There is abundant land

Sometimes –  well, quite often actually –  I’m tempted to despair of the elected leadership in this country.  For decades they’ve failed to reverse –  barely even stopped –  our decline in the international league tables, when productivity growth is the only secure foundation for sustained improvements in material living standards.  They’ve presided over an economy that has mostly been inward-looking –  remember, foreign trade shares have been shrinking, as has the relative size of the tradables sector of the economy –  when increased international trade is a typically a key marker of a successful economy.  Business investment has been weak, for decades.  And they’ve managed to preside over a situation in which, in a land-rich country, we have some of the most unaffordable houses in the advanced world.    And still, apparently, they and their advisers think they know best.    And they wonder why life is tough for altogether many people, as they run around proposing band-aids, while never sorting out the fundamental problems.  Arguably, in fact, they are simply making them worse.

The prompt (the latest one) for that paragraph was an article that appeared on Stuff a couple of days ago (and made it to the hardcopy Dominion-Post this morning).   In it, we read

Wellington region’s population, including the Hutt Valley and Porirua, will increase from 413,400 to 459,200 over the next 25 years, according to Statistics New Zealand.

Wellington City Council district plan manager John McSweeney​ said there was about 290 hectares of greenfield land left to develop in the region – enough for about 3500 houses, based on existing residential subdivision plans which allows up to 12 houses per hectare.

McSweeney said it was likely that the council would have to encourage developers to build more houses closer together.

When I checked, I found that Wellington City covers an area of 29024 hectares.  And yet the Wellington City Council’s (WCC) planning pooh-bah claims there is a mere 290 hectares of land left to develop –  not just in Wellington City, but in the entire region.

This is how much land is in each of the five local authority areas that make up greater Wellington.

Wellington City                         29024 hectares

Hutt City                                     37664 hectares

Upper Hutt                                 53992 hectares

Porirua                                       18251 hectares

Kapiti                                          73148 hectares

Wellington City itself has more than 40 per cent of the population of the greater Wellington region, less than 15 per cent of the land, and yet –  check out the map at this link (and especially the satellite image) –  less than half of Wellington City land is in built-up area.

There is abundant land.  Visible, in particular, to anyone who ever flies into or out of Wellington.

And if you object that much of the land is quite hilly, well take a look at the existing city.  This is part of the view from my study.

hills of Wgtn

Hills are everywhere.  Die-hard locals (the sort who find plausible Deutsche Bank’s claim that Wellington is the most liveable city in the world –  of whom I’m not one) even claim to like them, but at very least we all live among, or on, them.   And, in among that vast undeveloped area of Wellington City is lots of pretty-flat land –  the Ohariu Valley for example.

The Wellington City bureaucrat, presumably channelling his political masters, decrees that

The council was looking at options in some of the northern suburbs where land could be rezoned from rural to residential, McSweeney said.

That could create enough residential land for another 10 years of housing developments.

When the real question for him, and for Justin Lester and each councillor, should be, why is all of Wellington City not zoned residential (with appropriate requirements on developers regarding infrastructure provision)?

As one my readers notes, the only way that house prices can be where they really should be –  and for a long time were – at around three times median income is when developers can buy rural land at rural land prices (in turn, requiring that there is plenty of competition so that no potential seller can corner the market, holding the only parcels of (lawfully) developable land.    And yet what we see in and around Wellington –  and around so many other cities and towns – is almost the precise opposite.

Thus, there was a story the other day about the sale of 386 hectares of farm land just north of Wellington (in Porirua city).

The land is currently zoned for farming, but is part of the Porirua City Council Northern Growth Structure Plan. In 2016, it had a rateable value of $3m, but has previously been assessed as being worth more than $60m.

It is obscene.  “Value” created by bureaucrats and politicians, at the expense of potential home owners in greater Wellington, in this case apparently accruing to a family that has held the land since the 1960s.

It calls to mind a conference the Reserve Bank and Treasury held a decade or so ago at which a very able senior figure on the Wellington city council staff spoke.  He noted that most of the developable land (ie zoned residential) was owned by perhaps four groups who, of course, managed the release of this land in a drip-fed way, so as not to dampen the price of their land.    There was, of course, no thought to zoning all the land residential, or even applying land value rating which, at the margin, creates more of an incentive to actually use the land.

Meantime, each new rising generation suffers the heavy burden of trying to get into the housing market, all while bureaucrats and their political masters talk of a “need” to squash people in tighter or live in apartments without gardens etc.

It is 40 years and a few weeks since I first moved to Wellington.  Coming from Auckland as a teenager in 1970s, I still vividly remember the shock I experienced as we drove in Newtown and Berhampore (for those who know the place, think Rintoul St and Adelaide Road) for the first time, on our way through to Island Bay.  Was this the New Zealand equivalant of Coronation St, I wondered even then?   Most of Wellington (city in particular) is pretty densely populated as it is by New Zealand standards, and even the roads are often pretty narrow.  And yet the bureaucrats and politicians want everyone to squash in tighter.  It isn’t how economic development is supposed to work –  space is, after all, a normal good and, in New Zealand, there is no shortage of land.

For once, I’m with a real estate agent, quoted in the original story linked to above.

Bayleys Wellington general manager Grant Henderson said the thousands of sections set to come on market was not enough.

“For Wellington to continue to keep up, it has to keep developing greenfields. It’s crucial we do the developments.”

The latest residential development is earmarked for Plimmerton Farm, which was sold to Upper Hutt developer Malcolm Gillies and his business partner Kevin Melville.

The duo plan to create more than 1500 sections and 60 lifestyle blocks on the site, with some lots expected to hit the market in late 2020.

Up to 100 sites a year would be developed, meaning it would take about 20 years to complete.

By then, the region’s population will have grown by 45,800.

Henderson said there was a lot of residential land yet to be unlocked in Wellington.

“There are huge opportunities, and the sooner we get some supply into the marketplace, the better.”

 

And Council planners, even if they had the best will in the world –  about choice, and options, and lowering house prices –  still couldn’t tell what would be enough.  That is one of things we have markets for.

Elected councillors do make an appearance in the article

Wellington City Council councillor Andy Foster, who is in charge of urban development, said about 40,000 houses needed to be built in Wellington to cater for population growth over the next 30 years.

This did not include growth in the wider Wellington region, he said.

The council has commissioned research to establish how much space was left to develop and if the city could hold another 40,000 houses, he said.

“Most likely we can’t, and we are very much expecting that. So then we have to say, ‘Well where are they going to go? What do we need to change to accommodate growth?'”

There was a need to densify further. However, it was unclear which parts of the city were best suited for that, Foster said.

“This is going to be a really challenging conversation, and it’s going to be a really big one.”

Or, councillor Foster, you and your colleagues could just give citizens, residents, and potential residents, the choice.  People who want to live more densely should, of course, be free to do so.  Revealed preference –  the way our towns and cities evolve when there is no particular population pressure –  suggests that most would prefer not to, and of those who do end in terraces or apartments many do so simply as a less-unaffordable second-best, there being less land per dwelling in those sorts of developments.

The tragedy is that there is no public revolt against this political and bureaucratic mentality, which undermines communities and renders housing ever-more unaffordable, all in pursuit of some central planner’s vision for the way people should be, more or less, compelled to live.  There is no shortage of land –  and certainly not in Wellington city, or greater Wellington.   Even politicians who seem occasionally to display signs that they know better –  and there have been a few in both National and Labour –  don’t actually do anything about it.   We wouldn’t be having futile debates about Kiwibuild –  or “shortages” of physical houses –  if the land market was deregulated. Instead our so-called leaders –  elected officeholders anyway –  just preside over regimes that, by doing the same thing again and again, can’t but produce much the same dreadful results for a another new generation.  In a few years those will be my kids entering the market, another generation betrayed by our leaders.

 

 

101 thoughts on “There is abundant land

  1. If you dissolve urban limits you are still left with the problem of who pays for infrastructure? I wonder how many citizens who show support for urban limits are really voting for a smaller city. That was what I was thinking when Christchurch had a referendum?

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    • Sorethumb; what we did for decades, was do the infrastructure and keep housing affordable – i.e. a median multiple of 3.

      When the median multiple is 6+, housing costs over a lifetime are well over double because the loans take so much longer to pay off. Furthermore, in the low interest rate, low inflation environment, mortgage principals are not “inflated away” like what happened in the 1970’s and 80’s.

      The cost of paying for the infrastructure was and still would be considerably lower than the increased housing costs for all future generations. And at least we got infrastructure for our money. Increased housing costs is “nothing” for the money. And we end up with infrastructure deficits anyway, the people have to go somewhere, and as objective analysis has pointed out, there is seldom “spare capacity in infrastructure in existing built areas”. The cost of expanding capacity in these already-built-out locations is inherently inefficient – it is borderline deliberate lies from the “compact city” advocates, to claim that there are “savings” relative to greenfields development.

      It would have been POSSIBLE to plan, decades ago, for future growth by way of added density in existing built areas, by providing at the very least, rights of way and easements for efficient access to trunk infrastructure, but this was NOT done. In fact in place where there were corridor protections for road widening, such as from Johnsonville to Karori, the Council has abandoned these protections and sold the land where they already owned it.

      It is lunacy to leave road capacity unaddressed because the assumption is that increased density will put more people on public transport. Good solid data shows that PT mode share increases by around 5% for every doubling of density. That means a 95% increase in cars on the road. That means congestion Armageddon that more than cancels out any claimed efficiencies from the increased PT.

      Only when Hong Kong densities are reached, is there a quantifiable effect that there are LESS cars on the road than at the next lower density level. Quite possibly this is because the congestion is so prohibitive, not because the PT based lifestyle is so efficient.

      I constantly try and shine light on the false assumptions that underlie our planning approach, by pointing out that Wellington has a congestion delay at peak, of 45 minutes per 1 hour of driving, according to TomTom, when other piddly little cities (yes, Wellington is a piddly little city by global standards) generally have a delay of below 10 minutes, and sometimes as low as 4 minutes. Some of these other piddly little cities have 5 times as much main-road capacity as we do. The “induced traffic” argument is like a White Lie. The effect exists, but “not adding road capacity at all” is the WORST “solution”.

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  2. But urban limits are pretty ineffective as a way of limiting population – see Auckland. It works, to some extent, in the US – there are big cities with different approaches to planning – but not really here, where population is mostly driven by immigration policy now.

    I’m happy – as I alluded to in the post – to put much of the responsibility on developers to provide the basic infrastructure and connections. That is a real cost, but don’t forget that there are real costs to attempting to backfill and squash more people into existing developed areas, existing roads etc.

    As you know, i think that with a sensible immigration policy, NZ’s population would be pretty flat (and perhaps Wellington’s especially so, of the larger cities), so it isn’t as if there would be lots more people to accommodate. But the option of cheap land to build a new house on the city fringe is what would keep all suburban land prices at much more reasonable levels.

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    • The developer already pays for development contribution and also connections to water and also have to build public drainage. This in effect adds around $150k to the cost of the build. You can’t just keep trying to lump on infrastructure costs to the developer because it just adds to the cost to build which inadvertently adds to the price that a purchaser would have to pay. Nobody works for free so a profit margin goes on top of the costs to build.

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      • There is another aspect to the economics of this. Charges by way of a future levies stream actually suppress the price of sections and land; whereas as you point out, lumbering the charges in upfront definitely increases it. Home buyers pay a lot more in mortgage costs, than they might have paid in slightly higher rates (including, say, specially targeted ones on new development).

        It is even worse than what I just said, because fees and rationing schemes that push up the price of land and sections for new houses, push up the price of ALL existing housing. So first home buyers pay an EQUIVALENT of the inflated price in “new developments”, ANYWHERE they buy a home.

        We do EVERYTHING wrong. It is economically inefficient, and maximises social injustice / inequality – which we claim to care about!

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    • Logic – “NZ’s population would be flat” – exactly

      The point has been made before .. we .. NZ that is .. is building houses to accommodate immigrants .. we are getting exercised all the way to government .. it is govt’s problem .. they allowed it to happen .. they can fix it .. but at great cost to the existing whatever .. they will find they can never undo the damage

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      • Someone has to cook, clean and service our $15 billion tourist and international student industry.

        Someone has to cook, clean and groom our growing aging population. We could look seriously at the Japanese highly successful model or high productivity where they have a ratio of 1 nurse to 48 dementia patients using a cocktail of drugs to sedate patients and failing that tie them immobile onto beds as an option. Afterall productivity is more important perhaps?

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  3. I have a problem with the existing developers in the northern parts of Wellington. They opt exclusively for huge McMansions – which take up almost the entire section – with no thought to more economical use of land.

    News of the farm sale to developers within Porirua City suggests to me more of the same.

    The Kaiwharawhara subdivision – which is mainly series of townhouses clinging to the hillside – is an example of what developers can do when they put their minds to building on a constrained, difficult site.

    Local and central government needs to rein the profligate use of land in. I would suggest they could start by not allowing covenants on land titles which prescribe that you too need to build a McMansion.

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    • But the preponderance of big houses is itself largely a reflection of the artificially high price of land: developers are best able to recoup their costs by building such houses. Free up land use – so that that farm example I cited actually sold for say $3m – and you’d be much more likely to see a wide range of different types of houses built in new subdivisions. After all, go back to the 50s and 60s and new subdivisions were often where first home buyers went, using State Advances loans.

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    • Michael is right. This is evidence of the distortions to the market. Undistorted markets (as our once were) tend to have a good mix of fringe-suburb McMansions on LARGE lots (that cost LESS than the tiny lots with inflated land prices), denser housing development in the right places (eg on transit routes), and denser still redevelopments close to the city centre.

      Michael is spot on about revealed preferences. The still-undistorted markets in the USA, that have a median multiple of 3, tend to have housing “supply” response to demand that is some tenfold that of fringe-constrained San Francisco. 70% of it is stand-alone family housing and 30% of it is the higher density stuff. But ironically this 30% high density represents MORE high density development than there is in the cities that are Planning prescriptively for high density as the MAIN means of supply.

      The economist Issi Romem has crunched the data –

      https://www.buildzoom.com/blog/cities-expansion-slowing

      https://www.buildzoom.com/blog/can-cities-compensate-for-curbing-sprawl-by-growing-denser

      https://www.buildzoom.com/blog/paying-for-dirt-where-have-home-values-detached-from-construction-costs

      Note the comments threads too, where I attempt to shed some light on the distortionary channels that result in these absurd perverse distortions to the market.

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      • The “Paying for dirt: where home values detached from construction costs” is a great paper. Especially the maps showing areas of actual cities with higher or lower market values in comparison to construction costs.

        This analysis matches NZ Treasury’s models of three types of cities -type 1 cities being legacy cities with stagnant demand, type 2 cities being affordable cities even though demand is increasing because supply is elastic and type 3 cities being expensive cities with growing demand and inelastic supply.

        You can see the supply and demand diagrams for the various types of cities in the beginning of the following article.
        View story at Medium.com

        There is further debate in a comment to Phil about house values in comparison to construction costs below. Regarding the anchor thesis and elastic intensification supply.

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    • With the Labour Government appointing 100 working committees, that’s why there is a shortage of accomodation Wellington. Auckland consultancy businesses basically have to setup a presence in Wellington to get some of that business.

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  4. Michael the spatial economic evidence is that residential floor space is the normal good. Not density.

    I think revealed preference would show that a 100sqm house in Newtown would be more desirable to most people compared to 100sqm in Upper Hutt. Even though Newtown has much greater density than Upper Hutt.

    More residential floor space can be found by building up. This option is observed in every free market city in the world.

    I doubt that the demand for outdoor space/large gardens is as strong a normal good.

    I think there is evidence that the demand to be close to city amenities, to more workplaces and to important social networks is a stronger preference than the desire to have a bigger garden.

    Greater Wellington on a worldwide scale is not particularly dense. In particular the density around its train stations in places like Lower Hutt is pathetic and shows a regulatory and commercial failure.

    I support freeing up fringe land supply but the political economy arguments for freeing up density restrictions are as strong if not stronger, so should not be ignored.

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    • Density and space are two different things, but I suspect both are subject to demand increasing with income. Can I formally demonstrate it? No, but I’ve long been interested in how few signs of demand for inner-city apartment living, or terraced living, there seems to be in Timaru, Nelson, New Plymouth, Napier, Hastings, Palmerston North and so on,

      I”d dispute your claim about the relative attractiveness of the house in Upper Hutt relative to Newtown, but off the top of my head am not sure what evidence I’d use for the case – except perhaps that numerous people who grew up in this part of town moved to places like Tawa or the Hutt in the 50s and 60s, for the opportunities those places seemed to offer. The choice was skewed by State Advances loans, so it isn’t a clean test.

      We’ve gone around these issues before and I’m never quite sure how far apart we are when it comes to policy. Sometimes it seems that the biggest difference is that I have given up on our politicians (Nat and Labour, central and local) and you still seem to harbour some hope for your side to do something. I really hope you are right.

      Re Wgtn density, I don’t find comparisons with European cities particular helpful. They are typically both old (pre mechanised transport) and until recently were poorer than NZ. By New World standards, for cities their size, Akld and Wgtn are both relatively densely populated.

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      • Re: Density I suspect I am more favourable to it and therefore more optimistic that it can provide a preferable housing solution to many in the market. This maybe personal bias -I have lived in an apartment in Helsinki and it was very comfortable and in many ways better than any NZ home I have lived in.

        I have Finnish friends who genuinely would not want to own a house -with all its maintenance requirements etc. Many though have access to family baches which they go to when they need space/nature etc.

        Helsinki by the way only became the capital and a significant urban area after 1812 as a result of Russian annexation. So as an urban city it’s history is only a few decades older than Auckland or Wellington.

        Helsinki is about 50% stand-alone housing -but you wouldn’t see this housing close to major public transport hubs like train stations -that is the weird thing with Auckland and Wellington.

        Re: The politicians.Yes I have given up on local government -they are muppets and they will not challenge the status quo. I am hopeful that the new central government will make some effective land-use reforms though. I am giving them the benefit of the doubt for their lack of action so far. But they will not get 7-8 years like Key/English got. As the saying goes ‘Fool me once -shame on you. Fool me twice -shame on me’

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      • Thanks. I lived in an apartment too, in Washington, and really quite enjoyed that (new and good quality). We even had two kids there, but the oldest was almost 2 when we left and we’d have wanted garden, space etc had we stayed on.

        Re Helsinki, interesting but in a sense your point about baches and rural retreats goes to what I had in mind about space being a normal good too (look at the way the rich in London want a country home too, or Moscovites with their dachas). Of course, that need isn’t met within those cities, but in the New World – esp in moderate sized cities, which even Akld is – it can be.

        As I say, I really hope you are right about the govt. then again, Phil Goff and Leanne Dalziel were central govt ministers, and I strongly suspect Justin Lester has ambitions to be one. The interconnections are pretty strong (especially, at least formally, on the left).

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      • I wonder if anyone has studied the effects of being close to nature on small children,such as, being carried out in the morning sun and watching a bee on a hebe or tiny “money spiders” swarming over a cement step (versus sitting on a couch watching Dumbo)?

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      • I believe Brendon is one of the few people who understands that none of the options in our distorted markets are fair affordable prices, and that fair affordable prices for all options requires the allowance of greenfields development which provides the competitive anchor that ensures that all housing is price-disciplined.

        There is no such thing as a city with limited options for new greenfields development, and fair affordable prices for apartments, townhouses, or whatever. Everything in these cities is unjustly unaffordable. (Japan is an exception, for complex reasons that need another discussion thread).

        Brendon and I merely differ on what we THINK people will opt for if all the prices become fair and competitive. I don’t care who is right, as long as we actually have the integrity to allow the “experiment” to happen. I suspect that most of the density advocates DON’T want the experiment to happen because they DON’T want the freedom of choice for people, and they don’t understand the urban economics, and they don’t get it about the impossibility of prescriptively providing “density and affordability”. Ask them for one single example in real life, and they will name places like Vancouver and Melbourne – which have median multiples of 9+. Yes, they really are this stupid and callous. I call it “Marie Antoinette Urban Planning”.

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      • That is a reasonable description Phil of the common ground we share on housing matters. I might in a low key way dispute the anchor analogy with ‘removing unnecessary regulatory costs everywhere’ being my preferred description. But that really is quibbling over the details.

        We probably disagree more over transport matters -but that is argument we have had many times before and don’t need to relitigate here.

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      • Phil re the fringe providing a competitive anchor thesis. I am interested in this section of Issi Romen’s research, from https://www.buildzoom.com/blog/paying-for-dirt-where-have-home-values-detached-from-construction-costs

        “Even in metros that supply abundant new housing, homes in key locations are meted out
        …..How can this be? Even though expansive metros offer an abundance of housing globally, the supply of housing in sought-after areas within the metro is often locally limited. Prices in areas that are closer to the metropolitan fringe can be suppressed by growth on nearby vacant land – of which leapfrog development leaves plenty – but areas deeper in the interior tend to be “landlocked.” Local land use regulation typically prevents suburban fabric from growing denser and, as a result, “landlocked” interior areas can only add housing on a finite number of vacant lots, which are gradually depleted. When people are willing to pay well above construction costs to live in sought-after areas in the interior and don’t view the abundant housing elsewhere in the metro as a sufficiently attractive substitute, these areas can experience land value inflation, too.”

        I am proposing a solution so that homes in key locations are not meted out at an unresponsive inelastic supply rate.

        I believe it will be helpful if supply is globally elastic throughout the city -to prevent a speculative dynamic forming which prevents intensification supply being released to the market because speculators believe the returns are greater from holding.

        So Phil I am less convinced about the fringe ‘anchor’ thesis and more convinced that the solution to affordable housing is to regulate the market, such that building houses everywhere can be reduced down to as close as possible its true cost.

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      • Brendon, I do comment on Issi Romem’s article on this point. I believe that the pockets of high-priced housing in a median-multiple-3 city still represent a constant relationship with the incomes of the people who do live there; the prices are “high” purely because local incomes are high. But in the median-multiple 6+ city, the multiplier between the local incomes and the local property prices will be higher everywhere.

        I strongly agree that radical upzoning in the median-multiple-3 city would bring the housing prices in the high-income locations down to below the multiplier-derived level that existed before, “pricing in” lower-income people and increasing clustering economies – I am 100% “for” this approach on multiple grounds.

        But in a city where the multiplier is 100% or more higher to start with, and site values are elastic to allowed density, and development is already well beyond “low density” necessitating a lot of demolition of existing structures, and there is far less “brownfields” sites like there are in cities where land prices are low (because it is not so screamingly urgent to utilize every inch of space) – I don’t think it at all likely that the same beneficial outcomes market-wide, would occur. I’d expect the already-affordable cities to gain even more advantages over the unaffordable ones, in multiple aspects, especially co-location efficiencies.

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    • Good luck with increasing the density in the valley. Land of serious earthquake fault lines and subject to the real possibility of the valley floor raising in a major quake. It did so in 1856 and will do so again one day. Imagine the Hutt river flowing back to the hills!
      If you read the history you would know that the Waiwhetu steam as it is now was a river that was navigable to Naenae. That the Valley floor was mostly a swamp.1856 helped raise the valley floor.
      The Facebook page Old Wellington Region has many old pics and photo’s that cover this and the Wairarapa. For those from Welly it’s a great page to look thru.

      Same goes for the airport area. Used to be a swamp and subject like the waterfront to being raised by an earthquake. Photo’s on that FB page of the swamp.

      Why would you want to build on these places?

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      • Good first step Katherine. Do you think the Wellington Councils would be interested in my Master Plan Proposal as a second step towards housing affordability?

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      • I do Brendon. In my opinion local government is equally as concerned and keen to be active in this space as is central government. I’m quite keen on the Government’s progress on Urban Development Authorities. The RMA as it stands is a road block with respect to diversity in our development to my mind – so if there is no present interest in repeal and replacement of that Act we have to have find other ways to make urban governance more responsive and effective.

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      • Katherine I think reforming/replacing the RMA could take quite a few years and could be very controversial like the negotiations for Auckland’s 2016 Unitary Plan were. I think the housing crisis requires a more urgent response.

        My proposed Master Planned Block intervention could with support from both central and local government be up and running much quicker -maybe within a year.

        I don’t claim Master Planned Blocks or hyperlocalism in general are silver bullets. But it would make the intensification of the vast amount of low density suburban land more competitive and could be one measure working alongside other measures to liberalise density restrictions -like Lower Hutt is trying and also freeing up land-use regulations out past the urban fringe like Michael discusses here -that combined could turn NZ cities housing supply to being more responsive to demand (elastic supply).

        Elastic housing supply is the best long-term solution to easing the inequality and productivity costs of the housing crisis.

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  5. Interesting article Michael.

    I am increasingly convinced that the primary drag on our economic performance is rent-seeking behaviour of business with Ministries, local government and politicians largely co-opted to business interests.

    Lack of competition here can come about due to natural barriers to entry (eg Auckland airport, Port of Tauranga) or due to economies of scale (banking, fuel distribution) or political restrictions (land usage regulations).

    Without an activist government prepared to challenge business interests head on with a willingness to review regulatory restrictions and/or pursue a strongly pro-competition commerce commission, I really don’t see how we break free of this.

    Where we’ve seen the government willing to tackle business interests – eg electricity distribution and mobile telephony – we do seem to have made some progress. But I’m not holding my breath for any strengthening in competition policy from this government or it’s Centre-right alternative.

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  6. Michael you might like to show your kids this video on renting to orientate them to what to expect their future will be like if nothing is done about the housing market.

    P.S on a serious note -there is sexual references and foul language in the video so parental guidance may be required.

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  7. If I was one of the Greater Wellington Councils, in particular Lower Hutt, I would be looking at why there is not greater density being built around its train stations? A quick google search will show block after block of crappy old houses on largish sections within easy walking distance of a train station that has fantastic access to the heart of Wellington.

    Density restrictions, like height restrictions, shade plane restrictions, car parking minimum rules etc could be relaxed. If that is too hard politically. Then why not try giving small residential blocks the option of becoming their own planning authority? I explain how and why it could be done in the below article.

    This would benefit existing residents -no nasty land value correction to contend with, would benefit new residents which were previously priced out of the suburb, it wouldn’t add to the cities climate change burden,…. it is hard to identify a loser. Why don’t we do it?

    View story at Medium.com

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    • I think we largely agree on allowing blocs of local residents to become their own planning authorities. However, I still want lower land prices, and that won’t come without effective competition at the margins.

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      • True about the need need for fringe growth competition to lower the land price curve as opposed to trading large section/poor housing for smaller sections/better housing. I too would like lower land prices but doing that is politically difficult… see my comment below…

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      • I cannot understand the logic of cheaper land on the fringe being an issue. If we look at Auckland, there is much much cheaper land at the fringe. However it is called Huntly in the Waikato. But people just do not want to live there because the transportation costs to get into Auckland city is just too prohibitive. When you approach a problem purely from numbers you forget that the Auckland boundary that we see on maps is not real. The reality is there is no boundary but the reality is also that cheaper fringe land does nothing as it already exists.

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      • I know that people do not want to live in fringe land because I believed that Huntly being in between a growing Auckland and a growing Hamilton would get the capital growth due to land availability pressures. I was seriously wrong for15 years of holding 9,000 sqm of residential land with 5,000sqm of that lakeside. It has doubled in value over the 15 years in some of the best Huntly suburbs but in Mt Roskill prices in the rough poorest areas due to gentrification have moved up prices 3 to 5 times over that same 15 year period. Land availability does play a part but It is actually human emotional sentiment that plays a larger driver of price.

        Liked by 1 person

      • Most cities have concentric circles. Centre being the most expensive and cheapest on the fringe. In NZ, properties are priced based on racist lines with predominantly white upper middle class the most expensive and the Maori/Pacifica suburbs being the cheapest.

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      • Getgreatstuff: we have discussed this ad infinitum before. If Michael was to re-run his analysis for the case of Auckland, there would be many times as much “spare land”. A piddly little “allowed development” zone around Huntly is NOT remotely the same as liberalised rights to develop the TENS OF THOUSANDS OF HECTARES between the southern fringe of Auckland, and Huntly. Why is this so HARD to understand????

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      • Phil, it is easy to talk about the thousands of hectares of grass.But all that land is good for is for 10 million cows and 30 million sheep to graze on. Phil Goff has already identified the $30billion in infrastructure spending that is required. Huntly already has the infrastructure and already has the houses and the land already zoned for residential use at 400 per sqm per dwelling but no one actually wants to live on fringe properties. It is happening but fringe land availability comes after gentrification in the order of where people want to live and the prices that they are prepared to pay.

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      • “All that land is good for is cows”, therefore a prohibition on housing development is what? Justified? Or redundant? Mate, you are completely incoherent.

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      • 125 special housing areas were identified by Auckland Council which Nick Smith pushed ahead with under legislation only to find that infrastructure was not available to build on the 125 special housing areas that would make a significant difference. It is quite clear from Phil Goff that $30 billion (probably understated) is going to be required to get any degree of intensive housing. If you want to put up all that rural land as well then probably plan on $60 billion in infrastructure costs. Incoherent or government being just fiscally responsible?

        It is always easy to pen a solution but it becomes difficult when you have to ask taxpayers to front up.

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    • Think swamp and like the Red zone in ChCH. liquifaction as all that area sits on a huge fault line. It was last raised in 1856.

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      • Non-developable land MUST be leap-frogged. It makes ideal “parks and reserves”. In fact one of the perverse consequences of compact-city planning in some parts of NZ, especially Wellington, is that numerous sites that are highly questionable, are forced into “supply” – which is what happened in the case of the known, liquefiable land in ChCh.

        Wellington’s geography means that more splatter is necessary; more infill is insane! Many of the hands-on builders and tradies are going nuts lugging machinery and timber up slopes, and down narrow access strips right next to stroppy neighbours, and having fights over parking on the street frontage. The added capital cost of building on dubious sites is part of the problem we have, along with the inefficiency of piddly little one-off developments all over the place.

        You need scale on greenfields (and brownfields where you can get it) to discipline the entire market into affordability, and then what happens is that the dubious sites are suppressed in value by the known amount of the added costs of building there; and if the land costs are as low as they should be market-wide, many sites will end up with NEGATIVE value.

        Brendon’s proposals for potential block-scale redevelopment are logical but need to be part of big reforms, as he says, they are not the magic bullet.

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      • The Auckland Unitary Plan is a big reform allowing 2 dwellings on every available residential zone as of right without having to apply for a Resource Consent. In the last 3 weeks, the environment court has shifted that goalpost to to 3 permitted dwellings as of an owners right to build without Resource Consent. But it is still difficult because public drainage is still required at the cost of the owner or developer which can be a highly prohibitive cost.

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      • Indeed, with the sort of rainfall that NZ has, land is required to allow for drainage runoff. Most times what we see on maps as available building sites are actually flood sensitive and natural flow paths for excess water. I worry about Phil Twyford’s intent on the Unitec campus carve off for high density dwellings. Most of that land is in the valley and is flood sensitive.

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      • It is SOOOOO ironic that advocates of intensification and more density routinely use Houston and its flooding (BTW, Houston has been hit by rainstorms several times as bad as Sandy that caused NYC’s subway system to flood) as an argument against Houston. They hate Houston so much precisely because of its low density sprawl and the large backyards that provide a natural sink for rainfall.

        The “paving over” that is a problem, is actually what the density advocates WANT, in Wellington and everywhere! Flooding has definitely become a worse problem in certain neighbourhoods in Wellington BECAUSE OF intensification and paving over permeable surfaces – and this is the result OF “zoning” and prescriptive planning.

        GOOD planning actually would focus first on resilience to natural events, but there is little evidence that the OTT powers being exercised by planners under contemporary fads are “good” planning at all. Wellington runs the risk of being the world’s biggest laughing-stock one day on this very point.

        The next priority of good planning, would be corridor protection and rights of way and set-asides of land to enable efficient infrastructure capacity expansion as it is required. For example, it is criminal misuse of ratepayers money to acquire on the private market, once severe land price inflation has occurred, sites for “parks”. For Pete’s sake, Planners exist to secure this kind of land for NOTHING!!!! All they needed to do was draw the right lines on a map 30 years ago!!!!!

        The most important protections and set-asides, would apply to ROAD capacity expansion, but our planners deliberately WON”T do this!!!

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    • GGS: prices based on proximity to the centre true. Then in NZ it is mainly class with one of the most valuable properties in my suburb being Maori owned. In NZ race has little effect on property prices unlike Bradford which I visited last week. Admittedly PIs and Maori are more likely to be low waged, working class and therefore occupy poorer suburbs. Not saying there is no racism just that it is easily trumped by cash.

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  8. “Once, a very able senior figure on the Wellington city council staff spoke, noting that most of the developable land (ie zoned residential) was owned by perhaps four groups who, of course, managed the release of this land in a drip-fed way, so as not to dampen the price of their land”

    Were these 4 groups ever named? Or was it a simply a claim to focus the attention of the attendees

    Liked by 1 person

    • I don’t suppose we asked (we were mostly macroeconomists) but i had no reason to doubt his story – he was a serious chap, rather inclined to think better outcomes could be achieved, and didn’t seem to be some sort of central planner at heart. He wasn’t saying 100% of the developable land was owned by 4 parties, but that almost all the decent-sized blocks.

      Depressingly, on checking, I see he now works for MBIE https://www.linkedin.com/in/ernst-zöllner-95953760/

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      • The first thing that leapt up in my mind was Todd Corporation who have held land at Long Bay and Okura, which adjoins to the north of the Long Bay land all of which is immediate to the north of the Long Bay Regional Reserve. They have held the land for a long time.

        Trying to find how long they have had it for up popped Fulton Hogan also in the same game in the same area – but doing bare land plus infrastructure to finished villages – the works. Fulton Hogan doing some of the work for Todds’ – that’s Okura plus Millwater plus Millbrook in the hands of one outfit possibly just the two

        https://www.odt.co.nz/news/national/new-auckland-settlement-northern-outskirts

        Do a google search on “Todd Corporation Okura” and it reveals the complex relationship between Todd and Auckland Super City and legal jousting and positioning and delays

        ps: re: Ernst Zollner – it would have been the first question I would have asked

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      • Don’t forget that the Resource Consent to build on land in Long Bay would have taken at least 10 years and more. I do not see any neighbours welcoming high density in that sort of a remote beach type property location.

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      • That’s Auckland. That is bad enough. I think the “4 groups” in Wellington is very likely accurate. The quantity of land is actually small in rural terms, it would easily be no more than 4 farms. The Callendar Family would have had a monopoly on pretty much everything north of Newlands and Johnsonville, for the last 30 years, and that was 2 farms when they acquired it. There was no intent on their part to corner the supply, when they made the purchase there was no growth boundary; nor do I believe they would have done any dirty deals with Council to get their monopoly. Planners are so ignorant of economics and real life, they don’t even get what they end up doing in these situations.

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  9. The problem I have with the freeing up fringe land supply policy option is often the people who promote it,
    when push comes to shove, they start to panic about what the effect it will have on land values and the financial system. They then back away from the whole idea and say the problem can only be fixed in a post GFC type crisis situation….. which is of course not a reliable policy option…..

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    • I hadn’t encountered that argument before. Do you have any references, or names you can cite?

      (Of course, we know that politicians from both sides talk a reasonable game and then back away from doing anything much – but I hadn’t heard the GFC type of story. And the same people back away from allowing local fleixibility to determine planning rules, so nothing effective gets done at all. That was the story of the last 2 govts and at present seems likely to be what happens under the current govt.)

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      • It is something that I have encountered quite a few times in private conversations with housing affordability advocates. It is very common at some point in discussions -that post a financial crisis being the best time to make land-use reforms -will propositioned as the only solution to the housing crisis. I think it really unrealistic because who knows what a politician will do in a crisis.

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      • Thanks. Seems strange, especially as in a NZ context post some sort of really bad bust population pressures are likely to be more limited than usual, and so little or no impetus to do such reforms. And there was no sign of any such reform post crisis in the US (or Ireland)

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      • UK also, from memory they have 3 significant collapses of its urban land prices, since the implementation of the 1947 Town and Country Act, with no effective land-use reforms.

        After each collapse UK land prices have rapidly re-inflated to even higher levels.

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      • Getgreatstuff, WHY the asinine comments? “No-one wants to live there”?

        Where the land is cheap, it is cheap BECAUSE it is zoned rural. If it is zoned for development, it is THIRTY TIMES MORE EXPENSIVE, AND THAT IS NOT CHEAP!

        Are you arguing that the growth boundary policy might as well be abolished “because no-one wants to live there” anyway? Incredible! The sun rises in the west, too!

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  10. What I find confusing is the approach to current land held in public ownership. Take the flagship Hobsonville development: as far as I can tell, that land was developed with roads and civil works by the government and then sold to private developers at ‘market’ prices. The developers then built relatively uniform houses and sold (and will continue to sell) these on – with a portion having to be ‘affordable’ at a price point prescribed by government.

    https://axisseries.co.nz

    So, all along the chain, the land is priced at levels that, in part, reflect historical regulatory distortions.

    If roughly right, was there an alternative way to price the land? e.g. historical cost plus inflation up to commencement of development.

    Still thinking it through but if a major public land owner is required to achive market prices for its land, very hard to to envision a change in current housing market conditions.

    And don’t get me wrong, think Hobsonville seems a success – just trying to make sense of the economics / incentives with a live public-private development.

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    • QC my understanding, and there is lots of moving parts in the economy of a city so it is a bit complicated, but the overwhelming amount of developable land in and around NZ cities is in private ownership. So it is the regulations that apply to the use of land in private ownership which determines the supply of land, which alongside demand determines price.

      The government could purchase land at rural values and build affordable housing and build fast transport connections to other parts of the city. The first Labour government did that in Hutt and Porirua valley’s using commuter rail to make it successful – the lack of transport being the flaw of earlier affordable housing schemes of the Liberal government. But there is nothing really stopping private capital doing all of that too. As Adrian Orr has said global capital would very much like to invest in infrastructure if the impediments (people) would get out of the way.

      https://www.newshub.co.nz/home/shows/2018/06/interview-adiran-orr.html

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      • ….understood but in the case of Hobsonville, the land was already held by the government; to Michael’s point, if the land was priced below market, then there would be ballot winners (assuming something similar to the current allocation process + on selling restrictions) to the detriment of all other taxpayers; still, would it bring down land values more generally? probably not and too many variables for my mind but should at least help those that need it…..(great linked article – a mighty effort!)

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      • QC, a few one-off schemes -like Hobsonville, or the Unitec site or Lower Hutt removing density restrictions on a few hectares of downtown land is not going to make a difference, because it doesn’t materially change the housing supply equation. Those decisions lack scale. What is needed is a vast increase in the possible house building pipeline so there is competition from multiple players -at least 6+ biggish players and many more smaller players to break local cartels -of both the regulatory/bureaucratic and commercial varieties.

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    • Yes, what you say sounds right. Things like Hobsonville Point never addressed the fundamental issue, but allowed govts to look as tho they were doing something. The same will go for the proposed development on the old Oakley Hospital site, or Kiwibuild more generally. Land itself is the biggest single issue – free it up and the existing holders will be rushing to use their land, even as the price is falling.

      Govts themselves could simply sell off their land at rural prices, but doing so would just be a transfer from all of us to the lucky few who got to buy in that particular development, and I can’t see a good case for that.

      (Contra Brendon, I’m wary of infrastructure partnerships/ PPPs etc, which usually end up leaving too much risk on the Crown, and too much upside with the private providers.)

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      • Re: PPP schemes or special purpose vehicles -yes it could go wrong -they don’t have a great track record in the UK and Australia. In the US they do better with special purpose vehicles providing large Hobsonville sized and larger sized housing developments, including providing all the infrastructure that goes along with it -in some case the private sector also provides light rail -Phoenix?. In Japan the private sector train companies are very impressive.

        The devil is in the detail…

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  11. Brendon I am thinking reduction of density in the suburbs and less employment in the central areas are a better way to affordability and mobility. Self driving public transport will enable really cheap point to point mobility – so trains and buses will become largely irrelevant. The reasons for living close to transport nodes will evaporate – and as Michael suggest most people actually don’t really like the dense living – perhaps they don’t know about your experience in Helsinki. Anyway with any infill housing 90% of the time it adds a car to the problem – which is why you have such a massive congestion problem in NZ cities with urban limits.

    Employment areas should be on the outside of the city – so the traffic flows can be reversed at peak time. Outer ring roads should be where the public investment is – not rail systems and endless subsidies for public transport users.

    Anyway it should be a choice of where you live – providing housing on cheap fringe land should not be illegal. I am also a big fan of a return to unimproved land value rating – so undeveloped land is a liability not as asset – why did NZ change from this – apart from making rich people happier in their pricey suburbs and take a burden of land bankers?

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    • Undeveloped land usually come with a host of difficult issues including flood sensitive, and on slopes or the lack of infrastructure. The way stormwater and public drainage works is that it is a developers cost to connect but not all council main sewerage and drainage pipes may not be close to your development site. To get a public drainage pipe to connect to Council main pipes can cost $20,000 a meter. 5 meters of pipe installation and that’s your development margin screwed.

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    • Graeme I think it’s incredibly hard to predict demand for housing -especially in the long term as most plans are -in the sense of predicting house sizes, numbers, garden sizes, locations……

      In the beginning of my spatial economics article there is many paragraphs on this. Because that was a major flaw in the UK Town and Country Act. It assumed that London’s population would fall in the inner city, that manufacturing growth would continue which could be accessible by peripheral satellite towns. It didn’t predict changes in population -the baby boom, immigration, rising divorce rate, aging population…. It didn’t predict the rise of the service industry, that despite a digital communications revolution would enhance the value of face to face networking….

      It is a fool’s errand to allow housing supply to rely on some sort of Soviet style command and control system.

      The best bet is to lower the regulatory costs to its true value everywhere and let the market decide where to built.

      Re getting rid of unimproved value rating -you would have to ask the Rogergnomes -in particular Michael Bassett (Local government Minister from 1984 to 90) and Rodney Hide (legislated against it for the Auckland Super City).

      Prior to 1984 the practice was at Local Government election time was to also run a poll asking residents what sort of rating system they wanted.

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      • London’s population DID fall for three decades, according to papers by Prof. Paul Cheshire: from 1951 to 1981 it fell 17%, and only in 2011 did it get back up to the level it was in 1951.

        Real housing prices rose 72% over the 3 decades population was falling (same story in every UK city where population was falling) and then it rose 228% over the next 3 decades.

        Seeing prices can inflate even while population is falling, it is obvious how severe the distortions to property markets are, from prescriptive urban planning. Note that planning for housing supply in UK cities has involved endless upzoning already, but the perverse incentives (another essay subject) drive a wedge between the market signals, and actual housing supply response.

        John Stewart (2002) “Planning A Crisis: Housing Under-supply in England” makes depressing reading, and it has only got worse since he published this.

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  12. Time to name names

    quote “there have been a few in both National and Labour – don’t actually do anything about it”

    By saying “a few” casts aspersions on the lot

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    • I don’t know about aspersions, but from Labour Phil Twyford talked a good talk in Opposition (without any overt support from his leaders) and in earlier times people like Bill English, Nick Smith and Gerry Brownlee did to varying degrees as well.

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      • Thanks – was using the locked sport-locker-room example where some money is stolen from one of the lockers – casting suspicion on the whole team – tar-and-feathering everyone until the culprit owns up

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      • Yes, it is just in this case the people who’ve known the right thing to do but not done it could in part be considered the good guys. Compare them to local mayors, or political leaders who prefer to distract the debate by focusing on second-order tax issues (here I include National and Labour), foreign purchasers, and anything but the big real issue.

        Or, in John Key’s case, to smile and pretend this is all good news, “quality problems”, and a mark of our success.

        Liked by 1 person

  13. Great article Michael.

    1) Manage the immigration rate down to a sustainable level

    2) Reform the RMA so that it is effects based, not zoning based. This was Geoffrey Palmer’s original intent. There should be a national policy statement setting out the “effects”

    3) Remove all urban growth boundaries

    4) Remove all density restrictions – limit only by effects

    5) Sunset all covenants on land used for urban development.

    6) Require developers to fund all infrastructure within their development area – this is pretty much the status quo.

    7) Drop developer contributions – developers aren’t the users and don’t create the demand. Also developer contributions front load the capital cost of housing.

    8) Use targeted rates, infrastructure bonds etc to fund the infrastructure cost from the actual users

    9) Introduce congestion tolls in the large cities (at least Auckland & Wellington) & otherwise require/give tools to local government in other cities to price/levy all long term central city parking (public and private) to manage peak travel demands where congestion tolls are not in place.

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    • 1. Immigration reduction is not easily achieved when tourism will continue to grow at a rate of 10% per annum. James Shaw on Q&A today indicated that eco tourists can replace cows. The emphasis on service based industries will just put upward pressure on having more people. The $50k threshold just means that the cost of food in reastaurents will either rise or margins of kiwi businesses get eroded due to escalating employee costs. We just end up paying more for more migrant labour.

      The aged and retirement industries will continue to demand more labour. It takes at least 2 young people to look after one out of action old person.

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      • +1 to achieve housing affordability. Michael may have a point that the wider economy would benefit from a lower immigration rate though.

        I suspect, but of course can’t prove, so I tentatively suggest if the housing crisis was solved then NZ’s high emigration rate should fall and if it does it might be more politically feasible to lower the immigration rate???

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      • Yes. I agree too. And as long as the immigrants are vetted properly so we are getting good ones. I don’t have many issues with the current mix, we aren’t having anything like the problems they have where there is a long land border or overland route or easy over-water route, for billions of people in busted-arse countries and cultures.

        It is interesting that the NZ government, when it was investing in the national rail network in the late 1800’s, was intending it to be inter-urban transport for a projected population of 30 million. The timing was incredibly unlucky, as roads and road transport were not foreseen to be the imminent replacement for most urban and inter-urban travel. Furthermore, technology and progress improved the conditions in England that people were emigrating to escape from. Just one example: refrigerated shipping meant that they could eat our primary produce over there anyway without having to come and live here.

        I think it is hardly a prediction, more a certainty, that heavy investments now in rail-based urban transport will be an even more ill-timed decision. Rail-based urban transport has been going backwards under systems analysis, for 100 years already; its Kondratieff cycle peaked at around 1920. The cost of subsidies even in the cities that activists regard as “success stories”, have only been going up for decades. At the same time, the real cost of automobility has been falling because small economical cars are now so common, last for so long, and are so reliable. Cars as we know them have of course hit the peak of their Kondratieff cycle, but it is absurd to assume that “the next cycle” will be a resurrection of the one before cars!

        Liked by 1 person

      • Phil I think I am right that rail in NZ has been protected since 1926 when the first distance limits on trucks were introduced. I am not sure what trucks were like in the 1920’s but I am sure most connecting roads were still shingle and to think they were a threat to rail is a great example of the preference of “point to point” over fixed route transport.

        If you apply this to self driving (SD) PT the effects will be equally dramatic. So much so I think the last passenger trains and buses for most routes have already been built. Two headlines that have gone under the radar is China’s determination to build 30M autonomous cars in the next decade – and that they will allow testing of them on public roads. Also you can currently buy a cheap conventional Chinese built car for around $10K so a tiny mass production SD Google style car might be half that – say $5000 – so a capital cost of $1000 a year say? $3 per day of use? No labour cost and say 5c per km for electricity how can any PT compete?

        I remember one time when my kids were young we were going out to Wellingtons biggest mall, Queensgate, on a Sunday. Its about a 15 min drive from Khandallah – the PT option was a walk to the station then train-wait-train-wait-bus to get to the mall – an hour and a half. So additional 2.5 hrs on the return journey. But a SD cab would have us there in the same time as a car – and for about $2 – so who will be catching a train or bus?

        So how come with this new Governments 100 committees to enquire about things – we dont have one looking at the future of public transport?

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      • Looking at passenger travel.

        Have you taken into account the Auckland Ports situation where they have 2000+ container-truck movements out of the port, daily, wind there way out from Mechanics Bay through Beach Road, to the bottom of Parnell, up Grafton Gully and onto the Southern Motorway – mild chaos

        And the simple solution is to spend $NZD billions on moving the port, when they have rail infrastructure right alongside

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      • Graeme I suggest you read about congestion because it does exist in our cities -you could watch the Donald Shoup video for a start. Ultimately it is a problem of geometry. Technology is not going to changes the laws of space. There is a limit on how many people can be transported down a single use corridor by car (even a autonomous one) versus much higher volumes of people who can be transported by active modes -walking/cycling or public transport -heavy rail, light rail, bus rapid transit networks. That is why Auckland’s proposed rapid transit system is called a ‘congestion free network’.

        If driverless cars do come it may incentivise density rather than sprawl. A convincing argument is made here.
        View story at Medium.com

        Again Graeme I would like to say that it is a fool’s errand to try to predict, command and control supply and demand . If you believe in the free market then surely you would agree with me, that we should be moving to a regulatory environment where the cost of building is reduced down to its true value everywhere and then let the market decide?

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    • I’m with you on most of those (especially greater use of targeted rates) – just curious however about 2) and what you mean by a NPS that sets out the effects?

      Do you mean a national policy on what the effects (on land, water, air and coast) would be permitted, controlled, restricted discretionary, etc.

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      • Yes, for urban development. Theoretically we should be able to replace zoning with one effects based NPS.

        NZ is too small to have something like 60+ district plans with different rules & however many different regional policy statements on urban growth as well. It’s simply not an efficient land use management system & ties up huge amounts of resource.

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  14. Mr. Reddell’s lance seems to have been diverged from its target in the comments section.
    The tragedy is that there is no public revolt against this political and bureaucratic mentality, which undermines communities and renders housing ever-more unaffordable, all in pursuit of some central planner’s vision for the way people should be, more or less, compelled to live.
    yes.
    Discussions here are very interesting but still enclosed within the ” planning” paradigm, decided by idiots who we have voted for. These people are already attached to social policy which overrules any of the worthwhile contributions here. We blame local politics but it is the staff we must decimate [ phrase deleted- MHR].

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  15. In my opinion autonomous vehicles are further away than some boosters claim -solving the problems of the last 5% of various random events which human drivers seamless cope with will not be easy.

    But I believe we really are on a cusp of an electric vehicle revolution. I suspect within the decade we will pass the ‘digital camera’ moment where EV’s become good enough to replace a significant minority and then majority of cars, buses and possibly even trucks.

    This is a huge boon for NZ. We have multiple options to increase electricity production from onshore wind, geothermal, solar and even hydro (if we get over our previous objections to schemes like the Waitaki).

    A significant import -fossil fuels will be replaced by domestic production. This will boost New Zealand’s clean, green story….

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  16. I agree with Brendan on driverless cars. I was in Kerikeri this weekend and turned on my sat navigation and next thing it guided me into the culdesac by the Stone House thinking there was a bridge. If it was in control of the car we’d have ended up in Kerikeri inlet for sure. For driverless cars to work it requires absolute precision in mapping and updates on road conditions, roadworks, blockages… The Erubus disaster shows what can go wrong when one person makes a simple calculation mistake. For road mapping to work successfully would require tens of thousands of people to be accurate. I just don’t think that’s going to happen and driverless vehicles are a lot further away than people think.

    With regard to trains, to me the biggest mistake this Government seems intent on making is to force through light rail to the airport. Haven’t they been to the UK? You can get to Heathrow via taxis, Minicabs, busses, the Heathrow Express and the Piccardilly line. Almost everyone takes the Heathrow express because it’s quick and effficient. I took the tube once just to see what it was like. OMG! And I was about the only passenger on it when it stopped at Heathrow.

    We do need better connectivity to the airport here in Auckland but surely the thing to do is build an extension to run an express train from Britomart via Newmarket and then south on the existing rail, departing that and going across to two stops at the airport; domestic and international. Light rail will be an expensive white elephant that will prove a sinkhole for money and a disaster for commuters.

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  17. You talk about developers paying for local infrastructure, but hand-wave away the much bigger cost: new developments’ effect on TRUNK infrastructure, which falls to the local council and central government.

    I’m all for liberalising land use, but it’s absurd to apply a super liberal approach to urban fringes, but then leave local density decisions to locals in low density houses. Wouldn’t it make more sense to just give everyone the ability to do whatever they want (within reasonable limits) with their own property?

    I don’t think your “revealed preference” is very illuminating at all, either. Some people want lower density, but others are willing to trade off space for location – if it’s feasible. The US cities you mention have extremely large transport infrastructure subsidies, which make living far away from your destination artificially cheap. If they had to pay the true costs of driving on the motorway, or had better access to other transport, or both, I expect some of them would live closer to their destination in a smaller home.

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      • It’s absurd because it’s an arbitrary distinction. Why are the immediate community’s desires higher priority than the desires of the individuals within that community? And why are they higher priority than the people of the city who may want to live in that community, but can’t afford it? After all, the community isn’t a medieval village, providing for all of its own needs. It’s part of a larger city, so it’s silly to allow it to profit off the opportunities and amenities the city provides, but not participate in providing housing for that city.

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      • It only works if you have a majority rule. The question then becomes one of how large a majority must agree? If it is the usual 51% majority rule, then you have 49% that disagree and when it comes to houses people will lay down in front of bulldozes to prevent the majority to do what they want to do. All of which is still time in public consultations and money spent on consultants pros and cons studies of which Auckland Council does do and as a result we get lengthy compromised solutions.

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