On the weekend Phil Goff announced his bid for the Auckland mayoralty. Several interesting articles on Goff’s bid have been published, for example ones by the Herald and Radio NZ here and here respectively. A more recent article by the Herald is available here, which suggests Goff may be the favourite and exhorts him to “exert control”.
In this post I’ll discuss and interpret some of Phil Goff’s comments on local government in Auckland. The post is split into three juicy topics: 1) Rates; 2) Asset sales; and 3) Intensification. I should note that it’s relatively early on in the campaign, so in some ways this post raises more questions than answers. I hope you enjoy it nonetheless.
So what is Goff’s position on rates? Well, for starters at least Goff has his figures right: He notes that rates for the average household increased 3.5%, while also observing that some households experienced increases of up to 10%. Basic data analysis is something that seems to escape some journalists.
Now don’t get me wrong: 10% increase in one year is a big jump.
However, one of the things that got lost in the recent clamour is that some of the increase in household rates was associated with adopting single rating system for all of Auckland. This required harmonizing quite disparate rates across Auckland. Naturally, some people found their rates went up, while others found their rates went down.
The good news for Goff, and any other mayoral candidate, is that the difficult process of harmonizing rates is now largely complete. Len Brown has borne the brunt of that central government hospital pass. As such, the incoming mayor – whoever they are – will benefit from this issue dropping off the radar. So how will Goff seek to keep rates under control in the future?
Well, in his interview on Radio NZ Goff talked “prioritizing” projects, i.e. less important things give way to more important things. This really was the thrust of this recent post which I wrote on the effectiveness and efficiency of local government in Auckland.
Unfortunately we don’t know yet what Goff’s priorities are, so it’s hard to assess the size of the potential savings. There are however a number of poorly-performing transport projects which could be ditched, such as PenLink and Mill Rd. Right there Goff could save the mighty taxpayers of Auckland several hundreds of millions of $$$.
One issue Goff didn’t discuss is Auckland Council’s desire to shift the burden of rates away from businesses and onto residents.
This shift, as I understand it, is designed to reduce the costs faced by businesses, so as to 1) reduce prices for goods/services and 2) increase employment, both of which ultimately benefit residents. While this is a policy direction that I happen to support, it has also contributed to some of the recent increase in residential rates. We don’t yet know where Goff stands on this issue, but it’d be interesting to find out because it is one factor that will cause residential rates to rise faster than inflation.
2. Asset sales
Now we start to get into the nitty gritty about how to keep rates under control. One of the more controversial ideas that has been in the media lot lately is the subject of asset sales. It’ll be interesting to see where the mayoral candidates fall on this issue, because it really is the primary opportunity to find more money to invest in things that will make the city better.
In his interview on Radio NZ Goff distinguishes between what he calls “strategic” and “non-strategic” assets. He says no to the latter, especially in the context of Watercare. Auckland Council’s shares in Ports of Auckland and Auckland Airport, for example, also appear to be in the “not for sale” basket.
Now I can appreciate the need to distinguish between strategic and non-strategic assets, where the former are deemed to provide efficient support to Council’s strategic direction and the latter do not. However, I think there’s a need for Goff to outline not only which assets he considers to be strategic, but *why*. This would help shed light on his underlying values, and mitigate against the “slippery slope” arguments that are advanced by some people in discussions of asset sales.
On the other hand, it should be noted that from the interview it seems that Goff’s views on golf courses are relatively well-aligned with our own views here at TransportBlog. I’ve paraphrased the most relevant parts of the Q&A as follows:
- Interviewer: What about flicking some of the golf courses?
- Goff: Remuera golf course is worth $560 million and the subsidy for every golfer is $11,500 per year.
- Interviewer: So we could expect some golf courses to be sold for housing?
- Goff: I’m going to look at the facts before I make a commitment on that. But I don’t think it’s fair for Aucklanders to be subsidising those people who are lucky enough to be members of a golf course …
FYI here’s what a subsidy of $11,500 per golfer per year buys them.
Or here’s another fact just to ram it home: The annual subsidy for golf courses in Auckland is approximately equivalent in value to the annual cost of operating Auckland’s rail network. So when someone tries to tell you that asset sales will not have a meaningful impact on Council’s ability to deliver other goods and services, you should tell them they’re dreaming.
Personally, Goff’s views on rates and asset sales seemed fairly reasonable to me, even if more details are needed (NB: The same goes for all the mayoral candidates of course).
Now let me present one psuedo-question in the Radio NZ interview and the subsequent response from Goff:
- Interviewer: There’s more talk today about intensification in some of those inner-city suburbs, such as Mt Eden.
- Goff: I don’t see us putting up tower blocks in some of those really nice areas. What I see us doing is working down the main arterial transport routes, looking at places like New Lynn and Panmure. Those are the ideal places where you might want to put 3-4 storey intensive housing, plenty of public open space and making sure it’s good urban design. I don’t think that you start to encroach on the most beautiful parts of the city, before you, say, let’s follow the transport routes so that people can be close to where they are moving to.
There’s some good stuff in what Goff says, e.g. on concentrating development in areas where transport infrastructure exists and the need to focus on urban design, both of which have been somewhat lacking in earlier iterations of Auckland’s development.
There are also, however, some very unfortunate words and attitudes underlying Goff’s comment. Here’s the part I was most concerned by: “I don’t see us putting tower blocks in some of those really nice areas“.At this point my little red alert warning signals started to go whoop whoop. More specifically, in this comment Goff strays into very dangerous territory my friends.
Let me explain why.
First let’s consider what Goff is trying to say. From where I’m sitting, it seems that Goff is saying let’s not intensify in areas that are “nice”. Why? Well, the obvious implication is that intensive development is not nice?!? Goff meet Ockham. More specifically, if Auckland is to progressively change the discourse around housing, and thereby lance the housing boil that threatens our entire economy, then we need large numbers of apartments and town houses to be built. And we need them to be built all across Auckland’s central suburbs, where people want to live, not just in a few places like Panmure and New Lynn.
Second, in this sentence Goff implies that he will seek to undermine normal market forces. More specifically, if an area is “nice” then people are going to want to live there right? Goff seems to be saying that as soon as an area becomes “nice” then Council is not going to allow development there. By extension, Council will presumably only allow intensive development in location that are not nice? Where there is no demand to live? Great, Council can zone away its heart’s content, but it won’t ultimately change anything, all we’ll get is higher property prices in areas that are unable to be developed further.
Which brings me to the third issue with Goff’s seemingly innocuous statement: Goff’s use of the word “nice”. What does this imply for the areas of Auckland that are not like Mt Eden? Goff seems to think Council can identify a couple of not nice places and direct all the “poor” people (who can’t afford to buy a nice big ol’ villa on a large section in Mt Eden) to live there. Think again. Question: What if people all over Auckland come forward and argue their neighbourhood is nice just the way it is?
Answer: Goff either has to 1) tell them that they’re wrong or 2) roll back the intensification planned for those areas. That’s right: In arguing that we shouldn’t intensify certain areas because they’re “nice”, Goff has unwittingly created a rod that any NIMBY anywhere can use to beat back proposed intensificatio – on the grounds that their area is already “nice”. End result? Whole-sale down-zoning in response to self-interested parochial interests.
Now, in Goff’s defence, he is not alone in slipping down this slippery slope.
In fact, the interaction between planning regulations and political economy has been studied elsewhere. This interesting article from Los Angeles, for example, discusses how their planning regulations prevented intensive developments from occurring in areas where there was demand. Sound familiar?!? These regulations were found to have a massive negative impact on development capacity in Los Angeles, as illustrated in the figure below.
For this reason it is not surprising that Los Angeles has had the “fastest increase in home values since 2000” and “has become the least affordable major city in the country“.
In a nutshell: The more Goff is inclined to pick “winners” and “losers” when it comes to what types of housing can be developed in which areas of Auckland, then the more expensive and segregated Auckland is likely to become. Personally, I struggle when residents and politicians effectively say “we want the kinds of people who live in apartments to live over there, because this area is too nice for them“. That’s the definition of snobbery.
The discourse surrounding this issue is even more farcical when you realise that many of Auckland’s older suburbs are already peppered with 3-7 storey apartment buildings. Like my apartment building, which is over 100 years old. Like many apartment buildings in Auckland that were built before regulations and locals made it too difficult.
And let’s be honest: The debate we’re having is not about “tower blocks”: It’s about whether you should be able to build a 3-7 level building in Auckland’s extremely valuable and desirable central suburbs. You know, like the kinds of development that one finds Sydney and Melbourne. To which I say abso-bloody-lutely.
End result? I think Goff needs to think more subtly about intensification.
Overall score for Goff’s initial foray into local government issues? Well, I’d give him a 2/3. When it comes to rates and asset sales, Goff stated some reasonably coherent positions, while also appearing open to debate and discussion. Which is good, because after all he’s only one vote on Council so at the end of the day we shouldn’t overstate his importance.
While Goff is shaping up to be a good centrist mayoral candidate, it looks like housing and intensification may be areas for improvement.
At this point it’s worth mentioning that Goff naturally wants to win, and winning involves appealing to people from across the political spectrum – many of whom like Auckland the way it is and don’t want it to change. But allowing more housing, and more intensification in particular, is the single most important issue facing Auckland right now (yes bigger than transport).
For this reason, Auckland’s next mayor needs to champion Auckland as an integrated city, not a collection of self-interested suburbs.The reason we should sell Remuera golf course is the same reason we should allow for more development in Mt Eden: Because it’s in the best interests of Auckland as a whole. Both now and into the future.
I would like to elect a mayor who doesn’t apologise for the need for intensive development in central areas. A mayor who engages with the concerns of existing residents, but doesn’t compromise on the underlying reality facing Auckland and the city’s growth. Development is not a disease that needs to be quarantined in not so “nice” places. Multi-storey buildings already exist in Auckland’s inner-city suburbs, like they do in Melbourne and Sydney and almost any city of similar size.
Indeed, I’d personally argue that Auckland’s lack of density, and the consequences for civic life, is a primary reason why Auckland struggles to retain its young people. The life of cities like Melbourne, Sydney, London, and Amsterdam is what attracts young peolpe like me. I think our approahc to housing needs to be framed in that context: If you want your grandchildren to live in this hemisphere, then you’ve got to allow for more intensive development in Auckland.
Goodbye, goodluck, and godspeed to you my fellow Auckwooders. May Goff be with you.