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Resource Management Act reform discussion papers "bureaucratic mush at its worst"

Posted in Opinion

Performance Urban Planning's Hugh Pavletich

By Hugh Pavletich

On Tuesday 12 September 2010, New Zealand’s Environment Minister Hon Dr Nick Smith released the keenly awaited Resource Management Act (New Zealand’s land use law) Phase 2 Reforms, under the rather grand title “Planning reform needed for NZ cities to be competitive” stating –

“We are not getting the right infrastructure in place at the right time” Dr Smith said “Poor quality decisions on land planning are making homes too expensive.”

He got that much right, but then got confused from there.

Readers were led in to a 95 page meandering Discussion Paper, underpinned by a misnamed 70 page Technical Report. For those capable of withstanding “bureaucratic mush” at its worst, they could inflict even more suffering on themselves, by reading further forgettable homegrown background material.

Poor Dr Smith. No one was kind enough to remind the Minister to define clearly what an affordable and competitive city is. So here goes –

“For metropolitan areas to rate as ‘affordable’ and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household incomes. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market. The fringe is the only supply and inflation vent for an urban market.

The critically important Development Ratios for this new fringe starter housing should be 17 – 23% serviced lot / section cost – the balance, the actual housing construction. Ideally through a normal building cycle, the Median Multiple should move from a Floor Multiple of 2.3 through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7 – to ensure maximum stability and optimal medium and long term performance of the residential construction sector.”

The writer has often repeated this definition within numerous articles, such as  Houston, we have a (housing affordability) problem and many others at his website Performance Urban Planning, and the research resource on urban issues, the Demographia website.

There is no 'mystery' at all about how to supply affordable housing, as the great construction industry entrepreneur Bill Levitt had it all figured out over sixty years ago. He dragged the residential construction sector from the “horse and buggy” era to the modern disciplined production one we know today. Bill Levitt figured out how to supply US$7,000 - US$8,000 new suburban houses to SINGLE EARNER young families, earning US$3,500 a year. The wives/partners were not forced to be “mortgage slaves” through that era either.

Enduring listening to politicians “agonizing” over housing is embarrassing.

It seems too, Dr Smith is unaware of the six Annual Demographia International Housing Affordability Surveys. This year’s Survey (data September quarter 2009) illustrates clearly that the eight major metros of New Zealand have bubbled out to a Median Multiple (median house price divided by gross annual median household income) of 5.7 – with Tauranga at 6.8; Auckland 6.7; Christchurch 6.1; Wellington 5.8; Dunedin 5.6 with Hamilton and Napier 5.0 and Palmerston North 4.6.

To “add insult to injury”, poor quality governance created an NZ$11 - NZ$20 billion leaky home problem, involving up to 90,000 residential units. A seriously degraded development/construction culture created by the politically induced housing bubbles, put 61 Finance Companies to the wall , impairing NZ$8.5 billion and 239,000 deposits. The recent Christchurch earthquake illustrated clearly the massive systemic failures of local government, The writer explained just some of these failures within a recent article Christchurch: A Bureaucratically Buggered City.

So the obvious question is – how come New Zealand’s Environment Minister Dr Nick Smith got it all so wrong?

First – the National Party is historically not the natural party of reform in New Zealand. The Labour Party is. Indeed Dr Smith's RMA reform proposals are of such a poor quality, they would be more suited to an earlier National Government led by Sir Robert Muldoon, that put New Zealand to the wall in 1984. Dr Smith is clearly intent in taking this country back to the failed British style Town & Country Planning (dressed up as “spacial planning”) and central government direction and control.

Second – the current National-led Coalition Government did not win the 2008 general election – the tired Labour led Government lost it after nine wasted years. The current National-led Coalition Government leader John Key's great political attribute is that he is “likeable” and unlike his predecessor Dr  Don Brash, lacks policy development and management skills. If one was to ask what this current Government stood for, the only answer on its policy development performance to date would be - “itself”.

Third – for anyone knowledgeable of these local government structural and systemic issues, it was crystal clear that they had to be tackled in a comprehensive way, as the writer outlined within an  early 2008 paper “Getting performance urban planning in place”. Early this year, soon after Dr Smith announced this work, it was indicated to the writer this would happen – but it didn’t.

Forth – although the National Party (Conservatives/Republicans) purport to have some affinity with free enterprise and entrepreneurs, in reality it prefers to work closely with business interests seeking protection. It was no accident that Connal Townsend of the Property Council was appointed to the Urban Technical Advisory Group and too, professionals with no actual industry experience as developers/wealth creators. Mr Townsend's members would be delighted with the “bureaucratic mush” generated, as they will know Dr Smith's proposals will go nowhere. This group with other business interests, led the flawed local government amalgamation of Auckland – repeating the amalgamation mistakes of Christchurch of 20 years ago.

Little wonder Christchurch’s gross annual median household income is $NZ52,000 while Auckland’s is $NZ68,000.

It is the oldest political trick in the book, in that if politicians aim to do nothing with an issue, they take the “confuse them and lose them” approach. The able Governor of New Jersey Chris Christie explained this old trick to journalists recently (refer YouTube - Governor Christie explaining political clarity to journalists for a little light relief).

Clearly – Chris Christie is in politics to do a job – Nick Smith is in politics for a job.

Finally – the question needs to be asked – can anything be salvaged out of the “bureaucratic mush” the New Zealand Environment Minister Dr Nick Smith has generated?

The answer to that depends on whether New Zealanders demand performance from their politicians. Politicians are a reflection of us.

Hugh Pavletich runs Performance Urban Planning

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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For awhile there Hugh, you

For awhile there Hugh, you seemed to believe the Nat Gov't under Key was into "grass roots" democracy... that is, drawing their lead from intelligent well informed citizen initiatives.  Well, now you know, they're not.  They've got a close knit circle of friends - and are in my opinion the epitome of crony capitalism like we have never seen before.  Worse yet, we don't have two houses or any checks and balances - and to top it off a weaker opposition than Bill Rowling was to Sir Robert.  And more to the point, Key's expanded the nation's crony elite to include Maoridom's elite - who have similarly snookered the inexperienced Maori Party Parliamentarians.

The first phase of these RMA amendments - made blanket provisions for the Govt to do what it wants regards major infrastructure projects.... this second phase ensures the status quo regards landbanking / property speculation remains intact.  

Hugh - well done, well

Hugh - well done, well said.

It's very disappointing.

It's stacking up all over the place:

'Rejected Sth Canterbury bids cost taxpayers, says Cunliffe - Business - NZ Herald News'

There needs to be an inquiry, like the one goverment denied for the banking problems and issues being raised early 2009 - a need that was largely substantiated in Alan Bollard's recent book, Crisis.



You say, "Second – the current National-led Coalition Government did not win the 2008 general election – the tired Labour led Government lost it after nine wasted years." Agreed, I helped voted them out, but I can't see any indication they really understand why they lost and what they are doing to rectify the cause of their loss. I'm glad people like David Cunliffe are at least trying to provide some opposition.

Kate - your comment 5.24pm should be read and understood. Well said.

Cheers, Les. 

Some additional background on

Some additional background on Auckland fringe development gone wrong for interest;

Problem as I see it - not unlike the Crafar situation - is that all the "players" (be they government or private enterprise) are reluctant to cut the big parcels up to individual owner-developers.  Instead the grand plans just fall over.  Those "satellite towns" that do get built (like the one on the Chch fringe) haven't taken off either.

Yes, The problem with '

Yes, The problem with ' Pegasas' is the Pleasantville factor. Developers and clearly Government also think your can just make a 'model' of a trendy new town and the rest will fall into place. But they forget  that towns form naturally via natural migration to a particular area due to many factors. To 'force' such a concept will always lead to such dissapointment. 'Trend setting' can be an ugly business at the best of times and very short sighted and short lived.

Has it turned into a suburb

Has it turned into a suburb of Johannesburg yet, Justice? Last I saw Bob Robertsons boys were  trying to move the development  on by recruiting in RSA and offering 'assistance' with a job if they bought a plot at Pegasus. Job? Where? Woodend or Rangiora.....

Well put it this way. The

Well put it this way. The golf course has 18 holes and the town is the 19th!

Valid criticism Hugh. The

Valid criticism Hugh. The much trumpetted Phase I RMA reforms have made diddly squat difference, and Phase II looks to be no different 

IMHO,a very good analysis of

IMHO,a very good analysis of not only RMA and the related issues but also a very good account of the national Party s general approach. I am no labour fan ,infact I voted for NATS. I am disappointed.

"Yes Minister" was based on

"Yes Minister" was based on fact.

The real life Sir Humphreys in the bureaucracy are masters at producing this kind of "bureaucratic mush" and controlling their minister and sabotaging his most "courageous" ideas.

Maybe the Nats are waiting for the property crash to happen. If they reform supply and bring prices down, they will get the blame. Politics in the public domain simply is not sophisticated enough to understand that managed reform is preferable to an unmanaged crash.

In a way, I would not blame the Nats for doing the reform after the crash. As Hugh says right at the end, "..........The answer to that depends on whether New Zealanders demand performance from their politicians. Politicians are a reflection of us".

Look at the disaster of a Mayor Wellington just elected. Words fail me. Our chancesof economic recovery diminish rapidly the longer it takes us all to figure out that it IS "all about the economy, stupid"; and that councils and mayors do affect this as well as the cafes and the night life the culture and the arts and the buzzing vibrancy of your precious city. In fact, concentrate on the niceties at the expense of the basics, and you will lose the niceties too one day.

But Lange "the great communicator" was the last man NZ ever had who could actually persuade the voters that tough times couldn't be kissed better. It is a quirk of history, that he was a Labour PM and Roger Douglas was a Labour Finance Minister. And things are much worse now - at least back then the whole country had a chance of paying and building and producing its way out of trouble by actually USING land and resources (shock, horror). Now, it's all about tooth fairy economics. The Greeks are different to us only in degree, in electoral unwillingness to wake up out of the pleasant dreams of la-la land.

Kate It's not that


It's not that simple.

These large projects are often by way of Plan Change and the planners insist, as a condition, that the applicant manages the whole project because they don't want to have to track their multitude of onerous conditions and rules through to multiple developers.

They don't mind this with vertical "Gated Communities" but have huge problems with Horizontal "Gated Communities". Who know s why.

The other issue is that it is not just large developments which are being refused consent by the courts or councils.

Recently the Court declined a 41 lot subdivision on the Whangarei town periphery because it changed rural character. Well it would wouldn't it.

But no consideration was given to economic growth and development, or employment.

The councils planning staff opposed the proposal along with the regular NIMBYS and BANANAS. (Build absolutely nothiing anywhere near anything.)

We are condemned to permanent recession. 

The result of these decisions is a massive losses from company balance sheets. These RMA processes are wiping out capital faster than Bill English can borrow it.

I agree - no amount of

I agree - no amount of amendment is likely to 'right' the problems with the RMA in that it's basic premise regarding land use seeks to create an environment which allows for any type of activity (development), anywhere (via the private plan change process) - and indeed this has a large unproductive cost (i.e. loss) associated with failed attmepts to change land use on a piecemeal basis.  Not to mention that even those projects that succeed similarly "sink" all these same costs in jumping the regulatory hoops.

I can't see alot of common/coordinated reasons why some projects succeed and others fail - and hence the sort of disjointed infrastructure allocation/planning we have seen in recent decades.  Mind you something like 95% of all resource consents are granted under non-notified processes - and hence there is alot of successful development going on which conforms with existing plans.

Any alternative (such as the prescriptive planning laws in the UK) impacts on the flexibility of property rights.  So, what the alternate is - I just don't know.  Certainly if plan processes can be sped up, there would likely be less private plan changes sought.  Maybe it's a start?

Kate - I'd rather have the UK

Kate - I'd rather have the UK system any day, where i practised as an architect for a few years. Sure its more prescriptive but at the same time a lot more certain. Everyone knows where they stand. Either go the UK way or total laissez faire - the halfway house we have here in NZ is diabolical

Every application is notified there. So Councils don't waste weeks and weeks (or even months and months) deliberating on whether applications should be notified  (like here).

The process is transparent, and neighbours get the chance to have their say (even if it is two minutes in front of the decision makers - which isn't so bad as they can table comprehensive written evidence)

Yes, I've heard lots of

Yes, I've heard lots of similar comments of approval.  You are right - we have a halfway house - which to my mind has never worked for anyone (bar the lawyers).  But then Sir G was/is a lawyer... perhaps he could see the 'promise' in such adversarial-based legislation?

yes the RMA is very

yes the RMA is very adversarial and a horrible thing to be caught up in. The egomaniacal lawyers love it of course, even if noone loves them

I read somewhere recently

I read somewhere recently that in terms of lawyers per head of population, No 1, 2, and 3 nations in the world are the USA, Brazil, and NZ.

Pity help us.

All your comments are most

All your comments are most helpful. It needs to be borne in mind that we are now in the "public consultation" phase through to 17 December and Hon Dr Nick Smith and the Coalition Government need to get the message loud and clear, that this bureaucratic mush is not acceptable.

At least in amongst the bureaucratic mush there was the statement made that 20 years of land supply on the fringes might be a good idea, even though the "years of supply" measure is technically unsound - one the industry protectionists in Australia have used to con dim witted politicians with for years. Actually "price differences" is the best measure, but possibly Grimes wasnt taught this at Harvard !!!

Grimes got himself all tripped up when he did an earlier report on Auckland, confusing "rural urban echo values" with "true rural values". Real basic stuff.

I was extremely amused to read within the mush - and I assume this is Grimes again - that the Median Multiple measure is "simplistic". Grimes is a generalist economist (and I covered them in an article "Housing Bubbles & Market Sense" some years back) with obviously no knowledge whatsoever of structural urban economics. The Median Multiple is actually employed by Harvard University, the United Nations and World Bank and is recognised by industry practitioners as a very useful and adequate measure. There is no perfect measure however.

Grimes obviously doesnt know the MM forms part of the United Nations and World Bank Urban Indicators Programmes, of which with respect to the former, I suspect New Zealand is a signatory. Indeed it was Professor Solly Angel of Princeton University with the late Steve Mayo who were the archiects of the UN Urban Indicators Programme. Solly kindly contributed the Introduction to the Demographia Survey two years ago. He is rightly considered the world expert on housing issues in the developing world and author of  "Housing Policy Matters".

Indeed the Median Multiple measure is essential as a structural measure and foundation for understanding the problems and working through public policy  solutions. Grimes failed to realize this.

Hugh Pavletich

Another BIG problem with the

Another BIG problem with the 20 years supply idea (nice in theory) is that the councils will make a whole lot of unrealistic assumptions about housing yield being realised within the urban limits.  

Unfortunately the govt' advisers are believers in pure smart growth, with limitted  understanding or experience in the realities of development economics. I understand that the chair of the advisory group is an RMA lawyer...

Somehow these dicks still think 2 bedrooms apartments selling for $420K in GIen innes will be viable

Their simplistic conceptions of urban planning are automatically dispelled by visiting a number of the urban centres earmarked more than 5 years ago for intensive development. There is almost no intensive delveopment in these areas




Matt, you are so right. The

Matt, you are so right.

The thing I bang on and on about, that these people just do not "get", is that by driving up the price of land, they are SLOWING DOWN the rate at which people can "choose" to live in the very locations the planners want them to live.

If those 2 bedroom apartments in Glenn Innes were $150,000, we would REALLY BE TALKING. This is not pie in the sky; in many cities in the USA where there was never a property bubble at all, perfectly nice large new houses have been going for $120,000US all along, and small homes for $80,000.

As Alain Bertaud's international studies suggest, the CONSEQUENCE of these urban limits and unnatural high land prices is that densification occurs near or at the fringes instead of nearer the centre, and average commutes get LONGER, not shorter. You can literally confirm this thesis with a look-around any NZ or Aussie city. Also, the monocentric planning model, on top of the above,  REDUCES people's choices of convenience of location, and further drives up average commuting distances.

(I actually now think that multi-nodal development and flexible zoning are a factor in keeping median multiples down, as well as the absence of fringe development restrictions - otherwise, the "Ricardian" effect WOULD lead to rises in median multiples even if the urban fringe was not limited, but a monocentic, highly zoned planning system was still in effect. I think these things tend to go along together in practice - if a city is PRO "low regulation", it will have flexible zoning and land use policies as well as no fringe development limitations. But examples might be able to be found of a mixture of one or the other regulations)

Kate - You are quite right in

Kate - You are quite right in that I gave the current Government the "benefit of the doubt", allowing them time to get their heads around these issues and come up with workable solutions. And too - I have deliberately refrained from commenting on many of their other odd policy initiatives, hoping (how naive of me) they would at least get the RMA / Local Government issues right.

The Local Government / RMA issues are not actually at all difficult, so long as there are politicians capable of articulating the problems and solutions competently, and dare I say it, carry the people along with them.

As far as I am concerned, the RMA Phase 2 Reforms announced by Hon Dr Nick Smith Tuesday is the last straw.

I suspect the core problem within the current Government, is the lack of capacity to develop and manage sound policy. Prime Minister John Key lacks these skills and is in essense the Ambassador / Public Relations Officer for the National Party - with his main mission in life to be friends wih everyone.

I have no problem with that - and indeed it is necessary in an MMP environment.

The difficulty however is the lack of policy discipline and management within the Government. Its all so aimless. You can fool some of the know how it goes.

Key will be comparing notes with Rudd before too long, if he doesnt stop grinning and start thinking. There are political costs associated with Smiths failure.

Hugh Pavletich

Matt in Auck - you are quite

Matt in Auck - you are quite right regarding the "years of supply" nonsense. Put simply (hope Grimes is readiong this so he's learning something). the years of supply for any given number of units, if we are discussing cars is hugely more for Rolls Royces than it is for Fords.

The landbanker / speculators much prefer selling sections at Rolls Royce prices and of course will convince the planners supply should be Royce price levels. The Australian landbankers have been playing this game for years.

I was gobsmacked as a development practitioer how Dr Arthur Grimes fell for this. Again - its just so basic.

Grimes has no actual industry experience of course. There is a world of difference between being schooled in an issue and educated in it.

If Dr Grimes was attempting to protect landbankers interests, he couldnt have done a better job unfortunately. I suspect though, it is because he is an academic with no real world experience in these issues.

Hugh Pavletich

PhilBest - excellent,

PhilBest - excellent, thanks.  I will have to read Bertaud, that theory makes total sense to me.

There are many examples in Auckland - Flat Bush, Albany. you are quite right, these policies force the higher density stuff to occur at the fringes, where there are land holdings of sufficient size to do it, and where NIMBYism is less prevalent

And again you are right, free up land at the edges would actually make it easier to realise higher density develoment in the city. Although the Smart growht Planners don't believe this. One said to me recently that if you free up land at the edges then intensification won't work because the houses at the edge will be too cheap comrared to units in the city! . Thats bollocks. There will always be demand for central living, and that demand can be more easily realised if land inflation in urban areas is minimised  

Well, Matt, if a planner

Well, Matt, if a planner really did say that (which amounts to):

we cannot have affordable property on the periphery, because then the unaffordable in the city won't sell.

.... then why should they remain anonymous - name them and let us know just what council they work for.  It's time the managers and Councillors who feed this cr$p to the underlings had to start defending the stupid statements.  As I'm absolutely sure the mignons didn't think up such ridiculous orthodoxy on their own.

Ahhhh, someone to whom that

Ahhhh, someone to whom that thesis makes perfect sense. Matt, please join me in trying to get this across to the planners and the politicians.

Alain Bertaud's studies "The Costs of Utopia", and "Clearing the Air in Atlanta" are must-reads. For a grounding in urban economics, Colin Clark's books "Population Growth and Land Use", and "Regional and Urban Location". Then take it from there, and observe your local market.

I don't know WHAT our planners ARE learning about this subject. Nothing, I suspect. If I was placed to do it, I would try to do a post-graduate thesis on this and aim for a Nobel Prize in economics as a result. (Only half kidding - I think Alain Bertaud deserves one, although he hasn't pursued his findings to the conclusions they deserve. I think he does OK for himself in consultancy roles for developing countries who are anxious to avoid the first world's mistakes).

I would like to see a quick remedial course in urban economics made compulsory for all urban planners. On a whiteboard, plot 2 lines: the NORMAL (for other uses) cost of fringe land, per standard section, sloping up to the cost of the most conveniently located land before restraint. The factor of increase is about 10.

The other line represents the cost of a typical dwelling on the site. This is actually highest at the fringe, and then as homes depreciate with age, the price falls from there to the "conveniently located" end of the graph. Produce a third line by adding the first two - the result will be a curve. Say the fringe section is $40,000 and the structure (new) is $180,000; and the "most conveniently located" section is $400,000 and the structure (depreciated) is $50,000 (not at all unreasonable). In the middle, in the "trough" of the curve, will be a section for $220,000 and a structure value of $120,000.

Then pose some hypothetical questions about home buyers location decisions. Old home, convenient location, low travel expenses; $450,000; new fringe home, high travel expenses, $220,000; - in between, medium age home, medium travel expenses, $340,000.

Already, the cost of the land is the most crucial ingredient affecting the decision.

Now shove the "section price" line up, to fringe sections of $240,000, and conveniently located sections of $1.2 million. Assume that the historical factor of "10" no longer applies - I suggest a factor of around 5 from actual observation. But now re-do the curve for "total" prices and voila...! It is not half b----y obvious why almost no-one can afford to live in convenient locations any more.

Plot a new "structure" line, representing "subdividing", and offering 2 half-sized homes for a structure value of, say, $120,000; and re-plot the section cost lines at half their value. You will end up with half-sized homes at $240,000 on the fringe, and at $720,000 at the most convenient locations. Had you left the land values ALONE, you would have had $140,000 half-sized fringe homes and $320,000 half-sized conveniently located homes.

But in NON monocentric, mixed-land-use, natural-growth metros, Colin Clark observed much lower, flatter values throughout the metro, as "convenient locations" are "democratised". I suspect this is part of the secret for metros where median multiples can be kept down to 3.0 and below. I used to think the price of fringe land was everything, but I now believe that enforcing monocentricity would also force the median multiple up beyond the historical norm of 3.0. I still believe, though, that low priced fringe land would act as a "vent" for any bubble.

I am extremely pleased if anyone out there "gets" all this.

PhilBest & Mattin Auck You

PhilBest & Mattin Auck

You need to realize there has been a very long history to all this, leading up to the release of the "Competitive Cities" discussion documents by Hon Dr Nick Smith last Tuesday.

The first Demographia Survey was released early 2005 and it took through to early 2007 when the New Zealand Insitute of Planners endorsed it. That's when finally the National Party took interest in issues surrounding housing affordability and I assisted in arranging a trip to the UK and USA for their then Housing Spokesman (now Minister of Housing but behaving like Minister of State Housing ) Phil Heatley.

The great National Party intellectual and Associate Housing Spokesman Bob Clarkson had told me to "go to hell" in late 2006. Thart was entertaining!

Phil then got the Parliamentary Commerce Committee Housing Affordability Inquiry underway, which reported back late 2008 with mainly limp wristed recommendations.

Both John Key and Phil Heatley through 2007 and 2008 were making a good number of speeches on these issues - with much conviction and inspiration. That was before they became Government late 2008.

I then called on Hon Phil Heatley mid way through 2009, finding him insufferably arrogant and now (once in Government) having lost interest in the issue. It was made clear to me Hon Dr Nick Smith was handling thesee issues.

Part of the reason for all this arrogance was that Phil was getting a great kick out of his position as a Minister and was swanning around the country, having a grand old time. The tears came later when he was caught out - and in a (vain to date) endeavour to encourage acceptable performance out of him - I have refered to him as Phoenix Phil. He has yet to rise. All that new found power at the time caused Rodney Hide to fall in love you may recall. They were all generally very arrogant and pleased with themselves through that first year - and pretty much nothing was achieved.

It is clear Prime Minister John Key has still not got the sorely needed Policy Development structures in place. Hon Dr Nick Smiths "bureaucratic mush" is a wonderful example of this. Rememberr when Key told the Wall Street Journal earlier this year, he was focusing on sorting out problems? It would appear he seees the need to create more first.

So it took them through to early 2010 to get underway with the Phase 2 Reforms with little interest or conviction - which they will kick in to touch for next year. I expect however there will be reasons found (more research required is a good one - indeed the Technical Paper states the need for this) through next year - election year. Then towards the end of the year we can expect them to be speaking "with great conviction" how they will deal with these issues through the second term.

What an inspiration !

Hugh Pavletich

Hugh - National's efforts are

Hugh - National's efforts are very limp wristed indeed. Heatley is abysmal. The Nats are doing fine because they are fairly likeable and non threatening, and they have weak opposition . Unfortunately their inaction in a number of areas is cause for concern, and poses big problems for the country's future.    

Kate - I'd love to name and shame, but I fear defamation unfortunately if I did so. Also, the views I mentioned seem widespread amongst the urban planners, even if there are a minority who challenge the dogma, they fear for speaking out against the great church of smart growth for fear of being burned at the stake for heresy

what I find really funny is that many planners pride themselves as left wingers yet advocate policy that works to the advantage of the rich elite and landed gentry

Kate - I assume you are a different Kate to the Kate who has blogged here quite regularly in the past? the old Kate seemed quite socialist inclined and a smart growth supporter...???

Unless the old Kate has seen the light?????  

Hey Matt - no, same old

Hey Matt - no, same old Kate.  Never really concerned myself with being pro or con any type of urban development orthodoxy.  More concerned with energy use associated with urban form - so if anything have always been a supporter of greater accessability to public (shared) transport systems/networks.  I'm also very interested in environmental and social "aesthetics".  In other words, I like lots of safe, inviting open/public spaces.  The problem I have with many of these grand structure planned developments is that they are elitist - I refer to many of them as "own-your-own zones".  In that regard they often 'break' with existing rules/forms of neighbouring residential environments - with a concept of a more contained, closed and 'rigidly planned' neighbourhood.

Kate - its just some of your

Kate - its just some of your recent blogs seem a bit less leftist!

you are probably like me then - rather Apolitical and generally opposed to "herd thinking" - whether that be of a leftist or rightist kind

  "More concerned with energy use associated with urban form". Thats an interesting one-  I hope you don't assume that higher density intensification is more energy efficient than peri-urban lower density - several Australian journal papers have shown that to be somewhat of a myth - mid to high rise apartments generally have high embodied CO2, and because they have a lot of common areas the per cepata energy use in such developments is usually higher than in lower density forms (some studies mistakingly only look at the energy use per apartment unit, excluding the large energy use of the common areas)

I believe we have moved from

I believe we have moved from the 'old' way of defining ideological leanings - from capitalism being the norm - and the traditional/conventional left (socialism) and right (liberalism) of it.  Capitalism was overtaken by crony capitalism in the form of neoliberalism, which morphed into our present dominant ideological state of globalism.

Globalism has replaced capitalism at the centre ((i.e. the ideological 'norm') and we have left and right opposing factions (opposing globalism as the norm, that is).  I am on the left in my opposition to globalism - which is to say that I adopt largely Marxist and feminist critiques in favour of a new norm of social justice.

If none of that makes sense - this is a really good read on the ideology of globalisation (with the concluding paragraphs explaining the new left and right perspectives; 

To me both Labour and National political parties in NZ both still hold sway in their normative (i.e. beliefs) ideological positions with globalism.


Kate, well


well articulated. 

There are many who  hold to the Cold War ideology and have yet to wake up to the changed world 20 odd years after the East collapsed

Times have changed.

You've got it - and which is

You've got it - and which is why both our main political parties are referred to a centrist.

John Key's adherence to the ideology of globalisation was well illustrated the other day when he said there was effectively nothing he could do about speculation on the NZ dollar.  In other words, he adheres to the notion that "no one" is responsible for globalisation - hence, what can he - a mere mortal in the wash of the predicament society finds itself in - do about "it"?

Bernard, or someone was right when they said he needed to start thinking, instead of smiling.... because basically the people are wising up to the 'false god' of globalisation. 

The concern about escalating

The concern about escalating house prices goes back to 1995 when Don Brash as Governor of the Reserve Bank commissioned me to write a report on the impact of the RMA on the housing and construction component of the Consumer Price Index.

Go to:

This word document makes the search engine very powerful but for an easy read download the pdf file.

Don maintained this concern while leader of the national opposition and made an attack on MULs and similar constraints on land supply in his recent report on increasing productivity and catching up with Australia. As we know the government rejected it before it was even officially released. He also wrote a strong introduction to one of the Demographia Affordability Surveys. He is currently Chairman of the CRMS.

There are many economists who actually do understand economics 101 and in particular Professor Peter Gordon's team of urban economists at UCLS generates excellent papers.

I am always surprised by how many people assume that people who live on the periphery have longer travel trips to work than those closer to the CBD. Most peripheral workers drive across town to work and enjoy shorter commute times than those who join the crowds crossing the bridge etc. The trips may be longer but are usually quicker. Also when people choose where to live the proximity to work is well down the list. Households have complex travel patterns and contrary to planning mythology individuals make better decisions about their own family life than young graduate planners can ever do.

Of course this is why centralists like the old ARC always fought any job creation on the urban periphery. They regard job sprawl as an evil facilitator of urban sprawl - and in their own curious logic they are right.

The Swiss actually rank proximity to work as their lowest location criteria - but Swiss planning law actually assumes that the Swiss should be able to live where they like and in the kind of housing they prefer. Which is the why most live in single family surburban homes.

And the Swiss are not famous for being stupid.

I understood the Swiss

I understood the Swiss planning methodology to be quite highly regulated/prescriptive; 

See in particular section 5.1.


Kate, It certainly reads


It certainly reads like that. If you read it from the assumed relationships between Central, Regional and local government in NZ.

But the reality is modified by the remarkable reversal of the hierarchy of government in Switzerland.

The average commune is Switzerland has 2000 people. The average canton (regional govt)  has 130,000 people. 

The communes collect the taxes and after spending what they need to spend pass what is left to the Cantons who, after spending what they need to spend pass on what is left to the federal government.

If you want to migrate to Swizerland you apply to the relevant commune and they issue the papers. All legislation at the Commune level is passed at town hall meetings. Direct democracy.

The constitution also guarantees property rights and requires that landowners must be able to clearly establish what they can do with their land. 

So while it is prescriptive the rules are set by the locals not by a planning elite or by remote Central government.


The major research paper, Bigger Better Faster More, Why some countries plan better than others, by Alan W Evans and Oliver Marc Hartwich, of the UK Policy Exchange, found:

"In both Switzerland and Germany the councils have very clear incentives to provide land for residential and commercial uses as they receive state grants based on the number of inhabitants and are required to finance their local infrastructure with tax revenue created at the local level such as sales and income taxes.[13]

This study looks at the impact of planning on the housing markets of the UK, Germany, Switzerland, Ireland and Australia, and finds that the Swiss and German markets provide bigger, better and more affordable housing than their counterparts in the UK, Ireland and Australia, and for the same reasons that some States in the United States do better than others in these areas."

The Swiss experience is salutary if only it counters the common argument that housing is cheap in Houston only because there is lots of flat land and there are few constraints on urban development, such as mountains, lakes and other significant landscapes.

Also go to:

And read chapter 3.

Great link, Owen, thanks.  So

Great link, Owen, thanks.  So far only read the chapter on Switzerland.  I would say the big difference there (and a very positive one) is that the planners are actually in charge of a plan - whereas here our planners are largely in charge of a process.  And by federal law - Swiss farmland can only be sold to farmers, which prevents speculative land purchases (landbanking) on the fringes of their residential zones, or MULs as it has become referred to here.   I wonder if this is enforced via a use-it-or-lose it type regulation? - I mean how does one qualify as a "farmer", as opposed to a speculator?  But what the planner points out is that farmers on residential zone boundaries don't sell anyway, rather they encourage/support urban growth plans.  And it sounds as if, when a land-use change occurs - it is the local authority who makes the land purchase in extending it's MUL.

Nowonder they attract entreprenurial sorts to the planning profession!


The plan for zoning designations is reviewed 10-yearly - and so there isn't the free-for-all lobbying for changes in land use which go on here constantly and in a piecemeal, adversarial fashion.

In my experience, the

In my experience, the progressive left and the progressive right are pretty much on the same page. It is the elites out on the extreme of the left and the right that are the problem.

The elite on the right will do whatever it takes to protect their interests and shut the competition out. The elite on the left (the bureaucracies in the main) are convinced they know best and will do whatever it takes to expand control.

When these two elites hold hands, I refer to this as "the unholy alliance". They do massive damage - if allowed to.

Prime Minister John Key has failed to date to wake up to this. Once he loses the aspirational voters (as is currently happening), he and his mates are political dog tucker - as Fitch Research found when Howard lost the 2007 election in Australia.

In this internet age, politicians get punished very quickly if they dont perform. The heritage or main stream media is not able to protect them any more

The New Geography website , set up by Joel Kotkin, is probably the best website internationally, where the progressives of both camps gather to discuss urban issues.

Hugh Pavletich

I don't know if I'm the only

I don't know if I'm the only one here, but Hugh P's response seems overly emotional.

He's referred to Nick Smith's RMA2 discussion document as "academic mush", I view it as an extensive list of proposed solutions to very complex problems. What was Hugh P expecting? Did he just want a few pages stating that the median multiple should be no more than 3x income? Seriously Hugh...

I think Nick Smith has done a great job, he has engaged the experts (e.g. TAG's) to find solutions and with the submissions to come he will engage further. Also, the document does propose for Councils to seriously consider housing affordability in their planning processes.

About the only fair point Hugh has raised is that Nick Smith has taken his time with RMA2. But then again, Nick Smith did state that he was waiting for local body elections to be finalised and then release the discussion document. This makes total sense.

Does anyone agree with me? Is Hugh P getting carried away?





Phase 2



"The elite on the right will

"The elite on the right will do whatever it takes to protect their interests and shut the competition out. The elite on the left (the bureaucracies in the main) are convinced they know best and will do whatever it takes to expand control. " "

Superbly put Hugh.

Ricardo - I think you've got  a bit of a point. The document does propose that Councils be mandated to consider housing affordability in their decision making, which is a good thing. I think Hugh's main problem is the speed with which this is moving (and now we have more months and months of consultation and consideration) , the way all this was communicated (you have to admit the discussion document is bureaucratic mush), and the fairly limited weight on the affordability matter relative to its importance. And I think Hugh would be concerned like I am that a mandate to "consider affordability" will amount to Councils doing the WRONG THINGS - eg. considering inclusionary zoning, and thinking they can improve housing affordability through enforced intensification. Both mechanisms have a poor track record in addressing affordability, in fact are often counter productive.     

Ricardo - Many thanks for

Ricardo - Many thanks for your comments. I just tell it straight as as I see it - and leave others to judge.

Hon Dr Nick Smiths "Competitive Cities" announcement sadly was a huge disapointment to me. Like the Video hyperlink I provided on Governor Chris Christie "you wait to see me when I'm really pissed". No doubt Nick and I will meet up at some stage - where he will get the unvarnished version. My article and the comments that follow should be considered the varnished version.

Personally, its extremely sad for me, because I really like Nick as a person and a politician. I just happen to think he and his Government really lost it on this one.

New Zealanders deserve much better than this from their politicians. Remember - we pay their wages.

Hugh Pavletich

Hugh - Specifically what is

Hugh - Specifically what is wrong with the discussion document? If you were releasing the document, what would you have made different?

I know you mean well, but I'm failing to get past your generalisations.

Ricardo - thank you for your

Ricardo - thank you for your question. I think I have covered this in both general and specific terms adequately at this stage (with the article and comments so far) - and I would much prefer to learn of the views of others, such as developers, economists, RMA lawyers, land use regulatory administrators (planners until the RMA was enacted near 20 years ago) etc etc.

So please encourage your colleagues to comment here as well.

It needs to be borne in mind that these issues have been discussed in the public arena for near six years. Most of us with this announcement, were looking for action from the current National Coalition Government, to actually start dealing with these issues.

Hugh Pavletich

Hugh - Your answer is

Hugh - Your answer is something I'd expect from a politician.

You haven't provided any specific criticisms of the discussion document, which leads me to believe that you don't have any.

Also, you stated that you are wanting "action" - isn't this discussion document a good piece of action. Nick Smith has stated that he wants legislation passed ASAP, which is why the deadline for submissions is Dec 10. Sounds like action to me.

"Most of us with this

"Most of us with this announcement, were looking for action from the current National Coalition Government, to actually start dealing with these issues. "

Ricardo - I think thats your answer. The discussion document is just another talk fest.

We've had talk - and limited action - for years on this matter

Matt in Auck - Thank you for

Matt in Auck - Thank you for clarifying this important point with Ricardo.

Ricardo - do I really have to go through that mush critiqueing it line by line? At a guess would take me about 500 pages, it is just so bad.

How about we hear from others - particularly developers and people trying to get subdivisions in. I am getting plenty of private emails to , but I would much prefer if these "victims" of the current regulatory fiasco told their stories to others within this comments section.

Hugh Pavletich

Hugh - I wasn't asking for a

Hugh - I wasn't asking for a line by line critique. Half a dozen bullet points would be OK - you are supposedly a spokesperson on this topic, you just need to back up your lofty generalisations with some detail.

Matt in Auck - I agree, it would be great if Nick Smith was tabling this document 12 months ago. However with the Supercity not yet finalised, it was logical for him to wait until the local body elections. But let's put the "delay factor" to the side - what is the actual problem with the discussion document? I believe it looks very promising and will address the supply side issues of our property market. Hugh - any specific comments??

Ricardo, Having read the


Having read the documents, I can see that we could get a new law incorporating all the recommendations, and council bureaucracies will continue doing exactly the same as they have been, using different terminologies and making new excuses for the perverse outcomes.

Central government unfortunately WILL need to get "prescriptive" if real change is to occur. Hugh I think refers to "performance targets". I have studied the urban economics angle in depth and conclude, by way of suggestion, that it would be perfectly reasonable for central government to specify a median multiple price "ceiling" for a given jurisdiction, above which ministerial intervention would result in land supply restrictions being relaxed until the median multiple had fallen to specified levels.

The global financial crisis would not have happened had California had a legal mechanism like this at the State level - or if the US Federal govt had one.

It actually IS "not rocket science". Hugh's frustration is entirely justified. He has been spelling out the basics for long enough.

Maybe this paper is OK as far as those who are familiar with policy recommendations produced by bureaucrats are concerned. But in terms of addressing the issues Hugh has been concentrating on for years, it might as well NOT be the long awaited paper at all.

Ricardo well I'm not going


well I'm not going to speak for Hugh, but I am concerned that although some of the ideas in the document provide a "framework" for Councils to do the right thing, frameworks in the past have been ineffectual to get the required action. After all, the RMA since it was conceived has been a decent "framework" within which Councils could work, but the Councils' interpretations and implementation within this "good framework" have been poor.

I repeat my earlier comment:

" And I think Hugh would be concerned like I am that a mandate to "consider affordability" will amount to Councils doing the WRONG THINGS - eg. considering inclusionary zoning, and thinking they can improve housing affordability through enforced intensification. Both mechanisms have a poor track record in addressing affordability, in fact are often counter productive."

Anyway enough moaning about the document - its what we've got so we have the chance of submitting now.

I will be submitting on the need in the proposed NPS for robust peer reviewed economic evidence to be carried out by Councils in forecasting the 20 year land supply - this is critical so that a 20 year potential housing  supply is not based on some planner's fantasy of higher density housing that has no grounding in economics

this is what hapens when you mandate higher density in NZ: 

the economics are so marginal so that the only way it even has a remote chance of stacking up is with all corners cut in terms of quality - the end result is this sort of garbage



I'm guessing Hugh/developers

I'm guessing Hugh/developers main problem is the discussion document doesn't argue in favour of prescribed increases in urban boundaries - or perhaps even more favourable - abolishing the use of zoning (land use/activity definitions) in our planning documents altogether? 

But, just a guess as I haven't read the document.

I think another thing developers generally rail against is the use of Development Levies as a means to cover the council cost of providing public infrastructure (i.e. swimming pools, sports grounds, stormwater upgrades etc) to an expanding population.  Perhaps the document fails to address this issue?

Kate - please read the

Kate - please read the documents

You  put me off them - why

You  put me off them - why devote any effort to reading bureauocratic mush - and lengthy mush at that!

Kate - We all know you are a

Kate - We all know you are a strong woman, capable of enduring hardship. I know it is a big ask, but suggest you have a bottle of whisky on hand for medicinal reasons, to assist in coping with the pain as you wade your way through near 200 pages of the mush (before you get to the background information I might add).

I would be most grateful then if you could inform the media in summary form, what is in these documents. You will be aware the "Competitive Cities" documentation has barely been reported. Remarkable, when one considers the Minister stated these reforms are the most important in 20 years.

Then I would suggest you invoice Minister Smith for the cost of the whisky.

Hugh Pavletich

:-) okay, okay - just put in

:-) okay, okay - just put in my order for a hardcopy... what the heck, might as well help the Ministry for the Environment chop down a few more trees.

Heehee.  Just got a response

Heehee.  Just got a response on my order - they aren't yet in from the printers... but will be soon!  The bureaucratic version of just-(not)-in-time.

Well done Hugh. Keep up the

Well done Hugh. Keep up the good work.

I've not managed to figure Nick Smith out yet. Sometimes he seems bright and on the ball and sometimes just confused. I've seen him do a brilliant presentation that was focussed, insightful and well structured. I was hoping for some real progress here.

I suspect the problem is their choice of "experts" for these study groups. They seem to favour academics and special interests that between them only serve to confuse the real issues rather than clarify them.

Perhaps they just like central planning and don't like giving people room to do things that might not work. Maybe politics and government just attracts people who like making rules and 5 and 10 year plans. Long live Sir Humphrey. They are all schoolteachers at heart.

Roger Witherspoon Going back

Roger Witherspoon

Going back in history in the mid 1990's, when I pressed for more land supply here in Christchurch, the Tories on the Council were dreadful and it was thanks to the 2021 (Labour) Councillor Charles Manning, who was Charirman of the Environment Committee, that we got significantly more land opened up . Two of the major Councils in the Auckland region followed. It assisted enormously in stabilizing prices at the time.

Do you remember the Wall Street Journal article by Mary Kissel of 7 March 2009, when she interviewed current Prime Minister John Key, where he stated -

"We dont tell New Zealanders we can stop the global recession, because we cant. What we do tell them is that we can use the time to transform the economy to make us stronger, so that when the world starts growing again, we can be running faster than other countries we compete with,"

John Key was only kidding.................

Its clear to me there does not appear to be anyone within the current Government, who understands whats required for economic growth.

Hugh Pavletich

Thanks Hugh,   Actually I

Thanks Hugh,


Actually I partly wrote that because there is an outside chance one of them might see it and it might stiffen their resolve.

The current cabinet seems to have some quite capable people in it but they are clearly cautious about what they can get passed into legislation. Incremental change is their battlecry, I'm just not sure there is time for it.

They have done well so far in that they have avoided banana skins and are still in the job. They did inherit something of a posioned chalice after all.

Changes to the RMA do seem to over excite some sections of the populace and not in a good way, so perhaps their caution is justified. Personally I hate the verbose and self important style of these things. Phrases like "stakeholders" and "professional" turn me off and my BS meter goes to red and starts flashing. Clearly I would not prosper in government!

Thanks Roger As you will

Thanks Roger

As you will have no doubt noticed, I was pretty gutted by Hon Dr Nick Smiths "Competitive Cities" announcement early last week - because it is in my view the best evidence we have that this current Government has extremely serious policy development and management problem's. Problems I'm afraid to say, I dont think they have the capacity to overcome.

Unless Im missing something - I just dont think there is the will and the ability within the Government ranks to articulate the issues effectively - and most importantly - carry people along with them.

I suspect this will become increasingly obvious to people going forward.

Hugh Pavletich

A clicking error on my part..

A clicking error on my part.. Please scrub the "report comment"