Bernard Hickey says everyone would benefit if 'skinny' Auckland could 'fatten up' its city-scape with better transport and cheaper land to lower housing costs

Bernard Hickey says everyone would benefit if 'skinny' Auckland could 'fatten up' its city-scape with better transport and cheaper land to lower housing costs
Auckland city density

By Bernard Hickey

If only 'skinny' Auckland could fatten up easily then New Zealand in general and Aucklanders in particular would be much better off.

I'm not talking about waistlines.

I'm talking about Auckland's population, where it builds houses and how it organises itself.

The rocketing cost of housing in Auckland is more than a problem for young Aucklanders hoping to start their own families and live in their own homes.

It is a major problem for the economy at large, contributing to higher interest rates, a higher New Zealand dollar and the mortgage restrictions that are being felt from Whangarei to Bluff.

That's why a report this week from the NZIER called 'Big City Life' on the challenges for Auckland in coping with an expected rise in its population to two million by 2031 is important for everyone.

The report looked at various ways the costs of housing and commuting could be improved in Auckland.

But it also pointed out something obvious that isn't often considered when looking at housing costs in Auckland.

Auckland's geography is 'skinny', the NZIER pointed out in the research commissioned by Treasury, the Ministry of Transport and the Reserve Bank. The Manukau and Waitemata harbours effectively make Auckland a narrow and long city that can't take advantage of a single 'blob' of land with a CBD surrounded by a concentric circle of suburbs, as is the case with cities such as Melbourne, Christchurch and to a lesser extent, Sydney.

This means commuting times to Auckland's CBD are long and the city is 'broken up' into a series of centres and straggly corridors rather than one big centre.

That has increased the cost of land close to the centre and will make it very difficult and even more expensive to grow to that two million mark without some big policy changes.

The NZIER suggested a few options and analysed how these changes would improve the welfare of Aucklanders, and by extension the rest of New Zealand through cheaper mortgages and a more fairly valued currency.

It focused on transport, the cost of house building and the availability of land.

It suggested a one per cent increase in income taxes for Auckland families to pay for the better transport infrastructure needed to reduce commuting costs by two per cent per year.

It did not specify whether this money would be used to build motorways or train lines or pay for extra buses, but it's clear better infrastructure makes it easier and cheaper for people to travel and helps reduce housing and land costs, particularly of land close to the city.

NZIER estimated that each extra kilometre away from the centre of the city costs a home owner an extra NZ$738 a year.

NZIER also estimated a 15 per cent improvement in productivity for house building would make families 1.4 per cent better off each year.

This is a major issue for all of New Zealand, but is especially acute in Auckland. A building materials duopoly and a splintered house building sector full of one-man house-building bands that can't take advantage of economies of scale is a major drag on construction productivity and blows out costs.

The Institute's headline-making suggestion was for a 22 per cent increase in the size of Auckland's Metropolitan Urban Limit, saying this would make each family NZ$860 a year better off.

NZIER estimated the combination of all three suggestions would reduce housing costs by 16 per cent.

That would be a massive prize for young Aucklanders currently shut out of the market and for those in the rest of the country resentful they are paying higher interest rates and receiving lower export incomes because of Auckland's failure to organise itself and build enough affordable homes.

So it was disappointing then to see the suggestions slapped down almost immediately.

Len Brown dismissed the idea of extending the urban limit as 'old school' and the idea of a tax increase for Aucklanders to fund new transport infrastructure was rejected by the central Government quicker than you could smell a cup of cold sick.

That's a pity.

Auckland and New Zealand needs to find ways to 'fatten up' our skinny city in a way that takes pressure off house prices and makes everyone better off.


This is a longer version of an article that appears in todays Herald on Sunday. It is here with permission.

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

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Where the heck did you get that figure?  Houston's urban area is 4644 sq km according to the Demographia World Urban Areas Survey, with a population density (1200/sq km) 50% higher than Boston (800), 20% higher than Brisbane (1000) and similar to smart growth central Portland (1400).  

Kimy....  sounds like u have done 3 seconds of brain work here...
I went to zillow..
put the add. into google maps and got directions to downtown,+Theater+District,+4...@29.7451271,-95.3770642,13z/data=!4m13!4m12!1m5!1m1!1s0x8640bf36d72feeab:0x1a2ba975fd4700de!2m2!1d-95.367354!2d29.764396!1m5!1m1!1s0x8640c2157f9c3cd3:0x3381682071e1bfc7!2m2!1d-95.496193!2d29.698159
That house is $158000  and is 19 min to downtown...  11 miles.
your comments smell like....  well....  bullshit...

Don't understand ur logic..    but yes....  allow a city to spread and land prices drop... which is what Hugh says.
What Hugh says about Houston seems true , for me...   No urban limits = lower land costs
I'd love to go to Houston and see , using common sense, where the natural outer city limits are....   I have no idea..
it is hard to imagine a city actually being 26,000 skm....    I think that 26000 skm would cover the size of Northland..

Extra 1% income tax for aucklanders to pay for transportation infrastructure is a fantastic idea.

Alternatively could rise rates to levels more like the rest if the country pay (in terms of % of cap val of property).

Why stop in Auckland -just give all regional or unitary bodies 1% income tax for transport infrasructure. They all have bridges, gravel roads, cycle lanes, public transport etc. that need to be upgraded.
I have been saying for a long time that NZ central government needs to do a deal with local government where local government get the funding to upgrade transport and in exchange they agree to target housing affordability and mobility, like Alain Bertaud states.
Medium incomes and rents in every urban area should be measured and local government should be expected with their new resources that these measures will fall.  Mobility should also be measured with the expectation that urbanites can access the majority of the urban area within one hour of travel in the extreme and for the majority in thirty minutes.
This may seem expensive, but doing nothing raises interest rates, exchanges rates and leads to all sorts of social costs. The benefits for this sort of investment must be many times each dollar spent.

considering the population density and income size Auckland has over the rest of the country I would have to question why they need the rest of us to bail them out of a local problem, especially as pointed out they pay less rates for better services

Alowing such a massive percentage of New Zealand's population to be sited over an active volcanic region is utter folly.  We might get away with it for many decades but very probably not for ever. 

There, I fixed it.

"This means that there is an 8 per cent probability (1 in 12.5 chance) an eruption will occur in the AVF field over any 80 year period. This is based on the life expectancy of a New Zealand child born in 2008 being 82.4 years for females, and 78.4 years for males (Births and Deaths: December 2009 quarter - Statistics New Zealand). "
Actually higher than the risk of a big wellington earthquake.
But humans are short sighted and inately bad at math, so this can be spoken about all day and the message will never get through because Steve from Epsom at the BBQ last night said 'they've been talking about an auckland eruption for as long as I can remember, hasnt happened yet, prob never happen...'

Well, well, it has finally got traction. It takes 3 years to cotton on to what is obvious and has been stated often enough here before. Yes Kimy AKA ZaneyZane has been the sole advocate over the last year, but I lay claim to first mover
The pity is Bernard Hickey picks up on it 3 years later, when in fact he could have looked so much smarter had he paid attention to what was being said a long time ago

iconoclast 03 Feb 2012
Is there a town planner in the house? Think about it this way. Aucklands fore-fathers never contemplated what it is today. Going back in time, and knowing what you know now, starting with a blank slate, how would you plan an Auckland City capable of meeting the needs of the future.
As I have stated here before, the geographical layout of Auckland is in the shape of an hourglass with a chokepoint in the middle. At it's narrowest, the distance between the Manukau Harbour (Tasman Sea) and the Waitemata Harbour (Pacific Ocean) is 800 metres.
The optimal design of Auckland should (have been) along the lines of the Twin Cities of Minneapolis and St Paul in Minnesota. With a Northern city and a Southern City with the land area between the two left open for movement between the two.
Read the comment and subsequent responses from others

There are often good gems among the dross that go un-noticed and become forgotten

As I’ve noted on other articles:

  1. Give the RBNZ control over the rolling 12 month immigration rate so it can be maintained at a level NZ Inc can handle.
  2. Tweak the RMA to ensure the economic effects of insufficient phased land supply over the planning horizon (20-30 years) have to be taken into account.  We need an urban growth boundary that is flexible as moves with phased urban growth, not some arbitrary line in that the politicians and planners deem fit.
  3. Get rid of the transport component of developer contributions & allow Councils to introduce peak period road cordon tolling to reduce provide a revenue stream to fund road network upgrades and decrease the need for future upgrades.

Bidding up house prices in NZ is plain stupid as it is simply the land value increasing.  It is not as though NZ is short of land to urbanise.  It is also the most unproductive use of capital possible.  It's no wonder NZ's productivity is so low.

Auckland is not the only place in the country with a housing problem - despite it being the only place written about as having one.

Yes, other cities - they just got on and fixing the problem.