Monday, 5 May 2014

18+1 Questions for Mayors and Minister’s Blocking Christchurch’s Redevelopment

The oafish Gerry Brownlee is in denial about the disaster being made of Christchurch by his government’s top-down authoritarian management of the city’s (non) re-development.

The latest entrepreneurs to confirm there is nothing in the central city worth moving to is The Enterprise Precinct Innovation Centre (Epic), who are moving out, “saying delays and overpriced land make the project infeasible.”

EPIC (Enterprise Precinct Innovation Centre) co-founder Colin Anderson says the group has scuttled plans for an inner-city innovation "village" to house more than 50 small businesses.
     EPIC is now looking at land outside the blueprint…
    After months of delays, founders say land prices are too high and the Government's planning process is taking too long.
    "At a high level we have given up on the innovation precinct. We have lost confidence that government process would lead to land being made available at an acceptable price," Anderson said…
    Part of the innovation precinct's purpose was to gather small, innovative, tech businesses together to foster collaboration.
    But with small businesses unable to afford rising land prices, it seems increasingly unlikely it will be able to carry out that purpose

Brownlee’s response reveals his main aim with “his” redevelopment. He has “no concerns” about progress, or lack thereof.  And he remains very happy about, guess what, maintaining the city’s land values.


One of the things that was of concern to Christchurch immediately after the earthquake was the potential value of CBD land… What the CCDU has done through the acquisition programme and through the blueprint [says Brownlee]. . . they've managed to preserve those [land] values and in any disaster situation that's quite an achievement.

Quite an achievement: They’ve made the centre of what was New Zealand’s second-biggest city the world’s most expensive carpark. That’s not easy. That certainly is “quite an achievement.”

Christchurch businessman Hugh Pavletich asks:

Who were the people who asked Minister Brownlee to artificially inflate land values ?
    Why hasn't the media actually asked him that question ?

My understanding is that this "artificially inflating land" advice actually came from of all places Treasury. And Treasury too I understand gave Housing Minister Nick Smith the same advice regarding fringe land, with the recent Housing Accord fiasco. That is, to keep it inflated.
    Where are those Treasury reports to Ministers Brownlee and Smith? We need to see them reported…
    To the best of my knowledge, there certainly was not any "advice" from business to Brownlee and Smith to artificially inflate land values. If so, surely Minister Brownlee should tell us who these people / organisations are ... and provide us with the written advice he received. 
This is the biggest shambles of a recovery in the developed world.

Pavletich has 18 questions for the ministers, mayors and bureaucrats blocking Christchurch’s recovery – since we have no organised opposition, questions that some entrepreneurial journalist needs to ask:

  1. Locking down the Central Area for 2 years effectively killed it. The general understanding is that 1000 of the 2000 buildings demolished have been for economic reasons not seismic. What is the cost of this unnecessary destruction of the capital stock ?
  2. How does artificially inflating central land values actually assist the redevelopment of the central area ?
  3. How much is it costing taxpayers unnecessarily for Minister Brownlee’s “central artificial  land inflation programme,” i.e., taking land out of commercial use ?
  4. The reality is that through the supposed recovery phase, it was the bureaucrats of CCC, then CERA/CCDU that took control of the former central area … and deliberately did not engage with local property owners / business (read back through the history of this bureaucratic boondoggle).
  5. The National Party purports to “favour” market solutions” to problems, but has deliberately chosen as a Government to be political parrots for bureaucrats. Why ?
  6. Why is the National-led Government NOT following its own script with respect to affordable land   … refer for access to Deputy Prime Minister English’s Oct 2012 announcement, the subsequence Housing Accord legislation, and Prime Minister Key’s clear statement late last year ? Why aren’t these clear Government directives reflected in the recently announced Christchurch Housing Accord ?
  7. Why was so-called “social housing” tangled up with the Housing Accord … when clearly, it should have been treated as a separate issue ?
  8. From the Christchurch Council side, why hasn’t Housing Committee Chair Glenn Livingstone been the spokesperson on the Housing Accord issue ? Councillor Vicky Buck’s role appears to be simply social housing. Why has Livingstone been side-lined ?
  9. Councillor Raf Manji talked sense on housing recently, saying Council can't afford social housing … and on the impact of social housing debt on the City’s Credit Rating earlier by CCHL General Manager Bob Lineham too  …City council credit rating at risk. With his greater understanding, couldn’t he have more responsibility?
  10. Why have both Ministers Brownlee and Smith chosen to support the bureaucrats while ignoring people’s and business’s needs with respect to affordable land and proper infrastructure financing, so that a “market priced” recovery across Christchurch can finally get underway ?
  11. Christchurch housing is rated internationally “severely unaffordable” at 5.8 Median Multiple, when normal / affordable markets do not exceed 3.0 times (refer Demographia Survey ). When will something serious be done to allow new builds to easily proceed?
  12. Why does Minister Smith see the much higher residential build rates per 1000 population out in the adjoining Counties of Waimakariri and Selwyn (with all the associated traffic disruptions and additional travel times) as a “good idea” … instead of allowing affordable and convenient land to be supplied on the fringes of Christchurch itself ?
  13. As outlined within my op-ed ‘Focus on Restoring Housing Affordability’ there is approximately an artificial million dollars per hectare of artificial land value above True Rural Value on the fringes of Christchurch. Why does Minister Smith think it’s a good idea to keep this differential in place by persisting in artificially strangling land supply ?
  14. New fringe section prices at around the $250,000 mark are about what people should be paying for new starter house and land packages (refer Andrew Atkin THE REAL DEAL poster). Yet, thanks to Minister Smith, struggling new fringe home buyers are instead being forced to make an unnecessary “donation” of about $200,000 to Ngai Tahu and other subdividers for a little serviced plot of land.
    When, if ever, might these more reasonable section prices be achieved here?
  15. Mr Sewell of the Property Division of Ngai Tahu purports to be “concerned” about new house prices  (or are his real concerns that the excessive costs of a degraded house building industry are making it too difficult for him to sell grossly expensive sections ?). But why does Housing Minister Smith support and provide an artificially-inflated land-pricing protection service for Ngai Tahu and other politically favoured speculators / land bankers, while ignoring people’s need for affordable land ?
  16. Why is Minister Smith deliberately hampering the provision of affordable land, so that the building industry has the scale and the confidence to move away from the current inefficient/excessively expensive Cottage Building culture to one where normal commercial disciplines and market pricing are restored … as explained recently on my op-ed ‘House Prices: Focus on Land Mr Sewell’ ?
  17. When are those consistently making failed decisions (such as council planners and Ministers Brownlee and Smith) and those supporting them (such as Peter Townsend of the Chamber of Commerce) going to be held to account ? In contrast, there have been many who said little but knew from the outset that these failures would occur and why, and simply developed and invested elsewhere -- and very few indeed, who spelt out clearly the reasons for these failures and the solutions required.
    Isn’t it time for accountability ?
  18. What has Mayor Lianne Dalziel, with her band of largely new Councillors, achieved to date in getting the CCC restructured and functional, so that it is fit to take over from CERA in 2016 ?
    Where is the sense of urgency ?

And my own simple question to Ministers Brownlee and Smith, and Prime Minister Key:

Q: It’s still not too late to rescue the city from its malaise by declaring it an Enterprise Zone instead of a Ward of the State, getting rid of the costs, prohibitions and regime uncertainty that is killing it -- and allowing the spontaneous order that builds great cities to develop.
What have you got to lose now by declaring it an Enterprise Zone – with income tax holidays and planning holidays and the freedom to try new things – letting the city redevelop organically, the way all great cities have, and do?

Tragically, this video promoting an Enterprise Zone (as told by two business owners, an economist and an engineer) is as topical now as it was three years ago.


1 comment:

  1. The Enterprise Zone idea is excellent; what we need to do is decide on its boundaries and my suggestion would be its northern boundary at Cape Reinga and its southern boundary in Bluff.

    No taxes or busybody "planning" within that zone; sounds good to me!


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