Flashback Saturday: Stu Donovan on housing

Every weekend we dig into the archives. This ‘Flashback Saturday’ is a bit different from our usual, and as part of our “20/20 Vision on Housing” programme we’re doing a retrospective on ex-blogger Stu Donovan’s housing posts.

Stu is an economist and engineer, now living overseas. A decent chunk of Stu’s 170-odd posts for Greater Auckland were about housing, and while some were quite technical, they were always a pleasure to read. Stu owned and lived in a 50 square metre apartment in Auckland’s city centre; as he became based overseas more, he rented it out but still found time to write about it.

Stu has even been kind enough to write an extra update, just for this post:

While the core emphasis of these posts still remains, my views have evolved somewhat since many of these posts were written, especially in two related areas.

First, even with the dramatic intervention of the Independent Hearings Panel to increase the supply of dwellings in the Unitary Plan; even with record levels of dwellings now being consented and constructed; and even with more moderate levels of net migration, the cost of housing in Auckland is yet to fall. To me, this implies Auckland Council’s draft Unitary Plan clearly did not provide sufficient capacity for housing. I hope the planners, politicians, and organisations that supported decisions to reduce the supply of dwellings have reflected on their choices to the extent where we can do things differently in the future. After all, we’re over one-third of the way through the 10-year Unitary Plan cycle, so it’s not too early to start thinking about how we might update the Unitary Plan in the next iteration. And, of course, if we really wanted to tackle issues with housing affordability, then I suspect formal mechanisms exist through which we could submit a Council plan change to enable more housing.

Second, I think it’s fair to say that recent evidence suggests the Unitary Plan process didn’t place a high enough weight on the urgent need to reduce carbon emissions. In the midst of an accelerating climate emergency, where countries around the world–New Zealand included–are struggling to reduce their emissions and avoid dangerous levels of warming, the Unitary Plan still contains policies that, for example, designate large areas of Auckland as “single house zone”. Other policies mandate the provision of more parking than the market would deliver on its own, purely for reasons of convenience. Such policies are anachronistic relics of a bygone era in which global warming was not an issue; we are–in many places–literally playing with fire if we allow these policies–which lead to a less compact, more car-dependent city–to persist. People’s sensitivities about “neighbours” and “car-parking” simply must take a back-seat to reducing emissions. Starting now.”

Demolishing Demographia

In a series of three posts (1, 2, 3) called “Demolishing Demographia”, Stu looked at a report by Demographia which compares ‘median house prices’ to ‘median household incomes’ and concludes that Auckland (and other NZ cities) have very unaffordable housing. Stu pointed out that, based on other (arguably better) measures, Auckland and NZ housing affordability had been quite flat over time, rather than getting worse. This series, I think, does a good job of questioning why Demographia gets so much traction and press in NZ: their analysis is very simplistic and frankly outdated. Effectively, their one solution, trotted out each year, is to just remove urban limits and that will magically fix everything.

Of course, house prices (in Auckland, NZ and much of the developed world) have gone up a lot since 2013 when Stu wrote these posts. We’ll look at that later in the year.

Consume, Baby!

Denser cities often have ‘economies of scale’, or can produce more efficently. Things like public transport and parks work better (or more cheaply), and businesses benefit from having a larger labour pool and ‘knowledge spillovers’. Stu looked at the idea that denser cities can also can also offer benefits to consumers – such as more events, things to do, more social opportunities etc.

Urban Development Authorities

In another post he asked whether Urban Development Authorities should be able to compulsorily acquire properties (not sure if he reached a firm answer on that!). UDAs have a fairly short history in New Zealand, but a much longer one in Australia. Hobsonville Point was probably the first large-scale one, run by a subsidiary of the government’s Housing New Zealand. This has now transitioned into Kainga Ora, and still no compulsory acquisition powers; but these may come in future.

Wanderlust

In his last few posts (“I like my house“, “We need to talk about Brisbane“), Stu reflected on debates about intensification and higher-density housing in Auckland, writing

“I don’t understand why some people try to stop intensification in Auckland.

Why do people think it’s beneficial to prevent levels of intensification which were perfectly normal in Auckland 100 years ago, when my building (and others nearby) were developed? Levels of intensification which are perfectly normal in cities overseas, like Sydney?

I’d like to think that if opponents of intensification knew me and my tenants, then they might stop trying to prevent houses like mine from being built. They might even start to accept that it would be a good idea to let people like me to live in the types of houses that *we* prefer. Rather than force us to live in houses that *they* prefer. Houses like the ones which they live in, which have balconies, car-parks, and all manner of expensive bells and whistles.

I hope that by the time I return to Auckland the debate on intensification will have progressed.

I’m soon moving overseas, where excessive rents from my apartment in Auckland will help fund my lifestyle. Ironic? Yes. Sad? A bit. Unusual? Apparently not.

I can’t help shake the nagging feeling that New Zealand’s most valuable export is not dairy or tourism, but young people. Problem is we don’t get paid for exporting young people. In fact, we invest in them – only for them to live, love, and pay taxes somewhere else. Some come back of course, but what of those who don’t? I know of many people my age who fall into the latter category – indeed I may end up being one. Sorry Mum.

Notwithstanding all this I do like my house, and I actually quite like Auckland. If Auckland is able to move beyond the naysayers and allow intensification in a big way, then in a few years it might be enough to bring me home. If it doesn’t, well in the words of the His Royal Highness, the Prince of Bel Air, “smell ya’ later”…

“Auckland doesn’t stack up as a place to live. Sure it’s nice, but having spent the last few years living in Brisbane and Amsterdam — and with the option to live in either of those cities — I’ve slowly and begrudgingly come to the realization that the cost of housing in Auckland detracts too much from overall quality of life. I can’t honestly say to my partner that Auckland is a better place to live. And we’re the fortunate ones; we have a choice. When you see people — families even — living in cars and/or on the streets, then you start to realize the long-term socio-economic problems that are being caused right here, right now”.

I’m also fond of this quote (from here, and Stu has lived in a few different countries):

“No other country in which I have lived dedicates such a disproportionate amount of oxygen to the machinations of a single, relatively uninteresting market” .

It’s important to note that Stu’s not saying housing isn’t important – it certainly is – but that NZ is unique in how much we all drone on about house prices, capital gains, property investment etc.

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