Property Council blasts JAFA NIMBYs

Property

The Property Council blasts Auckland's NIMBYs, backs high rise development

1st Jul 14, 12:23pm by Greg Ninness

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

The Property Council has taken a swipe at Auckland NIMBY (not in my back yard) groups opposed to more intensive residential development in their neighbourhoods.

In a statement released today, the Property Council, which represents property investors, said it was concerned that some community groups were standing against the intensification of residential development in numerous areas of Auckland.

It said the city's population was projected to grow to nearly two million people by 2031 and housing them had to be taken seriously.

Community groups needed to to think more broadly, rather than merely protecting their own interests and established suburbs from change, it said.

"Auckland needs to be able to attract skilled workers and entrepreneurs by offering them viable lifestyle choices, if it was to retain its economic vibrancy," Property Council chief executive Connal Townsend said.

"Pushing people out on to rural boundaries away from commercial centres in the name of avoiding high rises is not rational," he said.

"With those people, jobs and economic activity go as well, taking vibrancy and desirability."

Auckland's Proposed Unitary Plan must not be too onerous, and should avoid policies and provisions that would make development a more expensive and riskier business, he said.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

30 Comments

by James007 | 1st Jul 14, 12:56pm 1404176196

"Pushing people out on to rural boundaries away from commercial centres in the name of avoiding high rises is not rational,"

Did you hear that Hugh P?

by Chris_J | 1st Jul 14, 1:30pm 1404178204

Auckland is over populated and sitting on a time bomb, like the Neapolitans, we have our heads buried in the volcanic ash!

Densification in the heart of the volcanic field is just dense.

Spread out and lower the impact of the inevitable eruption which will likely wipe out suburbs and potentially make Auckland uninhabitable for some time.

by two otherguys | 1st Jul 14, 1:43pm 1404179010

A couple of serious shakes, followed by colossal increases in insurance premiums, will fix that

by Gummy Bear Hero | 3rd Jul 14, 5:11am 1404321075

.... very obviously , you have not encountered many Aucklanders in your wonderful life ...

If you had , you'd be keeping mum about the fact they're sitting atop 29 potential volcanoes ...

.... " sleeping dogs " old buddy ... leave 'em be ...

by kiwichas | 1st Jul 14, 1:47pm 1404179273

Do the Councillors of the Property Council live in high rises in GI with no car parks??

Karaka mansion and helicopter more likely!!

by Craig | 1st Jul 14, 2:12pm 1404180750

That piece reads a lot like 'we want to make more money and you won't let us'.

I am sure the owners of the houses in question have very good reasons to oppose the high rises, they may not even agree that 2m people in Auckland is a good idea even.

by Averageman | 1st Jul 14, 3:25pm 1404185108

Agree with Craig. Article is a bit compaining. If you have brought up soon to be rezoned hi density land, and then run into the RMA tough luck. Expect a holding period while the new plan comes on line, and developments get bashed up through lawyers. Its call RISK for a reason.

That said, Auckland has to grow upwards as well as outwards. If your selling - win!, If the appartment tower is next to your inner city villa, then either no more nude sunbathing in the back yard, or no more winter sun depending on where it is built in relation to you.

by Spinach | 1st Jul 14, 3:34pm 1404185653

Just to generalize a little bit, Aucklanders would be a good approximation for the rank and file of the flat earth society members. Their view really is limited to the boundaries and resistance to outside ideas is very prevalent.

My hope is that as improved data services translate into more decentralised business, that CBD's can no longer command the higher rental and the land hoarders there see their capital diluted. The flow on may be that city suburbs become considered crowded and less desirable places to live.

Having lived and worked throughout NZ, including Auckland, a great many places are more attractive to me for many, many reasons. The Jafa's are welcome to their bubble.

by xingmowang | 1st Jul 14, 4:28pm 1404188890

Auckland needs that level of intensity to be creative, innovative and a safe nest for productive companies, trust me on that.

by two otherguys | 1st Jul 14, 5:34pm 1404192860

Running, jumping, standing still

Why advocate something that hasn't worked, doesnt work, and won't work

10 years of absorption of increased population due in large part increased migration, annual GDP has merely increased at a rate commensurate with the increase in population, while Per Capita GDP has not increased, (zero benefit to the incumbents) while at the same time the quality of life has diminished (for the incumbents) as more and more people share the same limited land area, infrastructure and services. Talking about Auckland, you can only squeeze so much into a proscribed area. It's past that break-point now.

What's the point ??

by Basel Brush III | 1st Jul 14, 5:24pm 1404192283

"Trust me on that" ???

We should never trust anyone on 'life affecting' decisions.

Trust no one and don't be disappointed.

by Chairman Moa | 1st Jul 14, 6:00pm 1404194448

Funny that we trust politicians by voting them in

by jh | 2nd Jul 14, 9:56am 1404251795

Auckland needs that level of intensity to be creative, innovative and a safe nest for productive companies, trust me on that.

.......

No.

Can you point to the number of high value export industries Auckland is producing (other than building and construction)?

According to the Drivers of Economic

Growth in Auckland

A report prepared for the Royal Commission on Auckland Governance:

There is robust evidence to support the view that larger city/regions are more productive

than smaller ones. In addition to international evidence, several local reports have

recently identified these agglomeration benefits. In our view, the best of these reports

was written by Motu researchers. It found evidence that “localisation” increases

productivity but that “urbanisation” decreases it. Localisation refers to physical clustering

by similar firms, whereas urbanisation is defined as the co-location of diverse firms. This

is an internationally unusual result, and may suggest that greater attention to clustering is

warranted in Auckland.

Given that agglomeration economies appear to exist in Auckland, the size of the resulting

benefits is of interest. There is a wide range of size estimates internationally, with most

suggesting that doubling the size of a city will increase productivity by between 3% and

8%.

Any productivity boost would help Auckland firms compete more effectively against those

in other locations. However, considering the official projection of population growth in

Auckland (43% over the next 24 years), even elasticities at the top end of the international

range would result in (agglomeration-sourced) productivity gains of only 3% in total,

spread over the next two decades.

Moreover, agglomeration also brings added costs. Large cities also contain forces that

drive people away, and there is some Auckland evidence of such an effect for older

working age people in our report on the composition and scale of Auckland’s economy.

The literature identifies land constraints as a key source of forces pushing people away

from cities, and show up in land rents, the cost of commuting, and congestion. The

resulting trade-off between the costs and benefits of greater population densities is an

issue for regional government, impacting primarily on land-use and transport policy.

These are matters on which some policy coordination is clearly warranted.

In summary, based on the available evidence, it seems clear that modest agglomeration

economies will accrue gradually in Auckland, but they will not be a causative force that

will transform the regional economy. Moreover, a larger and more dense population on

which they rely also imposes costs, notably in the land markets.

by Basel Brush III | 1st Jul 14, 5:36pm 1404193015

Why not let the market determine the viability of multi storey development by putting a price on it?

My suggestion would be for the owner to pay every neighbour including the local body a dollar amount based on common boundary shared multiplied by the number of storeys requested.

Wonderful windfall for the adjacent owner unless they also wanted to develop later when they would pay a similar amount to the then owner or owners.

Payment to the Council could be in place of development contributions.

by Basel Brush III | 1st Jul 14, 5:44pm 1404193468

It would also incentivise the developer to purchase the adjacent land and aggregate rather than pay up.

Example would be $5000 x 50 m x 4 storeys = $1m

Money machine !

by jh | 2nd Jul 14, 10:10am 1404252657

The Property Council says: the city's population was projected to grow to nearly two million people by 2031 and housing them had to be taken seriously.

........

because of intensive lobbying ( by the Property Council) for more immigration even though 20 years of high immigration hasn't done us any good.

by bob | 2nd Jul 14, 10:14am 1404252850

Roughly 2/3 of the growth in last 10 years is from natural increase. Stopping all imigration won't stop growth.

by jh | 2nd Jul 14, 10:48am 1404254885

Population growth is government policy. It has been to more than replace departing New Zealanders with migrants.

Michael Reddell (Reserve Bank) argues that departing NZr's (to Australia) act as a safelty valve on the economy encouraging employers to become more efficient or pay hihgher wages.

He also notes that 80% of population growth over the last 20 years has been non NZ citizens (when you take out NZr's who have a right to return). He points out that all the infrastructure required for a larger population must come from taxation from our low wage economy and this has forced up interest rates and the exchange rate crowding out business investment in productivity (and incomes).

by bob | 2nd Jul 14, 1:29pm 1404264562

That's interesting, this figure doesn't relate to data at http://www.censusauckland.co.nz/. I suspect Mr Reddell has made a cockup (hard as it is to imagine). The graph is same as SNZ data, but I think should read migration as a '% of natural increase' as opposed to '% of total population growth':

http://www.stats.govt.nz/browse_for_stats/population/mythbusters/popula…

In the peak year SNZ example (2003) there's 43,000 migrants versus around 30,000 natural increase which means migration is around 140% (matching the Treasury graph - so presumably we're using same figures). BUT once you average these figures to 80% it doesn't mean 80% of our population growth has been migrants. That would mean 80 migrants and 20 natural increase for every 100 person increase, but actual figures stated is 80 migrants for 100 natural increase.

The 80 is out of 180 not 100 so actual figure would be 44% - very different to 80%.

by bob | 2nd Jul 14, 1:38pm 1404265136

Another way to look at it - Mr Reddell's 2003 peak is150% of total population growth. So he's saying in 2003 immigrants were 150% of total population growth. Therefore if total population growth was 100 people 150 of these were immigrants - kind of impossible no?

His graph can't go above 100%.

by two otherguys | 2nd Jul 14, 11:20pm 1404300053

No bob, not impossible, in fact, mathematically very possible.

by bob | 3rd Jul 14, 10:29am 1404340168

I understand that if more kiwis leave than there's natural increase then number of immigrants will be greater than 100% of total population growth. But the way these statistics are presented makes it look like there's very little natural population growth which is not the case.

by iconoclast | 3rd Jul 14, 10:32am 1404340341

You are changing the rules

Your first post referred to Migrants (meaning inbound migrants)

In your second post you changed it to net-migration (arrivals - departures)

In the case of your first post, if you take into account departures it is possible for population-growth to be negligible or even negative, while inbound migrants to be positive. In other words if departures are equal to or exceed arrivals you can get to infinity

by jh | 2nd Jul 14, 2:27pm 1404268033

"And 80% of our population growth in the last couple of decades has been the net

inflow of non NZ citizens - thus almost purely a matter of discretionary policy

choice."

.....

total population increase = Births - deaths + net migration.

Net migration = (net migration NZ citizens - net migration Non NZ citizens). He does this because immigration by non NZ citizens is discretionary government policy.

Continues:

"Government policy interventions can act to stymie successful adjustment -

and I believe this to have been the case in NZ over the last two decades. Our negative

NIIP position is larger, our real exchange rate is higher, our real interest rates are

higher, and our capital stock per worker (and associated perceived business

opportunities) are lower than they would have been if we had simply let the selfstabilising

behavior take its course. As John McDermott’s slides showed earlier, that

adjustment was working prior to the mid 1980s."

http://www.treasury.govt.nz/publications/reviews-consultation/savingsworkinggroup/pdfs/swg-report-jan11.pdf

by bob | 2nd Jul 14, 2:50pm 1404269440

According to Stats NZ link above "... New Zealand has never experienced a natural decrease." As you state total population growth = natural increase + net migration. Given that natural increase has always been positive how is it mathimatically possible that net migration can be 50% more than total population growth?

by jh | 2nd Jul 14, 11:03pm 1404299020

Figure 17 tells the story. The net outflow of New Zealand citizens fluctuates (with the New Zealand and foreign business cycle) but has been negative for several decades. The average annual outflow - around 0.6 per cent of the population over the last decade - is large by international standards. But it is now typically more than offset by the increasing number of net arrivals of non NZ citizens: from around 10000 in the period prior to the reforms, to something closer to 40000 per annum now. The difference makes a material macroeconomic difference; on average, for example, equivalent to around half New Zealand’s house-building in a normal year. As a share of population, the average net intake of non-New Zealanders is one of the largest anywhere; directly as a matter of policy choice. The net inflow of non New Zealand citizens has accounted for around 80 per cent of average population growth over the last two decades.

Page 33

The long-term level “misalignment” of the exchange rate:

Some perspectives on causes and consequences

Paper prepared for the Reserve Bank/Treasury exchange rate forum

Wellington

26 March 2013

Final version: 19 April 2013

Michael Reddell1

by jh | 2nd Jul 14, 10:34am 1404254090

Given that the goal of immigration has been to generate economic growth, it is interesting to

compare the economic performance of Auckland to the rest of the country. Figures from the

Ministry of Economic Development (2005) on Auckland’s economic performance are not

impressive and do not reveal any benefits from the migration flows. Between 2000 and 2004,

the nation’s average real GDP growth was 3.5% but Auckland only enjoyed 3%. Auckland’s

GDP per capita was $30,750 in the year to March 2003 compared to a national figure of

$32,100. Auckland has 32.2% of the nation’s population, but only 30.9% of nominal GDP

and 30.3% of the labour force, indicating higher dependency ratios. Although Auckland is

the largest region, it is only the fourth ranked location for foreign investment. Figures from

NZIER(2006) are more positive, no doubt buoyed by the infrastructural expenditure

mentioned in the last section of this paper. These figures provide an average growth of Real

GDP of 3.6% between 2000 and 2005, slightly above the national average of 3.6 but much

below that of other main centres (Canterbury 4.5 and Wellington 4.3). Nevertheless, there

appears to be a broad consensus that Auckland is not achieving desired rates of per capita

income growth (Skilling 2006, Auckland Regional Council 2005).

Dr Greg Clydesdale

Growing
Pains: The valuation and cost of human capital

by two otherguys | 2nd Jul 14, 10:41am 1404254511

That is correct

GDP is growing at a rate commensurate with population growth, as it should.

However on a GDP Per Capita basis, it is not growing at all, which demonstrates that immigration is not bringing with it the supposed benefits to the country or the incumbents.

What's the point of it all?. The central planning boffins need to change their tune

by jh | 2nd Jul 14, 12:54pm 1404262479

This is interesting (Toronto):

Yet as Figure 2 clearly indicates, household growth was sustained through

immigration, which accounted for 78 percent of net population growth from 1986

through 1991 and 93 percent from 1991 to 1996 (Bourne 1998). Immigration gains of

about 70,000 a year over this decade were not far behind those of New York in the 1980s

(Waldinger 1996). These trends steadily match the climbing price gradient from 1986 to

1989, but continued at high levels while the housing market crumbled during the deep

recession of 1990-92, with GDP stagnant in 1990 and 1991, while unemployment

exceeded 11 percent in 1992. Why should immigration continue to rise during a

recession? Several factors seem to have been at work. First, and most important, the

federal government abandoned its policy of regulating immigration according to the state

of the economic cycle; high entry levels were declared for a five-year period regardless of

the condition of the national economy. Consequently high entry targets were sustained

during recession. Second, the movement of immigrants is only imperfectly related to

local economic conditions at the destination as American researchers have noted

(Waldinger 1996; Frey 1996). Economic migrants have a medium- to long-term horizon

and are prepared to wait out immediate economic downturns, while refugees – and

Toronto is by far the major refugee destination in Canada – were arriving in response to

immediate circumstances in regions such as Somalia, Sri Lanka, Eastern Europe and

Central America where civil war made survival a primary motive for movement. The

result is that while immigration was the principal new demand impulse during this period,

it shows only a low positive correlation against price changes in the housing market. The

data support the inference, however, that without the very high level of housing demand

sustained by immigrants in the early 1990s, the collapse of Toronto prices would have

been much exaggerated, perhaps precipitous. This is of course why the development

industry in Toronto and Vancouver (Ley 1995, Mitchell 1996) has lobbied so hard for

sustained high immigration levels.

by jh | 3rd Jul 14, 8:38am 1404333507

The Kiwi (Once Was) lifestyle isn't just about a house and Garden. It was about a House and Garden close to the Town Center.

O.K so suppose we switch to lovely apartments. It is unlikely to be win:win. The reality is that a zoning change is a windfall to investors and a loss to those who loose sunlight and ambience.

Of course when the young people have children we have to build for them, but this isn't about natural population increase it is about immigration policy based on dubious economic and social grounds.