What happens when carrying capacity is exceeded? The planning debate we have to have

In 250 words …

The failures of Auckland’s Unitary Plan could have been avoided if it had been based on the physical capacity of Auckland to absorb development, rather than on how to cram in as many households as we can imagine over the next forty years.  This would have focused on the population that the environment can sustain, not the population that comes from extrapolating sseveral years of high migration gains.

Using carrying capacity as a starting point helps rationalise infrastructure investment and enables aspirations for growth beyond “natural” limits to be assessed relative to the additional investment required. It would reveal the fiscal impact of the Plan based on understanding the City's environmental assets and residents’ needs.

Unfortunately, the approach adopted seeks to accommodate inflated population projections in a confined space, raising questions around environmental impacts, economic consequences, fiscal outcomes, and sustainable growth.

It may not be too late to adopt a carrying capacity approach.  It may mean redrawing the map of development and density,though, rethinking connections within Auckland and with other cities, and backing off over-specification of what is allowed, focusing instead  on desirable outcomes within the physical and social limits to growth. 

It also means debating some difficult questions: How many residents is too many? How do we enforce limits? And how does this impact on the national economy?  

A Plan for What?

Auckland’s Unitary Plan appears to be unravelling. Congestion continues to grow.  The infrastructure spending required to keep the city functioning and its waters clean keeps growing. The Central Rail Link budget is blowing out (as far as we know!)  The public costs of running the city are running away.   Between 2012 and 2017 operating expenses jumped 21% in (in 2017 dollars) while population increased by around 12%: that’s an 8% increase per head.  Borrowing went from around $3,600 per resident to $5,010, a 40% jump.

And now the taxpayer is being called on to top up investment as central government steps in to fund a transport package for Auckland, even as additional charges are placed on residents and households by way of fuel levies and, possibly, a bed tax on private short-term rentals.  

And now the government is overriding the Unitary Plan, a plan with  rules that even the people who wrote them – the City’s planners –  apparently struggle to interpret.

The Unitary Plan is all about the metrics of fitting more and more people into a confined space and pouring resources into the central city in the hope that it may retain its commercially dominant role.  This may serve some interests.  But how well does it serve Auckland’s population at large, now and in the future and what are the long-term consequences for the physical and social environments?

Even as our understanding of the risks of over development improves, the Unitary Plan and ad hoc responses to its short-comings threaten to reduce resilience and sustainability by over-running Auckland’s carrying capacity, particularly by emphasis on intensification on the Isthmus.

Fiscal, Economic, and Social Consequences

The fact that we are investing hand over fist in infrastructure may provide some reassurance about the capacity to accommodate growth, but carries its own risks. Infrastructure that is not justified economically, retrofitting under-capacity, aged, or obsolete infrastructure, and unbudgeted overruns all undermine productivity. Getting infrastructure investment right, based on sound land use planning among other things, is critical to sustaining the investment necessary for well-founded city growth.  Otherwise, inadequate or inappropriate infrastructure will undermine investment and productivity.  

Increased housing and commuting costs that arise from a deficient urban plan will also do so.  High living costs translate into high costs of employment.[1]  These, like high land costs and infrastructure deficiencies, also reduce the attraction of the City for productive investment. 

A large and growing rental population is one result of high living costs.  This is inherently destabilising.  It places downward pressure on birth rates as young households delay or abrogate child raising.  It makes recruitment of specialist skills more difficult.  And it creates a large fotloose component within the community, something that also increases the cost of employment.  All this, in turn, raises the risk that what has been a modest net population loss from Auckland to other parts of the country over the past thirty years will accelerate..

The current building boom arising from catch-up infrastructure and housing projects is creating a whole set of issues of its own. Cost overruns are inevitable when major private and public projects, and the drive to boost housing intensify competition for scarce skills and labour, for land, and materials.

Thinking about carrying capacity

If this gloomy prognosis has any crediblity, then its time to confront the question, how much growth can Auckland physically accommodate?

Identifying physical carrying capacity means addressing questions with a mix of science and subjectivity: when will the things we value about the Auckland environment be lost if we over-develop? Where are the environmental thresholds? At what point do we call a halt to untrammelled growth and consider alternative development strategies? 

 While politically difficult, here are some of the matters we must consider.  First, at what population level will we have transformed the city to the point that it hits the threshold for sustainability, and how do we identify that?  When might our valued natural and productive marine and terrestrial ecosystems collapse, or be threatened with collapse from the weight of overuse?  And what are the issues raised by recognising that we cannot continue to pursue hgrowth at any costs?

The answers will change as our knowledge of natural systems increases, along with out capacity to manage the effects of development.  But if we look at the state of our coastal waters, the fishing resources of the Gulf, the risks to our forests, and the dwindling of indigenous wildlife, it seems these things have not weighed in sufficiently in our planning.

Another question: how do we factor resilience into our plans for Auckland, especially in the face of climate change?  This may call for a retreat from the foreshore, or the funding of major structures in the marine environment, and the development of new transport corridors if the central city is not to be subject to regular and inceasingly severe disruption (the more we pack into the CBD, the mre far-reaching extreme weather events will become).. 

There is also a question of equity and social justice: how far are particular sections of the community going to be required to carry the cost of excessive growth, or be excluded from the benefits?

Finally, we need to address the role of infrastructure.  The wrong infrastructure, or infrastructure in the wrong place, will effectively reduce the region’s carrying capacity, just as too little will.  Our refusal to think of the treatment of transport corridors and future demands on them is already emerging as a significant limiting factor.

Start with “How much?” and then move on to “How?”

Identifying and managing carrying capacity is more fundamental than simply debating trains versus cars, public versus private transport, high density versus low density housing, mixed use versus single use zones, heritage versus high rise, greenfields versus brownfields, malls versus local centres, or city centre versus suburbs.

If we had been planning for Auckland based on how much growth the City can support without undermining its natural, economic, and social resources, we would likely have produced a plan quite different from the hotchpotch we are saddled with today. 

And the argument that Auckland must grow if the nation is to grow is simplistic. We already seem to have reached the point at which the diseconomies of agglomeration in the city exceed any benefits it might offer business.  Auckland’s GDP growth from 2000 to 2017, for example, lagged the rest of New Zealand, placing 14^th out of the 15 regions listed by Statistics New Zealand. [2]

It is time to rethink the strategy for our largest urban centre.

Getting ahead

A plan that builds from the ground up would explore technical thresholds and how they might change in the future. It would highlight the unknown and provide for flexibility and adaptability, rather than rigidity and over-written rules. There would be greater clarity on what is not allowed, and why, and ideally a scientifically informed consensus on the limits to growth.

At a practical level the plan would provide the canvas, not the paint.  It would accept that a growing city comprises a collection of connected communities and that, given their varying character and capacity, one set of rules for all does not work.  The attempt at homogeneity has led to a complex current plan which points the way to overdevelopment and uninspiring sprawl. Better that we recognise, among other things, the significance of diverse suburbs and  suburban life and work, and ensure that within them the public realm supports healthy communities.

It should recognise that containing development within an urban boundary is flawed in a growing city, boosting the externalities that occur when carrying capacity is exceeded, and diminishing the quality of life. These include bottlenecks and congestion, infrastructure and service failures, high employment and service costs, water and air pollution, and vulnerability to disruption.  

That contiguity does not lead to efficient urban development, is a reality finally being realised. We should be looking at the evolution of satellite towns and cities in the regional hinterland, and at the quality of connections with them and with provincial cities and regions (although they too will have to address carrying capacity issues as they gear up for a migration-driven boost to growth).  

The promotion of satellite towns and cities, adapting smart growth principles to the sites selected, incorporating modern and sustainable infrastructure solutions, and providing for diverse and dynamic investment and employment, increases the capacity to adapt urbanisation to changing circumstances.  It potentially provides for greater degree of resilience locally, through a high level of community self-sufficiency, and regionally, through multiple sites of production and consumption, and plentiful, accessible  green space. 

A ground-up plan will set broad land-use parameters within which infrastructure services should be provided, and guidelines for their assessment set out, rather than seeking to prescribe and control what will happen, where, and when . The timing and capacity of infrastructure cannot be pre-determined too far ahead of the growth it might cater for without excessive costs and risk. Any major public infrastructure provided for in a plan should be subject to rigorous economic, fiscal, and environmental evaluation. Uneconomic infrastructure is costly and a drag on productivity. 

Local or commercial infrastructure might simply be assessed on environmental and safety standards and the disciplines of finance and market left to determine development within those parameters.

Beyond Auckland

The fact that central government is becoming more and more involved in sorting out Auckland’s problems may signal time for a fundamental change in how we do urban development.[3]  The development of Wellington, for example, has benefited from modest growth.  However, today growth pressure is mounting, pressure which could well undermine its claim to be the world’s coolest little capital.

Wellington, like urban centres Tauranga and Queenstown, faces growth challenges that arise in large part from the costs and constraints physical character imposes on growth.  The challenge many New Zealand centres face is how to retain the character that makes them both appealing and viable in the face of new growth pressures.  

In Auckland and beyond, it is time to address how much centres might grow based not on naïve cohort projections but on just how much we can accommodate.  It is a shift in urban planning and policy that raises some uncomfortable issues.  But it may be better to address them sooner rather than later, before we destroy the very qualities that make our settlements and cities prosperous.

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[1]              This negative impact may be masked by methods used to estimate regional productivity that assume high wages reflect greater output per worker rather than compensation for excessive housing and commuting costs. 

[3]              The fact that the Government asked the Productivity Commission to visit ground aero with respect to urban planning says as much.

Breaking Through and Moving on: Beginnings of a New Plan for Auckland

The Break Through
After years of pushing the compact city fallacy and ignoring the obvious approach to solving Auckland’s particular growth problems, the city and its planners have at last begun to water down their dearly held but doomed compact city plan.  The New Zealand Herald revealed that today “the council's planning committee will consider a report to allow for 120,000 new homes at six main locations in the north, north-west and south of the city.” A range of smaller rural settlements has also been identified for further development, spread over 130km from north to south. 

While only 30% of the assumed requirement for 400,000 dwellings is targeted for the “mini-cities”, the appetite for new greenfield, peri-urban settlement won’t stop there.  After all, there is only so much that can be crammed into the current urban area, especially in central Auckland. without destroying its appeal.  Apartments in the suburbs, the latest battlefield for entrenched urban planning, is least popular of all options.

We’re not there yet, but momentum is gathering for moving Auckland into a sustainable future. 

Breaking with the past makes sense
The ground has been giving for a while now.  The conceit of planning by projection is clear as migration figures deviate wildly from the analysts’ assumptions.  The estimates of housing supply underlying the Unitary Plan are demonstrably spurious.  The impacts of intensification on air and water quality and nature in the city are now coming to be realised.  And the impact on council finances as it aims to retrofit under-capacity infrastructure and pours money into transit threaten the City’s credit rating and the pockets of its citizens.

The advantages
I have been documenting the short comings of a compact city plan somewhat tediously since my report on the proposal to the Auckland Regional Council in 1999.  So, to change my tack, here are some advantages of the new direction towards satellite cities and settlements.  It provides:

·       The opportunity to develop attractive, affordable 21^st century settlements, with emphasis on diversity, mobility, mixed activity, and balance – all so much easier to achieve in green fields compared with retrofitting existing services, congesting the suburbs, and squeezing housing into compromised brownfield or mixed use sites;

·        Better access to nature, greenspace, clean air, cycleways and trails, and recreational amenities;

·        Consequently, better health – an antidote for the urban epidemic of obesity;

·        Greater opportunities for self-reliance (detached, terrace, and duplex houses provide safe play space for toddlers and food growing opportunities) and more time to enjoy it;

·        Pressure off traffic congestion in the urban area;

·        Protection and restoration of community life –an alternative to the transience and anomie of apartment living;

·        A chance to focus on quality development in existing suburbs and on sustaining what makes Auckland an attractive place to live in and visit; quiet streets, healthy treescapes, generous parks and play spaces, bungalows and gardens, ease of movement, local shops and services, and a sense of place.

·        Urban form better suited to limiting the impact of extremeevents (mainly associated with climate change, but there is an increase in fretting over Auckland’s volcanic field), reducing over-concentration of resources, people and infrastructure, and an improved capacity to recover from disasters with dispersed development.

The provisos
Will all these good things come to pass?  Here are four provisos we need to consider as we allow our “pearls on a string” to expand:

(1)  Ensure that the mini cities have adequate commercial and employment land and in doing so avoid applying 20^th century views of what should be where on that land, and how densely it should be occupied.  Just set some standards to manage conflicting uses, protect the environment, mandate minimum levels of amenity, and let the investment happen;

(2)  Ensure that mini-cities are well-connected, to each other, to the main urban area, and to key economic nodes (including port and airport).  Corridors need to be generous to allow for diverse traffic, transport modes, and growth;

(3)  Planners need to back off saying what should happen where and when, and instead say what is required before development can proceed.  This will allow demand to influence the timing of investment.  It will lower the speculative gains and land banking that coercive planning and orchestrating development sequences foster. 

(4)  Treat these as greenfield opportunities in the widest sense: encourage innovation in design, infrastructure, and investment to achieve more cost effective delivery, allow for new funding instruments, and reduce demands on public finances.

So what can the Council offer?
Many years of resistance to peri-urban growth suggest that planners are not necessarily the people to determine when this the proposed development might take place, or even to design it.  Instead, the Council needs the skills to negotiate delivery packages with investors and developers, and to provide oversight, and authority. 

And Wither Auckland Council?
Finally, while I find this development a justification for the many critical pieces I have written about Auckland’s planning in the past, I will indulge in one more observation.  Marry the mini-cities approach with the push for Urban DevelopmentAuthorities and we can begin to peel back the institutional onion that is Auckland Council.

So here’s a thought.  The mini-cities could be subject to development under an Urban Development Authority.  This should involve some community representation.  And when the development task is over, perhaps they could assume the managerial and regulatory role of a local authority.  

Sure, I was wrong when I gave the new, consolidated (or overweight) Auckland City just five years.  It’s still with us.  But maybe it’s time we acknowledged the short-comings and costs of a super city.  And if the region’s future does lie in Council Controlled Organisations and special purpose authorities to fulfil its functions, perhaps it’s time to at least shrink it down to fulfil basic funding, purchasing, high order spatial planning, and regulatory functions.

Back to Basics: Planning, Housing Markets, and the Cost of Ignoring Economics

Acknowledging the impact of planning on housing

At last, economists, commentators and the media in New Zealand are recognising what has been evident in many countries since late in the 20^th century; that plans to contain city growth in urban boundaries betray the hopes of large and growing numbers of urban dwellers and job seekers.

In Auckland, an independent panel has modified the proposed Unitary Plan to allow more dwellings.  But it is too little, too late; so Auckland remains consigned to increasing social division fashioned around a new poverty, a poverty rooted in the failure of the housing market.

This post doesn’t deal with numbers, or with evidence of why the Auckland Unitary Plan remains a pig’s ear.  Plenty of others have picked up on that.  Instead, it aims to set out the basics of housing supply – the complexity of the market itself and the economic principles that regulators need to understand if the ground lost is going to be recovered.

The Conclusion

This is quite a longish post that concentrates on the basics of housing markets and economics.  If you don’t want to read it all, here is my conclusion.

There are no options if we want to make housing affordable again.  Without adequate supply, initiatives to dampen demand will be futile at best, destructive at worst.

Arbitrary restrictions on urban land development that cannot be justified on environmental or infrastructure grounds must be removed from the city’s plan.  Attempting to force people into small, high density dwellings by rationing land for inside or outside the metropolitan boundary penalises all new housing and large sections of the community.

Prescribing when, where, and how much  greenfield development can take place means that the price of brownfield land, infill, and remaining unbuilt lots within the urban boundary is inevitably pushed up to the point that virtually any dwellings in any location – whether apartments, terrace houses, or detached homes on tiny sites – will be unaffordable (and unfundable) for a very large share of the community.  Trying to make high density housing affordable will require small dwellings, cheaply fitted out, built to minimum specifications, little suited to most market segments.  They will be unattractive to developers and to the banks, and, if they can be delivered, are  likely to concentrate rather than alleviate the health and welfare consequences of inadequate housing. 

This is basic economics: generation rent, the millennials, the homeless, and families across the board will benefit only if land speculation is taken out of the housing equation by removing arbitrary restrictions on where, when, and how much urban development can occur in and around Auckland.

If you struggle with this conclusion perhaps you could read on.

What Happens When You Limit Land for Housing?

It’s simple, really: if supply is artificially restricted in a market with growing demand, that market will be distorted.  As a result, monetary and non-monetary costs will be higher than they need to be. 
If the market is at all complex, regulations aimed at managing demand to offset a supply failure (like investment or lending thresholds for house mortgages) will lead to further distortion. Distortion will show up in unexpected and inequitable outcomes, advantaging some groups and disadvantaging others.

A complex market

In a growing city the market for housing is continuously changing, which makes it difficult to predict.  It’s also complex, which makes it difficult to regulate. 

Complexity comes from the many ways housing demand is divided up; for example:

·  Across suburbs and sectors (e.g., inner, outer, north, south, east, and west);

·  According to where individuals or households stand on the housing “ladder”, which in simple terms distinguishes among people seeking a first home, households after a subsequent family home (or homes), empty nesters aiming to downsize, and those wanting a retirement home;

·  By demography which, while associated with progress on the housing ladder, will further influence the dwellings people need according to household size and type (non-family household, solo occupant, couple without children, couple with children, solo parent with children, extended family, and so forth);

·  By different lifestyle preferences among, for example: large and small dwellings, modest and indulgent scale or design; different types of locality (in or near the city centre, coastal, suburban, urban village, rural township, countryside); and, increasingly, whether or not in a planned or managed community;

·  By ability to pay, through which a household might exercise its preferences.

Together these divisions can be used to describe many market segments, each with distinctive housing needs and expectations.  Consequently, a trade-off between medium/high density and lower density development is meaningless: a differentiated housing market needs both, and options within each.

When housing supply is suppressed by regulations that reduce the availability of land, the impact is spread unevenly over dwelling types and therefore impacts unevenly on demand segments.  This is most obvious in the way in which new entrants are excluded from home ownership, along with low income earners, single income households, and young families with a preference for space; in fact, young people generally.  Social divisions that were once defined predominantly by income and socio-economic status are now also marked by a generational divide.

Housing and employment

The adverse impacts of limiting the land available to meet housing demand – by location, type, and price – are compounded by the link between housing markets and the labour market. Like the housing market, the labour market is organised geographically.  People want employment close to where they live; and businesses want to invest close to where the sorts of workers they need are likely to reside.  

Ideally, the catchments for certain types of labour will overlap with the areas in which those people live. This makes jobs readily accessible to households.  Accessibility can be maintained as cities grow with the development of transport connections that let people move easily between residence and work.  This is straightforward when a city is small enough and the city centre and inner suburbs account for a large share of employment.  But as cities grow and employment becomes more specialised, the role of the central city changes, and jobs and houses become dispersed, increasing the time and resources committed to commuting. 

Restricting land for housing and employment increases the costs of investment in both.  It makes houses less affordable and business expansion costlier.  The increased commuting times, costs, and congestion penalise both residents and businesses.  By lowering discretionary spending, increasing staff turnover, and inflating wages, the effect is to reduce productivity and competitiveness.

Fiscal pressures also increase, through the need to fund more roads, transit, and associated facilities. 

The social costs

There are costly social consequences. The impacts of substandard housing and overcrowded living conditions are well known.  They include poor health, difficulties securing and holding down jobs, erratic school attendance, limited educational achievement, and diminished employment prospects. 
Even for those who are housed, the high costs can create financial stress, contributing to domestic violence, and welfare and charity dependence.  The absence of starter homes, high rental commitments, and excessive mortgage repayments act to delay family formation and child-bearing, reducing fertility.  Ultimately, high housing costs will also suppress any offsetting demographic or economic gains that might come from immigration by making a city unaffordable to new arrivals.  It may well fuel outward migration, particularly among those with the skills and motivation to improve their situation elsewhere, robbing a city of some of its most socially mobile citizens.

The consequences of declining ownership

That fact that lower affordability reduces the opportunity to own a house is now well documented.  A prolonged period of renting becomes the only viable option for many if not most new households.  

This brings its own problems, especially in New Zealand where the institutional arrangements that might bring stability to renting are absent.  Lack of secure tenure is reflected in negative measures of school attendance, job retention, income growth, and social networking.  In contrast, home ownership has been a traditional path for saving and building equity, with the benefits of home improvement and appreciation accruing to the owner-occupiers.  Ownership provides households the stability required to underpin educational and career progression, savings, health, and social stability.

The opportunities to profit

The upsides of a housing shortage are confined to particular groups.  Home owners with significant equity may purchase one or more investment properties for rental purposes, boosting their incomes while bidding upprices. This favours older groups at the end of their careers and heading towards retirement, further highlighting the contrast in fortunes between retiring baby-boomers and the millennial generation

Then there are the speculators.  They may be small investors on-selling their rental properties for the capital gain.  Or, they may simply be owner-occupants who buy and sell regularly, sometimes improving their houses, but always seeking to exploit rapid price escalation by on-selling.

Large scale institutional investors, development companies and investment trusts, may accumulate green or brownfield land for development, and simply hold it in undeveloped form to farm the long-term gains from appreciation, writing holding costs off against investments elsewhere.  This slows the market – with less properties on sale than might otherwise be the case – and entrenches the shortage, compounding the distortion initiated by planning restrictions. 

Fixing it

Increasing housing supply alone will not solve the problem once the distortions initiated by inappropriate plans have become embedded in the behaviour of market participants, as is the case in Auckland with 15 years of compact city plans.  While boosting the supply of land for development is an essential first step on the path to normalcy in the housing market, reform to taxation laws will also be necessarily to remove the market manipulation evident in land banking and speculative investment. Imposing a modest capital gains tax across the board is the most obvious such measure, which would bring New Zealand into line with the rest of the world.

On the land use front, there are no options if we really do want to make housing affordable again.  Any attempt to force people into small, high density dwellings by limiting how much land will be made available for new housing penalises all categories. By prescribing when and where greenfield development can take place, the price of brownfield land, infill, and remaining unbuilt lots within the urban boundary is pushed up to the point that any dwellings built on it – whether apartments, terrace houses, or detached homes on tiny sites – will be highly priced and remain unaffordable to a very large share of the community.  Making high density housing affordable means small dwellings, cheaply fitted out, and built to a minimum specification, little suited to most market segments and difficult to finance. 

This is basic economics: generation rent, the millennials, the homeless, and families across the board will benefit from access to housing in whatever form they might seek only if land speculation is taken out of the equation.  This means removing arbitrary restrictions on where, when, and how much urban development can occur.  Until then, the Auckland Plan, even in its revised form, will remain the major impediment to creating a livable city which works for the majority of its residents. 

Hardening Arteries: Intensification and Inner City Congestion

Apartment creep
One tool in the compact cities toolbox is boosting residential densities along arterial roads. It’s a tool that should be used sparingly.

According to a report by Bernard Orsman in the New Zealand Herald, it’s a tool giving rise to mixed reactions along Great North Road, Grey Lynn, as planners apparently exercise their discretion to rise above the proposed Auckland Unitary Plan by allowing apartment buildings higher than originally planned.

This raises questions over the rights (or otherwise) of current residents to sunshine and views and over the impact of new bulky structures on heritage areas and buildings in the inner city (Figure 1). To be fair, the car yards along Great North Road hardly merit preservation, although adjoining and nearby villas may do. The trouble is, though, this is not an isolated example.

The other issue worrying residents is simply the impact of so many more people – and their cars. Allowing six storeys where the original intention was four (something that some local residents could apparently live with) makes for a substantial increase.

Do inner city apartments stack up?
I questioned the economics of higher density inner city dwellings in Auckland some time ago. These concerns are confirmed by developer Brady Nixon in the Herald article. 

He cited costs of $8,000 to $10,000 per sqm to build apartments in Auckland. Evidently a single bedroom 54sqm apartment at North Apartments on Great North Road cost $11,462/sqm. Brady compares this with $3,150/sqm for a 238sqm house at Flatbush.

Figure 1: Planned North Apartments, Great North Rd
Before

    Source: Google Earth

 After

    Source: http://www.northapartments.co.nz/

Good for some

There is no doubt that inner city[1] living suits particular markets, primarily the 20 to 30 age group, people in tertiary education, starting jobs, building careers, yet to develop permanent relationships. This is demonstrated in my last post.

 

But that will account for well under 20% of population growth over the next 15 years [2]. How many of this group and recent immigrants (40% of inner city residents lived overseas five years ago) will be able to afford well designed apartments?

What can we deliver?

The push for higher buildings is necessary so that high inner city land and development costs can be spread across more apartments. Adding storeys is one approach to achieving commercial returns. Sacrificing quality is another, an approach apparently adopted for a number of projects in the past. While that may suit a transient inner city population, it does little for the quality of urban design and may well contribute to social problems in the long term.

Can boomers give apartments a lift?

Another way forward if intensification is the objective might be to produce apartments that appeal to more mature households, and simply leave Gen Y to their own devices (not a happy prospect).   Apparently there has been a surge in demand for apartment living among older people in Brisbane. But, they are looking for well-appointed three-bedroom apartments where they can sustain – and afford – a lifestyle similar to the one they are used to. Given the economics of apartment development it’s difficult to see a similar standard and style in Auckland being affordable among those ageing boomers who might favour inner city living.

As it is, they are not likely to account for a lot of demand. Only 1.2% of Aucklanders aged over 50 lived in the inner city in 2013 (compared with 5.2% of Aucklanders aged between 15 and 39). So what is the likelihood that inner city apartments might appeal to more of them?

 Not great. Members of the boomer demographic in Auckland are suburban dwellers, used to space and privacy. Retirement villages offer a suburban alternative that does not require their withdrawal from the communities where they currently live if they choose to trade down. They still receive the benefits of low maintenance and security while retaining access to a little space and privacy. 

Congestion - the elephant in the apartment

That might be just as well because mindlessly boosting residential development on arterial roads promises simply to compound Auckland’s congestion problems.

We know higher densities are associated with higher congestion. Auckland’s geography means it already performs poorly on this count. The Tom Tom Congestion Index confirms this.  

When the 2013 congestion index for 65 American and Australasian cities is plotted against population density (sourced from the Demographia website) Auckland sits among the worst performers – Vancouver, Sydney, Los Angeles, and San Francisco (Figure 2).

 

Figure 2: Population Density and Congestion

 
Inner city dwellers still use cars
Intensifying housing on arterial roads can only make that worse. While proponents of inner city living might cite a reduction in car use as a result of proximity to work and cafes to justify it, the reality is that people use cars for more than commuting and dining.

 In 2013 inner city households owned over 10,000 cars (0.7 per household or 43/ha). Doubling or tripling the number of residents by promoting inner city apartments will lead to increasing congestion, especially when that takes place on arterial roads. 

Given that households in the inner suburbs (the rest of the Isthmus) focus their travel on those roads and owned nearly 200,000 cars in 2013 (1.6/household and 14/ha), Auckland’s main arterials could well resemble parking lots rather than roads in the future. 

Gilding the lily

This makes the before and after images in Figure 1 somewhat misleading given that there is no sign of additional activity in the second image despite the prospect that the North Apartments alone will house another 40 to 60 inhabitants.

This omission reminds me of a pitch for intensifying dwellings around arterial roads in Melbourne. The before and after images in Figure 3 were intended to illustrate how Australian cities might be transformed. Detached houses are replaced by continuous four to six storey apartments, all achieved, if we are to accept the rendering,  with no more people on the footpath, no more rubbish bins to sidestep, no more tram stops and no more cars .
 

Figure 3: Half a transformation: packed apartments, quiet street

 

Less haste, more thought

Oh that it were so easy: that with the stroke of a pen and perhaps a little airbrushing planners could solve our housing problems and retain a pleasant, uncongested inner city environment.

The reality is that it is hard to make apartment living work in the inner city, and short-sighted simply dumping it onto arterial roads.  Unthinkingly reaching for the sky is a risky response to the need for more housing, especially affordable housing. A lot more thought needs to go into this particular planning tool before it is applied in such a cavalier manner.

[1] The CBD and “outer central city” as defined in my previous post
[2] This estimate is based on the Statistics New Zealand age-specific Auckland population projections (2006 base). This groups 15 to 39 year olds together, a group projected to account for 27% of growth from 2016 to 2031, compared with 61% among the over 40s.

Planning on a Wing and a Prayer

Shaken beliefs
The Minister for the Environment’s submission on Auckland’s proposed unitary plan is only a surprise insofar as it was a long time coming.  The development gap resulting from relying heavily on residential intensification to cater for growth, the contradictory nature of the heritage provisions, the equity issues raised by backing off intensification in more desirable middle class suburbs, and the procedural challenges raised by over-complicated overlays all point to a plan that will make Auckland a lot less liveable for many more people.

And a history of artificially driving up the price of land for employment by rationing it in the hope that demand can be met by higher densities looks like being compounded by unrealistic rules that will further boost the cost of investment in Auckland, prejudicing output and productivity.

These are just a couple of examples that reflect the increasing unease expressed from various quarters over the proposed plan.

The historical record
The problem is not so much that the unitary plan is deficient in one or two areas and can be patched up by an amendment here and there.  The two deficiencies cited are critical in their likely impact on Auckland’s development (or un-development as the case may be). The more fundamental problem is the expectation that one plan will miraculously resolve Auckland’s development issues.  How did we reach this station?

It’s a belief that goes back in time, and has spread throughout the land.  It was first articulated about 15 years ago with business lobby Competitive Auckland suggesting that development was impeded and competitiveness undermined by having seven territorial councils, and seven different district plans.  Worse, these councils were regularly at loggerheads with a regional council which intruded on their land use mandate as a means of fulfilling its environmental responsibilities, with development mired in an unwieldy and litigious planning process as a result.

This belief that eight fiefdoms was seven too many was codified through the deliberations of the regional council-sponsored Metropolitan Auckland Project in 2006.  An international panel was invited to work through the plethora of documents assembled for that project, and explored the cross currents behind it by talking with key figures.
 
The panel decreed that One Plan for Auckland should pave the path ahead, over-riding differences in development within the region, in its physical and human geography, and in the contrasting and often conflicting ethnic and cultural values as these influenced local plans and practices. 

The reformation
The government then summonsed a Royal Commission to enquire into options for Auckland’s supposedly fractured governance.  As a result of its deliberations the Commission delivered an intelligent design for the super city, declaring that the only way to the fulfilment of one plan was with the one true council, a council that must be directly responsible for the fulfilment of its edicts across the land.

This was endorsed in a more grounded fashion by central government, in an act that effectively reversed the logic behind the 1989 local government reforms.  These had been based on the principle that transparency is served by separating responsibility for regulation from responsibility for operations, and the crafting of environmental rules from the practice of development.

The same reforms promoted modest amalgamation as the basis for administrative efficiencies, carefully avoiding the diseconomies and loss of local democracy associated with super-sized councils.  Operational efficiencies could be sought through the provenance of quasi-commercial council controlled organisations for service delivery.
 
The 1989 model did not set out to suppress the controversy and debate that naturally surrounds contentious development.  Indeed, in the seeds of administrative competence it sowed the capacity to articulate and debate differences and potentially moderate outcomes improved, potentially lifting the quality of decisions.  

The Conceit of Goliath

Internalising conflict in ever-bigger, centralised organisations like Auckland's super city does not resolve it.  Rather, it hides it, and allows dissonance to grow – as many now defunct corporations have found out.  Large organisations become uncoordinated, slow witted, and slow moving.  They are vulnerable to manipulation, even corruption.  They drive dissatisfaction onto the streets (or the social media), favouring the activists, the articulate, and the well-heeled in the battle for favour.

And that seems to be what’s happening in Auckland. Why stop there?  The ultimate in effective government if we believe bigger is better is one government, with power concentrated among the political and executive elite of a single central regime – or party – increasingly remote from its citizens.  Autocracy as government, however, must eventually fail. 

The Book of Rules
Let’s set that grim vision aside and return to the immediate issue. This is the belief that we can assemble a comprehensive set of rules that will in some way anticipate, regulate, and manage all forms of land use activity and development in what is, in fact, a diverse and constrained physical environment settled by diverse peoples in divergent circumstances and holding to a variety of values and beliefs.

Our planners and politicians as scribes are over-ambitious not just in what they seek to achieve, but in what they think they can achieve in the face of human multiplicity.  The proposed unitary plan looks increasingly like a sub-national canonical treatise – a set of laws that take us well beyond those mandated or intended by the state.  The irony is that in its sprawling complexity, this plan will be dissected, debated, and litigated by believers and non-believers for years to come.  And all the while the promised land will remain an illusion.

At Last Some Action on Housing – Getting Past Planning Paralysis

Daylight through the gloom
Even as the public begins to react against the over-simplistic approach to urban growth underlying the over-complicated draft Auckland Unitary Plan, there is a little light on the horizon.  The Tamaki Redevelopment Company, a joint venture between Auckland City and central government, has put together a plan to add up to 6000 new homes to an existing 5,050 in a special housing area under the Housing Accord signed last month.

Hopefully this urban regeneration project will be more than just a gentrification exercise. I suspect that government participation will ensure that the need for continuity among current residents including tenants of state housing, will be met.  Ideally, the plan will enable the low income households that currently occupy much of the area to stay and first time buyers to purchase there, in a neighbourhood of quality amenities and services, and sound, affordable, new homes.

Central government taking the lead

It is ironical that this good news story should be accompanied by news of continuing resistance to collaboration by the Council.  It has been so myopic in pursuing the grail of consolidating growth and in its reluctance to explore alternatives for an expanding city that it has created a complex web of policies that many of its diverse residents will struggle to come to grips with, or welcome. 

Given this track record, it was inevitable that the council should emerge as the junior partner in this arrangement. 

It’s no good wringing political hands over a threat to autonomy. The Council’s own failure to advance Aucklanders’ housing hopes with any urgency left central government to take the decisive stand. 

A threat to local autonomy?

A loss of autonomy may simply be the price we are paying for the council confusing its priorities – putting process ahead of form, and principle ahead of practice.  It had known about the housing supply and affordability issue that threatens to undermine Auckland’s growth for some time –it’s the core problem it inherited from the eight councils that came together on its formation. 

Despite all the good intentions, the new council continued simply to pay lip service to the issue.  It preferred to pick up and promote the old Auckland Regional Council shibboleth, trying to change the way Aucklanders live by shifting the emphasis of development to consolidation and centralisation. 

Sharing responsibility

A loss of local autonomy may, however, be more apparent than real.  The Government has had a long-standing role in the provision of social housing in New Zealand.  It also has the resources and clout to make things happen.  So it makes sense for it to take the lead. 

By contrast, with the jettisoning of social housing by councils their role has been confined to one of regulation to mediating what’s done rather than doing it.  That’s the model Auckland was following in its planning.  Unfortunately, it’s mediation looked like exacerbating rather than resolving the housing issue.

Through the Tamaki initiative, the council can once more become a contributor and not simply a gatekeeper in the housing sector, playing a direct role in shifting the city up a gear.

Collaboration: the way ahead?

The Government had hoped that combining councils struggling to collaborate would lead to more decisive and better directed policy in Auckland.  In practice, the one council model so far seems no more enlightened than the eight councils it replaced. 

At least when we had alternative local councils within the wider metropolitan area we could see where the strengths and weaknesses of their various policies lay and rely on differences and debate among them to lift transparency and engagement.  Consequently, we got policy diversity to match our social diversity, rather than a single (and singular) plan and policies over-ambitiously intended to reconcile the variety of needs of different communities in a comprehensive set of rules. 

Under the new model, the search for super policies is beginning to look a little too lofty, and fraught.  And if the council is not prepared to work much more closely with local boards to resolve local issues in practice rather than in principle, then collaboration has to be taken to a whole new level, with central government.

It is positive, then, that the Tamaki project looks set to be delivered by collaboration at two levels: between central and local government in planning, processing, land consolidation, and development initiatives to get the project off the ground; and between the public and private sectors (including social and commercial providers of housing) to put it all in place.

A better council, putting citizens’ needs up front

At least now we have some action, and an opportunity to learn from it.  We can put the Housing Accord to the test, and put the commitment and capacity of a range of agencies together towards achieving a common goal – a better Auckland for more Aucklanders. Through it we can put people back into politicians’ visions and planners’ pictures.

But Auckland Council will have learnt nothing if it continues to dictate terms to communities, to ride roughshod over the concerns of current citizens and the needs of future ones in pursuit of a single vision that doesn’t fit our city.

By participation in the Tamaki initiative, the council should be strengthened to pursue more such initiatives in other localities, to achieve better balance between principle and practice, and step up actions and delivery relative to promises.