The Answer Is Urban Consolidation – What Was The Question?

Perpetuating the Myth

The Green Party is perpetuating the claim that development beyond Auckland’s “city limits” imposes a high cost on ratepayers.  A spokesperson claims that the current Auckland plan which allows for some new development outside the current urban area, “will cost ratepayers $42b billion to 2042, an annual levy of $200 per ratepayer”  according to a report in the New Zealand Herald.   

But is just so happens that  study on which these calculations are based is a flawed commissioned report  rather than a peer reviewed academic study (Roman Trubka, Peter Newman and Darren Bilsborough (2008) Assessing the Costs of Alternative Development Paths in Australian Cities, Curtin University Sustainability Policy Institute, Fremantle, Report commissioned by Parsons Brinckerhoff Australia). 

Oops – Contradictory Claims

The authors of the Curtin report acknowledged at the outset that

"The challenge ...  is that infrastructure costs are so heavily dependent on area-specific values.  For instance, road costs among different prospective development areas may vary based on the necessity for major arterial roads, costs for sewerage and water infrastructure could vary immensely depending on terrain and trenching conditions, and many infrastructure components will differ depending on the level and degree of excess capacity” (p.4)

So why did they try to develop a generic tool for estimating the cost of urban development in Australian cities based on a mishmash of evidence from different cities and suburbs in Australia and the United States?  And why would anyone even contemplate applying such “findings” to Auckland with its distinctive physical geography, so different from its Australian counterparts? 

A Quick Critique

The Productivity Commission actually considered the study, among others, in a brief review of housing costs and urban form (Appendix B of the final report).  It noted substantive differences in the physical and social settings  behind the data assembled to support the  study’s claim to some sort of universal cost relationship between development and distance from the city centre.

And there are glaring methodological deficiencies:

“An obvious one is mixing discount rates (zero for infrastructure capital costs, 7% for transport-related costs, and 3% for health and emission costs), and omitting operating costs for some items (non-transport infrastructure) and not others (pp. 295-296)

To these flaws can be added the assumption of a cost of Aus$170/tonne for carbon emissions when the carbon floor price set by the Australian government (of $15) has since been rescinded and figures at or below $10.00 may be more appropriate based on today’s European prices.  So the environmental argument is seriously overstated.

And the analysis fails to deal with the costs of expanding the capacity of ageing infrastructure in long-established urban areas, of remediating services designed for far lower loadings than they are now expected to sustain, of the health impacts of apartment living in an increasingly brown – not green – environment, and of reductions in the physical and socialresilience of high density and often congested urban areas in the face of possible natural disasters or infrastructure failures.

Penalising the Household - is that Socially Sustainable, or Politically Justified? 

Even if it can be proven that the balance of public benefits favours medium or high density living, is there any evidence that such savings will not be offset by the better affordability of traditional suburban housing and the benefits residents derive from living into it?

Putting aside  flawed data and methodology for the moment, the results indicate that 70% of the differences in costs between decentralised and central locations is attributable to travel and transport.  Over half of these comprise travel costs and  time carried  by households.  If we take these private costs out of the equation the authors' estimate of the difference  between centralised and decentralised development falls by 40%.  

The resulting "present cost" for the average household (whatever that might be) of A$22,000 is easily  justified by savings on land and housing in “outer” areas, the benefits households get  from  additional space, greater choice over housing style, and the security and community benefits of suburban environments.

So who pays if we deny people the choice of living in medium to low density housing?  Mainly new households through exclusion from household ownership, or commitment to punitive mortgages, or through the insidious extension of housing poverty through ever higher income brackets. 

So what about the Auckland case: where does the evidence really lie?

Surprisingly-- given the obstinacy of the planners and politicians pushing the consolidation barrow --   no-one has actually done the analysis required to determine the relative economic benefits of different urban development paths for Auckland.  

A technical analysis of the gaps in the Auckland Regional Growth Strategy made the point that the planning  model that informed it was hardly up to the task.  The principal conclusion that came from using the Regional Council's land use and transport  model was that there is “little [identified] economic difference between growth options”.(McDermott Fairgray Ltd (1999) Gap Analysis, Review and Recommendations: Auckland Regional Growth Strategy, Technical Report, Auckland Regional Growth Forum )

The failure of the model to demonstrate economic differences between alternative urban forms was used to suggest that intensification imposes no additional costs than traditional  decentralised development.  Of course, the converse is true – although it has been conveniently ignored: there were no demonstrable economic benefits from consolidation or net cost penalties to decentralisation.  This suggests that it would make most sense to let the market prevail, subject  to broad environmental standards and fiscal constraints.   

The  conclusion  that consolidation was the best option for Auckland ignores other shortcomings  in the  model that could  tip the balance  in favour of strategic decentralisation:

• The failure to actually define realistic alternatives that would  clearly demonstrate economic differences;
• A failure to evaluate the marginal rather than average impacts of differences in urban form;
• The failure to identify the costs of implementation.
• Ambiguous measurement (both omissions and double counting);

To this list we can add underestimation of the high infrastructure and development costs associated with brownfield development and urban consolidation.  These are turning up today in high financial and development contributions for inner city projects.

Calling for  Consolidation – a Case of Artificial Intelligence

So why is the Auckland Spatial Plan so fixated on consolidation –despite the begrudging lip service the final version pays to decentralisation (a small concession to market reality that appears to have  upset  the Green spokesperson)?

I can only think it is "artificial intelligence": if enough people say the same thing, it must be right.  Consensus becomes an excuse for lack of evidence, critical analysis, or even common sense.  Groupthink prevails,: a phenomenon defined by psychologist Irving Janis as:

A mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically appraise alternative courses of action (Janis, I L (1972). Victims of Groupthink Houghton Mifflin p. 9)

Contrary evidence is dismissed while reports favouring an emerging consensus, such as the Curtin one, obtain a degree of currency which, while unjustified,  plays into the hands of policy makers looking for easy (or ideologically comfortable) answers to difficult problems.

And so we blunder on, potentially building our cities on myth and misconception and reinforcing the gap betwen generations as we do it.

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From Connection to Dispersal: Urbanisation in the 21st Century

Trade, transport and city growth

Commentators have long studied connections between cities and how these influence their development.  The city is the natural focus of trade-based theories of growth.  Exporting a surplus, based on local resources and specialisation was – and is – considered the way  to city wealth.

In this world, transport is the key to the trade portal.  The cities that dominated world trade in the 19^th and 20^th centuries were those best connected, initially through their ports and sea links complemented later through strong ties over the airways.  Mega-ports and airport hubs were  marks of city success. 

This blog raises the possibility that this model is changing, and we need to change our thinking about the future  of our cities with it.

Connectedness and concentration

Connectedness is a mantra for the new urbanists: through  international connection cities exploit the economies assumed to arise from ever-increasing concentration of people and business. Hence, the city seeking to make its mark globally must invest in ever increasing transport infrastructure.   Acknowledging the information age, it may add high-speed broadband to the mix and perhaps, in a symbolic move, an international convention centre.

But is this the right model for 21^st century urbanisation?

Aviation – moving on

Think for a moment about what has happened in aviation.  The last decade saw a quantum shift from a model whereby a few powerful hubs concentrated movement between a few major centres from which passengers and goods could, in turn, be distributed along local spokes – by regional aircraft, train, coach or car.  Airlines based themselves overwhelmingly at these hubs.  The large, twin isle jet reigned supreme.  The Airbus A380 is the latest conveyor of that model, but most likely the last.

Because late in the 20^th century there was a divergence between an ageing hub and spoke model and a growing model based on  dense networks connecting more and more cities directly. The single aisle, medium-haul jet took off.  And now the long-haul, highly efficient, medium-sized jet is further expanding this capacity to directly connect former spokes – smaller cities -- without the need to hub through major cities.

And all of this has been supported by the productivity leap brought about by the low cost airline model.  More people, more cities, more directly connected than ever before with the capacity to transform economic, political and social relations among them.  [1]

From transport to logistics

The transport sector was about moving goods from A to B as cost effectively as regulation allowed; and all too often regulation kept costs up to protect old technology and incumbent operators, whether by surface, air, or sea.  That, though, is changing as international transport is liberalised.    


And today transport is itself transforming into the business of logistics.  And logistics is about distribution – through a production chain, between producers and consumers, and among places.  Goods move seamlessly  through integrated operations that can deliver almost anything almost anywhere in a matter of days. 

An informational world

As the capacity to transport goods went up and the cost went down, academics trying to explain the differential growth of cities appealed to a new notion that dominating the exchange of information was the new key to prosperity.  Knowledge and expertise were concentrated in key informational hubs where they became the centres of capitalist power, the hearths of globalisation.  [2]

Well that’s changing, too.  Information and expertise is becoming dispersed, knowledge ubiquitous.  This is not just about the internet – although it obviously plays a huge part.  It’s also about the explosion of personal mobility as informational cities give way to an informational world.  (It may also be about the potential for implosion as a result of over-concentration, a threat still lingering in the financial centres of the world). 


Linked cities are giving way to networked communities.

From consolidation ...

The lesson?  Those of us involved in planning the city cannot assume the same structures will prevail in the future as those we inherited from the past.  We tend to plan, though, by looking for repeat patterns, seeking generalisation, extracting principles, predicting the unpredictable.  And because infrastructure – roads, rail, ports – are large scale, expensive, and enduring they become the bones around which we construct our futures. 

Infrastructure, particularly transport infrastructure, shapes our presumptions about how the city will function and the form it will take.  Hence, urban planning is preoccupied with how to consolidate  existing structures, increasing their capacity by building up rather than out and moving to mass transit, among other things.

... to dispersal

Yet the shifts in 21^st century logistics and information technology support dispersal.  And it might just be that dispersal is the key to 21^st century urbanisation.

Light rail systems, dedicated bus lanes, smaller, more fuel efficient vehicles, lower housing costs, more intimate localised but inter-connected sub-urban communities, common information and mobile expertise cutting across diverse tastes,experiences, and places  – these may be the way of the future.

In the developing world where urbanisation is most rapid they may be the only way.  Here dispersal is already the dominant reality.  While urbanisation may be exemplified in a few megacities in Asia, these account for only a small part of the total.  And even they are marked by rapid peripheral expansion, with distinctive, sprawling, dense and diverse communities on the edge.  Democraticised, localised self help institutions and NGOs may be the way to improved sanitation and health care in this environment, and micro-commerce the way to sustainable prosperity. 

And in the slower-growing cities of the west, the maturing of sub-urban life, a return to lifestyle-focused localism, ageing in place, and the growing importance of community-based care point to a future in which dispersal rather than concentration could be the dominant mode of social and spatial organisation.  Central structures may still have a role, but a diminishing one.

More generally we may have to think of cities themselves as comprising networks of connections, within and across boundaries.  The stronger these networks, perhaps, the  more resilient the city.  But this does not translate to physical density.  Proximity is not the issue. Well connected, dense networks will support, if not encourage, dispersal. 


This is contrary to the currently favoured model in places like my city of origin – Auckland – but it is not at all contrary to the centre within that city that I call home.

Getting it wrong

More than ever as we try to plan for the very long-term, we need to open our minds to alternatives.   You only need to look at the list of bankrupt airlines (or in and out of Chapter 11 in the US) to appreciate the consequences of overinvesting in the current model on the assumption that it will prevail indefinitely.

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[1]      See, for example, Centre for Asia Pacific Aviation (2003) Low Cost Airlines in Asia Pacific: A Force for Change
           and (2009) Global Low Cost Carrier Report

[2]     E.g. Castells M (1990) The Informational City: Economic Restructuring and Urban Development Blackwell;

          Sassen S (1991) The Global City, New York, London, Tokyo, Princeton University Press