Auckland's "Character Protection Racket"

"In response to last year’s legislation supporting increased density near urban centres and public transport hubs, Auckland Council has excluded central city suburbs from the plan under the guise of ‘special character’ ... protecting affluent inner-city neighbourhoods and forcing much-needed development further out... flailing desperately to ensure that the kinds of walkable, accessible lives it trumpeted in 2016 are mostly reserved for the city’s most affluent citizens....
    "[Council-imposed] character protections cover 41% of the residential land within five kilometres of the city centre. That percentage rises in city-adjacent suburbs, reaching 94% in Grey Lynn Central and 91% in Ponsonby East. The restrictions have choked growth near rapid transit, including along the future route of the City Rail Link. Around 80% of properties are subject to restrictions in central Mt Eden and near Eden Park. Nearly 70% are cut off from dense development in Kingsland, which is also expected to be a key link in the government’s planned light rail line. In the city’s best-located suburbs, the gates are locked tight...
    "Scott Caldwell, a spokesperson for the pro-density Coalition for More Homes, says he wouldn’t have minded if the council had tried to protect a few high-quality, architecturally or historically significant streets. But the sheer extent of the council’s proposed protections makes the proposal unfair and likely illegal, he says. 'It’s 3% of the overall city but 90% of the most desirable places to live if you want a compact city. The harm is that no one gets to live there apart from the people who already do, and anyone who’s lucky enough to inherit one of their houses'....
    "[I]n planning terms ‘character’ is a council invention, and its parameters are vague. Even council planning committee chair Chris Darby struggles to deliver a concise explanation. 'It’s groups of buildings, architecture that reflects periods of history,' he says. 'It’s representative of areas. It’s architectural style that tells a story of the past.' Albany councillor Wayne Walker offers an even more wide-ranging interpretation: “It’s a whole lot of things and it’s going to vary somewhat from place to place'....
    "Instead of genuine heritage, many housing advocates see character areas as a historical homage, similar to the former colonial streetscape exhibit at Auckland War Memorial Museum. Oscar Sims of the Coalition for More Homes calls them 'the worst of both worlds' — cutting off intensification while failing to preserve either historic integrity or original built forms. [West Auckland Councilllor] Shane Henderson says they amount to 'fake historical areas.' Wellington councillor Tamatha Paul (Ngāti Awa, Tainui) has proposed renaming them 'colonial streetscape precincts.
    "The rules governing [these living museum pieces] often restrict new development to lower densities than what already exists. Many of Auckland’s villas and bungalows were built before council planning rules — they’re close together, they shade each other, they’re on small sections. You literally couldn’t rebuild many of them under the rules designed to protect them, which enforce, among other things, height-to-boundary ratios, side set- backs and a 600m2 minimum plot size ... proof that character areas are aimed at warding off new buildings rather than protecting old ones. [Architectural designer Jade] Kake says the people defending those rules generally benefit from an inequitable status quo. 'If they were living in insecure housing, or in really poor-quality housing, or if they were experiencing fuel poverty, and they’re trying to get across the city, or their kids were sick because they’re living in shitty homes, I think they might advocate a different position'.
    "Peter Nunns, director of economics at Te Waihanga New Zealand Infrastructure Commission, says character areas are part of a 50-year history of council development restrictions that have put homes out of reach for many Aucklanders. 'They’re essentially a continuation of 1970s district schemes which cut capacity for growth,' he says. 'So the predecessor to the special character area policy has really been at the heart of our housing affordability crisis.' Character advocates say even if you built apartments in places like Grey Lynn, they’d likely be expensive. Nunns says a large body of international research shows all new housing supply helps affordability, including at the more luxury end of the market, and high land values in character areas indicate a huge amount of constrained development potential.
    "He has local stats to back that up. His research demonstrates house prices nationwide would be 69% lower if it weren’t for council-enforced density limits, along with the resulting inefficient, car-centric layout of our cities. When it comes to Auckland, though, Nunns’ interest is personal. His great-grandfather built some of the villas in Ponsonby and Devonport. 'So, from a family taonga perspective, I can see the appeal of this connection with the past.' Nunns doesn’t let that define his views on developing those areas, however, because he knows his great-granddad wasn’t trying to build wooden monuments for generations to come; he was trying to meet his family’s needs. People who want to set down roots today deserve the same opportunity, he says. 'If I told my ancestors we can’t meet our current housing needs because we’re protecting what they built 100 years ago, I suspect that their answer might be that we’re missing the point'."
          ~ Hayden Donnell, from his article 'The Character Protection Racket'

In Auckland, we’re still making affordable housing impossible

 

The authors of Auckland’s Unitary Plan took on the issue of how the city should be allowed to grow by the planners. Disallowing people’s freedom to choose themselves how the fuck they live, they characterised it as a choice between up versus out.

The best choice within this perverted planning framework would have been to say both-and.

The worst choice if you want to cure Auckland’s rampant housing affordability problem (for which, I remind you, we have the world’s gold medal) would be to largely prohibit building out in favour of building up. (“They don’t want people to have choice – they want everyone in an inner-city apartment.”)

The very worst choice of all would have been to largely prohibit building out while severly limiting where people will be allowed to build up – which is what the city has ended up with.

So we get the worst of both worlds.

The outcome reaffirms research conclusions that

Cities that have curbed their expansion have – with limited exception – failed to compensate with densification. As a result they have produced far less housing than they would otherwise, with severe national implications for housing affordability, geographic mobility and access to opportunity, all of which are keenly felt today as we approach the top of housing cycle.

Part of the reason is that, as urban-research economist Issi Romem finds, cities do fail to compensate for not building out by making it far too difficult to build up either.

But the other reason is that simple urban land economics means that because the planners’ ring-fence around the city “destroys the competitive market for land on the urban fringe,” the jolt in prices there feeds through to every single home in the city.

Discussing this disaster, Wendell Cox points out that this should hardly be news to anyone willing to remove their blinkers.

Near 50 years ago, legendary urbanologist Sir Peter Hall suggested that “soaring land prices …. certainly represent the biggest single failure of the system of planning introduced with the UK’s 1947 [Town and Country Planning] Act” (see: The Costs of Smart Growth Revisited: A 40 Year Perspective). Urban containment policy, the principal strategy of forced densification, cannot repeal the law of supply and demand. Seventy years of experience prove that.

The writers of Auckland’s Unitary Plan could not care less about that proof.

Now about Auckland’s would-be home-buyers locked out of the housing market by their strangling of it.

[Hat tip Hugh Pavletich]

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Auckland Council’s new Unitary Plan creaks closer

 

The change-a-minute process bringing us the Auckland Council’s new Unitary Plan appeared to be creaking towards some certainty, with the Plan now expecting to be notified on Friday. These are the councillor’s final amendments/decisions on the more controversial decisions:

• Retain standards around the minimum size dwellings have to be, to avoid “shoebox” apartments or units being built…
      Under the rule, a studio apartment in the centre city will have to be at least 35m², or 30m² plus a 5m² balcony. For one or more bedrooms the minimum size is 50m², or 42m² plus a 8m² balcony.

This effectively does to the local Tiny House movement what Simon Bridges is trying to do to Uber.

• Retain the pre-1940 building demolition control on the Queen Street Valley Precinct, which will enable these buildings to keep their character.
• Retain the objective that provides for the management of heritage values in the Regional Policy Statement.

A sop to NIMBYs demanding the city and suburbs become a museum-piece instead of somewhere affordable in which to live.

• Delete the Rural Urban Boundary from rural and coastal towns, enabling growth in new and existing rural and coastal towns.

A sop to “environmentalists” in places like Okura, these environmentalists being folk who already have their own mulit-storey bush cabin barring others from doing the same.

• Amend the threshold for requiring resource consent from three or more dwellings to five or more dwellings in the Mixed Housing Suburban and Mixed Housing Urban zones.

Helpful on the face of it, but since the extensive rules in the Plan are likely to trigger a resource consent in any case, only a paper victory.

• Delete Retained Affordable Housing provisions, which would have required 10% of homes in developments of more than 15 new dwellings to be affordable.

This was always a nonsense provision, ridiculously expensive to provide, wildly bureaucratic to oversee, and sensible only to those who’ve never encountered the subject of building economics before – particularly the concept of ‘churn.’

• Delete standards related to building work and internal design matters, addressed in the Building Code. These include standards around the amount of daylight dwellings need to be exposed to and universal access to residential buildings. 
• Have no minimum car parking provisions for retail and commercial activities in centres.

Sensible. Otherwise every new cafe would need to find several carparks just be allowed to open. Ridiculous.

• Delete the Sites and Places of Value to the Mana Whenua overlay and associated provisions.

The deletion of what’s been called the Taniwha Tax: the requirement to consult up to a dozen different iwi to by the right to  work on your own property. One of the few major victories in this final Draft, and almost entirely due to the heroism of Lee Short and the Democracy Action team he led. It is “the first push back against the racist agenda of tribal elites being pursued throughout New Zealand.”

• Retain the Rural Urban Boundary at the Crater Hill volcano at Papatoetoe, so houses aren’t built here.

This is just so-called “virtue signalling” on the part of councillors about a place that few would either know nor care about. It costs councillors nothing, but would-be home-owners dearly.

• - Retain objectives around rural subdivision that prevent “inappropriate” and “sporadic” subdivision and promote the “enhancement of indigenous biodiversity”.
• Retain policies to focus growth within the existing metropolitan area.

This is the planners’ ring-fence around the city that makes land-bankers rich, home-buyers poor, and guarantees progressive carpet sprawl as the city expands in the only way the planners allow: thirty metres or so at a time.

That this provision is retained shows these councillors have really learned nothing, and forgotten nothing.

Retained too over most of the city, it seems, is a ridiculous rule not seen in the city for decades mandating that every new house or addition must maintain a one metre separation from both side boundaries – and this in a plan that is supposed to encourage intensification!

Final publication on Friday of the Complete Works of the Auckland Council Planning Department will be fascinating.

It’s not pretty, it’s not expansionary, and virtually everything will require a planner’s permission of some description, but at least we will have a modicum more certainty in what property-owners themselves may plan.

Hayek on (Unitary) Economic Planning

 

 

 

Posted with Blogsy

Unitary Plan: The planners strike back*

 

The many-mirrored maze through which Auckland’s proposed Unitary Plan is finally decided upon – the plan through which planners gain detailed control of your property – lurches closer towards resolution.

When it came out of the Independent Hearings Panel, it was much less then this common-law loving blogger would have liked, but far better than anyone with my sympathies could have expected. And then it went on to the planners for them to tinker with it again. And the planners have struck back!

Not for them to sit back while some Independent Panel of geeks knocks some of their new power-base form under them.  Their recommendations to council, reviewing those of the Panel, put back in many of the more intrusive things the Panel recommended leaving out.

Of the Panel’s headline recommendations, I found one bad, one very bad, three good, one mostly good, and one very good. That’s not bad. But what is bad is what the planners have done now.

What I was calling very good news is now gone – the Taniwha Tax is back. So that’s now very bad.

They’ve essentially put the kibosh on any ambitions Aucklanders may have for Tiny Houses, those often cunningly crafted wee places folk are falling into overseas as a means to get into a city economically. Nah, say our planners. Not welcome here. We are going to insist on “minimum dwelling sizes” in our city. Fuck you, planners. Fuck you very much. Very bad news.

The planners want to strengthen the city’s ring-fence – what they call the rural-urban boundary – the thing that delivers land-bankers risk-free profits and guarantees future carpet sprawl. That thing. They insist we keep it. More very bad news.

There is more, and it’s massive, and none of the news is good.

The Council themselves are expected to vote on this final 618-page set of recommendations next week. Goog luck with that.

And good luck with knowing what the final outcome is going to be. It’s going to be a bunfest, that’s about all we do know.

And this bunfest has been going on now for years.

So if you’ve found yourself wondering why many empty sites around town are still empty, one answer is probably this: Regime Uncertainty. If you’re uncertain what decrees the regime in power is going to issue, then any wise investor ready to unleash his supply chain is going to sit on his hands until he knows what’s up. And he’s going to do that, even if folk are crying out even when supplies are running short …

[* Thanks to Toby  Manhire for the quip]

.*

Property-owners have a better plan

 

Auckland’s proposed Unitary Plan has been much talked about. No-one however (apart from this guy) has bothered to point out that planners’ plans only become a Plan if they restrict property owners from doing what they otherwise would.  The planners’ plans always and everywhere restrict private plans. Your plans. If they didn’t, they wouldn’t need all their planning rules to tell you what not to do.

Now the fact that capitalism even has economic planning, let alone the only possible kind of rational economic planning, is almost completely unknown [points out the sane and sober George Reisman]. Practically everyone under capitalism has been in the position of Molière's M. Jourdan, who spoke prose all his life without ever knowing it. The overwhelming majority of people have not realized that all the thinking and planning about their economic activities that they perform in their capacity as individuals actually is economic planning.⁸ By the same token, the term "planning" has been reserved for the feeble efforts of a comparative handful of government officials, who, having prohibited the planning of everyone else, presume to substitute their knowledge and intelligence for the knowledge and intelligence of tens of millions, and to call that planning. This is an incredible state of affairs, one which implies the most enormous ignorance on the part of the great majority of today's intellectuals, from journalists to professors....

Despite the comparative youth of their alleged profession, and cities for millenia growing up without them, no town planner anywhere seems even remotely aware that individuals’ own plans can be harmonised without them. Harmonised by price (there’s a reason houses overlooking water generally command a higher price; whereas if climate change really did causes oceans to rise, beachfront property should become cheaper); and harmonised by rights-based common law (dump raw sewage over my fence, or remove my land’s sun, air or support, and I may have an action against you.)

Every planner likes to think he’s the John Nash who laid out Regent’s St, or the Baron Haussman who laid out the Champs Elysee. or Pierre L’Enfant who planned the grand vistas of Washington DC – or Walter Burley-Griffin, who made the original comptition-winning designs for Canberra.  But they forget that the vast exanse of the great cities like London and Paris were built in their heyday not by planners, but by speculative builders. Virtually all of the Georgian London most of the planning ‘profession’ profess to admire, for example, were built on land leased by speculative landlords at a two-year peppercorn rate, by ill-resourced builders able to sell them at a profit within that time. *

Make the Auckland economic climate safe for spec builders again, and watch a similar explosion of activity happen here too.

And they forget too that they are neither Nash nor Haussman, neither L’Enfant nor Griffin. Instead, these sad souls are more like the sorry bureaucrats who butchered Griffin’s Canberra. These are people who live in the suburbs of Devonport, Ponsonby, Parnell and Grey Lynn – all designed before their alleged profession was even contemplated – and when they plan, they lay out places like Albany. And Manukau City. They hate your suburb; they hate decentralisation; but they do know what’s good for you: Albany.

Think of that when you ask these alleged planners to ‘plan.’

---

* It was quite a neat process, if you’re interested. John Summerson describes it in his Georgian London:

The speculative builder [was] the mainspring of London’s expansion for three-hundred years…the master-builder’s technique was this. He would sign a building agreement with the ground-landlord, preparatory to taking a building lease of perhaps sixty, perhaps ninety-nine years, with a ‘peppercorn’ rent for the first year or two.  During this initial period he would erect the carcass of the house – simply a brick shell with floors and roof – and offer it for sale. With luck, he would find a purchaser before the peppercorn period expired, so that his outlay on ground-rent was nil.  The customer would buy the house, finished and decorated to his own taste, for a lump sum and the lease would be made out to the customer’s name.

Everybody was happy.

The salient feature of the speculative builder’s operations is that he laid out very little cash. He carried out his building work by a species of barter [exchanging his labour on their houses for his tradesmen’s labour on his] and the land he built on merely passed through his hands on its way to the customer. It was reckoned [in 1747] that a man needed £100 capital to set up as a [speculative] master-builder… Bricklayers and carpenters led the industry in the peculative field, since theres were, of course, the biggest shares in the building of a house.

And of course, the great hereditary land-owners of London were the ones leasing out land at those peppercorns in the long-term expectation of the great wealthy estates that those places like Mayfair, Eaton Place, St James, Grosvenor, Bloomsbury Square became.

There is much to be learned from this …

RELATED POSTS:

• “How to fix a crisis: An Auckland housing manifesto”
• “Why younger people can’t afford a house”
• Fisking a land-tax looney

REAL.

Unitary Plan: Good news, bad news

 

Since 1:30pm yesterday, when it was released on the council website, every single person in this great little city of ours who is anything to do with land or building or housing has been huddled over their phones, tablets and computers finding out what our most learned lords and masters might be about to allow us all to do on our land. [Notwithstanding that “the very idea of a single long term plan for a 16,100sq km, largely rural region containing a rapidly growing and diversifying urban mass is flawed.”]

I speak of course of the Auckland Unitary Plan.  Written by planners, debated by bureaucrats, shredded by NIMBYs, and argued about by councillors, the “Independent Hearings Panel” yesterday issued its decree on all those deliberations that everyone fully expects to be voted into law on August 19. [Read it all here, if you have days to wade through it. It will take you 5 days. *]

Most of the commentary since release is simply talking its book, so I’ve most mostly just ignored it. [Although I had to laugh at Radio New Zealand calling up two people in Grey Lynn as their “couple of Aucklanders” to talk to.]

Lets start from the beginning. Every rule in a Plan is telling you something you can't do. If you didn't want to do it, they wouldn't need a rule to stop you; so every single rule is an imposition on your property rights. That makes it a plan to hinder your plan. [Maybe time to re-read ‘Capitalists Have a Better Plan.’]

At the same time, every one of your neighbours has the same property rights as you. And they probably have the same or similar expectations of peaceful enjoyment on their property as you do on yours. So that provides the only moral justificatinon for their rules.

Cities grow organically, or try to, reflecting the individual choies folk make in their own context. Planners prefer the shoehorn, making museum-pieces of the parts of cities they favour, and insisting other parts be cooked only to their own recipe.

So in the absence of genuine common law protections of your legitimate rights in your land -- protecting you and your neighbours rights to light and air and support etc., all or any of which can be negotiated between each of you to your own mutual satisfaction (setting up a network of delightful concatenations that help to build an organic city) -- the council's plan is the only thing you have in law protecting you from a new fifteen-storey glue factory next door.

And that's written by planners, well-paid busybodies well-schooled in the idea that they know best. 

So how does their proposed Auckland Unitary Plan shape up in protecting legitimate property rights while limiting the usual impositions on what you can do?

These are just my first impressions

• The plan generally allows you to do more on your land. Good news. On some land a lot more, on most land a little more—and mostly without taking your neighbour’s sun. So mostly good news.
• But almost everything you want to do now on your land will require the expense, delay and massive uncertainty of a resource consent. Bad news. Very bad news. So more folk will sit pat, either waiting for a knock on the door from a developer  with more staff and resources than they have to bust through all the hoops, or just putting up with what they already have, wary of putting their head in the planners’ noose. And meanwhile, more planners everywhere will find employment, and delude themselves they’re productively employed -- and your rates on these newly-intensified sites will go up. (Anf if you vote the vile Vic Crone, go up savagely!)
• The so-called Taniwha Tax has been axed [listen here to the wailing], removing the need on some sites to apply to up to a dozen iwi for a “Cultural Impact Assessment.” Good news. Very good news. This may be thrown out the front door only to make its way in via the back (note for example “that sites of value to mana whenua should be disregarded until the ‘evidential basis of their value has been assembled’”), but sanity at this stage seems to have prevailed. You can probably thank all those so noisily opposed for that. (But eternal vigilance , people. Eternal vigilance.)
• The blanket prohibition on looking sideways on pre-1944 “heritage” property has gone. Good news on the face of it, allowing these to be used and re-used much more imaginatively. But Heritage Overlays and the like still remain in many parts of the city (as of course do the provisions of the Hysterical Places Act) so there are still serious barriers in place to redeveloping or upgrading so-called heritage property.
• The rural-urban boundary – the planners’ ring-fence surrounding Auckland and protecting land-bankers’ risk-free profits, has not been smashed. Only moved. So imaginative hamlet development or the like out south or west is still subject to a blanket ban. And as even Labour’s Phil Twyford recognises, “just moving the boundary encourages speculation and land banking to shift to the new boundary.  Only scrapping the boundary will lead to land prices stabilising.” So in the short-term it will

THERE ARE TWO WAYS for mine to gauge what the plan represents:

• have the planners allowed folk to live as and where they want? in other words, are they Pro-Choice?
• has the plan made it safe again to be a spec builder? in other words, are they Pro-Affordable Housing?

1.On the first: on the battle over Up or Out, or sprawl versus intensification (as the dichotomy is falsely labelled) the planners and Independent Panel have still cast most weight in the scales for up. Sort of. So in the issue of being Pro-Choice – by which I mean, letting folk live how and where they demand to – we’ve only moved a baby step at best.

2. And on the second: since its birth this city was largely built by small spec builders who bought a spection on spec, building a fine house, and the selling it t a happy family at a small profit. For the longest time now and for all but the top end of the market, that model has mostly been broken. We need to fix spec building to make Auckland affordable again. This plan still does not do that. It has made it safe to be a bigger builder or developer, with the staff and resources to weather the process and all the delays of any development. But all the small spec builders are still largely shut out. You can guess what that means for affordable housing.

Now, with all the regime uncertainty of waiting for the arrival of this long-gestating and much misunderstood Plan, there will be literally thousands of folk who have been sitting on their hands unwilling to risk a cent until they have some certainty. The plan’s release will at least guarantee an explosion of projects in the immediate pipeline.  But with every new project still an uncertain one, with all the delays of a resource consent involved in every one, we may not have the full explosion that the bid for affordable housing really needs.

.

---

* Hugh Pavletich makes the pithy point:

… "If I was to read this at normal speed, at about 200 words per minute, that would take me in excess of 55 days to read this Unitary Plan."
    The report comes in several parts. It comprises two main overview chapters, published as separate PDFs, which tally 207 pages combined.
    The 80 individual reports are each between 12 and 37 pages long.
    Housing campaigner Hugh Pavletich​ is scornful of the sheer size of the Unitary Plan.
    "If a plan is any more than a thumbnail thick, it is irrelevant because it is beyond people's ability to get their heads around it," he said.
    But that's just what Auckland's councillors will have to do - they have until August 19 to decide if they accept the recommendations.
    The above comment actually came from the late Owen McShane … God bless him.

Vic Crone: “Talk is cheap”

 

This morning my inbox received an email from Victoria Crone. Yours may have too. “Talk is cheap,” she said. “We need a Mayor with fresh ideas who can actually deliver real results. Check out my 10 point plan for housing.”

So, thirsty for fresh ideas, I did.

They weren’t.

There were a lot of platitudes though.

Her first idea, after the hand-wringing boiler plate – her point number one? She wants to host a “housing summit.” A talk-fest. A whole festival of cheap talk. You can already feel all the good vibrations.

But that’s not all. She would also “put communities back at the heart of neighbourhood development,” whatever that means. She woud “release,” land faster than anyone else, “partner” with cronies, and “get tough” on land banking by slapping a huge rates bill on anyone not building what she wants. Not nice, and hardly either fresh or effective.

Not fresh either are ideas to speed up consenting, infrastructure, online consenting, or “aligning Unitary Plan intensification around key transport modes” -- all either being done (allegedly) or under way – or a nonsensical plan mentioned occasionally by the economically illiterate to force developers to build “a mix” of affordable houses in new developments.

So what is new and fresh from the Crone? A report card. A Mayor Crone led council would “provide user-friendly quarterly report cards on progress.”

And that’s it. Her ten fresh ideas. As a perceptive commenter said when she pasted these on Facebook, “It seems these 10 points basically deliver more government: more talk, more bureaucrats, more penalties.”

Talk is cheap, Ms Crone? Well, yes it is.. And bullying bureaucrats are ten-a-plenty.

Auckland doesn’t need another.

RELATED POSTS:

• Victoria Crone. Bully.
• Why “releasing” land doesn't necessarily make land cheaper
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• #HousingCrisis | Zoning for special interests

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#HousingCrisis | Zoning for special interests [updated]

 

In not being able to pay its own way, Labour's cure for affordable houses is unaffordable -- and in planning to confiscate private property both National and Labour plans are immoral. Yet even in their intentions (and politicians actions are judged not on results, but only on intentions) then even then, neither party are actually proposing producing houses that are actually affordable.

Affordable houses are generally considered to be houses with an average selling price of only 3 times average income for that area (a house price-to-income ratio met by Auckland as recently as the early 1990s).* Labour’s stated aim is to produce houses of around $500,000 to $600,000 – and National’s plan lacks even that paltry ambition. Yet at that price, that would still make a house price-to-income ratio of around 5 or 6.

So Labour’s seriously unaffordable plan is to make houses that are severely unaffordable.

Table from 12th Annual Demographia International Housing Affordability Survey: 2016

Nice.

And meanwhile, the current state of the law ensures that the housing crisis will continue.

It’s like neither party actually has any genuine solutions to the crisis their laws have caused. Yet the answers have been known for decades.

I refer you again to a simple book that’s been on my shelf for well over thirty years. Its solutions are comprehensive – one simple solution being to outlaw zoning --

If … there were no zoning or land-use control laws, there would be considerably more housing at considerably lower prices and in areas considered more desirable.

Both common law and the systems set up in un-zoned cities like Houston protect freedom and property owners far better than zoning, which has only been imposed for a few decades. The problems are evident, the solutions are known, yet zoning of every New Zealand city continues.

Men are born free but nearly everywhere in zones. Why? Because (as my well-annotated copy told me so long ago) so many cronies benefit from it.

         

These are just a few of the interest groups who benefit from zoning – to them these days we might add the councillors and politicians whose campaigns are part-funded by the beneficiaries, the bankers who get to lend in an over-priced market, the increasing sea of well-remunerated resource consultants (who will become even richer come the dawn of Auckland’s new Unitary Plan), the older owners of rapidly inflating inner-city property, and the circle of land-owners around the outer ring of NZ’s cities awaiting and lobbying for re-zoning; all of them  making hay out of other people’s misery.

Nice.

But it doesn’t need to continue …

NOTES:

* “The Median Multiple (this house price-to-income ratio) is widely used for evaluating urban markets, and has been recommended by the World Bank and the United Nations, and is used by the Joint Center for Housing Studies, Harvard University. Similar house price-to-income ratios (housing affordability multiples) are used to compare housing affordability between markets by the Organization for Economic Cooperation and Development, the International Monetary Fund, international credit rating services, media outlets (such as The Economist) and others.” [Source: 12th Annual Demographia International Housing Affordability Survey: 2016, p. 6]

RELATED POSTS:

• “The winners in this equation are those who already own property in the inner suburbs, mostly older generations. Restrictive land-use regulations have severely constrained the supply of housing in most Australasian cities, pushing prices up.
      “It is, in effect, a massive wealth transfer from the young to the old.”
  'Regulations that limit the stock of housing suitable for younger people, such as height restrictions and view shafts, need to be axed and pronto' – Jason Krupp & Alex Voutratzis, INTEREST.CO.NZ
• The Coming to the Nuisance Doctrine is the only objective means of determining who has the right to continue using his property in the event of a nuisance. If zoning is to be replaced, therefore, it must be replaced with the Coming to the Nuisance doctrine.”
  The "Coming to the Nuisance" doctrine: The antidote to zoning – CAPMAG
• “’When the productive have to ask permission from the unproductive in order to produce,’ said Ayn Rand, ‘then you may know that your culture is doomed.’ That’s true. Just ask anyone who has waited in line for a resource consent.”
  What would 'Party X' do about [affordable housing]? - PART 3: Small Consents – NOT PC
• “Here is how the housing market works under John Key’s crony capitalism: he and his housing minister and the council’s planners have between them just made around half-a-dozen land-owners around Auckland rich beyond their wildest dreams.
      “Announcing out of the blue some land allowed to selectively slip through the council’s zoning net, the land-owners quickly discovered their land formerly zoned rural by planners now had the politicians’ and planners’ tick to build houses – and the value of said land immediately went through the roof.”
  Windfall profits for some at the expense of affordable housing for others – NOT PC, 2014
• “Is zoning and urban planning racist? Are environmentalists guilty of racial injustice? Are planners the new segregationists? Yes, says Randal O'Toole of the Thoreau Institute.”
  Zoning and 'Smart Growth': The New Segregation? – NOT PC, 2006
• “Here's a lesson that town planning advocates everywhere should note.  While most of the American housing market has experienced boom and bust in the face of expansionary Federal Reserve policies, housing in Houston has remained relatively immune -- even though it's been at the epicentre of rapid economic growth due to the commodities boom.
      The reason?  While most of the western world is under the thumb of town planners, with the result that housing in much of the western world has become seriously unaffordable, the city of Houston remains unzoned, and its housing among the most affordable anywhere.”
  Why Houston housing has avoided boom and bust – NOT PC, 2008
• “Kip's Law:  "Every advocate of central planning always — always — envisions himself as the central planner.”
  “Planning” to stop Aucklanders plan – NOT PC, 2011
• “What do town planners mean when they talk about things like ‘affordable housing’ and ‘community’?
  What they don’t mean is making houses affordable, or about any ‘community’ other than their own.
  The weasel words of “planning” power-lust – NOT PC, 2010

Why “releasing” land doesn’t necessarily make land cheaper

 

There are many things to be said about the fatuous idea that simply having a National Policy Statement ordering the council to “release” land for housing is going to fix Auckland’s housing bubble, or take us any closer to making housing affordable.

Land has already been “released” for thousands of houses, but as that doesn’t mean that thousands of houses have been built. The reasons for that are complex, but can be relatively easily explained.

It’s true that the highly-restricted supply of land is one of the three major reasons whay young people can’t afford a house. But you can’t build an affordable home on a $500,000 section – so unless land costs drop savagely, simply “releasing” some planners’ chosen land by rezoning it doesn’t on its own transform it into land that can be built on affordably.

The problem really is that as long as planners constrain land supply at all, which they will continue to do, then the price of land zoned urban will remain well above the same or equivalent rural-zoned land – and the many dislocations and unintended absurdities of their “planning” will continue.

Recent comments by Phil Hayward posted at (then removed from) the Transport Blog capture the problem. Much new-home building is presently delayed in Auckland by the “regime uncertainty” of waiting to see what smoke signals emerge from behind the closed doors of the Unitary Plan’s Commissioners. But even when the Unitary Plans is finally finalised and enshrined, and even with the government’s new National Policy Statement in place enforcing the release of land when political trigger points are hit, people’s private property will still only be “released” to them in locations and under conditions of the planners’ choosing, and of political necessity.

“Upzoning” will tend to occur therefore not where there are better amenities and infrastructure, points out one commenter, nor where there is highest demand, but where there are fewer NIMBYs.

In my opinion [continues the commenter] they would be better off with sprawl than having density only in the outer areas areas (which is the perfect recipe for slums).

As Phil Hayward responds,

The result of this kind of perverse mix of planning actions is to distort the spatial distribution of population density in an urban area in the direction that average commute distances are increased. Alain Bertaud pointed this out about Portland more than 10 years ago. I believe it can be literally seen on Google Earth – every city with growth containment planning, has unnaturally dense developments near the urban fringe and even way out beyond it. In contrast, if you look at more naturally evolving urban areas, the density drops pretty uniformly from the centre to the fringe and beyond. A density curve on a graph looks like Mt Fuji. This is an efficient spatial distribution of population density. But the growth-containment cities tend to have spikes in density way out at the edge of the curve, and a concave look further in. Basically, the focus should be on intensifying in the right places, and NEVER arbitrarily prohibiting splatter suburban greenfields development, which always gooses the land values (and causes more intense developments where the opposition is less, which is usually “the wrong places”)…
    It is simply wrong to claim “30 years supply of land has been zoned [for housing], therefore [planners] cannot be responsible for the price inflation.” Is ANY of that 30 years supply of land still changing hands at prices reflecting true rural land prices? In the absence of the boundary policy, yes, land with development potential would still be obtainable at prices reflecting true rural land price, plus a “differential” reflecting its proximity. This is textbook stuff – the classical urban land rent curve with a slope like Mt Fuji.
    Every urban area with a boundary policy ends up with an urban land rent curve that looks more like a Mesa. The values are not “differentially” derived according to classical land economics assumptions, but derived “extractively”, or by “monopolistic competition.”
    A comparable hypothesis would be if a global governing body had the authority to decree which nations should and shouldn’t be able to drill and sell oil, based purely on the proximity of the oil to major consumers. Firstly, a lot of the “best sited” oil might be nowhere near the cheapest to actually extract. And the locals, land owners, and local governments, may not want oil drilled there either. The planners might well argue that they know “there is 30 years supply of oil in the zone we have drawn” but who would accept that oil price inflation would be no fault of the planning? Of course the “willing sellers” within the zone have far more power than OPEC, to price-gouge – without even having to collude. The large size of our average rural land holding does not help. It is different in European countries where rural land ownership is in myriads of absurdly tiny farmlets.

· As Phil explains, urban land economics are not easily explained in tabloid headlines.

If only more people understood the complex way urban land markets work.
    High, “extractive” urban land rents actually slow down intensification all by themselves, regardless of NIMBYs. Britain’s planners have been thwarted for decades by this effect, and never “get it”. Every “plan” upzones more and more existing built areas, but the assumptions that “x percent of this will translate into actual development” NEVER WORKS. Planner John Stewart is the author of a paper that estimates that new houses in the UK will need to last 2000 years because the rate of turnover of housing stock is so stagnant. John made a point of meeting me a couple of years ago when he was out here on holiday, because he wanted to understand why the plans never translated into actual housing supply (and he has decades of experience). Auckland’s planners need to be confronted with this evidence and asked why they think a different outcome is possible.
    The data for housing supply by city in the USA, shows the following regarding Houston [which has no zoning] versus Portland and New York [which have extensive zoning]:

        1) Houston’s total housing supply is, in proportion, several times higher than Portland / New York.
        2) Houston’s housing supply is made up of a mix of 1/3 intensification, 2/3 greenfields.
        3) Houston’s 1/3 that is intensification, is alone, higher than TOTAL housing supply in Portland / New York

The thing is that land markets are dynamic in ways never dreamt of by planners calcified zones.

Plans that assume an unrealistic proportion of supply by way of intensification merely end up collapsing not only total housing supply, but even the likely amount of intensification that COULD have happened in the absence of the distorted urban land market.
    The reality in the UK, Portland, New York and now Auckland, is that the Planning, including the upzoning, causes site-value inflation, and this is an incentive to site owners to “hold” in anticipation of more inflation, not an incentive to develop.

Simple economics explains that when a product can be reproduced at will, then its supply price tends toward its cost of production—as we seem in markets for widgets. By contrast, when a product’s supply is restricted, its supply price tends to be set by the competition among buyers for the limited supply on offer – just as we see in markets for art and gold and bullion. And sure enough, we have it here too with land:

As the LSE’s Prof. Paul Cheshire says, Britain’s urban land markets function like markets for gold and bullion, not land markets classically “allocating land to best uses” at all. [And we see the same thing with land under every restrictionist regime.] In contrast, if you own a site in [unzoned] Houston Central, the best way to make more money out of it, is to develop the site with more floor area, assuming that the demand is there for it. The rate of price inflation is not enough to make “holding it” the best option. And the site values are NOT “elastic to allowed density” as they are in the UK and Auckland. Putting more units on a site really DOES mean that the site value is divided up over more units. But obviously there are many cities where this is not true, otherwise Hong Kong would be the shining example of affordability rather than Houston.

[NB: Most of Phil’s comments posted above originally appeared as comments posted at the Transport Blog, which were removed by that blog’s moderator.]

RELATED POSTS:

• “WHAT DOES THIS MEAN for our own housing market? It means that no matter how many people with Chinese-sounding names are standing around hoovering up local houses, that matters not a jot to prices just as long as local houses are reproducible at will. Put it another way, it’s better if our housing market looks more like the market for posters than it does the market for fine art.
      “Guess which one it most resembles now?”
  Labour and the Law of Costs: But doesn’t “Yoda” sound Chinese?
• “The most sophisticated economic argument about how prices are formed might include a distinction between two kinds of markets: those in which a good’s supply is severely restricted (in which case, like Remuera property and rare Grand Masters, the bidding war from buyers prevails), and those in which a good’s supply is unrestricted and the good is virtually reproducible at will (in which case, like hamburgers and the Houston housing supply, the cost of their production looms large). In both the distinction and the manner in which prices are formed then, supply has everything to do with it.”
  The continuing delusions of Gareth Morgan: Part XVIII, The RMA edition
• “So the story is: people are generally staying put more because new opportunities elsewhere can’t be outweighed by the new places’ higher price of housing. And when they do move it’s generally to poorer places. Like NZ.”
  No, neither house prices nor immigration are high because we’re prosperous
  
  

Cornwall Park: host to a new eco-village?

 

Guest post by SDR

I was intrigued with the interview on NewstalkZB  last week with Malcolm Rands, a former rock musician, a founder of Ecostore Ltd, a recent recipient of the ’Member of the New Zealand Order of Merit ' award and Co-Director of the newly registered company, "Bump Space Ltd." As he stated on air, the founders of the internationally successful Ecostore Ltd  are about to launch an "eco village of 500+ homes,” which will be "far enough out of the Auckland CBD area to be able to market houses at a price, 'lower than the general market value' of around $800,000 each.” 

As the owner of a Cornwall Park leasehold property, I often wonder if, and when, I am to hear that I will be getting new neighbours as part of the citywide drive to overcome the huge shortage of housing.

If this is to happen, then I really hope that this developer's 'village' is the one which is about to arise in the very small section of Cornwall Park which the owners are legally entitled to subdivide (a right  for which  the Cornwall Park Trust Board have paid exorbitant rates over the intervening years).

For all those panic-ridden neighbours and  greenie reactionaries out there: I  guess most of you have never walked through these small paddocks which are but a fraction of "The Park" which we all love to look at and enjoy to wander in.

Also, the Cornwall Park Trust Board are promising all sorts of  "improvements" under their much vaunted, about to be announced, new "100 year Plan for the Park." These planned changes will, I am sure, provide much pleasure and enjoyment to all of us current and future walkers, doggers, joggers, sportspeople and neighbours. However, I am realistic enough to believe that they are not 'mere lollies' but 'a pay off ' for the soon to be announced changes designed by an exorbitably over-paid team of planners and PR "experts."

If I am correct in my supposition that this village is to be my neighbour, then,
i)  I congratulate the Park’s Trust Board for having the courage to exercise their legal right to their own private property rights;
ii) I congratulate Mr & Mrs ex -Ecostore owners for their courage in undertaking such a potentially controversial dream, and wish them every success;
iii ) As a leasehold neighbour who would be significantly affected by you both achieving your dreams, I sincerely hope you can both appreciate and deliver on the dream of all the existing Cornwall Park  leaseholders – and please, can we be given the opportunity to buy the land upon which we have established “our homes."

Twyford proposes ending city’s ring-fence [updated]

 

Very rarely do politicians deserve berating in the morning and praise in the afternoon. So take a bow Labour Party – in calling for the Goverment to abolish Auckland’s city limits, your housing spokesman Phil Twyford has kicked a major goal for your team:

Labour wants the Government to abolish Auckland's city limits to get people out of cars, caravans, garages and tents.
    Labour housing spokesman Phil Twyford said the urban growth boundary had to go because it has fuelled the housing crisis and people would not be forced into bad circumstances if the Government acted.
    "The Government should rule out any possibility of an urban growth boundary in Auckland Council's Unitary Plan if it is serious about fixing the housing crisis," Twyford said.
    "Over 25 years the urban growth boundary hasn't prevented sprawl, but it has helped drive land and housing costs through the roof. It has contributed to a housing crisis that has allowed speculators to feast off the misery of Generation Rent, and forced thousands of families to live in garages and campgrounds," Twyford said.
    "Labour's plan will free up the restrictive land use rules that stop the city growing up and out. It will stop land prices skyrocketing, and put the kibosh on landbankers and speculators."

All very true, and all of a piece with what Twyford said back in November: that the cause of this housing crisis is planning rules. (Yes, he’s been improving fast.) He has other thoughts as well, that

the Government use its upcoming National Policy Statement on housing and urban land use to … free up density rules to accelerate Auckland's ability to grow housing supply both out and up.

And…  

to use new methods of funding infrastructure so that Councils don't have to lump costs on all ratepayers and on developers, who are stuck paying high development contributions that they pass on to home buyers in a lump sum.

So, all good and thoughtful stuff!

Mind you, National’s housing spokesthings said much the same good things when they were in opposition, and we’ve seen how little they’ve done since. And Twyford’s preferred solution is still, somehow, commissioning the building of unprofitable state houses that will somehow show a profit pay for them.

And just freeing up the boundary in the new Plan isn’t going to immediately open up land anyway; not until the planners contempate the zoning for the newly “released” land.

So perhaps, in the interim, given this emergency we could resurrect the presumption that anyone with any site anywhere (both up and out) should have the automatic right to build at least one (or one more) house on any given site, provided only that rights to neighbour’s light and air and sunlight are protected.

And in the longer term, it’s to get rid altogether of the failed planning regime and the Resource Management Act that is their talisman, and repair to the common law it has long buried.

And in the meantime, at least, give thanks that one politician at least is prepared to contemplate solutions to his portfolio that might not seem to fit his ideological persuasion, but will actually help those he claims to represent.

[Hat tip Hugh Pavletich]

UPDATE: You can sign a petition here (from the Taxpayers Union) calling on the Government to adopt Labour’s policy on abolishing the Auckland Metropolitan Urban Limit. The more people who sign the petition, the more pressure on National to do the right thing and sign up to Labour’s policy:

ABOLISH URBAN LIMITS PETITION ... TAXPAYER UNION

.

Mayoral candidate says housing should grow ‘out’

 

Great to see an Auckland mayoral candidate recognising that if house-price inflation be tackled, then the city has to be ready to grow out.

Auckland mayoral candidate John Palino is calling for the removal of the urban-rural boundary to improve housing affordability.
    The boundary, known as the metropolitan urban limit, was restricting land supply in Auckland and driving up house prices for ideological reasons, Mr Palino said today.

And he’s right, you know, it does, and is:

• Land just inside this “urban fence” costs around ten times land just outside. For virtually identical land. Nothing else so demonstrably highlights the effect of regulation, nor gives some idea of what might be achieved by relieving it.
• And the reason for the “urban fence” is completely ideological – both “new urbanists” and te apostles of “sustainability” preach higher densities for their own separate reasons, but mostly for reasons of control.

My own position is that to promote affordability the city needs to grow both out and up – which recognises home-buyers have the right to choose, and land-owners have the right to build.

‘Out and Up’ should be the mantra.

But at least one mayoral candidate is loudly saying ‘out.’

[Hat tip Stephen Berry from Affordable Auckland, the only mayoral candidate saying ‘Out and Up.’]

RELATED POSTS:

• “So Auckland can’t grow out, because Auckland’s ‘planners’ and public-transport advocates say so.
      “And it can’t grow up, because councillors voted last night that they say so: Auckland Council voting 13-8 to pull new 'denser' maps from the Unitary Plan process.
      “So what are would-be home-owners to do who are trying to afford their own home in a seriously unaffordable city?
      “And what are property-owners to do who wish to build and sell to those desperate to get on the property ladder?”
  Up or out? From both sides council says NEITHER! – NOT PC
• “It is not primarily the fault of land developers that the American suburbs are thought to be dysfunctional and mundane. The blame belongs largely to the influence of boiler-plate zoning regulations combined with design consultants who seek the most minimum criteria allowed by city regulations.
      “Yet for all its problems, decade after decade 80% of new home purchases are not urban, but suburban. Some (architects, planners, and university professors) suggest we should emulate the dense growth of other nations not blessed with the vast area of raw land within our country, yet most of those countries as they prosper strive to emulate our American suburbs.
      “The planning of our cities is about design. Yet, for the past quarter century a highly organized group consisting mostly of architects (acting as planners) have pushed a New Urbanist agenda that is as much about social engineering as it is design.”
  Designing suburbs: Beyond 'New Urbanism' – Rick Harrison, NEW GEOGRAPHY
• “Auckland Mayor Len Brown’s fear of Auckland sprawling “like Los Angeles” is unfounded, pictures of the city’s growth over the past 30 years suggest.
      “A timelapse image of Auckland produced by Google shows New Zealand’s biggest city barely grew out at all between 1984 and 2012 (see pictures), despite its population increasing from 850,000 to more than 1.3 million during that time.
      “This is in stark contrast to many cities elsewhere, including the US where the likes of Houston, Dallas-Fort Worth and Atlanta have expanded rapidly.
      And critics say this footage undermines mayor Brown’s claim that Auckland is a sprawling city that needs to be contained.”
  Google busts Len Brown’s Auckland ‘sprawl’ claims – Niko Kloeten, NBR [via Whale Oil], 2013
• “What’s missing here is choice.  In talking about about development on either “greenfield” or “brownfield” sites, both advocates insist that folk do things their way. They completely ignore the fact that people have the right to choose where and how they live, particularly if they own the place on which they choose to settle down.
      “Let people live where they wish to, as long as they bear the costs. And let those choices themselves—choices based on people’s own values for which they are prepared to pay the cost—organically reflect the way the city develops.
      “Ironically, it’s the very promoters of intensification, the planners themselves, who have done the most to make decent intensification more difficult.  Here's just some examples of a few urban housing types that are enormously popular overseas, but could barely be even contemplated here…...”
  “Sprawl” versus “intensification” – NOT PC, 2012
• “Sprawl is good. Sprawl is choice. The opponents of sprawl are not just against sprawl, they're against choice -- the proof of this is that if people wanted to live in the way the enemies of choice wanted, they wouldn't need to be forced into it, they'd be doing it anyway.
      “The enemies of sprawl are the enemies of choice -- they simply use the power of government and the powers that the Resource Management Act gives local government to force people to live in the way that they prefer, rather than the way the people themselves wish to live. They're just another brand of interfering busybody who want to force their own predilections upon others.
      “The result in New Zealand is severe restrictions on building and development, and the result of that is some of the most unaffordable housing in the world.”
  Envy is making houses unaffordable – NOT PC, 2007
• “But my point here is that not everyone wants to live that way, and forcing people who would rather live otherwise into the planners' favourite cookie-cutter solutions removes any possibility of their planning their own future the way that they would like to; it removes their ability to make their own decisions based upon long-term considerations; and it's causing something no-one could really celebrate. And that's really the whole point, isn't it?
      “When it comes to housing, let's all be Pro-Choice.”
  More sprawling arguments – NOT PC, 2007
• “Most of the planners in New Zealand's major cities have imposed what's called a Metropolitan Urban Limit around the cities. This is sometimes called an 'urban fence,' inside which development proceeds (in theory) according to the planners' whims …
      “Outside the urban fence, development only proceeds to the extent that land-owners outside the fence can dodge the planners' desire to make a rural museum of the area surrounding the cities, and to the extent that developers who have built up land banks around the city can encourage their chums on council to relax the zoning, or to release the urban fence just a little. You might call this a sort of 'informal' public-private partnership…
      “The sameness and the sprawl that many people object to in our present-day suburbia are in large part due to these regulatory measures that the anti-sprawlists themselves favour. Specifically, the "carpet sprawl" that would have few explicit defenders is created by the very 'Smart Growth' policies considered so progressive by so many planners. Owen McShane explained the process … ”
  Message to planners: "Don't fence me in!"- NOT PC, 2007

.

Up or out? From both sides council says NEITHER!

So Auckland can’t grow out, because Auckland’s ‘planners’ and public-transport advocates says so.

And it can’t grow up, because councillors voted last night that they say so: Auckland Council voting 13-8 to pull new 'denser' maps from the Unitary Plan process.

So what are would-be home-owners to do who are trying to afford their own home in a seriously unaffordable city?

And what are property-owners to do who wish to build and sell to those desperate to get on the property ladder?

The collective answer to both that is coming from across all floors of the mega-council is this: “Fuck you.”

* * *

If last night’s vote to ban building up was a victory for anything, it was a victory for NIMBYism—for Not-In-My-Backyarders who successfully clubbed together to lobby councillors to stop their neighbours intensifying.

Make no mistake, last night’s vote to throw out the intensification proposed by the proposed Auckland Unitary is certainly not a victory for property rights. This proposed plan represents one of the very few times that council’s planners have actually and actively looked to allow property owners to increase the density on their land. Last night’s vote represented the antediluvian reaction to that: from those neighbours fearful of what effect that intensification might have on them.

It is true that everything someone does on their property may have an effect on their neighbour. It is also true that the proposed Unitary Plan does little to reflect the valid fears that neighbours of intensification might have.

But it is not beyond the wit of man to develop gudelines for minimising the effect of three-storey housing on a neighbour (three-storey housing being virtually all the intensifiation proposed). Indeed, it was not beyond the aegis of common law in ages past to recognise that if intensification is to proceeed while respecting property rights, then rights to light, to air, to support and so on must be protected.

I see little reason why those same protections cannnot be formally recognised today.

Instead, we have the worst of both worlds.

We have a city in which folk can’t build either out or up, in which would-be home-owners continue being locked out of their city – and in which the unsustainable bubble continues to bulge tumescently.

It is not a matter of young folk needing to buckle down and do what their older generations once did--buy a small house on the outskirts and save, save, save. It is a fact that house prices have risen well beyond what is actually affordable, and even able to be saved for, precisely because of the very rules those older generations have put in place.

* * * *

The house-price-to-income multiple is a simplified, yet internationally recognised measure of housing affordability … defined as the ratio between median house price and median annual household income, otherwise known as the median multiple.
    The World Bank also says this ratio is "possibly the most important summary measure of housing market performance, indicating not only the degree to which housing is affordable by the population, but also the presence of market distortions."
    Based on this official work, it seems to have become accepted that a median multiple of 3.0 times or less is a very good marker for housing affordability. [Interest.Co.NZ]

Historically, New Zealand’s house prices hovered well below a median price-to-income ratio of 3.0,making houses for most of New Zealand’s history very affordable. This was the era in which previous generations bought their homes.

Since the mid-nineties however (curiously, at almost the precise time as National’s Resource Management was introduced), that ratio changed radically – and is now all-but out of control.

Source: Demographia: 12th Annual Demographia International Housing Affordability Survey: 2016

There are many reasons for the rocketing rise in Auckland’s housing unaffordability, from the way new money is loaned into existence in the form of new mortages (in a process invented and maintained by monetary ‘planners’), to the way Auckland land has been kept off the market (in a process over which town ‘planners’ maintain a stranglehold over Auckland property-owners’ land). I don’t intend to relitigate them here (burrow into the archives if you can bear to). I simply wish to talk about choice.

Would-be home-owners have no choice.

They are being priced out of their city.**

And now it is clear home-owners have no choice either. They can’t build either out nor up.

This is not a recipe for a liveable city. It is certainly not a recognition of property rights.

I don’t say that we should be “pro-sprawl.” I don’t say that we should be “pro-intensification. I say, and I’ve been saying it for time, WE SHOULD ALL BE PRO-CHOICE!

The latter group characterise the former as being in favour of “sprawl”; the former characterise the latter as promoting the construction of the slums of tomorrow.

Both are right, and both are wrong.

What’s missing here is choice.  In talking about about development on either “greenfield” or “brownfield” sites, both advocates insist that folk do things their way. They completely ignore the fact that people have the right to choosewhere and how they live, particularly if they own the place on which they choose to settle down.

Let people live where they wish to, as long as they bear the costs. And let those choices themselves—choices based on people’s own values for which they are prepared to pay the cost—organically reflect the way the city develops. …

We let them ring-fence the city and stop people heading out and building away from the city when they want to —“sprawl!” is the all-too hysterical cry — and then we let them stop other people building higher density urban housing when they want to. Instead of leaving people free to choose, we have these boring “halfway houses” that some people like, but that many simply accept because that’s all that’s available, and they don’t know any better.

When there’s just so much available, so many great housing types  from which to choose, it just doesn’t make any sense.

“Sprawl” or “intensification”? That’s a false dichotomy. I say let people be free to choose.

That’s the path to genuinely liveable cities, and to affordability.

If only anyone truly gave a shit.

---

* And let those folk who think National’s Nick Smith is serious about improving housing affordability reflect that as Environment Minister in the mid-nineties the very same Nick Smith administered the Resource Management Act for many years, and did precisely nothing at all to change it.

** Let the NIMBYs reflect at least that many of these folk are their own children and grandchildren, who they may be driving out of the place they grew up.)

RELATED POSTS:

• “'Smart Growth' fan Tom Beard challenged my encomia to sprawl the other day. As I summarised at the end of last week, my argument was essentially that in lifestyles and the places where we live, we should be Pro-Choice…”
  The sprawling argument continues. – NOT PC, 2007
• “Last week I put out a post on possible mechanisms to enable groups of neighbours to protect their interests in their own and each others’ properties, while allowing the flexibility for them, rather than councils, to determine what, if any, and when changes in the land use rules affecting that group of properties would be put in place.”
  An interesting approach to urban land use property rights – CROAKING CASSANDRA, 2015
• “Libertarian blogger Peter Cresswell, author of the Not PC blog, says Auckland sprawl is a myth peddled by planners and politicians.
      “’The only uncontrolled sprawl is in their heads.  Auckland’s ‘sprawl’ has been contained, constrained, ring-fenced and ringbarked—and the dreams of would-be first-home buyers with it.
      “’What Aucklanders need is not to be told by planners where and how they live—either in high densities or in quarter-acre sprawl or in small hamlets or country houses miles from the city centre.
      “’What they need in their housing is choice – the ability to choose where and how they live based on their own values, their own desires, and the often limited ability of their bank accounts. What they don’t need is to be told by planners, who are just out of school, that their choices are illegal.’”
  Google busts Len Brown’s Auckland ‘sprawl’ claims – NBR [via Whale Oil], 2013
• “Those against increasing the urban limit are not just saying they don’t want to live further out – but they want to effectively ban others from doing the same.  They don’t want people to have choice – they want everyone in an inner city apartment.”
  Housing affordability – KIWIBLOG, 2012
• “Ironically, it’s the very promoters of intensification, the planners themselves, who have done the most to make decent intensification more difficult.  Here's just some examples of a few urban housing types that are enormously popular overseas, but could barely be even contemplated here…...”
  “Sprawl” versus “intensification” – NOT PC, 2012
• “There will be no innovations in NZ’s high-cost labour-intensive building techniques until innovative systems such as this can be painlessly introduced and exploited—perhaps only when councils themselves are taken out of the chain of responsibility for policing building standards…”
  Government finally plans to address unaffordable housing. But… – NOT PC, 2012