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Gareth Morgan's "blindingly obvious" five point housing plan for New Zealand. Your view?

Gareth Morgan's "blindingly obvious" five point housing plan for New Zealand. Your view?
We have to abandon the idea that the only decent home is one sitting alone on a plot of land.

By Gareth Morgan*

You don’t need a fancy Commission, costing over $4 million a year, to tell you what to do about house prices and worsening housing affordability.

It’s blindingly obvious.

There are four significant forces behind the housing affordability problem.

These forces affect all of New Zealand and are particularly obvious in Auckland;

1. A tax policy which favours housing over every other type of investment.

2. Reserve Bank rules which encourage banks to lend to housing at the expense of other borrowers.

3. The local government practice of subsidising the housing costs of people who buy into new subdivisions and,

4. Pressures for businesses and people to locate in key business hubs such as Auckland in preference to other areas in New Zealand.

Of these four forces, only the fourth – agglomeration – is inevitable and something we need to accept and work with.

The rest is unacceptable and fixable, but leadership is lacking.

The government certainly needs a plan, but the one it has come up with is poor, looking more like an attempt to appease public concerns rather than actually address the problem.

This is what should be done:

1. Introduce a wealth tax which includes all housing, including the family home, and integrate it with the income tax regime, so the combined tax take is no higher except to the extent that tax loopholes on wealth accretion are closed.

This would remove the tax advantages housing currently enjoys compared to bank deposits, shares, buying into a business and so on. Because they can enjoy tax free capital gains on their property, people are incentivised to buy into housing rather than these other investments, boosting house prices unnecessarily (and holding back investment in business).

Remove the tax breaks, and you take the heat out of housing.

A wealth tax has many advantages over a capital gains tax – for a start, it is low cost to administer. For the differences between a wealth tax and a capital gains tax click here. For a full explanation of the sort of wealth tax we need click here.

2. Incorporate the clear macroeconomic risks of bank lending to housing into the risk weights applied by banks to their home loan books.

This would make lending to housing less profitable to banks and lending to businesses more attractive.

3. Local government should stop the practice of loading the costs of supplying services to new subdivisions on to all ratepayers.

People who want to live in newly developed subdivisions should face the full cost of their choice, not a lesser amount. If they faced the full cost they might think differently about moving out and developers would pick up on their preferences for inner city living. In addition urban sprawl imposes social costs from isolation and higher costs of connectivity.

4. We need to get imaginative and flexible about inner city living, and our design community needs to get on the ball.

We have to abandon the idea that the only decent home is one sitting alone on a plot of land.

People all over the world have found ways to raise happy, healthy families and form strong, rewarding communities in apartment-style homes. It may mean combining dense housing with community gardens on a large scale, like the heavily subscribed allotment schemes in the UK. It certainly means incorporating quality community spaces among the developments.

5. Stop politicking and form a cross-party accord

Agglomeration is with us to stay. We have to adapt as quickly as possible and be as smart as we can. Like the Superannuation debate, housing is too important an issue to be fiddled with around the edges. Political parties should be getting together and finding a way forward. John Key is wrong, we don’t have the luxury of waiting.

What Bill English Announced

The four key priorities for the government include:

Increasing land supply. This will include more greenfields and brownfields developments, and allow further densification of cities, where appropriate.

Reducing delays and costs of RMA processes associated with housing. This includes introducing a six-month time limit on council processing of medium-sized consents.

Improving the timely provision of infrastructure to support new housing. This will include considering new ways to co-ordinate and manage infrastructure for subdivisions.

Improving productivity in the construction sector. This includes an evaluation of the Productivity Partnership’s progress in achieving a 20% increase in productivity by 2020


What do you think about the above plans?


Gareth Morgan is a businessman, economist, investment manager, motor cycle adventurer, public commentator and philanthropist. This opinion piece was first published on his new blog and is reprinted here with permission.

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A wealth you from the USSR Gareth?
Why don't you stand for the next election on your ideas and see what NZers think of your new tax ideas.

In a democracy the key for success for elites is to convince enough of the population that they are on the same side. So they convince people that inheritence tax is really a tax on family homes etc rather than a tax on the extreme wealth of a few families like the Todds- by the way none of the Todds alive today actually created the wealth they have today but still we defend there right to not pay inheritence tax or a wealth tax. I am not picking on Todds- all of the extreme wealth in this country is mostly the same. They are benificiaries of past generations.

Do you mean the Todds that are providing thousands of new homes in Stonefields and elsewhere through Todd Property?  The Todds who provide oil and gas through Todd Energy?  Yes, I can see why you'd rather the government confiscate all their money.  I'm sure the government would make much better use of it.

yeah.... quite right Kleefer....NZ would be so much better as a little Cuba...not.

Quite right Wolly, quite right about what, why bring up Cuba, what has Cuba got to do with anything. please try not to wander. I am advocating free markets and competition. Something that National wants nothing to do with - to busy handing out favours to insiders- and something that Labour simply does not understand. The thing about free markets and competition is that they are not efficient, all those calls from the right for efficiency mean less competition and less free markets. These ideas will actually save us if we let them, they mean we are conducting far more business experiments - live ones in the market- and all those extra players mean more jobs.
To understand how most markets in New Zealand work compare coffee here to the UK. In the UK a couple of pub groups along with Starbucks dominate and the coffee is rubbish or worse, here we have hundreds of independent raoster, outlets- we even have our own roaster maker- STONKA - who make great roasters.
Many of our other markets are exercises in Line Dancing- 3 or 4 players stand in a line and move in unison without touching and without being told what to do they all simply move together up , down, and side to side - whatever .

I suspect, but may be wrong, that if the Todds were suddenly abducted by, let's say, aliens, the rest of us would still have access to oil, gas and housing developments.

I know, why not completely misrepresent  what I said. The Todds as they are now or the Warton family in the US did not actually do anything - they inherited it. All they are now is a pile of cash and unearned influence. If your so keen on them keeping money they did not earn why not also bring back inherited debts- one could then have by law ones own   debts passed to ones children- they actually used to do this.. The Todds as you know are not 'providing' new homes they are building them 'for sale'. They were given a stake in the gas Fields by Mouldon who needed /wanted one New Zealand entity in the group that exploited them- they didn't actually do the work even then. And if you go all the way back they made the bulk of their money when the Labour Government handed them an import license for motor vehicles- back then this was a license to print money- many of the richest families in New Zealand and still living of the back of that bit of welfare.
By the way I actually believe in free markets and competition - it would be nice to have them once in a while.

Plan B
Well said, this is the unfortunate truth that the rabid Libertarians often ignore, that no-one or corporation in the history of the world ever built up this amount of wealth without state input. Banks are licenced. Apple pays less than 2% tax etc etc.
Sure governments are ineficient but the alternative is unmitigated venality, the challenge is finding the balance

Yeah right on 28_29 yr old.....what's mine is mine and f#%k  the rest!!! Yeehaa.....

Well it depends on what is reduced to compensate.  So if my PAYE is reduced and especially if a tax loop hole or 2 are also closed I see no problem.
Lets face it given the vast majority of MPs are utter self-centred morons I'd vote Gareth...I could do worse.

Absolute nonsense from Gareth.  The claim councils "subsidise" new housing developments on the city fringe is ludicrous.  Not only do councils impose urban growth limits that cause a tenfold increase in raw land costs, they also charge "development contributions" that are often far more than the costs of the services being provided.  
And why on earth, in a country that is only 0.7% urbanised, should we all be forced to live in apartments?  I say "forced" because the overwhelming preference of New Zealanders as demonstrated through the market is for single-family, detached homes.  All the people who advocate higher densities should live in apartments and practise what they preach.

I have to wonder if Auckland is a giant one way bet on oil. When you see just how few people there are here and how emensely spread out the place is. The other thing that stricks me is the poor quality of the housing stock in general. The place seems a little run down- especially the newer stuff.
New Zealand simply puts property above people again and again.

Isn't most of modern economic life a "one-way bet on oil"?  Aren't we better off than we would have been if we'd discovered oil and gone, "nah, not much point in using it because it will run out one day anyway"? 

And Auckland is actually not all that spread out.  It is the densest urban area in Australasia and is denser than all US urban areas except Los Angeles.  European cities tend to have higher densities due to their historically dense urban cores, but you'll find most if not all of the population growth in these cities is in sprawling suburbs.
Finally, what does "property above people" mean?  It's a bit like "profits before people": property, like profit, is ultimately determined by what consumers want, ergo putting profits above people is a rather meaningless term.  But maybe you mean something different.

In 1940s I think we were that point stopping population growth was probably the inflection point between we are OK for many generations to there may not be many generations.

I would suggest that New York is quite compact in comparrison to Auckland. Auckland really is spread out for how many people are here. There are not many at all but the place is huge. I think you may have that a bit wrong.
Property above people means that we simply do not care that our children are leaving as soon as they can- this is a major non fudgable indicator of a problem.
It means that renst are too high so business have to compete by driving down wages so as to be able to pay the rent because Land owners never want to take the hit. ratchet clauses that mean rent only ever goes up - how come there are no other kind.
Our urban environment is really poor but our land is very expensive- so we get away with building really poor quality buildings.
It means not educating all of our young people to a high standard but instead importing people- just  like they do in the UK- they have plenty of scrap heaps there
In a democracy we have to be more than simply consumers- corporates want us to be consumers not citizens. Being a citizen has rights and obligations however.
If you put people first - our children first would they be running away so fast from New Zealand- and they are not really coming back. Our numbers in this area are really big- other countries have wars and famines to achieve these numbers

I have read that the urban density of Auckland is 19 residents per hectare (worse than LA) and it hasn't changed since 1900, So Auckland is very much the ugly poster child of the automobile era.
Gareth is right about more compact dwellings and shared space, we are failing abysmaly in the transition though, partly entitlement complex, partly ninbyism but mostly failure to accept that 19 per hectare is unsustainable, so we concented high-rise central slums as a low impact solution.
Another aspect of this is the Left/greens assertion that if we get on a bus all will be ok, i'd love GM to slaughter that myth, they are a social service born of the crowded cities of europe in the early 20th century and no panacea for suburban sprawl

Auckland is denser than all US urban areas other than LA? So Auckland is denser than Manhattan? - you've been reading that pro-sprawl propoganmda website again.

Not a bet I'd take.

because the overwhelming preference of New Zealanders as demonstrated through the market is for single-family, detached homes.
That is nonsense. The other (quality) housing options possible are not available in New Zealand, so it is impossible for people to make an informed choice. Gareth actually makes a very informed opinion on the social cost of our low density detached housing, something I occassionlly post on.

What is this "social cost"?  Is it greater than the "social cost" of doubling the cost of housing and forcing people to live in substandard/poorly located accommodation due to lack of affordabiliy of better options? 
Because this is what the policies aimed at promoting "higher densities" have accomplished.  I have nothing against apartments even though I personally wouldn't want to live in one.  Part of the reason the quality of them in New Zealand is so poor is because land prices are so expensive, forcing corner cutting.


What most people around here can't see is that the disconnected communities that we have generated through low density detached housing permits the greedy, self centred antisocial behaviour that allows people to profit from substandard accommodation. The planners, councillors, bankers and developers don't have to answer to their neighbours, they can jump in their car and drive off into the world to be completely anonymous. The social cost is when people scream accountability because there is none. Yes the social cost is greater for it is a leading cause of the problems. Surprise me and see if you can make the connection Kleefer, but I won't hold my breath.

Scarfie – When you think of the word ‘ghetto’ it conjures up images of high density, not the suburbs. When you see riots on TV, they are in the CBD, not in the suburbs. But it’s not an issue of high density versus low density, it’s a matter that, in NZ, both are overpriced, and if people don’t talk to their neighbours as much, maybe it’s because they all have to work that much more to pay for the overpriced houses. NZers were the originator of the 40 working week, now we have one of the highest work hours of all OCED countries. The Kiwi Dream and the Kiwi lifestyle are a myth for many NZers.

Dale if you read my comments to Matt in Auckland you will see there is an upper as well as lower threshold. 30-60 people per acre is the target. When the 40 hour week was pioneered the birth rate would have put us within those limits despite the detached housing. But I think you miss my point, which is that we have overpriced housing because we have poor urban design. I put some work into my comment above, try reading and digesting it again. Go and get yourself a copy of "A Timeless Way of Building" by Christopher Alexander, or try and get it from the library.

Irrespective of design, housing in NZ is overpriced, especially the land component. The dye is already set before you get to design anything, and in fact limits what can be designed. Thinking that housing affordability can be solved by forcing people into smaller sections and houses is missing the point completely. By making ALL housing more affordable, you would soon see what people preferred, and would urban design accordingly.

I agree with you on the overpricing, but as to cause you are still putting the cart before the horse. It is well and truly possible to design disireable compact housing but you have to look to the to pioneers in Architecture like Jorn Utzon. He was not motivated by profit but by the plight of those less fortunate. Take a look at his Kingo houses and tell me what is wrong with those. He designed them for working class people but it was so successful they are rarely sold.
If you come back to my original point, which is quality medium density is achievable, but that people don't have that option available to them so can't make the choice. How the hell can you support the statement that people prefer detached housing when all the options are not on the table?

Not true, the apartment developers Ive had the mis-fortune to come across aim for 100~150% profit.
Nothing to do with land at all....cutting corners yes.....without doubt, hence I'd avoid them.

Who exactly? They would need to aim for 20% to to able to get funding but as many go bust as thrive.

Agree, is Gareth SERIOUS, or is he just spoofing the worst of the loonie Greens? Will he tell us he was just being provocative?
Surely he can do better than this.
For a start, there is absolutely nowhere in the world that housing is "affordable" because it is high density. The most affordable cities in the world all have large houses and sections, on average. The difference in land prices is literally thousands of percent when you start constraining where development is allowed to happen.
Of course the vested interests behind containment are considerable. Major property investors want their property to be the price per square foot that obtains in London and Manhattan and Hong Kong, not the price that obtains in Houston or Atlanta. There is literally thousands of percent difference, which makes a massive difference to the property owning class on the one hand, and to "housing" affordability on the other.
Is Gareth now wholly a stooge for these vested interests, or he just as ignorant and economically illiterate as all the usual stooges with their shallow and irrational Green assumptions?
Furthermore, anyone who knows anything about cities should know that the density of the type of employment that a city has, makes a major difference to what kind of housing works. All cities can't be Manhattan or London. If they were, then it would be impossible for London or Manhattan to actually be such concentrated global nodes of the activity their economies are based on.
Most cities in the developed world actually have to find something messy to base their economy on, something that emits CO2 and uses land and other resources. Surely Gareth Morgan is not one of these fruit loops who thinks entire economies can exist on bureaucracies and hairdressers and retailers and professionals and so on? Someone has to actually create the wealth that is consumed in "services" and retail and bureaucracy and rent-seeking.
There is far more "suburban" employment and workforce-employment balance in the cities of the first world as a whole, than there is "CBD" employment and workforce-employment balance. Gareth is way outside his area of expertise. Decentralisation is a natural direction in which urban economies evolve regardless of alleged "subsidies".
There is also few suggestions more stupid than the popular one that the costs of infrastructure be lumped up-front into the price of new houses. The simple reason is that these costs filter down to all houses in the market, representing a windfall gain to incumbent owners and investors at the expense of first home buyers and renters. If we socked $20,000 worth of road user charges into the price of new cars, used cars would go up in price too.
Pay as you go, and correct infrastructure pricing is the answer. The inefficiencies that result from "postage stamp" style pricing of much publicly-provided infrastructure is one of the sources of the problems Gareth is discussing. Pricing water is a political no-go zone - so why shouldn't lumping upfront charges into new houses also be a political no-go zone?
There is also no evidence that urban density forced by regulations, results in higher productivity. In so far as resource consumption ends up lower, this is because unaffordable housing and high rents robs households of discretionary income. In fact the efficiency of dense cities measured in commuting times rather than resource consumption, are worse. Therefore, the lower resource consumption is occurring in spite of inefficiency, and is occurring because of households simply having less income left over after housing costs, to get by on.
The corollary to this, is that low density, low housing cost US cities have higher resource consumption simply because households have got the money to spend after "housing costs". Housing costs are lower even though houses and sections are larger; and average commute times are lower than denser cities around the world. This is because relatively free urban markets find a balance between location of employment and workforces, and furthermore, if people want to move closer to a job, they can always afford to do so, in contrast to being so "priced out" as young people are in Akl that they end up living in Thames or Paparoa and commuting to Akl to work. Way to go with the "unintended consequences", urban planning a--holes.

There is also few suggestions more stupid than the popular one that the costs of infrastructure be lumped up-front into the price of new houses. The simple reason is that these costs filter down to all houses in the market, representing a windfall gain to incumbent owners and investors at the expense of first home buyers and renters. If we socked $20,000 worth of road user charges into the price of new cars, used cars would go up in price too.
So our influx of migrants will bring hydro dams and a new harbour bridge if needed? Or to put it another way, 80% net of population growth over the past 20 years has arrisen offshore and requires new and additional infrastructure. It is the property sector that benefits directly but you expect the incumbent population to pay for the (alleged) benefits of a population increase policy choice.

So having everyone who buys a home from now on, pay around $200,000 too much, for nothing, is preferable to paying a similar amount in total to actually get some infrastructure for the money?
DUH. NZ deserves a national Darwin Award for this.

The Ponzi scheme has to fall down sometime.

"there is absolutely nowhere in the world that housing is "affordable" because it is high density."
Try St Stephens in Parnell where high density is about half the price of similar sized free standing detached dwellings.
' The most affordable cities in the world all have large houses and sections, on average'
According to university research (which I know is not as plausible as home-made sprawl propoganda website research) the most affordable cities (like Houston) are the most unaffordable when transport as well as housing is accounted for.
Can't be bothered reading the rest sorry

A house in Houston is about $300,000 less for what you get, as compared to Auckland - as a terribly rough appromiximation (go look at a website on their properties for sale).
How far would you need to commute each day to offset a cost difference like that? 500km maybe?
And did you can make cars that are 10x more efficient than the existing average (VW has done it), and sprawl takes the jobs/traffic out to the fringes with it (giving us the evolution of the polycentric city), which makes low-density transport efficient compared to high-congestion high-density transport.
One fastest way to spot b.s is to simply apply a little commonsense. You need to start listening to the other side of the story.

Auckland is the big engine of NZ - everyone wants to live there.
Does everyone in the US want to live in Houston - or do more people want to live in NYC/LA etc?
The answer could well be: 'who cares'

I understand that Houston is growing rapdily, and that in America it's the districts that are NOT artificially restricting land supply that are attracting the growth - in both people and of course capital investment. 
When people vote with their feet is that not the bottom line?

Nice to see the erudite and intelligent Andrew Atkin helping things along on this forum.
Houston grew from 4 million people in 2000, to 5 million people in 2010.
This sort of growth simply fries Kiwis puny minds, especially Greenies ones.
Check this report out; it is not just Houston growing this rapidly:
See especially, Table 2 and Table 3

So says you who I've never heard of.  This study (ironically funded by the Ford foundation amongst others) says otherwise. Who to believe? Credible study or random poster?

Bob, my point about affordability is inter-city, not intra-city. There is no city in the world with high urban density and a house price median multiple anywhere near as low as 3. Those poky Parnell dwellings are still more expensive than a decent separate house in an affordable city, of which there is 200 in the USA, not just Houston. Poky dwellings in all the planned high density cities are likewise more expensive.
Poky dwellings in an affordable city are ridiculously cheaper still. This is genuine "choice" in housing. The pro-containment people are certainly NOT pro CHOICE in housing, whatever they may claim. They force up the price of all of it, and price people out to locations further and further away.
Andrew Atkin's point was good. The distinguished urban and transport economist Anthony Downs has been pointing out for YEARS that the higher house prices are forced up, the FURTHER it is worth driving to reduce "housing plus transport" costs. This was one of the key findings in the famous "Costs of Sprawl 2000" study, which has of course been ignored.
There is a chapter entitled:

"The Effect of Lower-Cost, Outlying Land on Housing Costs":

Page 448 onwards of the following PDF is highly relevant:


Dr Kara Kockelman of the University of Texas, some of whose research is referenced in the “Costs of Sprawl” study, has done further research since with the same outcomes.


It is simply a blatant falsehood that savings on transport can ever compensate for inflation in housing costs from urban growth containment. There is a classic abuse of objective scientific method that the authors of "studies" use to "prove" this falsehood. Basically, it utilises existing actual costs "by household", at the time of the study. This grossly skews results in favour of mature locations nearer urban centres, occupied mostly by people who bought their first home decades ago for a pittance in todays money, and who are mostly debt-free. Locations further away are where younger people "priced out" of the mature locations live.


Basically, the method utilised by these scurrilously dishonest "studies", is like saying that "housing plus transport" costs are lower for Mr and Mrs Smith who live nice and close to the CBD, compared to Joe and Jane who live on the urban fringe, therefore Joe and Jane should be living where Mr and Mrs Smith are instead of at the fringe - without mentioning that Mr and Mrs Smith bought the house they live in for $5000 back in 1965; and without mentioning that the same house would cost Joe and Jane $800,000 if they tried to buy it today instead of the fringe house they did buy for half that.


The "experts" peddling this stuff should be prosecuted and even jailed for fraud and malice, in my opinion.



getting a bit bizarre:
You claim " there is absolutely nowhere in the world that housing is "affordable" because it is high density".  An example is given of a street where a 229sqm high denisty dwelling (is that really "pokey"?) is half the price of similar sized neighbouring freestanding houses. An example that disproves your statement.
Then you claim that what you meant was that actually need to compare high density housing somewhere with freestanding houses somewhere else in the world to prove that high density housing is more expensive. Comparing apples with apples doesn't prove your preconceived notion so you try to compare apples with pears.
Your logic is getting so warped.

Even more wierd after claiming that density doesn't make cheaper housing you then say it does - "Poky dwellings in an affordable city are ridiculously cheaper still."

Before we all start damming him think for one moment what it would take to stop the exodus of young  New Zealanders. If the things he is suggesting will mean that more of our young people will think that they have a chance in this country great. The numbers leaving and the numbers of people we all know who have left tell us that something is deeply wrong with our society. Simply replacing them with people from countries in much worse shape than our own and pretending that we do not have a problem becuase our population in total is not plumeting is not an answer- it is not even a band aid.

A load of rubbish. Morgan is way out of his depth. He obviously has no handle on development economics, if he did he know that in most auckland locations family sized apartments need to sell for more than 600 k, only a minority of family households can afford that

MIA you're finally spot on!
Morgan is a clueless loon if he thinks that making developing greenfield sites more expensive or difficult is going to improve the housing situation!
He is also completely off base suggesting that it is taxation which makes property a better investment than other assets, the fact is it is a better invesment because it is a better investment!
Affordable detached homes is the cheapest and most desirable way to house us.  We don't want or need slums in the skies.

600K for a family sized apartment sounds a good deal to me.  Compared with the other nightmares you would have to pay the same for in a similar location.
As for people not affording that - well of course thats steep.  But they will also not be able to afford the house on land for the same cost.

The quality of the discourse on the housing issue really leaves a lot to be desired

Gareth the one thing you miss is the contribution of interest in this mess. Interest is a mechanism for redistributing wealth, lending on housing is simply an expression of that mechanism. If you eliminate housing it will express again elsewhere, you need to eliminate the mechanism first. Take the profit out and the mess will resolve itself very quickly.

So, to paraphrase South Park's underpants gnomes:
1. Get rid of profits
2. ?
3.  Profit!

The argument about the "social cost of sprawl is exceedingly simplistic and doctrinaire. All forms of development can be socially divisive or cohesive, the social success of a housing development is far less about location and density, and far more about design and other factors

You are wrong on the density, the link to crime is well documented. There is both a lower and a higher threshold. We are consistently below the threshold here. But certainly the design factor is seriously lacking here also and I suspect Gareth is well enough travelled to have seen better examples of urban design.

If you could provide references for the connection between density and crime that would be useful. I would like to see research that is properly controlled. 

Yes if you go above the upper threshold then you have disorder problems. I am not going to trawl through my old notes looking for the references, but trust me I have had the same information in the tertiary training from two separate but unrelated professions.

Here's a good summary of what I remember from psychology on a few of the effects of overcrowding (on rats in 'rat cities') and poor design (on humans), and some ideas on why disorder in crowded living spaces is not necessarily a foregone conclusion.

will all due respect scarife, they teach you a lot of things in uni which are bull:)
Look, of course its common sense that on average housing above a certain high density will generate anti-social behaviour. And that similarly ultra low density housing can be somewhat anti-social and anti-community. My point was that providing a major generalised blanket statement saying that peri-urban housing development - call it "sprawl" if you like - has major social costs is totally unjustified, especially as most peri-urban development occuring in places like Australia today is often achieving reasonable densities.
I could point to numerous developments in Auckland which achieve your optimal densiites which are anti-social slums.    
Unless we move away from crude stereotypes and doctrine, nothing will be achieved.
And Morgan like many others has not helped move the debate forward constructively.

I think you are being unfair on Gareth as he does qualify the statement by talking about community gardens, and what is really missing from Auckland examples is quality community spaces. Sure a bit of a blanket statement, but I have not seen anyone else ever discuss the social cost in relation to design/density so I think Gareth should be commended for at least throwing it on the table.
Ask yourself where in out cities do we have community spaces where a good cross section of society can congregate? I know that as a teenager the local mall on a Thursday night was the place for teenagers to "hang", and I suspect the shopping mall is about the closest thing available. But the fatal flaw is that it is not a publicly owned space, it is very much a manipulated private facility.
BTW you have to give me some credit for being able to filter the input. In Jungian typology I am highly intuitive, which means relating, valuing and categorising information, particularly in reference to what you already know.
I tell where I do have complete confidence in this matter, and that is that Aucklands housing problems won't be fixed :-)

The only thing that is becoming blindly obvious is Gareth knows nothing about housing.  Other posted comments herein adequately explain why. It’s becoming Monty Python ish.  Gareth Morgans solution to housing – live in paper bag in middle o’ road, but it will still cost 6x median income. His next suggestion for increasing productivity will be to tell us that we need to get up ½ hour before we go to bed.

Don't forget walking to school uphill both ways...

Isn't this a bit repetitive - I thought this was done to death last week - I am absolutely bored beyond reason with talk about shopping, including the purchase of homes to store it. 

I cant take him seriously with that completely ridiculous Hulk Hogan moustache.

that made me LOL!

Morgan hates property because it earns much more than crappy managed funds such as his .
When he offers to pay wealth tax or capital gains tax on the $70M he earned tax free from the sale of Trademe he might gain some credibility.

Actually he has done pretty well out of selling to Kiwibank -

Yep. Tthe good will payment took the taxpayer behind the woolshed for more than a good  beating.

Big Daddy, having formerly worked in managed funds (as an analyst), I was amazed at how anti-property senior staff were.
Behind it is the view that they can't make money from people investing directly in property.  The more funds under management the more bonuses and income for the fund managers (not for the lowly analysts though).
Morgan has the same perverted view.  But on top of that he thinks the worms should be entitled to occupy open paddocks and that all people should live in a bus.
Morgan needs to get real and stop trying to impose his world view, which doesn't help anyone but himself.

The issue is a system which excessively favours one sector not which is the best investment.

Housing is the best investment, full stop.
Stop trying to make a tax system to disadvantage property!
What tax benefit does property have?  Capital gains are tax free on passive equity investments too you know.  But then passive equity investments don't pay local government taxes (rates)!
So without depreciation, property pays more than its fair share already!
Penalise the best investment?  Sounds like tall poppy syndrome!

 Housing is the best investment, full stop.  
.... Your opinion, full stop.
Stop trying to make a tax system to disadvantage property! - 
... I see.... so tell me again why we should have a tax system that advantages property?
What tax benefit does property have?  Capital gains are tax free on passive equity investments too you know.  But then passive equity investments don't pay local government taxes (rates)!   .....  Don't you think they should?
So without depreciation, property pays more than its fair share already!
 .... Hahaha..... NO, it doesn't.
Penalise the best investment?  Sounds like tall poppy syndrome!
.... You're right.. those shining investment lights of New Zealand; property investors.... are Tall Poppys....   

That comment is rubbish.
Please explain how investors in passive shares pay more tax than property investors...
Both pay no capital gains.  Both pay tax only on the net profit.  Property also pays local government taxes, plus GST and income tax on any money spent on maintenance.
Investment in shares (which are mostly foreign shares given the size of our stock market) produces none of that extra revenue for NZ, nor does it provide a service for NZers (housing).
What does NZ have ... a few dozen investable companies??

The FDR (So called Fair Dividend Rate) means that there is a positive dis-incentive to invest in shares.
If the govenment brought in a FRR (Fair Rental Rate) and set it at the same rate as the FDR AND you had to pay tax on the FRR, you might begin to understand the dis-incentive

Gibber clearly you don't understand.
The FDR is the maximum tax you pay for passively held shares and that is 5%PA.
If a passive property investor losses capital value through a falling market in one year, they still pay tax on their income.  A stock investor in the same situation may pay no tax.
I wouldn't call that an incentive to invest in property over shares - more the reverse.
Property taxes are more than fair.  How about taxing business owners that have the intent of building a business then selling it for a profit in a short time frame.  Gareth Morgan's done it twice in quick sucession, maybe the tax department should come down on him like a ton of bricks.


clearly you don't understand the disincentive compared to the Australian system. There you get taxed on actual dividends rather than imaginary dividends.


You clearly know a lot about property. But not very much about the Fair Dividend rate and its disincentive re investing in shares.  Especially overseas shares.



The real problem is a lack of leadership and vision by Sir JK and his Wonker Bro's studio team.
Then we look at the opposition and see the guitar strummin David with only half his band turning out to play with him.
There will be NO leadership after the next election as no leaders exist to vote for.
Would't it be great if we ALL voted for a third party, ANY third party, and got rid of this lot.

I'm going to start a new political party called 'None Of The Above'.

I always thought the "No Confidence" party would get a section of the party vote.

It makes sense though that in AKL we need to build upwards close to the city. They should remove the zoning up suburbs like ponsonby, greg lynn, parnell. newton gully and let the market take care of it.....
apartment living in necessarily terrible, planners just need to be more thoughtful

The Savings Working Group ( a group set up by the government but ignored by it -thank's to the vested interests it represents) agrees with Morgan in so far as it identifies the need for immediate infrastructure waves of migrants require, draining taxes from the low wage economy :
Savings Working Group
January 2011

“The big adverse gap in productivity between New Zealand and other countries opened up from the 1970s to the early 1990s. The policy choice that increased immigration – given the number of employers increasingly unable to pay First-World wages to the existing population and all the capital requirements that increasing populations involve – looks likely to have worked almost directly against the adjustment New Zealand needed to make and it might have been better off with a lower rate of net immigration. This adjustment would have involved a lower real interest rate (and cost of capital) and a lower real exchange rate, meaning a more favourable environment for raising the low level of productive capital per worker and labour productivity. The low level of capital per worker is a striking symptom of New Zealand’s economic challenge.

This is a problem made by government without consultaion when the government decided it should increase the population with a cherry for the left (diversity) and one for the greedies (capital gains). As the Savings Working Group say it appears to have "worked directly against us" but into the pockets of Big Daddy Richmastery types.

A good example of a Houston type free for all would be Gloucester Towers in Chch... an elephant in the corn (Villas) sqeezed in by a loophole in the town plan.
Life in Houston:
The lie of regulation
Regarding the Page One story on Jan. 8 "Lanier puts his weight behind builders / Ex-mayor joins campaign against development regulations he says hurt city": As I have asked different builders and developers time and time again: How much money do you need?

For 14 years, I have had to listen to the frustration and disbelief of professionals with major companies who are transferring to Houston ask me, "What do you mean you don't have zoning?" Incoming homebuyers have become increasingly cautious about their purchases because our regulations are weak. To suggest that Houston is in danger of overregulation in development is laughable if not an outright lie.

When potential buyers see three- and four-story town-homes and four- to five-story midrises adjacent to and crowding one- and two-story single-family homes, they take a pass. It then becomes a challenge to find a relatively "safe" neighborhood with deed restrictions, or a separate city such as West University or Southside with a property that meets my customers' needs.
Unregulated residential construction on top of active railroads, freeways and busy commercial streets is the norm at this time, not the exception.

Excessive regulation is an economic danger? If I may quote the great poet, John Milton, "License they mean when they cry liberty!"
Realtor, Houston

Ex-mayor awakens
Why is it every interest group that is against any type of forward thinking always adopts a name that is the antithesis of its intention: "Houstonians for Responsible Growth"?

I was wondering when former Mayor Bob Lanier would awaken from his slumber and come to the aid of his builder friends. He never hesitated to assist his concrete-pouring friends when dismantling any hopes for mass transit in the city by axing voter-approved rail plans and standing aside as existing rails were ripped up and replaced with concrete so any future hopes of rail transit were made inconceivable.
Looking out for ... ?
The last statement in the Jan. 8 article said so much for exaggeration: " 'Houston-ians for Responsible Growth' includes bankers, architects, construction project managers and others concerned about the economic 'ripple effects' of excessive regulation."

Current and hopefully more stringent building regulation does everything for healthy city growth. The only ones who "suffer," albeit in a minor way, are those who are looking out for themselves first and the city second.

Developing concern
I read with interest the article regarding our ex-mayor's concern about possi-ble restrictions on developers proposed by City Council. I see stated in articles that develop-ers are concerned with the in-creased cost of housing prices if there should be limitations put on their redevelopment of inner-city neighborhoods.

If their concern is so great, can they please explain why the cost of a housing unit in one of their redeveloped neighborhoods is hundreds of thousands of dollars? How many residents in these areas can come close to affording the new homes in their old neighborhoods?

His Sixth sense
Richard Weekley (brother of David) and other developers, along with Bob Lanier, are ready to knock down the Old Sixth Ward historic district and put in low-cost housing? Where were they 20 or 30 years ago when Lanier was mayor and that neighbor-hood wasn't as hot?

Now that the homeowners there have started a revitalization effort that has made their neighborhood much more desirable, I guess it's time for them to step aside and let some authentic Houstonian builders take over.


It would be an interesting experiment to stop immigration into Auckland other than Kiws so that expectations of price rises were dampend and see what remained of the Auckland economy once stripped of building homes, new infrastructure for migrants etc.

Yes, a very interesting experiment into racial profiling, xenophobia, and what New Zealand would look like in an Orwellian future.

The question is if you took foriegn investment in land and developing property for immigrants  what would be left of the Auckland economy.
Auckland  already is one of the most diverse cities in the world. As for the Orwellian future it is hardly relevant as what we have now is a system manipulated by elites.

''While the other boom states have been driven by mining exports, Victoria's boom has been driven by high immigration,'' Birrell says. ''This created a buoyant economy, thanks to a rapidly-growing people servicing sector and migrant servicing sector.''
In other words, Melbourne is growing for the sake of growing, racing towards a population of 5 million, using other people's money. Just how big is that great sucking force from the south? Enormous. In the 2008-09 financial year, Victoria imported $70.2 billion in goods and services. It produced only $34.5 billion in exports, less than half its imports, a deficit of $35.7 billion. 

The Yarra monster is killing us

Racial Profiling? Xenophobia? Orwellian? Winston Smith and the Ministry of Truth?
Come on StanleyGoodTimes.
First:  Your response reveals your prejudice. JH simply advocated "for kiwis" which narrowly interpreted means Maori or 2nd or 3rd generation non-maori. More loosely interpreted it means "citizens" ie those who hold citizenship, not just residency, and have lived here for at least say 10 or more years. That embraces at least 70+ nationalities. What's wrong with that?
Second. Immigration should be terminated altogether until the housing problem is resolved.
Third. Alternatively, migration should be targetted to regions outside auckland with a capitation fee of $50,000 per person if they insist on locating in Auckland. And I mean per-person. That would be $200,000 for a four person family. Quite a financial disincentive.
Fourth. Gareth Morgan advocated new subdivisions should be front-loaded with the full costs of sub-dividing. Now that could work if new sub-divisions were set aside for new migrants, and all new migrants who wish to locate in auckland and buy a property be required to buy one of Gareths high-priced, front-loaded sections and build a new home. Plus an additional capitation fee for connecting to existing infrastructure.
Fifth: Although not overly keen on the idea, some of the "new migrant fees" set out above in 3 and 4 could be used to provide "First Home Owner Grants", only to youngsters under the age of 30 who were born here.
Sixth: I hope Gareth Morgan reads this.

MY prejudice??? what prejudice would that be exactly? and against whom? I'm not the one commenting on an article about economic steps to solving Aucklands property crisis by sinking to that old predictable chesnut - "blame the migrants", which is the catch-phrase of any true xenophobe... "bloody foreigners, coming here and wanting to change our way of life"

So why not just come out and say what you really mean? It's the Asians causing the problem. Sounds pretty racist to me. Also your proposals to "encourage" migrants in lesser desireable parts of NZ has been tried quite successfully before - the Germans did it quite well with the Jews in the 30's, and the Russians were quite big on it as well later on.


he is right on the button when he says that there is a tax policy which favours housing over anything else.
that cannot be denied as for the others i don't know.

There is plenty of cheap land in New Zealand, the problem seems to be that everyone feels the need to live in Greater Auckland (God only knows why)

Perhaps some financial incentives to move *away* from Auckland, some assistance for business to move elsewhere, some high speed rail links to satellite commuter towns, some competitive broadband to assist people in working from home or more rural areas, development of ports and international transport hubs in other cities, etc etc

Or just give every Aucklander a return around the world air ticket and tell them to go see the world. Hopefully when they get back they won't be so insular and parochial and might consider that there is life beyond Bombay and Orewa :-P

It isn't just land (unless your thinking market lead squatter towns) it is towns plus infrastructure and an economy (other than property development).

Maybe the council should remove all planing constraints both for density and city limits let aucklanders decide whether to live in apartments in the city or houses on the outskirts. My guess is the apartments would b more popular. 

The American suburbs are a giant Ponzi scheme
What we have found is that the underlying financing mechanisms of the suburban era — our post-World War II pattern of development — operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities.
Since the end of World War II, our cities and towns have experienced growth using three primary mechanisms:

  1. Transfer payments between governments: where the federal or state government makes a direct investment in growth at the local level, such as funding a water or sewer system expansion.
  2. Transportation spending: where transportation infrastructure is used to improve access to a site that can then be developed.
  3. Public and private-sector debt: where cities, developers, companies, and individuals take on debt as part of the development process, whether during construction or through the assumption of a mortgage.

In each of these mechanisms, the local unit of government benefits from the enhanced revenues associated with new growth. But it also typically assumes the long-term liability for maintaining the new infrastructure. This exchange — a near-term cash advantage for a long-term financial obligation — is one element of a Ponzi scheme.
The other is the realization that the revenue collected does not come near to covering the costs of maintaining the infrastructure. In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that’s just for just major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.
The reason we have this gap is because the public yield from the suburban development pattern — the amount of tax revenue obtained per increment of liability assumed — is ridiculously low. Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. The engineering profession will argue, as ASCE does, that we’re simply not making the investments necessary to maintain this infrastructure. This is nonsense. We’ve simply built in a way that is not financially productive.
We’ve done this because, as with any Ponzi scheme, new growth provides the illusion of prosperity. In the near term, revenue grows, while the corresponding maintenance obligations — which are not counted on the public balance sheet — are a generation away.
I declare this discussion over: Gareth Morgan wins (moustache and all).!/~/category/id=2588063&offset=0&sort=

One of humanity’s greatest strengths — our ability to innovate solutions to complex problems — can be a detriment when we misdiagnose the problem. Our problem was not, and is not, a lack of growth. Our problem is 60 years of unproductive growth — growth that has buried us in financial liabilities. The American pattern of development does not create real wealth. It creates the illusion of wealth. Today we are in the process of seeing that illusion destroyed, and with it the prosperity we have come to take for granted.
That is now our greatest immediate challenge. We’ve actually embedded this experiment of suburbanization into our collective psyche as the “American dream,” a non-negotiable way of life that must be maintained at all costs. What will we throw away trying to sustain the unsustainable? How much of our dwindling wealth will be poured into propping up this experiment gone awry?

Gareth Morgan suffers from the problem numerous people who suddenly think they are successful suffer from.
They start telling everyone how to live their lives and what's best for them in all sorts of other activities, unrelated to their own area of expertise.
Note all of Morgan's advice steers the reader towards giving more money to financial him.
Note also... Morgan was the man who, when the Reserve Bank Act was introduced in 1989, said that inflation was now gone and so there was no point buying houses because they would not rise in price. The average house price in 1989 was circa $90,000.
What is it now?

Kind of like Key ... successful in currency arbitrage, but what does he know about running a business, let alone a country ...
Every idea produced by a man is not good simply because he produced one good idea!

at 4% inflation $221,000 would be the equivalent.  Given a x2 housing bubble with houses about twice what the wage ratio is it doesnt look a great asset if/when they correct.
I'll agree on financial planners though....much are a waste of space.

#1  Except housing is a necessity and not an investment. Hence why to a degree its resonable to exclude it.  Besides which capital gains are an elusion Gareth, if you understand the headwinds of peak oil, aging population, debt  and AGW it just has to correct and hugely...bye bye so called profits....nothing to tax.

#3 Do you have data / proof?  Hugh P claims the opposite, not that I'd trust his maths mind....

Steven – Gareth has it all arse about face. Developer pays for (passed on in the cost of the section) all infrastructure within the subdivision boundary, and in many cases extra beyond. Then according to council, they capture all other costs through the development levy, the breakdown of such you can usually look at on line. Generally the development levy is a set amount regardless of the size of your property. So standard section owners get no credit for any green space they create on their own property, or for any neighborhood reserves. Suburban households do not require as much public reserve land as would high density developments that do not have any private green space. Likewise if you have no ability to grow your own veges, you have to go to the supermarket. 

exactly. I once quite liked Morgan, over time I've become more and more convinced he's a loon, and what's even worse I think his self interest colours his opinion. 
He should comment on what he knwos, not on what he knows jackshit about

The world is filled with loons MIA!
Just look at the comments on this page!

Dale, I asked for Gareth to provide evidence, your opinion is its ass about face, yet we have not seen his reasoning. 
In terms of veges the calcs Ive done and I re-do them often is the return on growing your own is at best marginal and thats based on the seeds and seedlings price. When you start to consider the full cost of your time, labour and the real cost of using potable water then its probably more expensive, let alone fertilizer etc. So in some ways higher density could actually be less energy costly overall to the system.
Surburban houses well again as per Hugh you fail to look at the increasing costs of transport energy and even its scarcity....that has been seen in the US.  Yet it seems Hugh and yourself are determined to build a castle on quicksand.  Tis simple, you have to step back and look at it overall....but some are too busy grinding thier little axes....
In terms of a set development levy, I dont have that info, but generally if you have 2.6 ppl per houshold (say) and the overhead ie reticulation is so much per km and its a known % of the plant per household having a set charge is straightforward to do. Especially if you end up with a huge overhead of labour calculating and desputing a variable charge. Maybe have to fight the develper in court over it....that just passes the costs onto that charge as a bigger overhead or existing ratepayers pick up the bill.  Then of course its more ammo for the likes of hugh to whine about regulation etc....

Developer pays for (passed on in the cost of the section) all infrastructure within the subdivision boundary, and in many cases extra beyond. Then according to council, they capture all other costs through the development levy, the breakdown of such you can usually look at on line
So the development levy covers all costs? Given 80% of our population growth over the last 20 years is from offshore I find that hard to believe (schools, motorways, tunnels).
Cities routinely trade near-term cash advantages associated with new growth for long-term financial obligations associated with maintenance of infrastructure.
To financially sustain itself then, a city or town utilizing the American suburban development pattern and making this tradeoff must believe one of the following two assumptions to be true:

  1. The amount of financial return generated by the new growth exceeds the long-term maintenance and replacement cost of infrastructure the public is now obligated to maintain, OR
  2. The city will always grow in ever-accelerating amounts so as to generate the cash flow necessary to cover long-term obligations.

Read more:

Growth as we know it today is driven primarily by four mechanisms, which we have discussed in detail on this blog but which I will mention briefly again. They are:

  1. Transfer payments between governments.
  2. Demand-driven transportation spending.
  3. Debt, both public and private.
  4. The Growth Ponzi Scheme.

The impact that all of these mechanisms share is that they create short-term financial benefits for a community, but almost always generate even greater long-term financial shortfalls. The long-term imbalance is due to the inefficiency of the development pattern. When the true cost of development is masked, there is little incentive to be efficient. And an inefficient development pattern is a very expensive thing to maintain.

I have to agree with Stan,we should be looking to build up the areas outside central Auckland.
Having listened to Geoff Kennett explain how Melbourne attempted to revitalise Geelong with Tertiary education opportunities,revitalising the waterfront and employment by simply moving central and local govt head offices to this satellite town and giving staff the choice to commute or not(most sold and moved),I have to strongly disagree with Gareth re agglomeration not being a possibility.
Auckland City Council should be strengthening their outer suburbs services,not bloody well buying in the bottom of downtown Auckland and asking all these people to travel in there to work and do business with them.
Any nong can drive from Auckland to Pukekohe in the morning in half an hour and watch the fools travelling for one and a more hour the other way at least.What a waste of productive time,family time etc.
Move the jobs and the people will follow.

Oh dear .. Jeff Kennett .. Mr Can Do .. Mr make it happen .. (I do like the guy) .. He presided over the re-development of the Docklands Precinct (an abandonded wasteland) right at the bottom of the city .. a huge area that begged to be developed into a high-value, exclusive, low-rise, aquatic marina area right on the door step of the city .. yep .. a residential suburb .. would have been perfect .. but Private Enterprise wasn't interested in his ideas .. they got down to 3 interested developers .. two pulled out .. only one left their hat in the ring .. and they turned it into a nightmare mixture of high-rise apartments and commercial buildings .. it was said at the time it will become a high-rise slum within 10 to 20 years .. and that is happening now .. businesses are leaving .. no-one wants to live there .. it is becoming a wasteland .. the 10 year prediction is coming true .. people are voting with their feet .. it is not the antipodean preference ..
The moral of the story is .. there is a modern living example of exactly what he (Morgan) is proposing .. available to be examined, analysed, dissected .. pulled apart .. did Gareth Morgan do any research .. did he reach out .. or did he simply do one of his written sprays?

"apartment-style homes", "dense housing". Hmmm, that'd be a real shame. For a country with hardly anyone living in it, dense housing would kinda remove one of its biggest drawcard. Speaking for myself, if I'd wanted high-density I'd have stayed in Paris or Manchester (at least there were the big salaries to compensate, and a whole lot more in the way of entertainment).

No one has ever suggested that anyone should be forced to live in apartments. The suggestion is if you want to spend $500K and live close to an urban centre then an high density gives you that choice. If you want to live close to an urban centre and want low density living you will always have that option (it's just you probably won't get it for $500K).
At the moment you don't really have the choice.

However sprawl requires more transport and ever more expensive energy, assuming you still commute to a centralised hub like a city centre in the future.
If you look at the USA (google satellite for instance) you see a lot of "cheap" outer suburbian housing either never built (just  plots with a road in an otherwise barren estate), never sold, jingle mailed or in neg equity. 
So having screwed up the USA we now see a push by some with a political axe to grind or greed in their eyes wanting to repeat it here.

Oops, looks like Morgan stired the wasps' nest a bit more than he would have liked to.
Who wants more property tax? Are we not taxed enough already? Rates, a silly euphemism for property tax, is but rent paid to local governments for the priviledge of owning a house. Nothing more! 
Who do you think benefits as property price rises? Not the home owner, for if he sells, he has to buy another home somewhere else, for a similarly inflated price. Not new buyers of houses. Certainly not house builders, their costs go up in proportion to inflation.
The ones who benefit from inflated prices in housing are local goverments, whose tax take increases in direct proportion to price inflation through rates. Another beneficiary of property price inflation are the banksters, because they can now justify a doubling or tripling of the house price through their financing of the purchase. And we all know that  bank assets are mostly home loans, with a bit in comercial property.
At 7% or 8% interest rate on a loan, the price paid for the property doubles every 9 or 10 years. Who would agree to these terms if property prices stayed the same? Nobody would!
Who thinks the government is willing (or able!) to give up this cash stream growth? Who thinks it will happen? Au contraire, mon ami! There is a joint effort by central banksters throughout the world to inflate property again. Who wants to fight central bankers? Nobody does!
Poor Nobody...
Hevi Groswaite

Im pretty sure you are wrong on how NZ rates are set.  They are set on what the council needs and then you pay a % based on the relative house value.  So actually if the house price doubled or halved you would still pay the same amount.
wasps nest....Maybe that was the idea....stir up debate....certainly we see the property poziers foaming at the mouth over what he's saying.

what the council needs  mmm.... I would beg to differ on that steven.  It is was council wants. Wants and needs are different things when it comes to councils. ;-)

Seems unlikely to be understood I think. There is no such distinction in council think.

Yet why is no one pushing this as a point?
My rates are treble what they were in 15 years, growing at 6% per year. Now i can accpt a new sewage plant or water dam  as essential, yet of course the "owners of the water gods" want a handout to make it OK....thet must be retarded, they need water as well.  Stadiums on the other hand seem to be like acne on a teenager and as much fun....

Ah well splitting hairs on another topic really,
but yes I agree on your point.
I was playing with some numbers and went back to 2003 for my household expenses. Since then my rates have averaged 6% rise per annum.  In fact in 15 years my rates are up 200%....seems excessive, no one I know has been getting wage increases of that magnetude year on way can that rate continue we will go bankrupt.
While the voters voted in the councillors, yes it strikes me that many of the councillors are not fit to be seems they have a I must do something to prove Im worth being here so I get voted in again.
Just listening to some of them makes we want to puke....

For some reason we think banks make the difference between deposit rates and mortgage rates. Say 6% less 4% or 5.5% less 3.5%. I realised that I was thinking that even though I should have known better.
This is nonsense of course. Each $100 of deposit costs them $4 in interest but supports $1000 of mortgage lending if they are leveraged 10 to 1. So for each $4 of cost they get $60 of interest income ($6x10).  They are creaming us and have created a debt serf economy without us realising.

Quite right Mr Sorel, in fact just been dealing with a couple of wayward, bog standard, New Zealand tradesmen who think the world owes them a living. Inflated milage, hours that don't exist, dreaming of a lifestyle they can't earn through proper accounting. I wouldn't be too hard on the pollies. Plenty of other losers out there, trying to make a score, that think no one will notice thier self inflated worth.

Prices in Houston rose 6.6 percent, the second-highest increase.
Blah Blah Houston - less affordable by the day.

Yet lots of ppl in neg equity and we dont know for instance how much mortgagee property is held off the market to stop a rout.
So many unkowns.
"We have to think about alternative mortgages that don’t invite the same sort of crisis where we have 10 million homeowners under water. We don’t want to put Americans in such leveraged positions.”
Meanwhile it seems some are determined to see the same thing happen here just the feather their own nests or to sink their political axe...

And in the same article 'Some of the biggest increases were in states that suffered the worst from the housing bust. Home prices in Arizona jumped 18.7 percent in the past year, the most of any state. Home prices in Idaho rose 13.1 percent, the second largest. Nevada's home values rose 11 percent." Talk about selective reporting.
No one ever said Houston prices don't go up, its just that they go up as much as other States that have restrictive land policies, and more importantly they don't crash as much in a bust. The net result is far more affordable housing.

These are great ideas and hopefully well be implemented. But these bureaucratic, red tape system process adjustments well take sometime to enact, particularly the inner city living options and the urban landscape part well be a challenge, getting rid of the concrete and bringing in quality green nature public spaces.
NZ urgently need solid supply action at low cost NOW! All concerned should check out Hugh Pavletich & Dale Smith Cantabrians unite - 50K section article; its pretty well sums up the failure of the current speculative driven system and provides fast rack solutions.

Considering my more passionate (yet totally accurate) statement appears to have been removed, I will instead pretend to be civilised and say this:
Gareth Morgan is, for some strange reason, being pumped up as the "people's hero". He is not and will not be. He will give NZ false hope with false solutions that will only delay the correct move for young New Zealanders to make - which is, sadly, to find another home country.
What NZ needs is a new political party called "the housing affordability party", led by Hugh Pavletich. And it needs to strategise ways of getting around the all-powerful editors of the major media that otherwise control the representation of all political parties, for better and/or worse.

Regarding your previous comment Andrew, please note the following, which can be found at the bottom of every story on this website:
We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments. Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making these comments.

I understand and sincerely accept your reply and conditions. Yet I want to say that I stand by what I orginally said. I, personally, do not believe that Gareth Morgan is a man of integrity.

You sincerely accept gareth`s reply...(?)
Have you been drinking?

Gareth, Andrew Atkin is a gentleman and a scholar, I am deeply surprised that he said something so OTT that it had to be deleted. I would tend to think he had a point, whatever it was.

Thanks Phil - but it was actually a bit crass what I said. My intention was that it would be seen as more amusing than "shocking", but I don't really blame them for deleting it. I was probably a bit out of line.


When Morgan accepts vertical property ownership for his family's abode, then I may consider that we must give up on the idea of a house with a bit of land arround it, but if I ever have to give up the way I live in New Zealand, I'll move to Australia, or Latin America, or anywhere there is some land to build a house and live on.
Hevi Groswaite

Another completely ignored factor in the arguments about what lifestyles are "subsidised", is that renting is subsidised. You can't get "accomodation supplement" to help you out with your mortgage repayments.

No, not all renters are subsidised.
And wff is in fact a subsidy that goes towards a households you could argue its more supportive of mortgages than your uh, idea on renters.

I think you can get AS to help with mortgage repayments, Phil - see here;

Accommodation Supplement
You may be eligible for a regular payment to help with rent, board or the cost of owning a home (called an Accommodation Supplement).  It will be included with your fortnightly payments if you already receive a New Zealand Superannuation.

Gareth may not have all the answers but I like the way he's injecting fresh thinking into the mix and actually coming up with ideas that can then be debated.  We need more of this.
I guess we have had the luxury in NZ of sprawling outwards because of our low population and access to cheap fuel.  But how long can this continue?
I would rather live in a quality apartment in the city/inner suburbs with well designed green/communal spaces nearby than in a home on a far-flung subdivision.  I could save time and money with a shorter commute to work and I would have access to all the services available in the city. 
Most people living in dense urban areas just get on with life and live together quite nicely.  It's a reality of this modern age that as population increases we have to adapt.  In New Zealand that means living like many people all over the world already do.  I know living in densely populated cities isn't everyone's idea of a good time.  Hence the attraction of the lifestyle block.   But I'd like to have the choice to live in the city close to where there's work and entertainment.
And I think Gareth is right that we need to be encouraged to invest more in business and actual productive economic activity than getting money for nothing as house prices inflate beyond the means of the people who come after us.  Our children and grandchildren.

0.8% of our land area is built over. World over it's estimated to be about 1%. Sprawl can be very 'green' regardless, depending on how you design it. The human footprint is overwhelmingly a food issue - not a housing issue.
The question is not providing the option of densified areas, but preserving the option of low-density living for those who want it. This is what is being taken away - unless you're rich. Also, research has shown that low-desnity living is the general preference, and this is where the mass growth in urban development is.
Gareth Morgan understands perfectly well that the core driver behind our property disaster is that good old supply to demand function (yet he is consistently silent on this). The supply response has been artificially restricted via smart growth policies, and the demand has been pumped in via Helen Clark's mass-immigration policy during her time. Helen Clark has been rewarded for destoying housing affordability in NZ (the direct effect of creating forced urban intensification) via her appointment to her new position in the UN. She was probably promised this pay-off right from the beginning. No doubt, I believe, "people's hero" Gareth will recieve his reward for helping to drive what seems to be UN policy too.

Use polystyrene as an insulation base, and double glaze. High-density is more structurally intensive than low-density. 

Use should read my Smart Growth article properly:

And also my Green Sprawl article:

Double glazing makes a very dubious energy / economic measure at typical NZ temperatures (winters around 0~+5DegC).   If you are replacing however as I am, then its more sensible as its just a part cost. Replacing some of my opening windows, the costs are, the DG units are $140 a pair (600x600mm in 4mm float with 8mm gap v $60 for 4mm float). Im spending $250 on wood and materials, new hinges, fittings etc as my ones are worn the $80 extra is not so bad, that is of course doing it with my free labour so its probably really un-economic still.

Polystryene, yes 75mm or 100mm but fibre glass is fine. When do other wall work such as I am doing, yes.  Im removing weathboards and gib anyway so the extra cost of insulation probably makes it economic, though Im not sure I want to do the calc to prove it!  Many ppl of course pay a tradesman plus the council loans are 7% if you need loans.  Solar hot water is the same problem,12year life and at 7% for the loan fails to pay back.



Hi mist42nz – The suburbs are greener than the inner city by just being the suburbs. There is far more green open space and vegetation in the suburbs than the inner city. It’s the inner city that one thinks of as ‘the concrete jungle’, not the suburbs. Generally, non permeable area in a suburb is not allowed to be greater than 40%, leaving 60% as permeable open (mainly green) space, ie 360m2 on a 600m2 section. On the other hand councils normally only charge a reserve levy the equivalent of 20m2 (in lieu of the developer not providing the open space).  Also lower density living gives more opportunity for passive design, which is not so much a cost issue, but a design issue.

Well you are wrong on several points,

1 ) Unless Gareth Morgan comes out and says that is the problem then your opinion of how he thinks isnt justified & supportable.

2) "Clearly there is no reasonable argument to preserve farmland, of which there is plenty and is hardly affected by sprawl."  Only to you if you cannot see the total picture. For instance present farmland output per m2 is dependant on a huge fossil fuel input, ie fertilizer, deisel, irrigation etc etc...without those we would be back to pre-WW2 farm outputs, basically organic.

Pre-ww2 we had 2~3billion not 7billion

etc etc.

Trafffic conjestion, thats simple millions of ppl wont be using cars within 20 years, indeed I suspect most wont, it will be a luxury of the top 20% at most.

Hence your entire position is probably fundimentally flawed, or moot.

The only unknown is what the end game position if we have a reasonable amount of energy density may make the most sense as we will have a transport fuel shortage....if we have lot less of all energy then dispersed and highly localised makes a lot more sense.

Your comment on population is interesting, I dodnt see a conspiracy, but I do see we had a boom base don cheap energy that is now ending.  So a) The other 5 billion who want to live like us and going to see that they cannot.  b) The 2billion of us who live like "kings" are going to see we are going to end up something like the 5 billion.

I cant see that working out nicely....



Helen Clark has been rewarded for destoying housing affordability in NZ (the direct effect of creating forced urban intensification) via her appointment to her new position in the UN. She was probably promised this pay-off right from the beginning. No doubt, I believe, "people's hero" Gareth will recieve his reward for helping to drive what seems to be UN policy too.

Hallelujah!!! - my father got thrown out of Mark Burton's Taupo Surgery for implying as much about Clark, a while back.

Yeah, I always called Helen Clark a "UN goon" because she reeked of it. Constantly refering to International standards (as though we should follow for the sake of following), and looking up to the UN as though it knows better than us by default.

Clark impressed a lot of people by saying lots of "sensible" things - but it was all so cheap. She never said what needed to be said.

StephenH: How disturbing. Assuming your father was NOT being an obnoxious prick, then Burton was demonstrating his lack of balance, (imported bias?) which makes one wonder how a recent zero generation blow-in (Mark Burton) without any new zealand history, can become the  Minister of the Treaty of Waitangi in 2005. Really??. Something is drastically wrong with New Zealand's sense of history. But, then a doctors surgery is not the place to have a raging political argument.

He (My Father) was visiting the local MP (Burton) in his capacity of President of Grey Power.- Rotorua & Taupo district. I mean surgery as defined in politics. The final main point of difference was sending troops to Afghanistan to seek US approval.

" there is absolutely nowhere in the world that housing is "affordable" because it is high density."  
If I had 1200sqm of land in glorious Houston and put a house on it the cost = land price plus house cost.  If you put 2 houses on it each would cost half the land cost plus house price. Could PhilBest or Hugh please explain why they think ithe second is more expensive.

bob, you would actually have to spend money subdividing the land and adding services, which in low land value locations simply isn't worth it.
For instance even in NZ, say south Invercargill or the cheaper hill suburbs of Dunedin, if you have a quarter acre section worth $20,000, you could subdivide and build 2 homes but the subdivision will cost $25,000, so each section ends up costing $22,500 plus the cost of the driveway and fencing etc.  So you are better off just to buy another site down the road.
I expect it is the same in Houston.

Hi Bob – For starters the 1200m2 in Houston is starting at less than ½ the price than the same section in Auckland. Not a bad place to start irrespective of what’s on it. In subdividing land you incur council consenting costs, development levy costs, survey costs, driveways costs etc. Plus your valuable time and as others have posted previously, between the cost and the council run around, it may not be worth the effort. And as the size of the property that is subdivided gets smaller you have inter tenancy wall costs in townhouses, and walls and ceiling, elevator, fire and safety costs and BC set up costs in apartments. Also the smaller sites and the old house you subdivided off was never expecting its new neighbour so there are more height to boundary issues like shading and definitely privacy issues. The land maybe ½ the m2 of the original but because of the subdivision costs has a value only about a 1/3 less than its original price. Both houses have also lost amenity value, eg no more back yard cricket, so the house may lose other marketable value as well. Yes the price will be cheaper than the original property but then you are getting less in land and amenity value, but where ever you do this it will always be a lot cheaper in places like Houston, -yes they have apartments in Houston too.

Hi mist42nz – Yes you are right about how some (very few) people amalgamate land and yes they do have less common ownership boundary issues because of that, but that does not alter my points of land being far cheaper in other countries irrespective of what is built on it, and that as you subdivide the m2 price of the land goes up. Yes a certain group of the population (at that time in their life) prefer to live in a smaller property because it suits their lifestyle, and it also goes that other groups will prefer more low density living.  Both groups should be able to purchase at the most economic price possible, not at highly inflated prices as they are. You say they do not care about the cost of the land so much because of the convenience of other services, but that if I want the convenience of backyard cricket (a trampoline for the kids, a vege garden etc.) that I should go somewhere else for that. That, for me, is not convenient.

Anyone else having trouble with this page in firefox?

Thanks for the reply's people: 

My links say it all, so I'm not gonna reinvent my wheel.

But here's another link....

Please don't believe we can't adapt to costly fuel (without living in hen houses). That assumption is just bluntly wrong. 

...And note with new sprawl we're talking about new-builds - much cheaper to get it right from the beginning, than expensive retrofitting.