Thursday, May 10, 2012

Czar Sutton strangling Chch home-owners [update 4]

For months the bureaucrats destroying Cantabrians’ spirits “managing” Christchurch’s recovery have successfully avoided addressing the growing elephant in the room: there is simply not enough residential-zoned land in Christchurch.

There is not enough residential-zoned land in Christchurch because the planners have zoned the city that way—ring-fenced,  locked down tight, build only where you’re told—and won’t be letting anything like an earthquake change their tiny minds.

It was bad enough before the earthquake. But at a time when good houses and safe residential land in Christchurch have never been more in demand, it has now become disastrous. So disastrous that folk with good houses on bad land in red-zoned areas of Christchurch face demolishing their good houses--or trucking them to Dunedin or Timaru—instead of being able to relocate them on the good land that exists in abundance around Christchurch, but which the planning arseholes have deemed off limits.

All this would be thuggish and incompetent enough. The truly bizarre thing here however is that this is not news to anyone but Roger Sutton, i.e., the uber-bureaucrat appointed by Earthquake Czar Gerry Brownlee precisely to “coordinate” and cut through regulatory restrictions on recovery like this.

It turns out however that Brownlee’s favourite uber-bureaucrat wouldn’t know his arse from his elbow—or at least, claims to have never heard of problems like this. “The first I heard of [these] difficulties was today,” he told TV1’s Close Up yesterday.

The man is either incompetent or uncaring.

Get the hell out of the way.

PS: Eric Crampton has more, and in a much more measured tone. I can only commend him for his restraint.

UPDATE 1: At the Cantabrians Unite Facebook page Hugh Pavletich invites us to

compare the Roger Sutton on the Close Up clip  with the same guy back February 2011 getting those overhead powerlines through to New Brighton when he was CEO of Orion. The sad reality is that Sutton is having a very hard time indeed under Bruiser Brownlee, who has turned the CERA exercise in to a bureaucratic shambles. The focus of CERA with Sutton leading it from the outset with a small competent team (say around 6) should have been to sort out the Christchurch Council. Sadly the low wattage guys Key and Brownlee were never bright enough to see that. To understand why - one needs to read the Vanity Fair article on the failed Merrill Lynch "The Blundering Herd" - which shaped Key. Key is in essence a corporate bureaucrat himself, who couldn't solve a problem if he tried.

UPDATE 2: Yes, let’s be honest, bozos like these bastards are making every city in the country unaffordable—even without our own earthquakes! As developer Olly Newland says today, “building reasonably priced housing is a dying business, strangled by regulation.”

UPDATE 3: Bill English knows this. He told a Christchurch audience last week:

having affordable housing in Christchurch will be the single biggest determinant of the population of this city in the next 10 years because housing affordability in New Zealand is way out of line ...
    "In Christchurch we have an opportunity to create affordable housing and that will certainly attract people.
    "With respect to the business community, the planning processes, in particular up until recently, have lacked a strong focus on who actually rebuilds the city.
    "It's not the planners ... what rebuilds cities are investors who will take risks….”

He knows it. But he and his colleagues are doing nothing about it.

UPDATE 4: Commenter Mark, who I know knows the field, reckons I’ve been unfairly harsh about Roger Sutton, and misdirecting my anger about high land costs and restrictions on relocating homes:

Lack of subdividable land is not a huge problem in Christchurch. There is a significant amount of relatively cheap land around. If you took away all zoning rules overnight, it might decrease prices a little, but not significantly.
    What drives the cost up is a complex and lengthy resource consenting process, high engineering standards in terms of stormwater treatment etc, not to mention new (very conservative) seismic requirements for land and foundations…   

Not to mention consent costs, reserve contributions, development levies etc., ad nauseum…

I think the "problem" Sutton was professing ignorance of was not lack of land (because I too am unaware of that problem), but the covenants that private developers have against relocating homes.

On this, Eric responds:

I agree that the covenants are what some people want, and they shouldn't be interfered with. But I can't see how we'd have covenants on pretty much all new sections if we had easier processes for opening up new sections for development.

More in the comments.

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8 Comments:

Blogger Eric Crampton said...

The post took several redrafts to tone it down. First version had a bunch of all-caps and underlining and shouting, ending with suggestion that we take Bob Jones' advice, put a lake downtown, and put the planners at the bottom of it. Figured that was probably not the best way of making the point.

5/10/2012 12:02:00 pm  
Blogger Peter Cresswell said...

Works for me.

If you're calling for volunteers, I'd be happy to help throw the bastards in.

5/10/2012 12:43:00 pm  
Blogger Mark said...

Peter,

Whilst I can agree with your general conclusion (government should get out of the way), I have to disagree with many of your specifics, and your case against Sutton is over-stated.

Lack of subdividable land is not a huge problem in Christchurch. There is a significant amount of relatively cheap land around. If you took away all zoning rules overnight, it might decrease prices a little, but not signficantly.

A complex and lengthy resource consenting process, high engineering standards in terms of stormwater treatment etc, not to mention new (very conservative) seismic requirements for land and foundations is more what drives the cost up. You can blame this on government in general, but it's not something Sutton has much power to change. The $50,000 sections Hugh talks about is not possible in this environment, even if the land were worth nothing. I say that as someone with years of recent experience developing large scale subdivisions in Canterbury.

I think the "problem" Sutton was professing ignorance of was not lack of land (because I too am unaware of that problem), but the covenants that private developers have against relocating homes. This is something that the market has thrown up because it's in general what people want, not any action of government. Expecting Sutton to "do something" about this only encourages the crowd now calling on government to get into the business of land development, or force developers into removing these covenants.

I know that Sutton is a rational man (at leat he was pre-CERA), and in general accepts the principle that things have to be left to the market (albeit inconsistently). I also know Brownlee is not immune to kicking a few Council heads when they get in the way of private developers. However they are both under intense public pressure from the public to intervene in the market. As someone on the ground here in Chch, I think we have little to gain by joining the hordes crucifying them for things they can't control. We're better served by calmly advocating for specific things they can do to make things easier. Yes, in general this means government needs to 'get out of the way', but we need to start by understanding what they can and can't influence, and what is politically achievable.

5/11/2012 02:26:00 am  
Blogger Eric Crampton said...

Mark,

I had a fun chat with a friend who works for one of the Councils adjoining Christchurch. She isn't one of the planners, but has to talk to the planners a fair bit.

Large minimum lot sizes and regs that increase lot prices work to keep poorer and browner east side Christchurch people from moving there. That effect seems to be a feature rather than a bug. She didn't much like that, but it's not her bailiwick.

I agree that the covenants are what some people want, and they shouldn't be interfered with. But I can't see how we'd have covenants on pretty much all new sections if we had easier processes for opening up new sections for development.

5/11/2012 10:18:00 am  
Blogger Mark said...

Eric,

If your friend works for Selwyn, then I agree - they don't allow high density in new developments. However Christchurch and Waimak district (eg: Pegasus) do - and in the case of Pegasus smaller more affordable lots is where future supply is targeted.

When I said there's no real land shortage, I'm talking large greenfield sites able to be developed. I agree that a relaxation of density requirements within existing developed areas (eg: letting anyone with a large backyard in Chch city develop to townhouse type density - or subdivide their backyard to accomodate a relocated red zone house) would make a difference.

5/11/2012 11:41:00 am  
Blogger Eric Crampton said...

@Mark: Agreed that they ought ease up on density restrictions in-town. Most of town should be zoned to allow (but not require) pretty high residential density and commercial mixed use.

5/11/2012 11:50:00 am  
Anonymous Mort said...

red zones are toast.
do a land swap with some decent stable grazing/forestry land further inland or away from river courses,and then allow the farmers to convert bexley etc into dairy farms. Allow them to put numerous new bores down to gain control of the aquifers, and sodden soil. Who knows, the plan may even turn around former lost zones where social welfare and dependency were the order of the day, and could now become productive income earning resources again.

5/12/2012 01:24:00 am  
Anonymous Hugh Pavletich said...

Mark - with respect your view that (a) there is abundant land supply and that (b) openning up land supply and financing infrastructure properly would not lower prices substantially - is bunkum.

Go to the Important Articles Section of Cantabrians Unite www.cantabriansunite.co.nz and read Dale Smiths article on $50,000 sections.

You might also iike to go to my website www.PerformanceUrbanPlanning.org to read the Definition of an Affordable Housing Market on the front page. Supplying affordable housing is a formulaic business - and has been since the time of the Levitts.

Housing aggordability is a "nonsense issue". We know exactly what the problems and solutions are - and unfortunately - have to endure the "agony" of listening to politicians and others protecting special interests on why it isnt posssible to RESTORE. There is NOTHING being invented here!

5/18/2012 04:30:00 am  

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