Report indicates acute shortage of industrial land likely, but key land advocates don’t press for specific measures

Councillors who have already dealt series blows to Auckland Council’s intensification intentions took it easy yesterday when they were presented with an opportunity to cement their position – of advocating more greenfields land be zoned for urban uses – through resolutions of the economic development committee.

That committee isn’t a decision-maker – any resolutions from it are passed on the Auckland development committee for further consideration. But, as with last-minute changes to residential zoning in the draft unitary plan last year, when the advocacy of Cllrs Cameron Brewer & Dick Quax was crucial, the final document presented to decision-makers is more often the one that counts.

Cllrs Brewer & Quax were instrumental in bringing changes to the final form of the draft unitary plan last August, which reduced the ability to intensify residential development in a number of situations.

Yesterday, when a report on the availability of land for business use indicated that the supply could decrease quickly as the economic cycle turns upward, they raised plenty of questions about the likelihood of land in categories such as “vacant potential industrial land” actually being available.

What they didn’t do, however, was strengthen the wording of a resolution telling the council’s development committee business land was a key (that word was upgraded to critical) consideration of the spatial priorities work the council is advancing, and recommending that “new areas of business land growth are prioritised in any future land release programme” the council outlines.

Principal advisor David Taylor said in his report 37% of identified long-term industrial land supply was either in the pipeline heading towards rezoning or in areas classified as future urban, and still requiring efforts to make them active zones in a timely manner.

He said this applied particularly to the 1000ha to be set aside for industrial use in the 6500ha future urban zone.

“While the short-term supply of industrial business land appears positive, it is dominated by small & fragmented sites which are not suited to large land-extensive activities. This indicates a real need to start to plan for, and enable, the new greenfield opportunities that have been signalled in the Auckland Plan & proposed unitary plan.”

And, Mr Taylor warned, “The assessment of the adequacy of current supply estimates that, based on historic land take-up rates, the region will begin to run out of available vacant industrial land within the next 10 years if there is no further new land provided for.

“This could occur much sooner if take-up rates increase over what has historically been seen in Auckland, and if less than 100% of plan-enabled opportunities are utilised.

“It is also clear that the region has a very limited supply of large parcels of business land – in particular, there is a significant shortage of large sites (bigger than 5ha). This is set against the context of slowly rising land values following the economic downturn that occurred in 2008.

“Therefore the identification & protection of new land-extensive business and opportunities, such as the proposed scheme at Drury South, is critical to ensuring the region meets the expected industrial business land needs over the next 30 years.”

Takeup varies considerably. Mr Taylor said it averaged 113ha/year from 1996-2008, fell to 23ha in 2009, got back up to 55ha last year. Through all cycles, it’s averaged 93ha/year. At that long-term average, the 3500ha identified as available would last 37 years – well over the 20-year horizon the council is now required to prepare for.

Cllr Brewer said: “The chickens are coming home to roost – all the warnings we got when we signed off the Auckland Plan 3 years ago, from the likes of Urbis, the Property Council & others, that we are in a crisis as far as business land goes.

“Not providing enough business land will be a legacy of this council. It should be our bread & butter but it’s not. What is becoming increasingly clear is that an extra ‘1000ha for industrial activities’ over the next 30 years will be nowhere near enough. That is only 33ha of new greenfields land for industrial sites each year. That’s not even the size of the Tank Farm on the waterfront. It’s nowhere near enough to satisfy the insatiable thirst for more land from the Bombay Hills to Wellsford.

“What’s more, council staff now recognise that even this 1000 extra hectares is under pressure, given more housing is set for greenfields in the future urban zone following the watering down of the draft unitary plan compact city model.

“The report states that industrial land activity in Auckland had been in the order of 113ha/year (1996-2008), yet alarmingly the Auckland Plan only provides for 109ha/year over 30 years.

“We are going to be short, as many in the development sector rightly predict. Let’s not forget that over the next 30 years Auckland’s population will hit 2 million and nearly a third of Aucklanders will be working in the industrial sector, with that sector set to experience 40% growth in workforce numbers.

“Don’t worry about benchmarking future uptake against the business land uptake in 1996. Back then Auckland wasn’t even one million people. Not to mention how much bigger warehouse buildings & operations have got in the past 20 years.

“The real concern with the future urban area, 6500ha, is that because of all the wars over residential intensification, the 70:40 split [proposing 70% inside the rural:urban boundary, with allowance for slippage outside] is more like 50:50, and that puts the pressure on getting these large industrial sites out on greenfield areas.

“They have to go out because 60% of our land in the urban areas is less than 1000m² – that’s less than a quarter acre. That’s no good when you consider we’re seeing 5000m² warehouses & distribution centres going up. It’s also a killer for big-format retailers. So they can’t get into urban Auckland, new greenfields is limited, and so companies will naturally start looking south of the Bombays, where there’s more availability and it’s cheaper. That’s the worry for Auckland.”

Cllr Quax said the availability report was “a very sobering picture – we can talk all we like about what makes the economy grow, but the thing we seem to overlook all the time is that we need land to provide opportunities for business to grow.

“In the debate around the unitary plan, I was very critical that we were only going to release 1400ha of land when we were told by numerous people we needed at least 3000ha, that 1400ha was minimal.

“I suspect that not all the land that’s been identified will be suitable anyway. We’re reminded that commercial land in Auckland is more expensive than it is in Sydney. That causes concern when it comes to a decision about where to buy land, develop land – currently they’re looking south of Auckland, the northern part of Hamilton.

“It actually requires more than a report, it requires action on our part to ensure land is made available, because we can be as expansive as we like, talk about the new industries, but as Cllrs Penrose & Brewer have pointed out, you need large lots, you need to provide them with choices. I’m not quite sure what we can do but I’d like it worked through.”

He suggested doing some finegrained analysis, as was done at an early stage on the unitary plan by Studio D4, which showed the plan “was impractical, impossible, so we changed that [intensification ratio] to 70:40, but that finegrained analysis was very valuable in showing what was available.

“That would actually inform us of what is actually available rather than what I suspect is some guesswork.”

Mr Taylor assured him that the next capacity study, due out next week, “does get into that”, including aerial surveys.

Earlier story, 30 June 2014: Report says business land supply “at best” meets 5-year demand

Attribution: Council report & debate.

,

Trackbacks/Pingbacks

  1. Bob Dey Property Report diary, week 11-17 August 2014 | The Bob Dey Property Report - Sunday 10 August 2014

    […] in any future land release programme outlined by the council Earlier stories, 2 July 2014: Report indicates acute shortage of industrial land likely, but key land advocates don’t press for … 30 June 2014: Report says business land supply “at best” meets 5-year demand 14 Housing […]