Jenée Tibshraeny discusses the 'democratic deficit' around the Auckland Unitary Plan and why densification is not a generational issue

Jenée Tibshraeny discusses the 'democratic deficit' around the Auckland Unitary Plan and why densification is not a generational issue

By Jen​​ée Tibshraeny

The Auckland Unitary Plan fiasco is so much more than a generational debate – it’s essentially a battle between a few thousand ‘not-in-my-backyarders’ (NIMBYs) and the rest of the country.

The Auckland Council on Wednesday voted to withdraw its 'densified' and 'up-zoned' maps it had presented in December as evidence to the Independent Hearings Panel on the Auckland Unitary Plan.

In doing so, it’s essentially opting for zoning rules that would leave Auckland 200,000 houses short of what’s needed to accommodate its burgeoning population (according to a group of experts assembled by the Panel).

Those who would’ve been affected by the Council’s proposed zoning changes don’t want their leafy suburbs to be “ruined” by three-storey buildings and townhouses.

Yet I believe the rest of the country’s population understands the math: According to Bill English, Auckland is expected to grow by 700,000 people in the next 30 years – almost the population of the South Island – so 13,000 news houses need to be built each year.

Furthermore, the country's fastest growing type of household is people living on their own, so we need to build more apartments and townhouses to ensure a greater range of housing types are available.

According to Statistics New Zealand, 11% of the NZ population is expected to be living alone by 2038, compared with 9% in 2013. The average household size is also expected to decrease from 2.64 people in 2013, to 2.50 people in 2038.

Housing crisis trumps systemic flaws

I appreciate a couple of the arguments chief NIMBY, the chair of the Mission Bay Kohimarama Residents Association, Don Stock, made at Wednesday’s meeting. He believed the Council had been secretive in the way in amended its initial zoning plan for the city to include more densification, without consulting residents affected.

He also questioned why the Council had proposed to have changes to the plan concentrated in about eight suburbs. For example, it proposed large chunks of Mission Bay, St Heliers and Westmere be densified, yet other inner-city suburbs like Herne Bay, Ponsonby and Mt Eden, to remain as they are.

I agree the process could’ve been handled better, but believe most New Zealanders will side with Auckland architect, David Gibbs, who at the meeting said the housing crisis trumps the flaws in the system. We need to focus on what’s really important – housing supply – and get the densification ball rolling ASAP.

The median house price in metropolitan Auckland is about 10 times greater than the median household income. Furthermore, 18.8% of an average annual household income in Auckland is spent on housing costs (ie rents, mortgages, rates, insurance, etc), compared to the national average of 16.0%.

Densification not just a “young person” thing

As those from Generation Zero and Auckland Council’s Youth Advisory Panel have said, young people are struggling to pay exuberant rents to live close to where they work and study in the city.

No, young people are not self-entitled and unrealistic, as the NIMBYs who rudely yelled out “poor thing” when representatives from the above spoke at the meeting, would make you believe.

Those of us in our 20s/early 30s have long ago given up the dream of owning a property in Auckland’s inner-city suburbs. We’ve accepted the only way to enter the property market is through Auckland’s outer suburbs (if we’re lucky) or the regions.

What we cannot accept is paying inflated rents when we see a better way forward.

This is not just the perspective of the “young”. Ask anyone who lives in Auckland’s outer suburbs and spends hours commuting to work each week, whether they’d be happy to down-size if it meant living closer to town.

And then there’s the elderly. I’d like to ask the NIMBYs of Mission Bay whether they’d like to move to the whops when old age catches up with them and they have to down-size their homes. Do they really think they’re going to be able to stay in Mission Bay when all the land is occupied by large properties?

Or what about their parents – would they like to see them shipped off to retirement homes in Tauranga, rather than have them live nearby? I would hate to see elderly people pushed to the outskirts of Auckland and disengaged from their local communities – their friends, churches, doctors, sports clubs, etc – because of poor planning and decision-making.  

And then there’s the Auckland property owners. I don’t see how they wouldn’t be pro-densification. We are going to need a lot more houses – fast – for demand/supply to reach equilibrium and prices to fall substantially. There is pretty much no way an Auckland property owner isn’t going to earn hefty capital gains on their property in the foreseeable future.

As for the aesthetics of the lovely leafy suburbs, the level of densification the Council had proposed wasn’t extensive enough to rapidly change the vibe of an area. In fact, it was minimal – even insufficient!

We are talking about land owners simply having the ability to build townhouse complexes and three-storey houses, not the creation of magic buttons that will transform villas to apartment blocks overnight. Developers will still need to front up with the capital and go through the red tape of the Resource Management Act to densify.

As for those in other parts of the country, they’re implicated by the Reserve Bank putting the brakes on the rate cuts needed to bolster the economy, due to it not wanting to aggravate the beast that is the Auckland housing market.

“Democratic deficit”

So how does this 1:1000 – NIMBY vs. the nation – ratio even constitute a debate you ask?

Because the NIMBYs who make up the ‘1’ are loud and loaded. They have the time and resources to advocate their position through the right channels. Just look at this photo of the extraordinary Auckland Council meeting on Wednesday. White, seemingly middle-class and middle-aged is all I can say.

Sadly the Council bucked to the pressure of a loud minority, nullifying all the time and money it put into updating its submission on the Unitary Plan. A “democratic deficit”, as said by Generation Zero’s Dr Sudhvir Singh at the Council’s meeting.

Singh urged the Council not to define the community by who turns up to meetings, but rather acknowledge the number of people unable to attend due to being at work.  

The issue is now in the hands of the government-appointed Independent Hearings Panel. It is expected to recommend a new Unitary Plan in late July, after which the Council will have 20 working days to make a decision on whether to accept the plan. 

While the Panel can technically be more brazen about densification than the Council, the Council will have its final say weeks away from elections in September and October.

It is for this reason I urge people to make their voices heard. There's never been a better time to remind the decision-makers who they really represent.

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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12
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My sympathy is with the residents whose homes will be very badly effected by an autocratic change of planning rules that will destroy their views, remove the sun from their homes and generally reduce the character and value of their homes. These people have paid a hell of a lot of money for these homes and the council is planning to significantly devalue them without any compensation or even meaningful consultation. If we were in their shoes I think that we would all be extremely angry and use any means we could to fight the moves. Since when did the needs of the nation allow effectively taking value or money from the pockets of people without fair and reasonable, contestable compensation.

The need for lots more homes in Auckland is obvious. But the planning for this is a joke and we seem to be in the position of getting a lot of carts before their horses. -

1 They have constrained the availability of land at the perimeter in favour of some sort of academic ideal of densification before they have workable plans on how to achieve this.

2 They have rushed headlong into building multi-owner dwellings before having sorted out workable and transparent rules on how people can own and organise themselves in these arrangements as per Nikki Kaye's campaign. (People would be well advised not to buy into these properties when one hears the sorts of things going on)

3 They have allowed pretty much open slather on immigration before having any workable means of producing sufficient homes for them at an affordable price.

The list is a lot longer than this but you get the point.

They need to take a deep breath step back from things, stabilise the situations, then develop workable plans that are actually in place and working before moving on to the next steps. This is the professional and intelligent way to do things, surely? To stabilise the situation this means.

1 An immediate halt to all avoidable immigration.

2 An immediate release of significant areas of land at the perimeter.

One of the most important things in life to learn is, that when things are going wrong. STOP. Because the costs and consequences increase exponentially if you carry on.

31
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I couldn't agree less with this analysis. "take a deep breath, step back, and stabilise the situation" is the type of delay and inaction that has got us to this situation.

It is serious.

Over 25 years plus we have made compoundingly bad decisions. These have gotten us to this point where urgent action needs to be taken. There is now a national imperative.

Costs are being paid now for this mess. Those costs are being paid by the poor and marginalised and unfortunately that group is getting larger quickly. They are also being paid by many non-Aucklanders, and those costs will rise just as quickly if durable solutions cannot be found soon.

Those long-term prior bad planning decisions (and non-decisions) mean we are long past the point of finding a way forward without some pain and cost for the necessary changes. Pain and cost now can't be avoided.

It is just appalling that some relatively well-to-do think their selfish untaxed capital gains and location benefits should be preserved as of right and those at the bottom and the margins should shoulder an increasing burden to allow that.

If any group should bear the pain and costs, it should be those at the upper end of society. They have had all the benefits. "Oh, poor you!" is a disgraceful response. Clinging to previous rule-based 'consultation' that rewards the loud and selfish is pretty dubious now too.

"their selfish untaxed capital gains"
Vast numbers of "rich" people would say that these are not what they wanted. They are mainly due to interest rate reductions/ money printing.
The thing is that if the zoning is changed and apartments are allowed, then the land value (plus rates) INCREASES further! So not only does that happen but the desirability of living there decreases at the same time when the big concrete walls go up on the boundary,

"mainly " I will disagree here, the gains are due to speculation as a shortage of supply/ excess demand was seen.

Example many areas outside of the main cities have seen no such rises with historically low rates.

"their selfish untaxed capital gains"

Looking after one's self is what everybody should do. Don't pay more tax than you are required to. Look after your family.

This is exactly the kind of selfish attitude that got us into this situation.

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Well said David.

"Those costs are being paid by the poor and marginalised and unfortunatley that group is getting larger quickly."

Maybe that group will eventually find a political voice? but I doubt that will occur early enough....until so much damage is done that it leads to some dire backlashes. More and more people I meet are speaking out about these issues and their sense of being held back from just living, rather than existing solely for the benefit of someone elses property portfolio. They feel dis-infranchised and robbed. They just want a "home" to call their own. "Hope" is fundamental to a healthy society

'Over 25 years plus we have made compoundingly bad decisions.'

To a degree that is true, but the bad decisions have not been made by us; they have been made by totally incompetent bureaucrats who reject scientific facts and rational analysis and charge ahead with dysfunctional policies because their career structures encourage dysfunction, i.e. they get rewarded for creating dysfunction.

The crux of this argument has been entirely overlooked (as it always is): cities (especially modern industrial cities) are inherently unsustainable because they require the resources they need to function to be supplied from the hinterland or from overseas. The list includes oil, natural gas, electricity, water and food.

The rising rate of extraction of easy-to-extract coal, and then a little later easy-to-extract oil that characterised the twentieth century permitted all kinds of insane thinking to become established in bureaucratic circles. Well, we have reached the point at which the very foundations of city living are under serious threat -the peaking of global oil extraction. Rather than acknowledging this threat and planning for it, politicians and bureaucrats have ignored the whole issue and pretended we can expand a complex oil-dependent system on a declining oil supply. Which is absurd, of course.

'According to Bill English, Auckland is expected to grow by 700,000 people in the next 30 years'. Well what would Bill English know about anything? He has repeatedly demonstrated his incompetence.....which is one reason why NZ is in such a mess now.

The present stampede to NZ (nearly 70,000 a year) is entirely symptomatic of the rapidly deteriorating conditions elsewhere in the world. Conditions will continue to deteriorate everywhere as a consequence of governments everywhere failing to heed the very clear warnings provided by physical scientists and ecologists from the 1950s on, that unrestrained growth of the human population and unrestrained growth of energy consumption would end up in disaster. It has.

The nub of the predicament goes right back to Henry Wallich, who, flowing the release of 'Limits to Growth' declared that any suggestion of limits was preposterous. That was the narrative the bankers and corporations wanted to hear, and that was the narrative that got promoted. Wallich died a while ago and does not have to live with the consequences of his idiotic analysis.

Gail Tverberg provides an interesting up-to-date analysis here:

https://ourfiniteworld.com/2016/01/07/2016-oil-limits-and-the-end-of-the...

The other aspect that is NEVER mentioned in any official analysis is that the global financial system is Ponzi because it is predicated on perpetual growth, which is a mathematical impossibility.

Just when the whole system will implode is difficult to determine because political aspects as well as physical aspects play a part. Essentially the entire system has been on 'life-support' since 2008, via lowering of interest rates, money-printing and development of unconventional oil sources. Unconventional oil sources are on a knife edge and could fall over at any time.

http://www.zerohedge.com/news/2016-02-26/us-oil-rig-count-plunges-lowest...

None of that will matter because there will be no proper consultation or expert analysis,

https://gailtheactuary.files.wordpress.com/2014/01/tverberg-estimate-of-...

and all decisions about the future of Auckland will be made in the complete absence of scientific data and on the basis of who can make a quick buck at the expense of everyone else.

.

Actually I'd say this about the Politicians and MPs in particular "incompetent Govn who reject scientific facts and rational analysis and charge ahead with dysfunctional policies because their career / outlook encourage dysfunction, "

Yes lets step back. There was a post someone/I did in here looking at the costs to put in infrastructure for green field sites. That pretty much looked like the best part of $200k per new house on top of the land cost and planning permission costs before the house(s) is even built. So really these costs of what must be $300k+ if not $350k plus seems unlikely to even get near "affordable" cost of $500k new.

Really then we need to look at destroying the demand for what we cannot afford to do/support, which means curtailing immigration severely.

In terms of capital gains that is just hogwash, and looks to disappear. All you are advocating is cramming a few more houses into the expensive areas because there are lots of un-realistic ppl wanting to live in them but cannot afford it and in the process destroy that quality.

Pain and cost could never be avoided but successive Govns and this one especially have tried to. Sure we should have a more progressive tax system or better tax that un-taxed income, no ifs no buts from my point of view, but to degrade "nice" housing areas just makes little sense to me.

Wow, about time someone stated the facts as they stand.

Changing the rules that apply, will be hard.

Vested Interests are very apparent on this site.

And many others.

That is why we have a world problem of gigantic proportions, Top 1% miraculously believe it is never enough. Bottom 50% are sure of the fact.

Screw the Middle, to help pay for both.

A fair and equitable regime is what we need, Loud and selfishly applied, would be about....Time.

Have said this for many a year. In one form or another.

At least this Forum makes it abundantly clear, but just think what the World would say of the rich and infamous.

Taxation is vexatious as it is...one rule for the rich, one for the poor.

Middle...has to play it according to means of both..

I think that we agree on many of the points you make. I, as much as anybody have argued the case to fix the problem so that the young and less fortunate get a decent honest deal. However what you are suggesting is that because some people are not being treated in a just fashion, that is an excuse to beat up on somebody else. Follow that logic and you can just about justify anything, Isis, the Nazis or the shocking treatment by the Palestinians by Israel.
Addressing your point that the privileged folk of the Eastern suburbs should be targeted for enjoying the benefits of the lopsided way that the economic playing field is structured. Not all the people that live there are using or abusing the system to screw their fellow man as your criticism suggests. Your approach is a rather oblique, ineffective and inappropriate way of dealing with what is a very real problem. Changing the rules would be the most effective and direct way of dealing with our lopsided economy that allows SOME people to indecently exploit our tax system, less fortunate fellow citizens and the economy in general. That way you would address the real problem throughout the whole country without damaging a whole lot of otherwise decent people as collateral damage just because they happen to live in the wrong suburb.
The multi unit dwellings that would likely be built in say St Helliers will do little for the people you are championing and I suggest that they would look more like the very flash apartments along Remuera rd. The lead time before they are ever likely to reach the market will be huge.
What I am suggesting, namely Control the demand through immigration control and increase the supply of affordable land will have a comparatively rapid effect both in physical terms and the psychological effect of chilling the overheated market. If you want to help the people you are championing we need something a lot more direct and fast acting, because as you say this has gone on far too long.
If this is not where the city wants to go long term, fair enough. Use the breathing space wisely and develop something that is going to work, get it implemented and refined to most peoples satisfaction. The present situation of politicians and councillors charging round like headless chooks is not getting us any where.

replies:
1) are you going to pay twice the rates to provide services/transport/ ect outside the perimeter? Are you happy to lose excellent high productive farmland forever?
2) is it your problem? if you live in your standalone then it's not an issue for you
3) Never heard property owners complain before, when we were saying housing costs are rising because of foreign interests. Immigration is good for yous

1. I rather want my taxes to go into public works than creating generations of social welfare recipients; take some money out of breeding govt handout dependency and there go your roads - and you can probably lower rates, too.

2. What standalone. Most people I know have one - and only one. Their wealth is solely theoretical, as most cannot sell. even if they wanted to.

3. Here you have one. I dont care about my house being mega-overvalued or mega-hyper-overvalued. I prefer less money and more quality of life. I dont need houses to make money, I do that with work, thank you.

12
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One thing I notice is that DC's rebuttal of the Chris-M comment is not addressing any of the arguments put forward but quickly goes into moralism mode.

What is wrong with doing something about NZ's ridiculous low skill migration scheme giving us any army of people polishing apples at New World or about creating more good settlements and infrastructure without destroying the few character suburbs Auckland still has?

The problem of home affordability exists in all countries with debt and low-skill immigration fuelled bubble zombie economies, no matter whether they are densely built up or not. Densification will solve 10% of the problem while destroying 90% of what we like about Auckland, namely that it is NOT an overpopulated, congested hell-hole like so many other cities in the world.

Sick if this loosing value crap - what high density area in NZ is worth less than low density? look at land values in Auckland city centre, it's not cheap even though it is high density with lots of appartments

And what moron buys a house anywhere close to aucklands CBD assuming there will never be appartments next door even though it has happened in every other city in the world? Sorry but you have to be pretty thick to buy close to the city centre if you are after a suburban lifestyle- that is what the outer suburbs are for.

I know lots of born and bred Aucklanders that are having to move to Tauranga because they can't afford a house in Auckland. All so these pricks can have their quarter acre in what should be the highest density area in NZ.

Chris-M - you have GOT to be kidding!

"These people have paid a hell of a lot of money for these homes and the council is planning to significantly devalue them"

This is the problem: people who clearly don't know what they're talking about, talking very loudly. Please explain to me how densification would do anything other than increase the value of a piece of land??? The fact that this will NEED to occur (eventually, how ever long the NIMBYs can hold it off) is largely what's driving prices up as it is.

If you don't want to live in a dense housing area - don't live in the middle of our biggest and most quickly expanding city - the writing has been on the wall for many decades.

"Since when did the needs of the nation allow effectively taking value or money from the pockets of people without fair and reasonable, contestable compensation."

Compulsory purchase ring a bell?

City growth is always painful, and merely dumping people further and further out without infrastructure etc does not work.

Who said the value of their properties would go down?

The Unitary Plan would have significantly increased the development potential in these neighbourhoods and their proximity to the city isn't changing - values would likely increase.

This is quintessential Baby Boomer NIMBYism - What they are worried about is people peering into their backyard because they don't intend to develop first.... whilst our Generation will never have a backyard to speak of.

If you can't afford Auckland, don't come.
And bear in mind there is little public transport, inadequate roading, no cycle lanes for the current population, let alone planning for 700000 more, not to mention hospitals, water, sewerage etc etc.

What about all the young that are being forced to leave? Just so some dickheads can prevent their neighbor from developing their own land to house more people. What ever happened to land rights and free markets?

Hey Jimbo, what's going to happen to the environment and quality of life through unchecked population growth.
Those who leave may well have a better life anyway, as the future Auckland may be a mass of leaky high rise body corp ridden matchboxes for the slaves in factories anyway.
But isn't it great to be on a benefit in Auckland today with a free million dollar taxpayer paid for house!!!

Bit of angst going on in this discussion. Why not be content with where we are in life, and enjoy, and make the best of it.

A very important incentive to live in Auckland is that living here is practically free. Where else can you get free houses? We will fight tooth and nail to keep it that way. This is globalism, every man for himself.

We have always made a lot of money with property. Why is it suddenly a problem? First house I bought cost 60K sold it for 100K, next was 192K sold it for 380K, had a marriage break up then bought for 265K sold it for 572K. At this point I realized if I had two properties I could use one to pay off the other - I then became a PI. Again, why is it suddenly a problem? Increases look normal, for a JAFA anyways. I think those canny Chinese observed this long term trend as well. i guess that's when it became a problem

20
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It is a problem in two ways. Firstly, the gains are tax free, distorting investment decisions by individuals, families, companies and governments. (All gains should be treated equally in the tax law. Those who have gains should pay their fair share.)

Secondly, it is a problem because it distorts affordability of accommodation. That doesn't need to be 'equal' and it never was. But for people on low incomes, lack of accommodation affordability can become a huge problem for society as a whole. You know it is a growing and dangerous problem when people on median incomes are under stress to afford reasonable accommodation. It needs to be fixed for people on low incomes; it is a crisis when it affects people on median incomes. This is a key reason why Auckland's housing unafforability is a national issue.

I've always felt that targeted rates, as opposed to zoning, should be used to encourage density in areas of land close to centres of employment. So what you do is remove all sub-sets of residential zoning - all there is is residential. Then you set a targeted rate for all residential land based on the proximity of the land to centres of employment multiplied by a lot/site or area/m2 density factor.

The proximity to employment has two factors (distance x size of the employment centre) and the lot/site density has a single multiplier (highest for single dwelling - going lower and lower whereby an apartment tower reduces that multiplier to a minimum of 1). All you might want to do is set height restrictions on a geographical basis, based on view shafts and/or other practical/planning matters.

The market will then sort out the men from the boys, so to speak and the NIMBYs if they want to stay on single dwelling lots/sites will pay enormous rates to do so which can be used to further fund transport infrastructure to the outer suburbs. After all - the reason more and bigger roads + upgraded rail are needed into the centre (in particular the Auckland CBD) is largely because of those within walking and biking distance to the centre wanting to hold fast to their low density holdings.

Fine, as long as they pay properly for it. In planning lingo, the term is betterment - this land has become more valuable, not because of the characteristics of the land itself, but rather by the proximity to infrastructure/assets that attract visitors and employers. So, effectively such residential landowners should have to pay the true cost of that betterment.

The other big advantage to such a targeted rating scheme is that the rates further out for those that must commute to centres of employment go down dramatically.

I rather like that proposal as it would encourage a wide range of housing solutions.
Ive always thought terrace houses, 2 story, are acceptable now as in the past.
Zero free ground and you live in the streets.
This proposal allows for it i think.

Indeed it would. It is a market (as opposed to a planner) based solution. The main planning thing that city councils need to do is ensure that all residential dwellings are serviced by a local playground and small park within no greater than a 5 minute walk radius. Kids would rather play with other kids in their neighbourhoods - and easily accessible gathering areas for after school and weekend play are really important.

The big problem with this approach is you are assuming all jobs are in CBD or some well defined area which is simply not the case. Employment is very much spread all over the greater Auckland area from Pukekohe to Warkworth.

Yes, that is understood - and is why the proximity to employment has two factors: distance to x size of the employment centre - so in this case a major shopping mall is an employment centre, but a small one, whereas the tertiary campuses are larger again and the CBD even larger still. It's a simple GIS exercise to plot these employment centres and distance is another easily calculated function within the GIS system.

It really is a very simple solution - completely automated. And no need for QV to do any property valuations (and revaluations) for rateable purposes because property value has nothing to do with setting the General Rate anymore (it's replaced by a Targeted Rate)..

The rating system would still have UAGCs and other fixed cost rates on a per unit title basis.

I still like it because it may enourage a decentralised city.
I feel the concept of the CBD is part of the problem, hand up those who want to travel less than 30 minutes to work...walking..biking...car...

I came to Ak. I used to ride to work. My company got sold to another company. I then had to commute miles. To the extent that I ended up starting my workday at 5am. Finishing at 2pm. (Nice boss). Public transport was 3 times more expensive than driving. Plus took 3 times longer. Driving is way more practical.
It isn't too bad though. You get used to waking up at 4:30am.

I sympathise,
I worked in Sydney and rode the rail for an hour to work. The twin cities of Sydney and Paramatta is a failed model in my opinion, so dont consider expansion to Hamilton.
Sydney increases the density around the railway stations and developing employment oportunities at those poiints would seem a possible plan.

Secondly, it is a problem because it distorts affordability of accommodation.

Does it? The government owns 1 in 16 houses in Auckland, and 60% of all rentals are subsidised. I would say a lot of people are completely insulated from the housing market.

All subsidies create distortions and increase prices.....it is disgusting that the State should own such a high proportion of the housing stock and then further distort those prices with WFF and other accommodation supplements. These latter two might seem like good public policy to those receiving it but it increases the cost of a roof over one's head.

Just replying to myself: Paying $95 in rent to be a neighbour to Lorde.

Sorry people, the only Aucklanders who have a hard time is the middle class who has to come up with the money all our politicians spend, or receive as a nice bonus of their policies (yes, we know who you are and were who brought property within the urban boundary and let the market run away).

"Firstly, the gains are tax free, distorting investment decisions by individuals, families, companies and governments. (All gains should be treated equally in the tax law. Those who have gains should pay their fair share)"

Broken record? It's been pointed out many times - hell, even the Labour got it finally! - that capital gains tax didn't prevent or stop skyrocketing house prices anywhere in the world!

Translation: "Me first, me second, and anything else is me again too."

There's a word for that.

'Those canny Chinese' huh? Looked at the state of their stock market lately? Obviously all those canny Chinese certainly know how to pick a bubble....

10
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The first step for the young/disadvantaged is get more organised (in the formal sense) to take on the Boomer Nimbys. If they don't get out and vote, speak up etc they're going to be out lobbied everytime. Ignorance is only bliss until it isn't.

Somehow expert and experienced representation is required to fight the fight.

14
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Fully fully agree with this. As someone who has been saving for 4 years, works 3 jobs and does nothing but that to keep costs down and savings up. I am utterly, utterly fed up with the constant goal post shifts in getting a roof over my head. A roof that I can't get even in the outer outer regions of Auckland (with sometimes 2 hour commutes back and forth, I have witnessed this first hand several times) and alternatively the tiny apartments in town are now out of reach. The problem is, I have started to notice, read more, follow the Unitary Plan and get angry. My peers? They have all but given up. They lost all the hope they had and either mortagage themselves to the hilt or stay silent for fear of being called 'entitled'. I'm looking all the time for the rising when I find it I will be joining to add my voice and to speak about my fears for Auckland. This isn't about having a lawn to myself. This is about the future. This is about what will happen when Auckland is so full of people that it cannot cope and neither can the residents paying high rents and being moved all over town every couple of months as houses are sold off for profit under them (this is happening people, we can't deny that anymore either). Are we finally starting to see the light? And is it too late?

12
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Time for this 'entitled Millennial' crap to go away. Don't stay silent and let that propaganda spread any further. It's a misrepresentation being put around by the truly entitled - a bunch of entrenched parasites who want you to shut up and take it while they get their fangs into the yummy bloodsack that is your lifetime earnings.

I know. I watch my peers taking on mortgages that will cripple them if the interest rates go up. When they have these mortgages and their 'dream' home they all but become ignorant again to the real problem going on. When I speak , I'm poo poo'ed and called a 'whinger' because I haven't got what they have? I also have peers who didn't 'miss the boat' who fully sympathise with my situation. They have open intelligent conversations with me about the very real consequences. I do wonder how this will all pan out. I'm no longer saving for a roof over my head. I'm saving money to pay rent when I retire. I'm scared. That's the reality. I am not an entitled whinger I'm SCARED.

These property bubbles don't last. In the great scheme of things it's nothing but a flash in the pan.
Fundamentals will force a return to something thats makes some sort of sense, no one knows how or when but imbalances correct and this is a monster imbalance.

By squirreling money away and refusing to take on a million dollar mortgage at 35, refusing to follow the desperate hoards doing that very thing (some with small children) I hope and pray every night I'm doing the right thing. Love the input here.

I don't see how you could be doing the wrong thing. Fonterra is going to pay 12.5 billion less to dairy farmers, than two years ago. The multiplier is x7 . Our Gdp is 230 billion, you cannot take 80 billion plus out and pretend it's going to all be ok for long.
The same money the farmers needed is also the same money needed to pay the interest on over priced houses and it's not going to be there.

Don't be scared. Get a liveaboard boat and park up in a marina near the CBD while you're working. When you retire, stay there or sail to one in a more tranquil area. It's a very good lifestyle.

Been planning to do that for years. But once a year at Xmas we get together with a crowd of friends and one of them has done just that - but he's always warning us about the maintenance (both costs and inconveniences). Still, it's very handy to the local yacht club bar :-).

I've had houses and I've lived aboard boats. Far less maintenance in the latter and am happily retired aboard since 1997. In a marina with several young families.

From someone with adult children I sympathize with you Hardworker but a question - did you and these peers of yours vote in the last elections and if you did was it for the "Pro Immigration party"?
For those who didn't vote stop your whinging. For those who voted for the "pro Immigartion party stop your whinging also - take away the demand and the problem is solved. We might also see lower interest rates, a lower dollar and pressure taken off our most precious asset - the dairy industry. We will also see less $2 shops and no longer need to learn a foreign language to speak to the "students" when we fill the car.

Hardworker - I did the same and it's pointless! The goalposts will keep moving and the rich will keep defending their capital gains and their views. These people are awful and the vibe in Auckland is bad!

Come to a truly international city like Melbourne - people are respected here, salaries are good and you will be able to create a better life for yourself.

Leave the boring, greedy old Aucklanders to themselves!

I remember reading, a long time ago now, about serious property investors and how they wouldn't buy a home of their own to live in. They would rather buy something like two bedroom brick and tile units and rent them out. Was that ever a possibility for you? Is it possible now? That strategy certainly would have worked if you did it four years ago in Auckland. Maybe it is hard to convince the bank but this seems like a way to get on the "property ladder" before buying your own home to live in. Have any readers done that?

No need for pessimism yet. The market fundamentals favour your being able to purchase a townhouse, as opposed to a bungalow or apartment. See my comment at the end of this string.

14
up

Zac - your parents and society have failed you if you truly stand by those remarks.

It is the every man for himself mind set that has got Auckland into this mess. It's going to take a higher level of thinking than that to get us out of it. Please don't take up politics Zac.

Location, location, location.
Immigration, immigration, immigration.
Division, division, division.

The solution lies not in multi-storey in the leafy suburbs which simply covert to larger still and more expensive homes with not the slightest hint that they will be affordable or free up other areas for lower cost home owners.

Just look at Sydney harbourside if you think this approach works !

We need to do what works and the answer can be seen in Singapore.

Massive multi-storey complexes on green or brown fields near the rail connections built by Government with a complete surrounding environment - parks pools etc catering for ~ 15,000. We are talking something like 24 high rise towers each of 30+ stories only available to first home and lower paid individuals with sale restrictions.

When one is complete they start another.

Prices remain stable and affordable for all.

We can do this in areas like Kumeu, Otahuhu, Drury, Papakura, Papatoetoe - all near existing mainline rail and motorway.

If we are to stop just tinkering with the problem and offer real solutions - than I'm sorry this is what is required.
A massive and immediate government intervention to cut through the crap and just do what works.

If we are going to have unconstrained immigration running at 66,000 net then we are simply never going to get ahead of the problem. That alone is driving maybe 20 - 25,000 new residences pa.

Remember Ardmore aerodrome and Camp Bunn were built from scratch and operational in 90 days.
Yes a few were affected and lost their land under public works - but that happened in 24 hours.
The Seabees arrived one afternoon - construction started at dawn the following morning.

Are we prepared to in effect to move to a war footing for what today represents a real threat to our total
economic well being ? I doubt it.

Solutions do exist - but not in the present framework.

Will the residents in all those high rises be travelling to the CBD daily for work ?

You've got to be kidding:

Massive multi-storey complexes on green or brown fields near the rail connections built by Government with a complete surrounding environment - parks pools etc catering for ~ 15,000. We are talking something like 24 high rise towers each of 30+ stories only available to first home and lower paid individuals with sale restrictions.

I come from Chicago originally - and yeah, we did that in the 50s and 60s - they called them 'projects'. Do a Google search - you don't want that for Auckland.

I agree - Singaporeans can handle these complexes due to their unique ability to create tidy, unique neighborhood and housing block identities but if they were introduced here they would become crime ridden drug dens as per the Projects of the USA and Tower Blocks of the UK

Stronger family units. In NZ there is almost an incentive to become a solo Mum. That is one big difference.

The view from the peak is both spectacular and scary.

https://gailtheactuary.files.wordpress.com/2014/01/tverberg-estimate-of-...

Even if this analysis is out by 5 years (highly unlikely because it is based on other excellent work), it's still extremely scary.

There is no way out for western nations allied to the collapsing American Empire and emulating its every mistake (including concrete jungles, high-rise, profligacy and money-printing).

http://www.zerohedge.com/news/2016-02-26/us-government-releases-2015-fin...

....once again, the US government’s financial condition has declined significantly from the previous year.

For 2015, the government reports $3.2 trillion in total assets.

This includes everything from financial assets like bank balances to physical assets like tanks, bullets, aircraft carriers, and the federal highway system.

Curiously, the single biggest line item amongst these listed assets is the $1.2 trillion in student loans that are owed to the government by the young people of America.

This is pretty extraordinary when you think about it.

37% of the government’s total reported assets are student loans, which is now considered one of the most precarious bubbles in finance.

$1.2 trillion is similar to the size of the subprime mortgage market back in 2008. And delinquency rates are rising, now at 11.5% according to Federal Reserve data.

Plus, it’s simply astonishing that so much of the federal government’s asset base is tantamount to indentured servitude as young people pay off expensive university degrees that barely land them jobs making coffee at Starbucks.

On the other side of the equation are a reported $21.5 trillion in liabilities, giving the government an official net worth of negative $18.2 trillion.'

I very much doubt he'd want to live in one Kate, let alone raise a family there.

I think it is wrong to pit people against each other. The problem are neither nasty people who like to keep their community the way it is nor the people demanding the humble Kiwi dream of providing their own home to their families.

The problem is that about 10 years ago governments and central banks have embarked on abolishing market economics and replaced it with "stimulus", "bail-out", zero interest rate etc central planning economics. The result is the gross misallocation of resources typical for Socialist systems. Market forces would have shut down mismanaged banks and states and we would not be in yet another huge real estate bubble now that is so thoroughly destroying the fabric of society.

Even if government would have a go at the vile NIMBY crowd with yet more government interference, the basic problem of a world flooded with cheap printed money would not vanish. Cheap money that distorts interest rates on the one hand and triggered a false boom in China on the other hand whose surplus cash is now sweeping into Auckland.

It is also not the NIMBYs' fault that there is practically no productivity growth any more in the Western world. Standards of education and training have fallen due to people from lower social strata being kept out of higher education by high fees and by massive low skill immigration. We have become dumber and so it is natural that we cannot generate the wage growth that is needed to keep up with the Jones.

Anyway, don't fall for false prophets promising easy solutions, especially when they incite envy and resentment.

"..nasty people who like to keep their community the way it is.."

"..the vile NIMBY crowd.."

Nasty and vile? Seriously?

"Poor you"

Yes, pretty nasty and vile.

13,000 news houses? my god there is only so much information people can handle!

The problem is Globalism with virtually unrestricted migration flows and now waves of "refugees" from everywhere heading toward the West. Globalism means you can kiss goodbye to your socialist dreams. We simply cannot afford social welfare and migration from the third world. Some of you here think we NIMBYs should sacrifice our wealth for the greater good. That would be all well and good if it was just Kiwis like it was the 1950s but things have changed. Our sacrifice would be futile and suicidal in the face of "The Horde". Now we are going to build a wall, a big beautiful economic wall around Auckland, that will make it exclusive. It will be, and largely already is, an International city, a Global city and a very nice place to live. But the price of living here will be high in order to keep almost everybody but the affluent out. Already the government actively re-houses refugees outside of Auckland. Everyone who wants to live in the sanctuary of Auckland needs to buy now, whatever it costs. Papakura still looks affordable.

I know people are going to think I am selfish. look i didn't engineer this system. I honestly believe that if we had heavily restricted immigration, mechanized the hell out of our primary industries, marketed our products as the finest in the world and stuck to and developed a strict code of the best of Kiwi cultural can-do and self sufficiency we would all be millionaires, each have a bach, a boat and an overseas holiday every year. It would be NIMBYism on a national scale. Of course the UN probably wouldn't allow such a place to exist for long.

Globalisation and "unrestricted" migration flows? uh no. Look at 100 years ago, no passport needed to come here? now?

"socialist dreams" not just the left but the right also. just look at the inflows into Europe due to CC and peak oil and its only just starting. You are correct no we cannot, that is a shock no one wants to see yet.

Good comment Steven but I did write "virtually" unrestricted migration. 100 years ago immigration was highly restricted. From Wikipedia:
Between 1881 and the 1920s, the New Zealand Parliament passed legislation that intended to limit Asiatic migration to New Zealand, and prevented Asians from naturalising.
By the 1960s, the policy of excluding people based on nationality yielded a population overwhelmingly European in origin.

However I am glad I am not the only one to predict the end of social welfare as we know it with the third world coming to our lands. To them it is not a safety net but a resource to be harvested and even they say it is unsustainable in the long term.

If you were white however no restriction. Interesting thing that I had no idea our Govn had that in place.

Nothing to do with the 3rd world coming here and not just social welfare but our way of life as we need oil to support it, then there is CC. NZ might be lucky in that there is a lot of ocean between us and everybody else but its a big might.

Nothing to do with the third world coming here yet an ocean between us and everyone else may save us?
It's got nothing at all to do with oil or CC. The problem is the social welfare provided by the West, over population in non Western countries, weak border control and access to the Internet.

You don't get this do you Zach - a key reason your properties are worth so much (and the 'wealth' you refer to) is because of the arrival of all these people from the 'third world' as you put it. They're putting demand on the market, pushing prices up, making you 'wealthy'. And now you want to kick them out because you don't want to deal with them?

So you want to be wealthy, but not take the responsibility for becoming so. Great character.

Au contraire Independent Observer it is you that doesn't get it. I once wanted restricted immigration because NIMBYism is my faith and I believe I would be even richer in more ways than one if that had happened but now immigration is a fait accompli I am relying on the natural development of an economic wall to make Auckland unaffordable. Let's make all of Auckland DGZ is my war cry! I'm not kicking anyone out, house prices are. It has always been this way, it's like a force of nature. Location, location, location is now a global consideration and Auckland is up there on the list. All I am saying is, take advantage of it.

Take advantage of what? Other people?

Take advantage of market conditions and global trends. We have never before seen such a rapid growth of wealthy people in China and perhaps India. A lot of these people want to leave their home countries.

Trolls live under bridges, and I guess that is how you live in Ak for no cost,( as per a previous post).

No we live in nice houses because houses doubled in price every seven years or so. If you had two or more the capital gain would pay off one of them negating the mortgage interest cost. This is why renting was ill advised and Mums and Dads encouraged their children to buy houses.

Its a ponzi scheme due to pop shortly.

It's not a ponzi scheme as rent can cover mortgage. It is still possible to buy properties that perform better than bank deposits. If properties drop in price they will be snapped up by property investors thus regulating the fall.

Its not a ponzi scheme mate, there are too many people at the top of the pyramid, they are called home owners.

The problems aren't going to be solved in a timeframe that matter to most of us here. The damage has been done to an entire generation and we won't recover.

National have spent the best part of a decade sitting on their hands while recklessly flooding the place with people and foreign capital we don't have the capacity to cope with. Inept, incompetent and corrupt.

Nothing but disgust for Key and his eat the children voting bloc.

The damage has indeed been done and is irreversible however it is wrong to blame Key. Labour would have done the same thing. It appears to be a problem with the entire Western world. A populist leader of tremendous charisma with the interests of his people first and foremost in his heart would be required. Kiwis just wouldn't accept such a person, leading us with no choice but to play with the cards we hold currently. Sorry about commenting so many times!

The word that should be introduced into the conversation is ENTITLEMENT In these neocon times we find that there have arisen many groups who feel that they are entitled. Some of these groups are:
Owners of freestanding houses in expensive leafy inner suburbs who want to cling on to their patch or dirt regardless of the greater good. Society exists for everyone not just them.
Professionals or pseudo-professionals. I have noticed that dentists are the worst of this group in my experience. I have experienced a trend lately where dentists have embarked upon a $700 root canal
without discussing it with me first ( it lasted 2 months )and a filling which was quoted at $600 but upon completion I was charged $1000 because it was 'a bit more difficult than predicted.'
Real estate agents who gouge vendors with exorbitant commissions. I have successfully sold my last three properties myself ( over a period of 40 years ).
Today it's hard to find tradesmen that do the job themselves: I've found that NZ tradesmen these days just price the job and receive the cheque at the end; they actually employ new immigrants on low wages to do the job. This practice means tradesmen are more expensive than ever.
The list goes on and on.

I think that a lot of commentators in this blog could profitably introduce the word ENTITLEMENT
into their commentaries.

What if a really fast train service - like they have in France - was introduced. Say from northland to Auckland and wherever south to Auckland. Would that provide the people with the ability to perhaps buy their own home? I have always thought that there should be a very fast train service through Christchurch from Timaru up to Pegasus. It would enable the small towns to grow and the people would have a much better lifestyle living in the small towns than all of them be trying to be cramped into one place like Auckland Such a service would have to come from Government but until we have a Government that actually thinks about infrastructure and thinks about its people dream on Patricia, dream on.

What if a really fast train service - like they have in France - was introduced. Say from northland to Auckland and wherever south to Auckland. Would that provide the people with the ability to perhaps buy their own home? I have always thought that there should be a very fast train service through Christchurch from Timaru up to Pegasus. It would enable the small towns to grow and the people would have a much better lifestyle living in the small towns than all of them be trying to be cramped into one place like Auckland Such a service would have to come from Government but until we have a Government that actually thinks about infrastructure and thinks about its people dream on Patricia, dream on.

So the money doesnt come from the "Govn" it comes from the tax payer. Where would we get the money from to lay such a track? (About $10k per linear m assuming a dual track, plus rolling stock plus stations).

They managed to find 1.4 billion for the Waterview Connection. That would have bought 140km of high speed rail.
http://www.nzta.govt.nz/projects/the-western-ring-route/waterview-connec...
From the web site:

The Waterview Connection project is one of the most important infrastructure developments ever to take place in New Zealand. Completing a motorway ring route around the city, it will unlock Auckland’s potential to become a truly world class city.

World class city...
Buy good little stand alone houses in West Auckland is my advice to young people.

Oops that is a light rail cost, not high speed. Single light rail track is about $4500 per metre, I dont have a price for high speed but with our rail gauge its probably not practical without everything new from scratch. What worries me is the debt involved with such things which is on the shoulders of the present ratepayers, ie you cant just keep adding billions in debt every year.

PS yet another road but with peak oil its got a very short effective life as mass private cars are un-sustainable.

There is the printing press. Don't get into a quiver Steven - it wouldn't cause inflation. Just think of what happened in this country from 1900-1950 when there was barely 1m people and adjust your thinking accordingly.

Auckland architect, David Gibbs, who at the meeting said the housing crisis trumps the flaws in the system.

Doesn't that sum up exactly what's wrong? We declare a crisis, there's always a crisis, and then democracy and due process can be put aside. The fault of this fiasco rests entirely with Len Brown. No case has been made of NIMBYism, these people wanted to have their democratic right of participation honoured.

And given Auckland Council's (and before ARC) treatment of the housing issue, i.e. given us the urban boundary, the cause of our woes, expecting them to solve this by paving over a golf course, is laughable.

The whole process reeked of a stab in the back of those who didn't support Len Brown, and was rightly rejected as improper by our elected representatives.

Yes I'm just another NIMBY. Paid good money for my house and don't want anything going up 3 stories or more next door thank you. We have green fields and land with nothing on it, build your high rise complexes there fore those that want affordable housing....but ahh no thats just not good enough for the whingers. You would have exactly the same opinion if you were in my position. The new motorway is set to go north as far as Whangarei, give it the on and off ramps it needs and start building.

Look Auckland's sewage system doesn't even have capacity for the current population. It overflows all the time, just look at the creek behind Mt Albert Grammar school, kids have to walk past it everyday and it smells - it has gone much much worse over the years. Sure build more density on top of already struggling infrastructure in the suburbs which weren't designed for density, but don't be surprised that your backyard is overflowing with human waste - literally.

As a non-Auckland homeowner, I am baffled by all the fuss. Creeping intensification by infill housing is a fact of life in my suburb, with no fuss involved. It's far more profitable to subdivide or cross-lease one's property and stick a townhouse on it, than just wait for the capital appreciation. Auckland Council should simply encourage inner-city ratepayers to do the maths and get compliance consents fast-tracked. It's a win-win: more efficient use of infrastructure, unlocking of capital value for ageing 'boomers without relocation costs, and younger neighbourhoods. Am I missing something?

Yep. The classic Kiwi quarter acre went years ago, I'm already only on 450Sq/m and just up the road the 1200Sq/m section is getting FOUR houses jammed on it as we speak. People buy in an area for a reason, they don't want to see it go to the dogs. You cannot just jam more houses in because the existing infrastructure cannot cope, I'm talking wastewater, storm water and roads. If you going to build high density housing it needs to be DESIGNED as high density housing from the start with the necessary services. Take the building north and create a new satellite city.

Your solution contradicts one of your premises, i.e. infrastructure. There is only so much water available for Auckland to draw on, so the Council and WaterCare are banking on housing intensification to manage demand (e.g. for gardens and pools).

No it doesn't, start using the rooftops for water. My mother is in Puhoi, there is no town water supply there. Actually its my dream to build a house there that is totally off the grid, your own power is quite easy as with your own water and wastewater. Your totally self sufficient. Move North and utilize the roof area for at least water to the toilets, washing machine and showers.