BusinessDesk: The changes will allow denser housing than has previously been permitted in urban areas

By Pattrick Smellie

The government has cut through a thicket of appeals against plans for more intensive urban land use in Christchurch, using emergency earthquake legislation to deal with regional policy changes that were first proposed more than four years ago.

The changes will take effect from next Monday, and will allow development in new areas in the west and north of Christchurch and in surrounding towns, including Rangiora, Kaiapoi, Rolleston, and Lincoln.

The changes will allow denser housing than has previously been permitted in urban areas, with up to 10 household units per hectare in greenfield areas of Selwyn and Waimakariri districts, 15 households per hectare in greenfields areas of Christchurch, grouped around Halswell and Papanui, up to 50 households per hectare in the Christchurch city centre, and 30 households in other areas identified in the Christchurch City Plan.

The proposals were already part of the so-called Proposed Change 1 in the Canterbury Regional Policy Statement, put forward in July 2007.

The process had ground through acceptance by the regional council, Environment Canterbury, by late 2009, but was still facing 51 appeals in the Environment Court.

The government decided that process needed speeding up because of the large number of people forced to relocate because of the earthquakes over the last 13 months.

“The changes … will accommodate both the population relocation forced by the earthquakes and population growth as the pace of rebuilding and development quickens,” said Brownlee.

To achieve this, the proposed change has been revoked and a new chapter 12A inserted into the Canterbury Regional Policy Statement, specifically referring to “accelerated gains of population … in western Greater Christchurch (including Christchurch City) as people and business activity has of necessity moved from the east (where earthquake damage has been most significant) to the west.”

“Since the earthquakes, shifts in population across Greater Christchurch have occurred and continue to do so (people leaving, both temporary and permanent and new people arriving as part of the rebuild),” says commentary on issues in the new chapter. “Given the potential impact these growth drivers have on Greater Christchurch, it is critical to understand the volumes of growth and the choices available for accommodating this level of future change, in the most sustainable manner, along with the investment in and development of strategic infrastructure which will be required to provide for such growth.”

The newly approved changes identify areas available for urban development, specify residential densities, make provision for business, require local authorities to provide for sequenced developments, and provide for form, design and development plans for integrated management of the area’s growth.

The decision to invoke emergency powers follows a string of related decisions, including to bring the previously opposed Prestons Road subdivision into the city limits, and to allow development in Kaiapoi in an area that Christchurch airport wanted kept clear as a noise corridor.

Brownlee also announced today that all but 20 properties on Banks Peninsula had been rezoned as “green” from “white”, making them capable of being built on and repaired.

That follows last month’s announcement that 9,700 Port Hills properties had also been moved from white to green zone status.

(BusinessDesk)

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18 Comments

For those who say "Land: They're not making any more of it!" Well here's a whole lot more, 'new land' ! Will this release stop the rot of migration to...Auckland? Let me think...If I were a property developer or even a speculator, would I take adavantage of this new, potentially cheaper land in Christchurch; a City undergoing renewal with the support of taxpayer's funds or do it elsewhere? Hmm....

How many more chances have our constantly underperforming parliamentarians/ ministers with your NZfriendly and NZpolite public NZmentality before you sack them openly and publicly ?

Good on you Hugh.

What a disappointment. Here we are over a year after the first quake and we are well on the way to completing the second new house (okay maybe it's the third, the rate of progress is so fast it's making me dizzy). At this rate Christchurch will be reborn by the year 2311.

We had hopes of getting stuck and in and having a new building up by now, but it's over to the planners and the number of car parks and whether they want the building at the front of the section now rather than the back where they wanted it before. 

The neighbours building would be 300 mm too high so its got to be redesigned. We had a tenant wanted to put up an arthouse cinema in Beckenham because his old one was in the red zone. Oh, no you cant't do that, you would need 53 car parks, they said so we both gave up. (The tenant said the ten we had would be fine, who is the expert, him or the planner)

So now its all silly plans for things no one wants and silly prices for worthless land. Seriously, what is the yearly return on a third of acre of Christchurch shingle? How many sheep per annum can it support? Let's be generous and guess half a sheep a year (I'm out of touch on these things but it will do as a guess - a local sheep farmer would have a pretty good idea). Let's say it can return $30 a year. Times ten gives $300 in real value.

Sigh.

Very good Hugh, that raised a chuckle. It's why the good old boys in Texas call the stuff Dirt. As in Dirt Poor.

Mr Pavletich, knowing but a jot about urban planning but having some basic economic understanding, can I please ask two questions.

As the urban fringe must have services (water, power, phone), who pays for this cost - and is that a legitimate drag on land release?

Apologies if this is in your web site somewhere.

Ralph,

Hugh's site is very good, but I am happy to take the time to explain a bit about this. Your contributions on other subjects are very good.

The one-time status quo was actually a perfectly fair and equitable way to finance urban expansion. Paying for all infrastructure, new and old, via a "charge" on all properties, has the effect of keeping the prices of all properties low. This helps to enable the younger generation to become property owners themselves, at which point they too begin a lifetime of contribution to the cost of infrastructure. Everyone "pays in" at a similar rate over their own lifetime.

But loading the cost of new infrastructure into the prices of new development, has the effect of raising the price of ALL property, because urban fringe developments tend to be the "benchmark" from which all other urban property prices are derived. That is, there tends to be a "location" premium associated with real estate, and the price of real estate tends to rise as its location advantage improves relative to the new "fringe". The urban land value curve tends to rise from the fringe to the urban centre.

Therefore, not only is the cost of new infrastructure imposed on the buyers of newly developed homes, the new higher prices of ALL property constitute a new cost imposition on ALL first home buyers, which represents a wealth transfer from them to "deceased estates" and other elderly disposers of property, and the banks.

It is also simply not true that urban expansion raises the REAL cost of infrastructure per property owner. There is no such correlation. In fact, there tends to be a correlation between rapid growth and LOW local taxation, on the part of those few first world cities that ARE still allowing rapid growth. Strangely, it appears to be the cities that have practised urban growth containment for the longest, that are having the utmost difficulty today with keeping local taxation (rates) increases down to somewhere near the rate of inflation. One likely explanation is that the cost of trying to increase the capacity of infrastructure in established, dense, busy areas, is far HIGHER than the cost of providing infrastructure on greenfields.

Everyone paying for wastewater/water/roads infrastructure via a loan and annual repayment also means that there is a subsidy from those already in an area with such infrastructre and the new ones requiring more wastewater/water/roads infrastructure.  

The one-time status quo was actually a perfectly fair and equitable way to finance urban expansion. Paying for all infrastructure, new and old, via a "charge" on all properties, has the effect of keeping the prices of all properties low. This helps to enable the younger generation to become property owners themselves, at which point they too begin a lifetime of contribution to the cost of infrastructure. Everyone "pays in" at a similar rate over their own lifetime. But loading the cost of new infrastructure into the prices of new development, has the effect of raising the price of ALL property, because urban fringe developments tend to be the "benchmark" from which all other urban property prices are derived. That is, there tends to be a "location" premium associated with real estate, and the price of real estate tends to rise as its location advantage improves relative to the new "fringe".

........

We aren't talking about natural population increase, however, we are talking about an immigration ponzi scheme, where wealthy foriegners can afford houses but locals can't.

"developers are being made, by the regulations, to build developments with all the bells and whistles for a market that simply can't afford it"  ... but wealthy migrants can.

What's more while in the past immigration was justified as we were moving from coal to oil and hadn't reached our potential as in breaking in the hill country we are now overshooting and growth is/was in the tertiary sector (tourism) which is energy price dependant.

There was a sharp spike in immigration in 2001, 2002 and 2003 and, said working group committee member Dr Andrew Coleman, it appeared that property prices did not fall anywhere near as greatly when immigration fell again.

The report added that there was little evidence that immigration boosted local incomes. In fact, the need to build roads and schools meant that net migration contributed to the national deficit.

http://www.stuff.co.nz/business/4622459/Government-policies-blamed-for-h...

Something doesn't add up.

Firstly, the issue of whether immigrants are a benefit or a cost, depends entirely on the quality of the immigrants.

Secondly, it is not a valid reason to deny our own young, generational social justice, because "immigrants also benefit". IF we decide an immigrant deserves entry to NZ, then they will benefit from many, many things provided by taxpayers and ratepayers, not just "affordable housing". If we don't want to be subsidising immigrants, then we shouldn't be letting them in. That is a separate issue entirely.

Then, if we are going to screen immigrants better so we only get the high quality ones that are a "good investment", which I strongly advocate; I suggest we also need to screen our locally born uni students who get taxpayer subsidies lavished on them too, to determine whether in fact our subsidy of each of them is a good investment.

The policy statement does not just allow higher densities. It stipulated mandatory minimum densities – something new to New Zealand as far as I know.

So essentially you have no property rights. You must build more than may be able to afford if you want to build at all.

In many US cities this technique has been used to drive minorities out of downtown areas because the banks will not lend to them for commercial development.

Good luck.

Can I park my camperbus on Hagley Park for a couple of nights or must I use a side street?

Imagine if the Canterbury Association had stuck with a leasehold only policy. The capital gains would have stayed with the public (I assume) instead of the swollen headed developers and investors and the decision making re where and how and what to rebuild may have been more fluid and intelligent*. The builder, architect and plumber would still get paid.

*Bob Jones pointed out that all the best designed cities have been built by autocrats.

Feb 22, 2002

Property developers and the housing industry have most to gain from immigration-driven population growth, according to Sustainable Population Australia (SPA).

While polls taken over the last three decades have shown that the majority of people feel immigration levels to be "too much" or "about right", businesses and individuals associated with property development have lobbied the Government very hard to increase immigration.

Spokesperson for SPA, Sheila Newman, said today that the most active of high immigration lobbyists are the Housing Industry Association, the Urban Development Institute of Australia, and the Australian Population Institute (Apop).

"Apop, in fact, exists solely to push for a bigger population for Australia," says Newman. "Most of its officers have huge involvement in property development, not least the President, Bert Dennis, who is one of Victoria's largest private land developers.

"Many developers stand to make millions out of the rezoning and development of their land holdings from population growth, whether it comes from immigration or natural increase," she says. "As populations grow, increased competition for housing will force prices up as well."

Businesses that supply or fund property development such as banks, building societies and manufacturers of building materials are also drivers of high population growth.

http://www.population.org.au/articles/2011-09-16/property-developers-main-drivers-immigration-feb

The 'why immigration won't and can't save us' arguement.

"So the wealthy will get more. But what about the average wage and salary earner and retiree? Possibly over 80% of our population?.... it’s all “down hill” from now for most Australians ( and New Zealanders) as the population increases.. With 22 million, we have the potential to share in the wealth of this country. Increase the population to 44 million, and each person has the potential to share in half as much.."

This is a ludicrous argument.  The idea that there is a fixed amount of "wealth" and that new arrivals will "take" from that wealth is so bizarre it defies belief.  I find it endlessly ironic that New Zealand First voters are opposed to immigration, yet they want the shrinking proportion of young people in the population to pay for the ballooning costs of the ever-growing cohort of oldies.  It ain't going to happen unless we let in lots of productive 25-year-olds from other countries, even if they are (gasp) not Anglo-Saxon!

This is a ludicrous argument.  The idea that there is a fixed amount of "wealth" and that new arrivals will "take" from that wealth is so bizarre it defies belief.

....

Yeah right. You're not Julian Simon are you?

 

It ain't going to happen unless we let in lots of productive 25-year-olds from other countries, even if they are (gasp) not Anglo-Saxon!

...

claims racist motives.

People returning will have to either be rich or deal with the fact that their country has been prostituted for the realestate industry.

Advertising blurb:

Once Redcliffs was an unprepossessing fishing village, distinguished by a collection of modest fishermen's cottages. Most have now dissapeared, replaced by more luxurious residences, and property values have escalated.

 

“It's a standing joke that we're being taken over by the Americans and British, who have taken advantage of the stronger property markets in their own countires and favourable exchange rates”

 

“I know an English couple who have summer here and go back to England in the winter”

 

“What other parts of the city have such nice walks?.....

The beautiful hill sights are a typical overdeveloped clutter- barnacle on barnacle.

 

Prior to the early 1980’s, Queenstown was a holiday village where property values had remained relatively static for at least a decade. At this time approximately eighty-five percent of property transactions were made to local and regional buyers – approximately half for owner-occupation and approximately half for investment/holiday purposes.

1980 – 1989
Property values began to rise in 1983 and then accelerate over 1984. Over this boom period significant speculative investment occurred and property values generally increased by a factor of between two to three times. The residential market was the first to move and with tourist numbers expected to increase dramatically in the short term, a demand increase and resultant value increase in developable tourist accommodation/servicing zoned property soon followed.

1990 – 1999
In the subsequent year however, there was still an over supply of property available and forced sales continued, generally to owner occupiers and South Island based investors. The cycle turned for the rise in early 1991, resultant in part from an optimism in falling interest rates, but to a greater extent through an increased enquiry/purchasing from off-shore – mainly in prime lake front, commercial and tourist accommodation property. These off-shore purchasers entering the market acted as a significant catalyst to recovery. In effect this period represented a “discovery” of Queenstown by the offshore market.
http://www.queenstownproperty.com/queenstown_property_overview.html

Queenstown advertises itself as "The Adventure Capital of the World," where you can bungy jump, heli-ski, jet-boat, or sky-dive. The confines of the modest town can no longer accommodate the throng of thrill-seekers. Soaring mountains still fringe the lake, but condos are creeping along the shore, a snake of traffic clogs the road into town, and Louis Vuitton has set up shop along with Global Culture, a clothes store.

If your idea of a holiday is a seething mass of cars and people, topped off by a cacophony of helicopters, Queenstown may be for you. Otherwise, it serves only as a warning of the perils of overdevelopment.

http://www.boston.com/travel/articles/2004/11/07/new_zealand_at_a_crossroads/

 

 

The UK removed its minimum density regulations in 2010.

 

http://www.ffw.com/publications/all/alerts/gov-housing-density-targets.aspx

 

Who in Government is responsible for this instruction to CERA when these minimum density regulations are being abandoned in so many places overseas?

 

Planning and Environment News: Government abolishes housing density target in new PPS3 housing

10 June 2010

The Coalition Government has issued the first of its amendments to planning policy. PPS3 Housing has been reissued today and whilst the main headline is the removal of residential gardens from the definition of Brownfield land to prevent what the government has called "garden grabbing", of more interest to developers will be the abolition of the minimum density target of 30 density per ha. The target was a material consideration in all planning applications and was used to support high density developments.

The density target was first introduced in PPG3 in 2000 to encourage Councils to build new houses at a density of 30-50 dph and seek greater intensity of development in city and town centres. PPG3 was revised in 2006 and the minimum density target reduced to 30 dph in PPS3.

The Minister states that the target has contributed to the lack of family sized homes and flats that local people need. It states that in scrapping the target, Councils will be able decide what level of density is appropriate for their area. Greg Clark the Decentralisation Minister at DCLG said:

"This is just the start of wholesale reform I want to make to the planning system, so councils and communities are centre-stage in a reformed system that works for them, and is not just a tool of top-down policy."

Developers with schemes going through the system with a minimum of 30 dph will now need to consider the schemes in line with local authority density policies. It will more difficult for those high density schemes that are already in the appeal system as they will not be able to rely on the previous minimum density target.
 
It may allow schemes to come forward for lower density developments but it is debatable as to whether it will alleviate the housing supply problem and in particular the affect that fewer higher density schemes will have on the delivery of affordable housing.