Archive | Urban strategies

The override edict versus responsible governance

Issuing edicts at the weekend is not a good way to govern in a democracy, but that’s the approach Transport, Housing & Urban Development Minister Phil Twyford has adopted to roll out a housing & urban development authority.

He’s promised consultation on the way to setting up the authority – but his proposal contains an important anti-democratic facility, the override.

This authority, under Mr Twyford’s proposal, will be able to override local & regional councils’ decisions, plans & policies on land use.

Good that he wants to speed up construction, but there are other ways to do it.

If the regulatory process is too ponderous – and it is, made worse by leaky building challenges & payouts, which in Auckland have not surprisingly made the council cautious in issuing consents – then smooth the process. Educate people, improve the construction & infrastructure sectors’ performance.

Mr Twyford’s call reminds me of the large infrastructure sector 20 years ago, seeking preferential treatment to get projects under way. My argument then was: Reject this quest, unless the small builder gets improved treatment too.

When a government minister sees a crisis without taking into account the years of failing to build or inspect properly, the number of homes vacated because of that and the billions of dollars spent in rectifying a completely unnecessary aberration from all sense, the minister is blind in at least one eye.

Creating Auckland’s unitary plan required serious thought!

Auckland Council has gone through a laborious process to replace a regional policy statement & 7 district plans with a unitary plan, 6 years after the super-city was set up. Most of that unitary plan became operable at the end of 2016. It involved consultation, submissions, council debate, hearings before an independent panel, further council consideration of panel recommendations, court conferences & decisions.

Why was all that necessary if somebody can come along and say, ‘We’ll ignore all that and do it differently’?

One of the failings of the last government was to create special housing areas that might be related to transport, job centres,shops & amenities – but in many cases were not. They were land-clearing (and, in many cases, onsell) propositions. A greater, considered community relationship wasn’t required.

Creating better communities through development proposals that are better thought through ought to be the primary consideration of this government.

A housing crisis doesn’t stand still

Mr Twyford referred again at the weekend to “the housing crisis” as if it were a stationary object. Housing need & housing demand are going to mutate.

Apart from government policies, wage-setting mechanisms, educational opportunity… population change over the last 5 years has been a huge factor in bringing on a crisis, also lifting national earnings (but making little difference to national earnings/growth head).

In Auckland, after the region’s councils agreed urban growth limits at the end of the 1990s, there was a population spike in 2003-04 under the Labour government – unheralded & quickly gone, but its effects lingered. It was the beginning of the housing market’s tightening, of the escalation in prices that rose along with the decline of interest rates, and of the unavailability of homes at prices ordinary people could afford.

Houses got bigger, far more expensive, and had more gadgets.

The urban limits, set with gradual expansion in mind, were blamed for causing the escalation of urban fringe land prices. But nobody has suggested how you can develop housing willy-nilly, efficiently & at low cost, without establishing infrastructure such as roads, power supply, water & sewers in an orderly way.

The region still needs growth corridors.

But this is where the override can be used. As an example,areas around Kumeu in West Auckland were identified decades ago as having poor drainage, and were therefore marked by councils as expensive to develop. Using an override, development could be approved, but at what later cost if not done properly?

If an urban development authority can negotiate anagreement to modify such an area to make it good for development, well & good. But should it use an override to achieve it?

The population & immigration factors

According to Statistics NZ figures, over the last 11 years the Auckland region’s population has grown by 290,400 – 46.4% of total New Zealand population growth of 625,700.

Through to 2013, Auckland’s population growth averaged 17,540/year over 6 years. In the 5 years since, that average shot up to 40,540/year.

Remember, Auckland Council went through 6 years of rewriting all its planning rules as the new super-city, created by the Government, while that explosion occurred. Do you blame a council for trying to make change orderly, when it’s faced by a population explosion not of its making?

Perhaps the council could have decided: ‘Change is occurring rapidly while we rewrite the rules, we’ll have to make some interim calls allowing for more urban land use.’

It could have tried to do that – while it faced a government intent on combating the creation of a far improved public transport network to match, and without any indication of a slowdown in immigration.

While the present government has been in power, the net migrant inflow has fallen by 11,000/year. That doesn’t ease Auckland congestion, but does reduce the growing pressure on it. It does ease some housing pressure points.


24 November 2018: New urban development agency unveiled to build more homes

Related documents

UDA factsheet.docx24.04 KB

UDA summary.pdf2.25 MB

Related stories today:

The override edict versus responsible governance

Ministry issues fact sheet on proposed new development authority Property Council chief executive likes authority model

Attribution: Ministerial release.

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Ministry issues fact sheet on proposed new development authority

Details below are from the new Ministry of Urban Development & Housing’s fact sheet on the proposed urban development authority.

“Traditionally New Zealand’s towns & cities have grown by turning neighbouring rural land into suburban homes. Second generation or ‘brownfields’ development is often difficult & risky with poor quality, aging or at-capacity infrastructure and disparate & fragmented land ownership. This means the private sector struggle to undertake these developments alone.

‘This is a new way of planning largescale & complex development so we can achieve scale & pace, co-ordinate different aspects of urban development and masterplan projects, assemble large or strategically placed parcels in developments and ensure quality intensification, great urban design & public goods.

“There are numerous urban development authorities in the US, UK & Australia.”

What will the authority achieve? According to the fact sheet:

Scale & pace: The ability to undertake largescale complex projects at pace

Co-ordination: A single public entity responsible for all aspects of urban development

Land assembly: The ability to assemble large, useful parcels of land at strategic sites

Government participation: Central government can participate directly in urban transformation at a local level.

The authority will take the best from current developments. It builds on:

  • The success of masterplanned developments, such as Hobsonville Point
  • The success of transit-led developments, such as New Lynn
  • Urban regeneration in Britomart & Wynyard Quarter
  • Current developments like Tamaki, Mangere, Roskill & Porirua

These projects are in addition to:

  • Government-led developments: The Government builds state, KiwiBuild & market homes on Crown land (eg, Northcote, Marfell)
  • KiwiBuild land for housing: The Government purchases land to build state, KiwiBuild & market homes (eg, Unitec)
  • KiwiBuild buying off the plans: The Government underwrites private developers so they can build more homes, speed up their developments, and incentivise the construction of affordable homes
  • Building public houses: The Government is investing over $4 billion to build over 6400 new public homes and renovate existing state homes
  • Local housing partnerships: The Government is partnering with local authorities to build affordable homes
  • HASHAA (the Housing Accords & Special Housing Areas Act): Council & Crown fast-track the supply of land
  • Urban growth agenda: Changing the system settings to ensure we have more affordable land, better spatial planning and finance & fund infrastructure.

Related documents

UDAfactsheet.docx24.04 KB

UDAsummary.pdf2.25 MB

Related stories today:

The override edict versus responsible governance

Ministry issues fact sheet on proposed new development authority

Property Council chief executive likes authority model

Attribution: Ministerial release.

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Property Council chief executive likes authority model

Property Council chief executive Connal Townsend called the weekend proposal from Urban Development & Housing Minister Phil Twyford “a win for urban development”, saying the new authority would help to ease the urban housing crisis.

“This new model will speed up the decision-making process on new developments. This is something that has been desperately needed for a long time.

“Our members are pleased that the approach of the new authority will be to look at the big picture of a development. This way, residential & commercial developments can more easily be provided with sensible transport links & other infrastructure which ensures communities are well planned, pleasant places to live & work.

“Overseas, urban development authorities like this one have worked very well to speed up the development of housing & infrastructure.”

Mr Townsend said the Property Council had been calling for this for a long time: “This authority, while no magic bullet, is another of the steps needed to ease the pressure on our industry.”

Related documents

UDA factsheet.docx24.04 KB

UDA summary.pdf2.25 MB

Related stories today:

The override edict versus responsible governance

Ministry issues fact sheet on proposed new development authority

Property Council chief executive likes authority model

Attribution: Property Council release.

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Dickens takes aim, but the residential land fix is elusive

Rodney Dickens.

Property-focused economist Rodney Dickens took aim at the Government’s housing initiatives at the weekend.

Despite the valid criticisms, though, his harshest presentation of failure is aimed not at a single year’s performance by the present government but at 2 decades of failure by successive governments.

In doing so, Mr Dickens didn’t present a forward path.

His solution to escalating house prices is to fix section prices.

That in itself is not an answer. How do you fix? Who fixes? Where do you start?

This article comes in 3 parts:

  1. Mr Dickens’s key points in his latest Rodney’s Ravings report – which will fill you with horror although you’ve known the truth of them for a long time
  2. I will take you to some questions which I think need to be assessed, and
  3. To close, I’ll look at potential ways forward.

Now to the Dickens report:

The Government should do the obvious to fix housing affordability, says Dickens

Economist Rodney Dickens, owner & chief researcher of Strategic Risk Analysis Ltd, produced graphs at the weekend which show how far out of kilter residential section prices have gone.

Mr Dickens wanted to throw the spotlight on the role rising section prices have played in driving up new & existing house prices in Auckland and the similar story in all major urban centres except Christchurch, where the 2010-11 earthquakes set it on a different path.

KiwiBuild, one of Housing & Urban Development Minister Phil Twyford’s solutions to the slow construction rate, has experienced some teething problems: “Some people aren’t happy that it isn’t delivering new housing affordable to low income earners, while the extension of the ballot for the first 10 of the 211 KiwiBuild dwellings planned for Wanaka over 2 years may be a sign it will face indigestion problems in towns.

“More teething problems will no doubt arise. But the real criticism should be aimed at the Government’s housing initiatives more generally because they aren’t aimed enough at fixing the largest obstacle to more affordable new housing: high section prices.”

Mr Dickens’s graphs illustrate, at least in part, the role rising section prices have played in driving up prices for new & existing houses in Auckland.

Ironically, he said, the housing accord & special housing areas the National-led Government put in place in Auckland “may be belatedly starting to drive a hint of downside in sections prices. But it is far too little. Much more needs to be done to get down the cost of developing sections; it would deliver a real solution to the housing affordability problem.”

True extent of escalation much higher

Even the research he has done doesn’t show the true extent of land price escalation, because Real Estate Institute figures on section prices don’t take into account the shrinking size of sections.

Over the last 25 years, the average construction cost/m² for a new home in Auckland, based on consent data, rose 212%. The median section price rose 903% over the same period, but Mr Dickens said that because sections had been shrinking in size, the price escalation/m² for sections could well exceed 1000%.

“Obviously the cost of sections feeds directly into the cost of new dwellings, but section prices are also an implicit part of existing dwelling prices.

“A link between Auckland section & existing dwelling prices is evident in the chart below that uses the Real Estate Institute median prices. The difference between the existing dwelling price & the section price is the effective market value of the improvements, that is linked to a moderate extent to building costs.

“Between January 1993 & October 2018, the median section price increased 903% while the median dwelling price increased 514%. In the 12 months ended January 1993, the median Auckland section price was 41% of the median dwelling price, while for the 12 months ended October 2018 the median section price was 67% of the median dwelling price.

“In a country with an extremely low population density, it is madness that it costs more on average for a section than for the house built on it, even in the largest region.

“These increases, and especially the increase in section prices, look horrific when compared to the 68% increase in prices in general over the same period based on the consumers price index, the 111% increase in hourly earnings over the average employees & the 89% increase in the national average rent based on the CPI rent component.

“The causes of sky-rocketing section prices have been discussed elsewhere, including by the Productivity Commission. Relevant factors include massive increases in development contributions, council policies that effectively gave oligopolistic pricing power to landowners, and a drawn-out & expensive process for getting new subdivisions approved.”

Next, Mr Dickens compared the median section price reported by the Real Estate Institute for Auckland with the average cost of building/m² based on the new dwelling consent data: “While the median section price increased 903% between January 1993 & October 2018, the average cost/m² for new dwellings in Auckland increased 212%. Building costs have increased much more than prices in general & average hourly earnings – this is in the context of average hourly earnings most likely understating overall income growth for a range of regions not discussed here. But the increase in building costs is dwarfed by the increase in section prices.

“The increase in section prices is even worse than it looks because, since 1993, the average section size has fallen significantly. The average price/m² for Auckland sections will have increased much more than suggested by the median prices reported by the Real Estate Institute. Unfortunately, data are not available on section prices/m², but the increase will be well over 1000%.

“If Auckland section prices had increased in line with building costs, the blue line in the chart below suggests what existing dwelling prices will have done relative to what they actually did.

“If Auckland section prices had increased since 1993 in line with the average cost/m² of building new dwellings in Auckland, the median section price would be around $180,000 now rather than $575,000.

“By implication, the median existing dwelling price would be around $460,000 rather than $854,000 (ie, $394,000 or 54% lower). So why isn’t the Government (and the Auckland Council & councils in all major urban areas) doing more to get down section prices? If the problem of high section prices was fixed, the market would fix the new housing affordability problem without the need for the contentious & bureaucratic KiwiBuild ‘solution’.

“Maybe the problem lies partly with the other parties that Labour relies on for support? But the problem runs deeper than this. National had every opportunity to fix this problem when it was in government, but didn’t.

“Ironically, the minor fall in the weighted average Auckland median section price since early-2017 may be a response to the boost in supply from the 154 special housing areas approved following National introducing special housing area legislation in 2013. The 154 special housing areas were expected to add over 60,000 new dwelling sites in Auckland. But if it is, it is far too little & way too late. The special housing areas didn’t stop a massive increase in section prices since the legislation was passed in 2013 (ie, 69% based on the weighted average median price for the Auckland region).”

Links (for all 3 pages of this report):
Rodney’s Ravings, 17 November 2018: The government should do the obvious to fix housing affordability
2017, National-led Government’s urban development authorities discussion document
Solly Angel + 5 other contributors, essay 5 July 2018: The new urban peripheries: Findings for a global sample of cities, 1990-2014
Solly Angel
NYU Stern urbanisation project
Stern urban expansion initiative

Earlier stories:
16 November 2018: 3-way partnership to fund infrastructure for next big subdivision at Wainui
13 September 2018: Transport agency sets out project list
20 April 2018: Council approves quest for $300 million of government housing infrastructure money
24 July 2017: Ministers explain infrastructure funding deal
24 July 2017: New Crown entity will advance housing infrastructure
12 July 2017: Council gets $300 million infrastructure package, balance sheet-beating deal to come next
28 April 2017: Joyce lifts infrastructure intentions and talks new operating mechanisms
6 March 2017: Property Council joins call for new infrastructure funding
8 January 2017: Housing infrastructure fund call for final proposals imminent, and panellists required
26 October 2016: Goff talks up growth along with cutting congestion and revising funding
5 October 2016: Infrastructure frailty puts US financial woes in perspective
3 July 2016: 
PM talks $1 billion infrastructure fund, English talks payback frame, Smith talks grabbing more power
6 September 2007: Curtis loses fight to remove “compact” from development framework
11 April 2007: Expect 4-5 centres to be earmarked in growth strategy review

Articles on Productivity Commission:
22 August 2016: Commission sees government change as essential for urban planning
22 August 2016: Commission says everything English wanted on planning
19 August 2016: Government says it’s already implementing land for housing recommendations
 5 October 2015: Commission sends land for housing report to Government
19 June 2015: Commission looks behind high land prices
19 June 2015: Key points from land for housing report
2 June 2015: Productivity Commission draft on land for housing out in fortnight
 7 November 2014: Productivity Commission launches land supply regulation inquiry
13 April 2012: Productivity Commission misses key affordability point – again
4 April 2011: First inquiry for Productivity Commission is housing affordability

Productivity Commission releases:
11 May 2018: New inquiry into local government funding announced
2 March 2018: Why can’t Auckland build enough homes?
29 March 2017: Urban planning – moving beyond the wheel spin

Pages in this report:
1: Dickens takes aim, but the residential land fix is elusive
2: Things to keep in minds while focusing on fringe land supply
3: Cutting the margin without breaking the market…

Attribution: Rodney Dickens, Solly Angel.

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Things to keep in mind while focusing on fringe land supply

This is page 2 of a 3-page article based on economist Rodney Dickens’s weekend report, The Government should do the obvious to fix housing affordability.

In this section, I’ve raised other factors that need to be considered.

Things in the wider picture to keep in mind:

  • Keep in mind that a syndrome featuring in the Auckland & New Zealand pictures also happens to have featured worldwide: Housing prices have been escalating in many countries, not just New Zealand, which ought to raise the suspicion that there’s at least one element of common cause.

The common features internationally:

  • Unheard-of low interest rates, which lift asset values
  • Rising US public debt, now truly out of control, an influence on values exported worldwide because of the reserve status of the $US
  • Sharp & prolonged increases in immigration.

Near-term international influences which will make it harder to bring specific economic policies of countries & for sectors such as housing under control:

  • The US desire for control, seen at the moment through President Donald Trump’s trade war with China, pressure on Iran & increase in military spending
  • Likely for/against positioning regarding the South China Sea, Pacific islands (including New Zealand) support, various treaties & international agreements (particularly those involving Asia), ad African development

Those might seem like far distant influences with little likelihood of interfering in domestic issues down here, but look at them this way: When, as a country, you’re forced to take sides (and this will happen all too soon), your trade routes & relations can be seriously upset.

There’s also one issue peculiar to Australia & New Zealand, and another which both countries can start to rectify:

  • The peculiar local issue concerns the flow of migrants across the Tasman Sea, thataway when times are tougher here & expanding there, the reverse when jobs are harder to find in Australia and Kiwis come home.

New Zealand came out of the global financial crisis of 2007-12 (the years of greatest impact here) very well, courtesy of a leap in immigration. Australia has encouraged even more immigration than our previous government did, though as a lower percentage of total population, but other factors have reduced the boost there. The most notable factor is the price of mined commodities, combined with some uncertainty in the biggest market, China.

Reduced immigration by both countries would at least stabilise the pressure on housing, but would also reduce economic growth.

Auckland’s 2 key issues: land availability & price

The 2 key issues for housing in Auckland are land availability & land price. Less of an issue (although they’re still big) are construction costs & regulation. Infrastructure funding is also less of an issue than the certainty of providing it quickly in the right place.

Housing & Urban Development Minister Phil Twyford addressed infrastructure funding this week in a way which looks positive, but in reality shifts the cost burden from today’s buyer down the track as a fixed-in-place (& spreading everywhere in short time if it’s accepted) cost for all homeowners.

Why do I regard it as a “targeted” cost for all homeowners? Targeted rates have spread from a city-centre rate to local rates for services such as sewerage to a fuel tax. Development contributions paid (and factored into land pricing) by developers to local councils were seen as a short-term solution to infrastructure expense and will remain in place, but are increasing in Auckland. The new targeted rate will be an extra.

The division of rates into general & specific is turning up more specifics. At the moment, buyers in new subdivisions pay development contributions, and you will see that kind of cost spread to specific charging for replacing infrastructure in older suburbs.

In the short term, the Government’s infrastructure funding support measure, via Government-sourced loans (as a long-term depository for Accident Compensation Corp income) plus targeted rates on specified homeowners, gives more certainty to the supply of utility networks & roading. It will spread infrastructure costs from immediate into years hence – an addition to the mortgage.

Is the rural:urban boundary the real bogey?

There has been a campaign for several years for Auckland Council (& the regional council & regional growth forum before it) to abandon set rural:urban boundaries (the RUB) to free more land for subdivision and, through competitive pricing, thereby reducing land costs.

Through all that campaign, nobody has ever said how that open-slather approach would be applied. In particular, how infrastructure would be provided.

One method could be to impose regulations on urban-fringe land sales to control prices of sale & onsale – authoritarian, roughly applying the model brought in by National Prime Minister Rob Muldoon in 1982 to freeze wages, prices, interest rates & dividends, which lasted until he lost office to Labour in 1984.

Lifting of that freeze had the most telling impact on interest rates – first mortgage rates flew quickly as high as 30% – but also loosened the reins on mortgage lending.

Unitary plan changed the equation

Auckland Council’s unitary plan, mostly operative since October 2016, has done 2 things to encourage new housing. One is to make zoning through much of suburbia less restrictive, opening the way to more brownfields development through many existing suburbs, resulting in a wider spread of intensification.

The other is to ensure a supply of potential greenfield residential land is made available through rezoning, starting as land zoned initially as future urban, mainly on the fringes, and progressing to long-term zonings.

Despite the aim of the National-led Government’s special housing areas legislation to free more land for housing – pretty much anywhere – somebody had to supply infrastructure, and that was in the hands of the council, which was approaching debt ratio limits.

Through last week’s 3-way government-council-developer infrastructure funding agreement for the Wainui area west of the Hibiscus Coast in Auckland’s north-east, Government loan support in September for Auckland Council via the Housing Infrastructure Fund to get further development underway at Redhills & Whenuapai in the north-west, and the legislation to establish a national urban development authority (that’s been sitting on the rack since National introduced it in early 2017), funding uncertainty appears resolved.

Pages in this report:
1: Dickens takes aim, but the residential land fix is elusive
2: Things to keep in minds while focusing on fringe land supply
3: Cutting the margin without breaking the market…

Attribution: Rodney Dickens.

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Cutting the margin without breaking the market…

This is page 3 of a 3-page article based on economist Rodney Dickens’s weekend report, The Government should do the obvious to fix housing affordability.

In this section, I look at market answers, and ways to achieve change without destruction.

The central housing issue in Auckland, as economist Rodney Dickens presented it in his weekend Rodney’s Ravings, is the leap in house prices resulting from excessive land prices.

The market answers have been:

  • Shrink section sizes
  • Build 2-storey houses to keep their size up to expectations of 200m²-plus homes
  • Supply some smaller homes, cheaper, but still more expensive than they would have been if section prices had been held down.

Mr Dickens wrote: “If Auckland section prices had increased since 1993 in line with the average cost/m² of building new dwellings in Auckland, the median section price would be around $180,000 now rather than $575,000.

“By implication, the median existing dwelling price would be around $460,000 rather than $854,000 (ie, $394,000 or 54% lower).”

Politicians keep looking for ways to get the prices of new houses down, and KiwiBuild is part of that hope.

But is it realistic?

And if new housing does take a price cut, how does that affect existing housing?

The first requirement is to increase supply so there is no longer an acute shortage.

Small builders’ assessment of prospects a critical aspect

The Government can force the issue by using Crown land for subdivisions but, long-term, the country’s thousands of small private sector builders need assurance that prices aren’t going to plummet. That, as we know from experience, destroys small businesses, the country loses experienced tradesmen to Australia and New Zealand goes through the painful task of rebuilding expertise again.

Buyers also need assurance. Like the builders, buyers will have negative equity if prices plummet after they’ve signed up for their purchase.

Alternatively, all other costs rise to meet the already-escalated land & house prices – inflation, but somehow excluding housing. That would include rises in fixed incomes, such as pensions & income derived from interest. Interest rates would have to rise.

Oh, and the banks. They’ve just reported massive profits, but that doesn’t mean they’re ready for a house price shakeout.

For all these entrenched & vested interests, a sharp drop in prices would be destructive. A general rise in non-housing costs & prices is possible, alongside a steady housing market. But who’s going to build if house prices don’t rise along with the rest of the economy?

Take a quantum leap

One answer to that question is to do something very different.

First, infill housing – intensification of existing suburbs as townhouses replace standalones – can reduce the heat in the greenfields market. It’s starting to happen, and an increase in available land supply should curb price expectations.

Second, brownfield development can go right to the heart. Those upstairs flats above shopping strips, in recent decades turned over to storage or the occasional office? Modern apartment blocks now have shops at ground level, and you will soon see apartments being developed above shopping centres.

They will need to offer a mix of the small & the family-sized. They will also need to be accompanied by far more town centre amenities. They can come without attached parking – given enough residential development in a centre, more travel can be by public transport and rental vehicles can replace the private car.

Generally, apartment developers wouldn’t expect to build to the same height in the suburbs as they would in the city centre – and generally, stipulated maximum heights would prevent it.

At the moment, only a handful of apartment blocks have been erected in old city centres or suburban centres. I see the increasing development of standalone apartment blocks, with retail at ground, becoming acceptable in suburban centres. And if shopping centres can have housing built on them elsewhere in the world, the same can happen here.

That would lead to 2 fundamental changes in New Zealand urban living:

  • Day & night populations in those centres, bringing a different vitality, and
  • A move to larger apartments to accommodate families (which is also achieved elsewhere in the world).

It could also lead to a further decline in home ownership, the arrival of largescale residential investors, and the growth of residential ownership by small investors. That, in turn, would create new requirements for investment education, and changed pension expectations as pensioners switch from mortgage-free owners to lifelong renters.

All of that is a long way round uncontrolled escalation of fringe land values. It needs to be accompanied by less inflationary population growth; continued advances in public transport systems; and more careful relation of dormitory suburbs to suburban centres, jobs & amenities.

Urbanism expert Solly Angel presents an action plan

New York professor Solly Angel.

For an outside view, New York urbanism specialist Shlomo (Solly) Angel + contributors wrote in the concluding section of a 29-page essay on the new urban peripheries, a shortlist of takes to prepare future urban peripheries: “Emphasis on complex master plans that rely on strong compliance must give way to simpler interventions that can utilise the limited available capacities for making significant changes on the ground.

“Finally, the quality of the urban fabric in new urban peripheries can be enhanced with a simple 4-point action programme:

  1. Estimating the amount of land needed for expansion in the next 30 years, identifying the area needed for expansion, and obtaining planning jurisdiction over the entire area
  2. Preparing an arterial road grid throughout the expansion area
  3. Identifying & securing a hierarchy of public open spaces that need to be protected from development, and
  4. Improving land subdivision practices on the urban periphery.”

Shlomo (Solly) Angel is an adjunct professor at New York University & senior research scholar at the New York University Stern urbanisation project, where he leads the urban expansion initiative. Professor Angel is an expert on urban development policy, having advised the United Nations, the World Bank & and the Inter-American Development Bank.

It sounds fine, except: We are not good at predicting (or acting promptly on our predictions), which is why we have bottlenecks, congestion, land & house price escalation well beyond reasonable.

Local body infrastructure providers in New Zealand have always been wary of developing too much infrastructure ahead of time, in case the economy slumps, needs change, somewhere else becomes more popular – in short, taking away the excitement of unpredictability.

Influences not covered

Others have noted that New Zealand has no capital gains tax or stamp duty, and Auckland uses capital value to set council rates rather than land value.

Seemingly irrational buying by a surge of foreign investors appeared to have the intention of shifting money out of their homeland, mainly China, as quickly as possible rather than being a carefully priced asset investment. That door has closed.

The above is a handful of ideas on how to gradually overcome an imbalance that’s been grown over a quarter century, without sudden destructive impacts.

You may think those ideas are impractical, or you may have better ideas to share. Comments are welcomed.

Pages in this report:
1: Dickens takes aim, but the residential land fix is elusive
2: Things to keep in minds while focusing on fringe land supply
3: Cutting the margin without breaking the market…

Attribution: Rodney Dickens, Solly Angel.

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Code for smarter cities released

The Smart Cities Council, covering Australia & New Zealand, and the Green Building Council of Australia released a new practice standard last week which they said would address issues relating to telecommunications connectivity, data insights, digital planning practices & innovation districts.

The 2 organisations released the Code for Smart Communities in Sydney, as part of Smart Cities Week Australia. They said it would set a new benchmark for urban development practices across greenfield communities, urban regeneration precincts & diverse institutional campuses.

Smart Cities Council executive director Adam Beck said the release of the code was an “important milestone after deep engagement with the development industry, technology companies, city shapers & all tiers of government.

“This is the first time a smart community has been defined in a way that can be practically applied. We went back to principles to build this code from the ground up.”

Green Building Council of Australia chief executive Romilly Madew said there was a strong synergy between the sustainable development outcomes articulated in the green star – communities rating tool and the enabling opportunities from technology & data to enhance community outcomes: “This work will provide us with the opportunity to ensure smart cities principles are embedded in green star as the rating system evolves to meet industry & global trends, and continues to deliver environmental efficiencies, productivity gains and health & wellbeing outcomes in our buildings & communities.”

Chris Isles, planning executive director at Place Design Group, a technical partner in the code’s development, said it would be a single source for planners, developers, communities & governments as they shape cities & suburbs.

Mr Beck said 2 projects would be the first to embrace the code’s principles:

  • Yarrabilba, a Lendlease community in Logan City, on the Brisbane fringe, set to be home to over 40,000 residents, and
  • Sydney Olympic Park, planned to grow into a 23,000-person community with more than 30,000 jobs.

Lendlease was the code project’s lead partner. Matt Wallace, managing director of its communities business, said: “Our customers are expecting more seamless connectivity in all aspects of their lives, from high-speed broadband at home to free wi-fi in the park.

“Our smart community flagship, Yarrabilba, has provided us with a platform to test & evolve a range of technologies to optimise people’s lives to create healthier, safer & more sustainable communities.”

In addition to the new code, the Smart Cities Council’s Smart cities explorer illustrates technology options, their place-based outcomes and relationships to the metrics of the new code.

Smart communities code
Smart cities explorer

Attribution: Smart Cities Council release.

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Te Atatu South centre plan scope up for approval

The proposed scope for a Te Atatu South centre plan and the approach to implementing it go to the Henderson-Massey Local Board for approval tomorrow.

The Heart of Te Atatu South Group & its agent, the Isthmus Group Ltd, completed survey work last year, and Auckland Council’s plans & places department has been co-ordinating preparation of the 30-year vision, and will set out a 10-year action plan.

Principal council planner David Hookway said in his report for tomorrow’s meeting that community engagement in November would lead to a plan that the local board would consider in February.

The project arose out of local community concerns expressed in a submission to the council’s 10-year budget & Auckland Plan 2050 consultation in March.

The Auckland unitary plan has nearly doubled the size of the local centre business zoning of the Te Atatu South centre, ringing it with by the residential terrace housing & apartment buildings zone & the residential mixed housing urban zone. “Considerable additional development opportunities have been enabled, reflecting the intention of the Auckland Plan development area for Te Atatu South,” Mr Hookway said.

The Auckland Plan says “access to Te Atatu South will be greatly improved by the completion of the north-western rapid transit corridor. Development in Henderson & the Te Atatu Peninsula is anticipated to encourage development opportunities in this area.” Te Atatu & Edmonton Rds, which meet at the heart of the local business centre, will feed the nearby motorway & rapid transit corridor.

Other council & local board strategies & plans for the area include walkways, trails & parks under the Henderson-Massey open space network plan 2015-25, the Whau walkway plan and the community facilities network plan August 2015.

Henderson-Massey local board, Tuesday 18 September at 4pm, Henderson Civic Centre, 6 Henderson Valley Rd:
13, Investigation into North-west community provision
North-west community facility provision investigation summary report
14, Te Atatu South local centre plan – project scope and approach
Attachment A – Te Atatu South centre plan area
Attachment B – timeline

Attribution: Local board agenda.

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Urban development authority on its way

Published 3 September 2018
This government & its predecessor have both seen a need for an urban development authority, and it’s about to happen.

Never mind that Housing & Urban Development Minister Phil Twyford’s new ministry, set up in June, still doesn’t have its own home in Auckland – the city of greatest crisis.

Never mind, either, that Auckland Council’s unitary plan largely became operative in November 2016, enabling far more intensification throughout the region’s suburbs, and that development based on that potential is starting to happen.

The authority would have the power to override the provisions of the unitary plan – chiefly, the rural:urban boundaries, created through Auckland’s urban growth forum in the 1990s to ensure infrastructure could be provided for a rising population and that development would be orderly, not willy-nilly sprawl.

Provision of infrastructure still needs to be orderly – that’s what underground pipe networks do – unless Auckland moves to smaller waste & water supply systems – water tanks as a standard feature of every home, systems to dispose of sewage inside the boundary (I wrote about such a project a quarter century ago).

Phil Twyford holds both the transport and the new housing & urban development portfolios. When the new Housing & Urban Development Ministry was announced in June, it was given a 1 August start date (but, in Auckland anyway, no independent accommodation) and an official start date for its operations of 1 October.

Mr Twyford said on its setting up: “Addressing the national housing crisis is one of the biggest challenges our government faces. The new ministry will provide the focus & capability in the public service to deliver our reform agenda.”

One of its objective is to launch an urban development authority to lead largescale urban development projects, confirmed by Mr Twyford last week, when he said he’d take a proposal to Cabinet soon.

“The Ministry of Housing & Urban Development will help us deliver our bold & ambitious plan to build much-needed affordable housing, and create modern & liveable cities ready for the future,” he said.

The 2017 version

In a 126-page discussion document the Ministry of Business, Innovation & Employment (MBIE) issued under the previous government in February 2017, the powers potentially available for an urban development project would relate to:

  • Land – powers to assemble parcels of land, including existing compulsory acquisition powers under the Public Works Act
  • Planning & resource consenting – powers to override existing & proposed district plans & regional plans, and streamlined consenting processes
  • Infrastructure – powers to plan & build infrastructure such as roads, water pipes & reserves
  • Funding – powers to buy, sell & lease land & buildings; powers to borrow to fund infrastructure; and powers to levy charges to cover infrastructure costs. An urban development authority would not have building consenting powers.

Support & opposition

Auckland Business Chamber head Michael Barnett supported the launch of this authority on Friday, as “a long overdue initiative”: “For the past 5 years Auckland has needed to build 14-15,000 new houses/year to keep pace with demand, but the most it has managed was around 13,000 consents in the year to July 2018.

“We are currently around 55,000 houses short. An authority that can speed up the delivery of the new houses Auckland desperately needs has been in the pipeline since the Government came to power last year.”

Mr Barnett said the Government should put the legislation to establish the authority through Parliament under urgency to ensure it’s operating by the end of the year.

Property Institute chief executive Ashley Church, on the other hand, said the institute had rejected the establishment of such an authority in 2016, and still rejected it: “Our position has not changed since that time and our fears, articulated back in 2016, that an urban development authority would ride roughshod over public consultation and the unitary plan are now being proved correct.”

If anything, he said (in 2016, and again), “the super-city provides a stark example of why a single authority isn’t the solution for Auckland. If the creation of a single authority was the answer to the housing problem, Auckland would now be well on the way to solving its housing issues. Instead, it hadn’t gone unnoticed that this property boom – the first since the creation of the super-city – was taking much longer to resolve than any previous boom since at least the early 70s.

“To be fair – that’s not all the fault of the Auckland Council. It’s also the result of strong migration & a strong economy. But I don’t think anyone gets the sense that Auckland Council ‘has matters under control’ – so the last thing the city needs is a new ’Soviet-style’ central planning agency.”

MBIE, February 2017: Discussion document on urban development authorities
MBIE, May 2017: Proposed legislation for urban development authorities
MBIE, September 2017: Summary of submissions on urban development authority discussion document

Attribution: Ministerial, Business Chamber & Property Institute releases.

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The wheels are turning down the southern rail corridor

Published 3 September 2018
The wheels are turning and transformation down the southern corridor to Hamilton is on the way. Alternatively, transformation is on the way up that corridor, from Hamilton to Auckland.

Presumptuous? For Auckland there’s a serious adjustment: Instead of looking at Hamilton as a place to extend to, Auckland needs to see the Waikato is an active & growing part of a larger matrix, where change will occur at many stops in multiple directions.

The NZ Transport Agency has a Hamilton-Auckland corridor plan – and it has another for Hamilton-New Plymouth. Auckland, if it sees a triangle at all, sees one encompassing Tauranga/Mt Maunganui.

Image above: The corridor, running 5km each side the rail line between Hamilton & Auckland.

It’s all very hard to keep with, but consider these points of discussion & action, in the last few days and into the next week.

Tomorrow, Auckland Council’s planning committee considers the Hamilton-Auckland corridor plan & its role in this. The recommendation is to endorse participation, and the new Auckland Plan 2050 development strategy as the basis for staff input.

The corridor plan stemmed from calls from Waikato councils for investment in a commuter rail service between Hamilton & Auckland.

Urban development authority ideas also enter picture

The committee will also need to start thinking hard, and quickly, about the Government’s plans for an urban development authority – not just as a twinkle in the eye but something likely to be in place this year.

Ideas for such an authority have been around for the last 3 years, promoted by former Housing Minister Nick Smith and sent through a consultation process in 2016-17 by the Minister of Business, Innovation & Employment (MBIE), and taken up by Phil Twyford, now Minister of Transport and also of Housing & Urban Development.

Natural development will cross the Auckland-Waikato border – Pokeno as an Auckland suburban outlier on top of being a growing Waikato business & dairy production centre is an example.

Report notes interdependencies

As Auckland Council senior transport advisor Szening Ooi says in her report to tomorrow’s committee meeting: “There are significant interdependencies between Auckland & the Waikato that cross local government boundaries. However, previous spatial planning along the Auckland-Hamilton corridor has largely been confined within these administrative boundaries.”

She said the plan was initiated by the Government, aiming to investigate opportunities to unlock & shape growth along the rail corridor, unlock the potential to connect communities and provide access to jobs in Auckland & Waikato towns along the corridor.

The corridor plan went to a ministerial briefing on 25 June, aimed at getting all partners in it to agree on the project scope, purpose, objectives, deliverables, timetable & ongoing partnership. That was followed by a 3-day enquiry-by-design workshop in Tuakau on 27-29 August, where the project partners developed a draft integrated spatial plan for the corridor.

The NZ Transport Agency board is due to consider the business case for the Hamilton-Auckland start-up passenger rail service in October. That ties in with electrification of the Auckland rail line to Pukekohe, building the third main rail track along the southern line and completing the city rail link.

Maori roles & gains

Ms Ooi said Waikato Maori – Tainui, Ngati Paoa & the Hauraki Collective – were partners in the project, and it presented investment opportunities for Tamaki Makaurau iwi as well: “Additionally, Maori will benefit if the project’s aims of improving housing affordability, providing employment opportunities & enhancing the quality of the natural environments along the corridor are achieved.”

Auckland Council staff have recommended the establishment of a mana whenua–iwi steering group to sit in parallel with the project’s steering group.

Pressure on urban boundary structure

A pressure point for the Auckland council is the Government desire to see more land released for housing both inside & outside the rural:urban boundaries agreed in the brand-new Auckland unitary plan, to improve housing affordability. This is expressed in the just-released Cabinet paper, Urban growth agenda: Proposed approach (see link below).

Ms Ooi said: “Through the project, central government has indicated that it aims to provide spatial plans that are more ‘minimalist’ and allow the market to ‘fill in’ & sequence development where possible, rather than through regulation.

“There is a risk that, through this project, central government could apply a top-down approach to addressing growth management in Auckland & the Waikato that could undermine Auckland Council’s approach to urban growth and be contrary to both the Auckland Plan development strategy & the unitary plan.

“The project’s focus is also to connect communities & provide greater access to jobs in Auckland & Waikato towns along the rail corridor. The project does not aim to displace growth from Auckland to Waikato but may have this effect as it provides growth opportunities along the corridor. This is not an issue in itself, but the potential impacts & subsequent responses need to be better understood.”

The timeline now:

September: Refine the plan and further test with key stakeholders, amend as required
Late October: Governance leaders consider proposed plan
Mid-December: Governance leaders consider the partnership design & refined list of projects; formal consultation & endorsements & implementation to follow.

The Waikato lead

Future Proof, created by Waikato public bodies, says on its website: “We estimate that there will be nearly half a million people living in Hamilton and the surrounding Waikato & Waipa districts by 2061. That means we will almost double our population in the next 50 years. We want to know our future by planning today.”

The Future Proof partners have produced ‘Future proof strategy, planning for growth, November 2017’. This updates the 2009 strategy & implementation plan. The partners are now working on the second phase of the update.

Auckland Council planning committee, agenda item 4 September 2018:
11, Hamilton-Auckland corridor plan
Outcomes of the Wellington ministerial briefing on 25 June  
Cabinet paper, released in August 2018: Urban growth agenda, proposed approach
Future Proof, Hamilton to Auckland corridor study, December 2012
Future Proof
Future Proof strategy 2017 – summary
Future Proof strategy 2017 
Background reports

NZ Transport Agency, transport corridor plans:
NZTA, 31 August 2018: $16.9 billion investment in the future of NZ
NZTA, 31 August 2018: National land transport programme, 2018-21
NLTP regional summaries
Auckland land transport plan summary

Attribution: Council committee agenda, Cabinet paper, Future Proof.

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