Monday, December 31, 2012

Derailing Auckland - Unravelling the Assumptions

Public spending and productivity
Economic commentators call increasingly for the private sector to lift productivity  to compete in trans-national markets.  However, we hear less about the need for wise public investment as a condition of productive nations, cities, and business.  Maybe we need to hear more.  

In particular, ill-considered infrastructure imposes unnecessary costs on producers, consumers, and taxpayers. It does so directly through excessive spending and racking up liability for the maintenance and depreciation of poorly performing assets, and indirectly through the impact on credit markets. 

Governments at all levels need to take a highly rigorous approach to investment if they are to avoid undermining the competitiveness of regions.  Yet all too often major public projects are based on weak assumptions. Ideally, no public spending of substance would be undertaken without considering  the risk of getting it wrong and the regret that follows bad decisions – fiscal, economic, and political.

Risks – and the regrets
That does not appear to have been the case with the latest report justifying spending up large on a central rail link/loop (CRL) to enhance public transport in Auckland.

This post considers some of the assumptions about employment that underpin the latest argument for the $3bn or thereabouts needed to improve rail-based commuting into and around central Auckland. It compares the employment numbers projected to justify rail with recent  history.

Of course, recent history is not necessarily a guide to the future.  But forecasting significant shifts to justify the CRL calls for more convincing arguments than we have seen to date. The contingencies - events or behaviours that vary in practice from those projected - need to be analysed.  And the regret arising from getting the assumptions  wrong (which include wasted funds, reduced revenue, foregone opportunities, and fiscal blowout) need to be fully assessed.  

In this case, there is every chance that these assumptions are too weak and potential regrets too big to justify proceeding with the CRL.
Weighing up alternative outcomes
Assessing risk does not simply mean drawing high and low variants around a central projection.  This inevitably favours adoption of a single central forecast which, by definition, will be a compromise and countenances little departure from trend.  And if there is one thing we know about the future of our cities, it is that the events and technology we don’t expect will play a big part in shaping it.

Assessing risk means weighing up the probabilities of different events and outcomes and appraising the costs they might impose.  At the very least, a risk-averse approach would review downside rather than upside risks as a basis for sensible investment.

Projecting past mistakes
There is no sign of risk analysis in the documents promoting the Auckland CRL.  And this is a critical shortcoming with respect to the key employment projections on which the promise of unacceptable congestion without the CRL rests. 

The growth assumptions that underlie the most recent arguments about inner city congestion derive from a model developed by the now-defunct Auckland Regional Council. Projections from the model published in 2009 suggested total employment growth of 41,000 jobs between 2006 and 2011, a 6.8% gain (for a projected city total of 642,800). In fact, Statistics New Zealand’s Business Directory show just 12,500 jobs gained (from 616,230 to 628,780 – based on the new Auckland City boundaries). 

In other words, the projection published just two years earlier overshot actual growth to 2011 by over 300%!  How can we have confidence in this model, especially when in its latest incarnation the 2011 estimate is 682,000, or 53,700 (7.9%) more than the actual Business Directory count.
Forecasting future employment – or simply wishful thinking?
The 2031 projection on which the case for the CRL is based requires  an annual increment of 12,500 jobs a year: in the five years to 2012 the equivalent figure was just 2,600.  True, it was much higher over the preceding five years (19,000 a year) but the questions that need exploration today are (1) are we are faced with a ground shift in the economy as a result of the GFC, a complete restructuring for which the outcome remains a mystery and, if not, (2) when  might we expect the return to business as usual implicit in the model.  Because the later that happens the further astray the model projections will be and the greater the regret from overinvesting in rail infrastructure.  

In fact, there are still too many risks on the international economic horizon to have confidence that an early correction might offset the current shortfall in actual compared with projected employment.  Why risk funding a marginal increase in Auckland’s public transport capacity and patronage based on what are demonstrably over-optimistic employment growth assumptions? 

(And it is a marginal increase: according to the study, 45% of commuters into Auckland already use public transport - 8% rail.  Boosting that high level of public transport dependence, especially if at the same time we are pushing cycling, walking, and inner city dwelling as responses over-dependence on the private car is a tough challenge.  How much do we need to spend just to get a slightly bigger rail share and not, at the same time, cannibalise an effective bus system? Executive Summary, p45).
Where will business – and employment -- grow?
The case for the CRL depends heavily on assumptions about business growth and location.

According to the study employment in the city centre was 90,940 in 2006 (Supporting Report p.22). It projects this to reach 147,000 by 2041 (1,600 more jobs per year).  This  62% growth contrasts with  51% projected for the rest of the City. It bears little resemblance to what has gone before.
Between 2000 and 2012 employment in the CBD grew by 25% (660 per year) and in the rest of the City by 24% (9,460 per year).  So where is the analysis or logic to support the fundamental shift assumed, especially if it contributes, as the report suggests, to increasing congestion?  The likelihood is a return to declining CBD employment share (the long-term trend) in the interim as more firms opt for localities elsewhere. 

Or is the plan simply to reduce the location choices available to business?  Because it won't work.  If it gets too hard to locate where they want to go, or the cost of favoured land -- and rates -- get too high, then businesses may exercise their choice to leave Auckland altogether, relocating some or all of their functions elsewhere in New Zealand or overseas.  Why adopt spending policies to accelerate this process?

Back to the assumptions: when the city fringe is added, inner city employment is projected in the report to reach 203,100 in 2041.  This is 25% of an already optimistic forecast for the entire City .  This substantial gain in inner city employment share is based primarily on the CBD growing from 12% to 18% of the total – another overdose of optimism on the part of the proponents of the CRL.

So what’s the starting point?
How these figures are derived is difficult to follow in the published reports.  However, a quick analysis of whether different parts of the city are gaining or losing employment share illustrates why we should be wary of assumptions about a substantial increase in centralisation.

Between 2000 and 2012 the CBD, CBD fringe, and inner suburbs (Rest of Isthmus) all lost share to other parts of Auckland in manufacturing, retailing and wholesaling (see table, below). Production, distribution, and lower-order business services are decentralising, especially into the southern corridor. Retailing and hospitality services – considered drivers of CBD growth– have also been decentralising.  The CBD is losing share in health and social services and professional and scientific services, although some of these are still gaining on the fringe and inner suburbs. 

Changes in Shares of Auckland City's Jobs by area, 2000-2012
(Source: Business Directory, Statistics New Zealand)
Some sectors are becoming both dispersed and centralised at the same time.  Logistics, information services, and financial services gained share in the CBD and further out in the city, perhaps hiding emerging sub-sector specialisations.   Others certainly favour the CBD.  Various business services and education stand out, but these, and arts and recreation services, have not necessarily been the big movers in  the past decade and there are no strong grounds for expecting them to be so in the future. 

A self-defeating case?
The fact that the proposed CRL does not stack up  on economic grounds makes reliance on the ill-founded projections of central city employment on which it is based all the more worrying. 

If we narrow our "recent history" to just the last two years there is some evidence of a gain in CBD jobs relative to the rest of the city.  But such  centralisation is simply an outcome of recession, the geographic expression of companies consolidating in difficult times, and the rate of growth slowing slightly faster outside the CBD.  However, projecting this state of affairs forward raises interesting questions about  how far we  expect the New Zealand economy to stagnate – and what the long-term consequences will be for Auckland of it doing so.  The conditions favouring centralisation may also be the conditions that undermine the city's growth. Equally, healthy growth across the city is a precondition to a healthy CBD.

At this time of  uncertainty it is manifestly unwise to  promote substantial capital expenditure that may well lower capital productivity and incur the ongoing taxpayer and ratepayer liability  this imposes when it is more important to promote sustainable growth .  If nothing else, addressing economic and employment growth by overspending on a project of dubious merit will guarantee that the exaggerated demand projected to justify the CRL does not come about. 

Monday, December 17, 2012

A Flawed Case? Auckland’s City Rail Link Project

A tale of two cities
Two newspaper stories on infrastructure investment caught my eye last week. The first praised the approach undertaken by the
Port of Tauranga. The Port has performed extremely well for shareholders, including 55% owners Bay of Plenty Regional Council. This is put down to rigorous analysis of the financial impacts of any capital spending:

For years Tauranga has used its capital resources astutely to lift cargo volumes and improve efficiency to build economic value for its shareholders. ...

The port has an outstanding record in kicking for the right goalposts when determining strategic capital development. ....

For Tauranga, a vital key has been to back innovation-driven capital investment with rigorous economic and financial analysis.

Contrast this with the latest addition to the grab bag of evidence assembled by Auckland Council to justify an underground central rail link (CRL) . Admittedly, Auckland Transport is not a commercial operation. However, making the best possible use of capital is a key to the efficiency and productivity that will underlie the long-term prosperity of the city and the country. And this project will not deliver.

Fiscal irresponsibility
I have not read the
latest report in depth. But I did have a quick look to see what the financial implications of implementation might be for the ratepayers of Auckland, and how risk was assessed. I couldn't find any discussion of them. And interestingly, in their absence it would be easy to use the analysis to demonstrate why we should not be risking substantial public funds on it. Yet the Mayor was quoted as saying that this report provides a strong basis for funding negotiations with the government.

The Transport Minister won’t buy into this. He quickly
responded by pointing out what the latest report demonstrates. The project is not viable. There is no financial analysis suggesting that this project has a life. 

An unsustainable city?There is no assessment of the impact on public sector finances and the fiscal sustainability of the project, or of the consequent demands on ratepayers and, if they are to be roped in, taxpayers. It does not begin to address the impact of borrowing, operating costs, maintenance , and fully funded depreciation arising from this capital expenditure on the council's long-term financial position or on the city’s ratepayers.

Financing the CRL should be assessed against the funding needed to maintain and renew basic infrastructure and meet other new capital commitments. I suspect that the CRL alone could trigger substantial rate increases and thereby contribute directly to a reduction in the appeal of the city as a place to live and do business. And suggesting that the taxpayer should bail the city out on this project before it even gets off the drawing board demonstrates a cargo cult mentality that has little resonance if Auckland is to be a truly successful 21st Century city, a leader of New Zealand's economic growth rather than a drain on it.

Bigger is better: yeah right
As I understood it one of the reasons for creating a single Auckland Council was to reduce wasting money on uneconomic and unwarranted projects. Well, this obsession with the CRL simply demonstrates how a bigger council can make even bigger mistakes, and that more residents will experience the consequences on a project aimed primarily at maintaining private values in the inner city.

An economic evaluation?
There is an economic evaluation of sorts in the report ( Appendix G) but it does not mention costs, risks, or return on capital. Instead, it’s a sort of wish list that suggests that rail may be more effective than other modes in bringing people into the central city, and that this will boost property values there, increase jobs, and lift productivity. Well, I am sure there are a few CBD landlords who will gratefully accept such a wealth transfer. But I wouldn’t bet the bank on the job projections behind the latest study, and that somewhat undermines the rest of the analysis (more on that in a future blog, but I do not see the
grounds for growth that the authors seem to). 

A B:C ratio of WHAT?
Anyway, the economic analysis simply does not stack up. The benefit cost ratio for the CRL project is just 0.4: for every dollar of resources committed we will get 40 cents worth of benefits back (in terms of quantifiable resource costs and benefit)! And this ignores the $1.1bn already committed to the
electrification necessary for trains to travel underground .

This is a serious deficiency; such a low ratio denotes a grossly inefficient use of resources that will undermine aggregate capital productivity in the city. 

Even bringing to bear a speculative assessment of agglomeration benefits (based on a 2008 study which is
contestable as grounds for policy) brings the ratio to just 0.9. And that is simply not good enough when it is based on a host of arbitrary assumptions. There is no contingency analysis, no assessment of risk and no consideration of the additional cost of getting what is already a shaky case wrong. 
Wider economic benefits?
In any case, the wider economic benefits, if they are not already counted in the analysis (because, after all, the travel cost savings and congestion impacts measured in transport analysis already incorporate elements of them) are not captured by the project. They add nothing to its viability. Rather, they represent a transfer from the funders of the project (ratepayers and perhaps taxpayers) to business and property owners. 

Any link between investment in an uneconomic and financially flawed rail project and region-wide agglomeration economies is tenuous to say the least. And even if such advantages do exist, they rely on satisfying a whole range of conditions external to the project, and may well be better achieved by other means (including land use policies actually tuned to the diverse needs of households and businesses). 

Avoiding inner city gridlock - again
I have not looked yet at the modelling that underlies the claim that without spending another $2.8bn on the CRL (after electrification) traffic in downtown Auckland will halve its speed on the morning peak within a decade. The evidence is, though, that
vehicle use is stabilising if not diminishing (for demographic and financial reasons), and I wonder how far this tendency was built into the assumptions. 

The report’s claim that without the tunnel “there will be inadequate road capacity to meet demand after 2021, and relying solely on more buses to improve public transport will hasten gridlock” has the ring of the 1965
de Leuw Cather report for Auckland transportation. This promised inner city gridlock if the motorway system (and supplementary transit provisions) was not completed in around 20 years. 

Well it wasn’t – and isn’t nearly 50 years on – and still the traffic moves. And the inner city appears more attractive and prosperous than ever. Why sink it now with irresponsible capital expenditure? That is a bigger threat to Auckland’s wellbeing than the possibility that cars will move more slowly in the city in the future and the remote possibility that throwing more ratepayers' money at the CRL will solve the problem.

It’s time for the Auckland Council to begin to work in the long term interests of all its ratepayers and bring some discipline – and common sense - to bear on its capital spending.

Tuesday, December 11, 2012

Down and up or down and out? Confused heritage thinking in city hall

Oh no, not another one
Another overseas expert has been called in to tell us how to do our business here in Auckland.  Peter Marquis-Kyle, a heritage architect, spoke to councillors, officers and heritage advocates about how they protect old houses in Brisbane.  There the default heritage planning position is that all old houses are protected and can only be demolished if owners can successfully argue why that should be allowed.

Now it seems that Auckland Council is seriously considering new rules that would ban the demolition of all pre-World War II houses.  The exceptions would be houses that are damaged beyond repair. Apparently these rules would apply to "23,344 houses in the existing character zones of the inner city suburbs, Devonport, Birkenhead and Northcote, plus thousands more pre-World War II houses being identified in other parts of the city”.

Looking backwards
So much for heritage policy identifying and protecting those markers of the past worthy of preserving and passing through the generations.  We seem to have lost the capacity to discriminate and to balance the needs of multiple generations – past, present, and future.

If all dwellings over seventy years old are worth preserving, no doubt in 20 years time the suburbs of the 1950s will qualify, and then those of the 1960s.  The urban heritage of my generation that will qualify for blanket protection will be the sprawling suburbs that mark the triumph of automobility . 

I might have no problem with such move but I suspect there will be some serious confusion in city hall where such suburbs are anathema to the compact city brigade. 

So, how does this affect the Auckland Plan?
Development expert Martin Udale recently told the Auckland Council that if it wished to achieve its ambitious plans for urban consolidation and medium density residential growth, it needed to rethink its approach.  For starters, the targets set out in the Auckland Plan require the demolition of perhaps 15% of housing stock.  As the Plan calls for consolidation around existing centres and the CBD, demolitions need to be more extensive in these areas, the very areas in which pre-World War II houses are concentrated.  So now the Council is thinking about adopting heritage rules in its proposed Unitary Plan that will frustrate the compact city vision shaping its adopted spatial plan. 

Given the Auckland Plan’s unrealistic emphasis on compacting Auckland, perhaps there is a silver lining in this cloud of confusion!

But the latest proposal certainly doesn’t look like the sort of rethink Martin suggested was needed.  Because now the Council is planning to put a large chunk of the housing stock that has to go if it is to fulfil its vision out of the reach of the bulldozer – or at least substantially lift the cost of pulling it down in favour of multi-unit housing.  And cost is already one of the reasons that the Council’s plans for upping medium density housing are running into downdrafts. 

Is the Council really prepared to further frustrate its recently completed spatial plan in order to follow Brisbane’s indiscriminate approach to heritage?

Some other questions
Before we can take this latest silly idea seriously, we might ask a few more questions.
  1. Where is the consultation and analysis that might underpin this particular silver bullet?  The occasional controversy over the odd demolition is not all that unhealthy because it raises awareness and stirs debate.  This move will only stir resentment
  2. Is this a make-work plan for under-employed city planners?  Just how much time and money is absorbed in pedantic resource consents processes and opportunities lost to conservative decision-making, and how much more will be lost if this rule is introduced?
  3. Or is this initiative a further joining of the legions as planners, already leaning on reinforcements from urban design to justify resisting discretionary resource consent applications, can now add heritage architecture to shore up their resistance to change?
  4. Have the protagonists of this approach even considered the state of repair of many of these houses, not yet ready for demolition but already a liability for their owners,  especially now that earthquake risk and readiness are on the public agenda?
  5. How far will old houses now be left to deteriorate by their owners until they are beyond repair?  And what will that do for our inner city rental stock?
  6. The Council is proposing a sledgehammer to crack a nut.  So what will happen to the sales of sledge hammers that might be more gainfully employed– to shift a pile, bend a beam, or strike a stud?
  7. Has the Fire Service been consulted?
No easy answers
It is hard not to be cynical in the face of shallow policy thinking.  But heritage is not easy, and there are no quick fixes.  It inevitably involves the application of subjectivity and exposes conflicting values that need to be worked through.  It requires trade-offs to be made, and sacrifices.  What the public really values it may have to pay for, and not simply shift the burden of preservation onto the private sector. 

There is no silver bullet in this area, and we need to be suspicious of those who tell us that there is. 

Multi-purpose, multi-layered, multi-metaphored
Perhaps the problem of shallow thinking lies in the confusion of goals in a large, multi-layered, multi-purpose behemoth.  Creating a super council in Auckland was not the way to get the region moving forward.   Not only do we now have the poacher as gamekeeper and mountain-making out of molehills in our council, but it also looks rather like the left hand doesn’t know what the right hand is doing. 
How confused - and confusing - is that?  And how costly will it prove to be?



Saturday, December 8, 2012

Selective Thinking – When Common Sense Works for Some Projects it Should Work for Others

Auckland’s ambitious port plans
Earlier in the year, I suggested that the Port of Auckland plans for expansion are over the top. The ambitious reclamation that the company claimed was required seemed to be a step or two away from reality in its projections of demand. And it was inconsistent with the Council's ambitions to turn downtown Auckland into a major destination for living, tourism, recreation, and business.

Applying a dose of reality
Now the Council is acknowledging that the port plans were unjustified.  It has received a commissioned report that went somewhat further than my thinking by addressing the potential for greater productivity to make better use of existing capacity on the port, deferring any proposed reclamation, and potentially reducing its scope.  The report also highlighted the potential in Auckland for increased congestion on related rail and roads.

It seems likely that the Auckland Unitary Plan, currently under preparation will adopt a more grounded approach to the provisions it makes for port expansion than anticipated by either the Port Company or, indeed, by the council itself in its earlier spatial plan. Less is definitely better in this case. 

Better planning
Indeed, promoting incremental investment around existing infrastructure often makes better sense than going for the big “transformational” spend.  Pulling back the planning time horizon to avoid the risk of locking communities into long-term projects that they don’t need or can't afford is also good economics.  Acknowledging that there is a range of possibilities for achieving desired outcomes, not all of which are obvious on Day 1, is sound planning.

The bigger picture
In the case of the development of our ports, there is much to be said for the wider perspective and the greater range of options that arise from taking the bigger view.  This means, among other things, \acknowledging the inter-connection of land and sea transport chains, and recognising in Auckland’s case that the future of its port cannot be separated from the future of other ports in the region – whether the region is the Upper North Island or the South West Pacific, and from ongoing changes in shipping and shipping companies.  

The report on Auckland’s port even goes so far as to acknowledge the possibility that at some time in the future New Zealand freight could trans-ship through a Sydney or Brisbane hub.

Now there is a distinct possibility, and it’s not all bad.  It may well reduce costs to our producers, in part through creating a greater diversity of (indirect) connections into Asia and the Americas where demand growth is likely to be concentrated.  (It happens already for much of our freight through different sea-sea and sea-land connections in places like Singapore or Rotterdam).

And it would incidentally breathe new life into regional ports, potentially reduce internal transport costs, and effectively create much more capacity – and more options – at Auckland.

Dealing with uncertainty by retaining options
Simply assuming “build it and they will come” does not make sense, especially when the build is out of proportion to the demand. Bold long-term plans full of commitments to expansion do not reduce uncertainty as some planners and politicians would like us to believe, they simply raise the costs increase the risks..

True, the uncertainty that we are faced with when contemplating infrastructure investment, land use changes, and urban development generally shouldn’t paralyse us, or lead to endless rounds of report proliferation and workshops rather than decisions.  But it does call for a degree of realism in our thinking, the avoidance of over-stretching, and recognition of when apparently bold plans are demonstrably bad plans.  And often decisions that consciously limit risk – including decisions to defer investment – may be better than no decision at all, and certainly better than those built on little more than blind optimism.

The elephant in the Council Chambers
So maybe preparing the Unitary Plan may be just the time to rethink the underground rail link.  The Council could apply a reality check to the demand thinking, the shonky economics, the flaky business case, the fiscal risk, and the land use assumptions behind the proposed underground passenger rail link, and just how far the spending on this transformational project will limit Auckland City’s options in the future.  

There may well be better, less risky ways of maintaining accessibility in and around the city than one which not only misallocates public resources but also locks in a particular and contestable image of urban form and assumptions about land use for a very long time. Isn't this just what has happened to those unrealistically ambitious port plans? 

Tuesday, November 20, 2012

The Auckland Plan: A High Risk Recipe?

Prioritising readiness, promoting mitigation
In my last post I discussed the risks to cities highlighted by Hurricane Sandy.   In New Zealand earthquakes pose risks of similar scale.  I suggested that the unpredictability of such extreme events should place the highest priority on readiness, response, and recovery.

This leaves mitigation as a second order but still essential priority in emergency management.  Long-term mitigation revolves around land use strategies (where people live and work) and urban form (how cities are shaped around them).  This post shows just how far removed from effective mitigation planning, and in particular the Auckland Plan, lies.

Does reshaping cities lower the risk
Many cities have committed to indirect mitigation by focusing on moderating global warming by promoting urban form that might lower dependence on fossil fuels. The prescription for this is increasing dwelling and workplace densities and putting more people on public transport. 

In a slow growth environment such policies can only take effect at the margin: urban form for the next 50 years is largely shaped by what is already here. And even if they eventually do reduce warming and sea level rise, these policies increase vulnerability in the meantime.

Let’s look at this claim with respect to Auckland. 

First, the Auckland hazardscape
Based on records and fault mapping, Auckland has the lowest risk of serious earthquakes within New Zealand – although they cannot be ruled out. 

But the city sits on a volcanic field of some 50 vents and several explosion craters.  The last significant eruption took place 600 years ago.  The return period may be as short as several hundred years.  It makes sense that long-term plans take into account the hazards associated with volcanic activity if only by ensuring lifelines – roads, infrastructure networks – are resilient, buildings robust, and city and town centres have adequate open space and corridors to provide for public sanctuary and movement.

Auckland’s maritime geography poses the  most immediate threat. Auckland lies on an isthmus incised by two harbours and penetrated by estuaries and streams. Its main street is a drained swamp, much of the CBD is on reclaimed land.  And while some attention has been paid to tsunami risk, the most likely risk may be from the sort of inundation New York suffered under Sandy.

Given global warming and seal level rise, storm surges are likely to increase in intensity and severity.  In Auckland in early 2011, for example, a combination of high tides and low pressure inundated the waterfront, including downtown. 

How well is Auckland prepared?
I explored various documents to understand Auckland’s capacity to respond. An Auckland engineering lifelines group is examining the likely impact of different events on networks and collaborative responses to the risks raised.  This is very much a work in progress.

The office of Civil Defence and Emergency Management has a well-developed strategy for response but still relies on others for mitigation.  Here are some of the risks it identifies:

·       Auckland’s infrastructure is vulnerable because networks (power, gas, water) are supplied by external sources and Auckland’s geography creates delivery ‘chokepoints’;
·        Auckland utilities depend on external agencies for service;
·        Increasing urban density lifts the potential consequences of hazards;
·       Auckland has approximately 1,800km of coastline where development exposes communities to a wide range of hazards.

What does the Auckland Plan offer?
The Auckland Plan, the city’s blueprint for the next fifty years, is probably the best place for promoting initiatives to mitigate the effects of extreme events.  So what does it say?

Chapter 8 talks about limiting emissions and promoting energy efficient to reduce global warming. But that’s it.  Unfortunately, nothing in the Plan relates land use to the hazards Auckland faces.  

Planning for disaster
Worse, the Plan promotes urban form likely to increase the vulnerability of many residents and businesses to extreme climatic (and other) events. A commitment to focusing public and private investment downtown and tripling the population there is a particularly high risk policy.

Housing more people in more multi-unit, multi-storey buildings in the confined area of the CBD promises to increase turmoil for households and business located there when power fails and the lifts don’t work , water supply and sanitation services are disrupted, when there are gas outages , and telecommunications falter.  Given the age and capacity of infrastructure in the city centre, these outcomes are all possible if not likely, and could be prolonged under extreme storm conditions.  

Getting people out and getting emergency services and supplies  in would be a nightmare.  Focusing the rail network on the underground Britomart station 120m from the water's edge is particularly short-sighted.  Flooding there would disrupt the city’s entire passenger service.  Increasing intensity of development on arterial roads and around ageing centres won’t help much, either, compounding already congested routes.  Nor will further development of the already inundation-prone eastern arterial road and rail link, much of which crosses a causeway just metres above sea level. 

Central Auckland - Key Transport Links
Real mitigation - adaptive urbanism
One response to such threats is to build defences.  Architects Stephenson and Turner have looked carefully and creatively for mitigation solutions for Auckland.  They have considered initiatives, experiments and research internationally.  Their report favours a resilience-based response, one that might protect the CBD by softening the shoreline, or make use of protective maritime structures, and reverse engineers an urban retreat from the edge, or a combination of such measures. 

Options for Adaptation, Auckland CBD
Following this prescription will be difficult, costly, and challenging.  It would transform Auckland.  It suggests reshaping not just the city, but also the way we think about it.  It means sacrificing current aspirations for future security.  It may be inevitable if we do not rethink Auckland’s urban form.  It sets up a conversation that Aucklanders must have.

Rethinking our plans
Rethinking the current approach to Auckland’s growth remains an imperative if we really do accept global warming and sea level rise are part  of our future.  We should drop 20th century thinking about compact cities, rethink the CBD, and rethink city form.  If we cannot do this, then we will continue, Canute-like, to pretend that we can hold back the waters with little more than wishful thinking when the reality is that retreat in one form or another is the only action that will truly acknowledge the rising tide of risk.  The most effective urbanism in the 21st Century may be that which embraces the desirability – and sustainability -- of decentralised urban form.

Wednesday, November 14, 2012

Planning for disaster

Lessons from New York

An article by William Solecki in the latest edition of Environment and Urbanization outlines measures New York City has taken to lift its capacity to deal with the challenges of climate change, especially the risk of storm surges. Here’s some of the abstract:

Climate change presents cities with significant challenges such as adaptation to dynamic climate risks and protection of critical infrastructure systems and residents’ livelihoods. City governments and inhabitants must continually respond to a variety of urban environmental risks. Understanding how cities have begun to extend these experiences to the context of climate change adaptation as well as mitigation is crucial for the development and identification of climate action practices. The focus of this paper will be to document and explore how the city of New York has begun to define and implement a set of climate actions over the past half decade.

The paper noted that the city's infrastructure systems are "tightly coupled, leading to the possibility of a cascade of failures and secondary and tertiary climate impacts." The responses to the risk of a storm surge included an evacuation plan (response) and inter-agency co-operation to prepare adaptation initiatives that might reduce impacts on critical infrastructure (mitigation).

Counting the costs

Maybe nothing could have prepared NYC for super-storm Sandy, although given the scale of evacuation and the extent of damage done, the city probably performed better than others might have. The most recent estimates put the monetary loss at between US$30bn and $50bn in New York Region alone, based on loss of property and business. It does not count the cost in human lives (at least 43 in New York) and suffering.

Economic and community costs are driven in large part by failures in critical infrastructure, particularly the supply of water, sanitation services, electricity, gas, roads and public transport. The Governor’s office has already totted up $3.5bn in repairs to bridges, tunnels, subway and commuter rail lines; $1.65bn to rebuild homes and apartments; $1bn overtime for emergency workers; and "several billion dollars" in loans and grants to affected businesses. The Governor's advisers also estimated $13bn lost to business from damage to property or because employees could not get to their jobs.

Building Resilience

Hurricane Sandy demonstrates that physical barriers cold do little to reduce the impact of truly severe events. A quick survey of the damage suggests that many of the physical measures adopted to protect the coastal zone were as nothing in the face of this storm

This brings us back to our theme of building resilience into cities. There is a direct link between resilience and urban planning. New York’s sustainability plan focuses, for example, on the reduction of greenhouse gas emissions and energy consumption initiatives as ways of mitigating risks around climate warming.

Among planning responses is the push for more rigorous building codes, although given the built-up nature of the city these will only have a marginal effect and will reduce the impact of extreme events only over the long term.

The New Zealand response following the Canterbury quake has been for councils to identify buildings of insufficient structural integrity to withstand a significant earthquake and require them to be strengthened or abandoned. The economic and logistical challenge this presents will be met only over a prolonged period. Unfortunately, natural disasters don’t necessarily share our planning timeframes.

But what about the here and now?

This of course underlines the dilemma facing emergency management: how much resource to put into resilience, how much into mitigation, and how much into recovery planning?

Wellington Lifelines

Look at the Wellington example. A recent report outlined the impact of a 7.5 Richter scale quake on the Wellington fault on the city's life-lines. Wellington would be devastated with road and rail routes out of action for months, the port would most likely be unworkable, loss of gas and electricity would last for weeks, and telecommunications for days. And this does not address widespread property damage by way of shaking, fires, and slips, let alone loss of lives and income. The impact of such an event – even one of lesser magnitude or reach – would be profound in the long-term.

The costs of recovery would be enormous and the impact by way of loss of population, business, and investment profound. The chairwoman of the lifelines group putting this report together suggested that the probability of such an event was low, but people should not be complacent. Wellington Electricity is seeking consumer feedback next year about what level of strengthening consumers might be prepared to support.

These are hardly reassuring responses to an event that would potentially destroy the national as well as the regional economy. Perhaps they just confirm how powerless we feel in the face of extreme events. It's easier to downplay their probability than to dwell on their impacts. But even if a 7.5 quake occurs only once every 800 years in Wellington, that is no guarantee that an event like that is not just around the corner. Or that a shallow, 5, 6, or , 7 quake on the Richter scale would not have devastating impacts on the city.

The Wellington analysis leaves little doubt that response and recovery planning should be of the highest priority.

What can we do?

A multi-faceted response to the threat of extreme events is called for. But let’s not pretend that long-term feel-good solutions that might reduce the rate of global warming will do the trick, even if they are desirable. Beyond response and recovery initiatives it might be an idea for planning to look instead to things that might make a difference over the next twenty to thirty years - incidentally the sort of time horizon that most urban strategies seem to favour.

The irony is that we seem hell-bent on planning cities in ways that will exacerbate short-term risk in the name of long-term sustainability. Compacting our cities will almost certainly increase the impact of extreme events and prolong recovery. A penchant among planners and politicians for centralised, high density, water-edge development focuses expansion (and public and private capital) in places where critical infrastructure converges and where, because of its age, infrastructure is usually most vulnerable, where network capacities are already strained, were open space is scarce, and outages or congestion are not uncommon. It almost inevitably concentrates risk in waterside areas that are naturally hazardous, often on or beneath ground that is unstable and prone to liquefaction.

The missing link

It is time for land use planning to treat hazard mitigation seriously, to develop plans that limit the capacity for extreme events to turn into disasters, and to consider a future built around decentralised urbanism, distributed infrastructure, and resilient communities.

Entire cities cannot decamp, despite the heroic evacuation of large parts of coastal New York prior to the Sandy onslaught, but their growth can be managed in a way which will reduce the impacts of extreme events rather than compound them, and facilitate recovery rather than impede it.

Tuesday, October 30, 2012

Redesigning a City: Planning an Affordable Future for Auckland

At last some urgency ...
The Government has responded to the analysis of housing affordability by largely adopting the multifaceted approach proposed by the New Zealand Productivity Commission.

My interest is in what it says about boosting the supply of houses, a necessary but not sufficient condition to improve affordability and sustain the liveability of our two largest cities.  The government response acknowledges the urgent need to boost dwelling numbers in Auckland and Christchurch by providing sufficient brownfield and greenfield land accessible to the market in a regulatory environment that no longer unduly impedes development. 

This posting explores where some of this land might come from. 

The Government concedes that land supply is largely the responsibility of local government.  Having said that, it suggests that legislation will be needed to support the regulatory tools councils need to accelerate consent processes.

The risk is that the Auckland Council (and others) will offer up an all too familiar response: “We agree, and we are doing it already”.  Because that would belie the performance that got us into this fix and suggest a complacency unjustified by current plans.

It’s time to get beyond the glib.  A failure to rise to the challenge – and it is a challenge – that faces Auckland risks continuing distortion of the housing market and all that entails.  This in turn undermines the labour market, as employers are obliged to pay higher wages to offset high housing and living costs to attract and retain skilled and experienced employees.  And wage inflation detracts from any advantages of scale associated with operating in New Zealand’s biggest city.

We need jobs as well as houses
A failure to ensure the availability of suitable land for business in the right places has also prejudiced development.  This was a hole in the 1999 Auckland Regional Growth Strategy, subsequently squeezing the supply and lifting the price of industrial land.  It has continued to receive scant attention, despite the gloss in the Auckland Plan.  It was not addressed by the Productivity Commission.  But a failure by the Council to move with alacrity on deficiencies in land for industry will undermine any response to the housing shortfall, continue to exacerbate costly cross-region commuting and congestion. 

An integrated response is needed to ensure that sufficient business land is released in the right places to facilitate investment and employment accessible to growing residential areas.

Where will the houses go?
Simply pushing housing up or out is not a sufficient response. There are limits to demand for medium density housing in central locations, and cost impediments as well as community resistance to their proliferation. 

At the same time, the usual form of greenfield development – the tack-on model of occasionally stretching  urban limits – is not good enough.  It risks all the inefficiencies and social shortcomings of undifferentiated sprawl by creating extensive, contiguous, tracts of housing – often large houses on small sections – with minimal local employment and poor transport connectivity

There is a real risk that Auckland Plan’s centrepiece for urban expansion – the Southern Initiative – will simply  go down the path of continuous development of limited merit, limited amenity urbanisation, and little by way of local employment.

Here, instead, are some options available to create a truly interesting and liveable Auckland.

Some options
Thinking brown? Then think big
One of the problems of brownfield and infill development is finding sufficient land for comprehensive development. Piecemeal development that simply fills in the spaces, including green spaces (such as golf courses) is not especially exciting.  And squeezing multiple units onto scattered sites demands a lot of care and innovation in design, cost, and development. 

We need substantial brownfield sites where the amenity and variety associated with greenfield sites can be incorporated.  The existing public housing estate is a start, but hardly enough. This is where the Council and the Government might most usefully work together, assembling sufficient land and, once done, calling tenders for substantive, integrated (re)development.
There are few obvious areas for doing this, though. Henderson central may be one. The head of the Manukau Harbour may provide an opportunity close to industrial and commercial areas.  Ageing industrial areas on the Isthmus  may work, although the costs of land remediation will mean that some public funding is inevitable.   With imagination, though, and the clout of council and government backing, there must be more brownfield opportunities of substance.

Decentralised intensification
Greenfield sites on the fringe are okay if based on integrated suburbs or urban villages which meet many if not most residents’ needs locally – for community activities, recreation, shopping, and work.  They may include a mix of housing options, townhouses, low-rise apartments, detached and semi-detached homes.  Ideally they will be on sites that offer some interest by way of contour and the natural environment.  The secret is in smart design. And not all such development need be contiguous.  Let’s bring green space – and nature -- back into our city as it expands.

Satellite towns
Ideally, small and medium-sized towns will be promoted in a green hinterland, linked by effective and flexible transport corridors which allow for a variety of modes..

Pokeno in the south is leading the way (with the added benefit of a potential rail connection), building on existing infrastructure and community in an attractive physical environment, well removed from the urban limits but utilising good urban design and providing for substantial local employment. 

The growth of nearby service town Pukekohe over the past decade tells us something about the market's positive view of this sort of setting.  Warkworth and eventually Wellsford will follow the Pukekohe path, providing real grounds for plans to push the motorway corridor north.

The opportunity of progressive expansion through rail-linked towns to the west is an exciting one, through Kumeu, Waimauku to Helensville and Kaukapakapa.  This is an  area of significant natural amenity and an opportunity for effective commuting to new employment precincts around the north-western motorway.

Village Life
Some consolidation and growth can be founded on existing villages. Already Matakana and Whitford are showing the way, acting at the same time as centres of rejuvenated rural economies.

There are similar opportunities elsewhere – Waitoki, Wainui, and Coatesville stand out in the north, all reasonably close to a north-western rail commuter service in  one direction,  and the commercial infrastructure of Albany, in the other.  Tuakau, Waiuku, Bombay and Te Kauwhata offer similar opportunities in the south.

We might also encourage the emergence of totally new villages and hamlets, catering in compact, contained sites of character for those who might otherwise opt for sprawling and wasteful countryside living under the current planning regime.   

Detached greenfields
Greenfield areas beyond the city edge could be the focus of substantial new townships: Dairy Flat on the Hibiscus Coast, Riverhead near Albany, and Drury in the south are opportunities where land and land use would be enhanced by sensible urbanisation.  Each is far enough removed from existing development to protect extensive green belts but close enough to offer efficient connection. 

This is perhaps how the Auckland Plan's Southern Initiative might work – developed as a new community at Karaka, rather than as an  extension of Manukau.  It would be detached but close to the southern urban edge in an area where the landscape calls for sensitive and comprehensive planning rather than piecemeal enlargement of the urban boundary.

Moving markets
There is the risk that good quality development will maintain a tendency for new houses to be the preserve of established households already well up the housing – and income – chain.  Mixed communities with a variety of styles and tenures might offset this.  But the ideal outcome of a multi-faceted supply shock like the one outlined will be a more active market in existing dwellings.  Moving on means someone else can move in.

And here’s the how
It goes without saying that this all has to be done within environmental constraints.  The council may have to develop a new mindset, a new culture; one that ensures good things - innovative and varied -- can happen, rather than that they can’t.  

And to achieve some momentum, it may need  adopt a project-managed approach to a whole range of new initiatives , rather than attempting to spread planing, evaluation and design  through various divisions of the council focusing on just one or two models for boosting the land and housing stock

It may even mean creating a new public land development agency that can work with central government and the private sector to rise above currently constrained thinking and remove impediments to large scale development in a number of localities. Only when we get a variety of development opportunities and move away from the monotony of contiguous development might we realise the variety of housing models available.   Multiple initiatives may reduce the incentive  to land bank at the city boundaries-and encourage new players into  the development and housing field where a prolonged downturn has left competition weak.

Land assembly must be high on the list of actions so that a growing and hopefully increasingly efficient supply sector gets the opportunity to respond in a comprehensive fashion to a diverse market that has for too long had its material needs and diverse preferences curtailed.