Opposition withdraws support for legislation that will enact the Auckland Housing Accord aimed at providing 39,000 new houses in Auckland over three years

Opposition withdraws support for legislation that will enact the Auckland Housing Accord aimed at providing 39,000 new houses in Auckland over three years

Opposition parties have withdrawn their support for legislation the Government's trying to fast track, which would enable it to enact its Auckland Housing Accord aimed at providing 39,000 new houses in the Auckland region in the next three years.

The Housing Accords and Special Housing Areas Bill achieved strong cross-party support when it went through its first reading in Parliament after the Budget in May, but now, following select committee hearings, opposition parties have withdrawn their support.

A key sticking point has been a clause in the bill that allows central government to take over from local councils the process of designating areas for development and approving developments. See here for articles on the Auckland Housing Accord. 

The Auckland Council has previously indicated it might not sign off on the accord if the legislation is not changed.

However, Housing Minister Nick Smith is still pushing to get the legislation through by September.

The bill still retains the reserve powers for government to directly establish special housing areas and approve residential developments.

However, amendments have been made to the bill that enable "a dispute resolution process" to be included in a housing accord.

"I am disappointed that opposition parties are not supporting this bill when all the research from the Productivity Commission, the Reserve Bank and the IMF on housing affordability shows that land supply must be addressed. The bill was overwhelmingly supported by submissions and their opposition shows they are not serious about being part of the solution to the challenges New Zealand faces over housing affordability and financial stability,"  Smith said.

"This bill is an interim measure while the Government’s long-term work programme on housing affordability beds in. This includes reforming the Resource Management Act, our inquiry into building materials, work on infrastructure costs, review of development contributions and compliance costs, and investment in skills to improve productivity in the residential construction sector.

"The Government will be giving priority to progressing this bill through its final stages. My ambition is to have it in law in September."

Labour's housing spokesperson Phil Twyford said the bill was flawed and wouldn't achieve its aim of increasing the supply of affordable homes.

“It contains no mechanism to ensure affordability," he said.

"It is based on the notion that increasing supply of houses at any price will somehow bring down prices -- which is trickle-down economics at its most dubious—and given current market conditions, it is highly likely any new houses built in the special housing areas will be expensive, and snapped up by speculators.

"Labour would have preferred to see an approach that required a share of new houses in the special housing areas be affordable, as part of a comprehensive package of housing policy," Twyford said.

 

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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104 Comments

Mostly agree Hugh.  I had a number of email exchanges with Michael Cullen back when it started to try to get them to do somthing to stop the growing bubble.  He was totally dismissive.  The left's refusal to support National's moves to break the councils crooked manipulation of residential land supply is totally at odds with the interests of the average Kiwi and gives concern as to what they would actually do if elected.  As you say I think that within the left there are powerfull groups whose self interest come well before the average family.  They need to take more notice of the people who's votes they seek.

Here we go again , with Labour Flip Flopping all over the place. like an Australian mudfish  thats been taken out of the mud 
Just where do they propose to build their 100,000 low cost cook-and- push - houses in Auckland ?
Labour dont have a clear strategy or direction on anything, or if they do they never articulate it clearly so we never know whats going on with them .
Its no wonder polls show  National can rule on their own.

Hugh
I would mind betting that $1000/m figure could be lowered if we had an honest building materials market.  I was in Australia a while ago and surveyed a few prices.  Ignoring the exchage rate our prices are on average twice theirs.

Labour will not be thanked for playing political games with this serious issue
 
It the Nats playing the political games.
 
All they have to do to re-gain cross party support in the House is go back to the bills first reading intent - put in the clauses that legislate for a requisite number of low end/low cost properties to be built in the special housing areas - and take out the Government's "reserve power" to override local democracy.
 
 

Hugh,
It does seem that The Auckland Council and the government reached an agreement in principle. The government are now trying to renege on that deal. Apart from the fact that reneging seems bad form, if they do, then we struggle to know who to blame and kick out when it all turns to custard.
I would prefer that the deal in principle was stuck to; that the Urban plan was given a reasonable chance, and the only real steps required from the government would be to:
Allow some fast tracking of that plan.
Address any building cost issues that are in the reasonable realm of central government- someone else usefully posted for example that many materials are double or treble the cost they are in Australia.
If the government for its own social housing needs requires more houses, then commit to those.
Consider any red tape/legislated requirements of the building code that add to costs that Councils cannot then avoid.
If alternative funding, like MUDs, really do work, then consider a framework for them. I suspect too much would have to change in NZ for that to work, but that is an aside.
Consider monetary demand (and yes, foreign investment) bubble issues and address those.
Otherwise government, step out of the way. If Auckland City then stuffs up, and we don't like the direction the City is going in, we can vote for someone else here. And we would only have ourselves to blame. 
 

Sorry, Kate, the answers are fairly much a combination of the following:  let's give the ol;' record another spin.

  • Do away with the MUL's.  As Hugh and others note, the lifestyle blocks have become the default outlet outside these useless squiggles on maps.  175,000 of 'em - lifestyle blocks are a sprawlier, less productive use of that dirt than a buncha flatpack homes could ever be.
  • Mass-produce houses.  Fletcher's new head honcho is likely to kick this one along.  This could so easily be a great Regional Development effort:  it's no different to any other factory.
  • Type-certify the factory produced builds - no mo' fighting every dumbo Inspector in every tinpot District Council in Godzone as to Why your perfectly standard build should be a matter of extraordinary scrutiny. 
  • Better still, centralise all building inspection across NZ.  Cut the loopy locals out altogether.
  • Lower the boom on the building materials duopoly - the disparity in costs was highlighted by the Productivity Commish and many common taters.  Super-profits year after year are being made...
  • Ban development levies and other development taxes:  these are a great way of loading district-wide costs of dubious utility, on first home buyers, by stealth and by compulsion.  Tony Alexander, BNZ is hot about this.
  • Have a fiddle with GST on new builds to first-homers.
  • Have a fiddle with GST/CGT/Big Kahuna in existing housing stock, to send the message that there is a social component to price rises over time which is gonna be clawed back.  Lotta comments and ideas around all this.

 
There's very little 'politics' (cheap shot) in all of these - the offended vested interest are all across the spectrum.  (Labour's latest blather is really an exposure of their cluelessness on this topic).
 
Question is - which items on this list are really getting attention, and from whom?

Re: lifestyle blocks. I visited a mate out on his little block out in the Canterbury Plains. Down the road and around the corner there was a long road partitioned off into 4 hectare blocks for sale.
 
Really the blocks only made sense in the weird arbitary lines on the map that urban planning in New Zealand has created.
 
The blocks had no community amenties and really you have to wonder what would the harm of allowing those blocks to be smaller and clustered around a 'village' of amenties -a park, shop, pub, cafe etc. Maybe they could have been funded by the MUD model, maybe they could be self sufficient in the important necessities of sewage, water, energy and food like www.earthship.com
 
Really what we are doing makes no sense.

.. maybe they could be self sufficient in the important necessities of sewage, water, energy and food ..
 
And they could!!!!
 
If the landowner who subdivided them into x4 - lodged an application for a self-sufficent, self-contained x400 - I'm guessing it would likely gain consent.  That's the beauty of the RMA - you can apply for a private plan change to build anything, anywhere.
 
These "lines on a map" you refer to only relate to a boundary within which a city/district council is obliged to provide services as far as I'm aware. Perhaps I'm wrong.

It's a fair point that plan administration is not always in the spirit of the legislation. Many councils have jumped through multiple hoops to bend their implementation of the RMA back into something resembling the Town and Country Planning Act. It doesn't take away from the fact that the RMA is permissive and developers can and do frequently triumph in the Environment Court.
 
Pegasus remains an interesting natural experiment. Let's be clear that Waimakariri District Council - where Pegasus is located not Christchurch - did not object to the development. What was there to object to? The original plan was self-contained for services and the town connects to State Highway 1 so it was NZTA that had to approve the connection. Since that time it has been a straight-forward process for the various new owners to arrange vesting of assets in WDC as it turns out they didn't want to be self-sufficient after all. Ecan's ongoing opposition was an embarrassment to everyone else and it's no wonder they don't have councillors anymore.
 
Since Pegasus got the green light the Greater Christchurch Urban Development Strategy specifically promotes rural residential developments (think country villages). Any time a developer wants to build a self-contained village within driving distance of Christchurch it is possible.
 
Hugh I am curious to know what your definition of "financing infrastructure properly" is. In my experience councils have no problem financing infrastructure that's why we pay the rates we do.

 I am curious to know what your definition of "financing infrastructure properly" is.
 
I believe Hugh means "financing infrastructure fully".
 
He wants the abolition of development contributions.

Bulls eye!
 
I was building up to some comments on the easy ride developers got from the Productivity Commission blah blah blah. No need - you've put it in a nutshell.
 
I would still like Hugh and Brendon to give some more detail on what sort of infrastructure should be developed and who should pay.

".....In my experience councils have no problem financing infrastructure that's why we pay the rates we do....."
The hidden reason Councils prefer “intensification” to greenfields development even though greenfields developers make a net contribution to the Council’s coffers, is that they still gouge developers through every orifice when they do “intensification”, on the pretext that the existing infrastructure “needs expansion because of the intensification”.
The argument we hear all the time from the advocates of growth containment, to the effect that “we need to better utilise existing infrastructure”, is an argument made in very bad faith. Developers are still gouged when they do this kind of development…..!
The Council loves this rather than greenfields development because they are double dipping. The infrastructure that is already there, has for decades had rates paid to allegedly fund it, including maintenance and upgrading. But the Council likes to get a windfall source of funds from developers of intensification projects, so they can spend the rates on “other things”.
Two excellent postings by “The Policy Parrot” on WhaleOil Blog. Don’t let the names and the writing style fool you, this is top quality commentary and analysis.

http://www.whaleoil.co.nz/2013/07/why-development-contributions-are-a-crappy-tax-rort/

 

http://www.whaleoil.co.nz/2013/07/bye-bye-excessive-development-contributions/#more-104203

 

The essential reason for not charging infrastructure costs upfront on new houses, is simple social justice.
These charges on new houses, capitalise into the prices of all houses.
If we socked 200,000 kms of "road use charges" into every new car, the price of all used cars would leap overnight too. The "used" market does not differentiate as to the reasons for the prices of "new" being higher.
Introducing upfront charges means that every first home buyer from then on, is paying the fee regardless of where they buy a house, new or not. If they do not buy a new one, they are paying the fee as a windfall gain to the vendor of the used property. 
It would be fairer, instead of charging development contributions to developers, to just hit every first home buyer with a fee to pay for infrastructure, and actually spend this on infrastructure. 
Fairer still, to just charge everyone over the course of their lifetime as they use the services. 

Every new home buyer in a standard subdivision pays for two sets of infrastructure in the price of their section:

  • the greater amount is for road formation, kerbing and channelling, water, sewer and stormwater mains to the section, a neighbourhood park. This is invisible because this is what developers do and what they charge you for
  • the lesser amount through development contributions is for upstream development such as mains/pump upgrades, library upgrades, sports facilities

 
I'm pretty sure any valuer would tell you a house that gets water from the roof, has a long drop out the back and is on a dirt track is worth way less than an equivalent structure that is fully serviced. So you pay up front then recoup when you sell.
 
As for social justice work through a simple example. A council spends $100k extending a water main to a new subdivision. Who should pay for that? Existing ratepayers who don't need that pipe or the newcomers who do?

One reason for the block/village would be its position to generate a livelyhood for each family....we then come down to distance from the employment centres and if a layout like this is the least TCOL (total cost of ownership/living) model.  As an aside, you also need an element of competition, one shop would charge to the limit of what ppl would bear, so you need more etc etc. One way around that would be for ppl to purchase online and the shop be nothing more than a centralised drop off point say once or twice a week.
If the you take the price paid to the council right now I dont see you need MUDs you would have a sum of cash to buy, its just a debt engine.  Ive only just started reading up on MUDs, but they would seem to be a decently sized undertaking, say 10,000 homes and not 20, even 200. 
What do MUDs do? they raise money via debt, to build assets what does a mortgage do?  it raises money to build assets, so why is there a need for a different debt system than the one we already have? I certainly wonder on how just efficient/un-efficient councils are, if that could be fixed then the possible advantage of a MUD that of competition could be removed. Which is atuallyone issue ive not seen addressed, ie do we have any evidence that MUDs are [significantly] more efficient?
If you look at auckalnd's need, say 12000 houses, I cant see why we couldnt do 4 self-contained mini-towns with services built from the contribution levy....and handed over to the council ia a turn key style solution...
regards
 
 
 
 

waymad - I'm not saying I think the Nats proposed Housing Accord bill is the answer to housing issues in Auckland by a long shot. And neither has it anything to do with, as you point out, any of the above.
 
All I'm sayin' is with respect to this bill - if the Nats want cross party support in the House - then they can have it if they stop playing petty politics and take on board some of the advice/criticism it got in select committee. 
 
Why don't they want to improve it? Because affordability ain't what its about anyway, I suspect.
 
Just like the Environmental Protection Authority - nothing to do with environmental protection - all to do with bypassing local democracy. It's Muldoon's National Development Act 1979 revisited.  I mean do you think salmon farming in the Marlborough Sounds is a Nationally Significant Proposal? .. National Party significant, probably, but nationally significant, I don't think so. 

All political parties are as ignorant as each other when it comes to providing a positive affordable housing environment, some are ignorant in thought, and all are ignorant in action.

The MUL and RUB highlight what limited land is targeted and to be sequentially developed and therefore supply is limited relative to demand. This land is effectively held in a monopoly position and prices rise according.

The Housing Accord limits the amount of land released even further, and therefore only exacerbates the issue. Houses maybe build, but not true affordably.

As long as neither National nor Labour are willing to show any leadership i.e. do something unpopular within their own constituencies nothing will ever get achieved.
 
It strikes me there are some easy solutions - it's just that they will inevitably hack someone off e.g.:
 
1. Govt builds multi-lane freeway with rail in the middle from central Auckland towards Hamilton and keeps going as long as someone keeps building suburbs attached to it. Freeway funded by canceling pointless rail loop and second crossing.
2. Auckland Council attaches arterial roads to freeway and allows developers to build suburbs off them. Also designs and builds modular water, sewer etc schemes to be built incrementally
3. Auckland big - rest of NZ small is a given so amalgamate all other councils into 10-12 unitary councils so they can manage down
4. Job done - this man deserves a beer

A MUD is a New Zealand territorial authority without restaurant inspectors. I took a look at some of Hugh's links and I don't get what the big deal is supposed to be. A MUD seems to be an entity with coercive powers to extract money from houseowners to pay for basic services with the ability to provide some social infrastructure such as parks and libraries if they want. The only difference between a Texas MUD and a NZ council is that they don't have to pay for and house the field agents of MPI and DBH that our councils do.
 
There are plenty of NZ municipal bonds sloshing around so MUDs don't get acess to sources of finance that our TA's can't. Given that MUDs and other body corporates would pay more for capital than TA's I just don't get what the advantage is supposed to be.
 
 

The point is "competition" and "choice". It is one thing to say that consumers have "choice" but when there is restriction to entry to the market for "suppliers", the existing suppliers may not bother to try too hard to compete - you have an oligopoly, especially where there is a spatial/locational aspect to the market.
A "MUD" is in effect, freedom for someone else to enter the market for the provision of infrastructure. This keeps councils in the USA honest. Most MUD districts end up voluntarily amalgamating with an existing council anyway. This, however, does not mean that doing the MUD in the first place was a waste of time. 
There is a world of difference between a Council that the residents in a MUD district might opt to amalgamate with voluntarily, and a Council that always did have 100% control right from the start of any new development. 
Councils will protest that residents of a MUD district will behave as free riders on amenities funded by the Council's ratepayers. That will help Councils to focus on "user pays" instead of more and more special interests getting free rides at ratepayers expense. 
You'd have to be crazy to regard NZ's Councils right now as "providing" services with such efficiency that changes to the system, especially of the kind that MUDs represent, would make "no difference". 

Hi Phil - I'm interested in perceptions of the use of the various rating tools - and for this comment;
 
That will help Councils to focus on "user pays" instead of more and more special interests getting free rides at ratepayers expense. 
 
Can you provide some examples of those goods/services which in your opinion council's should convert from say, general rates or fixed charges to user pays?
 

Art galleries. Concert halls. Sports stadiums. Convention centres. Public transport is the "biggie"
But if you run a fine tooth comb over council expenditure, you will find money going to clubs and youth groups and outreach programs and dozens of piddly little things that Councillors could not say "no" to, but which add up. 
I would support user-pays "pricing" of water and roads too but these are leaps too far for this discussion. Let us just say that it would be very very surprising if we did not hit a fiscal crisis sooner or later with so many core services provided "free". Focusing all our argument on urban form and how people should live is just senseless evading of the real underlying issue. 
Yes, we should "subsidise" some things, but we absolutely must use "pricing" to reduce inefficiency and waste. And some things - like concert halls and sports stadiums - should be 100% user pays. They are not an essential and an economic "enabler" like water and roads, which justify subsidy.

Phil this user pays argument is for another day. What you see as subsidy, I see as a public good (in the economic sense). Transport systems, water and sewage all have public good attributes and have to looked at differently than your standard private good.
 
I agree by the way that stadiums, convention centres, concert halls do not fit into the definition of a public good.
 
But really we agree on so many other things, your whole analysis regarding housing I agree with. So lets not muddy the water with bringing in too many issues that just cause unnecessay argument.

I have run the fine tooth comb over a council's accounts for some years. Not the sanitised public version but the 600-1000 pages of spreadsheets that councillors and managers use on a daily basis.
 
No matter how much they may get up your nose community grants add nothing to your rates in a practical sense.
 
I am on record as being against stadia and convention centres. It's up to each community how they feel about museums, libraries, pools etc. They have the opportunity each year and there does not seem to be a groundswell against them yet.

Art galleries. Concert halls. Sports stadiums. Convention centres
 
Yes - but what we're actually talking about here all comes under the broad heading of "economic development" - and the question really is: should LG be allowed to levy rates for projects under this heading - or is economic development the responsibility of central government?
 
Effectively this the same issue as that between "core" services and everything else.  The National Government in amending the LGA initially went for "core" in their media/PR on the reform based on what I perceived to be a return to the three Ws.  But then backed down when they realised all this economic development stuff would be subsequently passed back to central government.
 
Should cities and districts be able to levy rates as a means to "compete" with one another in an attempt to retain a population base and hence attract new public and private sector business? 
 
 
 

Inflation does your wages NET no good though.  Housing is a x2 bubble, so really the problem isnt so much wages are too low as property twice its fair value.  Pay ppl more and hosuing would just get more expensive, NET achieved, nil.
I'll agree its probably too hawkish right now, but its a balancing act...
regards

Exactly, Steven. Thumbs-up from me well earned. Wages are higher in LA than Houston; that doesn't stop house price median multiples fluctuating between 6 and 11 in LA while Houston remains at around 3.
Houston wages might be 80% of LA but the house prices are literally between 50% and 80% lower. 
There is a "rule" that can be confirmed by observation. In the absence of growth containment, over the decades, median multiples will remain at around 3 while sections and houses increase in size and amenity. People are spending what they are confortable with and getting more for it.
With urban growth containment, median multiples will fluctuate from 5 upwards over the decades, with space per home in new developments shrinking. People are spending "what they can stand" and getting less and less for it. 
If you look at the price of land per square foot, the difference is colossal. Dozens and even hundreds of times higher, especially at the most central locations.
 

Ok, lets address just one point, say we me move the urban boundary outwards, say 3km. The artificial constraint of the council is now removed.  That is now however passe don. How do you stop the land owners drip feeding what land comes onto the market and thus holding up prices?
 
 

Yes indeed, a compulsory land purchase at rural/agricultural land price, rather contraversial to say the least.
It would I suspect need a specific law otherwise using any others would be challenged in court.
regards

I would support that if the public really are so implacably opposed to "sprawl". But their beliefs are based on ignorance, not reality. 
Quite a few people like the idea of the self-sufficient village. The "free to sprawl" city actually ends up functioning as a whole lot of self contained villages. People fail to see this, looking at a city 50 miles accross and assuming that "everyone drives 25 miles to work". 
There is no correlation at all in commuting and density data. If anything, the very low density cities - which also have housing far cheaper even though it is larger and on far larger sections - also have shorter commute times than a dense city of the same population level.
NZ cities congestion delays are just a Kafka-esque joke for cities their size. I wish there was commute to work time data available too. 
Auckland's congestion delays at peak are slightly worse than LA, which is the worst in the US (and is the US's most dense urban area, BTW). And how many times more people has LA got? Any low density US city with Auckland's population, has congestion delays half or less what Auckland has.
Wellington, population 350,000, is only slightly behind LA, and worse than every other city in the US.....!  We should be an international transport-planning laughing stock for this. Wellington has New York and San Francisco scale traffic congestion to go with population economies of scale of Boise and Wichita. 

By not having a growth boundary at all. This does not mean that development ends up happening at crazy distances away from the city instead of at sensible distances away from the city, it means that the development ends up happening at sensible distances from the city, at prices which have not been gouged by the land owners.
Allowing people to buy food from everywhere does not mean that no food is provided locally. It does mean that it is provided locally at much lower prices than if you gave the local providers an oligopoly "to reduce food miles". 

Zanyzane, the kind of thing you are envisaging is just a matter of "free market development" in many US urban areas. Look at "The Woodlands" near Houston. 
It really makes a huge difference if a developer starts with farmland he paid $10,000 per acre for. A developer who has paid $1,000,000 per acre for the land (because it is within an urban growth boundary) is going to be a lot more reluctant to sacrifice space to something other than saleable sections, than a developer who has paid $10,000 per acre. "The Woodlands" is an example of the latter. Examples of the former, are the ghastly suburban developments with 10 units per acre crammed in in cul-de-sacs (to eliminate space lost to intersections), footpaths as narrow as possible, roads as narrow as possible, minimal green space or public space, etc. Cycle lanes? Ha ha......
If a developer who has paid $1,000,000 per acre, has to sacrifice one third of the total space to non-saleable uses (and one third is extremely low in real life), it will increase the "raw land" COST of every 1/10 of an acre lot from $100,000 to $150,000. If a developer who has paid $10,000 per acre sacrifices 2/3 of the total space, often voluntarily, to increase local amenity, it will increase the raw land cost of every 1/2 acre lot from $5,000 to $15,000. Developers know that the kind of amenity created by larger lots and plenty of public space per household on top of that, at a cost of only $10,000 per lot, is easily recaptured in the selling prices of the houses built. The cost of infrastructure and services is about $5000 per house higher; also easily recaptured in the selling prices. 
In "The Woodlands", the developer actually gifted developed commercial sites to desirable employers. Jobs-housing balance was nearly instantaneous. 
The result of all this is that mandates for "affordable" housing are superfluous. The decent McMansions are already at prices we would call "affordable" and expect to pay for a poky row-house. And older homes are cheaper still, often in locations well served by long established amenities. Look at some Real Estate sites in US cities with the necessary regulatory freedoms at the fringe. What is the point of building $200,000 poky row-houses in fringe developments, when under a freer-market framework, you could get a 30 year old family home 20 miles closer to the CBD for $150,000? And row-houses and apartments in redevelopments right next to the CBD, where they make sense, are cheap as chips? 

cause its bloody cold mate...
regards

This is a fascinating subject. You should read Ed Glaeser's book "Triumph of the City". Up till halfway through the 20th century, colder places were by far the fastest growing in many parts of the first world. The "sunbelt" only started to boom from the 1950's. Now the colder places - New York, Chicago, the Northwest, the Lakes - are tending to lose people. 
But if you want your national economy to succeed under the global economic realities, you have to let your most desirable locations grow. NZ's productivity paradox is because it has missed out on the "global city" phenomenon that is the driver of most of the growth in the economies of first world countries. 
This really does mean letting Auckland grow, and grow horizontally as well as vertically. 
It does not mean carpet coverage of the landscape - that is what "planning" does. Look on Google Earth at the low density US cities, to see how much green space is left for the enjoyment of everyone, as a city grows, without planners insisting that every square inch is filled in. 
(Those Dorkland planners that "planned" to fill in all parks, schools, cemeteries, etc to meet "housing growth" targets should be sacked for incompetence or even malice). 

There could be explanations for coldest, for instance natural resources to be extracted had already been extracted from warmer climates first.    The Great lakes could well be losing ppl as the production in the rust belt is declining and ppl are moving to where the work is and not necessarily because its desirable in terms of nice to live.
Global economic realities, well the reality is peak oil is going to have a huge impact on the globle economy, probbaly serverly curtail it.   If you look at classic reasons for placing factories it was because of natural resources nearby and/or communications and/or existing manufacturing made this location the most economic.  NZ probably did miss out to some extent on the "global city" but look at whythe global cities are such, ie they have often moved on from the original reason for their location and are now almost self-serving due to consumerism (say) whcih is going to decline severly.
Milk solids as an export, we dont need Auckalnd for that for instance thats locked to the land and spread out.  
Low density cities in the US were built based on the car and low petrol costs, that changes going forward. We have to build denser for public transport, or possibly build low density allowing for per habitate food production....the unknown is where will we end up.  More of how the US did it is a sure fire disaster. PS How many of the MUDs/city authorities cannot keep up with services repairs and are almost bankrupt?  Even the beloved Houston almost went bankrupt in 2009.   Historically some of teh stuff I read pretty clearly had private developers wishing to fill n parks and greenbelts which the councils had set aside, so this does not match what you say on planners...
regards

Can’t remember their names, but there were a couple of books that put down the growth of the Sun Belt down to the affordability of air conditioning (and electricity) and the ability to access water. In some years none of the mighty Colorado River water makes it to the sea, but that’s ok because by then it’s in Mexico!
I don’t think one MUD has defaulted on its bond. And of course Detroit has just filed of Chapter 11 Bankruptcy.

Dale I think these sorts of facts - the Colorado running dry, urban areas only being habitable because of massive energy use for air conditioning make it really difficult to argue why we should want institutions like MUDs that have made that possible.
 
I think in NZ you could design the rules for MUDs to be much more environmentally friendly while still keeping the criteria that allows for affordable housing. If a MUD could be used by a greenie community to set a www.earthship.com or was something that http://generationzero.org.nz/  saw as a step forward would be a good sign the balance was right.

Brendon – MUD’s did not cause any rivers to run dry. Most of the Colorado water goes to states and cities that have nothing to do with Texas or MUDs. Some here mention that for a MUD to work it would have to be thousands of sections in size. The penny still has not dropped for them. The smallest MUD could be one house on a 600 metre section. This size allows almost full independence in sewer, water, recreational area etc. Then there are the economies if scale to small village size etc. but as economy of scale is a U shaped curve, by the time a bureaucratic city and council (as opposed to a non-bureaucratic one) get involved, it starts to lose its economy.

Dale my language was a bit loose I didn't mean to imply that MUDs cause these problems. Just that those sort of environmental problems exist in the US and I think people need to be reassured that MUDs are not a factor in causing them.
 
You are right about the penny not dropping. I was talking to someone with a lifestyle block about how the Council would not allow a new system of composting toilet. The Council's rationale being that being an composting sewage enthusiast might mean he could go 'off grid' sewage wise. But what happens down the line when the property has changed hands a few times and ends up with someone who doesn't have that interest and allows the sewage to pollute.
 
A MUD might be the answer for that, where lifestylers could get together, form a MUD and experiment with different 'off grid' sewage, water and electricity systems with the 'body corporate' MUD being the stable and accountable entity that is responsible for issues like preventing pollution. As Roelof says below MUD are a way for communities to innovate and evolve the technology for providing our most basic services.
 
Kiwis are very concerned about environmental factors. The Greens are our third biggest political party and despite the world dipping in and out of recession oil is $100 a barrel. So there is a logic to there concerns.
 
I think if MUDs are to come to New Zealand and I really hope they do, then we need to show it has advantages for all concerned.

The biggest difference that could be made is by getting housing costs down and stable. Wage increases just get swallowed up in house price rises unless "supply" of housing is allowed to be "elastic". This is always OK for everyone who already owns a house, but makes it worse and worse for first home buyers as time goes on. 
We could have an economic boom, attract hundreds of thousands of expatriates back, and keep young graduates here, if we just built freakin' houses and commercial properties instead of sinking all our discretionary income and investment capital into Ponzi price inflation of the dirt the cities are sitting on. 

and OAPs? wed have to tax more to pay them 5% as well...
You are just chasing your tail I suspect.
We dont have a low wage "policy" we have a low wage sure.  On the other hand when I left London in 1993 my car insurance was about to go up to 1500Sterling, about 3500NZD, same car here <$500NZD, the latter I could pay on my NZ salary, the former on my British salary was a nightmare (PS in fact the UK was on 60% no claims here for the first year I only had 50%).
regards
 

Kumbel I am a layman at this property development/ local authority game but lets see if we can nut this MUD scenerio out, using the hypotheritical villages out on the Canterbury Plains I introduced above.
 
A developer or greenie community decide to build a self sufficient village.
 
MUD rules say once all the infrastructure -say local roads, water, sewage, parks, geotech strengthening etc is done and 1/3 of the houses are built and sold a MUD can be formed elected by local residents. The debt of building the infrastucture is transfered to the MUD who take out a municipal bond to repay it.
 
As I see it this gives four advantages over current practice.
 
1. It encourages speedy builds by the fact the builder gets compensated for their infrastructure build costs once 1/3 of the houses are built and sold, thus there is little difference between the time housing is demanded and the time when housing is supplied. This is a big improvement in elasticity of supply.
 
2. It encourages transparency because the new village resident can do due dilligence on what infrastructure they are getting, what it cost and what the debt repayments are. Compare this to the opaqueness of developer contributions that is current practice.
 
3. It encourages competition, because more than one MUD can be set up, so potential new residents can choose which combination of infrastructure and debt repayments they will commit themselves to. Compare this to the take or leave it attitude councils have regarding infrastructure, rates and developer contributions.
 
4. If as Kate suggests the RMA allows this sort of village to be built on any rural land then the land costs should be some $10,000s a hectare not $100,000s that urban land is going for and this fact plus the above should make village housing affordable.
 
In the US municipal bonds are subsidised by the Federal Tax system but that is not a necessary component of their success.

Excellent, excellent. 
5. It results in the services being provided by the most efficient means for each location. If it is cheaper to hook into the centralised regional supply, that is what will happen. If it is cheaper to get the water somewhere else and dispose of the sewerage somewhere else, that is what will happen.
People never realise just how much decision making in bureaucracies is based on the interests of the bureaucrats. It sounds stupid, and it is very stupid, but it is unfortunately true. Growth of the department, promotions, pay rises, job security, perks - all matter more than the cost effective use of public money, the wider economic interest, and the wider social interest. 
Lee Kuan Yew set up the public service in Singapore, for its employees to serve no longer than 3 years. He was a guru of human nature. 

There is nothing in NZ law that stops this from happening today so why doesn't it?
 
#1 this is probably the nub of it. Who pays the interest and depreciation once the developer has gone scuba diving in Vanuatu? Take a drive around Pegasus - these sections have been selling for seven years. Who would be paying the interest on all the streets, pipes, pumps, earthworks, street lights - the handful of residents who have built?
 
#2 Sorry this makes no sense at all. If your development connects to council services the annual plan lays out ten years of financial projections at a level most private companies are uncapable or unwilling to match.
 
#3 Again it can happen now so why doesn't it?
 
I have no problem with councils loosening up, some serious reviews of what they fund and don't fund but there is no magic fairy dust from Texas that we can sprinkle about to make everything perfect in an instant.

Yes.  Much of the Phil/Hugh discussion reminds me a bit of the anti-flouride campaign as there is alot of misrepresentation going on.  But such going on and on about "fringes" all serves in my opinion to divert attention from the other (likely more important) cause of inflation in house prices - loose money and loose immigration.
 
 

You only have to build, Hugh, if you intend to grow a population.  Folks in Kapiti in their foundation LTCPP (long term plan) - i.e. the "outcomes" document - wanted growth to be constrained.  They liked being the size they were - most folk moved out there from Wellington FOR the quiet life. Look at the place now.
 
Is growth social progress?  You make the fundamental assumption that it is.
 
I'm not sure - but what I am sure of is that it has real monetary costs that in today's economic environment are unbearable not only by present, but also by future generations.

And another thing about population growth.
 
I've been looking at social mobilisation (direct colllective action from below) and it's effectiveness in influencing executive government.
 
The question Bernard often asks about why folks in the US aren't protesting at the myriad of injustices being heaped upon them as a citizenry.
 
I believe their sheer size makes such successful mobilisation near impossible.
 
Here in NZ you can still launch a petition - and it can make an impact both locally or nationally.  You can take a judicial review and set a meaningful precedent. You can threaten a rates revolt and get some attention/action.  You can march from the far North to Wellington and change the political landscape.  These sorts of civil actions against the arbitrary use of power by the executive can be successful in a non-violent way (where both sides are concerned).
 
Proportional representation has made a big difference in NZ - and in my opinion if we keep the population small, we have a better chance of being a more just society going forward than say a place like the US.
 
Being a big fish in a small sea is in my opinion a good thing in a globalised world - small fish in the big seas are more exploited and exploitable as their capacity to act collectively is reduced. 

Kate what is happening is that many places in New Zealand like Christchurch are not working for our young folk and what happens is after giving them a good basic education we effectively send them to Auckland, Australia or the four corners of the world by offering them no local opportunities.
 
I have discussed over the last few weeks about how the lack the regionally controlled resources for proper transport infrastructure and proper vocotional education systems means we cannot modernise past our agricultural based economy. And although there is a lot wealth in our rural areas, for instance Fontera has just put up its milk solids payments, rural New Zealand cannot employ all our kids. Regional New Zealand needs to diversify.
 
But the biggest part of this story is how many young folk leave New Zealand because they cannnot afford housing. Most of the immigrants we have are just to replace the 10,000s of young kiwis that have left. Unfortunately this causes a mis-match between Auckland and the rest of New Zealand. Because young kiwis leave from everywhere while immigrants mainly go to Auckland.
 
So the housing affordabilty problem comes before the immigration problem.

Kumbel – Just because the law says something is legal does not mean that other self-interested parties cannot slow it down enough to negate it, the justice system is another example. They are not allowed to work in NZ because most Councils do not want the subdivision owners to be independent of them as this would show the Emperor (council) has no clothes. The closest we have in NZ to a MUD is a Body Corporate and everything Brendon has mentioned could be done under that type of Model. Jacks Point in Queenstown and La Pointe Subdivision at Marsden Point are examples that work. Pegasus was supported by the councillors and then fought against by the council bureaucracy who applied so much planning gain to it, that any advantage that was gained in buying the land cheap was lost in costs and time. The land also being the site of the historic Kaiapoi Pa did not help.

Great summary Brendon ...and Philbest... these comments are toooo  good to be lost in a thread.... shame they can't reach a wider audience... ( Bernard..?? )
 
This would be the best way for innovation and technology  to naturally evolve and be integrated into new communities... 
Also... it is a great way for the "market" to express its' needs in regards to housing and communities...
Brilliant!
 

error!

I have suggested that Philbest write a whole article in the past. Maybe he thought I wasn't serious. But I genuinely think it would be a good idea.

Dont get me started on DEVELOPMENT CONTRIBUTION  Levies.
I would like some answers about DC Levies and Kyle Road in Greenhithe
What happened to the millions of Dollars paid by developers in DC LEVIES for developing the Northern side of Kyle Road  ?
The Northern section of Kyle Road is a narrow steep dangerous road with no pedestrian sidewalk pavement and the council collected the DC levies to widen the road , and did nothing , and a decade has passed since the development occurred .

Boatman, DCs only came into being with passage of the LGA 2002 - so only a bit over 10 years.  My understanding is, it took many TAs quite some time after that to put their DC policies in place - and indeed many of those initial policies under estimated the cost of growth, and thereby earlier DCs were often set too low.
 
DC levies if collected would have been collected across the growth component of any number of infrastructure projects/activities - not just roading. 
 
You could send off an OIA request to your council to ask for the actual amount paid in DCs for developments in that specified geographic area and they can also break down the actual amounts paid.  Also ask why they did not/have not widened the road.  Council's in the main are quite efficient about responding to OIA requests in a timely manner.

Actually the description sounds more like the older financial contribution. Councils really only have about five years to use a financial contribution otherwise they have to give it back. Worth following up on.

Kate: smiled at that. had to look up what DC's were currently defined as. On the North Shore, where Boatman is, the North Shore councils had for years (going back many years before 2002) extracted DC's out of land developers, something like 10% of the land or an equivalent monetary donation. It was supposed to be for the provision of parks and other public spaces. The monetary solution was particularly useful where sections were developed on the sides of hills or down gullies that were more suited to mountain goats. In all the years I lived there I never once saw a new playing ground or football field or public space provided in spite of the council(s) collecting squillions. Now I see that "neat idea" has morphed into a fee for everything including adding a deck or a shed to your house

Nope, those weren't Development Contributions (DCs) levied under the Local Government Act (LGA) - they were Financial Contributions (FCs) levied under the Resource Management Act (RMA). Two completely different things and you are right FCs could only be used for parks/reserves expenditure (not for roading upgrades).   They still exist and are still charged.  DCs are new (since 2002) and the money charged and collected for them can only be used to fund infrastructure costs that they are specifically collected for (this can include roads/roading upgrades).
 
Squllions?  I doubt it.  Were they used for the purpose for which they were collected - I'm guessing they were even if not apparent to you, as the point is they must be by law - in other words (and Kumbel would be better qualified than me to answer) but RCs are ring-fenced - you can't build a road or fix a reticulation pipe with them - but you can mow a road reserve or a public park or plant trees along a river bank etc. 
 
This is why DCs were introduced as a means to solve "core" infrastructure upgrade and capacity funding shortfalls (meaning existing ratepayer resistance to cover the full cost of growth).
 
RCs are only charged on subdivision consents - DCs are charged on building consents.
 
 
 

  • Financial Contributions (RMA) had to be charged for a specific remediation of the effects of development - could be roading: I have seen examples of FC's collected to seal rural roads. If the money was not used within a reasonable time (five years) it had to be returned
  • Development Contributions (LGA2002) collected via Resource Consents (nothing to do with building as far as I know) go into a big pot to be applied to any growth related project. Not tagged but ring-fenced. Audited twice by Audit NZ: once before going into an annual plan and again at year-end audit.

 
As far as I know both are specifically linked to resource consents.

Agree, a great, great thread.
 
Small note about the DC's and levies which TLA's extract.
 
Their essential feature is that they Don't add into the 'Rates Required' hierarchy.
 
A secondary but no less important feature is that they are typically subject to a Policy statement that would make Machiavelli weep with envy:  convoluted, obtuse, requiring many expensive Legal Eagle's precious chargeable hours to decipher.
 
So DC's etc are, in practical essence, arbitrary, compulsory, expensive and completely out of the political loop.
 
From a Rates perspective, what's not to like?

  • They aren't peanuts.  Before Gaia threw her toys in Chch, DC's were give or take $30m, rates were $295m.  Ask your good selves - what business is gonna volunteer a 10% drop in revenue by waiving or reviewing DC's?
  • They aren't Rates.  Cannot be said too often.  They are staff, developer, consultant territory and therefore out of sight and out of mind (as long as they make their revenue targets)
  • It's also worth noting that a major source of Chinese "data" problems is that their TLA's have thoughtfully set up a great stew of SPV's and other off-budget siloes where the munny boyz can play. All revolve around land:  acquisition, development, sale.  Different country, different scale, exact same concept.

 
I'm inclined to Tony Alexander's view:  ban (easily done by a Regulation) all DC's, levies and other development taxes cooked up by TLA's, for a generation or so.
 
 
 

Someone has to pay. Doesn't matter whether its rates, development contributions, MUD's, tax capitation someone has to pay if you want  to build and use infrastructure.
 
If you think that the new arrival in town deserves a welcome batch of homed-baked biscuits in the form of free water and sewer services just say so.
 
The cost of complying with Ministry of Health and Ministry for the Environment requirements for water services will be the same no matter who pays.

Kumbel for a start that 'new arrival' could be someone who has lived there all their lives and is now of a age to buy their first house. They will not be getting anything 'free' because they will pay rates and taxes.
 
Really your language is emotive and trying to split a community into an 'us' and a 'them'.
 
If the community cannot afford needed amentities then as you say someone has to pay. The fairest way is the whole community pays in higher rates or other taxes. MUDs do that in a very clear and transparent way. Development contributions do it in an unfair and opaque way.
 
And your developer disappearing off to Vanuatu with a big wodge of ill gotten gains is not a factor. If they disapear off before the formation of the MUD then they do not get compensated for their infrastructure spend. Once the MUD is formed, residents will be able to walk round the corner and talk to the chairperson of the 'body corporate' because they are another resident. There is no disappearing off to Vanuatu.
 
Clearly it is in the best interest of the MUD that the remaining sections are sold quickly so the cost of repaying the debts is paid off by a greater number of residents. So there will be some sort of process/gaurantee between the MUD and the developer that the remaining sections will be sold quickly. Developers will not be able to release sections in many stages over many years at inflated prices. A huge advantage over current practice.
 
This will be an important part of potential MUD residents due dilligence.

No I dont agree its fairer, just the opposite.  If existing ppl have paid for what they need, new ppl pay for new/extended  services, they need, simple. 
In terms of MUDs geting sections sold you only have to look at empty sections on google eartth to see that hasnt worked.
In terms of due diligence for MUDs, really you just open up another complex can of worms for no obvious gain.
Empty sections, well just look at how many there are in the US, roads and all services provided, sections empty many years in some cases decades later. 
regards
 
 
 
 
 

Steven the original residents paid for amentities using rates not through up front charges like development contributions until about 10 years ago. So why is it unfair for us to go back to that system?
 
Where is your evidence that you repeatedly state that MUDs are failing. A general point at Google earth is not evidence. Give us some objective evidence or stop making unsubstantiated claims. 

There is enough pieces showing this on the Internet Brendon.  Now are our councils and the system we have any better? dunno, look at Spain for instance their councils would seem to be as bad debt wise as MUDs.
Google earth and articles are enough Brendon to convince me not to vote for MUDs or changing the existing system for what is probably worse.  So really its beholden on you to convince the voters that MUDs are a substantial advantage when I see no evidence they are.
The model changed because it was un-sustainable, rather than incraese rates the cost was broken out into charges to be met by those who wanted the new work, simple.
regards
 

Steven it is you who made the claim that there are many MUD developments with unsold sections and this problem is so big it undermines the MUD model. If you want us to believe this then show us the evidence. Otherwise I for one am not convinced in what you say.
 
A lot of people have shown many benefits of the MUD model. If that doesn't convice you and you will not be supporting it fair enough. But many people seems to be getting it. So I'm comfortable with the arguments I and others have been putting forward regarding MUDs and the housing situation in general.
 
Regards

On the issue of unsustainable of our rates system. It is my belief that is because we have such inadequate transport infrastructure. http://www.interest.co.nz/opinion/65197/brendon-harre-thinks-we-have-problem-poor-quality-and-inadequate-quantity-local-infras
 
Philbest thinks the solution is more user pays, I think the solution is Councils having a larger and wider tax base to provide that infrustructure.
 
In my opinion Councils should be offered greater tax resources in exchange for supporting the MUD model.
 
But really transport is a different problem to housing and an argument for another day.
 
Remember the start of this argument was why is a long road of 4 hectare lifestyle blocks a possibility and in fact a reality but a village with the same number of residents not. That isn't a transport issue.

Energy is driving the costs up, this is what is making it un-sustainable. 
Councils have a monopoly, give them more powers to tax and in effect that strangles business and spending IMHO. 
Housing and transport are the same argument due to the interlinks.  For instance when petrol gets to $3 a litre and $4 a litre commuting longer distances for cheaper housing doesnt work any more (if it even does today), yet we will have put in services that have no use but outstanding debt on. 
Why do councils have to support the MUD model? simple, they do not. Like I keep saying it makes no substantiual sense ie a big advatnage, its merely another way of doing the same thing.
regards

Steven you don't like answering questions and proving your claims....
 
You just switch from one unsubstantiated objection to another... So it is pointless to argue with you because really you are just trying to change the subject.
 
You keep telling others to follow the numbers but that advise never seems to apply to you. 

Brendon put yourself up for council election on a MUD platform lets see how you do.
I follow the numbers, for myself.  I'll say it again, you want change you justify it to the voter ie me. You show me why I should change my vote.  I dont consider I have to justify why I do not, again and again to every right winger with a bee in their bonnet they cant justify.
regards
 
 
 

Steven I have seen a problem in housing affordability and poor infrastructure here in New Zealand and have gathered evidence and wrote two articles so people could be more informed. I am happy with my contribution to society. I know I am not suited to politics.
 
So I think I can ask what are you doing? You see a problem with peak energy/ peak resources. How are you helping people adapt to that?
 
I have ask you what the criteria for an earthship would be and could that be applied to a MUD. To my mind a self sufficient earthship is little different to a self sufficient MUD. But what is your contribution. Do you add anything to the debate or just repeat the same old objections.
 
I think you have found your bolt hole here in New Zealand where you are safe from a resource constrained world. And now you just whinge. Where were you from again? Is this criticism uncharitable?

The whole value of the housing accord bill is it allows the government to say to Auckland council "Get it together on housing - or we will get it together for you".
 
And so they should, because the truth is Auckland, if it has it's way, will continue to destroy housing affordability and the New Zealand economy. Never forget how much Auckland council ALREADY has to answer to. They need nothing less than a stick.
 
And Labour, as it appears, wants to take away the power of the government to hold Auckland (and other) directly to account. Muppets.

Hi Andrew - Yes agree the housing accord may be National giving Auckland more rope. But all the council will do is use it to make a noose rather than a bow. And as time rolls on, the housing situation gets worse. This is about lining up blame prior to the next election. All this could have been sorted years ago.

Some are not making the connection of the Trinity between the price of land, council’s involvement and infrastructure.
1) If council control the process, then they control the revenue.
2) If you have to connect to infrastructure that only council can supply (by mandate) then they can control the process.
3) By having to connect to council infrastructure it identifies which land is next to be developed and it is limited by nature and higher in price.
The main essence of a MUD in Texas is that all land is available for consideration and the councils are happy to let the developer develop the subdivision through its most risky development phase before councils annex it, if they so wish. Section owners have more say in how the subdivision is run through the MUD administration (like a Body Corp).
As the developer has been able to purchase the land at rural value, his financial outlay is far less, as is his risk. Infrastructure funding further helps this so all in all very affordable housing is achieved with very little risk and cost to council and the section owners.

A key sticking point has been a clause in the bill that allows central government to take over from local councils the process of designating areas for development and approving developments. 
...................................................
 
"License they mean when they cry liberty!"
John Milton

"I am disappointed that opposition parties are not supporting this bill when all the research from the Productivity Commission, the Reserve Bank and the IMF on housing affordability shows that land supply must be addressed. 
................................
  at NBR reports:
Last year’s Productivity Commission report looked at the issue, but only in the context of immigrants buying houses.
In that context, it found the main inflow was – again– not from Asians, as Mr Shearer dog whistled at the weekend, but expatriate New Zealanders.
There is, the commission said, “no evidence of an inflow of foreign-born immigrants to an  area impacting on house prices”.
There is, though, “a strong positive relationship between inflows of returning New Zealanders into an area and local house prices (with a 1% increase in population resulting from an inflow of returning Kiwis associated with a 6%-9% increase in house prices)”.
The commission concluded the main cause for higher house prices in recent years is  shortage of supply, driven by a mix of investment nervousness since the end of 2007, plus poor regulation leading to slow consenting processes for new developments and some evidence of high building  costs because of a lack of competition.
..............
However in the local realestate newsletter someone wrote:
"“Once Redcliffs was an unprepossessing fishing village, distinguished by a collection of modest fishermen’s cottages. Most have now dissapeared, replaced by more luxurious residences, and property values have escalated.
It’s a standing joke that we’re being taken over by the Americans and British, who have taken advantage of the stronger property markets in their own countires and favourable exchange rates”
“I know an English couple who have summer here and go back to England in the winter”
“What other parts of the city have such nice walks?….."
.....................................................
what's more the terms of the productivity Commision:
Agree/disagree
agree that Commission’s second tranche of inquiries be selected on the degree that
they:
• are relatively uncontroversial given the desire to establish broad political support for the Commission

.....

Choosing to listen to a PC Productivity commision over the Savings Working Group is a result of the power of vested interests (Property Council, etc) and progressives who favour immigration (Labour and Green party). - Decision making that is unrepresentative.
 

Blaming house price rises on returning expat kiwis is saying a. we haven't had significant immigration by foreign born people b. they don't rent or buy.
In fact we have had the second highest rate of immigration in the OECD and 80% of population growth over the last 20 years has been the inflow of non NZ citizens.

WSJ on Dirt Bonds.
"During the boom years, as big housing developments mushroomed throughout the country, developers worked with local governments to raise billions of dollars for roads, sewers and sidewalks through a municipal-debt security known as "dirt bonds."
Now, as those bonds get tested by the worst housing downturn since the Great Depression, dirt-bond investors are getting a few nasty surprises.
Take a case playing out in U.S. Bankruptcy Court in Florida involving an ill-fated 6,000-home project in Naples, Fla., known as Fiddler's Creek. The investors who bought some $100 million in dirt bonds backed by the project have been hamstrung because of the unusual structure of the dirt-bond deals.
Other dirt-bond investors throughout the country are paying attention. Some observers estimate that about $35 billion of dirt bonds were issued, mainly concentrated in about 10 states, during the real-estate boom.‬"
.....................
at the end of the day you can't have a sustainable economy based on property development. Government policy is stimulate the economy on population growth- money earned offshore  (a foot for the shore) aglomeration effects with a well run free market will increase productivity (a foot on the boat) - and we'll be gone by then anyway.

Immigration and tax breaks for investment in residential property are being cited as the underlying causes of steep increases in the cost of housing over the past decade.
New Zealand now boasts one of the highest rates of home unaffordability in the world as a result of prices rising far faster than incomes, and the government's Savings Working Group blames that squarely on the policies of successive governments.
Although "the favourable tax treatment of property investment" accounted for about 50% of house price increases between 2001 and 2007, the working group said, there was also strong evidence that rapid swings in immigration brought about price-rise "shocks".
There was a sharp spike in immigration in 2001, 2002 and 2003 and, said working group committee member Dr Andrew Coleman, it appeared that property prices did not fall anywhere near as greatly when immigration fell again.
The report added that there was little evidence that immigration boosted local incomes. In fact, the need to build roads and schools meant that net migration contributed to the national deficit.  
http://www.stuff.co.nz/business/money/4622459/Government-policies-blamed-for-house-prices
http://www.treasury.govt.nz/publications/reviews-consultation/savingsworkinggroup/pdfs/swg-report-jan11.pdf

Steven, the challenge you and others have in accepting what Brendon, and others like me say is because it has a completely different rationale to your way of thinking. It is difficult to understand a different logic. This is part of the human condition so is not unique to you, just as I have difficulty in understanding your logic. To paraphrase another, ‘All people interpret what they hear from within their own frame of reference, so what you ‘hear’ is not necessarily what I or others meant. It is your frame of reference from which you ‘understand’ that is getting in the way of you understanding.’
Brendon, because of this, it’s getting correspondingly hard to change norms through debate. To achieve change, it will to easier through action. Although this in itself is becoming problematic as the status quo, in protecting their interests, refuse to provide a level playing field. I think things will have to get worse before a MUD style development will be allowed the opportunity to show its worth.

I find the comment  "I think things will have to get worse" very interesting, ie we dont seem to be getting very far with dealing with Peak oil or AGW yet these are really so big they make arguing over provision of services that will never be provided moot, and for the same reasons.
No its not different rationale, its a different system or method to do the same thing.  Like any procurement you need to be able to compare apples with apples and see a significant or worthwhile gain from it to be worth changing to it.  By this I mean anything less than 5% and certainly 3% is probably noise or imperfect data, there is insufficient gain to make the risk worthwhile.   I  do this quite a bit with systems and applications so Im used to doing some digging. Right now I see no significant advantage of using MUDs to make me want to waste my time looking deeper at them, time is better spent elsewhere.
Also you shoudnt need to show its worth by doing it new.  MUD style provision of services exists it has been used for 100years? 150years? in the USA. in which case there should be some evidence of its worth against other systems.  If you cannot show this you have no argument to replace the status quo IMHO.
regards
 
 
 

Steven, surely you must be joking when you say you see no significant advantage in MUD’s. The evidence of this is easy to see in the price of sections and houses in Texas, less than ½ the cost of NZ houses. Having been involved in development both in Texas and NZ, I have used both methodologies, and the Texas model wins hands down for affordability at any density. And it has been used a lot longer than the present system we use. If you don’t know what you are looking for, you will never find it. You obviously don’t know how to make housing more affordable, if you do, please tell us.

Dale have you noticed that opposition to MUDs is just Steven now. I think the other greenies are reserving judgement. And may in fact support MUDs depending on how they were put into action. As I said before, is there much different between a self sufficient MUD and a self sufficient www.earthship.com?
 
You also have to wonder how green Steven really is?

There is no difference between what a MUD can offer and earthship and as great as the earthship is, MUD’s don’t need any greening or green washing to justify their existence. If the greens cannot see the inherent benefits (which they don’t) of an Affordable Community Controlled & Owned Residential Development (ACCORD) ie a true Housing ACCORD, then they will miss the opportunity for the general populace to voluntarily embrace the benefits of living more sustainably.

Dale there is a big do it yourself culture in New Zealand that has been suppressed by rules and regulations. And if MUDs is something that works as well for developers as it does for a 'do it yourself community' -greenie or otherwise then I think support for them will be great after the penny drops.

An earthship has little need of services, ergo there is no justification for the sizable contribution required by a council....ergo a MUD area for a village of earthships could make financial sense, but no more sense than a council waiving contribution fees....or most of it.  The interesting thing is legal isolation ie if the earthship MUD fails there is no comeback on the council aka leaky homes.....the risk is all dumped on the house owners....thats one aspect of a MUD I like, however again Im sure that could be acieved in other ways.
regards
 
 

Fair comments Steven : )

You know Steven as much as I criticise you and as much as our debates are tedious and maybe it seems like we are making dicks of ourselves I think what we do has value.
 
I believe in democracy, so I believe in public debate. I have learnt a lot from you and the likes of PDK. I think it is good you keep reminding us that one day oil and other resources are going to run out and that will have consequences. Personally I would never have taken much notice of the likes of Jeremy Grantham if I hadn't first been exposed to you and PDK.
 
So go well my friend : )

Brendon...  I think u have let Steven ..."off the hook"....  too easily
I think Steven has actually clouded the whole issue with his comments......  and one can tell that Stevens knowledge in this field of study is  low... ( I'm not having a go at steven ).. 
I'm not expert.... but it makes alot of sense to me when Hugh suggests eliminating artifical boundaries and "financing infrastructure properly".... ( One can see how the current way of doing it actaully capitalizes into house values... )
Rodney Dickens has just put out agood piece....  
http://www.sra.co.nz/pdf/HousingInitiativesAug13.pdf
The current way of doing things is not working....   Developers have not been "stepping up to the plate".... ... 
I have found this thread to be really..really informative...  and appreciate the collective wisdom of Hugh, Phil best... waymad, Dale Smith, Kumbel ...etc...and also your efforts.
So good in fact... that I have been cutting and pasting things into a word document.
This discussion shows the possiblity of a way ..in which there is the "space" for the "market" to respond in "intelligent", "innovative" and affordable ways to the needs and desires of a growing population.... 
 
 
 
 

Roelof I'm not sure if having a long winded debate with Steven means the earlier comments on MUDs get a bigger or smaller audience. It probably doesn't make much difference.
 
What is needed is a whole article on MUDs like you suggested earlier. I'm not an expert so it shouldn't be me. PhilBest or Dale Smith would do a good job.
 
You link is excellent and shows some of the problems that smartgrowth is causing Auckland. Down here in Canterbury the problems are even more stupid. Growth is so constrained in Christchurch that the rebuild instead of happening near the the outskirts of the city are happening 10-20 km further out in Rolleston, Rangiora etc and of course these strange 4 hectare block subdivisions that I mentioned way back near the top of this thread.
 
Smatgrowth in name stupid growth in reality....

... seen the silly 4 ha. lifestyle blocks out the back of Oxford , chewing up productive land so some self-styled gentry can run a pony or two for Jodfrey and Herminie ..
 
50 km + out of the city ..... weird spot to wanna live .... nice view of the alps ....

Well that's the free market for you.  I thought you endorsed it.
If someone can afford to buy a few acres to give thier kids some space and do things they could never do in town, then that's thier buisness. Thier choice.
 

Dale part of my bread and butter is understanding different terms of reference. Often patients that I work with have delusional beliefs that dictate their behaviour. So to understand their behaviour you have to understand their belief system or terms of reference in your words.
 
I get a lot of practice at that so it is a little easier for me.
 
Not to suggest that a Steven or a Hughy is delusional, far from it. But they each have a belief system and to really understand them you have to kinda put yourself in their shoes. You only have to read or watch some Jeremy Grantham to realise there is some logic and evidence to what the likes of PDK is saying.
 
The thing with Steven is if we cut through the BS and face saving arguments. He would admit the peak oil believers do not really know when peak oil hits whether it is better to have high density compact cities that are easy to walk/bike around. Or cities made up of low density villages where people can grow there own food.
 
The thing is that the environmental community have previously commit themselves to the 'smart growth' agenda and now they cannot admit to being wrong or not knowing what the best choice is. So the greenie vested interest is all about saving face.
 
I believe if they had an honourable way out re housing that saved face you could see a big swing in their support for MUDs etc.
 

Lets correct some bull.   Peak oil, ASPO etc works with incomplete data, often hidden bu the Oil industry. What we do know is Peak oil was / will be sometime between 2006 and 2018, but its probable it was 2006. In terms of planning we know moving to another energy source would take many years if not decades.  We have 5 years, so its going to be hard....
After peak oil is an event that has never been seen on the scale we look at now, and we have the most complex and inter-dependant society / economy the world has ever seen and will ever see.  There is no way therefore to determine just how this pans out, or even what the end point will be.
In terms of smart growth that is partially a different argument, so called smart growth usually really put forward by those a little less delusion than the bunch who think we can grow forever.
In temrs of face saving its quite simple I love teh saying, I change my opinions when the facts change, show me the facts and not your opinions. In any event MUDs is as PDK says its just moving deckchairs on the Titanic.
PS belief, no not belief as in bible, belief as in laws of thermodynamics and math, big difference.
 
regards
 
 

Steven when New Zealand hits peak oil. Obviously it has to occur sometime, I make no predictions on when. But something pretty strange is happening to oil prices. But when we do hit peak oil it will the second time in a 1000 years that New Zealand has overshot resources. Last time it was peak Moa. After that we got some pretty extreme adaptations -cannabalism being one. So lets hope things go better this time.
 
Regards

Moa went extinct not peak ie zero, prophetic on your part maybe.
I take it that as per normal we are back to attack the messenger when the message cant be.
I'll give you a 2/10 for managing to stay above some others level a bit longer than most. 
regards
 

No I wasn't attacking the messenger. But now I will, Steven you are a nit picking so and so....
 
Obviously Moa was a renewable resource so it does not 'peak' in the same way a non renewable resource like oil will. But consumption greater than reproduction led to extinction which for simplicity and what I thought was dramatic effect I called peak Moa.

Did the ice age end because we ran out of ice ? ...... " Peak Ice " ....
 
.... one hopes not , our ancient ancestors may have wanted their whisky on the rocks ....
 
And chilled their XS mammoth meat with some slabs of the cold stuff ....

Belief system meaning Weltanschauung. Look it up and maybe you will understand what Dale was trying to say.

World view, perception...interesting, and like Ive been saying worying about what system we'll not be using to continue not to grow really shows a lack of "Weltanschauung" on energy.
 
regards
 

Don't wory about peak oil - we've already got the "electric compliments" ready to go.
The car is with us, peak oil or not, and it's here to stay:
http://andrewatkin.blogspot.co.nz/2009/10/where-are-electric-compliments.html
...and that's just the beginning of what we can do.

Peak electricity , mate , have you thought of that , hmmmmmmmmm ?
 
..... we may be nearer to peak electrical atoms than you think ...
 
Indeed , we may need an urgent parliamentary inquiry to flesh out the ramification of limited atoms on the very planet we call home ..... . it's a worry , I know ....

Well, there will never be a "peak geothermal" power. Even if geothermal costs 2x conventional power (no, it doesn't) we'll still have no problem crusing around in little cars 10x more efficient than the alternatives.
We will see changes in the types of cars we buy, over time, but we will not see the need to implode into high-density living. The latter will be (and is) a politically-driven event of which has nothing to do with real need.