The latest version of the proposed Auckland Unitary Plan – itself a phrase that leaves me slightly queasy each time I read it – is apparently due out at 1:30.
Reading an article on it in today’s Herald I found this sentence:
“it will decide where and how Aucklanders will live, work, and play for the next 30 years”
Actually, I doubt even the most fervent advocates will claim all of that for it – and almost certainly it won’t be what actually happens – but it is a sad reflection of where we have got to, in respect of freedom, property rights, individual choice (add in the sheer unknowability of the future) that a journalist can write a sentence like that and probably not even see anything unusual or controversial about his statement.
In a free society, Aucklanders would make those choices themselves, and Councils (as providers of basic infrastructure and public services) would fit themselves to those private choices exercised in a free market in land, and the ability of private landowners to contract with each other, to respect each others’ interests and property rights
Allow any land within 100 kilometres of downtown Auckland to be built on to a height of two storeys and we’d pretty soon see house and land prices a lot lower, and the market – private preferences, private opportunities – would sort out just where the new houses were built.
croaking cassandra 
For once I find myself not in agreement, Michael. Your faith in the market to deliver satisfactory outcomes for housing is misplaced. I do not have sufficient knowledge of the Auckland Plan to critique it, and thankfully, I only have to put up with Auckland when I visit there once a month, but my concern with your broad brush, market solution would take out some of New Zealand’s most valuable horticultural land. Not even intensive horticulture land values can compete with the dollar values ascribed to residential or commercial land, so Franklin District would gradually be lost to food production. And those Aucklanders do want to eat fresh food, which is much more expensive if airfreighted in.
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Good to have the debate. Actually, I suspect that if we adopted something like my programme – and gave the property right to groups of existing land owners allowing them to sell rights to greater intensification (rather just having it taken from them) we’d see the price of land in suburban Akld, and on the periphery would collapse. Really good horticultural land would probably then be more than competitive with what such land could command for housing. It couldn’t compete at the moment mostly because the urban land market is regulatorily-“rigged”, creating an aritificial scarcity.
I was interested, driving into Akld from Helensville a couple of weeks ago, to still see a lot of vineyards in Kumeu – and Kumeu is closer to downtown than a lot of the places one gets to on the southern motorway. In a liberalized land environment, it would be interesting to see if land was really more use as vineyards than for housing.
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I can’t agree with the sentiment of this post enough. Really, this type of attitude boils my blood that other people think that it is appropriate to plan how ‘all of us’ ought to live. And you only have to speak to people about very personal fights they’ve had with councils around doing things like building a three car garage in a suburb where that’s not de rigeur, and you get a taste for how wrong the application of these rules can be in an intensely personal way.
But that’s the issue isn’t it? A majority of voters think that it’s appropriate to tell the rest how to live, though they may argue around what a preferred forced outcome looks like.
I still find it infuriating that we as a profession won the battles of central planning vs market driven decision making, thanks to people like Milton Friedman and Julian Simon back in the 80s, but somehow this lesson was never learnt in land use planning. Nobody works as a communist central planner in industry anymore, but governments still take advice from these idiots in land use issues. It is no coincidence today that we have shortages of housing in countries with abundant open space and cost efficient builders.
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It very simply boils down to infrastructure costs and who pays for it. Auckland is currently spread over 5000skm from leigh up north to Pukekohe down south a travel distance of 129km. Houston is 10,000skm from Woodlands in the north to texas city in the south, travel distance is 118km. They have 6.2 million people. We are full with 1.5m people. It is not about more land. It is about height.
We must have highrise 18 levels to 50 levels in Mt Eden, Mt Albert, Mt Roskill, Epsom, One tree hill in order to lower our infrastructures costs and build cheap housing through economies of scale.
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It is already very clear to me that the Independent Hearings committee and the Council do not want a bigger high rise core that engulfs those pretty little mounts which is pretty standard for large cities, Houston, Melbourne and Sydney all have large central high rise cores around 3000skm compared to our harbour which is only a meagre 500skm. This means that the Unitary plan is already a failure before it is even launched.
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“Allow any land within 100 kilometres of downtown Auckland to be built on to a height of two storeys and we’d pretty soon see house and land prices a lot lower, and the market – private preferences, private opportunities – would sort out just where the new houses were built.”
Actually, the Unitary Plan will allow for a 2 dwelling concept on all existing houses on September 2013 on virtually all residential zones. It does not equate to cheaper houses because it now allows for a home and income or 2 incomes for a rental property so the income doubles on each existing property. It could mean cheaper rents but I doubt it as John Key reaches out for 4 million tourists they will need a space to stay especially as we are not building hotels and the 120,000 international students need a place to stay as well.
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Michael
I noticed that the turn up for local authority elections in NZ is very low (in Wellington at least). I think that local elections are important for the housing issue. I do not know how to solve these problems without voting existing councils out and replace them with better ones (easy say than done). But from economics perspective, if the supply is inelastic (I have not seen an estimate of the elasticity) then the increase in the price resulting from the increasing demand, may not be qualified as a “bubble”, so the price may not collapse but keeps increasing. If the supply of land issue and building regulations do not change, the housing problems (price and scarcity) could not be solved (the market will be in disequilibrium for a long time). What we are really saying that the market is not working properly in the sense that it could not bring about an equilibrium in price, hence we want the adjustment to take place in the quantity rather.
Weshah
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It might allow 2 dwellings on most residential zoned land, but within a 100km circle around downtown there would be a great deal of land not currently zoned residential.
I have no problem with more intensive development, or even the huge high rises you talk – if people will buy them – but I think existing interests and property rights have to be respected. I’d favour allowing residents – in blocks of say 250 houses – to treat the existing rules as a property right, akin to a covenant in a new development. If much more intense development is really worth while, a developer will be prepared to pay a premium to existing owners to agree to change the rules (could be subject to collective action clauses, as exist in many bond issues, allowing changes with the consent of say 80% of those in the group). It might sound messy, but it would actually allow the market to work, and real new developments would happen – instead of having weird central planner arguments all over Checkpoint about what should happen in this bit of Panmure or Mission Bay or wherever. The rest of us really shouldn’t care – up to owners and developers to negotiate a price and get on with it (or fail to do so, and the development goes elsewhere.
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Auckland Council has already delivered to the government a budget requirement of $17 billion for additional reading, sewerage, water, bridges, waste treatment facilities for the greenfield sites. On top of that $10 billion for rail, another $5 billion for a second north shore bridge crossing plus $2 billion to have rail and you are basically staring at a $34 billion infrastructure requirement. This is the prohibitive factor of stretching Auckland 129km from leigh to pukekohe over 5000skm.
The only way to resolve this is highrise much much closed which essentially means to go highrise in Mt Eden, Epsom, one tree hill, 3 Kings and Mt Roskill. The stupidity of the Unitary Plan is highrise in Manukau, Albany, New Lynn, Slavia Park is just too infrastructure prohibitive, ie they are too far away from the central core.
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The independent hearings committee has already failed in their duty.. They have left Epsom, Mt Eden, Mt Roskill, 3 Kings, one tree hill, as mostly single dwelling. They have failed to properly account for the infrastructure spending required to stretch out so far with 2 or 3 or 4 level buildings instead of 18 to 50 levels in expanding the highrise central core around the harbour.
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The new Commercial Bay development downtown Auckland will house 10,000 new workers due for completion in 2019. This equates to another 10,000 people travelling from pukekohe to work at Commercial Bay.
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Mt eden apartments are being sold for $1.2 million each so people do want them but equivalent ones in Melbourne sell for $600k within the CBD core because they are building apartments 50 level high. Economies of scale bring down the prices. It is expensive to build 2 or 3 or 4 level apartments.
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