Friday, March 29, 2013

Phil McDermott: Upping the Ante - Where can we Afford to Live?

Auckland fiddles, Sydney makes its move

The Auckland Council has released a Housing Action Plan that will be an addendum to its encyclopaedic
Draft Unitary Plan.  It contains seven objectives, 12 priority areas, and 32 actions.  The Housing Action Plan will now be subject to the submissions and appeal process  associated with the Unitary Plan, whatever form it takes, and presumably also subject to the red tape associated with trying to implement it.

Compare this non-action with what is happening in Sydney, where the State government has just announced the   planned release of greenfield and brownfield land for up to  171,000 new homes across 31 new and existing suburbs. Alongside that will be land for new jobs, shops, schools, and transport. 

By moving on a variety of sites and promoting real volume construction, and by providing for diverse housing types the State is hoping to make housing affordable once more with a mix of multi-unit and detached housing.

Which city will be more liveable?

In Auckland, we are not sure if we have even 2,000 sites ready to build and maybe 15,000 in the pipeline.  And by the time we get the grab-bag of policies in the Housing Action Plan sorted and refined to something workable, it's not clear that we will have many more.

Certainly the Sydney plan will take some time to get traction, but with this announcement it is underway.  And that may create even more grounds for New Zealanders who cannot afford a house in Auckland to head west to Sydney and beyond.  Abstract notions of liveability - and comparisons of liveability rankings - may be irrelevant if you cannot buy the house you want in one city but can in another.

The Auckland challenge 

The New Zealand Productivity Commission and the Government have challenged Auckland to cut the red tape and introduce substantial new capacity to the market as a means of increasing the affordability of housing.  The Council is resisting. It has, after all,  produced many documents on the issue - but not much else.

The time is over-ripe for bold action in Auckland.  Allowing this issue to get caught up in the red tape surrounding the Draft Unitary Plan means going backwards. We knew at the time of the original Auckland Regional Growth Strategy in 1998 that we were facing a significant shortage of housing capacity. Yet we wasted the following decade writing reports that estimated theoretical capacity, projected theoretical demand, and  proposed impractical responses. 

Going by the increasing press and social media comment, people are finally realising that we are now faced with a housing (ownership and rental) crisis and that this will have significant long-term economic and social consequences.

Let's not waste another decade

Here are some simple if challenging  actions:
  • Identify sufficient land in green and brown sites for, say, 60,000 new dwellings immediately. This is not so difficult.
  • Some of that land will be available in and around satellite centres including but not confined to existing  rural centres and townships. Plan today for the necessary transport corridors. 
  • Some of the land might be developed by pushing out the urban limits on the edge of the city, but this somewhat conventional response promotes sprawl, diminishing the quality of the metropolitan environment. 
  • And some of it will be brownfield sites around town centres, some close to the harbours and Gulf, and some close to -- but not right on -- transport corridors.  The secret is to have multiple sites on the go at a time to create diversity and to avoid disrupting any one sector of the market.
  • If necessary create a community controlled organisation (or expand the mandate of and resources of the council controlled Auckland  Council Property Ltd) to consolidate ownership in land parcels large enough to sustain efficient development.  Such an agency would work with the private sector and central government to achieve packages and put to tender such sites or the right to build on them .
  • Streamline the regulatory processes through which the quality of development can be managed and maintained.
  • Ensure that adequate provision is made for community amenities and services, including medical centres, education , retailing and commerce, recreation areas and green space.
  • Zone and develop accessible and well-connected employment centres in association with new housing areas.
  • Ensure that we are realistic  in our infrastructure prescriptions, that we do not over-specify, overbuild, or overcharge.

Moving ahead

Developing new capacity need not destroy Auckland's green and blue image.  In fact, done right it will enhance it and enable more people to enjoy it. 

The figures show that the expansion of Auckland in the past has not devastated the output of the rural sector in the way many people seem to think.  Nor need it do so in the future.  Indeed, the figures suggest that it may even increase rural productivity.  In any case, efficient urban development is essential and will enhance economic development. In contrast, inefficient, ad hoc, incremental development that offers too little too late may add more costs than benefits,

We need to move quickly, with due sensitivity to Auckland's diverse living environments, and provide flexibility if the city is to grow in the way this Council thinks it will, or should. This does not mean development at any cost.  But it does mean moving away from the piecemeal and ponderous approach to the City's future that is constricting housing at the moment.

 A bold vision is needed to replace the report-ridden,  incremental, piecemeal, abstract, and partial policies developed to date if we want to protect the quality of the Auckland environment and develop the housing that enables more Aucklanders to enjoy it.

1 comment:

Dale Smith said...

Hi Phil
What you are proposing is exactly what the unitary plan is trying to achieve. Namely increase council control of when and how land will be developed with the intent of increasing council revenue.

If this plan gets approved and council have control, supply of houses will be further restricted, not just because of the lack of available land that can be developed at the rate of demand, but also because council monopoly control will mean housing is a cost plus exercise, with most of the costs being non-value costs ie waste.

This will continue with needlessly increasing house prices, or with the diminishing size of houses to off-set this. Either way, whether you are into high or low density, you will pay too much.

Land is three dimensional, zoning needs to be released up (height) and out (length and width) at the rate of demand (within a 6 month timeframe at the max.) to make sure supply keeps up with demand.

This provides the correct platform for lower costs, which should/could be passed onto the purchaser by way of lower prices. The Unitary Plan is designed to, not only, capture any savings but to increase costs.

Some of the tools council will use to do this are their new Shared Value Uplift tax, or use the Inclusionary Zoning tax so they can subsidise ‘affordable’ housing. Either way extra costs for homeowners, which is extra revenue for council.

Using the Aussie model won't help, they have housing that is more unaffordable than ours.