Why compact cities aren't so smart

More advocacy for a compact city

I was interested to read the views of Rick Boven of the New Zealand Institute about central and local government needing to resolve their differences about the future of Auckland.  Well, they have worked on that since the establishment of GUEDO in 2005 (now the Auckland Policy Office). 

But that’s not what the article was really about.  Under the pretext of calling for “new ways of working together” Rick promotes urban containment and greater train travel for Auckland’s future. Well, we’ve heard all that before.

What Rick may have noticed by way of differences is not a failure of cooperation, but growing realisation that the old prescription for a compact Auckland is not working.  And while it may pain me to say so, in this instance the centre may be looking ahead, while the city continues to look to the past.  Any differences, Rick, arise from diverging views, not from a failure to work together.

Fallacies and frailties

And in this case I’m on the side of the centre.

I’ve picked away at the frailties of urban consolidation planning previously.  I can’t put it all together in one blog. But consider the following propositions about the compact city:

• A focus on centralisation guarantees congestion;
• A focus on centralisation reduces green space and concentrates urban pollution;
• Consolidation prejudices old infrastructure, increasing overload and the risk of failure;
• A focus on rail transit escalates costs, reduces flexibility, and caters for only a minority of trips among even those (relatively few) households that have ready access to it;
• A focus on rail transit commits us to developing unattractive brownfield sites with high remediation costs if we intend to increase residential densities nearby;
• A commitment to centralisation and higher densities increases vulnerability to extreme climatic events, rising sea levels, and other natural disasters;
• Medium to high density living is socially flawed, as it is associated with transience, increased urban crime, diminished quality of life, and loss of a sense of community, especially for households in middle to lower income brackets (and, ultimately, razing of failed apartment blocks);
• The market does not favour medium to high density housing unless well located, well appointed, and therefore out of the price range of most households;
• Refurbishment and restoration of inner city suburbs for higher density living leads to gentrification that displaces lower income households;
• Mixed use developments reduce the amount and push up the price of land for business while lowering the quality of life of residents;
• Limiting new business land and expecting to take up new employment by increasing densities on existing sites forces up business costs, reducing the attractiveness of investment and competitiveness of business.

None of this makes compact city policies look very smart.

Pushing for alternatives

The current council vision is for Auckland to be the world’s most liveable city.  Well, we won’t achieve that by “me-too” urban consolidation.  Don’t forget, in the corporate world consolidation is a defensive strategy, associated with stagnation not growth, holding the line, not forging ahead.

A better answer may be to take advantage of our distinctive physical environment and make sure that our urban form complements and takes advantage of it as we move ahead.

Here are some very broad ideas.

Allow decentralisation to continue.  It’s happening, don’t fight it.  Provide for it.  That means ensuring that people can meet most of their needs close to where they live.  A sustainable city won’t work without sustainable suburbs.  These should be at the heart of our plans.  And some of them might just have to spill over the urban limits.  Now there’s a real opportunity to practice some innovative urban design.

Let the city breathe:   We want a CBD which stands out among cities.  Well, by promoting sustainable suburbs we can lay off simply playing with structures and instead seize the opportunity to restore a green (and blue) heart to our city.  A timid but worthy start was made to Queen Street with the (re)introduction of Nikau palms, but we can go a lot further than that.  Barry Lett had great idea for the radical conversion of mid-Queen Street and Myers Park into an urban garden.  What a great place to visit!

If we take the pressure off forcing housing into the CBD, among other things, we could do a lot more of that.  We could think seriously about creating a pedestrian precinct the length of Queen Street. I would also push for my hot spots to be green – and forge walkways and cycle ways among them.  We could better Integrate the CBD with the quality areas around it.  On the harbour front we need to find ways to cross Quay Street, for example, to merge water and land.  We might start by taking note of Lambton Harbour in Wellington, and how it blends hard and soft surfaces, restores the harbour edge, and creates a place for all people. 

Develop Smart Sub-Urbs:  Forget Jane Jacobs’ nostalgia for the lost American city.  Those images belong to another age and another place.  Our life, our cultures, and our communities are in the suburbs.  Let’s ensure that strong communities can develop and thrive around urban villages and suburban centres throughout Auckland. 

If we are serious about sustainability, the suburbs are where it must happen. Here we can deliver smart urban design, strengthen social relationships, and provide capacity for improving the quality of life at all levels.  It’s also at a sub-regional if not suburban level that labour markets operate most efficiently, and employment opportunities might best be promoted.

And while we’re at it, we need to make sure that the suburbs are well interconnected by generous arterial corridors. This call for some difficult retrofitting.  It may mean reviewing how we use motor-ways; thinking more creatively about buses and bus-ways; and getting over an all-consuming desire to focus everything on the CBD, turning it into a giant interchange instead of a great destination.

Launch the Satellites: Some of the best places to live in Auckland are beyond the bounds.  We seem so desperate to cling to urban limits that we ignore the fact that people like Auckland because of what lies beyond them. Let’s see if we can encourage smart growth in places like Warkworth, Bombay, Pokeno, Wellsford and Drury, Beachlands, Pukekohe, and others.  Let our rural villages prosper, too. These are all places where we could do some exciting planning and design.  And let’s make sure that we have wide, green corridors linking them, corridors that can cater for whatever modes of transport the future might throw at them – electric cars, light rail, and the like.

There’s more, but I’m over my word limit.  If nothing else, let’s lift the discourse so that our ideas begin to match our aspirations.  The last thing we need to do, Rick, is to get together to recycle the old stuff.

Let's not jettison bold urban development plans

New centres fail to fire

Anne Gibson in the New Zealand Herald reported the recent failures of several large, integrated urban development projects on Auckland’s fringe.  Plans for a number of substantial developments are now defunct or substantially scaled down.   She said that this was a result of “the end of the boom-bust real estate cycle rather than any centralised planning attempt”.

The article attributes the failure to “commercialise” Auckland’s borders to financial failings, to the drying up of bank funding and consequent bankruptcies, and a reliance on too much debt to carry forward bold plans.  What planning could not achieve by way of containing the city, the global meltdown has apparently done. 

That is certainly part of the story, but it raises as many questions as it answers. 

Short-sighted planning still a problem

Perhaps most obviously, some of the projects cited were overturned because they contravened the Auckland Regional Policy Statement’s commitment to largely containing growth within Auckland’s existing boundaries.  In other cases, protracted planning requirements simply delayed getting projects to the market, precipitating or compounding any problems of financial over-leveraging. 

The irony is that a number of these projects were responding to the strictures of smart growth, reducing vehicle dependence, increasing housing densities, promoting pedestrianisation and public transit, and integrating local commercial and residential activity.  Some were potentially exemplars of the sustainability principlesbehind the Regional Policy Statement.  Unfortunately, these principles were buried by the practice of defending the Metropolitan Urban Limit at all costs and regardless of consequences.

So what have been the costs of these projects failing to fire?  

The financial losses associated with the failure of these projects can be far-reaching, especially as they impact on promoters, financial institutions, and investors.  More than that, they compound the nervousness of financiers for large developments.

But the impact reaches well beyond any undermining of the development sector.  The long-term cost is likely to be counted in a distorted housing market.  It may even undermine Auckland’s economic growth.

One cost has been a reduction of housing affordability.  In 2007, Motu Research demonstrated the pressure on residential land prices exerted by the Metropolitan Urban Limits.  While the study focused on an unsurprising gap between rural and urban zoned land, and perhaps the size of the differential was of some interest.  But what was most revealing about the data used was that growth in land values far outstripped growth in capital value. Inflating land costs have been a major contributor to falling affordability in Auckland.

Obviously, the inflation of land prices within the Metropolitan Urban Limits has done little for the economics of large-scale housing projects.  It adds to holding costs and by inflating prices for developed land may reduce the rate of uptake.  On this score , it is interesting that the one project cited as making progress in the Herald article, is Housing New Zealand’s Hobsonville development – a public project on publicly owned land.

The gap between the houses we need and what we are getting

Statistics New Zealand projected that between 2006 and 2011, Auckland region would grow by between 39,000 and 60,000 new households each year.  Over the four years to December 2009 there had been just 20,600 consents issued, a little over 5,000 a year.  With just 1,800 issued in the first six months of the current year, there is no sign of a recovery either.

There has been a solid decline in consents for dwellings issued in Auckland since 2004 (see figure below).  Whether this is a victory for market rationality or for our former regional planners so intent on holding the line, it has to be a defeat for new households and aspiring homeowners.  The fact that its share of national residential consents has fallen from 45% in 2002 to under 24% in 2009 suggests that whatever the reason  -- falling demand or constrained supply -- its impact is falling dkisproportionately on Auckland.

In fact, Statistics New Zealand’s medium projection would see 49,000 new households potentially entering the Auckland housing market between 2006 and 2011, and another 53,000 over the five years to 2016.  Even if this projection overestimates demand, it suggests that supply in the region is “short” by as many as 30,000 new dwellings . 

Impacts on Auckland’s growth

One response to a supply driven shortage, of course, is for households to go elsewhere.  It is instructive that Auckland’s share of new dwelling consents in New Zealand has been falling.  Other responses are deferred family formation, a growing number of multiple household dwellings, and in some instances over-crowding.  A turn down in the international migration gains that underpin Auckland’s long-term growth projections may be another result.

The reduction in activity in the new housing market has other effects, one of which is to hollow out the development, construction, and supply sector.  Trades move elsewhere, perhaps to Australia, and businesses shut down.   

While it is difficult to separate the downturn in urban development and housing and its consequences from the recession generally, the real issue is one of long-term impacts.  The city is looking at the prospect of a severe housing shortage.   Not only is land for housing likely to be a major issue for the foreseeable future, a diminished housing sector will see prices increases when -- or perhaps if -- demand picks up again.  Infill and brownfield development alone will not do it.  inevitably large scale projects within the urban fabric will compound infrastructure and congestion issues.  They cannot be cost effective, either, without a compromise to quality.

Such impacts and outcomes will be compounded if the significant urban development projects that are needed to provide the residential stock for the next ten to twenty years fail to get off the ground.  The demise of the projects cited is guaranteed to keep residential prices unduly high when there is a lift in demand, and may see the region faced with an unseemly scramble for housing, inside the Urban Limit and outside. 

Where to now?

Creating an environment in which plans support rather than stifle innovative urban investment wherever it goes will be one of the challenges that the new Auckland City needs to address now to ensure orderly long-term growth.  We need the sorts of projects which overzealous planning restrictions and difficult financial conditions have conspired to sink in the recent past if we are to have a properous and equitable future.