There is that, I also have some peeps in Auckland/Hamilton with uncommon interests, so there's critical mass and things happening Auckland that just don't happen in small rural towns.  
 Add that to Named Schools and bigger university facilities (the concentration of student dollars being spent)  since ports and industries are either commoditised or offshore, and ports means warehousing/distribution.
   Bigger population means more retail and better selections, especially at the critical mass for higher end products (and thus wages).  
   More willingness for companies to keep up with the Jones, more people to support the concentrated infrastructure for those wanting to keep up with the Jones (ie spend wildly on shif they don't really need)  eg superfast broadband, ultra-fast courier services, "premium price and you know it" finishings, high margin construction and design (pays higher architects bills, higher amount of engineer hirage, longer building times with higher cost materials, bigger cashflow to squeeze in extras)
 Bigger libraries and more population to make other social services viable.  (eg 300,000 people with a zoo, what are ticket prices to see the animals.  10,000 people would result in how many animals (assuming each animal can't be exchanged within it's lifespan) and thus what interest level.
  A similar social service, is airports.  In Palmerston North, the ticket prices are high, the planes smaller and slower and the services much further apart, with airport services almost nil, and the place is closed after last flight.   In Auckland, it's always open, there are lots of flights...to other large population centers (and chances are if you're travelling for commercial reasons, another large population center will support the company or services you require, compared with smaller airports - in some smaller centers there _isn't_ a taxi available, even at high credit card costs, you have to get a taxi to drive from town once one is available, and often none or only one rental car outfit is open)

I'm sad but not surprised by this info, Bob.
 
I always refer to Councils as economically clueless.  None of their policies is ever really vetted by any Dismal Scientists, and the elected members are by and large grandstanders.  The is the odd opportunity for such inpout to occur (e.g. during LTP construction) but one has to question the actual results even if the points were made.
 
They all (staff and elected representatives) just don't understand that they are now such a large part of the land development and house build process that their actions, delays, policies and fees, all influence developer, builder and financier actions, and generally in a direction which increases costs for the end consumer.
 
As a thought experiment, consider what would happen if Councils had to account for elapsed days on consents, RMA deliberations etc, plus fees incurred on both sides, at ruling IRD rates of interest and the sums involved. 
 
That would highlight the opportunity costs of:

• adversarial processes
• inspector and adviser bloody-mindedness
• involvement of external consultants and advisers on either side

This would give the eventual end consumer some idea just how much economic deadweight is produced by the whole end-to-end process.
 
They (end consumers) will be Shocked, Shocked to discover what their hard-paid-for mortgage is in fact paying for.....