supply…. totally reasonable to ask if the conditions that led to their formation still hold. And of course they do not.

        It is really informative to look back old over old aerial photographs top see just how much bare farm land and other undeveloped space accompanied Auckland’s development until relatively recently. Some of us can even remember great swathes of it. It s quite easy to see how Auckland has grown through intensification over the last 20 odd years: there’s been a lot of infill.

  10. This again for the umpteenth time. What’s with the crusade on golf courses? I don’t play golf and have no interest in it, but that doesnt mean I’d want to see green space covered in yet more housing or other buildings. I don’t have any problem with them not paying commercial rates as they’re not there to make profit anyway.

    1. Peter’s simply observing that 1) Aucklland Council has a lot of valuable land tied up in them and 2) there would seem to be better uses for such large amounts of public money. You can agree or disagree, but the fact that it’s so controversial – with people fairly evenly split between the two sides – suggests it was a very worthwhile topic to raise.

      1. Then let’s hear a more honest blog post about public parks / forests / bush v more housing. Not another pointless golf flog (haha) presenting the same old specious argument that conflates two issues.

  11. Thanks Peter – very much agree with you. The matter with a golf course for me isn’t the golf, it’s the very low level of use. Not appropriate for inner city areas – whether a public park or some housing would be appripriate is the next question, but I am not happy with the huge golf subsidy via my rates (and to be clear, I wasn’t happy with the huge rugby subsidies either – i.e. Eden Park loans etc).

  12. What is the difference between a golf course and a cycle path? Both promote recreational activity which reduces our health costs. Why are some people unable to understand that cycling is mostly recreational the way Golf is and yet some posters here seem to only want rate payers money spent on the MAMILS.
    Beaches are mostly for recreational activity. Does Mr Nuns think we should build state housing on the parks that surround some of our foreshores? Wenderholm is bigger than any golf course I have seen.
    I suspect this anti golf stance is deep rooted in socialist prejudices. Some people thinking that only the elite play Golf.
    Much of what is written on this blog makes sense but I am afraid this attack on golf courses is just plain stupid

    1. Cycling is not mainly about recreation or MAMILs. You are only showing a very narrow minded NZ attitude by thinking so (and one that never existed before the 1970s).

      Cycling is the very best way for people to efficiently transport themselves around a city, as many cities in non-English speaking countries have demonstrated. Plus cycle paths occupy a tiny area compared to golf courses. And even less compared to the street space dedicated to moving people in the least efficient manner possible, the single occupant motor vehicle.

      None of the examples you have given possess the same attributes as golf courses. Golf courses are only usable on payment of a fee and can only be used for one purpose. What other public space is similar to that?

      1. Just ignore “jackson”, it’s just another fake identity of our resident troll Phil, using any thin pretense to moan about the skypath and quietly insiuate that everyone is jealous of him.

        FYI the parkland and beach at Wenderholm is 10 hectares smaller than a golf course, if not the bush reserve.

        1. For someone who claims to be so rich and important he seems to have an awful lot of time to troll.

          I wish I had half his spare time when I am just running a small professional services business.

    2. I dont think anyone has problem with Wenderholm being a park or even a golf course, we are talking about golf courses in areas where there is large urban housing demand. Cycling is a form of transportation, not just recreation, it potentially means cars off the road, more room on buses etc, and cycle lanes are not large, just long and narrow, like footpaths… maybe a tad wider.

      Nobody is attacking golf courses here, merely where they are located, I am sure people who want to play golf dont mind driving a little out of town, like you would for hunting or dirt biking and many other recreational activities that require a large land-use footprint.

    3. cycling has far higher health benefits because it involves moderate levels of physical exertion. Golf is much less intensive exercise and so has considerably lower health benefits.

      Plus you have to consider health benefits per user versus cost per user. I’d expect that the health benefits per user from golf courses to be small relative to the costs of holding golf courses.

      Your suggestion that Peter’s posts are an “attack” is stupid. This has been a very controversial topic and many people, if not the majority, have expressed support for Peter’s stance or at least been happy to discuss the topic. Feel free to disagree, but I think it’s been very beneficial to raise the idea and get various opinions out in the open.

    4. A poor comparison. Cycleways serve a commuter function (and they will, once we have a comprehensive network) as well as a recreational one.

      The difference between a golf course and other public space is that one is open to all Aucklanders to enjoy how they like, while the other can only be used for a specific purpose upon payment of a fee. Given that land is scarce, we have to ask the question of whether a golf course will be utilised enough to justify the land not being used for any other purpose (be it a different sort of green space, a leisure facility, or housing). Doesn’t seem unreasonable or socialist to do so?

    5. As a 79 yo NZ’r I see bicycling as transport.
      I used it from an early age to go to school and later to work. It was the mode of transport i used most for over 50 year working life and feel that is was beneficial both from a financial and health point of view. I also managed to carry 2 children on it to their weekend sports until tyre blow outs forced one of them onto her own bike. I feel that the conversation had while we were all on the one bike were very beneficial to our communication and their growing up. I only wish it were now considered the prime mode of transport in NZ.

    6. “I suspect this anti golf stance is deep rooted in socialist prejudices.”

      In a previous post, I was accused of being a far-right libertarian for proposing public asset sales. Which is it?

    7. I guess you used to be one of those poor 15 year old kids who had to ask mummy or daddy to drive you around every single time you wanted to leave the house.

      If only you could just ride your bicycle there…

  13. Are the Council owned Golf Courses, Public open space?
    Are the Public able to use them?
    Were these areas originally farmland on the edge of urban areas when they became Golf courses?
    How much do the Golf Clubs that use this Council owned land contribute to the Council financially as compared to the rateable/rental value?

    1. @Ted: For the most part they aren’t public open space (however in future when there is greater demand for public open space they could be converted to this purpose… kinda hard to convert a bunch of buildings into open space…).
      For the most part the public can’t use them at present (except for the purpose of golf, some do have paths or small pockets of public areas).
      They would have been farmland at one stage.
      They are a positive contributor in that they pay more in rates than they receive in council funding. Sure they don’t pay rates on what the land is really worth but this isn’t a business it is for the public good and at present is a better use for the land than having council spending money maintaining it as a park. As mentioned it is effectively a land bank for future when the population will be greater and the need for public space will be higher. More expensive to buy land in future for parks.

  14. The choice is 1600 flats where people can ride public transport and relocate the golf course to the edge of town where a few people will have to drive to it at weekends, or keep the golf course where it is so a few people have a short drive and locate the next 1600 houses on the edge of town where all those people will have to drive a long distance in the peak hour. I guess it depends on what you think is important, if it were up to me the golf course would be gone.

  15. If you’re talking public housing then, as per recent history, the housing would only be public (state or council) for a while and then get on sold to private interests. All in, a terrible way to convert council land to private property.

    1. But what good is it locking up public land for only a few people to use for leisure. Surely even private ownership is good if people get to have a home in a convenient location.

  16. It would be good to also have a discussion on what kind of parks provide the most amenity. I really like “ribbon” parks that also go somewhere. Myers park is a good example, except that the final gradient isn’t so bike friendly.
    Copenhagen’s “5 fingers” strategy is great.
    We tend to make parks a big blob so they can be used for sport, but parks that “go somewhere” are maybe more useful- they also result in lots more people being close to a park border.
    So far the talk for Chamberlain park seems to be “do something with one half/third/whatever and something else with the rest” – what about creating a series of intersecting ribbon parks with housing in between?

    1. You’re right. We’ve got far too many underutilised parks because of this and yes, it’s usually down to sports fields (which are another private use of public land in many cases).

      1. Actually we don’t have enough sports parks. To do my sprint training I need to use a local school as neither of the closest council parks ever have sprint lanes mowed (and one – Terry St – is far too bumpy).

        “Ribbon parks” are just excuses for lazy meandering not real physical activity. Sell them all and build more running tracks for the public

    2. That’s an interesting proposal. There’s something like that out near Botany – a series of paths running along streams and connecting (or almost connecting) residential areas with several town centres. A while back I took a high-altitude look at it from a cycle network perspective: http://greaterakl.wpengine.com/2015/02/19/now-connect-them/

      My sense is that ribbon parks could also be quite good for stormwater management in the area – but I’m not a stormwater engineer, so who knows?

      1. Ribbon parks depend on good edges, and therein typically lies their problem. Look at Glen Innes: lots of green/blue fingers, with housing backing not fronting onto them, and therefore downright unsafe at many hours. Postwar autopian economics likes inward looking pods, hence the poor outward interfaces, and that tendency is still a problem. IMHO lots of smaller, distributed pocket parks integrated into a street grid is one thing Stonefields has got right, much better than big sport-shaped blobs. Like most things urban, proximity and quality trump homogeneous quantity.

      2. There’s certainly a lot of potential for linear parks/walking and cycling routes/SUDs drainage/Flood corridor cross overs, but yes, having access to provide the required connections for each into the existing development can be difficult. On one greenfield site I’m looking at just now they pretty much all drop out into the same corridors without any effort at all.

  17. I am not a fan of how the current social house is managed.

    The tenant generally dont look after the property and often involves crimical and anti-social activities. It devalues the whole area no matter how good is that land and cause a downward spirals to the whole area. It distort the natual land value and the use of the land value.

    It is also a lose lose for government as well, as tenant will grow drugs and break the house, steal the chattles, put all the junk to the backyard and they dont care. The cost to maintain the house is often greater than subsiding them to rent outside, where they will be subject to bad reference.

    1. “often involves crimical and anti-social activities”, “tenant will grow drugs and break the house, steal the chattles, put all the junk to the backyard and they dont care” – Any evidence to back this up? Not denying some small % do this but are you really claiming this happens “often”?

      Sounds like the usual characterising of the working poor by their materially wealthier neighbours. Always much easier than just trying to fix the actual system, I guess. It is all their fault they are poor because they are lazy and sit around doing drugs all day.

    2. I don’t think negative sterotypes about an entire group of people is helpful or accurate. Remember, the current prime minister grew up in a state house. Whether you agree or disagree with his politics, I think it’s fair to say that it hasn’t led him into a life of criminality.

      However, state houses are often poorly maintained, resulting in health problems for their inhabitants. That’s a serious issue that we’ve been slow to tackle. Even in cases where the (gainfully employed) residents have made desperate requests to be re-housed: http://www.stuff.co.nz/national/health/69249015/Another-death-linked-to-damp-state-house

  18. Leave the golf courses alone! There’s other land that can be developed for housing. This hobby horse against golfing is getting a bit tired.

  19. I get that this isn’t necessarily an attack on golf. But I haven’t seen an argument yet that convinces me that the land tied up in golf courses should be converted to other uses.
    The first reason that I am uneasy is that I can’t see the environmental value of the green space to the outsiders looking in or the people using the green area, this is a benefit that hasn’t been costed or explained.
    The second is golf courses as lungs to an urban area, and what value do we place on this in Auckland-probably small because of the prevailing wind.
    The third opportunity cost is the value of the land relatively undeveloped in the middle of a city to future generations, what value do we add to this.
    For the third reason alone I would leave the land as it is because it’s future strategic value is instilled to us and will only be known to future generations,

    1. Now these are some good questions!

      In the second post, I estimated the easy-to-quantify factors – i.e. the value of the land for housing vs the value of the land for golfers. Of course it’s true that there are other, harder-to-measure things that also matter. If we measure the easy-to-quantify stuff first, it lets us ask some intelligent questions about the rest.

      In this case, we are asking the question: Given that the land would be worth over $200 million more as a mix of housing and public parks than it is for golfing, is it reasonable to expect unquantified benefits such as environmental services to make up the difference?

      There are a number of papers on the value of environmental services from open space. Some quick Google Scholar searching found a few. Let’s start with the data in this meta-analysis of studies on the value of environmental services from wetlands. This is likely to provide us with an “upper bound” figure for those values, as wetlands are among the most “productive” ecosystems.

      The average ecosystem value of wetlands estimated in several hundred studies is around US$2800 per hectare per year. Let’s take an even higher value than that – $10,000 per hectare per year.

      That suggests that a reasonable upper bound on the value of environmental services from the Chamberlain Park golf course is around $320,000 per annum (32 ha * $10,000/ha/year). If we convert that annual “flow” of value to discounted present value, it’s worth perhaps $5 million.

      In other words, even if we assumed that the golf course was an exceptionally productive and useful ecosystem, which it is not, the value of the environmental services would be small relative to the benefits of developing the golf course.

      Now, this is all back of the envelope stuff, so I’d welcome a more in-depth view. But I don’t see anything here that would suggest that my conclusions are wrong.

    2. Lastly, I agree that there is value in preserving options for future generations. However:

      1. While the value of open space will presumably rise, so will the value of being able to live on the isthmus.

      2. We are somebody else’s future generation. I’m sure people were having these debates 50 or 70 years ago. If you’re land banking, you’ve got to be willing to use the land at a certain point.

  20. Our local cases of the SHA development on the golf course at Bellfield rd has concerned me because of the STRATEGIC nature of the course in the future which could be another opportunity lost. On our side of Papakura we have very little child accessible open space. The Great South Road and Opaheke Rd block to children the green areas on the south side of town. The nearest open space is central park and then Bruce Pullman park. With Mill road eventually going through to Drury, we are going to have a triangle of development with no open space. I guess I am also concerned at the value of the easily convertible strategic open space and future proofing access to it for young people. There are many lessons to be learnt around the loss of the army camp golf course and the loss of Poland park course and now the loss of bellfield Road. Mini communities broken up at what cost or value do you put on those. I guess I am trying to work out the values that accrue from an activity such as golf courses or camping grounds versus their value when developed. I suspect that the answer will always be that money talks

    1. I agree that it’s important for a city to have public parks, and that they seem to be lacking in parts of Auckland. However, as I wrote in the first post, golf courses are different – they aren’t open to the public. As a result, I’d argue that there are opportunities for win-wins from redeveloping some publicly-owned courses to provide more public parks and more housing.

      “I suspect that the answer will always be that money talks”

      People pay to golf – so money has a chance to speak in favour of golf courses. But what’s actually happening is that utilisation of golf courses is declining, leading to falling revenues and reduced financial sustainability.

  21. People do pay to golf, but I will never be able to afford the cost of Carrington or kauai cliffs at $200 plus per round. Manukau at $35 per round and nearly $1000 per year was becoming too much. Papakura public course at less than $20 per round was very affordable, consequently the people that used it were not elitist, again how do we quantify the social values here. Families came from all over south auckland to use it. How do economists measure these conflicting values and come up with something sensible and meaningful?

    1. The question you’re raising has a simple answer, and a more complex answer. (At least, if you’re asking an economist!)

      The simple answer is this: When somebody goes golfing, do they capture all of the value of that experience? Or are there significant positive or negative spillovers to others that aren’t accounted for in their decision making?

      I suspect that there are some positive spillovers, but that they are small in magnitude. For example, you could account for reduced public health costs associated with more walking/exercise. (Assuming that the golfer wouldn’t simply switch to other forms of exercise.) If we value that based on the NZTA’s evaluation procedures, which state that the external health benefits of added walking are in the range of $1.50/km, and an estimate of around 9km of walking per round of golf, it suggests that the external benefits of a round of golf are in the range of $12-15. This is equal to about 50% of the green fee at a public golf course. Again, not enough to materially change the BCR.

    2. The more complex answer takes us from descriptive analysis to normative analysis. I think you’re asking, basically, “isn’t it better to give consumption opportunities to low-income people?” After all, well-off people have many more choices, so why would we want to take choices away from poorer people?

      If we’re talking welfare economics at a high level, I agree with you. If society has a choice between increasing the choices available to low-income or high-income people (or their incomes, which is equivalent), it’s usually best to give more choices (or income) to people who have less to start with. (Because of diminishing marginal utility of income!)

      However, I disagree that publicly owned golf courses are an efficient way to do this, for two reasons.

      1. The costs of providing them tend to fall most heavily on low-income people, who feel the added rates bills most heavily and also suffer the most from reduced housing supply in accessible areas.

      2. It is a very poorly targeted welfare programme, as there is nothing to stop well-off people golfing on the cheap. I would prefer a more efficient form of redistribution, such as increased benefits and working for families payments.

      Anyway. Thanks for the interesting comments!

  22. I guess it comes down to what you think local government is for. I think it is there to run the city according to the wishes of the voters, not to run the city according to the needs of minorities nor to be some sort of social welfare scheme, nor to run the city according to total guessing on the opportunity costs of things. Bear in mind that I say this as someone who has always lived in one of the poorest areas in Auckland. I don’t think local government should be in social housing at all. That should be central government. My problem is how that sale money was spent. If it was spent on widening some roads or mowing some berms, then it was a huge waste or public money.

    I don’t golf, but I would rather have a golf course than 1600 social house or a public park rather than 1600 private houses. Why? Because I like green space. I feel better seeing that green space. I love my city more because I see that green space. I rarely go swimming at the beach, but I like that we have it instead of building a causeway and reclaiming land. I have insurance, not because I use it, but it gives me peace of mind. This is a non-quantifiable benefit, but I consider it a significant benefit nonetheless. I may not walk around the golf course, but it looks better than a bunch of house. Yes I read your other posts and I do agree to a certain extent, but just like traffic engineers only considering cars in their models, economic models can’t easily quantify that personal benefit by just looking at costs alone, thereby rendering your economic analysis a little bit useless. It may be correct in the economic sense, but it may be the wrong measure.

  23. As a land use golf courses internationally rate right up there with oil refineries, smelters and gas works as bad industries.

    To maintain grass noxious chemicals are sprayed. and copious amounts of water are sprayed in dry weather. Excess fertilizers are applied. Has anyone got a comparison of what a golf course does to underground water in New Zealand? I bet it is little different to dairying.

    In new Zealand golf courses are almost all landscaped with exotic trees, dramatically reducing potential for native bird-life with minimal increase in utility of the course for the players. Why is this? At least Councils could ask that golf courses be landscaped with natives.

  24. I think I will pots Llyods comments on twitter. Comparing a Golf course with an oil refinery, that really is worthy of sending around the world #embarassed2bakiwi

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