Welcome back to Sunday reading. If the weather forecast is accurate, we should be in for a classic Auckland winter day: overcast, a bit damp, and a bit windy (but not too cold). Good weather to justify doing just about anything, from going for a bush walk to sitting inside with a pot of tea.

I’m going to be down in Wellington catching up with some friends. Since Wellington’s on the mind, I’d highly recommend taking a look at Derek Smith and Maclean Barker’s Flickr account, which compiles hundreds of photos they’ve taken of Wellington (and New Zealand towns in general) starting in the 90s. Here’s a Stuff article on the couple’s photography – Smith has apparently worked as a meter reader most of his life, in part to get good opportunities to take street photos.

Newtown wellington nz 1991

The photos give a great impression of what a visually interesting city Wellington is – and also a sense of the economic doldrums the country was in back in the early 90s.

wellington, new zealand, 1992

Of course, Wellington hasn’t been the only city that’s needed to reinvent itself over the past few decades. In NextCities, Bruce Katz and Luis Noring write about how Copenhagen revitalised itself:

Thirty years ago, the city of Copenhagen was experiencing 17.5 percent unemployment, an out-migration of population, the loss of manufacturing, the decline of taxing capacity, and an annual budget deficit of $750 million. Today, the city has been transformed into one of the wealthiest (and happiest) in the world.

A little known publicly owned corporation — the Copenhagen City & Port Development Corporation (or By & Havn in Danish) — is one of the main reasons for this remarkable turnaround. While cities around world rightly celebrate Copenhagen for its cycling culture and climate change commitments, the real focus should be on institutional innovation, explored here in this first in depth case study.

Like many innovations, the genesis of the Copenhagen model was a product of crisis. The mayor of Copenhagen at the time, Jens Kramer Mikkelsen, put it as follows: “We knew the city was in a desperate situation and we needed to [make large-scale infrastructure investments] to address this situation. However, to pay for the grand infrastructure project we needed serious money. We could not raise taxes. Also, we needed agility and flexibility to operate.”

The solution: transfer vast amounts of public land to a new publicly owned, privately managed corporation. Rezone the land — primarily in the old harbor and an undeveloped area between the airport and the downtown — for residential and commercial use. Then use the revenues projected by smart zoning and asset management — not taxes — to finance cross-city transit infrastructure, thereby spurring the regeneration of core areas of the city.

Pretty good scheme. The problem is – for New Zealand cities in particular – is that a lot of the prime brownfield redevelopment opportunities have already been chewed through, often without careful thinking about how to maximise housing development and public infrastructure benefits.

On to present-day New Zealand. In Bloomberg Week, Ashlee Vance profiles Rocket Lab founder Peter Beck, who’s undertaken an improbable venture in an improbable place and is now ready to begin slinging satellites into orbit from the Mahia Peninsula at a rate of one a week:

For most people, a successful rocket test conducted with home-brewed fuel might have led to an engineering degree. Beck instead took on a series of apprenticeships and jobs. He worked for an aluminum supplier, cleaning toilets and putting together mills and lathes. He built luxury yachts, becoming expert at analyzing their acoustics to dampen engine and propeller noise. He worked for a local appliance maker, where he learned tool and die casting. Finally, he joined a government-backed R&D lab.

At every stop he would complete his required tasks, then stay late into the night fiddling with his rocket engine designs. Co-workers appreciated his pluck, and now and again an expensive bit of material, like a $2,000 hunk of titanium, would mysteriously appear in his workspace.

In 2006, Beck’s wife got a work assignment that brought the couple to the U.S. for a month. He took the opportunity to tour the country’s aerospace research institutes and companies, showing up—sometimes unannounced—at places like NASA’s Ames Research Center and its Jet Propulsion Laboratory, as well as Boeing Co. and Rocketdyne. He was hoping to find a job but came away depressed. “I expected there to be all these startup people running around with high energy and crazy shit everywhere,” he says. “But there was none of that happening.” Companies and labs were still making rockets and talking about missions to Mars, but their approaches seemed stale.

Beck’s theory, which a new guard in the industry increasingly shared, was that space would open up dramatically only if a much cheaper way of getting things into orbit could be found. The rockets available at the time were massive, designed to carry bus-size satellites. Beck understood that cheap electronics and clever software would make it possible to build fleets of smaller, inexpensive satellites. These machines would soon be manufactured by the hundreds and would need rides to space.

At the time, Elon Musk’s Space Exploration Technologies Corp., or SpaceX, had yet to hit its stride. Launches were still run by governments and cost $100 million to $300 million apiece. Official space agencies flew once a month, at most, and their priorities were telecommunication companies and the military. Beck believed humans wouldn’t be able to truly experiment in space unless cheap rockets were going up all the time. “It’s so hard to get to space,” he says. “I knew we had to make it easier and that I was going to build a rocket.” And so, Rocket Lab was born.

We could do with a few more left-field businesses like Rocket Labs. That’s the real economic opportunity for New Zealand – not just shipping off more milk powder but incubating a whole host of weird and wonderful ideas that we can take to the rest of the world.

Speaking of disruptive technology (and Elon Musk) Brent Goldfarb has an interesting and skeptical take on Tesla Motors in Vox. Like Uber, which I highlighted in last week’s Sunday reading, Tesla’s electric car manufacturing plans have been tipped to shake up the conventional car industry. The company’s been valued accordingly by the sharemarket. But will that happen in practice? Good question.

Recently, Tesla’s valuation surpassed both Ford’s and General Motors’. BMW is among the other major carmakers in the rearview mirror. The logic of this is intriguing, given that Ford, for example, is coming off its second-best year in its 112-year history, earning $4.6 billion while selling more than 5.5 million cars worldwide. General Motors earned $9.4 billion selling 9.8 million vehicles.

Tesla, meanwhile, sold 76,000 cars while losing near $1 billion. Judged by the valuation, anyway, Tesla appears to be the first successful American entrant into the automobile industry since Chrysler in 1922.

Everyone likes to root for the underdog. David beat Goliath with his new slingshot technology and neutralized the advantages of a giant. The hapless, and slightly naughty, Bad News Bears win the championship. Disruption is fundamentally an underdog story, propelling entrepreneurs and infusing fear into incumbents. Much money has been made, and lost, on this storyline. And it’s a narrative that Tesla founder Elon Musk has cultivated well as he has jumped from one underdog-disruption scenario to the next, ditching various subplots as they become more and more implausible: Electric cars! Batteries! Solar! Self-driving cars! Recently he tweeted that Tesla is about to unveil a new semi and pickups. Truck companies beware!

By conventional measures, Tesla is a small concern, but investors are placing their bets that it is a disruptor, a concept that has near-magical qualities in some business circles. The term comes from the work of the Harvard Business School professor Clay Christensen’s Innovators’ Dilemma.

While the term is often used loosely to describe any exciting new company, disruption is actually defined fairly precisely in Christensen’s work (if with plenty of wiggle room). In theory, an existing firm can be disrupted if it complacently ignores the needs of its customers — or at least technological trends that threaten to make its market and technology positions obsolete.

Read the whole article – there’s some interesting history in there. And it’s got broader relevance beyond Tesla’s future. A lot of economists think that our ability to achieve higher productivity growth in the future depends upon our ability to develop transformational new innovations and scale them up across the economy. Kind of like how assembly line production and cheap electric motors fed the productivity boom of the first half of the 20th century. But it’s a bit unclear, at this stage, what those innovations may be.

Personally, I think there’s a lot more we can squeeze out of existing technologies and techniques. Take housing. We’d have a lot more homes, for cheaper, if we took full advantage of existing technologies like elevators and rapid transit. That’s what Tokyo’s been doing. Here’s a few remarkable statistics:

Importantly, Tokyo’s increased housing space per person primarily by consistently building up (although they’ve built out too):

On the other end of the urban spectrum from Tokyo, Yonah Freemark (Streetsblog) explores prospects for public transport in Indianapolis, one of America’s most sprawling cities:

Indianapolis’s downtown extends out in a walkable grid from Monument Circle, around which stand the city’s tallest buildings and the Indiana State House. The city’s transit center, completed last year, is two blocks away.

Because of the city’s rather limited bus network, all IndyGo routes radiate from the transit center, meaning that people who want to get from the south side of the city to the north have to transfer. With service so limited, the wait to transfer between buses can be very long — yet another disincentive to use the system.

But most transit trips are headed downtown, so theoretically people don’t have to transfer to get to their jobs, right?

It turns out that’s not the case, because Indianapolis’s downtown is too big for a service pattern where routes all terminate at the same point. Walking from the transit center to many major destinations is quite difficult. As shown on the following map, several major destinations, such as the central library, football stadium, and the headquarters of Eli Lilly, one of the city’s largest corporations, are more than half a mile from the transit center, essentially putting them outside of walking distance.

It seems like Indianapolis’s land use-transport integration problems are fractal: they recur at various spatial scales. Not only is the city as a whole too low-density to sustain strong bus routes (let alone rail), key employment destinations are too spread out to allow people to easily get to where they’re going at the end of the route. However, as Freemark observes, the city’s putting some policy reforms in place to allow it to evolve in a more public transport-friendly direction:

The city of Indianapolis has worked closely with the region’s metropolitan planning organization (MPO) on a strategic plan to encourage transit-oriented development. The document, released in 2015, forecasts 35,000 new units of housing in mixed-use, walkable neighborhoods in the region over the next few decades. If one person from each of those households commuted by transit each day, ridership would double.

A separate long-term plan from the city calls for more mixed-use development along frequent transit routes. According to Sean Northup, assistant director of the MPO, “the zoning downtown is all ready to go — no parking requirements, no height limits.” In other words, the city is adjusting its regulations to support transit.

Both plans identify key areas along future rapid transit routes (which we’ll get to in a future post) where walkable, mixed-use development would be encouraged, mostly concentrated around downtown…

Will be interesting to watch how that goes.

Speaking of public transport, some clever folks have developed a real-time map of public transport services all over the world. You can see it here. Hours of fun, if that’s how you get your fun!

To conclude on housing and urban planning, Liam Dillon from the LA Times has a fantastic expose on attempts by the California state government to prod along local governments to allow enough homes to be built. The title says it all: “California lawmakers have tried for 50 years to fix the state’s housing crisis. Here’s why they’ve failed.”

Home construction depends on complex factors including the cost of land, materials and labor, the availability of financing for developers and interest rates on mortgages for homeowners. But decisions made by California’s cities and counties are important, too, and many of those local governments have made it even more difficult to build new housing.

More than two-thirds of California’s coastal communities have adopted measures — such as caps on population or housing growth, or building height limits — aimed at limiting residential development, according to the Legislative Analyst’s Office. A UC Berkeley study of California’s local land-use regulations found that every growth-control policy a city puts in place raises housing costs by as much as 5% there.

The housing supply law, known formally as the “housing element,” is supposed to help knock down local barriers to development by requiring cities to plan for new housing that would accommodate children born in California and people expected to relocate to the state. Over an eight-year period, state officials send estimates of housing needed to meet projected population growth to 19 regional agencies, including the Southern California Assn. of Governments in the Los Angeles area.

These agencies outline how many new homes are needed across four income levels: very low, low, moderate and above-moderate. So, in theory, all cities and counties would receive their fair share of growth. Local governments must show they’ve zoned enough land for the new housing — and the state must sign off on those plans. But the state doesn’t hold cities accountable for the goals they set, and the plans are often ignored.

Even so, city and county officials resent the law, arguing it unfairly takes away their power over development in their communities. To avoid complying, local governments have over the years asked state lawmakers to, among other things, count prison beds and student dormitories as low-income housing and allow cities that place foster children in their communities to reduce the number of low-income homes they need to plan for.

In one case, La Habra Heights, in Los Angeles County, asked that it be exempted from the law because the city was too hilly for apartment complexes.

At the base of the San Gabriel Mountains, the affluent bedroom community of La Cañada Flintridge has few apartment or condominium complexes — and many of the city’s 20,000 residents and public officials want to keep it that way.

Four years ago, city leaders wrote a plan to make room for multifamily housing in several sections of the city. But, to discourage developers, they chose areas already occupied by single-family homes and, in one case, a big-box retailer. As a result, developers would have needed to buy up the homes one by one or, in the case of the retailer, purchase the commercial real estate and force the store out. In devising the plan, city officials assured concerned residents that it would be prohibitively expensive for developers.

Counting prison beds as low income housing has to be one of the most Orwellian things I’ve ever heard.

What I find interesting is that public officials are willing to go on the record and state outright that the aim of their urban planning policies is to keep the ‘wrong type of people’ out:

Herand Der Sarkissian, a former La Cañada Flintridge planning commissioner who approved the city’s housing plan, said in an interview it didn’t make sense for the state to try to force low-income housing into La Cañada Flintridge because the city’s high land costs made it fiscally irresponsible. He added that any state efforts to integrate housing of all income levels into wealthy communities are doomed.

“People like people of their own tribe,” Der Sarkissian said. “I think the attempt to change it is ludicrous. Be it black, be it white. People want to be with people who are like them. To force people through legislation to change in that way is impractical.”

None of the multifamily housing called for in the La Cañada Flintridge housing plan has been built.

But one might observe that it has always been thus:

https://twitter.com/eean/status/880806241991184384

That’s it for the week! Enjoy the weather!

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19 comments

    1. More a case of trying to get more young people to elect to take physics as an option, especially girls. We have 3 daughters, all of whom have taken (or have started taking) physics and it is something that I try hard to encourage without applying too much pressure. The 15 y.o and I undertake design-and-build projects, discuss how things work and I talk her through maintenance and troubleshooting jobs (such as figuring out why the ride-on mower won’t start).

      1. Good on you. Studies in the 80s showed that girls entering engineering school generally had engineers as fathers, or single parent mothers. As I’ve said before, we need more physics teachers teaching junior science so they excite the kids about the subject. And there’s possibly some work to do on removing irrelevant standards (cathode ray tubes haven’t been part of my working life 🙂 ) I do wonder about how to get some interested older people with a bit of time on their hands coming into schools to run a physics club, or some such idea…

      1. Too late for 2 of them. I have explained that getting their degree is like a medieval “slay the dragon” type quest. A box that you tick before going out and learning stuff.

  1. A year or two back housing, transport and planning discussions used to be very heated, now they barely get a comment. Is that rising cynicism, a dejected public has given up….. or is it that there is a broad consensus on what to do and the public is waiting for its leaders to get on with it?

    1. “Pretty good scheme. The problem is – for New Zealand cities in particular – is that a lot of the prime brownfield redevelopment opportunities have already been chewed through” … I can think of a prime waterfront site on the Manukau, with about $1.8b attached, too. It’d make a superb new high density housing development with glorious waterside parks…

      Yes, rising cynicism. And the feeling of individual impotence. But I’m hoping too that it means we’re not as entrenched in our opinions. I think people are open to new ideas, since the recent ones have failed.

      I was personally quite inspired by the graph of dwelling sizes in Tokyo. And today I was reading about how developers in Vancouver can build tall skinny apartment towers – but only if they provide community assets like parks… so every development brings more green space or other community benefit. Auckland can do this.

      1. Hmmm have to be very careful making comparisons. Japan’s huge population, industrial base and economies of scale makes higher rise building stack up a lot better than here, and their excellent pt plus very very high densities (allowing many local services and shops) allows many apartments to have minimal or no parking. Also they don’t have Auckland’s incredibly onerous urban design requirements which is a little good (for housing supply and cost) and a little bad (a lot of pretty average / ugly buildings)

        1. Japan’s fascinating, too, because they don’t seem to look after the buildings. They really seem to believe the design life is when it’s disposable. I think I take my inspiration from the change that’s possible. Auckland will have a different path, and I hope for lots of green infrastructure with low – mid rise high density rather than shadow-making high rise. Vancouver’s got to be a source of inspiration because it doesn’t have a motorway dissecting the city. And that’s because the people fought one back in the 70s.

          Three houses are for sale in a row in Pt Chev on Huia Rd, right next to Great North Rd and the shopping centre. This is when I’d like Council to buy, build the 4-storey apartments with good green landscaping and perhaps 2 parks for carshare. If only to show the quality possible. Hopefully they’ll be bought together, but who can afford that? So we might be seeing a little infill?…

      2. I am inspired by Tokyo’s increasing dwelling sizes too : ). This new housing must mainly be coming from intensification -Tokyo Prefecture (roughly the middle third of the total metropolitan area) has grown by 3m people to 13m people, during the 50 year period when average dwelling floor space doubled. That is a massive amount of building/intensification.

        32 sqm per person is good -Tokyo is moving away from its cramped apartment reputation. I lived in two apartments in Helsinki with my wife -one 50sqm, the next 69 sqm. 69 sqm or 34.5sqm each, was spacious, well designed -two bedrooms, good size lounge, kitchen, dining area….. It was wonderful for 2 people, okay when our first baby was born and cramped when the second came.

        Tokyo is also inspiring because it has managed to get affordable housing under control. I wrote about this in an article earlier in the year. https://medium.com/land-buildings-identity-and-values/what-is-the-secret-to-tokyos-affordable-housing-266283531012

        1. Yes Helsinki apartments are also warm, acoustically insulated well, and have facilities like communal washing lines, basement storage units, bike parks, and communal saunas. Plus they’re not high rise, so they don’t cast shadows. In the 90s they had lots of tenant rights, but this led to landlord wariness so you had to pay a years’ rent up front, often. Which was kind of interesting.

          We lived in under 70 m2 here in a duplex for 5 years with one child. I actually wish we’d asked to buy the place instead of having to move. The 2-storey house we’ve moved to is too large – too much to clean and heat and maintain.

          1. Yes we had a 4sqm basement storage unit. There was a communal room for bikes and another for prams. There was a washing and drying rooms but they started to charge for that -so we just used our own washing machine and hung things up to dry in our sauna (no communal sauna) -just using the natural heat/ventilation of the apartment. We were on the third floor of five and the apartment was built in the early 2000’s. We did not pay a years worth of rent in advance -it was a kind of rent to own deal.

  2. I hope Tesla is a disrupter. Some of these industries deliberately stall new technology knowing it won’t be as profitable in the short term, or they just get lazy. We had the technology for electric cars a long time ago.

    I still love it that apple could make its first ever phone be so much better than Nokia could make, and Nokia has paid a massive price for being lazy.

  3. Thanks for an interesting post. The prisoners as low cost housing is a bit rich. In NZ each prisoner is costing about $100,000 or roughly double the average wage.
    The ‘we don’t want to mix with that type of person’ is a very strong motive. In the UK when too many visible immigrants settle in an area then despite the best will in the world people move out. Not racism – they find the local schools having to spend too much time teaching remedial English and for home owners they can find their area on a blacklist for the banks supplying mortgages (experience of my sister in Huddersfield) so they leave in a hurry when the immigrants comprise about half the local population..
    In Auckland North Shore it works in reverse – the more ‘tiger mothers’ the better the academic performance of the school and you only have to check the real estate adverts to see that school zone is a prominent feature.
    The trouble with state housing is that in my area of Auckland it is reserved for the extreme poor and therefore ends up with a disproportional number of failed families and criminals. When I grew up in a state house (as per John Key) the houses were for the proud working classes.
    This is one issue where a socialist solution is needed – a serious commitment to building large numbers of inexpensive properties but with a decent mix of middle class too. In Singapore they insist on a percentage of low cost apartments in every new block.
    BTW – loved the photos – architecture at a human scale and compares very well with the vista pictures of west London on TV recently.

    1. I remember Mum and Dad buying into a street in Manurewa. Every fifth house was either Maori Affairs or a State house. I remember it being reasonably harmonious and I certainly learnt a lot about the culture of NZ quickly. I dont remember them being exclusively for the very poor and the people that lived in them seemed the same as us in many ways. That was the mid sixties. Since then we have gone through a whole heap of housing models. But this governments laissez faire approach to housing has been the most damaging social experiment of them all. With my sons generation seemingly shut out of buying into housing easily.

    1. Great watching the Johnsonville Line in operation. You can see the trains crossing each other at the crossing loops!

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