Patrick Reynolds is deputy chair of the City Centre Advisory Panel, and a previous director of Waka Kotahi/NZTA.
Recently there has been some good attention on New Zealand’s relatively low productivity. Just last week the Mayor led on this issue:
Brown stressed that Auckland’s economic future relies on shifting from low productivity and long hours to high-value, scalable innovation.
“New Zealand is one of the least productive OECD countries. We work longer, but produce less,” he said. “We need to lift real GDP per capita—and Auckland must lead that charge.”
In his speech the Mayor focussed on attracting and supporting high productivity sectors to set up in NZ and particularly Auckland, and this is a very important issue that needs attention. But here I want to focus on an additional key issue that effects the productivity of all businesses, high tech or otherwise, new or existing…
The role of urban form and transport infrastructure decisions in productivity
So what is productivity? It is essentially a measure of efficiency, how well we’re doing. Sounds dry, but it really really matters, it is all about how prosperous, or otherwise, we are becoming; whether our daily efforts are actually helping improve or reduce our ability to maintain a good quality of life. This is not about the distribution of wealth, but about how much there is in total. Whatever our aims for society this measure is always critical – it’s the size of the pizza, but not how it is cut up and shared out.
“Productivity isn’t everything, but in the long run, it’s almost everything” -Paul Krugman
Whatever it is you want – grand public institutions, high quality infrastructure, a broader tax base, wider redistribution (eg universal basic income), a stronger military, more teachers and doctors, whatever – a more productive economy makes it more possible and the tradeoffs to achieve them less savage.
Building the original Chief Post Office downtown, converting it to a train station (Britomart, now Waitematā), then through-routing those trains (via CRL), has required public wealth over different generations. Building these things at all, let alone to a high standard, requires surplus, spare wealth beyond subsistence.
We can and should argue over how best to spend any surplus, but those arguments get a lot easier when it is increasing, so a good starting point is to include things that deliver greater positive returns, i.e. enable higher productivity.
Productivity is spatial
Productivity is technological, but it is also spatial. Cities everywhere essentially exist because their concentration means they are more productive. New Zealand is no exception to this: here’s a recent slide from a study commissioned by the City Centre Advisory Panel:
This is a quick way of illustrating just how productive the Auckland city centre is, at just 4.3 square km. (Note: it’s frustrating that the colours aren’t consistent between both pies; and sorry to Matt to be putting pie charts on a GA post!).
This tiny area generates nearly as much GDP as the mighty Waikato (below).
Because cities are engines of productivity, it is important to get them right. To increase productivity we should increase the city-ness of our cities, as these are the petri-dishes in which efficiency flourishes. This is why the recent timid planning changes in response to PC78 are so disappointing. Reducing the size of our already tiny city centre to an even smaller subset will not help this problem, as very well covered by Tim Welch in Newsroom.
Productivity and transport investment
A key way to optimise this spatial efficiency is to invest in the kinds of transport infrastructure that enable and enhance it. Which is why the CRL and other more spatially efficient transport systems are so critical to Auckland.
But that’s not all: a fascinating new study from The Victoria Transport Policy Institute has just dropped, and it offers some really critical insight. This suggests some of our official assumptions about what works for increasing economic efficiency via transport investment might now be actually be making things worse. How so?
For pretty much all of the 20th century, GDP growth was largely in lockstep with both oil consumption and the quantity of driving being done. This makes sense, as oil-burning motor vehicles enable much more in the way of movement than the horse and cart. This not only led to more travel of more people and goods more efficiently; it also enabled whole new spatial patterns at greater distances, as these new machines more efficiently addressed the physical barriers of both distance and gravity.
But it also makes sense that this boon has its limits. Vehicles not only overcome longer distances, but, in large numbers, they require more space, forcing an ever greater spreading out. On top of this, they require ever more increasingly expensive infrastructure to serve them. By both creating more distance between everything, and requiring more and more cost to cover those those distances, the productivity advantage is lost.
Essentially, driving improves productivity – up to a certain point. That point is when it gets to such a scale that it costs more and more to simply enable it to function at all. That’s when driving demands so much space and infrastructure that it begins adding to the time and distance between transactions rather than shortening them.
In other words, there is inevitably a point at which the costs of further expanding this new system become greater than the benefits. Indeed, that point seems to be well in the rear-view mirror now. In the United States, and presumably other economies with similar auto-dominant systems (like New Zealand), we are now well into overshoot:
To me, the chart above screams: saturation. The US has gotten as much as they ever will out of the driving/dispersal model. They’re now firmly into good money after bad territory. Investments into expanding highways are now likely making the US poorer, rather than richer:
This is why, in driving-dominant cities, much more value is going to come from investing into all the alternatives to driving systems. This enables more people to opt out of the increasingly dysfunctional driving network more often, while still engaging in the economy. And, helpfully, the more people who are able to opt out, this more this helps keep that network more viable for longer, with a lower infrastructure cost for those who still drive.
Every person on a bus, a train, a bike, or a ferry; everyone living closer together and more proximate to their work, study and play; and everyone connecting remotely as a substitute for commuting (when viable), is helping to increase our overall economic productivity.
This is why it is important to talk about access rather than just mobility, because not all better alternatives are transport investments. All three higher-productivity means of connection (alternative modes, more proximate urban form, and virtual connectivity) are more valuable now than a new additional motorway lane.
But they don’t just include physically moving faster, as illustrated here in the Triple Access Planning model.
More evidence from the VTPI paper:
We can therefore conclude that over the last 20 years, investments that have helped shift Auckland’s urban form inwards and upwards have supported higher productivity in the economy. For example:
- the Northern Busway
- Rail electrification and expansion
- the New Bus Network
- City Rail Link
- the urban cycleways network
And also:
- broadband
- planning liberalisation, e.g. the Unitary Plan
- city-centre place quality upgrades (enabling more urban living).
At the same time, these have been counteracted by almost continuous sprawl and extension of urban and exurban motorways. These are likely mixed: negative, in that they enable sprawl, but positive so long as they decrease inter-regional travel times.
Todd Litman calls this a paradox; I’m not sure it is, or least is only in the context of the continual claims that building more roads of any kind, anywhere, is always valuable. This study suggests we should take a much more sceptical view of those lazy assumptions.
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See, I love your work, Patrick, but this is why I feel what I call “neoliberal urbanism” has lost the plot a little. Everything you’re arguing is true, as far as I can tell, but that doesn’t matter to the contemporary Right wing. The Trump administration is busily dismantling what makes America wealthy (research infrastructure, education, skilled migration) because they’d rather be poor than allow the end of social conservatism. All your arguments about wealth don’t mean a hill of beans to people who would rather the country be poor if they keep their relative status and we don’t develop an urban culture.
This is why, to have a future, urbanism has to address its arguments to people who don’t have power but would better from a sustainable, urbanised future, by which I mean working people broadly defined.
I agree Daphne. The other main issue that “neoliberal urbanism” misses is that it assumes the pie can continue to grow. It can’t. We are overshot. There will be no more growth. So the idea that we can continue to focus on growing the pie is just misguided.
The right have realised this. Whereas before the strategy was to grow the pie but take an ever bigger share, now the super rich are focusing on dismantling the institutions that focus on wealth redistribution. The super rich didn’t mind throwing the crumbs to the plebs when there were plenty of pies but now there is going to be less pie overall they do not want to cut their share which means the plebs get even less crumbs than before.
This is why Trump got in.
Until the left develop a coherent policy response to the end of growth people like Trump will continue to thrive.
Again, with respect, Trotsky argued that there would be no more growth in 1938, and he was wrong then too. Capitalism has a way of surprising you (although of course the kind of growth that eats the planet/future is bad news)
Trotsky said no such thing. Not sure where you get your history lessons from. We are overshot. Growth is no longer possible on the global scale. As always there will be some areas where growth is still possible but not in aggregate. From now on, if one area experiences growth it will be taking it from somewhere else, we have entered a zero sum game. It is fundamentally different from before.
I think the far right dot on Figure 9 is California (4500pp/sqmi, 37mill/8200 in the data). It isn’t density of cities that makes Californians so rich and they didn’t get there by not building roads. Figure 9 is drawn to imply increasing density will make people wealthier. It might be that people crowd into areas where there is easier money to be made (think Dawson during the gold rush). Density might be a result and not a cause.
The correlation might be more important than cause and effect. If density and productivity coincide, the questions become: where are we, and how can we achieve better efficiency without wasting wealth?
My question is what did they use for a proxy to deal with the mutual causality?
If density caused increased wealth then the slums of the Third World would be the wealthiest places on earth.
Very good point. Perhaps some agglomeration shill could explain.
These are more productive places than subsistence villages, that’s why people move to them – In other words you are making a false comparison.
Everything is relative to actual real alternatives. And yes, the proximity and productivity of slums in the global south do make them often chosen over the alternatives, despite the very obvious downsides, especially their environmental and public health disbenefits.
People do choose to live in Dharavi because in offers increased prosperity, but these people are not starting from Lower Manhattan, or the 1st Arrondissement, or suburban USA.
The choice in Auckland is between a more compact and efficient version of itself, or a more vapid, spread out, and inefficient one. Not between suddenly becoming Hong Kong, or indeed Dharavi, or whatever north American driving-only ex-urban nirvana you may prefer.
There’s limits to the spatial as a framing for urban productivity, which are getting stronger not weaker.
You may recall in the late 1990s Professor Porter proposed specific industry advantages for New Zealand and Auckland particularly if it built on existing spatially clustered industry nodes. Way back in the day. You’ll also probably remember the Richard Florida theories about the upward spiral of peripheral city spaces churning into creative centres. I remember him as a fad that went through some local government circles at near the same time.
Despite the entire 2001 Knowledge Wave initiative that took Professor Porter’s ideas and turned them into something approaching grand national strategy, it only took off in very limited areas. Florida’s ideas were a subset that also didn’t take off here.
Auckland has some broader infrastructure advantages as noted this year by the Infrastructure Commission, especially in broadband and energy efficiency. But we aren’t seeing commercial giants grow and headquarter in Auckland as a result. Auckland’s physical form pretty much mirrors our national wealth distribution and our concentration of industry.
https://www.knowledgeauckland.org.nz/media/rawptbpa/aucklands-infrastructure-infrastructure-commission-january-2025.pdf
The productivity advantages with spatial clustering seem fair to anyone stuck in an Auckland jam trying to get to a meeting, but that same Aucklander can have an even better meeting on Teams from Wanaka.
The question of density from the CBD inferring productivity needs now to go to the nodes of Manukau, Takapuna, Westgate, Hobsonville, Avondale and beyond.
If the job can be done in Wanaka instead of Auckland, it might also be done from the Philippines/Malaysia/India
As well as writing about clusters, Professor Porter wrote that NZ’s needed to put more effort into work, even if it meant changes to their lifestyle. In fact, he thought aspects of NZ’s lifestyle were inconsistent with economic success. I think about this every time established residents try and stop anyone from building new housing in their neighbourhood. In reality, more inner city housing would be good for the lifestyle of those who move into the new housing. And although the amenity of inner city suburbs would change, it would often be for the better. For instance, shops and public transport would improve, and inner city schools would have healthier rolls.
It is instructive to walk from Grey Lynn to the city centre, and observe how the urban landscape changes. People believe, correctly I think, that amenity will sharply degrade with density.
The Villa Belt might be out of place, but to its credit, it looks like a place where humans would plausibly live.
In comparison, the commercial area closer to Ponsonby Road looks like the surface of a Death Star.
Across the motorway, you are between apartments. As for streets, you have a choice between big ones like Cook Street and Hobson Street. Loud, busy and dangerous. And the small ones like Nicholas Street which still seem to be set up as car only arterials but for no apparent reason. Do you want your neighbourhood to become more like this? No. Come on, don’t be stupid.
Amenity in cities implies that you need to be able to walk on a street, without getting a visceral sense of discomfort due to being so oddly out of place over there. The Villa Belt is the last thing we built before we stopped being able to build such places.
Return to the city centre. Do a walk on Hobson Street. This is one of the densest residential streets in the country. There is almost no amenity on this street — due to the amount of traffic, and also the design, it is purely a liminal space where you get out as soon as possible. Nelson Street is even worse.
Maybe your walk took you through Sugartree Lane. This apartment complex started out with shops on the ground floor. But also with all sorts of signs telling people not to loiter, so it was immediately obvious those shops would’t stick around. And anyway, it is too isolated from its surroundings by the surrounding street grid.
It also started out with shop fronts on Nelson Street, but those weren’t ever occupied AFAIK. Spot the difference between today and 2019:
https://maps.app.goo.gl/y1cxaKtPuR5VyCn36
It is the boxes for shop signs. They were never filled up, and are now gone. Turns out that bleak little lane still is a bleak little lane where nobody in his right mind would walk unless strictly necessary. Because otherwise, why not? There is a large amount of apartments nearby.
So… this urban amenity story just isn’t working so far.
The amenity sharply degrades with motorway ruined streets. Everywhere around Hobson, Nelson, Pitt, Hopetoun etc has been reshaped to serve the great traffic sewer, the adjacent land use reflects that. Higher density does not have to meet the ground in grim ways. Any amount of vaguely observant travel to the great dense cities shows that. That’s the difference. Street condition is a choice, as Paris is showing us now, among many others.
Sugartree Lane goes from nowhere to nowhere and, as you say, is hardly welcoming to exploration.
In an alternate universe, Sugartree would have had a bicycle off-ramp leading directly to/from the Nelson Street Cycleway. This version of Sugartree Lane would be a proper right of way. It would lead through the heart of the complex, with connections to high-quality cycle parking. It would also be part of a network of lanes leading to Cook Street, Sam Wrigley Street and City Works Depot.
Density and amenity can and should go hand in hand. It’s difficult when the road-controlling authorities (AT and NZTA) flat-out refuse to consider the notion that a street is anything other than a factory for producing traffic.
The most striking thing about Sugartree Lane IMO is that the developer was more optimistic about the near future of Auckland than the council itself. They expected to soon have a functional city around them — hence the shopfronts, while the council seems to have given up on that idea.
I met a student on the train who told me she gets up at 5am each school morning to catch, then train,then bus to get to school.
There are stories of people driving 100 km a day to and from work and for 12 hours a week.
Those people won’t be having much time for going to all the many sporting and cultural activities in the city
All the more reason to build more houses in the central city and surrounding suburbs?
The people I know who live on the outskirts of the city do so because they want a section and to live in a lower density environment. They will put up with the commute to get this. The way we do density in NZ isn’t that appealing to many, including young people in my family that are house hunting.
Others unfortunately pay the price for those who want to live in far flung areas. General taxation is currently contributing about $3b each year to pay for costs not covered by motorists. And so as a society we have to forgo a new hospital in Dunedin and Nelson, and there would still be heaps of change to start a surface light metro from the city to Mt Roskill.
I also know young families who say that having even a small garden is a pain, and they would like to live closer to work. Density is partly about providing choices for those without inherited wealth to live in a wider range of suburbs.
I would imagine if people don’t really want a section, they would have moved to Sydney or Melbourne a long time ago.
There is no need to try to guess what other people want, let them choose, people are really good at understanding trade-offs in their own lives. eg counting the cost (time and money) in a longer commute versus a private garden or whatever.
It’s just weird when planners, or economists, or politicians claim to know what everyone wants, to justify restricting choices. Almost always they are simply projecting their own taste on society.
Maybe some of those who don’t want a section and haven’t moved to Sydney or Melbourne have a career in NZ, or a spouse who wants to stay here, or parents who are they want to see regularly and are helpful for childcare, or prefer the NZ school system over the Australian school system. It should not be mandatory to leave NZ to have a small section or live in an apartment.
A lot has been written about how poor people are at understanding trade-offs in their own lives when it comes to the cost of commuting.
That said, owning a car is really cheap in New Zealand, thanks to abundant imported second hand cars from Japan you can own and operate a car for $5000 per year, and that includes deprecation.
Yeah family nearby is a big deal when you have kids. But also especially with kids your options are limited.
The canary in the coalmine here IMO are streets like Nicholas Streets. There is not much reason to have a lot of cars on small streets like that. But on the ground the street still is just built for cars only. Meanwhile it is surrounded by apartments so some quiet space for people would be incredibly valuable.
The cost of infrastructure in the CBD is much less per dwelling than in distant suburbs. Wellington did such study in 2023.
A 2021 study by the city of Ottawa showed that servicing low density greenfield development was $465 per person per year while high density infill or brownfields benefits the city $620 per person per year.
The huge costs includes sand mining for concrete around Parakai that causes costal erosion, fast tracking more quarries that take away our hills and volcanic cones and make Auckland flat, the loss of our good farmland, the terrible sedimentation of the Gulf, and the very high costs to families including transport and loss of productivity due to sickness.
Each year, air pollution causes more than 300 premature deaths. It is estimated that the social cost of air pollution in Auckland is $1.07 billion per year. 13,200 cases of asthma in children every year are exclusively caused by car pollution.
In Auckland our university has been building many apartments and struggling to keep up with supply. Precinct properties announced a 960 unit on Stanley St. The University owns many student accommodation buildings and a new 15 level beautiful one on Lorne St is near completion. Auckland University with 30 000 students is very important to our economy and community. Remember local and international students love studying and living in the city and not in a distant suburb as hours of commuting would harm their chances.
I have known about a dozen people who live in apartments and all have told me they enjoy living on the city. The views are great and the living is easy. I have also been in many houses in the suburbs where those 2 storey houses are on small sections and packed side by side and the only view is from the upstairs master bedroom. There are usually 2 or 3 cars parked in the double garage and on the front yard.
Are you sure all of those people aren’t simply choosing to live further away from the CBD out of preference?
The phenomenal housing price increases in the inner suburbs over recent years indicates no.
They’re extremely popular areas and without some combination of generational wealth, a top 1% income, or buying a house there in the 80s, you’re priced out.
Do you seriously think that the value of that land is explained simply due to its proximity to Auckland’s second-rate CBD?
Tam – I can’t see anywhere where anyone says it is due to proximity to the CBD. However, the CBD is central and you don’t have to have a lot of intellect when viewing a map of land prices to see that the biggest driver is being central.
That won’t necessarily be due to proximity to CBD but it will be the broader proximity to everything that you get from being central.
Actually in cities the world over and through time proximity to the city centre is a very strong determinate of land value. People value access and shorter journeys, and other things being equal (Auckland also exhibits a very strong coastal premium too and especially for coastal + close in).
Transport systems seek to level that out, by speeding and easing journeys, but if that’s mainly by car it will degrade over time in even moderately successful places.
Be as harsh as you like about our improving but constrained city centre, stripped for decades to fund suburban expansion through rates, it not only remains the nation’s biggest concentration of employment and education, but that proportion is growing.
Anyway, as Jezza says, it is the centre, so geometrically it is just a fact it is the closest place to more destinations than anywhere else.
There’s a lot of things NZ needs to do to increase productivity (seeking to increase gdp/capita or preferably wellbeing/capita) but they all lie outside the control of Auckland City. Some key ones are:
a) Increase R&D spending (Govt subsidy) to at least the OECD average. Ours is about 1/2.
b) Have a population strategy that brings the rate of growth down to and keeps it at sustainable level at which the country can build infrastructure to match.
c) Having a capital gains tax (like just about every other OECD country) so that all income is treated equally instead of being squandered bidding up land prices (which is an incredibly wasteful use of capital) which will eventually fall again. Investment and capital needs to be driven into productive business growth.
d) Begin to invest in NZ and address the infrastructure backlog at a sustainable rate. NZ could issue very long dated infrastructure bonds to fund it.
In terms of transport:
a) Sitting in congestion adds to GDP (absurd, and a poor measure of productivity) as we are burning fuel and increasing vehicle operating costs.
b) We value actual travel time at zero (so savings are fully valued at the full hourly $ value) distorting investment when there is plenty of evidence that travel time has some utility (so unit travel time savings should be valued at a lower $). The 30min travel budget also implies something similar.
c) Vehicle users are heavily subsidised – no congestion tolls, no air pollution tolls (health benefits), ratepayers subsidize them, no payment towards the health system costs of crashes etc etc etc – its no wonder we sprawl & overinvest scarce capital in roading.
I would take exception to your (kiwi overseas) statement :
“a) Sitting in congestion adds to GDP (absurd, and a poor measure of productivity) as we are burning fuel and increasing vehicle operating costs.”
Surely sitting in congestion cannot possibly be measured as GDP?! Yes, it is using fuel (that will tend towards zero if using an EV instead of an ICE) – but it is only possible to do any actual meaningful work on a train (reading, typing, report writing etc), whereas in a car stuck in traffic then all you can really do is talk on the phone (and gesticulate wildly, complaining about the traffic). So, I would argue that train travel can be counted as part of Productivity, but car travel surely cannot?
Yes, crazy isn’t it? That’s GDP for you! It measures flow, not outcomes.
Illustrated by the classic example of Keynesian economics, digging holes and then filling them in creates GDP as the hole diggers and fillers are paid, but unless they plant potatoes, there is no added value in the outcome.
The aim of this apparently pointless exercise might be to keep people employed and therefore boost demand in the economy overall. There is plenty of employment in keeping cars running, even if it is otherwise unproductive.
Even if you crash your car it adds to GDP because goods and services are needed to fix it. As an extreme example take the Chch earthquakes, the rebuild added to GDP.
GDP is all final goods and services produced.
Don’t mix GDP with productivity, the latter would see the rebuild as an added cost if we were measuring the total cost of running Chch per year.
It doesn’t really add to GDP, sure there is some activity generated out of it’s just money from everyone’s insurance premiums that can’t be spent somewhere else.
Also, if your car is written off you will be buying a replacement. Sure that is a again a good being purchased, but it’s money you would have spend elsewhere and money from buying a car mostly flows out of the country rather than through it.
A car accident will almost certainly be an overall reduction in GDP. The Earthquake was a bit different in the short term as it bought overseas insurance money into the economy, however that money is finding it’s way back out through increased premiums, so it hasn’t done anything in the long run.
Public Policy Institute of California states that finance, real estate and professional services make up almost half of their GDP, while manufacturing comes in at 11%.
The Bay Area far outperforms other regions for GDP in a very diverse state.
They didn’t build skyscrapers that multiply density in a fault zone just for the fun of it.
Productivity – real its GDP/capita and while NZ, particularly AKL has had mass immigration especially of the unskilled (Govt report early this year 98.2% migrants unskilled). This is a drain on productivity (GDP/capita) and essentially the New Zealanders end up paying to slow the decline of services and infrastructure overrun by migrants – Milton Friedman – you cannot have mass immigration and a welfare state. AKL Council should be crying out to Govt to dramatical slow immigration. Sadly, with the stupid deal with India, NZ will see a surge in third world migrants under the guise of “education” like Canada and Aust has. Canada now totally overrun, has 4 million visa holders who have meant to leave the country (Mainly Indian) who never will and Aust is already heading down the same path that NZ is about to follow.
sure, racist grandpa, blame immigrants for the failings of capitalism. time to take your meds.
Ageism and ableism is fine, but heaven help us if somebody causes you offence based on your confused definition of racism.
you have to be pretty thick headed to not see that racism is the driving force behind blaming immigrants. or at least the main privilege that the populist right leverage when they distract the masses and prevent anyone from gaining class consciousness: blame and ostracize the ones who are most obviously “different”
Another irony lost on poor old Borrower. Here they are impeaching people’s intelligence while showing precious little of his or her own.
Its almost like they don’t understand the names (or terms) that you’re using …
I’d stick to nailing the normal dictionary definitions of words before having ago at the ones that you come across on Reddit.
Interesting! The proportion of unskilled migrants quoted by the minister in 2023 (RNZ:Exploited Migrants) was a third, then a little later ‘nearly half’.
98.2% does seem a bit high.
It seems these data are not publicly available, so we can all just make up whatever narrative we prefer.
A lot of information can be found in here – part 3 especially:
https://www.treasury.govt.nz/sites/default/files/2024-05/pc-inq-is-immigration-by-the-numbers.pdf
Also, it’s interesting to see the definition of “skill”:
https://www.stats.govt.nz/methods/about-the-national-occupation-list/
It’s a waste of time arguing with the car and trucking brigade best thing is use our limited resources to push for projects which can really make a difference if the oil tankers stop coming. Things like a strong renewable power grid first class railway network and bus ways in our cities. Heaps of electric buses and cpharging facilities. And a backup system in case the Internet falls over or becomes to dangerous to use.
Does Fig 9 prove the point that congestion is the prize of a successful economy?
Separation of productivity from GDP may be necessary, so that the examples of increasing churn without increasing wealth can be understood.
Congestion has a direct relationship with willingness to pay, as shown with long school travel distances when other schools are closer to home. which is why actions to reduce travel time generally increase travel rather than reducing congestion.
Congestion is a symptom of having both a sufficiently thriving economy and lack of good alternatives to driving.
Detroit’s economy crashed, the population fell by 60%, and congestion went elsewhere, with all those people. That is the one proven way to ‘fix’ or ‘solve’ congestion.
Assuming we don’t want that (though some do!), the alternative is to live with it, but enable more and more people to opt out of it. So taking part in congestion is more or less optional, and doesn’t reduce productivity so much.
It is shown that improving alternatives sufficiently (all 3 types as in blog post), will lead to an equilibrium with driving, maximising the efficiency of each. A kind of balance known as a ‘Nash Equilibrium’.
Oh and of course pricing driving accurately is key to reducing congestion too.
Ivittuut has even less congestion, but that because it is a mining town, abandoned in the late 1980s.
https://www.britannica.com/place/Ivittuut
Infrastructure to allow driving certainly helps keep us poor. A couple of months age we received a circular saying that our cul de sac was about to be resurfaced. Cul de sacs by their very nature don’t get much traffic so wear is minimal. I walk and drive our end of the street and have never noticed any issues. I walked the rest of the street to see whether that needed resurfacing. It appeared not. Nevertheless AT resurfaced it, on what basis who could say. I note in the last annual report AT proudly announced that the percentage of roads that they would resurface every year would increase. They seemed to regard this as a good thing. And yet AT struggle to even meet their target for cycle way expansion. In the last couple of years Auckland Council has replaced perfectly serviceable toilets at Takapuna and Milford beach. Auckland has a productivity problem because there is not money left over for mass transport that moves people in economically efficient ways, and that become even more efficient as patronage grows.
The main culprit here I think is on street parking. How wide is the roadway on that cul the sac? Every metre wider than 5 metres is just pissing away money. And even if you want on street parking, in other countries it tends to be built differently than the actual roadway. I assume it would be cheaper because it doesn’t have to withstand moving traffic.
I have lived most of my adult life in the Central City of Auckland. Watching the suburbanites immigrate every day, and migrate every evening, highlights how inefficient we are. We have a mostly functioning train service, and multiple bus services, yet private motor vehicles still dominate our peak hours.
Our city space is wasted by carparks. We could all be living in spacious apartments, of a high quality, in the Central City, if cars weren’t occupying our space, and destroying our lungs.
I am one of the very fortunate who has a modest apartment in the city, and I can afford to laugh at those who live in multimillion dollar mcmansions in the suburbs because they are a joke.
I have spent time in Sao Paulo and a few other serious cities on this planet and in those places apartment living is never questioned.
Unfortunately we have a very rural mindset, and the commute seems to be a sacred space, for too many in their silly little metal bubbles, or silly metal bubbles with big wheels.
I catch the train, the ferry and the odd bus for fun, because from the city centre, it is a boomerang service, and as an ex backpacker, I cannot sit still for too long, so yesterday Pukekohe was a nice scenic train ride, and I did not even bother to enter the township, as their were too many cars cutting off the train station. I am not scared of cars, but they are weapons, and should be treated as such.
When we lose so much time and money in congestion, how will we ever be productive?
Sao Paulo isn’t the instructive and ringing proof of the benefits of density that you think it is …
The GA comments section improves by 30% every time Matiu comments
Surely a big factor in our productivity doldrums is the fact that most intelligent and productive kiwis of a certain age now live overseas.
Housing affordability may be one factor driving them off, but there are ‘pull’ factors just as powerful as ‘push’ ones.
Those pull factors (economic, social, and cultural factors) are hardly going to be weakened if we do as this blog urges and turn the central suburbs into a wasteland of shoebox town houses and overheated apartments.
It might succeed in bringing house prices down, but the City that will be left won’t be one that many skilled and productive Kiwis are interested in remaining in.
“Surely a big factor in our productivity doldrums is the fact that most intelligent and productive kiwis of a certain age now live overseas.”
Not really as they are replaced by similarly aged immigrants with the same or even higher qualifications plus the added advantage of overseas experience.
And, as a bonus, these immigrants usually have a higher productivity.
Link provided earlier but here goes again:
https://www.treasury.govt.nz/sites/default/files/2024-05/pc-inq-is-immigration-by-the-numbers.pdf
Thanks for the interesting report. It looks like you’re comparing migrants with New Zealanders generally (instead of with Kiwis overseas).
The part of the population I am most concerned about are departing New Zealanders. These Kiwis are our among our most ambitious and most productive (this is reflected in the Treasury Report; unsurprisingly).
The report seems to say that there is no doubt that skilled migrants bring many essential skills (which boosts our odds of increasing our productivity and therefore stemming our outflow of skilled Kiwis somewhat).
What is less certain is the contribution (or cost) associated with lower skilled migrants – particularly non-working dependants. Here the report seems to suggest that these lower skilled migrants are less productive than their Kiwi equivalents.
Treasury also note the danger that high rates of immigration could risk social cohesion, strain infrastructure, have cultural implications (unsure what this means) and imposes added pressure on the environment.
Clearly, Treasury does not see the issue nearly as simply as your comment seems to suggest.
“The part of the population I am most concerned about are departing New Zealanders. These Kiwis are our among our most ambitious and most productive.”
Are these the same ones that you recently referred to as “NZ’s useless bureaucrats and consultants”?
If so, labelling them as “useless” would certainly be an incentive for them to leave.
In addition, kiwis moving overseas is not new – this has been happening for 50+ years. Also, a large contingent of these will or have come back, especially since the Covid-19 pandemic.
And with them, they are bringing back experience and new skills as well as more than enough money to buy houses, thus inflating house prices.