Brendon Harre and David Lupton set out the case for more, and more variety of intensive housing options in New Zealand's urban areas

By Bendon Harre and David Lupton*

Part one: The critique

That there is a housing crisis is now universally accepted.  That an essential part of the solution is to liberalise the supply of land for development is gradually gaining credence.  Labour’s housing spokesman Phil Twyford got wide support for his call for the Metropolitan Urban Limit (MUL) to be abolished. Commenting in the Listener (August 13 2016, P. 22) on the impact of the rural urban planning boundary envisaged under the Auckland Unitary Plan, Phil Twyford said that although the RUB is a more permeable “fence” around the city than the old MUL, it’s still a restriction that depends on council decisions as to when land should come onto the market, and therefore provides opportunities for speculation by land owners.

Unless and until the constraints on land development are removed, there is little prospect of land prices falling to a level that would allow the building of affordable homes. For that to happen we must allow cities to grow organically in response to demand with a minimal amount of supply restrictions. Yet it is also true that allowing organic growth will create problems for the provision of transport and other infrastructure.  A package of measures is required so that where developers build outwards or upwards from the existing city, the full cost of the additional infrastructure required is internalised through road and infrastructure pricing.

The proposed Auckland unitary plan and the recommendations of the Independent Hearings Panel (IHP) place considerable emphasis on intensification as a means of increasing the supply of housing. Note - it didn’t specifically target achieving competitive urban land supply. It focused on requiring enough development opportunities be made available to allow for expected growth, in this way the IHP hope to create an over-supply of housing by 2040 that would put downward pressure on prices. Land use economic theory and empirical data indicates that the hoped for oversupply of housing in Auckland is unlikely to eventuate. In particular, the amount of housing intensification is likely to be significantly less than expected, while the prices will be greater. It is our strong recommendation that greater efforts need to be made to reduce restrictions for building our cities up and out.

New Zealand has long and laborious processes to increase its housing supply options. Local government District Plans, which create zoning maps, take years of consultation, submission and decision making.

A new group has formed to advocate for the Independent Hearing Panel version of the Unitary Plan rather than the previous more restrictive Auckland Council version. The group is call the Coalition for More Homes. It is a diverse group including economist Shamubeel Equab, Patrick Reynolds of Transportblog, Mark Todd of Ockham Residential, Leroy Beckett and Sophie Hudson of Generation Zero, as well as social agencies like the Salvation Army and Peter Jeffrey of CORT Community Housing.

We support the ‘build more affordable homes’ goal of the Coalition for More Homes, although we have concerns that housing affordability reforms need to be much broader and go further than one moderately less restrictive District Plan. We note that Auckland’s Independent Hearing Panel’s less restrictive re-zoning proposal doesn’t change the underlying planning philosophy that house building should be prescriptively rationed. Rationing means a relatively fixed supply of decent housing is allocated by price, which inevitably prices out the lower income groups. It is understandable why reasonable people would choose the less restrictive IHP plan over the more restrictive old Auckland Council plan, but unfortunately we have doubts the IHP plan will build enough houses, especially affordable homes which will genuinely solve the housing crisis. 

Alongside our wider concern about housing continuing to be allocated prescriptively by planning quota, we have specific concerns that Auckland’s Independent Hearing Panel have not removed enough restrictions on intensification i.e. up-zoning to meet its target of 60% to 70% of new homes being in existing urban areas.

Bernard Hickey, author of an aptly titled article, Shooting for the Housing Moon, puts the Panels supply solutions into context. They are a set of zoning rules that will progressively give permission for the building of 422,000 additional homes in an expanded Auckland - both up and out - by 2040. In particular, the Panel points out there is already an undersupply of 40,000 homes and an extra 131,000 houses will be needed to be built in the next seven years to eliminate the supply shortage and keep up with population growth.

To put that in context, that is over 18,000 houses a year or more than double what was built in Auckland over the last year. As seen in the below graph it is significantly more residential construction than Auckland has built at any time this century.

Source: The Auckland Special Housing Accord: Success? July 30, 2016 by Donald Ellis

It is not just the quantity of housing which is challenging but pricing as well.

Modelling done for the Independent Hearing Panel predicts that only 15 per cent of new homes under Auckland’s Unitary Plan will cost less than $800,000, Leader of the Opposition Andrew Little says.

The majority of these houses will be out of the reach of most Auckland families. The modelling found that, of the 247,000 new homes planned within the existing urban area, 85 per cent will cost more than $800,000 and most will cost more than a million dollars.

Less than 2 per cent will cost less than $600,000 and just one house is expected to be sold for under $500,000.

There are several possible reasons to account for these high price figures, firstly the Panels Auckland Council Development Capacity Model had to account for the rapidly increasing land and construction costs since 2014 when they had last estimated these figures (IHP Report, Overview of Recommendations -Enabling growth, E. Updates to ACDC Model v3.8,   P.11). Another reason is the Panel recommendations only allow a minimal amount of some affordable housing construction types, such as terrace housing -they forecast less than 19,000 terrace dwellings versus nearly 175,000 apartments will be built in existing areas (P.17). Finally, supply shortages and the slowness to respond is surely a factor explaining high and escalating prices.

There were over ten thousand submissions to the Independent Hearing Panel. Any potential objector had more than ample opportunity to assess possible harm and submit on this.

Individuals who would benefit from additional housing were less easily identified, the future is uncertain and for obvious reasons many individuals and families do not know where their future homes will be. Due to this uncertainty factor, potential future beneficiaries cannot assess personal benefit from specific zoning changes and therefore do not make submissions supporting rule changes which would allow more house building (a fuller article discussing objectors vs benefiters can be seen here).

This reflects the inherently flawed nature of the local government processes of consultation, submission and re-zoning. The institutional setup means re-zoning objectors outnumber beneficiaries. There have been a few brave individuals, like the representatives from Generation Zero who try to speak for future generations needing affordable housing. But they have been shouted down, ridiculed and abused by the community consultation process. This video-clip recorded and commented on a recent Auckland local government Unitary Plan community consultation event -shows how feral this process has become.

Yet housing has risen nationally to the top of public’s concern. Housing affordability has been described as the government’s Achilles heel. The government has vacillated between unsuccessful attempts at fixing the housing market and ignoring it. There is a sense that tensions resulting from the housing crisis has risen to such a degree that something has to give.

Given the tensions between the local political environment and the wider national public concern about housing affordability and given the Independent Hearing Panel was appointed by the government (not Auckland Council) it was not surprising that they recommended a compromise solution. With regard to intensification, more up-zoning than anti up-zoning objectors would prefer, but not a wholesale up-zoning of all of Auckland’s inner city suburbs. 

The Panel’s recommendations have a planned for oversupply of 5.5% by 2040, meaning 422,000 dwellings could possibly be built over the next 25 years, versus the 400,000 needed to meet expected demand.

We believe there is a significant risk the estimated oversupply will not eventuate. It certainly seems unlikely that 131,000 homes will be built in 7 years to balance supply. Leith Van Onselen an Australian based economist has publicly stated the planned for Auckland house building figures are highly unachievable. In particular, we have doubts about the achievability of the amount of intensification that is planned for. Actual supply tends to be a lot less than planned for supply, for the following listed reasons.

These reasons are based on the work of specialised land use economists such as Prof Alan W Evans and Prof Paul Cheshire. Local government and the planning community in New Zealand do not acknowledge these economic supply arguments which challenge their prescriptive urban land resource allocation philosophy. So although the Independent Hearing Panel undertook some economic modelling, using the Auckland Council Development Capacity model, it is doubtful that they fully accounted for all the difficulties in providing housing intensification. These include;

  • Newly zoned intensification areas are still subject to other restrictive rules -like the outlook space rule still being 6 metres (Property Council asked for 4m). This means not all up-zoned sections will be of the right size or shape to allow intensification, or at least allow enough extra floor space to make the development economic. Matthew Paetz a planner wrote about this recently for interest.co.nz
  • Because of the limitations of intensifying on a single traditional sized urban section, housing intensification will in many cases require site assembly of neighbouring contiguous properties. This is a slow and difficult process. There is a definite upward supply curve for this supply response -the faster and the more properties this involves the greater the price that needs to be offered to the original owners. For a more detailed analysis of the economics of site assembly see this article.
  • Some property owners may not want to intensify -they value their network of local schools, medical centres, kindergartens, friends, family and other amenities. For them selling up to a developer at the prevailing price or rebuilding themselves is not worth it. 
  • Some property owners want to keep their intensification options open -if they build now they cannot build something potentially better later -this is especially true if there is the possibility for more commercially orientated development in the future.
  • Some property owners have a speculative, land banking, capital gain investment model and will not waste capital on building when they can get a greater return by sitting on their property investments. These property owners could ‘hold-out’ for large increases in price before they release supply onto the market.

Overseas experience shows that actual housing supply is significantly less than planned for supply. In London actual building rates have been roughly half the rate of planned for building. See page 6 of the following report.

To be fair to the Panel, both it and the consultants which did the housing supply capacity modelling have made statements in their reports that the housing supply figures are indications of travel and should not be used as a forecast or an exact indication of growth enabled (IHP Report -Enabling Growth, A -Background, P.1, Footnote no.3). The Panel saying it “simply does not have available to it the necessary information or a recognised method to attempt to match with any confidence the supply of urban land with its estimated demand across the Auckland region over the next ten years -let alone for thirty years” (IHP Report – Rub rezoning and precincts, P.11).

The idea of urban development capacity modelling seems to be to experiment over time to make the modelling more accurate. In the meantime, to release more development capacity periodically -in response to what exactly? -inadequate construction, excessive price increases, political pressure? The Panel specifically mentioning that capacity modelling will line up with the governments National Policy Statement on Urban Development Capacity (IHP Report -Enabling Growth, A -Background, P.1, Footnote no.1). The IHP did not explain how this will work.

If local government planning processes in New Zealand are inadequate and there are risks that the government appointed Independent Hearing Panel in Auckland have been unable to go far enough to address the housing crisis, should other processes be tried?

Wholesale inner city up-zoning has precedent overseas. Houston in 1999 went through a city wide planning reform debate which led to a decrease in its minimum section size to a little over 100sqm and a removal of side setback and shade plane rules for the area within its inner motorway ring -an area larger than Auckland’s isthmus. Here is a nice set of architectural slides showing how traditional standalone housing suburbs were gradually transformed into higher density suburbs with the sort of affordable ‘missing middle’ developments which Auckland lacks -terrace developments, three story walk-up apartments and the like.

Tokyo offers another example where freedom to build in the city was recently given, meaning property owners are now free to demolish and rebuild at higher densities. This has kept house prices in check. In 2014, Tokyo with a population of 13.3m built more houses than England, which has a population of 54.3m. H/T Michael Reddell of Croaking Cassandra for the below Financial Times article.

“During the 1980s Japan had a spectacular speculative house price bubble that was even worse than in London and New York during the same period, and various Japanese economists were decrying the planning and zoning systems as having been a major contributor by reducing supply,” says André Sorensen, a geography professor at the University of Toronto, who has written extensively on planning in Japan……

As bad loans to developers brought Japan’s financial system to the brink of collapse in the 1990s, the government relaxed development rules, culminating in the Urban Renaissance Law of 2002, which made it easier to rezone land. Office sites were repurposed for new housing. “To help the economy recover from the bubble, the country eased regulation on urban development,” says Ichikawa. “If it hadn’t been for the bubble, Tokyo would be in the same situation as London or San Francisco.”

Transportblog also discussed the Tokyo example of affordable intensification. Readers’ comments about their personal experiences of Japanese urban environments was particularly interesting.

There are other examples of cities and countries trying to address the problem of over dominant Nimbyism driving up house prices. The Economist magazine reviews some examples here.

The Labour party, the traditional New Zealand party of reform, were the first to break the urban planning status quo thinking. They have started a conversation about alternatives to our existing urban planning system, in particular, by announcing a proposed urban development National Policy Statement for the Resource Management Act in May. The government responded with a proposed National Policy Statement on Urban Development Capacity (NPS-UDC) in June. Labour’s announcement is written in clear language -basically saying house building restrictions should be removed. National’s statement is less clear, but seems to indicate if house building capacity is inadequate, then further tranches of greenfield land should be approved for development. This seems similar to status quo prescriptive planning thinking which has drip-fed planning approval onto the market, making it easy for land bankers to corner supply.

There has been a vigorous argument amongst the various politicians about the governments proposed National Policy Statement, again demonstrating the rising importance of housing affordability, Minister of Housing -Nick Smith at the end of this short news video-clip argues the government’s Urban Development Capacity proposal is a buttress to support Auckland’s Independent Hearing Panels Unitary Plan recommendations.

Labour state that the Government should rule out any possibility of an urban growth boundary in Auckland Council’s Unitary Plan if it is serious about fixing the housing crisis. With respect to intensification boundaries, the following statements are revealing. 

“Freeing up growth on the fringes needs to go hand in hand with allowing more density – so people can build flats and apartments in parts of the city where people want to live….”

Labour back in May asked the rhetorical question of what to do about Auckland’s plan.

“Are you saying the Government should override Auckland’s Plan? 
Restrictive land use rules like the urban growth boundary and density controls are a major contributor to the housing crisis that is locking young people out of home ownership. It is entirely appropriate that central government should have a say on behalf of them and future generations.”

So clearly a future Labour government believes it should alongside other housing reforms act to remove restrictions on intensification.

The question is -what specific restrictions should be removed? It is doubtful that the Labour Party has the appetite to do a “Houston” or “Tokyo” and allow all property owners in Auckland the right to rebuild at higher densities, regardless of neighbourhood concern.

If the status quo risks undersupplying the market -thus the continuation of New Zealand’s current housing woes. What other measures are needed and specifically what intensification national policy statement would be workable?

We will give our suggestion in Part two of this paper, titled: Intensification Solutions.


References:

Urban Economics and Urban Policy: Challenging Conventional Policy Wisdom by Paul C. Cheshire, Max Nathan & Henry G. Overman, 2014

Economics, Real Estate & the Supply of Land by Alan W. Evans, 2004


Part two: Intensification Solutions

In Part one we laid out a critique of current New Zealand planning processes which in our opinion means actual supply of housing will be a lot less than expected supply. In Part two we will argue New Zealand needs new urbanist tools and a removal of some planning restrictions, in particular we want to focus in this paper on ways to allow for a better housing intensification supply response, so that people can build in parts of the city where people want to live.

Our first suggestion would be to increase the height limit to 3 stories -still much shorter than many trees which any property owner has the right to plant. But to keep the existing setback and shade planes rules -which will limit building height and bulk in any case. Note a setback is the distance a building must be constructed from a boundary. A shade plane is an angle going inwards, which building height and bulk cannot exceed. It is taken from a certain height directly above the section boundary -2.5 metres in the below diagram. The angles vary depending on whether it is a northern, southern or east/west boundary.

Our second suggestion is a little more complicated. We think New Zealand should adopt a system where neighbours can reciprocally agree to drop the shade plane and set back restrictions along their common border. So in the above diagrams, if there was a section to the north or south and if the two property owners agree, then they both would have the right to build up to their adjoining boundary - utilising the appropriate building code for firewalls etc. If other adjoining neighbours disagreed, then on those boundaries the standard setback and shade plane rules would apply.

This proposed national policy statement would be written in a way to minimise transaction costs -two neighbours being able to lodge this variation on their property title records for a small nominal fee. The national policy statement would mean this reciprocal intensification process would not require an RMA consent.

Of course there would be many property owners who wouldn’t want their neighbour building right up to their boundary. But some would see the advantage in co-operating so they have the option of building more floor space. Making this reciprocal intensification right a choice option eliminates the major criticism of up-zoning. Being, up-zoning dictates an exchange of a property rights to sun, views and privacy for the right to intensify. Some property owners believe they will be worse off if this exchange is enforced by local government zoning dictate.

If reciprocal intensification rights were spread across a large enough area - say the entire Auckland isthmus, then we think this would give the opportunity for a lot of intensification -in the form of duplexes if two neighbours agree and European style terrace housing if many neighbours agree.

The main benefits of this reciprocal intensification property proposal are;

  • It decreases transaction costs for contiguous housing developments. Note, it could also apply to mixed use residential/commercial development areas.
  • It gives greater housing supply options for building types with construction costs per square metre comparable to stand alone housing. This will lower the median price and increase build rates for the new build market, benefiting the middle and lower ends of the market. David Chaston from Interest.co.nz has compiled the statistics showing that apartment building in 2016 is no longer supplying the smaller more affordable end of the property market.
  • It allows housing supply to respond to locational demand. Jason Krupp from the NZ Initiative has written several articles, most recently with Alex Voutratvis from the Property Council arguing there is evidence that with the increase in service sector employment, the proportion of inner city (such as the Auckland Isthmus) employment versus peripheral employment in Australasian cities is rising.
  • It allows housing supply to respond to housing size demand. There is evidence that the market place is over supplying 4-5 bedroom homes and under supplying 1-2 bedroom homes.

In some ways this reciprocal intensification property right proposal is the generic application of a specific proposal (and this too),which Brendon Harré made for an alternative way to provide residential housing in Christchurch, following the earthquakes destroying much of the CBD.

The below pictures give an idea of what Brendon was thinking, with each unit being owned and developed by a different property owner, whilst complying with some common design themes.

The reason this form of intensification is cheaper to build compared to high rise apartments is their low height means they can be built as a walk-up unit, requiring no expensive elevators, mechanical ventilation, sprinkler systems, underground parking and expensive structural engineering.

Ockham Residential an Auckland building company specialising in medium density residential construction, have long argued for planning rules to be more favourable to this type of intensification.

Ockham Residential would like to see the final Unitary Plan enable the development of homes that meet the social and demographic needs of current and future Aucklanders, at price points they can afford, in places they want to live. Achieving that in our view means maximising the established suburban areas of Auckland which permit three storey structures, unlimited density (measured as dwellings per 100sqm) but with a minimum of 40 per cent retained green space.

It is possible that as city residents become more familiar with intensification and in neighbourhoods where there is a high degree of trust and co-operation then bigger and more elaborate voluntary land reallocation and adjustment schemes could be attempted. For example, a large segment of a traditional suburban block could be reconfigured so that say 10 title holders with 10 houses were replaced with 40 dwellings on 40 titles. In the process section sizes and shapes could be rearranged and reallocated amongst the original property titleholders and common areas like laneways could be provided for.

These larger schemes may require additional legislation similar to Body Corporations or the Municipal Utility District idea discussed in David Lupton’s earlier article to provide financing and manage common areas and facilities, such as car parking, communal outdoor spaces, pedestrian/bike laneways and other options like centralised hot water heating schemes or centralised electricity generators -such as solar power. Some common areas such as laneways may benefit the wider public and the Council might therefor contribute financially into such a scheme.

There is a criticism that Auckland may be uniquely unsuitable to intensification, due to the low amount of public space it has provided for roads and intersections, meaning Auckland is prone to congestion and gridlock. This being based on a UN Habitat Report comparing various cities allocation of street space. We believe the best way to manage this risk is with variable road pricing as already discussed by David Lupton. But in some cases public laneways in conjunction with intensification schemes may assist in making Auckland suburbs more porous for active transport modes like walking and cycling. This might help increase the catchment areas for more space efficient public transport services.

We believe reciprocal property right intensification and neighbourhood voluntary land reallocation schemes will be driven by both supply and demand. Demand will come from urban areas with high amenities -like proximity to employment, easy public and private transport access, cycle-lanes, markets/shops, entertainment and desirable natural environments like beaches, parks and forest.

Many Aucklander’s have commented that not all the high amenity areas of Auckland have been up-zoned in the recommendations made by the Independent Hearing Panel -so there is an opportunity for reciprocal property right supply to increase housing supply where there is a demand for it.

Reciprocal intensification property rights and neighbourhood voluntary land reallocation schemes will not be enough by itself to encourage intensification. Other intensification restrictions such as minimum section sizes, minimum car parking requirements, landscaping site coverage rules, height restrictions, viewing shaft restrictions, absolute dwelling density per hectare limits, outlook rules, heritage restrictions ... may be as or more significant in the way they restrict the supply of housing intensification options and should also be reviewed by affordable housing policy makers.

The demand for housing may be so intense that voluntary intensification proposals like ours need to be considered alongside state run building agencies -Urban Development Authorities -who may need to utilise the power of compulsory purchase to combat the land banking hold-out problem. Labour, National and local government have all made recent announcements about this. The fact they believe this intervention is needed, indicates despite whatever else they say, that they believe existing local government planning processes will be inadequate to supply the market with affordable housing.

Building affordably upwards needs to be considered in conjunction with building affordably outwards so that the entire urban land supply market is free from pressure cooker land price increases. In particular, policies need to address land banking and speculator incentives to hoard development opportunities with a capital gains focused business model.

New Zealand is at an important turning point in the evolution of its cities. We hope New Zealand takes a constructive, brave, future focused approach.


Brendon Harre is a reader and commenter on housing issues in a number of forums. David Lupton is a transport economist with experience in transport planning and operations.

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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42 Comments

Read the article -it is about given people more housing choices.
Here is a short Gif explaining what I am advocating a lot quicker than David's and mine article (hopefully our article provides a bit more useful information).
http://thespinoff.co.nz/wp-content/uploads/2016/08/Choice-2.gif

No amount of intensification will help unless givernment changes or their attitute to please non residents changes.

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11693726

It us true wherever you see will see.........thanks to national government.

Change is the neef of the time if NZ has to maintain its identity.

I like those design suggestions you have illustrated Brendon. The two New Zealand cities I am familiar with are Auckland. All the Auckland froth can make us think these ideas are about their problem. But interestingly I see these as very suitable in Dunedin. (And Gisbourne, Wanganui and Nelson for that matter).
Dunedin doesn't have expensive housing, but there is considerable urban renewal required, and these sort of developments at the edges of the CBD, say Melville Street and the University area would be very useful. They would be useful in themselves, not just because the commute to the edges gets to tedious.
Another place to think about is Remarkables Park, next to Queenstown airport. Alastair Porter is already talking multistory residential there, and those designs would also work extremely well for the challenges the Wakatipu faces.

I am familiar with Christchurch and could see my design suggestion of reciprocal intensification used as a different way to gentrify old working class neighbourhoods.

So they probably could be used in any developing neighbourhood in the country.

It is extremely difficult to get multi unit to stack up financially in lower land value locations like Dunedin, Napier etc, A far better option there is small townhouses on small sites to rear of existing properties.

I studied nursing in Dunedin in the 90s and the few times I have been back since I have noticed quite a lot of infilling. So an alternative to that, which my reciprocal intensification proposal would be -might be popular.

The old student villas will not last for ever. They will be replaced some day -so maybe Dunedin does need this sort of intensification policy option?

Brendon - there's a tiny bit but not much, also some of that will be uni housing so not necessarily subject to stacking up in a true market sense. I've been back and forth to Dunedin probably 40 times in the last 3 years for personal reasons, so I know the city pretty well.
With the cost of building, and the 'relatively' low cost of existing housing there, it is nigh on impossible to deliver 3 or even two bedroom townhouses on very small sections for a price lower than an average quality existing house on a full section. When you are faced with that scenario, you are simply not going to get much intensification.
Yet the Council somehow ignored those realities and came up with plenty of 'fantasy density' in their proposed plan....

By the way, that 'density fantasy' is being played out in a few smaller cities in NZ.
I was in Napier earlier this year presenting a course on Development Economics for the NZ Planning Institute, and we do a practical high level development feasibility exercise.

Many of the planners were quite shocked how higher density redevelopment so often failed to stack up (in fact a long way from stacking up). Yet many of these smaller cities have placed a whole lot of stock on unrealistic intensification goals to provide for future housing needs.

You are right, the economics either stack up or they don't. It will not hurt having this intensification option available for when the economics do stack up, as long as intensification is seen as a compliment to outward growth, not a substitute for it.

It doesn't hurt provided it's limitations are acknowledged.
It hurts massively if its limitations are not acknowledged....

So what kind of high-density development were they using for their exercise?

From what I've seen in Mount Maunganui, there are definitely cases where it does stack up.

Massive infill around the university in Dunedin actually. There are a lot of serious, experienced development landlords there who work every which way they can to build. You can be sure every square meter of that whole area has been given serious examination about development.
Given the extra possibilities Brendon's proposal provides, those landlords would be busy working a whole lot more options and if there is an economic way to get more done, they will wrangle it for sure.

Auckland Council rejects Unitary Plan decisions:
Auckland councillors voted this morning to reduce the number of dwellings allowed to be built in the mixed housing zones as of right from four to two.
This will mean anyone building three or more houses in these zones will require a resource consent and the checks and balances that go with that.
They rejected a recommendation from the hearings panel to allow up to four dwellings to be built in the mixed housing suburban and mixed housing urban zones - which make up the majority of the existing urban area - without a consent.

The Councils prescriptive tendencies go deep.....

Yes.
It's always a bit of an arbitrary assessment on this one.
I thought the panel's recommendation of requiring consent for 5 or more dwellings was about right.
Really, the council need to expend their energy on more important things than tiny 3-4 unit developments!!!!!!!
I could possibly see the rationale in requiring consent for such small developments if they didn't have quite so restrictive development controls (outlook space, recession planes etc) but they do have quite restrictive rules!
Having to get a consent for every 3-4 unit development will certainly put the brakes on getting housing happening quickly...

PS I'm not having a go at your ideas :)
I think they can work well in the bigger NZ centres.
It's just intensification is really really hard to achieve in lower property value, smaller centres.
These places should focus on providing for back section infill - 'gentle density' - if they want to achieve more density in their existing urban areas.

Curious; what on earth is the reason for small towns wanting intensification? Usually this is a logical response to demand for proximate location to city-centre amenities, you can get more people in by allowing for intensification at those locations. But in a small town???? Are there a significant number of people who want a short walk to the main post office or something? Or the pub?

There may not be much demand for it - it depends on circumstances. I could imagine in a popular tourist town being within walking distance of some amenity might for example induce some intensification.

As a bona fide Dunedin-ite and former resident of one of those student villas I can tell you intensification within the Ghetto around the university makes lots of sense. It is an amenity to be within close walking distance of the university and the pub.

And Brendon is right that there is probably still a lot of older stock that could do with bowling to make way for medium-density. Having said that, I smile whenever I go down Castle St and see my old flat. When I moved in in 1980 the landlord told me to keep my bags packed as the house was coming down very soon to make way for a new University building. It's still there and has been refurbished as offices for post-grad students. Takes a lot to kill a Dunedin villa.

While it's hard to see why you would go hard out on intensification anywhere else you have to bear in mind that each town has its own geography and quirks. In Dunedin's case some people would trade living in a smaller property if it meant receiving year-round sun or avoiding snow-prone heights.

In Wellington it is the holy trinity of -views, all day sun and protection from prevailing winds....

Perhaps those that the live in smaller centers are happy with just that, small town stuff.

A new group has formed to advocate for the Independent Hearing Panel version of the Unitary Plan rather than the previous more restrictive Auckland Council version. The group is call the Coalition for More Homes. It is a diverse group including economist Shamubeel Equab, Patrick Reynolds of Transportblog, Mark Todd of Ockham Residential, Leroy Beckett and Sophie Hudson of Generation Zero, as well as social agencies like the Salvation Army and Peter Jeffrey of CORT Community Housing.
.........
So we have a crisis, but why are some of these people also proponents of a larger population?
Penny Bright called Generation Zero the youth wing of the Property Council.
Christchurch has had intensification for years but it is mostly second rate as subdivisions are laid out for single unt houses. A photo essay would show it for what it is.

JH how do we stop having a larger population without becoming North Korea?
Whilst I firmly believe we need to pull back a bit on immigration, we'll need plenty of immigrants to care for our ageing population etc.
At my mother's dementia home 70% of the care staff are immigrants and they are wonderful. We need people like this.

Relax Fritz someone has already baggsed the North Korea name

I'm very relaxed, thank. Just want a rationale explanation as to how you can reduce population, let alone stop it from growing, without pretty draconian ('North Korean') measures.

Really? You haven't noticed that Japan has done it without really trying. It is done by educating women, making sure they have all of the say in their own reproduction and are able to live, work and support themselves in society. When this happens, they simply do not breed as often and they delay fertility (you may have noticed how mothers are getting older), and some may even choose not to breed at all, and not a draconian measure in sight. That is how it is done. Without immigration our population would be dwindling, actually, and while NZ may be able to cope with a few more, the planet most definitely can't.
We either do this sensible way or we resort to our old tried and true, blowing each other to bits, that I would have thought was pretty damned draconian.

And their economy has been really prosperous as a result right?
Also, you ignore the fact that Japan's markedly ageing population can be supported in terms of care, without much immigration, by virtue of the cultural expectation for family to care for elders.
I also hope you do realise that at some point in the next 15-20 years Japan is in big trouble unless their politicians face up to some brutal truths?
Good night, I've had enough of the dumb hippy crap that sometimes enters the fray on this site....

Japan is experiencing exactly the same demographic trends as other developed countries. The difference between Japan and us, Aus, the USA etc is that they don't encourage immigration. Apart from the marginalised Ainu of Hakkaido it's a mono-cultural country.

@ Fritz. "how do we stop having a larger population without becoming North Korea" What an odd comment. Seems to me that with a population smaller than now, we would live very comfortably, with much higher incomes. The ageing thing is not actually a problem, it has been a change from the past, but quite able to be handled, especially if we eliminate the real extraordinary costs which are providing extra infrastructure.

I got from Fritz's comment, what do you do if women are having babies but you want a smaller population?

Actually there are numerous feedback loops that mean that population decline will be a cause of economic decline, it is not only about supporting more old people with fewer young people. Colin Clark’s magisterial 1967 book, “Population Growth and Land Use”, analyses numerous positive feedback loops in economies as populations are rising, that go into reverse when the population growth levels out or falls. The end of growth, either planned or unplanned, spells recession and falling income, not equilibrium at the “status quo”.
The development of free markets and the creation of wealth requires, along with a culture that encourages trust and co-operation; “connections” via transport and communication, between potential participants in exchange and trade. These connections can be the result of proximity (through density), as well as by roads and other transport infrastructure. There is a limit to how much density is achievable as a substitute for transport infrastructure, because the production of low-density rural areas, especially food, has to be transported to the workers in urban industry. There is actually a correlation between the “density achieved” in urban areas throughout history, and the provision of roads in those urban areas.
Population growth is one way in which densities are increased, and “demand pressures” result in rural land being used more intensively and efficiently. Population growth disturbs a certain “status quo” that might have existed previously, where rural production levels were regarded as “satisfactory” to both the producers and the consumers of the produce.
As population densities increase, and rural production increases, a number of efficiencies are realised.
There is increased competition, and reduced oligopoly, monopoly, and monopsony exploitation.
Increased specialisation becomes possible, because of a viable number of customers for the products of the specialist. “External efficiencies” are realised by increasingly networked producers.
Economies are realised in infrastructure, social institutions, and government. Roads, bridges, harbours, etc, can be utilised by increasing numbers of people without capacity increases being immediately necessary. The same goes for churches and clergy, courts and lawyers, hospitals and doctors, other professionals, government bureaucracies, public buildings, educational and other institutions. This also allows for important advances in sanitation and health.
Labour productivity growth occurs, and less additional “capital” is required for each additional unit of output. The utilisation of land and resources previously underutilised, is a “substitute for capital”.
Nevertheless, return on capital increases, AND capital formation is also increased. A rising population results in increasing returns to existing investment, encouraging more investment. Less investments “go bad”, because there is a rising number of customers for whatever products or services the investor and his competitors provide. More production capital is utilised (and even worn out) before it becomes obsolete.
The products that result from new investments, inventions, and efficiencies, are easily absorbed in a rising population; as are the redundancies and relocations that might be necessary. Younger people, of which there are more, are more mobile and receptive to change. The increases in wealth creation and demand, make society more amenable to changes in employment patterns as the result of advancing technology and methods. There are more valuable “positions” to go around, so that change is less regarded as a threat by those occupying positions of advantage.
Younger people tend to accumulate capital, while older people tend to “draw down on it”. Larger families result in pressure on the parents to save more, and on the children to provide for themselves because their inheritance will be split more ways.
A higher population includes both more inventive geniuses, and more people to purchase and enjoy the fruit of those creative geniuses.
A high proportion of government spending is inflexible to rises and falls in population. This spending is more efficient if population is higher. Much government spending is extremely difficult to reduce even when falling population justifies it.
If population is falling, there is much greater pressure on politicians to cheat by inflating the money supply, as the fewer numbers of young simply cannot sustain the taxation levels necessary to keep the government running, apart from the burdens of caring for larger numbers of elderly.
Younger people are rendered less able to save, capital is “drawn down on”, returns on investment decline, more investments fail, investment declines.
Population increases demonstrated beneficial effects in Holland in the 1500′s, Britain in the late 1700′s, and Japan in the late 1800′s. Holland and Japan were economic successes while importing most of their food. A LOWER percentage of the workforce in agriculture, correlates to wealth increases. These increases in population and in wealth, result in a freer, more mobile society.
Ancient Rome in its decadent phase, illustrates the effects of falling birthrates, including increased taxation burdens and monetary debasement. Declining populations, in ancient Rome and in Europe in the 1400′s, brought about a simultaneous shortage of workers, and yet lack of demand. Many people clung to their source of diminishing income, becoming protective and demanding restraint of competition; others had serfdom imposed upon them by the government, their freedom to relocate and change their livelihoods being removed. These seemingly contradictory effects are the result of a reversal of the “virtuous cycle” described earlier, that occurs when population is increasing.
France, in the period from from the Revolution onwards, also illustrates economic decline consequent on falling birthrates. In underpopulated lands, and where population is falling, the people themselves become more “protectionist” in sentiment, and more vulnerable to illusions regarding “planning” and regulation of production and prices. This only worsens the vicious circle of decline.

yes Phil. Japan is an obvious example where population has been basically stagnant the last 25 years, and as a result so has its economy. I'm not sure the Japanese are feeling wealthier now than when their population was actually growing...
They have been better placed to cope with an ageing population without much immigration, than a western country, because of the still widespread expectation for the elders to be cared for by the family.
Whilst, with minimal population growth, it has meant there has been minimal pressure on house prices, there has also been minimal wage growth, so probably most Japanese whilst not feeling poorer don't feel wealthier with limited house price inflation.
It is often said that high immigration dampens wage growth and maybe there is some truth to that. But perhaps very limited immigration - like Japan - also limits wage growth, because the economy does not grow much!
I think the optimal is somewhere between the two.

One thing is absolutely for certain, eternal growth is not sustainable no matter how small it is. This is a finite world. Truth is, we know this now, we know what we need to do, but it seems people are still more concerned about how much personal wealth they may or may not be able to amass should we either stop growing or reduce our numbers.
It can be done, we can still succeed. Just might have to do some things differently and this is where I see technology being able to be used to our advantage, the only problem there is who gets to accumulate the benefits of it.
There is only one thing required to make sure we do not resort to war, and that is the will, that's all.

If an entity of any nature or persuasion says they will never go to war, then they are lost.

Possibly not, but you do your utmost not to.

Japan's population is declining but Tokyo is still increasing at a similar rate to London and San Francisco yet its house prices are stable. See the above graph. So declining population is not the reason house prices stabilized in Tokyo.

No foreign money artificially inflating prices, then, maybe?

Let's be considered and rationale here. I think we will then find you are the one that is being odd.
If we aren't to have a larger population, what do we do to get there? What policy approaches would be required to reduce the population? You need to answer that rationally, rather than throwing unsubstantiated rhetoric around.

- Enforced family planning: one child policy ala China? Because even without immigration we will have growth unless something like that occurs - no thanks.
- Prohibition of internal migration to Auckland?
- Enforced care of elders by their offspring?

'The ageing thing is not actually a problem, it has been a change from the past, but quite able to be handled...' I hope you do understand the maths, the quantum of the issue, in terms of numbers over 80 needing care in NZ in 20 years time? Again, do you expect offspring to be enforced to care for them?

With a mother that has dementia, I know there is no way I could care for her, even if I could afford not to work.

"If we aren't to have a larger population, what do we do to get there? What policy approaches would be required to reduce the population?"

Well stop immigration.

Not that hard is it?

a. No need to prohibit internal migration into Auckland. The net internal movement in New Zealand has been out of Auckland, and has been for many years. Startling factoid for you. Census data posted here on interest.co.nz a number of times. People are actually leaving right now. Those who assume Auckland is some sort of Mecca for New Zealanders should have a quiet think about that one.
b. China. The rules have been relaxed there about family planning. But it's becoming clear there has been a culture change and the one child family thing remains as the choice people make. Interesting that
c. I do understand the over 80s math. We have more of them sure, but also that's because people are healthier. There is always a small portion who die in care, and a majority who die 'out of care'. All that has happened is that the age profile has changed so there are fewer young people for each older person. So more of a burden sure, but not extreme and would be well balanced in a stable population by fewer young people (under 20) needing expensive support and the reduced costs of extra infrastructure.
Doomsday rhetoric about population stability is quite common. Lots of it is just rhetoric.
But yes. Reducing population is not simple. First thing is we need to think what our goal actually is.

I could not agree more with this analysis, the plan is better than nothing but much to restrictive. I now think the whole isthmus should be THAB, 8-).

At the moment large areas right next to the trains are single house even now. To make a difference it all needs to be accessible, at least potentially

"...unfortunately we have doubts the IHP plan will build enough houses, especially affordable homes which will genuinely solve the housing crisis."

I share your concerns.

Auckland's cost structure is anti-building apartments. Our land costs are similar to Sydney and yet our apartments sell at about the same prices as Brisbane. There is no profit to be made here that cannot be tripled or quadrupled by investing elsewhere. There is no profit to be made here building apartments.

There are severe restrictions around urban Auckland and none or very few around the exurbs. Until the high Auckland land cost is remedied everything else means squat. All the so-called intensification opportunities generated by the Unitary Plan, already exist more profitably in other places. Why will you invest here?

Auckland has an RUB designed to be anti-urban and pro-sprawl.

Thanks Brendon and David for a most timely and Interesting article.

My take-aways are:

  • The new Plan is simply a re-hash of the same old Brit-style Town and Country Planning Act shtick which has foobarred the Awkland housing scene
  • It's also crystal clear that economic expertise within the Council is as rare as rocking-horse poo
  • From the comments, it is equally clear that the core economic environment around incentives to develop, has not moved much if any
  • Which will effectively all mean a continuation of the status quo ante: not much volume increase in total builds
  • and certainly no more 'affordable' homes of whatever configuration or location.
  • All thanks to the hideously lop-sided nature of local government consultation processes
  • Allied with an elitist and thoroughly entrenched 'We Know Best' (sorry, Phil) attitude amongst LG planners.

What would break the log-jam is a combination of:

  • Different (faster, cheaper, warmer) building methods
  • Carried out in technically advanced factories
  • Which need volume to justify sunk costs and keep unit costs small
  • Which volume is needed by Generation Live-in-Cars-Garages-and-ten-families-in-a-rundown-house
  • Which needs a concerted effort (UDA's, real Gubmint heft, real billions of dollars) to effect

Which, and of course, ain't gonna happen given current settings.