Planning to Fail - Wrong Assumptions, Wrong Policies

A Complex and Contested Plan

Deficiencies in the vision for a compact city promoted in the Auckland Plan are apparent in the contested nature of the statutory document intended to implement it.  The Proposed Auckland Unitary Plan (PAUP) has attracted 13,000 submissions and is subject to extensive hearings by an independent panel

The proposed Plan is complex and detailed.  It aims to manage the public domain and private behaviour mainly by regulating land use, defining in detail what can be done, how, and where. And because there will be winners and losers from applying its many rules, it is not surprising that many people are concerned at the content.

Where is the evaluation?

Given the direction underlying the Auckland Plan – a compact city focused on an intensively developed CBD and relying on a legacy of heavy rail and buses (and now, perhaps, trams) to alleviate congestion – the PAUP will inevitably impact on many people and organisations.  It is surprising, then, that the evaluation of policies did not deal with the distribution of costs and benefits. 

But then, the analysis, such as it is, is not very strong on costs and benefits at all.  Anyway, despite the long list of papers and reports assembled in support of the PAUP (the “Section 32 Report”), few appear relevant to or reflected in the land use policies adopted. 

The evaluation is focused, the S32 Report claims, on “the objectives and provisions within the proposed Auckland Unitary Plan that represent significant changes in approach from those within the current operative Auckland RMA policies and plans”.

The comparison of policy options required for evaluation appears to have relied on a bunch of like-minded people comparing four somewhat arbitrary scenarios of the future.  Curiously, all four scenarios are based on a single population projection as if how we plan has no impact on the outcomes!  That hardly matters, I guess.   I could see no recourse to any formal analysis of policies anyway, and no obvious attempt to distinguish the marginal differences among them that an evaluation of changes from “current operative policies and plans” would call for.

And what of the quality?

My concern about the quality of evaluation is heightened because the proposed Plan’s spatial policies are based on misleading analysis.  The fundamental assumption that the proposed plan needs to provide sufficient capacity for an additional 400,000 households over the next thirty or so years is demonstrably wrong.  

Having heard the level of disagreement among experts about the credibility of this number, the Hearings Panel back in April asked them to jointly produce an estimate that they could agree on. 

They couldn’t. Over several months of collaboration and analysis the best the group could come up with was an estimate of 83,420 “developable feasible” dwellings – or 26% of the Auckland Council’s Plan estimate (013 Expert Group, p5).[1] And despite acknowledging that this was much more realistic , the Group failed to reach a consensus on a final number. 

Which to my mind was just as well: to believe that we can predict both dwelling demand and supply without even seriously referencing the impact of price on demand (among other shortcomings) over 25 to 30 years is a conceit too far. The more we refine such projections, seek consensus, and treat the results as reality, the less we are prepared for the uncertainty that inevitably attends our plans, and the greater the risk that, in our ignorance, we adopt inappropriate policies.

So what happens when the policy makers get it wrong?  They keep going regardless

What is even more disturbing, though, is that the Council gives the appearance of cynically changing the Plan rules to offset its miscalculation. This has been done in haste, apparently, without reconsideration of the policies they support, without obvious analysis of the effects of these changes, and certainly no consultation with those affected.  Hence, the New Zealand Herald reported in September that by relaxing rules within the plan, council planners were able to get their capacity numbers over 150,000 (still a long way short of what the plan is supposed to deliver).  

To help achieve this, the heritage provisions of the Plan, always problematic, were effectively dumped in October. And in November, the Council’s Unitary Plan Committee accepted changes to the Single House Zone in central and western suburbs to Mixed Use to enable townhouses, studios and apartments to achieve the new number.

Now where did that come from?  I have searched the Council website for an analysis of the effects of these new policies and cannot find it.  At least the media is prepared to air the changes and their potential effects.

Dumping on the suburbs

The Plan certainly needs to address the future of Auckland’s suburbs: this has been a failing all along in a city which is no longer mono-centric and in which any expansion will be shaped by the simple fact that it is contained on a narrow isthmus.  But this sudden zone change is knee jerk reaction to what has been revealed as an ill-informed plan.  It has no apparent regard for matters of open space, transport and transit, commercial services, schools and other public services, or community and recreational amenities, all critical to the quality of suburban life. 

Simply creating new rules that can fundamentally change the character of suburbs because the planners got it wrong first time round without any obvious attempt to appraise or moderate adverse effects undermines the credibility of the proposed Plan, the process, the planners, and the politicians. And it’s cynical to the extent that it potentially circumvents the independent hearing process and suggests that the Plan is no more than an ad hoc means to an arbitrary end.

A step too far?

The uncritical foisting of a particular set of beliefs – that the way to the future is through less of what we have now -- raises fundamental questions over the practice of resource planning, not just in Auckland, either.  Whatever we call it -- urban design, place making, or resource management –an autocratic and patronising mind-set today permeates urban planning and is increasingly reflected in the diminishing capacity of elected councillors and board members to influence outcomes. [2]

Planning to fail

All this will make life that much harder for many Aucklanders to live here, especially those who do not already own a home.  While much is made of the City's growing diversity there is little evidence that the plan is sensitive to differences in places, communities, and circumstances, or that it is flexible regarding where and how different peoples might live. It looks set to sustain and even exacerbate the division between those who stand to benefit from property ownership and those to whom the Plan offers little hope of home ownership, and the social, health, schooling and employment benefits that brings. 

The proposed unitary plan looks set to accentuate divisions rather than accommodate diversity.

Time to think about connections and consequences

Unless there is a radical change in the way we plan, I see little prospect of sustaining the growth Auckland has recently experienced or of achieving the projections that the Plan is built on. For all its expertise, the Group convened by the Independent Panel failed to agree on what the Plan provides by way of capacity, or to forge the link between housing supply and demand .

A new approach is called for.  Let’s treat housing as a right, land for housing as a necessity, and prepare a plan that enables us to provide it in a cost effective and timely manner. 

The failure to provide land for sufficient dwellings so graphically illustrated in the Expert Group’s report (and in others[3]) must lead to a decline in demand as prices escalate.  We may have a liveable city on some measures if the PAUP is somehow implemented, but for whom and for how long?

---

[1]           Topic  013 Expert Group (July 2015) Residential Developable Capacity for Auckland Report to Auckland Unitary Plan Independent Hearing Panel

[2]           And unfortunately this is not about to be changed by the Government’s latest tinkering with the Resource Management Act,

[3]        Quite apart from the many submissions to this effect (see Hearings Topic 13 at the Independent Hearings Panel website), the Productivity Commission has published two compelling reports on this issue.

Just Another Stake in the Sand: Planning, Demographics, and Uncertainty

Another million or another myth?

The Mayor, Len Brown, reiterated the Council view that Auckland is facing an increase of around one million people over the next 30 years, and that planning for this level of growth is the prudent thing to do.  I cannot be so sure. 

The Mayor is pretty bullish about growth, though.  He even claimed that “our actual rate of population growth has been well above the highest projection” since 1999. 

That doesn’t quite match the evidence. The actual population in 2011 was well below the high projections contained in various Statistics New Zealand projections and revisions since 2002. These include the one it prepared for the Auckland Regional Council in 2009 which suggested that under high growth assumptions Auckland could have another million people by 2051, forty years out.  

Successive Auckland Population Projections to 2011
(Source: Statistics New Zealand)

So how safe is a bet on another million in thirty years?  And incidentally, what do ratepayers and residents stand to lose from over-the-top plans and investment in infrastructure beyond what is needed if that growth doesn’t occur? Surely addressing the risks and the cost of getting it wrong is what would be really prudent.

So what do the numbers really tell us?

We can acknowledge that Auckland’s growth has exceeded Statistics New Zealand's medium projections. Perhaps more interesting, as these were updated through the decade, the medium projections became progressively more accurate (helped, of course, by the 2006 Census). This confirms that the longer the projection period, the greater the uncertainty, and the greater the risk of getting it wrong.

I draw two conclusions. First the magic million is highly arbitrary.  

Second, we need to address the inevitable uncertainty around long-term projections and develop plans that can cope with the risk that what we plan is not what we get, or takes a lot longer than we think it will.   

This uncertainty is not news. The 2009 ARC projections show a significant spread. The medium one is for growth 36% lower than the high projection.  The low projection is 52% below the high.  Incidentally, in 2011 (two years after the projections were prepared) we were already tracking on the low line.

     Source: Auckland Futures Growth Model, Auckland Council 2012

And if we were to stay with the Statistics New Zealand recommendation that planning should be based on the medium projection, we would be planning for another 800,000 people over 40 years rather than one million over 30.

Digging beneath the lines on the chart

I don’t know what the long-term future holds for Auckland and Aucklanders. No one does. However, it’s worth considering the possibilities by exploring the assumptions behind the projections. This will give us some idea of the growth drivers we need to plan for (or perhaps against).  These include assumed mortality fertility, and migration rates.

The focus here is on migration, but acknowledging that if gains from overseas continue to contribute substantially to Auckland’s growth they will also impact on mortality and fertility because of the different ages of people moving in and out of the city.

Migration: the great unknown

Although net gains from overseas are lower than Auckland’s natural increase (which is the annual excess of births over deaths), they are key drivers of population growth. Over the last twenty years net migration accounted for 30% of growth, a share ranging from 15% between 1996 and 2001 to 42% between 2001 and 2006 (and back to 30% since).

Annual Gains in Migration and Population, Auckland 1997-2012

The high population projection on which the council is placing so much store depends on substantially higher migration gains than we have sustained in the past. It’s a little difficult to envisage the conditions under which this might happen, yet it is the basis for projecting population growth of one million by 2051 (or is that 2041?), and hence an important prop for the Unitary Plan.

Actual and Assumed Net Migration Gains for Auckland

Getting past the numbers

Statistics New Zealand terms its projections “scenarios” and (wisely) not forecasts.   So what are some of the things that might influence the migration scenarios towards the higher or lower assumptions?

In fact, there are good reasons to favour lower rather than higher migration gains. For a start, a booming Asia over the coming decades should create competitive demand for skilled people, and could supplement Australia by increasing attractive opportunities for young New Zealanders. 

And an ageing and more prosperous Asian population will lower the supply of working immigrants – and increase competition for them from Australia, Canada, the US, and, increasingly, Asian countries.

Beyond that, poor housing affordability and the ambition (encapsulated in the Auckland Plan and its handmaiden, the draft Unitary Plan) of transforming Auckland from a unique South Pacific city into something resembling Vancouver, or Hong Kong, or London, or Melbourne, or Paris (exemplars cited by the Mayor and his advisers, not by me) are likely to lower Auckland’s attraction.  Somewhat perversely, the planned transformation to a higher city may also encourage older households to move out if the recent groundswell of concern is anything to go by.

Auckland –engine or anchor?

These possibilities highlight another feature of the projections.  They imply that Auckland will dominate national growth in a way that stretches recent history. While there is no denying Auckland’s primacy, there are threats to this and no reason to assume that city will – or should -- take up an ever-increasing share of New Zealand’s population growth.  .

For a start, issues around the availability and price of dwellings need to be resolved if a much larger population is to be housed.  Congestion, crowding, and associated pollution issues need to be dealt with, particularly if the Unitary Plan’s particular  penchant for lifting densities carries the day. And with little more than lip service paid to the needs of business, the Plan might make it just that much harder to do invest – or get a job -- in Auckland.  The difficulty imposed by a tight housing market might also make it difficult (and expensive) to attract and retain the right labour, so there is no guarantee that Auckland will dominate economic growth in the long-term..

The limits to primacy

So how far can we assume that Auckland will take ever increasing shares of New Zealand’s population growth?

Over the past 15 years Auckland accounted for 55% of New Zealand’s population gain. The high population projection behind the Unitary Plan, though, would see that climb to 64%.


Auckland Share of New Zealand Population Growth, 1996-2011 and Projected 2011-2031

The only way for Auckland to lift its long-term share of growth is to resolve housing problems speedily, and open up the opportunities for investing through a Unitary Plan that provides for expansive employment as well as housing.

In any case, growth may need to be more widely distributed within the country as a whole, if only to support our principle source of wealth, the primary and associated sectors.

A solution in search of a problem

The million person myth looks rather like it is being employed to support the Unitary Plan, rather than the other way round.  The planners have for searched for reasons to consolidate Auckland for well over twenty years now.  Well, so far this one’s no more convincing than the reasons that went before.  (And I suspect that a rushed job on the economic rationale for the plan will be no more convincing).

Numbers are important – but they are never definitive.  Projections are useful for what they tell us about the drivers of change as we understand them at the time we compile them. But they should be the starting point for discussion, debate, and policy development – not the end point. 

Planning is not about tracking a line (or even lines) on graph.  It is about identifying community needs and preferences, and responding to them in a way which enables citizens to get on with their lives without undue impact on the environment, or each other.  Right now, that does not seem to be the way the Council is tracking.

Trans-Tasman Blues – the Housing Crisis and Our Future

Boxed in thinking

While filling in time in the Auckland International Airport waiting hall last Thursday I read about a Property Council discussion of what accommodating  an extra 1.2 million people over the next 30 years might entail. Martin Udale, the development expert heading Essentia Consulting Group, talked about having to push the envelope to meet the challenge posed by the Council’s population growth expectation and its commitment to housing three quarters of that  growth over the next thirty years within the city's boundaries: that's 10,000 new dwellings a year (not counting any catch up from the current  shortfall ).

This is going to need as much as 15% of the current stock to first be demolished, to be replaced with infill housing – apartments and townhouses -- at a ratio of perhaps three or four new for every one knocked down . But for this to happen, Martin said,  Aucklanders -- and that includes planners -- have to first "get over their phobia about height".

Affordable living, Auckland City

Now that’s a challenge. Building medium density housing to a standard and in localities that Aucklanders might like at a price they might afford has so far proven well nigh impossible. New apartments are generally over-priced relative to detached houses because of land prices in preferred locations, consenting and development challenges, and construction costs.  The result has often been cost cutting and poor construction. Consequently, most apartments built over the last 15 years cater for transient populations – students, recent immigrants, solos, non-family groups –often in tight accommodation. 

Outside the box

There are other options for increasing densities – in greenfields, satellite towns, and through selective suburban infill and brownfield redevelopment (including developments modelled on retirement communities and suburban villages).  Going down this path – of decentralised intensification --- would take a serious re-think by the city fathers, though, and their planning advisors. 

But if we take on the challenge  of demolishing 50,000 to 85,000 of our existing housing to build apartments and townhouses, we might inadvertently solve the problem another way: by  stalling population growth. 

Or outside the country
The slowdown is already here.  And intensification along the proposed lines with the congestion and loss of amenity that goes with it will make Auckland that much less liveable and Australia that much more attractive.

Affordable living, Sunshine Coast

Which brings me back to why I was waiting at the airport.  My wife was returning from visiting our three Australian-based children and their families. She’s beginning to think we should move there.  Some of our friends have done just that.  Even though they are not far off retirement age, their skills and experience are transportable if they want to work in Australia and be closer to their families.  

And they are in good company. According to Statistics New Zealand (SNZ) there was a net national loss (an excess of long-term departures over arrivals) to Australia of 486,000 people over the past 30 years, 212,000 of those in the last ten years alone (September years).  The trend has been accelerating (Chart 1).  Add that to the cyclical nature of movements from other countries and we can anticipate more, and more prolonged, net migration losses from all sources in the future.

Chart 1: Net Migration Movements, New Zealand 1991-2012 (September Years)

So how will Auckland fare?

The latest population projections from SNZ suggest that there could be another 480,000 people living in Auckland in 20 years time under a “medium scenario”,  a figure which  more or less lines up with 10,000 new dwellings a year.  Over a third of this  growth is based on assumed migration gains .  Of course, some of the natural increase projected also depends on migration : fewer migrants = fewer babies.

Going down

So I took a look at the assumptions behind the projections. According to SNZ sources, there was a net gain of 66,600 international migrants (arrivals less departures) in the five years ending 2006, but that dropped 56% to 37,700 between 2006 and 2011 (September years).

And the net loss from Auckland to other parts of New Zealand from internal migration has been growing –18,000 estimated between 2001 and 2006.  So, international and internal migration over those boom years contributed around 48,000 new citizens, 9,600 a year.  

Without a 2011 Census subsequent internal movements cannot be calculated.  But since 2005 gains from  international migration  have continued to fall, down to an average  7,000 a year. The trend continued in 2012 with a gain of just 4,100 (Chart 2). 

Chart 2: Net International Migration Gains, Auckland 2002-2012 (September Years)

More hope than history?

The SNZ medium assumptions in fact assume an average 6,000 gain in migration through to 2016 (actually, that’s now closer to 6,500 following the overshoot in 2012), before it is assumed to jump back to boom-time figures of 9,000 a year for the next 15 years.  But the conditions experienced ten years ago are unlikely to be repeated in the foreseeable future.  And our longer history certainly doesn't support a view of such prolonged gains.  And even a modest 6,000 a year through to 2016  looks  out of reach if real house prices cannot be brought down to where they were a decade ago.

So who are we losing?

So what does this mean?  Well, over the past twenty years, more than half of the people who have left Auckland have been aged between 15 and 34 (again, based on SNZ data), mostly educated young adults at the start of their work career and entering the housing chain.  Lose them, and we can trim our housing demand figures. More than that, though, we can reduce our aggregate fertility expectations and lower forecasts of workforce growth 

Some of these young adults  are embarking on the traditional New Zealand passage of rite, the Overseas Experience trip  – rather like my daughter and her partner did ten years ago.  But they are now well settled north of Sydney with an affordable home, pool and yard for the children, great amenities, good friends,  good schools and jobs.  I don’t see them – or many others like them – heading back this way in my lifetime.

In any case, Chart 3 shows a shift over time towards more  family groups leaving, older adults and children. This is worrying because they don't  make such a significant move without  good reason.  Could it be tied up with housing affordability?  Is it associated with the challenges facing the intermediate housing sector – people with good jobs and dual incomes still unable to afford a house in Auckland ? And not wanting to live in ever-more crowded suburbs?  

Chart 3: Age Distribution of People Leaving Auckland for the Long-Term

Of course, there is always the prospect of resurgence in immigration from Asian origins offseting the  loss of young New Zealanders.  Even that is not  assured, though.  The prolonged GFC  and economic uncertainty here changes New Zealand's appeal  relative to other options opening up to them. We cannot count on New Zealand always being a destination of choice, especially if we are busy recreating the sorts of urban densities that many potential immigrants are moving from.

Maybe exporting some of our housing problem to Australia  is positive move – but we are also exporting our future and accelerating the ageing of our city as a result.  It would be a shame if by going along with the urban design consequences of consolidation that the advocates of a compact city are bestowing on us  the Property Council somehow legitimises the dogma that risks the undoing of our city.

It is time, instead, to begin to think about quality not quantity in our urban planning.  And that means really thinking outside the compact city box.