Are all Cities Born the Same?

Urbanisation and development: a history in under 200 words
Way back in my youth we were taught that cities grew because of specialisation.  As societies became more specialised they produced sufficient food to support bigger populations.  This, the manufacture of basic tools and implements, and exchange of surpluses led to concentrated settlement.  This could be where raw materials were present, transport routes converged, or defences could be mounted against marauding neighbours.  Craftsmen multiplied, guilds formed, markets emerged, armies assembled, merchants traded, knowledge deepened.   So towns and cities became centres of production, repositories of knowledge, places where wealth – and poverty – accumulated, where capital and labour met. 

This sequence was highlighted in 19^th Century Europe and North America.  Rural productivity gains released whole communities from the land, their labour supporting the emergence of machine-based factories in the cities. People housed in rapidly growing urban areas could be employed to generate far more goods – and wealth – than any subsistence, feudal, or village-based society could. 

This pattern was repeated more or less in Asia’s development and continues in developing nations in different ways today. 

Can cities grow themselves?
Of course, there are variations.  Certain cities may be favoured, for example, by technical progress. A low cost workforce, evolution of skills and technology can compensate for less than ideal location. And in today’s age of middle class consumerism sunshine and sea can favour localities with otherwise few advantages. 

So the current policy preoccupation with how cities might grow themselves is interesting.  This might lead to plans to increase densities in the hope of lifting productivity; or pushing the quirky and creative in an attempt to attract knowledgeable people and knowledge-industries; or promoting Big Projects like performing arts or sports stadiums and convention centres.  

Promoting cities this way, the theory goes, will make countries succeed through a process of civic bootstrapping –creating urban advantage out of nothing, or at least very little. 

How realistic is this, and how widely applicable?

The Triumph of Cities?
Academic Edward Glaeser’s recent book, The Triumph of Cities, brings together a lot of these threads.  It goes further, turning my old professors’ theories upside down.  According to Glaeser the city drives development, it’s a human "invention" that itself facilitates advancement.  The city is a generator of ideas and not just the repository, the source of development rather than the consequence, and, latterly, the saviour of the environment, all driven by the way it concentrates human capital. 

From his experience of cities Glaeser offers a prognosis.  If we accept the city as a triumph, we can live with the negatives, including urban impoverishment.  Even where people congregate in poverty they will find a way to progress.  But in spatial terms that progress, he thinks, should be upward rather than outward.  Higher density cities mean even more interaction of people, more productivity and the bonus of a smaller carbon footprint.

While these ideas have popular appeal, I’m not convinced of their universality.  I don’t doubt an association between urbanisation and progress.  Much of Glaeser’s career has been based on demonstrating it.  But I don’t believe even now we fully understand cause and effect – certainly not enough to provide a recipe for prosperity based on one view of how cities should evolve.  Nor do we have the crystal ball to understand the future technologies that will shape – and reshape – cities.

My preoccupation has been with cities in a very small corner of the world and their particular shape and needs.  Based on that experience, though, I’m not sure that Glaeser’s bigger corner justifies the sweeping generalisations he makes.

The elephant in the urban room
I have examined UN Department of Economic and Social Affairs World Urbanization 2009 Revision data for 1960 to 2010 to consider the dynamics of global urbanisation.  Urbanisation is taking place today at a rate without precedent.  Just how far, then, does dwelling on past experience take us?

The world’s population grew by around 3.9 billion over the last 50 years.  64% of that growth (close to 2.5 billion people) was in urban areas, a spectacular 250% increase in urban dwellers.  Of these 57% were in Asia and 14% each in Africa and Latin America and the Caribbean (see diagram).  

Europe and North America, where much of our thinking about cities originates, together accounted for just 14% of urban growth.  How far can prescriptions for the rest of the world be based on this heritage now that the world’s biggest urban growth challenges reside elsewhere?

Where urban growth has taken place, 1950-2010 (Millions of Residents)

 Source: UN Department of Economic and Social Affairs

Global urbanisation trends
I plotted the growth increments for each world region divided among cities with more or less than 1 million residents (as well as rural areas).  There are significant differences, even at this high level.

Look at the three developing continents.  In Africa, rural growth remained strong.  Only since 1980 has urban growth made significant inroads, mainly in smaller cities.  In contrast Latin America’s rural population actually declined over the last two decades, and large cities kept pace with smaller ones.  In Asia, urbanisation has outstripped rural growth since 1990.  Here, smaller settlements dominated.  

50 Years of Urban Growth: Asia, Latin America, and Africa

Note: Vertical axes have different scales

                                Source: UN DESA

 Even on the more developed continents patterns diverge.  Rural depopulation is stronger in Europe than North America.  In Europe smaller settlements have taken over growth from larger cities.  In the United States large cities remain dominant. 

Note: Vertical axes have different scales

Source: UN DESA

 (Oceania is complicated because of small populations, only six large cities, and because Brisbane, Perth, Auckland, and Adelaide all hit millionaire status during the 1980s and 90s).

So who’s right?
There is no obvious pattern here.  Maybe we cannot generalise about urbanisation.  We are seeing quite different forms and stages of urbanisation in quite different settings.  And among cities even within the same region there are bound to be huge differences in urban process, progress, quality, and character. 

How well does Glaeser’s book reflect this diversity, and how widely applicable might his prescriptions be?  The Triumph of Cities refers to around 75 cities.[1]  Collectively they account for around 11% of the world’s urban population. 

Nearly a third (24) have populations over 5 million. This compares with just 9% of the world’s 590 cities of 750,000 people or more.  There are 19 cities in the world housing more than 10 million people: as far as I can see Glaeser mentions nine of these, focusing on places like New York, Boston, Chicago, Detroit, San Francisco, London, and Paris.   

And, half of Glaeser’s city references are from North America (36 from the United States) and close to a quarter from Europe.  Only three Chinese cities appear to merit a mention, and four from India.  Yet according to the UN data, of the 590 cities with over 750,000 residents 131 are in China and 59 in India, compared with 56 in North America.

While the Triumph of the City is informative and occupies an interesting space between academia and populism, it falls short of its ambitions.  It draws sweeping conclusions from a partial and inevitably selective sample. 

Perhaps ambitions to produce a prescription for successful cities will never be realised.  I suspect my teachers’ theories also fall short in today’s urbanising world.  But I cannot accept that the city is a triumph: it just is, and it is in many forms, each with its own challenges and opportunities.  Even if we accepted Glaeser’s prescription for better cities, we would have to ask for whose cities, and where? 

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[1]   Based on a count of cities cited in the index

Auckland – not the only town in the game

Do people prefer small cities?

Leading US urbanist, Witold Ribczynski, in his recent book Makeshift Metropolis (2010), places the past growth of major metropolitan areas in context:

“the majority of us still appear to prefer dispersed, small cities, a significant minority want to live in concentrated big cities, and a tiny fraction is prepared to pay the price of living in the very centre of things” (page 179).

Despite signs of dispersal, he still sees increasing urban densities as the way forward for America “while taking into account people’s desire for dispersed living in smaller cities”. 

One implication is that advanced urbanisation does not depend on centralisation or the ever-increasing expansion (upward or outward) of the largest urban areas.  Equally, decentralisation does not necessarily mean sprawl.  It may even be that the more compact settlement planners have been pushing over the past two decades is best achieved through dispersal – decentralised intensification – because that lines up with what more people want.

And, if more people prefer small cities, we need to be asking questions about what that means for public spending and economic growth, as well as for the quality of life.

Do small cities feature in New Zealand’s growth?

I thought it would be interesting to see if New Zealand’s changing settlement pattern reflected a similar preference for smaller cities. 

Of course, New Zealand is not North America.  It is distinctively dependent primary production, something which has traditionally supported a wide level of dispersal of a small total population.  At the same time Auckland in the northern North Island  has evolved into a strong primate city, something I have touched on elsewhere.  A productive hinterland, nodal advantages, import substitution, the cumulative concentration of services and consumption, and immigration have all contributed to this.  Today, Auckland accounts for a third of the nation’s population, something that guarantees that it will continue to dominate growth.  

I have looked at recent population change to see if there is any stirring among New Zealand's smaller cities, though. 

The data I used

I have used Statistics New Zealand’s population estimates for territorial local authority areas (TLAs) from 1996 to 2010 for this.  I divided Auckland into the inner city area, the balance of the built up metropolitan area, and two predominantly rural areas or ex-urban areas.  These are based on TLAs in existence (Rodney and Franklin) before the 2010 reforms rolled them up into the city's jurisdiction. 

I then grouped into several categories: the second tier cities (Wellington and Christchurch); ex-urban areas (TLAs immediately adjacent to metropolitan Auckland, Wellington or Christchurch); those TLAs dominated by provincial cities, ranging from Marlborough/Blenheim (TLA population 39,000, urban population 30,000) through to Hamilton City (143,000 people); those TLAs with mixed rural and urban (town) populations; and the predominantly rural TLAs. The inner city population figures for Wellington and Christchurch were added to those of Auckland (and deducted from the balance of the city population in each case).

Auckland remains dominant

In 1996 metropolitan Auckland accounted for 27% of the population, but over the next 15 years it accounted for 52% of the country’s population growth.  There’s not a lot of obvious support for the small city hypothesis in those numbers. 

Of course, Auckland at around 1.4m (inner, metropolitan, and ex-urban areas rolled together) is not an especially big city by North American standards.

But something is happening.  This shows if we compare the first five years of our data with the last four years.

Between the 1996 and 2001 censuses the three inner cities, with less than 1% of the population jointly, exploded (at least in relative terms) to account for 7% of growth recorded between 1996 and 2001 (see chart, below). 

And, Auckland’s metropolitan area, with just 27% of the population, recorded almost two thirds of the nation’s growth.  Exurban areas also grew their share of population (with 20% of the growth).  The second tier cities (once we take out inner city growth) and rural areas declined.

Shares of Population (1996) and Population Growth (1996-2001)

But centralisation is slowing down

Between 2006 and 2010, however, this pattern moderated.

Metropolitan Auckland still dominated but with 29% of the national population in 2006, its share of growth slipped back to 47%.  Inner city areas dropped their share of growth, too, back to 4%.  Exurban areas dropped back to 13% (chart, below).  

So where did the balance go?  Well, between 2006 and 2010 provincial cities accounted for 22% of growth compared with 15% between 1996 and 2001.  Mixed rural/township areas were also up.  They accounted for 12% of national growth, up from just 3.5%.  Rural areas were back in the black. 

Shares of Population (2006) and Population Growth (2006-2010)

This is by no means an end to Auckland’s dominance.  But centralisation is no longer a one way street.  New Zealand, like the United States, is experiencing an increasingly complex pattern of population growth reflecting, presumably, greater variety in residential choices.

A time for rethinking?

We’ve raised this earlier, but its time to take a more balanced view of New Zealand’s growth, one that is less Auckland-centric.  Sure, with around a third of the population and employment, it is important that Auckland operates efficiently, that we invest wisely in the city’s infrastructure, and that it provides a great lifestyle to its citizens and continues to attract (and hold) skilled migrants. 

We can also acknowledge, like Rybczynski, the desirability of inner city living for some citizens.  This is reflected in the growth rates of inner Auckland and Wellington in particular.  But, like him (page 178) we also have to acknowledge what a small minority that is.  Using our generous definition of the inner city,[1] less than 60,000 people lived collectively in inner Auckland, Wellington, and Christchurch in 2010, or 2.6% of their joint population. 

Let's not stop thinking about Auckland and its needs, but let’s also invest some thinking and planning in how to realise the opportunities that arise out of more dispersed settlement. 

A national view
When we look at the annual compound growth rates of the top 15 growth areas in New Zealand since 2006 the movements that stand out for me are: the revival of rural and small town South Island; the increasing pervasiveness of growth across the wider northern North Island; and the significance of ex-urban growth around our major cities. 

Fastest Growth Areas in New Zealand, 2006-2010

Metropolitan and inner city growth are up there, but Auckland is no longer the only game in town.

In any case, a preoccupation with fixing Auckland must now make space for the imperative of recovering and rebuilding Christchurch.  The numbers used in this blog predate the September 2010 and February 2011 earthquakes there, and right now we do not know what long-term effects they will have on housing preferences and settlement patterns.  But the analysis here suggests that decentralisation to smaller, nearby centres may be an attractive option to a significant share of Christchurch citizens, and perhaps a reasonably affordable one from a national point of view.

In a mature urban society – and especially one facing an uncertain economic outlook – we may need to think about a future in which we don’t bank too much on the prospects and opportunities associated with large-scale urbanisation.  That, in the New Zealand case, would be too much like putting all our eggs into one basket.  The time may be upon us when we have to seriously consider  the role of smaller cities and towns play in our economic growth, if only to support the fact that more people are choosing to live in them.

The prospects for New Zealand and the prosperity of New Zealanders demand that we think long and hard about how we are going to exploit the advantages and attractiveness of our smaller cities.

[1]               For those interested, the following Census Area units: Auckland – Harbourside, Central West, Central east, Newton, Freemans Bay, Grafton East and West; Wellington – Thorndon-Tinakori, Lambton, Willis-Cambridge Tce, Aro-Nairn Streets; Christchurch – Cathedral Square, Hagley Park, Avon Loop

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Desperately Seeking Submissions

The clock is running

Auckland Council issued a discussion document yesterday seeking public input into the Auckland Plan.  It sets out “ideas and initial proposals” and a series of questions.  It asks for responses by the end of May.  There will also be consultation after the plan is drafted in June. 

I’m not going to say anything about the merits of the ideas in the Document – but you might care to look at the New Zealand Herald’s initial take on it here. But I do have some thoughts on the nature of engagement with the people for whom the plan is being prepared.  Seeking submissions in response to a discussion document follows a familiar but not especially encouraging path.

Getting the public to endorse our plans

Growth management strategies are intended to promote the quality of life.  They are justified on the grounds of enhancing liveablity and strengthening communities.  Such high-sounding outcomes sit among other laudable objectives: reducing vehicle emissions and fuel consumption, improving housing affordability, increasing opportunities for walking and cycling, promoting public health, improving urban efficiency, and protecting agricultural land.

It’s hard to disagree with such outcomes.  It must be comforting for the public to read that they are all there for the taking if people will embrace policies aimed at increasing urban densities.

After all, what citizens would endorse a plan that included among its outcomes higher costs for overloaded infrastructure?  Or a lower quality of life, increased congestion, and concentrated pollution?  Or reduced mobility and congestion making it harder to get to work; or urban form that increases the prevalence of heart attacks or diabetes?

In other words, the authors of discussion documents almost inevitably contain the debate and shape its outcomes with the options and questions they present.  So when the document indicates that, say, Option B – usually the compact one –will deliver the goodies, why not just tick the box and be done with it?

The Preference Paradox

But then, why don’t all those people who ticked it go and live in smaller dwellings, closer together, and walk or catch the bus to the shops, the movies, or work if that’s what Option B is all about?  Unfortunately, while the majority might say “Yes, that’s how it should be done” only a minority translate that into their personal behaviour.

Of course, that’s a bit on an over-simplification.  Whether the favoured growth management tools of the last twenty years  – which are usually about making the city more compact – can deliver on the outcomes claimed for them is a moot point, not one I am going to go into here. 

However, there is an interesting paradox at work which frustrates those planning outcomes: what people say is not necessarily reflected in what they do[1].  And as long as people resist the rules that they seemed to support in submissions, then those rules will not even be tested.

NIMBYism is the reality

So what is it that goes wrong?  Well, we shouldn’t be surprised by a tendency to behave in ways which prioritises personal or family benefits over collective community benefits.  We are also familiar with NIMBYism – resistance to change in one’s own backyard, change which we are nevertheless happy to see others wear.  Or perhaps people tick the box in expectation that the better public transport Option B promises means that with more people taking the train they will be able to drive to work quicker.

Why don’t planners take the reality of apparently contradictory behaviours into account when they write plans or draft options?  Or why not plan for real behaviour?  Or find ways to encourage the adoption of more “socially responsible” behaviour?  Pricing comes to mind as an option, along with education. 

(To be fair, planners and policy makers do promote education as one of the tools in the toolbox, but usually adopted somewhat half-heartedly and almost always after regulation).

Are planners disengaged?

The answer may be that planners are just not very good at identifying with the community.  Planning is intrinsically patronising.  As planners, we favour prescription based on principles that are no more than abstractions or feel-good statements in the minds of the people we address them to. 

Engaging with the public in planning is frequently too structured and calculated to offer true insight into how communities work, their spontaneity, emotionalism, irrationality, inconsistency, diversity.  This shows in discussion documents which encapsulate and simplify planners’ views of how the world should work.  That’s not surprising; by definition planners premeditate, calculate, extrapolate, and prescribe.  We seek generalisations to make sense of disorder.  We dismiss the outliers and focus on the averages.  We try to reduce the chaos and dismiss the exceptions. 

That’s not to knock what planners try to do.  It is important to see and respond to patterns, distill movements , and paint the big picture.  But let’s not be surprised when the formulaic plans, the orderly maps, and the rational rules that we impose on our disorderly society don’t produce the results we hoped for.  When we get down to implementing our plans, we better have listened very carefully to what people are saying and not just to how they react to what we say.

Just occasionally we may have to think like the communities we work for; decide when to accept apparent disorder and when some bottom lines are needed; when can we allow for individualism and diversity and when collective needs (including environmental needs) should prevail.

Seeking submissions: the end point of engaging the community

This is all a long-winded way of saying that seeking submissions on options is a highly constrained if not distorted way of engaging with the community on development matters.  It will not reveal people’s preferences.  It is no basis for understanding behaviour.  And it will not tell us how people, households, and businesses will respond to our plans.

Submission-based engagement constrains dialogue, limits public input, and stifles creativity.  It plays to the articulate, active, and informed.  Responses are self-selecting, often self-serving, and unrepresentative. 

At the very best, submissions can be used to check that our draft plans reflect what the community has already said it wants or could live with.  But first those questions have to be asked.  People need to be listened to before they are quizzed.  And seeking open-ended information from communities requires entirely different methods of engagement from submission-seeking if planners (and the politicians who employ them) are going to win the trust and occasionally the compliance of the communities they serve.  

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[1]               Of course, that goes for the planners and policy-makers, too, many of whom live on or beyond the city edge (or enjoy coastal second homes) while prescribing intensification for the average citizen.

If the CBD is dying, will rail save it?

A common cause
A lot of energy, analysis, and ideas have gone into preserving Central Business Districts round the world.  Sometimes this involves changing traffic conditions, restoring redundant quarters, creating public amenities, and changing planning rules.  It may mean trying to turn public transport round in the hope that we can deliver more commuters to inner city businesses.  Or creating major downtown entertainment facilities – stadia, convention centres, and the like.  Or both.

The quest for former glories may result in attempts to stem growth elsewhere to keep the CBD as we know it from dying.  Of course, if that simply discourages investment, or drives it away, the result is a poorer CBD.  The reduction in the net wealth of a city means less discretionary spending on those things that might actually work in the centre.

Whatever initiatives, saving the CBD will cost.  This is an area where we need to tread carefully: to know the beast we are trying to save, and why as well as how.

The myths of urban intensification
In an earlier posting I suggested three myths that misinform urban policy. 

• Agglomeration automatically increases growth.  This doesn’t appear to be the case for Auckland.  There is no silver bullet to boost the urban economy.  Lateral thinking will help, together with creativity, and an environment that welcomes rather than restricts development.  And let’s not forget that agglomeration carries with it costs which can drive investment – and skills – away.
• Higher density enhances firm productivity.  The evidence does not support policies that effectively undersupply business land and limit investment choices.  We need to get back to basics to make this a great place to invest in, and address in particular the quality of labour, land, and capital.
• Rebuilding the CBD is a key to the compact city. Is it?  If so - and I think there may be other, better reasons -- will trying to boost white collar commuting work? This is what I look at below.

Promoting the CBD
Promoting the CBD has been an international preoccupation for over 50 years.  As automobility increased after the war, international trade grew, and baby boomers supported a prosperous suburbia, the CBD was increasingly bypassed. 

An unlikely alliance of business and regulators attempted to reverse this.  The former were interested in preserving property prices, and dragged the latter along with them. 

The planners more recently took up the case in its own right, a plank in the new urbanist and sustainability agenda.  This relies in particular on promoting public transport in compact cities.  For this to work, employment has to be concentrated.  The CBD was where employment focused in the past.  Many planners believe it’s where it should refocus today. 

So how is Auckland’s CBD faring?
Does the future of the CBD really rest on its employment performance? 

Let’s look at Auckland's employment changes over the past decade, from 2000 to 2009.  I have used Statistics NZ’s Business Directory employment counts for comparisons.  I analysed what I call Central Auckland, which includes the Inner and Outer CBD.  [1]  What does it show us?

First, total employment in Central Auckland grew by 13%, the rest of the region by 19%.  Central Auckland accounted for 16% of regional employment in 2009 (down from 17% in 2000). 

Second, employment in Central Auckland fell 2.9% between 2007 and 2010, but only by 1.9% elsewhere.

Third, service employment (the white collar stuff) grew by 20.2% in Central Auckland but by 30.8% elsewhere in the region.  Central Auckland accounted for 26.5% of regional service jobs in 2000 but was down under 24% at the end of the decade.  These activities actually declined by 1.1% in central Auckland between 2007 and 2010, but grew by 3.2% in the rest of the region.

Fourth, retailing in Central Auckland grew by 7.5% but 21.2% elsewhere.  Central Auckland accounted for just 8% of the region’s total retail employment in 2009.

Fifth, hospitality also grew by 7.5% in Central Auckland, but it grew by 26% elsewhere.  Central Auckland still accounted for 26% of the region’s hospitality jobs in 2009, however.

What do we take from all this? 
So Central Auckland is no longer the powerhouse of employment growth in Auckland.  It has some specialties, of course.  But its traditional strength in white collar services is declining.  Its retail dominance is long gone.

More than that, it may just have turned a critical corner.  The Global Financial Crisis is by no means over and even if it is, we may not see a return to the buoyancy of the service sectors that sustained the CBD over recent decades.  Even public sector growth will to be much more constrained over the coming decade than it was over the one just gone.  

With improved communications, leaner operations will be looking for more cost effective sites.  Decentralisation and decamping may be a feature of a slimmer white collar sector in the future.

Health care and social services remain biggies in the CBD. They accounted for 43% of net new jobs there over the decade.  But how much more can they continue to grow in straitened fiscal times? 

Business services started  the decade well but unsurprisingly went backwards after 2006.  Financial services continued to hang in but with much reduced growth.  Anyway, they are growing faster elsewhere.

Professional and scientific services and computer systems have done well.  Let’s hope they hang in there.  They are important to our recovery, in more ways than one.

The creative industries, much touted by Richard Florida and others, and echoed in research commissioned by the old Auckland City Council, did okay.  The arts and recreation sector added 1,275 people over the decade.  Interestingly though, gambling accounted for much of this growth – with 840 more people employed in 2009 than in 2000.

And without strong growth in discretionary incomes across the region, gymnasia, arts, movies and movie making, gambling and other amusements are unlikely to be the stuff of serious growth in the foreseeable future.

Don’t bet on the office sector
So let’s not assume that office employment, the key to CBD growth over the past forty years, will be the driver over the next forty. 

But this is what the recent business case for a CBD rail loop assumes.  Much of the potential benefit is attributed to opportunities for premium office space expansion based on better commuter transport.  The case projects 30,000 new office-based jobs in the CBD by 2041 (Appendix K, Figure 21), despite the recent slowdown and the highly uncertain outlook for the medium-term.  What will all those white-collar people be doing to sustain the projected construction of all that new high rise – and high cost – office space?  Gambling?  Exercising?  Making movies?  Administering superannuation funds?

In any case, the international evidence used in the rail loop business case is based on ... guess what? The experience of large American cities over the past forty years.  I'm not sure what this tells us about how Auckland’s CBD will evolve over the next forty. 

Where to from here?
A healthy CBD is one where people want to be.  And as the structures of cities and regions change, so the reasons that they might be there change as well.  So preserving the CBD of the past – the centre of department stores and high rise offices, the heart of white collar employment, the home of the casino and multiplex – may not be practical, or possible. 

What we might hope for is the CBD to be the cultural and spiritual if not commercial heart of a strong city and region.  We can’t just give up on it.  There are huge expectations around the CBD and its waterfront in Auckland and elsewhere, and a willingness to commit resources, ideas, and energy to keeping it pumping. 

So what exactly will we be trying to achieve.  And how best might this energy and these resources be applied? 

I’m still thinking about it.  But preserving – or restoring – the past is only likely to be justified in terms of respecting our heritage, not in terms of shaping the future. Pumping more commuters into the CBD seems to be a high risk approach to an area undergoing another interesting if still largely unpredictable transformation.

 

[1]      For those interested, the following Census Area Units make up my version of Central Auckland: Harbourside, Auckland Central East and Auckland Central West .  Freemans Bay Newton, Grafton West and Grafton East make up the Outer CBD.  There are interesting differences between the Inner and Outer CBD which I may go into another time.

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Auckland Spatial Plan – Part 2: What would I do?

A sideline view

In my previous blog I expressed a concern about over-inflating the spatial plan for Auckland – promoting it as the panacea for the region’s ills.  Equally, a deterministic an approach that seeks to enforce behavioural conformity by mapping a particular urban form onto the region is unlikely to be successful.

It’s easy to stand on the sidelines and criticise, though.  What if I had responsibility for designing a spatial plan for Auckland?  Fortunately, I don’t.  But without accountability it’s easy to offer advice.  So here goes.

Can we limit prescription?

I liked Ree Anderson’s light handed approach, one that focuses on function rather than form, and priorities rather than comprehensiveness.  That’s the approach I would like to follow, one starting with how places within the region work and recognises relationships among them. This is along the lines of the network model applied to Zurich over the years, which Shane commended to us.

In keeping with this approach, let’s limit prescription. Let’s develop a framework within which people and organisations can be creative in addressing the environmental, economic, and community issues they will face.

How?  Well, I accept there do have to be bottom lines to start with, no go areas around which the plan can be developed. Then we need to address how infrastructure and land-use might evolve to support whatever growth Auckland experiences, and, finally, think about turning the whole thing into a framework for reducing uncertainty and resolving growth issues as they arise. 

We still need bottom lines

The bottom lines are the immutable, non-debatable features the community wants preserved. They will be given weight by being defined sparingly. Beyond volcanic cones, ranges, estuaries, wetlands, and shorelines they might relate to regional parks and open spaces (a town belt would be good), cultural heritage, iconic structures, critical infrastructure, and hazard avoidance.  Many of them we know about already.  Others will emerge from listening to the community. 

We cannot afford to overdo them, though, because we should be prepared to spend what it takes to secure, enhance, and preserve our bottom lines.  Relying on regulation is an inferior option.  If we cannot afford it, it may not be a bottom line that we can justify.

Make sure our infrastructure is affordable

Infrastructure is critical to community, economy, and environment.  Network services such as electricity and gas, water supply, wastewater, and drainage need to be integrated to deliver on all three fronts.  Like the transport network, they must meet the diverse demands of business and residential communities within a constrained physical – and fiscal – environment. 

The spatial plan is the place to pin down the key trunk services and their possible extensions.  It is also the place in the spatial plan to highlight the region’s critical infrastructure lifelines.

Beyond that, though, we need not rush the detail or commit to unproven investment.  The real key with infrastructure is its efficiency.  Does a major commitment lead to a commercial return?  If not, does it generate sufficient benefit to justify public expenditure?  The alternative is monumentalism – extravagant infrastructure spending for dubious returns. 

If the demand for major investment does not materialise the outcome will be lower aggregate productivity.  Over-capacity or redundant public projects add to the fiscal deficit, create structural distortions, and undermine economic performance.  The larger a project and the more imprecise the rationale, the more suspicious we should be. 

So let’s be sparing in what new commitments are written in and ensure that ill-justified works are not imposed on Auckland simply by inclusion within the Spatial Plan. Significant initiatives should be subject to the disciplines of rigorous evaluation both in their own right and as part of an informed view of how Auckland might develop.

And how might Auckland develop?

Envisioning the future

Ree Anderson suggested differentiating between things that work for individual places and Auckland-wide themes.  The vision should be discriminatory, but founded on realistic priorities and not a vague wishlist.

I’m a technician, not a visionary.  So I go to observation and measurement as my starting point.  Let’s first map where people live and where they work, socialise, and play today.  What’s here now will dominate Auckland’s activity patterns over the next thirty years.  And what people are doing today should provide some guidance as to land use needs tomorrow. 

But we should also look hard at emerging values and behaviours. We should think about inter-generational change in needs, tastes, and attitudes. We need to look and listen to diverse views to expand insights about the future and avoid extrapolating the limits implicit in our own knowledge.

We will find that distinctive communities and settlements are already being carved out within Auckland.  The spatial plan may have to provide for an emergent localism, and avoid submerging community character with a preoccupation with densities rather than people and places.

The emergence of distinct communities raises interesting land use possibilities in terms of encouraging – and allowing – people to meet future needs in a series of urban and ex-urban villages each with its own character. 

Acknowledging the limits to our knowledge of the future

Of course, we also have to explore options for accommodating population and employment growth.  Any detailed forecast of either is bound to be wrong. That has been the recent experience. Instead, projections should be undertaken to ensure that we maintain options, rather than to fool us into closing options down because we think we know now all there is to know about the future.

Better to stick with principles and leave choices to be made by future decision-makers rather than to anticipate particular outcomes built on current behaviours and knowledge.

So where will we develop?

There is a contrast between centralised and decentralised settlement, and the current thinking presumes that the former will – or should – prevail over the latter.  But perhaps we should avoid policies that promote one over the other. We have been slow in Auckland to acknowledge the reality and challenge of simultaneous concentration and decentralisation.  We need to cater for both.

Decentralised development need not depend on expanding the urban edge, though, the option implicitly favoured by present policies.   It might occur instead through the growth of distinctive centres along major transport corridors within and beyond the current Metropolitan Urban Limit. 

The spatial plan cannot necessarily pick where ex-urban centres will be or how they will evolve over the next thirty years. It might try to signal some of the more obvious candidates – Pokeno and Drury in the south perhaps, Warkworth and Wellsford in the north, Waimauku in the west and Beachlands in the east.  Beyond that, it can simply set out the conditions under which new, efficient, and attractive settlements might emerge and be linked.  Fortunately, Auckland’s new governance structure has increased settlement options within what has become a large unitary authority.

The role of the spatial plan, then, might be to set out the conditions under which different land uses might proceed, rather than to say what can or should happen, and where. 

What sort of plan? The physical framework

Bottom lines, urban villages, outlying centres, lifeline infrastructure, and land use principles can be tied together in the spatial plan, not as an exhaustive overlay of zones but as a framework around which the city can evolve.  The plan might provide for a string of centres across a strong linear transport network, a range of villages within the existing urban fabric, separated by leafy suburbs and parks, an iconic CBD as the meeting place of Auckland’s peoples and cultures, and harbourside, and the infrastructure needed to support these diverse places.  

The keys, though, will be the linkages between functional centres, not the boundaries between zones, and the principles which might be observed in the interstices rather than rules stitched into a map.  The plan should almost certainly identify those special bits of Auckland where we are prepared to meet the cost of avoiding change.  Equally, though, it should highlight the extensive areas that remain from which the changing needs of a city of growing communities might be met in the future.  

The plan can be flexible rather than exhaustive, at least in the first instance, indicative rather than definitive, informed by principles rather than prejudice, and transparent in terms of where the costs and benefits of its elements fall.

It should leave the detail open, subject to continuing development in light of the circumstances, preferences, the means, and the views of the day.   

Opting for simplicity and structure in the spatial plan might well provide the best way for the council can meet its 2012 deadline.  And keeping the plan general but informed might be just enough to satisfy diverse interests and expectations without making commitments that prove problematic down the track.

Is bigger better? Trying to reshape Auckland’s lagging economy

Getting Auckland growing – a national policy imperative

It has become conventional wisdom that New Zealand’s performance depends on Auckland’s economy, and that this in turn depends on agglomeration – the supposed economic advantages associated with large cities. 

But is Auckland really the driver of New Zealand’s growth?  It would be nice if it was, if innovation and investment in urban business was the main source of our prosperity.  And hopefully it will be a major contributor one day.  But the truth is, as I pointed out earlier, the country remains dependent on the fortunes of our non-urban sector. 

So how are we going to wind Auckland up from being a place where consumption and income redistribution are concentrated, to be the focus of national economic growth?

Promoting agglomeration to promote economic development

 Policy advisors make much of the virtues of agglomeration – sheer city size – as a driver of growth. [1] By concentrating in our largest urban area, businesses are presumed to reap productivity benefits.  Is this right?  And is it sufficient to drive national economic performance?

The benefits to firms of locating in large urban areas were first discussed late in the 19^th century by economist Alfred Marshall. The low cost of transactions with nearby businesses, shared access to specialised services and suppliers, a common labour market, and information sharing explain the advantages enjoyed by firms in big cities.

Arguments underpinning agglomeration economies are firmly rooted in the industrial age.  So they are questionable when wealth is associated with services as much as goods, logistics companies integrate international transport, communications are seamless, and capital moves easily to most places in the world.

There is still some statistical evidence to suggest that firms in bigger cities (or states) might grow faster than in smaller ones.  The difficulty, though, is in separating differences in performance from differences in the fine mix of products, services, and occupations that naturaly concentrate in larger cities in response to the larger markets there in a cumlative process that is not necessarily economically rational. 

But does it lend itself to policy?

Despite this, agglomeration theory has been adopted by policy makers in two areas. First, has been promotion of concentrations or clusters of businesses as a growth policy.  Second, compact city advocates argue that a higher density of employment in large cities is a path to higher productivity. 

Leaving aside possible flaws in data, methods, and assumptions, the statistical evidence reveals at most 10% gain in aggregate productivity for a 100% increase in employment density.  More commonly the estimated gain is half that.  Anyway, any estimate is so influenced by method and measurement as to undermine any confidence in policy based on it, as demonstrated in a recent report by Motu Research for the New Zealand Transport Agency. 

Surely there are easier, less costly ways to gain a few percentage points in productivity and output: to do with the quality of the labour force, for example, the quality of investment, or commitment to research and development?

Living in policy dreamland

As far as I can see from reading many international studies on agglomeration, the cost of lifting the capacity of ageing infrastructure within existing urban areas rarely gets a mention.  In trying to reveal cause and effect from within a tangled web of associations, the studies assume away the actual costs of increasing land use densities.  They ignore the quite different circumstances and histories of the cities and states bundled into their samples.  And they often mistakenly infer investor and firm behaviour on the basis of trends among cities. [2]

Transforming the buildings and infrastructure that make up a city to increase land use densities in the hope that businesses will screw more out of their investments is a very costly exercise.  The impact on the quality of urban life is also likely to be unacceptable.  Crowding and congestion, the unreliability of over-capacity and dated infrastructure and network services, and increased risk of service disruption mean that significant increases in density are unlikely to be sustainable even if they can be achieved without a fiscal blow-out.

Quite apart from the economic and political naivety of jumping from quantitative analysis to policy prescription, is bigger better anyway?  A simple look at recent history does not show that it is.

Auckland is already bigger – but is its performance better?

A focus on Auckland’s growth presumes that it is our only city big enough to have an international presence, so that we should focus policy and plans on reaping agglomeration benefits there. 

To explore this presumption we look at how well Auckland has done recently.  In 2000 the region had 32.6% of New Zealand’s employees, nearly two and half times Canterbury’s employment. [3] Surely this spectacular concentration of economic activity would become apparent in Auckland’s superior performance?  if agglomeration economies are to be evident anywhere, they would show up here.

Well, no.  Look at the graph.

Auckland’s employment growth lagged Canterbury’s through to 2010. It lagged non-metropolitan New Zealand (areas outside Auckland, Canterbury and Wellington).  And when the global financial crisis hit in 2007, Auckland’s employment fell faster.  Even Wellington, trailing early in the decade, was not hit as hard, down just 0.7% from 2007 to 2010 compared with Auckland’s negative 2.8%.

Naturally Auckland still dominated national employment in 2010 (32.4% of the total), but according to the theory that dominance should have increased not diminished.

So how do we explain this?

First, maybe the economic benefits of agglomeration are overstated.  Tthe empirical evidence tends to be generalised and static.  Despite the growing complexity and apparent precision of analyses, the causal impact on firm performance of lifting urban densities remains fuzzy and trivial. They are a weak foundation for policy.

Second, I suspect that all those factors assumed away in the analyses are actually important in the real world.  We cannot exclude the physical environment of individual cities, their history, the condition of sunk capital (public and private), different regulatory environments firms, and stocks of human capital, skills, and experience. To assume that proximity and density have a predominant influence over the investment and operation of firms seems naive.  And we cannot ignore the external costs of over-concentration.

Third, what if it really works? What if the secret of economic growth is simply being the biggest city? And at the sam time, what if breaking down economic barriers means that the advantage of size is measured across nations, not just within them?  Where does this leave Auckland?

New Zealand economy’s is increasingly integrated with Australia’s. Labour, capital, goods and services move relatively easily between the two countries.  Where does New Zealand stand in an Australasian urban system?  The second graph gives us some clues. Look at where Auckland stands in the bigger picture.

Australia’s metropolitan areas outperformed their New Zealand counterparts between 2000 and 2007. [4] In percentage terms, Sydney was a bit of a laggard.  But this simply confirms that being biggest is no guarantee of top performance.  Melbourne outstripped both Auckland and Sydney. 

More interesting were the second tier cities, Brisbane and Perth. With just 12% of Australasian metropolitan employment in 2000, Brisbane accounted for 18% of its growth!  Compare this with Sydney: with 29% of employees in 2000, it accounted for just 22% of subsequent growth.

Auckland had 7.8% of Australasian metropolitan employment in 2000 but accounted for only 7.1% of growth, significantly less than Perth (11.8%) and a little more than Adelaide (6.8%). 

Two simple conclusions 

One, in a global economy we cannot reap greater economic benefits from urban agglomeration than our Australian (or, especially, our Asian) neighbours. Being the biggest city in New Zealand offers no particular advantage in an international economy.  We have to find a different way.

Two, in both Australia and New Zealand, being biggest does not guarantee topping the economic performance tables.  Let’s do what needs to be done to make Auckland a great place to do business.  But size is certainly not everything in these stakes.

Sure, these are broad comparisons based on general data, but if we think that promoting agglomeration holds the policy key to Auckland’s – and New Zealand’s – economic performance, we need to think again.

[1]        E.g., Ascari Partners (2007) Assessing Agglomeration Impacts in Auckland: Linkages with Regional Strategies, Report to Auckland Regional Council

[2]           It is a mistake to infer the behaviour of individuals from the behaviour of populations, the so-called ecological fallacy. There are exceptions, e.g., David Mare’s Labour Productivity in Auckland Firms deals with micro-level data in an attempt to reveal the impact on individual firms of locating in Auckland

[3]           Based on employment data from the Statistics New Zealand Business Directory. 

[4]           Labour market data is for the major statistical regions in February so that the figures are broadly comparable with the New Zealand Business Directory figures.

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