A new reform for Wellington’s mayor

Wellington residents –  at least those still buying a hardcopy newspaper –  woke on Thursday to find that the shrunken Dominion-Post newspaper had given itself a temporary Maori masthead, and an apparently permanent change of name, to something that looks as though it might be the longest newspaper name anywhere in world.

I guess private businesses can do whatever they want to try to boost sales –  or in the case of newspapers, temporarily stem the decline.  And given that pundits offer odds on how much longer daily hardcopy newspapers will survive, I don’t suppose this particular marketing effort will be with us for long.  In today’s paper, they claim to have been flooded with messages of support, but in the letters to the editor, the only letter in favour was an over-long (and thus abridged) effort from the head of the Maori language commission.

What was perhaps considerably more questionable is the way the newspaper and its proprietors launched their new name to coincide with, and explicitly to celebrate, Wellington City Council’s own new Maori language policy.   Since one role of newspapers used to be to provide scrutiny and criticism of those in power, I guess we can’t expect any such scrutiny of this particular act of culture war and virtue-signalling.

Wellington City Council is a beacon of awfulness, pursuing political visions and cultural agendas that (a) aren’t really any business of local councils, and (b) seem to be a substitute for doing the basics well.    As I’ve noted here before, there are smallish things like the Island Bay cycleway –  millions and millions of dollars on something ugly, and largely useless, which the residents (a clear majority) have indicated strongly that they don’t want.  There are staggering sums wasted on convention centres, film museums, and saving an old Town Hall, and rather smaller sums (so far) devoted to plans to tip tens of millions in to help pay to extend Wellington airport runway.  And then there is a scandal of house and urban land prices.  Perhaps Wellington City Council is no worse than most other councils on this score (all are reprehensible) –  in a city with abundant land, the council is determined it won’t be used, and instead want to compel future generations to live on top of each other (often literally), while delivering house and land prices that are simply unaffordable to most.     It is like some San Francisco model (on a smaller and poorer scale), pricing out ordinary people, and in a city with some big captive businesses (central government).   Life might be sweet for the middle-aged liberal elite; shame about anyone else.

The Council’s latest initiative –  approved unanimously on Thursday –  was the new Maori language policy, aiming to make Wellington “a te reo Maori city” by 2040.   Which is puzzling –  except for the culture war/virtue-signalling angle –  given how scarce people of Maori descent/identity actually are in Wellington city (and likely to remain so, given the housing/land use policies which increasingly crowd-out lower income people –  a group Maori are overrepresented in).

If one ranks all the territorial local authorities by the percentage of the population identifying as Maori in the 2013 census, the top 10 TLAs (mostly central North Island, plus Far North and the Chatham Islands) averaged 46.3 per cent Maori.  The bottom 10 TLAs in 2013  –  all in the South Island –  averaged 6.6 per cent Maori.  Wellington City was 7.6 per cent Maori, just a touch ahead of Dunedin.

What compounds the oddity is that Wellington is one of only two TLAs in the entire country with a far larger Asian population (“Asian” of course encompassing a whole range of quite different ethnicities) than the Maori population.

Per cent of population identifying as…. (2013 Census)
Maori Asian
Auckland 10.1 21.7
Wellington city 7.6 14.9

It seems likely that the relative share of the different Asian ethnicities will have increased further in this year’s Census.

The Council claims that their goal is that the city should become a “bilingual capital”, with the aim of “making te reo a core part of Wellington’s identity by ensuring it is widely seen, heard, and spokem in the capital”.

All of which, frankly, seems highly unlikely, given the demographics, aided and abetted by the Council’s own housing and land use policies.    It isn’t, say, like Wales where efforts to save the language actually involve a language that was the heritage of most of the current residents.

Not that it stops Justin Lester and his crew of councillors.   In future, new streets will preferentially be given Maori names and (whatever this means) they plan on  “incorporating te reo in its decisionmaking processes and functions” (when roughly one in 14 residents identifies as Maori).     Some place names in the council precinct are being given Maori names now –  there was talk of the heart of the city being renamed, but the stark windswept Civic Square is barely used most of the year.   Already, the annual civic fireworks display has been shifted from Guy Fawkes to Matariki –  a “festival” barely anyone had heard of even 20 years ago.  Fortunately, councils don’t get to decide public holidays, but Mr Lester is also calling for Queen’s Birthday to be scrapped as a public holiday in favour of the same pseudo-festival Matariki (an occasion which appears to be observed mostly by taxpayer and ratepayer funded entities –  my in-box is awash with newsletters from schools proposing that I attend such events).

These people seem to be embarrassed by their own heritage (almost all the councillors appear to be of predominantly Anglo or Celtic descent).   I’m pretty sure that even in secular Wellington the churchgoing share of the population is roughly equal to the Maori share (with some overlap of course), but I can’t recall the last time the council was championing Easter celebrations to anything like the extent they champion Matariki (and nor would I want them to –  it simply isn’t the role of a council (roads and drains and rubbish –  oh, and land use)).  And while the Mayor is no doubt embarrassed that New Zealand is a constitutional monarchy, it is –  with clear public support at present.   Even civic heritage is for the chop: the lagoon down on the waterfront was named for decades for an eminent former mayor (not one of my particular political sympathies) but now the councillors –  but probably no one one much else –  want to call it Whairepo Lagoon.  But no doubt Mr Lester and his team will feel better for it, having (as he puts it) provided a lead for New Zealand –  including most of the rest of New Zealand where Maori actually largely live.

I’ve another idea for Mr Lester and his bunch of culture warriors.  Guess who Wellington is named for?  The dreadful old Tory, the Duke of Wellington –  former soldier and Prime Minister of Britain and its empire of which we are now apparently supposed to be ashamed.  He might have beaten Napoleon, but what’s that to anyone now, here?   The Wellington City Council’s buildings are on Victoria Street (yes, she the Queen-Empress) and Wakefield St  (Edward Gibbon, master colonial expansionist –  who spent time in prison for abducting an heiress).   Lambton Quay is named for chairman of the New Zealand Company, Cuba and Tory streets for two of the first ships carrying settlers and the bacillus of western culture to Wellington.  And so on.

I hesitate to mention it lest I give someone an idea, but this particular virus is already afoot elsewhere, with a story recently about people calling for name changes in Levin, Hamilton, and Gisborne (although, to be honest, and notwithstanding the history, I have some sympathy in respect of Poverty Bay).  But why stop there?  Surely the culture warrior left must be embarrassed to live in a country with places named for

Lord Auckland

Lord Nelson  (with streets named for Hardy, Victory and Trafalgar)

Sir Charles Napier  (“The best way to quiet a country is a good thrashing, followed by great kindness afterwards. Even the wildest chaps are thus tamed”)

Lord Palmerston (twice over)

and when our third largest city is named for an Oxford college, itself named (with such uncomfortable particularity) for the Messiah, when a southern city’s name celebrates Scotland and its leading role in the empire, and when Hastings surely evokes memories of militarism and conquest,

then surely it is past time for reform.  Lets just junk our heritage –  the roots that built one of the better societies on earth (amid all its flaws) –  for some expensive feel-good campaign.

Or perhaps the Council could refocus and actually make Wellington an affordable city, for Europeans, Maori, Pacific people, Asians and whoever else chooses to live here.  It really isn’t so hard –  except of course that it runs head on into the planners’ mentality that pervades our local government.  They know best…..and we’ll suffer it.

 

 

 

Wasteful and ill-disciplined councils

Mostly this blog is focused on national policy issues and national economic developments.  But local government matters too.  Often the choices local government make affect us at least as much as questionable central government choices do, and  –  so it seems –  they are typically based on less-robust analysis, and with less transparency and serious accountability.  The cavalier approach towards the use of our money –  from people who would not be so rash in their private lives, with their own money –  would almost beggar belief.   “Almost” except that public choice literature has been analysing for decades the incentives, and absence of constraints, that lead to such behaviour.

In the headlines this week have been the efforts of the Auckland Council.  The Mayor, it appears, commissioned a $1 million report on a possible new ($1.5 billion) sports stadium, which his own fellow councillors have not been allowed copies of.  The Mayor and his office –  again – defy for months the provisions of the Local Government Official Information and Meetings Act (the local government equivalent of the OIA).   The first element of the purpose statement in the LGOIMA is

The purposes of this Act are—

(a) to increase progressively the availability to the public of official information held by local authorities, and to promote the open and public transaction of business at meetings of local authorities, in order—

(i) to enable more effective participation by the public in the actions and decisions of local authorities; and

(ii)to promote the accountability of local authority members and officials,—

and thereby to enhance respect for the law and to promote good local government in New Zealand:

Something that too many mayors, councillors, and local government bureaucrats seem to treat with contempt.

The Wellington City Council is at least as bad as any of them.  On the LGOIMA, I gather that requesters have still not been able to get from the council documents relating to the subsidy the residents of Wellington are paying to Singapore Airlines (now to provide additional flights between Wellington and Melbourne).   It is as if councillors  –  and their staff –  believe we work for them, not the other way round.

On spending, we don’t have anything quite as expensive as a $1.5 billion stadium –  not happening for now, but presumably only a matter of time.  But that is about $1000 per Aucklander.    Here, we’ve had the desperate desire of councillors to kick in $100 million or so to extend (privately-owned) Wellington airport’s runway (a project fortunately stymied, at least for now, by the courts), $90 million to refurbish and strengthen the Wellington Town Hall, $165 million for a convention centre and film museum.  Not one of those projects would be likely to survive the scrutiny of a proper cost-benefit analysis, but that, of course, doesn’t deter our council.

And the waste –  and the arrogance – flows all the way down to individual neighbourhoods.  I live in Island Bay, a pleasant seaside community of about 8000, where the residents as a group tend to vote for big-government parties (around 60 per cent of the party vote in last year’s election went to Labour and the Greens).  We had the misfortune to be the test-bed for the Council’s cycleway policy (which I wrote about here).

The plan was for a cheap cycleway all the way from Island Bay to the city.  Never mind that the supporting analysis never stacked up, or that hilly Wellington is one of the least propitious places for cycleways anywhere.  Years later, we have a deeply unpopular cycleway to nowhere (running a couple of kilometres along one of the safer wider roads in Wellington, before petering out just as things start to get tricky for the few potential cyclists).  The Council spent $1.7 million putting the thing in –  originally they thought to spend less than that getting the whole way into the city –  and is about to spend another $4 million to change the scheme, and in doing so they still avoid responding to the clearly expressed preferences of residents in a fairly well-designed and run “vote” organised by the residents’ association.   $700 per resident –  almost as bad as a sports stadium on Auckland’s waterfront, and a great deal of aggravation later – all to impose something that local residents simply don’t want, and wouldn’t choose to spend their money on.  But councillors have a dream……while we have a nightmare (expensive, unattractive, and dangerous).  One might suppose that on an issue that affects no one outside the local neighbourhood, majority local preferences should be an absolute basis for not proceeding, not wasting public money.  As it is, there is next to no effective accountability, since Island Bay is subsumed in a larger ward and of the local councillors who voted for the scheme, one resigned shortly afterwards to become an MP in rock-solid Labour seat, and the other has announced he is moving to Christchurch and will be standing down at the next election.  The Residents’ Association is reduced to taking costly and risky legal action against their own council.

But today I wanted to highlight another small Wellington City Council excess.  It is of no wider interest, except as symptomatic of the way our money is wasted by councillors up and down the country.  As I said, Island Bay is a pleasant seaside place.  Just to the left of the photo, fishing boats lie at rest, and the eponymous island guards the entrance.  There is a pleasant sandy beach, good for swimming (if somewhat bracing).   There weren’t a lot of people around when I took this photo on a cool late-autumn morning, but on summer afternoons the beach is often crowded and finding somewhere to park can be a challenge.

island bay

And so what is the Wellington City Council in the process of doing?  Why, removing probably half a dozen carparks  on the main road (you can see where the dark new seal is by the van) –  and others on the side street –  as part of putting in a new roundabout.  This little project is said to be costing $400000.  There was, it appears, no consultation with either residents or beach users.

Both roads are wide, and neither is particularly busy (I walk down there most days).  There is no obvious problem, no apparent record of accidents, but that doesn’t stop the Council frittering away public money.  I guess we should be grateful for small mercies: a few years ago when the sea wall was damaged in a storm, some councillors wanted to rip up the road (past the new roundabout) altogether and let the sea “take back its own”.  Fortunately, they lost that battle.

Each individual project like this doesn’t sound like much.  But they add up, and before you know where you are, hundreds of millions of hard-pressed ratepayer’s money is being lavished on the big stuff with little rigour, less transparency, and not much accountability.   It is a shame there is no way to have councillors put rather more of their own money on the line: perhaps for each new initiative they vote for councillors could consider making a personal contribution equal to, say, ten times the average per capita cost of the project in question.   When the mayor, Justin Lester writes a personal cheque for $4000 as a contribution to the convention centre, and another for $2500 for the town hall refurbishment or the runway extension, I’d start taking the views that underpin his wastefulness (with other people’s money) a little more seriously.  Of course, even then it might just be considered a campaign expense on a journey towards Parliament.  Instead, we go on with citizens being plundered to pursue the whims of councillors and specific vested interests.

 

WCC approach to housing problems: hot-bedding

I think the imported chief executive of the Wellington City Council, Kevin Lavery –  he of non-transparent subsidies to Singapore Airlines, and the like – must have pushed “send” on an email to staff without checking just who he was sending it to.   My household just received two copies, on two different email addresses, of what looks a lot like a staff email.  Since we used those two email addresses to make our separate submissions last night on the Island Bay cycleway –  and the Council otherwise wouldn’t have one of the addresses –  it looks as though he sent his staff email to online responders to the cycleway proposals

Most of it looks harmless enough, although it was wryly amusing to note the self-congratulation about the Council’s Annual Report

Congratulations to everyone involved with our 2015/16 Annual Report, which received a silver medal at the Australasian Reporting Awards. The award is a reminder that the public documents we produce are not just about our performance as an organisation – they are also an opportunity to communicate effectively with our stakeholders.

When this is the same Council that simply refuses to comply with the Official Information Act, in its local government manifestation.   Self-promotion, rather than transparency, is rather more like the hallmark of the council.

But included in the email was a “Good Reads” section, with links to various articles on housing and cities related issues.    Perhaps next time he could make room for Brendon Harre’s interesting new piece on “Successful cities understand spatial economics”. Out of interest, I did click on one of the links, described this way

Some interesting ideas from outside of New Zealand at possible solutions to housing affordability issues. I like this because it looks, with a different lens, at the challenge of providing adequate, secure and affordable housing and suggestions for tackling them.

Sounded promising.

But I was somewhat taken aback by what I found, in an article championed by the chief executive of a Council that is keen on promoting Wellington as a cool, successful, and prosperous city.

The author –  a freelance writer in the US –  is writing about a report from something called the World Resources Institute, on housing options.  Not mind, housing policy options for advanced countries, but for

the global south (India, Africa, Asia, Latin America) where the lack of affordable, adequate and secure housing in cities is projected to grow the fastest.

We are told that

The paper spotlights three key challenge areas “to providing adequate, secure and affordable housing in the Global South,” as well as suggestions for tackling them. They include the growth of informal or substandard settlements (i.e., slums), policies and laws that push poorer residents out of the city, or to its fringes, and, interestingly, an overemphasis on home ownership.

The authors apparently favour skewing the tax system to “incentivise renting”.

It gets worse

Beyond the policy-side, however, it also looks at a number of creative rental models, from land leases and co-ops to lump-sum rentals, which are popular in a number of Asian countries, including Thailand, China and India. …… The paper also makes a case for a practice known as “hot bedding,” in which “a bed space in a shared room is rented for a specific number of hours to sleep, typically 7 to 10 hours.”

Hot-bedding………

In conclusion,

“Promoting a range of rental housing options expands opportunities for more renters while testing which types of rentals best meet local demand,” the authors conclude.

I’m all for flexibility, but does the chief executive of the Wellington City Council really think that “hot bedding” is an appropriate or desirable solution for the increasingly unaffordable Wellington housing market?   Is his vision of the city he temporarily serves now so diminished he regards the growth of slums as the sort of pragmatic idea his staff should be interested in, to fix the mess the Council itself has created?

To be clear, I’m sure Mr Lavery believes none of those things.  And perhaps they are reasonable and practical partial solutions in very poor but rapidly urbanising countries.  But what does it tell us about his mindset – and that of his political masters –  that this is the sort of stuff he is encouraging his staff to read?    Most New Zealanders –  most Wellingtonians –  want to own their place.  They don’t have much tolerance for imported bureuacrats who think that home ownership

in many economies just takes up too much mental bandwidth

They are just excuses for the decades-long failure by New Zealand central and local governments.

Free up the land use rules instead. There is plenty of land in greater Wellington, but owners simply aren’t encouraged, or even allowed, to use it.  And look for creative ways of allowing greater density where people would prefer that, but in ways that respect the interests of current owners.  Above all, look and sound as if you think Wellington might have a future as a first world city, in which residents –  present and future –  might be able to buy good quality housing at genuinely affordable prices.

But “hot-bedding”………I still can’t quite believe it.  But it was good of Mr Lavery to send his email to (presumably) the wrong list of recipients, and thus shed further light on the sort of mindset that prevails at council headquarters.

UPDATE: While I was typing that another email arrived

For those of you who’ve unexpectedly received an email from Wellington City Council – we apologise profusely! The message from our Chief Executive was meant to be a routine communication to Council staff but we’ve hit the wrong button and so it’s received a considerably wider audience. Hopefully it provides a positive, albeit unintended, glimpse inside the engine-room of the Council.

“Positive” –  I think not.

 

 

Blunders of our local government

Shortly after I began this blog, I wrote about a couple of books on government failure.  There was Why Government Fails So Often which had a US focus, and The Blunders of our Governments which had a UK focus.

The authors of the second book define a blunder as

as an episode in which a government adopts a specific course of action in order to achieve one or more objectives and, as a result largely or wholly of its own mistakes, either fails completely to achieve those objectives, or does achieve some or all of them but contrives at the same time to cause a significant amount of “collateral damage” in the form of unintended and undesired consequences….financial, human, political or some combination of all three.

Most of the specific episodes the authors wrote about were on quite a large scale.  But smaller debacles can be just as telling.   Take, for example, the Island Bay cycleway.

I was the among the hundreds of local residents who crammed into a local church last night for the latest round in what must surely be a case study in how not to do things.  Unless, that is, your purpose is to deliberately and repeatedly ignore the cleary-stated wishes and preferences of the most directly affected members of the public –  in this case, the residents of the suburb.

Some years ago, the Wellington City Council and its cycling (Island Bay resident) mayor kicked off an ambitious (to give it the most flattering possible description) plan to build a cycleway from the sea (Island Bay) to the city.  The cost would, we were told, be modest and the benefits considerable.

As most readers will know, Wellington is not a flat city.  And much of the territory the cycleway was supposed to go through included older suburbs with cramped housing, narrow streets, and no nice wide grassy verges.   Berhampore isn’t Grey Lynn.  It was never remotely likely that creating a cycleway the full length planned would be cheap or easy.  Probably not very sensible either, but set that observation to one side.

By contrast, the main road through Island Bay is flat and wide (at least by Wellington standards), lined with pohutakawa trees that help make it a pleasure to be around home at Christmas.  So, thought the Council enthusiasts and the cycling lobby group, lets start in Island Bay.  A cycleway might go nowhere, but at least we’ll have made a start: they’d show sceptics what could be done.  It should have bothered evidence-based policymakers, that (a) there that weren’t many cyclists, and (b) that over the decades there had been very few accidents.   In other words, not much case for doing anything at all.  The status quo seemed to be working well.  Not, of course, that that ever deterred a visionary with someone else’s money and no effective accountability.

The process that led to the cycleway being constructed a couple of years ago was deeply flawed.  There was no proper consultation with residents, and the Council simply barged ahead with their plan.  In the process, they spent around $1.7 million –  that was originally what the entire cycleway (sea to city) was planned to cost.   And thus we have today a bizarre cycleway.    There still aren’t many cyclists.  There are more accidents than there were.  And in the one potentially dangerous part of the road –  though recall, with few or no actual accidents over the years –  through the main shopping area, there is no cycleway at all.    Visibility is much worse than it was (especially turning from side streets. or getting out of driveways of houses on The Parade), and the designers coped with bus-stops by weaving the cycleway onto the footpath in places.    Dozens of car parks were removed –  and anyone who does find a parallel park has to remember (in this small part of the city alone) to look on the passenger side before opening the door, lest they open the door into the path of a (rare) cyclist.   It is an outcome that has almost nothing to commend it.

Most of all, most residents really don’t like it or want it.   The Residents Association last year organised a vote of residents.   It wasn’t perfect, but as these things go it was organised pretty well, the checking was pretty good, and the final result wasn’t even close.  On a pretty big turnout, there was overwhelming opposition  (80 per cent plus, if I recall correctly) to what the council had landed us with.

That prompted a rethink.  In a constructive spirit, the Residents Association and the Council agreed to work together in a consultative process on better options.  That was more than a year ago.   There was a series of public meetings and workshops, and then the council staff went away to consider.  In all this, the elected councillors seem to have been largely absent  –  as if the staff ran the council, not the councillors.

Last week. the council staff revealed four new options, and opened a short period of public consultation on those options.    When I picked up the newspaper and read the story, I was flabbergasted. I have a low opinion of the Wellington City Council, but even I wasn’t prepared for what I read:

  • four possible options, not one of which involved simply unwinding what was done a couple of years ago and putting The Parade back as it was,
  • the cheapest of these four options –  recall, to fix something that had already cost $1.7 million –  was anouther $4.1 million (others cost up to $6.2 million).

And having taken out 34 parking places when they put the cycleway in, the council bureaucrats now proposed to take out another 57 parking places – including, in three of the four options, removing more than half the public carparks currently available in the shopping centre.

It was incredible.

And thus there was a huge turnout to the public meeting last night, at which council staff and their engineers/architects attempted to make their case (burbling on about “urban design principles”, the priority of safety etc) and councillors rather lamely defended the process.  We’ll see what the overall tone of the submissions/votes is, but I think it is prety easy to predict that residents’ opinion will be overwhelmingly opposed to any of the four council options, and in favour of something that looks a lot like a simple reinstatement of the way things were until a couple of years ago.

The committee of the Residents’ Association, and representatives of the local business community, took the stage to denounce the council.    The president of the association –  who has been keen to work with the Council –  described the process as a travesty of democracy, noting further

Greco called the four sanctioned options an insult, and warned the removal of 57 car parks could economically ruin the suburb.

She said residents had been put in an untenable position by arrogant council officers.

They offered a fifth option, which they estimated –  using some of the council’s own numbers – could be put in place for well under $1 million.   Applause from the floor suggested that at least among those attending the meeting it would command a great deal of support.

Who knows how it will end.   Most councillors don’t live in Island Bay, and aren’t necessarily responsive to residents’ wishes.  It is easy for them simply to impose a Green/cycling agenda, at ratepayers’ expense.  Of our own two ward councillors, neither will be standing at the next local body election –  one is heading for Parliament in a rock-solid safe Labour seat, and the other is also running for Parliament, in Christchurch, and plans to move to Christchurch anyway. He appears more interested in his Green Party agenda than in the interests and preferences of residents.

There are roughly 8000 people in Island Bay.  The cheapest of the Council’s four options is another $4.1 million –  or around $500 per head.    I know that my family of five would much rather have the $2500.  In fact, if the Residents Association costings are roughly right, we could have our main street back, parking spaces and all, fewer accidents, easier driving, better visibility, and still save 80 per cent of that money.

Island Bay is at the end of the road.   Get to the end of our suburb and the next stop would be Antarctica.  There is no through traffic, so no obvious reason why people outside the suburb should have any say at all, especially when the clear preference of residents is the spend much less money (most would prefer none had been spent in the first place) than the Council bureaucrats want to spend.    The principle of subsidiarity – making decisions at the lowest level possible –  seems highly relevant here.  If the Council don’t trust expressions of public opinion so far, perhaps they could run a proper little referendum, restricted to Island Bay residents, and including the Residents’ Association option.  Ask people to rank the five options, use preferential voting, and see which option wins.    It seems highly likely that the cheapest option would win, and not just because it is cheapest but because it reflects the way most residents would prefer Island Bay to be.

But I guess there is an ideology to pursue and bureaus to build.  And even our notionally centre-right government is apparently committed to lavishing public money (our money) on cycleways, whether they are needed and wanted or not.    I’m still torn as to whether the cycleway is a blunder of our (local) government, or a deliberate arrogant strategy.  Even if the latter, I suspect it is destined to end up the former.  It will be a long time before residents –  not just here, but in much of the rest of Wellington looking on –  will trust councillors again.

In sort of, kind of, half-hearted partial defence of Wellington City Council

That isn’t a stance that comes naturally.   Wellington City Council wastes money with the best of them (convention centres, possible runway extension, bike stands outside our church, and so on –  they even use ratepayers’ money to help fund the New Zealand Initiative) and presides over land-use restrictions that deliver increasingly high house prices.  And then there are more localised gripes – but which have managed to get quite a bit of national coverage –  like the Island Bay cycleway.

It was built without adequate consultation, and after it was built an overwhelming majority of participants in a well-run survey of residents conducted by the Residents Association told the Council they didn’t like it and wanted it gone.  There was never an obvious reason for it in the first place –  The Parade was one of the wider flatter safer streets in Wellington –  but the then Mayor lived in Island Bay and liked to cycle to work.   (It remains part of a grand vision of a cycleway all the way into the city –  key bits of rest of the route currently serviced by roads that are barely wide enough anyway).   And the only bit of the street I’d be a bit hesitant about cycling –  through the shopping centre, with reversing angle parkers etc –  is the only bit where there is no cycleway.  It has been a fiasco all round.  It is still relatively early days, but as someone who is mostly a pedestrian or a motorist, I suspect the overall environment is now more dangerous than it was (not very).  As a pedestrian, one suddenly finds the cycleway merging with the footpath (to get round bus stops).  As a motorist turning out of side streets it is materially harder to see oncoming traffic than it used to be.  And I’m not at all sure how people who live on The Parade, backing out of their driveways, cope.  It would probably matter even more if there were many cyclists, but on a nice autumn morning I just walked the length of the cycleway and didn’t see a cyclist.

The story is back in the news because a local dairy owner has decided to close his business, and blames the loss of short-term parking for a downturn in business (more than a few parks were removed to facilitate the cycleway).  Perhaps so, but I’m just a little sceptical.  Perhaps that is partly because it isn’t clear to me who uses dairies, even when parking is no problem, apart perhaps from school kids buying lollies.   I’m in the neighbourhood all day, and I might have used a dairy twice in a year.  But along the length of the cycleway –  a distance I just walked in 14 minutes –  there are six dairies (including the one planning to close soon) and a full-service supermarket (open from 7am to 10pm every day), for a population of around 7000.  There were only one or two more when I first moved here 40 years ago.  On one corner, two dairies face each other across the street –  and somehow seem to survive.  And actually, the dairy that is to close is the furthest from all the others, and the only one everyone has to pass coming into Island Bay from the city.  It is a little hard to believe that the ill-considered cycleway is the only, or even dominant, factor.  The Wellington City Council is guilty of many things, and a prima facie assumpton that they will be guilty of whatever they are charged with is often safe (don’t get me started on the walkway they currently have indefinitely closed to protect “heritage interests”), but perhaps not this time.

None of which excuses the inaction on the cycleway.  It was kicked beyond the election last year, even after the survey results had been released, and now we are told to expect a decision in six months time.  Meanwhile, of our two local councillors, one is off to become a member of Parliament –  unless perhaps the Greens find a more dynamic candidate, in this one of their strongest party vote seats –  and the other sees his future in Christchurch –  he’s running for Parliament for the Greens in Ilam.   The fear remains that the other councillors, the bureaucrats, and the cycling lobby  –  all keen on a whole network of cycleways –  will just wait things out and the monstrosity will be with us forever.

What’s wrong with Auckland and Wellington?

Having not lived anywhere else in New Zealand since I was 10, I’m not quite sure.

Yesterday I was filming an interview in which one of the questions the interviewer asked was whether Auckland house prices could be explained, at least in part, by an influx of New Zealanders, whether returning from overseas or moving to Auckland from elsewhere in New Zealand.  I noted that the data actually still showed a net outflow of New Zealanders from Auckland to other countries in 2016 (albeit much smaller than in earlier years), and that Census data had suggested a modest net outflow of Aucklanders to the rest of New Zealand since the mid 1990s, and that that pattern seemed unlikely to have changed in the years since the last census.

All of which got me curious.  If New Zealanders were still (net) leaving Auckland for abroad, what was happening in other regions of the country.  Were there places where there was a net inflow of returning New Zealanders?   As it happened, the answer proved to be most of them.

plt-by-region

Auckland and Wellington were, in fact, the outliers.

Here is a  more aggregated look at the same data.

plt-by-agg-region

New Zealanders (net) came back last year to the rest of the North Island, and to the South Island, but not to Auckland or Wellington.

I wouldn’t want to make too much of it.  It is, after all, one year’s data, and has all the pitfalls of the PLT data (self-reported intentions and all that).

But it did bring to mind some analysis from The Treasury that I highlighted a couple of weeks ago

As agglomeration and clustering theory predicts, our more urban services-based regional economies (Auckland and Wellington and to a lesser extent Christchurch) are relatively more productive and generate higher incomes than our more resource-based regional economies.

Our Treasury preference is usually to encourage or permit the continued concentration of economic activity in key centres (forces of agglomeration) where returns are expected to be greatest.  Resources and activities should be allowed to flow betwen regions over time.

New Zealanders don’t seem to have been convinced by our officials’ analysis of the prospects and opportunities within New Zealand.

What about over a longer period?   Here is the average annual net outflow of New Zealand citizens from each regional council area, as a per cent of that region’s population each year, for the period 1996 to 2014 (ie from when the data start to just prior to the current sharp reduction in the overall outflow of New Zealanders).

plt-net-flow-96-to-14

Wellington and Auckland were losing just over 0.6 per cent of their population each year as New Zealand citizens left those regions for abroad.  But so were the Bay of Plenty and Gisborne.    (What is, perhaps, more striking is how much lower the net outflow rate abroad was from the South Island).    And in the last year, New Zealanders flowed into Gisborne and the Bay of Plenty, and they still flowed out of Wellington and Auckland.

I can think of various stories why this might be.  Auckland, presumably, has the highest share of naturalised citizens, and perhaps there is more of tendency for those new citizens to leave, than for natives?  But if so, it doesn’t explain the previous 20 years of Wellington, Bay of Plenty or Gisborne.   And while house prices are ruinously high in Auckland, they are nowhere near so bad in Wellington.   Perhaps there is something in a story about Auckland and Wellington people being more “internationally connected” – but again, over almost 20 years, the outflow rates were the same in the Bay of Plenty and Gisborne.   And perhaps, for all the talk of agglomeration opportunities, and a focus on Auckland and Wellington, the economic opportunities, and overall prospective living standards, just aren’t really there in Auckland and Wellington.   The regional per capita GDP data certainly support that story for Auckland.

Perhaps the patterns will change again this year –  and there is quite a bit of year-to-year variation in the regional outflow rates –  but for now, despite all the talk of “problems of success“, or “quality problems“, the migration data suggest New Zealanders when deciding whether to stay or go, and where to come back to if they do, don’t seem to share the sense of Wellington and Auckland as success stories.

Other interpretations/perspectives most welcome.

Wellington rental market: a problem of success?

I’m a bit tied up with other stuff today, so will come back to the New Zealand Initiative’s immigration report next week.  But in the meantime, I was somewhat taken aback to see the Prime Minister quoted as describing the current squeeze on the Wellington private rental market as “a problem of success“.

Sadly, it is like some line lifted directly from the John Key playbook.  I wrote last year about the then Prime Minister’s ludicrous, and frankly insulting to the intelligence of ordinary citizens/voters, attempt to pass off the extraordinary pressures on Auckland house prices and infrastructure, including traffic congestion, as “quality problems”.  In fact, what they were –  and are –  are failures of central and local government to get the land supply market functioning effectively, having over-regulated it in the first place, interacting with central government’s decisions to keep on bringing in lots more non-citizen immigrants.

How does the new Prime Minister justify his insouciance about the Wellington situation?

However, English said the demand for rentals was “a problem of success”, which the Wellington City Council was already trying to address.

“It’s actually a long time since Wellington has felt the pressures of growth – the Government’s investing large amounts of money in the infrastructure…

“The council has shown that it understands for the first time in a number of decades, there is pressure on the housing stock and they are enabling more houses to be built because that’s the only way that they’re going to see a bit less pressurised.”

Damage to Wellington office buildings from last November’s Kaikoura earthquake had also had “a bit of a flow-on effect” to the city’s accommodation, English said.

Although the large lines were “certainly concerning for people who are looking for accommodation”, they did not show a crisis as the housing shortfall was well understood by the council.

Wellington hasn’t experienced pressure in its market for quite some time and as long as they respond quickly, they’ll be able to deal with it.”

I presume not even he is arguing that the earthquake effects were a problem of success.

I was a bit puzzled by the infrastructure spending line.  I’m looking forward to trying out the new Kapiti expressway, but the biggest local infrastructure spend is on Transmission Gully,  the total uneconomic  new motorway on the outskirts of the city.  Perhaps that might, in time, help ease housing pressures in Wellington city, if people could get in more easily from Kapiti, but then I recall a commenter a while ago pointing out how little land Kapiti had actually zoned as residential.

But what really puzzled me about the PM’s comment was that it was a long time since Wellington had felt the pressures of growth, as if this was the dawn of some new renaissance of Wellington.  But here are the population growth data for Wellington city (where the pressures seem to be), greater Wellington (Wellington, Upper and Lower Hutt, Porirua and Kapiti) and New Zealand as a whole.

wellington-popn

Wellington city has had population growth rates very similar to those for the country as a whole –  Wellington city grew faster than the country as a whole in the previous population surge in the early 2000s, and has been just slightly behind in the last few years.  As for the “greater Wellington” region –  a more comparable basis to compare to Christchurch or Auckland –  there has certainly been a rebound in population growth in the last few years, but it continues to lag behind New Zealand’s population growth rate as a whole.  In only two years in the 20 shown here has greater Wellington’s population growth exceeded that of the country as a whole, none of them in this decade.    House prices rose rapidly in Wellington in the 2000s boom, and they are doing so again now.  It just looks like the same old shared central and local government failure.

I’ve written about rents previously.  In a well-functioning urban land supply market, a substantial and sustained fall in real interest rates should be expected to result in rents falling.  Actually, what has happened –  and still appears to be happening in Wellington –  is that real rents have been rising: not as much as house prices have certainly (rental yields have been falling), but they;ve been rising when, if governments hadn’t so badly messed up the housing market, they’d have been falling.

But, says the Prime Minister, not to worry: the Wellington city council is apparently on the case and moving to resolve the problem.    Really?  They didn’t do anything very much in the previous boom, and I haven’t seen much sign of far-reaching reform this time round.  Last week, they announced a plan to build more “social housing” –  which might or might not be a good thing in time –  but I’ve seen little sign of any sort of serious reform of the land supply regulatory situation.

Immediately after the local body election late last year, I wrote about the prospects for housing supply liberalisation in Wellington.

Sadly I don’t expect much.  Here is the housing policy of the new Labour Party mayor of Wellington.

For starters, I’ll be sending a bill through to parliament to make rental WoF a reality in Wellington. If you’re paying rental for a house it’s only fair that house meets basic standards. Living in a warm, dry house that’s free of mould should be a right for every Wellingtonian.

I’ll also invest in social housing, so there’s more available for the people who need it most. This means a long term building program, partnering with third sector housing providers to increase the number of live-to-own dwellings. It also means improving the 2500 existing Wellington council owned social housing units, making them safer and better to live in. 

But that’s not enough. It’s vital that we look after those in need, but we also want Wellington to grow and prosper. That’s why I’m offering a $5000 rates rebate for anyone building their first home in Wellington. Newer homes means better quality homes, and Wellington needs to encourage fresh young talent and new families to move here if we want to keep thriving. 

Plus, I’m committed to establishing Build Wellington, an urban development agency that will utilise existing green-field land holdings for affordable, good quality residential development in the tradition of state and Council housing in years gone by.

Nothing, at all, about freeing-up land supply, just more statist “solutions”, and a local version of the sort of first home buyer grant central government offers –  the sort of tool that has been proved, time and time again, to do precisely nothing to improve housing affordability.

And this is the Council that the Prime Minister thinks is going to quickly resolve the stresses?    Promising to make renting more costly, and offering subsidies to first home buyers to bid up the price of houses

In truth, Wellington’s situation looks a lot like the situation in the country as a whole –  a milder form of Auckland’s stresses, with 2 per cent population growth at present rather than 3 per cent.  There is no sign that housing stresses are a result of some great Wellington renaissance, but rather it looks like the outcome of the same old mess: land use regulations imposed and enabled by central and local government combined with a fresh wave of fairly rapid population growth.  Some of that is about a drop in the number of New Zealanders leaving Wellington –  only about 800 last year – but much of it is, in effect, down to central government’s non-citizen immigration policy.