The new Minister of Transport, Housing and Urban Development – Phil Twyford – has certainly hit the ground running across his portfolios. But in one area it seems as though he’s either poorly informed or is potentially embarking on a pretty dumb and unnecessary path. This is his push to remove Auckland’s rural urban boundary.

The NZ Herald picked up the story on Saturday following his interview on The Nation:

New Housing Minister Phil Twyford wants to scrap Auckland’s regulated urban boundary to let the city spread.

He told Lisa Owen on TV3’s The Nation today that solving Auckland’s housing crisis will require “fixing” both the system of financing new infrastructure and the rural/urban boundary fixed in the current Auckland Plan.

“Given the shortfall of housing in Auckland and the population and growth projections, this city is going to have to go up and out,” he said.

“We want to build most of the development we can in the city around the transport network. We want to do density well and build great urban communities for people to live, work and play, so as far as I’m concerned it’s got to be up and out.

“On the question of the Metropolitan Urban Limit, we are going to build affordable houses, we are going to tax speculators, we are going to do all those things.

Looking at the interview transcript itself provides a bit more detail:

So, when you talked about – when we started this conversation – building in new areas, are you talking about outside the Metropolitan Urban Limit?

My view is that, given the shortfall of housing in Auckland and the population growth projections, this city is going to have to grow up and out. So I said the other day I was very interested in work that had been done by Infrastructure New Zealand on a large new development in the south of Auckland there, Pukekohe. But there are massive opportunities for us–

So, are you going to ditch it, the Metropolitan Urban Limit? We’re going to spread out in Auckland, absolutely.

Let me just finish what I was saying, Lisa. So we want to build most of the development we can in the city, around the transport network. We want to do density well and build great urban communities for people to live, work and play. As far as I’m concerned, it’s got to be up and out. On the question of the Metropolitan Urban Limit, we’re going to build affordable houses. We’re going to tax speculators. We’re going to do all of those things, right? But if we want a lasting solution to this problem, we have to make reforms that will allow the market to deliver better outcomes on its own, and the two really big things that we have to fix there are the broken system for financing infrastructure that stops the city from growing, and the highly restrictive planning rules like the urban growth boundary. But you can’t get rid of the urban growth boundary without fixing the infrastructure financing issue. So this is going to be a major priority.

There’s a lot of different terminology being thrown around here and distinguishing between them is pretty crucial here. A quick reminder:

  • Urban Growth Boundary – this is a general phrase that is mainly used in America to describe some sort of regulation that either prevents or regulates where urban areas can expand outwards
  • Metropolitan Urban Limit (MUL) – this is the boundary the old Auckland Regional Council enforced to constrain sprawl. It was in most places hard up against the existing edge of the urban area and was expanded piece by piece through fairly tortuous processes. The MUL no longer exists, because in the Unitary Plan it was replaced with the…
  • Rural Urban Boundary (RUB) – this is an entirely different concept to the MUL and is included in the Unitary Plan as the outside edge of the areas where urbanisation is expected to occur over the next 30 years. A good diagram of the RUB is included in the Auckland Plan:

Looking at the Unitary Plan maps, the RUB is the black dashed line sitting outside all the Future Urban Zone. Essentially it distinguishes between the areas likely to change from rural to urban over the next 30 years and the areas likely to remain rural over the next 30 years.

Reading through the Auckland Plan and the Unitary Plan, it seems like this approach was taken for a number of reasons:

  • To provide certainty about what rural areas would stay rural over time
  • To provide infrastructure providers with some certainty around where growth would be focused, so they could develop plans for where new roads, railways lines and pipes should go
  • To focus urban growth in areas with fewer environmental impacts

Importantly, there is a lot of land that has not yet been developed that sits inside the RUB – generally in the areas shaded yellow in the Unitary Plan maps (the Future Urban Zone). This is highlighted in the Future Urban Land Supply Strategy – which details how the timing of developing this “yellow land” will be integrated with the provision of infrastructure. $20 billion of infrastructure.

So just to summarise, there is capacity for around 137,000 dwellings in “outwards urban growth” in these future urban zoned areas – which are all still inside the Rural Urban Boundary. At the desired split of around two-thirds of growth occurring in existing areas and one-third through expansion, this is more than enough capacity for 30 years of growth. If nothing else, removing the RUB seems entirely unnecessary given how much development capacity there is within it.

Furthermore, in the Unitary Plan it is possible for the RUB to be changed (i.e. expanded) through a private plan change process. This means that if a good argument can be mounted to – for example – fill in the gap between Whenuapai and Kumeu to make the most of infrastructure investment, this could be possible. This is the “soft RUB” argument that was a core part of the Unitary Plan hearings process.

So what are the implications of “getting rid of the RUB”? Answering that question requires us to go back to the key reasons for putting the RUB in place – certainty about which areas will stay rural (which is important for Auckland’s rural economy), certainty for infrastructure providers and investors and avoiding urban development in the most sensitive environmental areas. Therefore you’d probably see the following impacts from getting rid of the RUB:

  1. Greater uncertainty for rural areas. With all rural areas theoretically having the possibility of becoming urban in the future you’d be likely to see less investment into the rural sector (why invest in new processing plants when you might sell up to urbanise in the future?) Furthermore with no way of encouraging urban development to “clump together” you’d be likely to see many small and disconnected urban areas across rural Auckland. These would be extremely difficult to become anything other than extremely car dependent settlements.
  2. Slower infrastructure investment. With urban development theoretically possible anywhere, it will become impossible for NZTA, Auckland Transport, Watercare and other infrastructure providers to plan for where they need to expand their networks. As large “trunk” infrastructure can take many years to plan, design and then build, this uncertainty raises huge risks of misalignment between where the growth happens and where the infrastructure gets built. Given we don’t have billions of dollars to waste on infrastructure that’s built in the wrong location, the most likely result will be a slowing down on investment – which ultimately will probably lead to less greenfield development (not necessarily a bad thing, but hardly what Twyford is trying to achieve).
  3. Further environmental degradation. While Twyford has been at pains to emphasise urban development will be kept away from environmentally sensitive areas, at the end of the day highly dispersed sprawl is terrible for the environment. As I discussed earlier, without a RUB that encourages the “clumping together” of urban areas, it’s highly likely we will see little bits of urban development spread across vast rural areas. These will be very car dependent. Just take a look at the edge of Houston to see how it looks:

I’ve noticed that many of those who advocated against the MUL in the past don’t seem to have understood the key differences between what that was and the new RUB. I wonder if Twyford has fallen into this trap too, so it makes me wonder whether this is a policy designed to fix a pre Unitary Plan problem where the urban growth limits truly did prevent pretty much any outwards expansion of Auckland. However, the Rural Urban Boundary actually now does a very different job. It’s much more about providing certainty than about actually restricting growth. Undermining this certainty, through getting rid of the RUB, is actually likely to slow growth down and make it much more expensive.

That makes it a pretty dumb idea.

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  1. I think that Phil Twyford has been listening to the NZ Initiative (Business Roundtable) too much on this issue.

    The party that stands to gain the most from removal of the urban-rural boundary is the property speculator. Should that be encouraged?

      1. And why would getting rid of the rub make land cheap? Land outside the rub that can’t be built on is cheap, but if you can build on it why would it stay that way?

        1. So true. As soon as the RUB is dropped all land will increase in price. Density will drop prices for homes as we will do more with less. Looks like the Phil T has missed this.

          Hopefully he is not so big headed he can admit he got confused and take on board that the Unitary plan has already done the ground work. The government just needs to step in with Capital and RMA reform

        2. Indeed, but there is already a 30 year supply of buildable land inside the RUB in areas earmarket for infrastructure networks, so that price drop will be negligible…. and more than offset by the infrastructure costs of serving random pockets of rural land far and wide (or if you don’t build the infrastructure, it’s not even buildable land so has no effect on prices).

          Economics 201.

        3. Sailor Boy – do we agree that the RUB is unnecessary regulation then?
          Although I’m not 100% convinced that a section in Manurewa will still be half a million dollars without the unnecessary regulations…

        4. The RUB doesn’t control what is buildable, that is now done by the zoning instead and so long as the land is zoned FUZ you can’t use it. Basically the Council shifted their machine guns and barbed wire back one trench.

        5. The RUB isn’t much different to the MUL. I’d be happy to see it completely removed and we can just call anything outside the boundary rural and be done with it. That achieves the same thing with one regulation fewer, but sections in Manurewa will still be half a million dollars.

      2. 1. The reason why land is “expensive” is because the land utility is wrong. Actually land is not expensive. What is expensive is the land cost per person. The “market” or supply/demand mechanics are sending signals that our current urban form and lifestyle is not sustainable.

        2. Building out is basically the public subsiding housing by increased infrastructure costs – roads, water and extra amenities (schools, parks, etc).

        3. Living further away from other people is also giving up time (commute) for some notional cheaper/better lifestyle.

        4. Socially if you push the people who need affordable housing (the less well-off) further away and outside the city. Then this is also a form of social injustice, as you commit them to an economically more expensive lifestyle and with more time away from their people.

        1. Is a 2 bedroom house (in a location that forces the occupants to drive for every trip) for $750k that no one can get finance on a preferential (sic) solution.

        2. Lets put it this way.

          Maybe the land you mention costs 100k. Then we (mostly me via my higher rates on my more expensive land) need to pay 350k to connect infrastructure for your site. Then you spend 300k building a house.

          Two points:

          1. You fail to amortized the higher cost of living (commuting if you work in the city) for your choice of living. See

          2. I’d rather spend that 350k (or less) on my site in town so I can put your 2 bedrooms and 4-5 other dwellings on top of my location. While my land might cost 1000k, but once you divide it by 4-5 it’s pretty much works out the same.

          So your choice is not really one of economics, but culture and identity. I’m happy for you to make that choice, but I’m not paying for it with my rates.

        3. So do the banks take your commuting habits into account when deciding if you can get a mortgage or not?

          I think the usual case is:
          – you cannot get finance on that $750k property
          – you can get finance on that $500k property further out but you’ll have to suck up that 1 hour or longer commute.

          Putting 4-5 other dwellings on top of your location, that’s illegal just about anywhere in Auckland.

        4. I thought building anything resembling terraces or apartments still requires a fairly large lot. So you’re not going to buy a section and then build only a couple of dwellings on it. The only players here are developers who can build at least a dozen at a time.

          I can’t really read the legalese in the UP, but I remember one of the weird things is the expectation that a site has at least 20 m frontage. That’s not how terraced housing works.

        5. @roeland

          25m I think. Yeah, I don’t understanding the reasoning behind that rule.

          I’m speaking here more to the concept of intensity rather than the specifics of how it develops.

          Part of problem is how to get this all working. I’ve got an article brewing at the moment trying to speak to some of these issues.

        6. I forgot that planning rules are permanent and can never be changed to allow sensible developments.

  2. If it was in The Herald, it is probably spun out of all recognition. You would need a couple more sources to check anything they report on Auckland or Government issues.

  3. Out west there is a particular issue. The Waitakere Ranges Heritage Area Act is designed to support the RUB and stop further subdivision and urban sprawl. I have raised this with Phil and he has assured me that it will continue to be protected. The language is a bit sloppy. I take it that he is not talking about a free for all but rather targeted growth using spatial planning to plan for expansion. But I would prefer the choice of language was different.

    1. I think you’ve just described what we already have.

      In fact that’s my biggest problem with what Phil t is saying: the unitary plan has basically achieved what he is talking about; big increase in land supply and some relaxation of density controls. More could be done particularly on the latter but i don’t think it’s worth ripping up the rule book and starting again.

  4. Auckland’s housing costs are dumb. It is ridiculous that houses cost so much in Auckland -which at the end of day is only a moderate sized city by international standards. The biggest city in the world -Tokyo -a family home can be bought for half the price of Auckland. So the current situation is unacceptable. The government campaigned on changing it. Change of some sort is coming because the credibility of the government depends on it.

    The Unitary Plan was an incremental improvement. But Auckland still has not built enough houses -there is an estimated shortfall of 45,000 houses. The Unitary plan has been inadequate. It hasn’t produced enough affordable houses to accommodate the people coming to Auckland. What is being built is not only inadequate in number, what is being built are expensive McMansions on expensive small parcels of land.

    What NZ needs is a radical change so it can build more affordable houses.

    Many cities around the world have better housing and better transport systems than Auckland’s. There are a number of different urban development models Auckland could choose to follow to build its way to affordable housing. Check them out.

    I quite like the Montreal Model -to achieve that the Unitary Plan will need to be changed. Land prices will have to come down so Auckland can build up or out.

    1. Thats a great article you linked to Brendon.

      The common denominator I saw in all of those (other than Houston – obviously not an appropriate model for NZ) is that all of them make it simple to build density.

      That is where Auckland falls down, not the supply of heaps of land being available on the margins.

      One solution must be to just take the gloves off in terms of development within 1km of a train/busway station. Once the CRL is built, the rail system can pretty much handle whatever is thrown at it. I am sure that would result in heaps of good quality apartments.

      1. Auckland has allocated its city spaces very poorly -for a very long time and the consequences are plain to see. Expensive housing that is often poor quality -cold, mouldy and unhealthy. Rising degrees of homelessness. A private rental market that is highly subsidised by the public purse but fails to provide security of tenure to raise a family, participate in community activities, provide consistent schooling etc. A grumpy Millennial generation who have reason to believe the cost of housing will prevent them from achieving a middle class lifestyle. It is not too far fetched to say if current housing affordability conditions continue then the middle class in NZ will fracture. It is easy to understand why affordable housing has risen to be one of public’s top concerns. It is a meta-problem affecting multiple policy areas.

        I suspect Auckland has reached the end of the road for automobile only dependent growth and needs to switch to a transport mode neutral growth model. Something that can work with the worldwide trend of increasing numbers of people seeing transport as Mobility as a Service. That doesn’t mean there will not be some outward growth of Auckland -it just means when it happens it will be accessible by multiple modes of transport and contain multiple different housing types. It will not be cul de sac suburban suburbs with a monoculture of 4 bedrooms, 2 bathrooms, double garage McMansions.

        You can get an understanding of the spatial economic mistakes NZ cities make by reading the following long form article.

      2. Goosoid -a simple take away message for commentators, policymakers, politicians etc would be to keep asking themselves – “what does such and such policy proposal do to make it easier to build more affordable housing.”

        Affordable housing will not come from policies which make it harder not easier to build houses.

        The successful cities all seem to have found ways to do that. The unsuccessful cities -seem to have their head in the sand denying their is a problem, or denying that any change will help.

    2. Be very cautious looking at the Montreal Model. The construction industry in Quebec is corrupt, there have been multiple bribery scandals with heads of large organizations ending up in prison. In addition the province of Quebec and their municipalities are heavily subsidized by other parts of Canada. As such their economics and entire system are very warped.

  5. The MUL was used in two different ways. Firstly it was about planning the next area to develop. It meant the money could all be invested in a few places and when they were complete then the money could be focused in a few new places. Then in the early 1990’s the ARC changed its approach to using the MUL as a means of trying to prevent outward growth. The Long Bay appeal was a defining point in that process. The Regional Growth Strategy still included a few areas like Takanini and Hingaia etc that were allocated for greenfields growth but the general idea was they would become the last and the MUL would become a constraining collar. In my view that was the mistake that resulted in huge increases in land value for those of us already owning homes. We are short of homes now because of the Phil Warren era where the politicians listened to the planners rather than thinking about the next generation.

    The RUB is different that you can apply to move it. But the constraint now is the Future Urban Zone or FUZ. It is like saying the King is dead- Long Live the King. Now the challenge is getting an operative residential zone. The Council will claim neutrality on that process while using their CCO’s to completely screw you. If you have the FUZ zone on your property you actually have fewer options than if you have the rural zone.

  6. Hopefully Phil Goff will talk to him and set the possible confusion right. Seems a pity if they do remove the RUB as everything else they are talking of doing in this area seems so good.

  7. The true way to provide affordable housing is to allow people to build whatever they want, wherever they want. If people prefer density, they will build density. If they prefer sprawl, they will build sprawl.
    I don’t know why we need a council telling people what they want. Is there any other market where we do this (other than for safety reasons)? Imagine if the council told you what car you must own (and sleep in…).
    Of course the infrastructure needs to be paid for by someone – to me this is a completely different issue. You should be allowed to build wherever you want, but you may need to pay the cost for infrastructure or provide it yourself (even if it is a sceptic tank).

    1. There is a limit to what market forces can do. If everyone wants to build wherever they want but once the true costs are known they decide not to build then we may well end up with less being built and prices remain higher.

      There is no way AT would bother with rapid transit to Huapai and Silverdale if there was no certainty of that being where future housing occurred.

        1. Your probably right and they will likely pay top dollar to be in the areas proposed by the FUZ as they are more convenient. I’m not sure how removing the RUB would actually reduce prices within the FUZ and the current Auckland urban area.

          The option of cheap housing in places that are inconvenient to commute from, such as Huntly are already available. I’m not sure adding other areas with cheap housing that are a pain to commute from will make any difference. People will still pay more for places in the existing urban area.

        2. No, people won’t. The current situation is a disgrace. There is a generation of people growing up who are putting off having families and kids because housing is so hideously expensive. It simply cannot continue. People only have so much money available before you start effecting the quality of life they lead. We are well past that point.

        3. I agree the current situation is disastrous. However, sprawl beyond the RUB is not the answer. Building more homes is the answer and if we build these homes in places people want to live then there will be cheaper housing everywhere not just out in the middle of nowhere with a long commute.

        4. The effect of land prices is that even houses in the middle of nowhere cost an arm and a leg – Hobsonville, for instance, where $650K gets you….an apartment. And how long do we wait twiddling our thumbs for this to happen?

        5. There is plenty of land within the RUB that is not currently being developed. I’m not sure how adding land outside of the RUB is suddenly going to result in a dramatic fall in prices in Hobsonville.

          If the effect is only minor then I am not sure it is worth the long term impact of dispersed sprawl.

  8. Judgemental word ‘sprawl’ ; to the family living there it may be their castle and their slice of eden.
    Ok it still looks like sprawl as you go by but at present we are denying so many families their dream with our unaffordable housing.

  9. To me it seems that the biggest issue is that things keep changing and that means a lot of effort has to be repeatedly expended by people with different points of view and interests, to try to prevail, or to counter others whose ambitions they don’t share. Some of those people make it their job to either second guess (or hopefully influence) the process, to profit from the changes. People who do it for a living have a resource advantage over people who just care about it.

  10. Perhaps they could move the RUB to what was recommend by the commity not the counclors voting it to be smaller. (Okura)

  11. I think Phil Twyford has mixed up his MUL with his RUB, specifically what he calls the MUL is I gather, that what he really means is the Year 1 to 10 (Decade 1) “zone”/boundary around the current edges of Auckland. i.e. the land that is slated to be built on “next”. So I don’t think he wants to remove the RUB, rather make things happen in a more timely and council controlled fashion, without being developer constrained.

    When he talks of fixing the financing and the MUL, what he means (and a Phil Goff soundbite echoed this yesterday on Radio NZ news), that if a developer wants to build outside the present [rapid] transport modes, they better be prepared to pay for all the infrastructure its going to need, rather than assume that the council, its CCOs [AT and WaterCare], and other parties [like Vector, NZTA et al] will rush in and all put in the infrastructure in on a time frame to suit the developers wishes.

    And that these costs for doing so will be paid for either by the developer directly [and thus loaded on to the building lot price when ts sold], or Council will levy a 50 year type “special rate” on the area to get the “users” [resdients of said developments] to mostly pay for it.

    Of course, the devil is in the details here, but with talk of value uplift capture [likely via special rates] then it becomes clearer that the developers will have to come to the party more than they have up to now with the so-called “Development contributions”.

    I look at this way, what is being proposed by the Government and Auckland Council appears to be somewhat akin to how the RMA allows developers to request a private plan change to the district plan. Which comes with a lot of red tape, but allows the developer to do developments sooner and which were not envisaged when the district plan was last updated.

    The Developer can, if he chooses, simply wait until the district plan is next due for an update and try and get their land rezoned “for free” as part of that, likely, for a lot lesser cost than a full on private plan change. But it comes at a cost of a delay of up to 10 years or so. And you may not get your change at the end of it.

    So, by allowing private plan changes you can speed up some outcomes quicker than 10 year plan reviews would normally allow. But the developer pays more for the right to do so but gains certainty of timeframe as a trade off.

    And I think this is kind of what is being proposed here without saying as much.

    However, I also sense that the Government and Council are wanting to deal with the land bankers, as well, and I think the aim here is for council to say that the council will start “special rating” your [bare] land based on what it will be able to do with it in the [near] future – due to zoning changes, so that you pay for some of the induced value uplift, rather than paying rates on what your land does now.

    Thus if you hold a large holding of land in the Decade 1 zone [or likely within the city proper] and simply sit on it, even though you could develop and chose not to. You will be special rated on that land as if you had developed it, thus encouraging developers to consider developing it to avoid incurring large holding costs.
    Or at least council capturing a larger chunk of the windfall profits than they do now.

    Of course, council won’t mind if a developer doesn’t develop yet as the special rates they collect can, [and hopefully, will] be used to provide the infrastructure that the land will eventually need anyway. Which means the entire ratepayer base are not carrying to burden of doing so in the meantime. And stops the developer calling the tune as to when they “cash in”.

    We could also see a seemingly perverse situation where land bankers start pleading to council for the right to less intensely zone their land in the future – to lower their land holding costs, until they are ready to develop.

    I think Twyford’s comments [and Phil Goff’s too] show that the days of developers being able to lead the council around by the nose as they’ve done up to now are coming to an end.
    And hopefully better housing and transport outcomes for everyone will result.

    Early days though, and its a long, long road from here. With lots of places for everyone to make mistakes or get held up or diverted by minor details.

    1. Devil in the details indeed. Informative post – it seems as if the RUB is actioned properly all will be ok.
      I don’t like the decade as boundaries; what happens if immigration stops or accelerates or kiwis rush to Australia? And if you are planning a new home the difference between the infrastructure being in place next year or 9 years away makes for uncertainty.
      The author says planning, design and building new roads etc takes years. Maybe the building but plan and design ought to be quick, that is done in advance.
      The proof of the RUB working will be when a line across a piece of land doesn’t make one side worth a multiple of the other side.

    2. I think the key thing is in the statement below, where he recognizes that the zoning indications (the RUB, and FUZ to live zonings) are really about prioritization of limited public monies for massive infrastructure investments (of which much less than 100% is currently recovered via development contributions, not even including tax funded infrastructure like schools etc) is needed to facilitate urban growth. Even if this funding nut could be cracked such that zoning can be decoupled, im not sure ‘and’ prices would be lower. The market is signalling well located land is a scarce resource (land itself being a fixed quantity!), the usual approach to such situations is to use it more efficiently…

      “But if we want a lasting solution to this problem, we have to make reforms that will allow the market to deliver better outcomes on its own, and the two really big things that we have to fix there are the broken system for financing infrastructure that stops the city from growing, and the highly restrictive planning rules like the urban growth boundary. But you can’t get rid of the urban growth boundary without fixing the infrastructure financing issue. So this is going to be a major priority.”

    3. that makes total sense, and is much more sound 🙂
      Unfortunately I think Twyford does imply total abolition of the RUB.
      Having read his thoughts on this previously, he seems to have been quite swayed by the neo-liberal notions around this.

  12. There is no need at present to think about expanding outside the RUB. What is required is speeding up the release of development – ready land inside the RUB. Which all comes back to the cost of getting infrastructure in place.
    For instance, Whenuapai was considered one of the places that was most ready to be developed (along with Paerata) but had only a limited amount of infrastructure ready for the first 5 years. When the Independent Hearings Panel for the Unitary Plan immediately, and unexpectedly, live-zoned neighbouring Redhills in October last year, this took up all the wastewater capacity that was supposed to be supporting the development of Whenuapai. So now the bulk of Whenuapai will not now be development-ready until 2028-32. This despite the fact that all of Whenuapai was being planned on being live-zoned by now, albeit developed in stages. The $300m Housing Infrastructure Fund loans to “speed up” development in Whenuapai and Redhills does not appear to have changed things in Whenuapai in any way.
    If this has happened to the “most development ready” area (Structure plan already in place) why would you start again from scratch planning a new development outside the RUB. Just put in the infrastructure and Whenuapai is all ready to go.

    1. ‘What is required is speeding up the release of development – ready land inside the RUB. Which all comes back to the cost of getting infrastructure in place.’
      But another issue, that varies in severity, is landbanking. Even with infrastructure funded and planned, there is no guarantee private land owners will not just sit on the land and see it appreciate in value.
      We need a govt-led UDA with compulsory acquisition powers that can go in, acquire and assemble land, and develop it. With affordable housing (Kiwibuild) as part of it.

        1. not necessarily.
          From personal experience in the urban development industry, there is plenty of foreign money just ‘parked’ here. Large capital gains are not necessarily a pre-requisite.
          NZ’s safe haven status is quite attractive, regardless of capital gain.

  13. The RUB is an oversimplification. In most cases it’s just an outward extension of existing sprawl by a further 1-2 km, with no detail about what will happen inside of that Future Urban Zone. Thus we get more sprawl – just a slightly more compact version. And the economics of property development don’t change – serviced & zoned land is still at a premium because it’s being drip-fed as infrastructure is rolled out incrementally.

    The “infrastructure-led” satellite city approach being discussed in the media is way more pro-active would l likely challenge the RUB. But we need to ensure critical aspects like amenity and environment are not ignored. “Faster, cheaper, bigger” is not an outcome most of us want for Auckland. I really hope Twyford understands that.

    The free market is simply unable to deliver the development models that Auckland could benefit most from. For example a series of compact satellite towns, each situated near high amenity or high employment areas and all connected by rapid (200kph+) trains & freight routes. This takes co-ordination of a type that has been missing from NZ for at least 50 years. This amenity-led approach would gear Auckland to the a more globally competitive knowledge and creative economy.

      1. Because all the immigrants can go over there where I never see them and I can drive down Remuera Road to my hearts content… or something.

        1. Imagine if we build a Gold Coast-style high rise satellite city. A lot of homeowners from the Isthmus may actually shift outward thus releasing land for more intensive development.

          – Brownfields (mixed housing) projects are usually about replacing 2 houses with 6. They’re too expensive and slow, and the urban outcomes are pretty ordinary.

          – Greenfields projects (except Hobsonville) tend to be designed to lowish densities due to insufficient economic incentive for high rise, or lack of servicing, or too much NIMBYism.

          E.G. Beachlands – huge 800sqm sites and single-level homes ……because no water supply exists. Could have been a great spot for a coastal high rise satellite.
          Whenuapai (in the RUB) does offer coastal living but is about to be zoned for low densities along the coastlines. Where are the proposed ferry terminals, the marinas? Go look at Sydney – they know how to do it.

          – High rise satellites need high amenity locations (coastal) plus a few visionary projects (transit, schools, fibre, etc) and funding to kick them off.

          Seems simple to me. We just don’t have a method in NZ to make this happen. Singapore’s HDB wouldn’t blink twice.

        2. Not sure there is much comparison between Whenuapai (tidal estuary) and the Gold Coast (sandy surf beaches).

          I’m also not sure the Gold Coast model would succeed at Beachlands either. The reason the Gold Coast is successful is because it pulls in visitors in big numbers from the southern states of Australia and also New Zealand because of its climate. That isn’t going to happen at Beachlands.

      2. The rationale for making it easier to build new high amenity satellite towns is the same rationale for removing restrictions for building a city up, by removing some or all of the following; density restrictions, height restrictions, shade-plane, setback requirements, car parking minimums etc.

        A less restrictive planning environment creates a superabundance of housing supply options. The housing supply curve becomes more elastic. Landowners with developable land have less monopolistic pricing power and the result is that urban land prices are lower than they would be in a more restrictive planning environment.

        More houses and more types of houses are built in places where there is demand. House and urban land prices are more stable. Over time booms and busts are less of an issue.

        Construction companies have the confidence to invest in capital and labour to raise productivity. Over time the quality and price (full or rental) of housing in relation to incomes improves.

        Most of the people commenting on the Stuff article about how to get a prefabrication housing industry working in NZ understood the importance of addressing the land price issue.

        For the Labour led government the success or failure of Kiwibuild will depend on;

        A. Getting a competitive number of companies investing in economies of scale prefabrication production.
        B. Not pricing themselves out of the urban land supply market with its commitment to increase the number of new houses being built by 100,000 over 10 years.

        1. Kiwibuild also depends on the government’s ability to force the council to allow far, far more mid-density development. There is no way that the government can build half of all commercially feasible infill without causing even more pricing inflation.

          Your concept of reciprocal intensification would help, but I think government needs to make it illegal for councils to specifically zone height limits lower than three storeys anywhere or to specifically zone against attached dwellings.

        2. I agree -an important part of my reciprocal intensification idea was the use of a National Policy Statement in the RMA. If Phil Twyford wants to remove the RUB (which I am not against if it can be done in a way that is transport mode neutral and supports high amenity satellite town developments) he will need to do it with a National Policy Statement amendment to the RMA. This is what National did with its National Policy Statement on Urban Development Capacity.

          But if Wellington can direct through the RMA for local government to remove restrictions on cities building out then they could do the same for building cities up.

          For instance there could be a NPS forbidding car parking minimums. According Donald Shoup up to 30% of US cities is carparking. Why should city land be hugely expensive for housing but free for carparking?

          What about removing all viewshaft restrictions? Why should one land owners view be more important than another landowners right to build more residential space? Especially when that residential space could be affordable housing for those who can’t access it.

          What is wrong with 3 story residential dwellings? Shouldn’t that be an as of right dwelling option. Auckland has something like 500,000 residential houses, mostly 1-2 stories high. If they were allowed to build up one more floor -that would be a huge increase in potential supply.

          What if heritage heritage restrictions were a limited allocation by NPS -so only the best examples were given this designation -say a maximum of 1% of a cities housing stock -about 5,000 houses in Auckland.

        3. What can be done about the poor use of land where the developer could have built more under the plan? Like single home McMansions or a set of one storey houses with a ribbon of paving around each.

          Often the new development is exceeding the building coverage or impermeable area rules, and grossly failing under all the objectives of the zone, but Council turns a blind eye because it’s “development”.

          I’m quite sick of the talk and no action from Council on this and wonder if there should be some sort of “good development” ombudsman.

        4. Heidi
          What can be done about ‘under densifying’?
          It’s a good question. Maybe having minimum (rather than maximum) densities.
          But…there’s a bit of fundamental development issue here, putting aside idealised urban planning concepts….and that is, somewhat counterintuitively, building more does not always equal more profit. Often quite the reverse.
          This, along with many other reasons, is why I think government needs to be much more active in house building. Simply put, the private sector for the most part (there are exceptions of course) is not driven by altruism.
          And this is coming from someone who once heavily believed in a dominant (rather than equally balanced) role for the market….

        5. Yes, that’s what I’m seeing. And even when building higher density could be more profitable, it is still avoided as the builders in charge of the company are the older conservative ones happy to keep going as they always have. Too late in their body-wearying career to want to take on the risk of a new style of development.

          Even if Council didn’t do some serious building themselves (and I think they and the government should), directing the type of development must surely be possible. Taking what Panuku does and expanding it, regulating for it, and tracking it – then stepping in and fixing whatever it is that is preventing the desired development from happening, with incentives or new infrastructure or fast-tracking consents or training or technical assistance… Seems to me if the focus was actually on Brownfields developments only, these issues would quickly be sorted, and it’s the distraction of easier Greenfields that’s stopping it.

        6. mmm, nice idea, but I think that’s tricky.
          It took some time to rid myself of some of my latent neo-liberal hidden desires, but I have now :).
          Govt-led development is the only way we’ll get anywhere near the housing we need in the optimal locations, at anything remotely approaching affordability. Heck, I even believe in compulsory acquisition now for urban development. Even 2 years ago, I would have said ‘over my dead body, that’s too draconian!’
          the market has it’s place, but it is a limited one in terms of urban housing development.
          I think the biggest problem for the market in NZ is lack of capacity and economies of scale, and I think that will always be a big problem

        7. I’m not sure if you would ever get rid of booms and busts in a free market, it’s fundamentally how markets work. The only way would be to intervene to ensure a relatively consistent level of supply, and even then demand would still come and go.

  14. So we are going to have a sprawl with development located on different random spots without any public transport and master plan.

    And greedy developers will sell sections with poor planning and transport.

    It is the ignorance buyers who think they got a cheap land will regret spending hours congested in car everyday.

    As a whole the auckland pay the price as well as more car coming from 40km away. All motoways will be congested, we are repeating the lesson from Los Angeles.

  15. This implies that this government intends to do what Mayor Phil seems to have done with Panuku, pushing “affordable” to the outskirts, and making more land on the outskirts available for this. The Unitary Plan should have discouraged this, with European style low rise the preference. Affordability is an issue as most developers do the absolute minimum to qualify and then only offer shoe boxes to the lower middle class (an growing demographic), affordable because they are not a million dollars, but not affordable in any real sense. Fletchers’s development in Three Kings an example, where they will build three thousand homes, 90% plus will be priced well over a million dollars. I ask if it costs so much to build an apartment, why build it? But of course it isn’t expensive to build these things, it is just that those deep pockets that developers have must be filled. Phil Twyford needs far more imagination to sort this one out, including addressing the rampant rental market. Yes foreign investors are part of the problem, but “local” investors are milking it too. It is a big job, but not as tough as dealing with nationalisation, which is not too far away from becoming a political reality.

  16. Ideally the market should operate as freely as possible which means:

    1) The RUB should not exist

    2) Land zoning should not exist and development should be effects based only. Agreeing nationally what those effects are (e.g access to sunlight on your property),wont be easy, but it was the original intent of the RMA. (We don’t need 60+ district plans)

    3) There will always be distortions in the market as development has to be staged for infrastructure provision. However in the case where are two competing developments providing similar outcomes & both need infrastructure provision & the council can only afford to fund one at a time, then I see no reason why they shouldn’t effectively have to bid to see who develops first.

    4) Another interesting distortion is that you cant easily add another modular floor to existing buildings until the marginal cost of adding that floor leaves you no profit. (someone needs to come up with modular buildings – 4 floors would do as the cost of adding floors above 4 floors can be disproportionately higher) We build a 10 floor commercial building or 4 or 1 floor residential building and that’s it. The markets ability to response to demand is very sticky.

    5) The transport costs need to be closer to actual costs to get better signals to the land development market. We need congestion tolls and a petrol excise tax that covers to full cost of transport (historic papers suggest we underpay)

    1. It took 60+ replies but finally a response from someone who gets it.

      Congratulations on your post kiwi_overseas.

    2. With no RUB and no zoning, it will be like Houston.

      The problem with Houston is developer just keep building single level houses on Greenfield. The city ends up a big sprawl which become lifeless car dominated city.

    3. I mostly agree. People whine when I suggest that the government could simply force people to move to the regions because “the market is sacred!” but then when someone suggests abolishing the RUB they’re all “the market must be bounded!”

      1. No one says the market is sacred. We ask how you force people to move to the regions and then you either don’t reply or whinge that your ideas are being challenged.

      2. Forcing people to move is manifestly unjust, this has nothing to do with whether people support a free market or not. I’m baffled as to how you managed to link the two to be honest.

        1. Either you accept the government can intervene with the workings of the market to create a desired outcome, or you don’t.

        2. I absolutely accept that assuming you mean desired by the population not the government.

          Still not sure what the link is to forcing people to move, that is interfering in people’s lives not markets.

        3. JDELH, the market is one tool at our disposal. Ensuring it is only given the same importance in our economy as all the other tools at our disposal is pretty hard at times. But your placing “forced movement of people” on the same footing as these other tools is just plain weird.

    4. point 2 is one of the reasons the RUB exists as it simplifies the problem with the effects you describe. It is not just a problem with someone building a tall building next to your house blocking sunlight… Sometimes this problem can go the other way, In the rural sector there can be a problem where an industrial operation gets impacted on by new housing being setup next door. For example in the case of a quarry operation:. the nearby city expands and a developer buys a section of land next to the quarry and builds houses. People start to move in and then shortly complain that the quarry is too noisy. Eventually the quarry operation has to be shut down due to noise complaints.
      The quarry could have been operating for decades and when started the city boundary was miles away. It doesn’t seem right to me that the owners of the quarry should end up suffering due to a lack of a clear boundary

      1. In fairness I don’t think the owners of quarries suffer too much when they get surrounded by urban land. The owners of Stonefields did very well out of selling it to developers.

  17. I’m not convinced getting rid of the RUB will do much of value in terms of land costs. I see it more as symbolic, which might have some limited effects at the margins.. Most of the land beyond the RUB is too remote or too fragmented or too steep to be promising for anything more than bitsy development.
    Even without the RUB, there is still scarcity of good land because of these physical factors.
    You get rid of an ‘artificial’ barrier but there are still lots of ‘natural’ barriers

  18. It’s now 2020. The cost of land has tripled not decreased because now supply is there and demand for larger plots has increased. So, why lower the price? Aucklanders have spent the last few decades chasing the money by decreasing the sizes of their properties either through cross leasing or dividing their property and realised, “Oh that was a dumb idea, the new house is way too close”, so they sell up and go hunting further out for a larger plot. There isn’t a housing shortage because there aren’t enough houses, there is a bloody housing shortage because rent is way too high because rates and water rates have increased. The average working Joe now has to pay at least 3/4 or more of their wages for rent alone. Auckland pays double or triple the rates compared to any other place in NZ. Super city my arse, it should be SUPER RIP OFF CITY.

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