Auckland Cannot Afford Light Rail

 A  long and winding trail

The October report from the Auckland Light Rail team promoting tunneled light rail from the City Centre to Mangere continues a history of reports built on aspiration rather than evidence. Like its predecessors, it is long past its use-by date.

A proposal for underground rapid rail proposed by American consultants failed to get traction in 1965, a classic case of a landmark project that could not be justified.  

That has not changed. Regular rejigging of the dream since 2009 is a case of a solution looking for a problem. In an earlier post I looked for a consistent rationale for light rail.  All I found was:

considerable variation in the policy trail regarding what LRT services might be required, and in what order: long-term cross-regional commuting? linking the inner Isthmus suburbs and the CBD? lifting capacity between the outer Isthmus suburbs and the CBD? or linking other employment centres (Westgate, the airport) with the CBD?

It seems a decision has now been made.  It is not a sound one.

Who will use it?

CBD commuters? Not many. Jobs in the CBD declined by 7% last year. Over half were in the business sectors that accounted for well over 50% of CBD growth in the previous 20 years. Expect further falls: this is the sector in which the largest share of jobs can be done remotely. 

As it is, the CBD accounts for just 14% of Auckland’s jobs. Its where fewer than half the commuters rely on cars. Most arrive from the northern or the eastern suburbs. Very few will be using light rail from the south, and most have bus options.

Inbound travellers? Forget it. Mass tourism has tanked and there is no saying whether or when numbers will recover.  Anyway, it relies on coaches. Independent travellers hire vehicles at the airport, or head directly to their accommodation by taxi or shuttle.  Some outbound travellers may use rail if they live nearby and are not encumbered by cases, while inbound locals will usually head directly home with their meeters and greeters.

Mangere workers? A few, perhaps. The area employs 34,000 people, 80% on and around Auckland Airport. The majority come from across South Auckland, though, and a few from the west. Light rail running north doesn’t meet their needs. 

Non-work trips? There may be demand for Isthmus-based trips for purposes other than commuting. But given the many origins and destinations for personal, social, retail, and education trips, flexible modern buses provide a far more cost-effective option.

So, it is hard to see market support for the optimistic projections underpinning the report (p32).

 

Does it stack up economically?

Even assuming the projection of boardings is reasonable, a total benefit of $11.6bn for Tunnelled Light Rail is no more than “broadly commensurate with costs” (at $10.3bn).  Costs and benefits are summed over 60 years and discounted at 4%. These are geared to justifying projects with high upfront costs and a long payback period; in other words, high risk, low productivity projects.

It gets worse. It is not clear that the costs of business and household disruption during construction have been factored in. The cost of “enabling infrastructure for ... urban development” (touted as a benefit, pp. 34-35) has not been included.  No provision appears to have been made for the erosion of  bus patronage. And the stated accuracy of the capital cost estimates still lies between -50% and +60%!

Quite simply, the project lacks economic justification. The consequences will be a huge cost to taxpayers and ratepayers: see here for an instructive (if more modest) example in Queensland.

Tail wagging the dog

The latest report is founded on the notion that light rail will work if accompanied by intensive corridor development to sustain Auckland’s projected growth. So, we will be shaping urban land use to support an ill-conceived project.  Unfortunately, the unspecified and uncosted “integrated urban interventions” required to make light rail work will add a lot more to project costs than benefits, compounding the risk of under-specifying and under-costing that have driven the cost blow-out, ongoing disruption, and delays on the totally uneconomic Central Rail Link.

Let’s get real

The report appears to be a self-serving document assembled by a range of agencies (“central and local government working together”) driven by a ”need to develop new living patterns.” There is scant regard for the public purse, or for how residents might like to live, a severe case of groupthink.

Here are some contrary arguments:

·       People have diverse mobility and access needs – fixed route public commuter options only address a small share of them. For many households and life stages automobility remains a high priority.

·       Bus transport in Auckland is working well , despite competition with revitalised heavy passenger rail.  Buses offer flexible operations, fiscally responsible investment, and continuous technical improvement.

·       Road-based transit will adapt with shared travel options in vehicles that are becoming safer, more automated, and less prone to failure (increasing the capacity of the existing road network).

·       With rising carbon prices, the uptake of electric light vehicles and hydrogen fueled heavy vehicles well within the 60-year framework makes any argument around transport emissions redundant. (A fraction of the cost of light rail could go a long way towards accelerating that transition).

·       The decentralisation of services, retailing and employment is a land use trend that promises to reduce trip intensity and length, by meeting more  household needs locally. It should be encouraged.

An elephant in the room: the growth fixation

A fixation on endless growth codified in Auckland’s Unitary Plan may be misleading policymakers. Whether or not a city of around 2.5m by 2050 is what people want or sustainable may no longer be moot.  Even before Covid struck, the driver of the exceptional post-GFC growth mesmerising super city planners – international migration – was turning down, while the net outflow of people to other parts of New Zealand was growing.

The halt to Auckland’s growth in 2021 is not a blip, it is response to the cyclical nature of international migration, a falling rate of natural increase, the decanting of an ageing population to provincial New Zealand, slowing employment growth, and the diminishing attraction of a city of over-priced housing and increasing congestion – which light rail will do little to alleviate. 

If productivity is driven down by ill-conceived mega-projects, expect emigration to prevail over the next decade undermining the growth assumptions on which Auckland’s planning and investment is based. The city needs a Plan B.

Rapid Rail to Mangere – A Wet Feat?

And there’s a second elephant: climate change. With heavy consumption of concrete and steel in tunneling, track laying, and station development, the proposal runs headlong into New Zealand’s commitment to halving net CO² emissions by 2030. Light rail’s embodied emissions will exceed any gains from shifting people from cars and buses for decades.

Worse - if temperatures rise by even 1.5^oC above the Climate Change datum (a prospect based on more realistic assumptions than those used to support light rail) both Auckland Airport and much of the Wynyard Quarter could be beneath the tideline.

Its time halt the expensive business of surveying, consulting, and concocting cases, pack up the train set, and concentrate on developing resilience in the existing transport system. Auckland is at a crossroad.  It may be that it is time to take the path of conserving resources, not squandering them

What were they thinking? A plan built on sand

The highway is for gamblers, better use your sense
Take what you have gathered from coincidence
The empty-handed painter from your streets
Is drawing crazy patterns on your sheets
This sky, too, is folding under you
And it’s all over now, Baby Blue
Bob Dylan (from It’s all over now, Baby Blue 1965)

Citizens rising

The suburban rumbling is turning into a roar: the citizens are finally having their say over a plan that was never going to work for them.

Council politicians– well some of them – have been leading the charge for a compact city, but dealing with the communities directly affected has tended to fall to local board members, and to the planners.  And it is the resistance that they are encountering rather than the shortcomings of the plan that might lead to a rethink, and perhaps to a plan rooted in the city’s geography and its communities rather than one built on the sand of grand visions.

Is planning the problem?

Increasingly planners and planning law (the Resource Management Act) are copping the flak for unaffordable housing and an unpopular plan.  Is that fair?

It’s certainly easy to target particular groups and processes, like planners and planning, when things go wrong, and polarise the dicussion.  But the issues generally run deeper than that as values, beliefs and expectations become institutionalised, and once-progressive institutions become conservative.  Hence, it’s hard to accept the suggestion by Bryce Julian, President of the New Zealand Planning Institute, that all that was lacking was time, that the big picture painted for Auckland was fine but politicians have not allowed their planners the time to get the detail right.

Planning as doctrine rather than reason?

That’s a bit of a condemnation of planning in its own right.  If we don’t get the big picture right first, how can we expect the detail to fall into place?  If the spatial plan is shaky, the fine grain is not going to shore it up.

It seems the Auckland spatial plan reflects planning based on broad assumptions rather than evidence (unless we count hearsay and groupthink as evidence), underwritten by proselytising on the international speaking circuit by planners and academics seeking to globalise their particular North American or European experiences, experiences that are increasingly irrelevant in terms of global urbanisation and removed from the Auckland situation.  

How good was the advice?

Perhaps it’s not the Auckland planners’ fault that politicians run too hard and too fast with their advice.  But by not emphasising the shaky nature of the evidence for their preferred approach to Auckland’s growth, by not pointing out that after two decades of pushing by the Auckland Regional Council the compact city failed to gain traction, and by failing to warn politicians that their big picture solution was bound to be unpopular locally the planners may have fallen short. 

Too little, too late

And the claim that the plan is based on “best analysis from the global marketplace” is a little hard to swallow.  As late as 21 May, just ten days before submissions on the Draft Unitary Plan close, the Council requested expressions of interest for a study on the costs of growth – to be finished in six weeks. 

The objectives for that study are not reassuring.  It appears to be about finding some evidence to underwrite “a view”.

For some time there has been a view, supported by Council’s Transport, Water and Wastewater CCOs, that it is more costly to service development at or beyond the urban edge of Auckland than it is to service development within it. There is some evidence supporting the view on development location in international studies but no specific work has been done for Auckland. In addition there is growing acceptance that different dwelling types place different demands on infrastructure^[1].

Methodologically it’s a worry as well.  While it’s good that the importance of marginal costing is recognised (it wasn’t in the analysis behind the 1999 Auckland Regional Growth Strategy), the approach appears a little naïve:

The Auckland Cost of Growth Study will examine the respective costs of new development at inner and outer urban locations. The study will assess the marginal cost of development of one new dwelling in a particular location compared to another.  This will be supported by an agreed standard dwelling unit measure.

Urban development (and housing) costs vary substantially according to the scale of development from place to place, its timing relative to construction of new infrastructure or the rehabilitation of old, densities, construction design and materials, site qualities, whether in green-fields or brown, proximity to work, distribution of community, recreational, and social amenities, and so on.  How meaningful can a single “standard dwelling unit” be under these circumstances? 

It cannot be done.

Information on the relative costs and performance of different forms of development should be undertaken at the outset of a planning exercise, not when the ink is all but dry.  It requires input from civil engineers, infrastructure operators, and development professionals as well as competent economists.  And that’s before we even begin to think about externalities.

Coming now, this study looks like a catch up job.  And what happens to the unitary plan if the results do not support the model being promoted by the council and its planners?

Can we generalise on the costs of growth?

I’m reluctant to draw on precedents.  However, I have reviewed a number of studies of the economics of urbanisation across New Zealand and Australia that may have usefully informed the study brief. 

Here are some general conclusions from the review:

·        Costs, where they fall and when do vary from place to place.  Hence, any claims to general rules of thumb or generic cost differences are fallacious.

·        Savings may accrue from higher densities and shorter travel distances, but their magnitude and the capacity to achieve them tend to be overstated given the role of other factors.

·        Cost relationships are not generally linear.  This means there may be economic advantages moving from densities of 10 dwellings per hectare to 20.  But the benefit of moving beyond that is open to question given that diseconomies set in as densities continue to increase.  More complicated urban design, more expensive structures, greater congestion, and a jump in transit spending compound costs beyond certain density thresholds, although where those thresholds fall varies from place to place.

·       The costs of density may be higher in brownfield sites where they require land consolidation and rehabilitation and expensive retrofitting of infrastructure, including roads and underground services.

·        Unsurprisingly, the best urban design outcomes may be achieved in greenfield sites, although modest gains can also be made within existing suburbs.

More to the point, the review confirms a lack of conclusive evidence of the relative benefits of building up or out.  It depends on how you do it, and where.  It’s unlikely that a six week study of the comparative costs of a standard dwelling unit will prop up the unitary plan.

Getting beyond principles to practice

Starting with an unrealistic and largely doctrinaire grand plan was never the way ahead for Auckland. 

Options need to be explored and costed, from the ground up.  And if that’s just too hard, then a much more flexible approach is called for to planning, not one that tries to lock down an untested, unpopular, and generally inappropriate view of what’s best for Auckland. That’s something Auckland politicians and planners have been reluctant to accept, even though the success of any urban strategy depends ultimately on how acceptable it is to the market – which includes today’s as well as tomorrow’s residents.

 

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