Monday, 26 August 2013

Turning Crisis into Opportunity: Rebuilding Without Repeating Costly Planning Mistakes.

It is still not too late to rescue our cities from the “planners,” says Guest Poster Phil Hayward—not even in Christchurch.

THE URBAN PLANNING PROFESSION today is completely unmoored from reality, and at loggerheads with the economics profession, in so far as expert economists have been critiquing the outcomes of popular planning policies.

There are some economists ideologically allied with the “planners.” And most local body politicians blindly follow the “planners’” shallow assumptions despite them being demonstrably invalid, as demonstrated by both international experience and academic research, some of which was identified by last year’s NZ Productivity Commission Inquiry into Housing Affordability.

There is actually a strong case to be made, economically and environmentally, for a city with low densities, low cost land’ mixed land-use with localised employment / residential “balance,” and  good road connections between multiple “nodes.” (Refer for instance to the papers in the afore-mentioned database, authored by Prof. Alex Anas of the State University of New York at Buffalo.)

Having a strong “centre” in itself is nowhere near as important as having “nodes” biased towards the centre of the “greater city” with good connections across the centre between those nodes, as well as "ring" connections between them. 

Bad “sprawl” on the other hand has higher density “nodes” at the fringe (unintended consequences of planning fads: refer the papers of Alain Bertaud, World Bank Chief Urban Planner), a CBD that is a “choke” to cross-region mobility, and congestion resulting from "everybody trying to go the same way at the same time."

Dispersed employment and urban form is a reality in the evolved city, in developed nations anyway. The main "Ring" roads and "Radial" roads should have fly-overs where they intersect, so that cross-town travellers can always select a route where they will conflict minimally with "cross traffic."

The road network that carries inter-nodal traffic has much higher utilisation rates than a radial highway network because traffic travels on it in both directions at both ends of the day, and expansion of capacity is less prone to the return of congestion because traffic loads are dispersed. “Stop-start” congestion lowers road throughput to well below the throughput that was the norm when traffic demand was lower and traffic was free-flowing. No wonder “decentralisation” is such a strong force in urban land markets where road capacity has been neglected and misdirected.*

CHRISTCHURCH HAS THE ENVIABLE feature of having abundant flat land around it, so that obviously beneficial ideas like these can be put into practice without pleading geographic obstacles (as planners do in Wellington especially). Land that is geologically unsafe can be utilised as Green space.

Christchurch's airport, currently on one edge of the city with abundant rural land beyond, is still an obvious "fulcrum" for strategically placed new "nodes."

Land inside the planners’ artificial city boundaries are jacked up well above lands’ market rate in the absence of the planners’ “urban fence.” Even the best agricultural land outside the urban boundary costs only a fraction of urban land inside under conditions of zoning restrictions and growth boundaries.  Also, there is so many times as much agricultural land than urban in NZ that our cities could be doubled in size with only a minimal impact on agricultural production.

Christchurch home-buyers, Christchurch businesses and their workforces would be greatly assisted right now if inexpensive land for “Greenfields” development were thrown open to them. It is unconscionable to have denied them this opportunity for so long.  The cost and delays involved in “maintaining existing urban form” etc. are unreasonable to insist on in the crisis that still confronts us, and inhuman to impose on those still being made to suffer from 2011’s disaster.

Christchurch businesses and their workforces cannot even be easily absorbed into other NZ cities, because all those cities are all pursuing urban containment strategies as well. Inflated urban land prices are already a serious drag on NZ international competitiveness, and businesses and workforces relocating from Christchurch will only drive these prices up further—unless, of course, other cities like Invercargill and Hamilton and Palmerston North were to adopt “no growth restraint” policies to encourage cost-effective relocation, something no council has demonstrated any sort of willingness to even contemplate.

The existing Christchurch CBD should be relegated to “node” status and a pattern of new nodes allowed for, especially through the provision of intelligent and high capacity road connections.  Some of these nodes could be in existing popular growth “suburbs” (mini-CBD’s) and some should be on “Greenfields”. Known earthquake and other natural risks should be taken into account. 

Flexibility is important; agglomerations of certain economic and social activities occur spontaneously and planners have a poor track record of anticipating and controlling them.  Temporary rapid “churn” of land use does NOT indicate “failure” of planning or markets, but healthy functioning of markets to ultimately efficient ends.  The ultimate character of each “node” should not be pre-determined by “planners,” but “rightS of way” and so on for future roads and infrastructure should be put in place for low-cost ultimate provision of efficient infrastructure to support successful “node” growth in the future.

The need now to purchase “built out” land for roads, new infrastructure, etc. years down the track, DOES represent a costly failure of previous “planning.”

Generally, Greenfields infrastructure is lower cost than upgrading existing built-out areas in the case of increased density or disaster reconstruction.  The NZ Productivity Commission Inquiry into Housing Affordability included an excellent appendix of academic references on this subject, and this writer has several more. Existing areas possibly might be reconstructed efficiently at new LOWER densities, with many structures simply removed and turned into “green space”. 

The existing CBD could still be maintained as “heritage” much more practically by abandoning unreasonable notions of rapidly returning previous business activity to the area, especially under the utterly unreasonable uncertainties and cost requirements being imposed on businesses in the process. The existing CBD should be allowed to “heal” and rejuvenate on an indeterminate time frame. The money WILL ultimately be forthcoming from private investors seeking to “buy in” to the area, which will not cease to be a tourist attraction and a centre for cultural and artistic activity.  It is merely unreasonable to expect funding for reconstruction according to strict heritage maintenance requirements, combined with safety standards, to come all at once, right now. 

There are numerous international precedents for long-term self-rejuvenation of what were even once-blighted areas but still having the “potential” of a certain “period” charm.  Christchurch’s CBD’s potential will be glaringly obvious, including to serious international investors, bearing favourable comparison to some of the international urban “rejuvenation” success stories that were far from obvious at one time.


HAVING DRIVEN UP THE price of urban land in cities, “planners” have now moved on to take "regional" control of development, to prevent people from living in lower-cost rural areas and commuting very much further than historic norms, to city jobs. But had urban land prices been kept lower in the first place, much LESS development would move to rural areas and to "fringe node" development, and the infill of “fragmented” land would take place faster. (Shlomo Angel et al find this in comparisons of Houston with Portland, in their paper “The Fragmentation of Urban Footprints.”)

It is said that many CBD property interests favour the proposed but still long-delayed government-favoured “rebuild” of the central city. CBD property interests do not care however what the broader cost-benefit of a particular project is, as long as the benefit to them exceeds the cost to them. The correct way to fund light rail systems, conventions centres, and sports stadiums however is not to to soak taxpayers and ratepayers. It is to levy special assessments on the interests who expect to turn a profit, particularly the nearest property owners. If it was clearly understood that this was to be the funding mechanism, the “support” for these proposals would evaporate. What usually happens however is that the costs are, say, $4 for every $1 of benefit, but the $1 of benefit is reaped by the nearby property owners, while the share of the cost borne by them is 50c or less; the other $3.50 being wealth transfer and deadweight loss borne by the region’s households and businesses who do not benefit. 


Roger Sutton himself pointed out early on that the Canterbury region’s GDP had barely blipped with the disaster, and the Airport and the Port were busier than ever. What I believe, is that ChCh has become, completely by accident, a working example of a city that is more efficient without a traditional dense CBD at all. Sir Bob Jones’ intuitions in his various writings are absolutely correct. ChCh’s “Plan”, if it really was going to be bold and objective and futuristic, should involve going with the flow of the ever-powerful economic forces of urban decentralisation.

One of the many distortions of policy that CBD property-owning interests are historically responsible for, is the “radial” nature of all transport planning. I have a copy of a very interesting paper that discusses the policy debates that took place in the USA when the Interstate Highway System was being planned. At the time, there was an enlightened fashion among urban planners in favour of investment in inter-suburban arterial networks and “parkways” to support the already-evident trend to decentralisation. Victory went to the interests that advocated for the highways that connected cities, to penetrate right to their CBD’s. Of course this was regarded as “free” Federal money; just another example of the hazards of excessive central government powers of taxation and spending. (Federal subsidy of Commuter Rail is another example today).  

Prof. Peter Gordon’s latest papers (University of Southern California) have been concentrating on the point that urban economies, when they are allowed to, find their own balance between agglomeration economies, congestion diseconomies, transport costs, and land prices. He suggests that this underlies the high productivity of US cities, whether NYC with its skyscrapers and high finance, or cities with lower-density industry and workforces. Refer Gordon, (2012): “Thinking About Economic Growth:  Cities, Networks, Creatitivy & Supply Chains for Ideas.”

ChCh should position itself as an enlightened city that has abandoned the old radial and monocentric ideas that are mainly a result of rent-seeking by the property owning interests involved.

Generally, local businesses and developers, as opposed to incumbent land-owning investors, have much more practical ideas for development and progress. It is misguided in the extreme for politicians and advocates to be in bed with the latter, at the expense of all others. The wealth transfer that takes place away from first-home buyers and renters is an indictment of our loss of moral compass.

There is actually no “democracy” like the free market. Exponentially more people vote with their feet and their money, for stand-alone family homes and suburban malls, than would ever bother to participate in “planning” processes to put up a fight in favour of such things. Contemporary “consultation” processes are no more than a sham that enables busybodies with too much time and taxpayers money, to impose their ideological beliefs on society.

A common complaint in these post-enlightenment times is that humans are failing to conserve their environments. Yet land converted to urban use has frequently had chemical fertilisers routinely spread on it and cattle and sheep defecating on it, with far worse effects on local waterways and groundwater than urban developments have. Furthermore, agricultural production has low value-to-bulk ratio and requires far greater provision of transport per dollar income generated, than the economic production of urban areas. If agricultural production was so important to the nation’s economy, agricultural land would be sufficiently expensive that it would not be worth converting to urban land. Such basic and glaring economic principles should not be beyond our discernment.

Phil Hayward is a Wellington housing researcher and commentator.

* Those opposed to car use should reflect that bus public-transport efficiency is greatly enhanced by the same features that enhance mobility for individuals in cars.  Rail public-transport however  is completely incompatible with economically competitive urban structure in any low-population nation like NZ:



1 comment:

  1. At the time of the Auckland power crisis I recall that the gnashing of teeth initially was countered later by a realisation that many people working from home were far more productive. Maybe CBD's come down simply to egos of CEO's wanting to have bling and being incapable of building teams that can work away from the withering gaze of a control freak.

    The company franchise I contract to is coming under presure to be back in the CBD from suburbia (a short distance away from the CBD) to look flash after abandoning it some years ago because of cost. It just adds costs - no one ever visits so looks matter not.



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