Thursday, May 19, 2016

Auckland and the Opposion - now I'm more positive

Phil Twyford, well done sir. 

Best news I've seen in a while.  Ending Len Brown's RUB is much better than keeping it.

Wednesday, May 18, 2016

Auckland and the Government - a pessimistic prediction.

Nick Smith, Minister for Housing has just signaled that he is going to force council to open up more long-term land for housing supply.  On the face of it this should be great news for Auckland.

However I am a pessimist and a cynic.   Cynical zero sum politics say the Nats and the Council politics align around keeping land costs high. 

I believe Nick Smith is going to "force" our Lenny Penny council to open up even more exurbia.  

More exurban land is more sprawl and more cost.  It will suit both their cynical politics and screw over Auckland.  More exurban sprawl will not help Auckland. 

What is required is more land added to Auckland City.  Auckland City is the biggest city in NZ, it should be possible for our politicians to work out where it is and where it isn't. 

Monday, May 09, 2016

A Tale of Four Cities

As a million plus city it is interesting to see how Auckland is doing and where it stands against comparable places.  Auckland is in the Australasian region and the three closest million plus cities are Sydney, Brisbane and Melbourne.

In the post-GFC construction boom differing policies have caused these cities, which all suffered from housing shortages pre-boom, to start building faster. Auckland Council has decided to make Auckland the most expensive place to build and we can see the results. 

Auckland - housing shortage forecast to extend until 2028*
Sydney - housing shortage may to extend until 2023*
Brisbane - housing shortage forecast to extend until 2018
Melbourne - housing shortage may to extend until 2018

* optimists are expecting a downturn by 2025, pessimists by 2022.  In the event of these predictions being true, Auckland faces a structural housing shortage and rent rises for a generation. 

Monday, April 04, 2016

How Awful must the RUB be to "Work"?

The PAUP with it's RUB is Auckland Council's plan to create an abnormally large sprawl growth over the next 30 years.  Auckland City as a modern city of 1.5 million people cannot sustain a sprawl rate of much more than 30% by normal means.  This is not nearly enough destruction of rural Auckland or creation low density car-centric sprawl to satisfy Auckland Council.  The PAUP is to create pattern of 40% sprawl development. 

So the Council drew the RUB very tight to Auckland and very loosely around the exurbs.  This makes the cost benefit case more favourable to exurbia by making the city cost more.  The RUB creates massive exurban growth at a very high cost. 

To achieve its exurban goals the Auckland Council needs to convince people to want to build in exurbs, which people generally are opposed to do.  This means an increase in land cost in Auckland City.  Within the context of normal urban growth, allocating 70% of new building (280,000 homes before 2040 at $350,000 additional cost) within existing city means a total of $98billion.

Auckland Council has imposed an $100billion barrier against urbanisation and in favour of sprawl.  . 

Monday, March 28, 2016

Maximising Urban Limitation

Auckland is a city.  Auckland has a centre, inner suburbs, outer suburbs (which contain the peripheral and hubs of Manukau, Waitakere and Takapuna) and eventually an extremity of its suburban development.  This extremity of its suburban development is called the Metro Urban Limit (MUL).  Outside of the MUL are some low density Auckland exurb towns.

Auckland was a growing city expanding upwards more and outwards less. Then we merged the governance of Auckland and all its surrounding areas to form a Super City.  Elections were held - Len Brown became mayor, along with Penny Hulse as deputy mayor.  After the merger the whole of Australasia entered a construction boom with a multitude of apartments being built everywhere - except Auckland.

Len Brown and Penny Hulse killed development in Auckland by doing one simple thing - constricting expansion of the city way below that required for growth.  Implementing this Auckland Plan they restrict the greenfield expansion of Auckland City to less than 10%, whilst expanding the surrounding exurb towns by adding 80% - 120% greenfield to each of those areas.

The natural rate of expansion Auckland had been 25 - 35% greenfield and 65 - 75% intensification for about 25 years prior to 2010.  The Auckland Plan states that the council wanted this to continue, but suddenly cuts off the 30% land supply required to sustain the growth, reducing it to 9%.  The plan takes that 21% greenfield development reduction land of Auckland City and spreads it across the Auckland exurbs.

The Auckland City Council treats the city and the exurbs as one continuous entity.  Which is a very weird position to take. 

The Auckland Plan states that it expects the city to develop 70% intensively and 30% greenfield.  The Auckland Plan then restricts greenfield Auckland City land expansion to 9%, directing most greenfield to exurbs and states that it expects that the 70% intensification will continue.    This means the Auckland Plan calls for 91% of development in Auckland City to be intensification.

The historical natural market has intensification 70% to greenfield (largely single dwelling) 30%.  The regulations entrench a 91% supply intensification and a 9% supply greenfield.  The result is obvious - there is anticipated over supply of intensification and a shortage of low intensity greenfield.

This has two easily observable effects:
- Prices of single dwelling will increase.   As single dwelling is highly land inefficient, but highly valued - land prices will rise.
- Prices of apartments will be suppressed on expectations of over demand.  As the cost of land increases, but price remains suppressed, the rate of apartment construction becomes very slow. 

Saturday, March 19, 2016

Lenny & Penny said the City is Sprawling

In the decade prior to 2008 Auckland added 20,000 plus apartments to its central areas, the start of a phase of intensification that looked set to continue.  Auckland had a growing amount of intensification and was reducing the proportion of outward expansive growth to the lowest ratio seen in a century.

Yet in the decade after 2008 we are due to have a mere 5000 additional apartments built in our central city.  Overall growth has slowed to a crawl, but is dominated by single dwelling sprawl.  We are predicting a housing shortfall lasting towards the middle of the century. 

This is all the result of a truly awful policy platform of the Council led by Len Brown and Penny Hulse.  The platform has destroyed intensification and created never before seen sprawl. We are now sprawling our development outwards in Warkworth, Orewa, Kumeu, Pukekohe and Pokeno.

Ironically, Lenny Penny got elected on the zeitgeist of the time - when intensification was booming and sprawl was slowing - they promised to intensify Auckland faster and slow sprawl to nothing.  Then they implemented policies that have stopped intensification dead and sprawled over far horizons .

Lenny Penny said the city was sprawling, it wasn't. 

Sunday, March 13, 2016

Len Years For Auckland

From 2011 to 2016 has been the largest ever residential construction boom in Australasia and CanadaEverywhere that is growing is reaching record highs or surpassing those and moving ahead by 20 - 40% higher peaks.  Low interest rates and capital inflow from China have been used to construct buildings and kick-start economies

Except in Auckland - where we are merely approaching our previous highs of 2005. 

Why are we so bad?