Developers are leaving Auckland. This is not new -- the folks who build the city have been quietly leaving for some time in the face of increasing impositions on their efforts -- but apartment developer Conrad Properties decided to speak to Bob Dey to explain why they've had enough.
The short answer is that development in Auckland is now uneconomic. They point the finger squarely at Auckland City Council, saying they're to blame for two things at least:
One is the introduction this year of an Auckland City Council plan change setting minimum sizes for apartments, and the other is the council's policy on development contributions.
The combined effect of both impositions is to add $120,000 to the cost of a two-bedroom unit, and this is on top of the increased costs and sundry delays associated with changes to the Building Act. The cost of the "development contributions" alone -- which is a means by which the Resource Management Act allows council to put their hand even further into property owners' pockets -- amounts to around $70,000 per unit.
Annie Fox explains the sort of thing on which this money is usually wasted by council once extracted: "purchasing multi-million-dollar properties at inflated prices."
One that got my blood boiling for it's total stupidity, was the purchase of the SuperLiquor site on the corner of Ponsonby Road & O'Neill Street, for a staggering $7 million.
Retail? I hear you ask. However, not for retail, but to be demo'ed and turned into a park! The most ridiculous place for a public park, it will be small, which in itself isn't a problem (small parks can be charming) but with roads on two sides (one being a main road) it will be bloody awful place to sit. It will be empty 99% of the time, and anyway within 1km of this site there are 8 reserves and 16 within 2kms.
Apparently, they had to make a purchase to justify all the reserve contributions they have been taking over the years. Why didn't they just give the money back to the developers?
Good question. Another question should be why they're allowed to damn well take the money in the first place. The answer is the Resource Management Act, which gives council's carte blanche to boss developers around and to make them pay for it.
But Conrad Properties and developers like them aren't paying any more. They're getting the hell out -- and who could blame them -- leaving the supply of Auckland housing up to ... whom?
The fact is that the real culprit here isn't the council officers or planners or regulators who make the plans that are forcing developers out; the real culprits are the Resource Management Act that gives planners and regulators the power over other people's property, and a culture that assumes that local governments need planners and regulators to plan and control the city. They don't. On this point I'm four-square behind the Anti-Planner Randal O'Toole, who says that,
"After more than 30 years of reviewing government plans, including forest plans, park plans, watershed plans, wildlife plans, energy plans, urban plans and transportation plans, I've concluded that government planning almost always does more harm than good."
Ain't that the unfortunate truth. Time to put a stake right through the heart of the RMA, and draw the teeth of the planners and regulators for good.