Can we fit all these new Aucklanders in? One critic of the economist Auckland Council hired to analyse its growth capacity recommendations, Doug Fairgray, called him myopic, and several representing major organisations said the council model he was working with was never going to produce the desired answer: room to house a million more people over 30 years, 70% of them inside the urban boundary of 4 years ago.
The session on urban growth on 15 December drew representatives from some major land interests, the Minister for the Environment & the Property Council, some supportive of the compact city concept but most also questioning how the proposed rural:urban boundary & revised zoning inside it could possibly enable the 400,000 homes for a million more residents to be built.
The one who called Dr Fairgray myopic for focusing on growth to 2026 rather than all the way to 2041, Fraser Colegrave, had never heard anybody talk of the unitary plan having such a short timeframe – 13 years.
In fact, there’s been barely a mention of what happens to the plan once it’s approved, scheduled for late 2016. But, like other district & regional plans (and this one is a combination of the 2), it will be up for a new iteration, probably 10 years after first approval. So, 2026.
Dr Fairgray said in his evidence: “Much of my assessment accordingly focuses on the 2026 outcomes in the medium growth future, because that is the most likely future situation which the proposed unitary plan needs to address. …. The plan rules have been designed to enable at least the first 10 years of growth, and there will be changes in the plan provisions over time – as the regular monitoring of outcomes will result in responses to growth & change – and these will inevitably alter the scale, timing & location of capacity. While it is very important that the longer-term outlook (to 2040) is considered, any direct comparison of current provisions & enabled capacity against the longer-term outcomes should be treated with caution.”
After reading through a large number of expert witnesses’ evidence, I suspect a number of them didn’t fully grasp quite a lot more than the number of years in a decade. That said, Dr Fairgray didn’t guarantee his sums would be right. But, he said, the point of the exercise was not specific numbers for specific long-horizon timeframes.
What was important to him was that there would be capacity to meet demand in the early years. Later years wouldn’t take care of themselves, but thoughts on how to do it were likely to change.
He looked at rates of change, the capacity for new development & redevelopment in many different parts of the region, at how pricing would change and how that change would also affect people’s opinions on how they would act.
In his evidence, Dr Fairgray explained: “The time element is an important part of the assessments of capacity, since dwelling development of each type cumulates at different rates, and the size & mix of remaining capacity changes over time. However, the level of reliability decreases as we look further into the future.
“A key issue is that the information which is currently available is not able to tell the complete story between now & 2040. The Capacity for growth study information identifies enabled capacity as currently proposed in the proposed unitary plan, but it does not provide information in the same detail for the later periods out to 2040. Future changes to the unitary plan will provide for more dwelling capacity, including through the ongoing local area plans, but when & where those changes arise will depend largely on what happens in the intervening years….
“There will be changes in the plan provisions over time – as the regular monitoring of outcomes will result in responses to growth & change – and these will inevitably alter the scale, timing & location of capacity. While it is very important that the longer-term outlook (to 2040) is considered, any direct comparison of current provisions & enabled capacity against the longer-term outcomes should be treated with caution.”
Dr Fairgray said compact strategies (including this unitary plan’s) affected land values not just by constraining supply at the edge, but also by enabling more intensive use of available land: “That typically has 2 effects. One is that there is some corresponding uplift in the value of that land because it is able to be used more intensively. The other is that the land area/dwelling can be reduced, as the land is used more efficiently in terms of dwellings/ha.
“Accordingly, higher dwelling density usually means that average land values/m² are higher, but it also allows for average land values/dwelling which are lower. That is the case in Auckland (see table 4.1 above).”
Dr Fairgray said that, if the development capacity currently identified from the capacity for growth study represented all of the potential, “then 72% of Auckland’s dwelling development capacity would depend on redevelopment of properties in the residential zoned areas and new development in business zones (mainly the city centre, metropolitan centres & mixed-use zones, together with town centres).
“However, achieving the medium- & long-term future growth would not depend on that mix, because future as-yet-unspecified changes in the plan – especially through zone changes, including the introduction of future urban zone capacity – would alter the make-up of Auckland’s dwelling capacity and substantially increase the share from greenfield development. … I would expect redevelopment and construction on business-zoned land to account for correspondingly larger shares of growth from about the mid-2020s and after 2026.”
He said all the processes through which residential capacity would need to be provided were well established in the Auckland market: “Dwellings are provided through 4 broad processes – development of greenfield sites, uptake of vacant sites as these are created (mostly by subdivision of existing sites) and/or become available to the market, by redevelopment of existing residential sites (commonly through demolition & replacement to provide more dwellings on the site), and by the construction of residential-only or mixed residential & business buildings (predominantly multi-level) in business zones.
“For Auckland, a key issue is that, for the potential capacity to be achieved, there will need to be a change in the relative importance of these processes, with lower shares than historically provided through greenfield development & uptake of vacant sites, and greater shares than historically occurring through residential redevelopment & development on business land.
“It is difficult to precisely model or forecast outcomes in the changed future environment. Nevertheless, it is pertinent to consider the parameters of the changes which would be required, including the required rates of uptake of the estimated capacity to accommodate that growth, and the rate & extent of change from the existing urban environment (considering together the land which would change and that which would not change). While there is no hard & fast rule as to what rates & extent are achievable, as a general indication slower rates of change are easier to achieve than faster rates of change because they require a lesser shift in market conditions and slower rate of adaptation.
“Accordingly, I have examined below the dimensions of the required changes in Auckland in relation to the current environment, considering first the extent & timing of Auckland’s expected household growth, then the rates of uptake of the estimated capacity required to accommodate that growth, and the rates & extent of change from the existing urban environment.
“Auckland Council’s projections show a requirement for an additional 130,200 dwellings in the period 2013-26 (medium growth future), and longer term a requirement of 264,300 dwellings right through to 2040. The high growth future indicates a requirement for a further 171,900 dwellings by 2026, and longer term a total of 351,100 dwellings over the period 2013-40.
“The projected growth – in medium & high growth futures – could be accommodated by the enabled capacity. The medium growth future indicates that the increase in households to 2026 equates to 31% of the capacity estimated in the capacity for growth study 2013 for Auckland as a whole, while in the high growth future the increase equates to 41% of estimated capacity. Within the metropolitan area 2010, the projected growth equates to between 25% of capacity (medium future) & 34% (high future).
“Sensitivity assessment shows considerable additional capacity is possible, in special housing area land and in other parts of the future urban zone, as well as from amalgamation of sites in the residential zones. Conversely, it also shows that growth to 2026 could be accommodated if the capacity identified as vacant & vacant potential were considerably less than estimated.
“The focus on accommodating growth within the metropolitan area 2010 means there will be definite change in residential environments, because a significant proportion of Auckland’s potential capacity would arise from the redevelopment of existing properties. While vacant, vacant potential & special area capacity is expected to account for relatively higher shares of growth in the 2013-26 period, change will be evident in the form of more dwellings & greater densities, especially in the terraced housing & apartment buildings and mixed housing urban zones – including from redevelopment of existing properties – as well as more dwellings in business-zoned areas.
“Nevertheless, the quantum of household growth relative to the estimated capacity means that it can be accommodated with modest annual rates of change to 2026, and a limited extent of change overall within the residential environment. For Auckland as a whole, annual rates of change of 1.5% (medium) to 1.9% (high) are indicated, and by 2026 new dwellings (including replacements because of redevelopment) would represent 23-29% of the total estate in residential zoned areas. Around 90-93% of the existing dwelling estate would remain by 2026.”
Links: Unitary plan addendum, rural:urban boundary
Unitary plan section 32 report
Capacity for growth studies
Darroch for Centre for Housing Research Aotearoa NZ, 2010 housing market assessment
Articles in the series:
UP1: The PAUP, the MUL, the RUB, the RPS & the LRP – the what-the?
UP2: Council tells panel the evidence backs compact city, and new urban boundary will work
UP3: Paper on preferred form an important backgrounder
UP4: Fairgray doesn’t fix on the far horizon, but says million new Aucklanders will fit in
UP5: Rule changes would shorten land supply and discourage new villages
UP6: McDermott argues for better ways than compact city to accommodate growth
UP7: Burton sees the antithesis of good planning, but says the compact city can work
UP8: Crucial question: Who will control land release?
Attribution: Hearings, submissions, supporting documents.