Part Two

SOURCE Otago Daily Times
5.00AM Monday October 22, 2007
By Geoff Cumming

DTZ’s Ian Mitchell says the situation means a whole raft of essential workers on middle incomes - from teachers to firefighters and police - risk being excluded from the city.

Property Council director Connal Townsend says the availability of land is “an overwhelmingly significant driver” of property price rises. “It’s all very well being purist about sprawl but, if no one can afford to live there, who cares about sprawl? The fact many people can no longer afford to live in this city means worrying about sprawl is a luxury.”

The Property Council has been accused of advocating unfettered urban sprawl but Townsend says its position is more subtle. Easing the city limits would free large footprints of land for commercial and industrial uses. As for housing, easing height limits in the high density zones would make development of small parcels economic. “Verticality is what’s needed.”

Which might not please the neighbours but at least confronts the issue of providing affordable housing within cooee of jobs, social services, entertainment and public transport.

There is, in theory, no shortage of land within the urban limits, says the ARC, which argues soaring house prices have been driven by demand, not supply. The ARC estimates there’s enough land for 16 years’ residential growth within the city limits. Planned extensions to the limits will stretch capacity a further 10 years.

Also in theory, high density development should produce affordable housing. Having more units per hectare means the land cost per unit drops, along with construction costs as economies of scale kick in for extending services such as water, power and drainage.

Economist Kel Sanderson of Berl says higher density, mixed use development brings an affordability bonus: higher incomes. The types of commerce and light manufacturing which suits mixed use supports better paying jobs, says Sanderson. “Continuation of the compact city approach will lead to increasing productivity of the regional economy and increasing relative affordability of housing,” he told a hearing into the Local Government Auckland Amendment Act.

When civic leaders agreed to the growth strategy, planners talked of European-style “vibrant communities where people live, work and play” - mixed use development within walking distance of town centres, public transport, parks and community facilities to reduce reliance on the car.

We’ve yet to see much sign of it. Most of what we’ve got has been piecemeal, with too many cheap and nasty apartment blocks lacking street appeal and connectivity. And leaky townhouses and condos.

Developers blame fragmented ownership, a shortage of large sites and the regulatory hurdles which add to the delays and result in lowest common denominator buildings.

This in turn has entrenched opposition. Council officials surveyed by Motu say the nimby syndrome, coupled with public perception about what is appropriate development in Auckland, is “the biggest single constraint to intensification”.

Most New Zealanders continue to aspire to living in a detached house on a 600sq m section. The expectation is ingrained in our psyche, the ARC told the parliamentary inquiry. But with Auckland expected to house 2 million people within 35 years, being a successful city means smaller sections, more apartments and townhouses - just like Sydney or Melbourne or Manchester.

And tastes are changing. An ARC survey last year found 38 per cent of residents agreed a townhouse or apartment might suit them sometime in the future.

Higher densities will also make public transport work and ease traffic congestion, particularly with rising fuel costs and the need to reduce carbon emissions. It’s equally arguable decent public transport is the silver bullet needed to make higher densities work. Rising rail patronage only hints at the potential; electrification, modern rolling stock and modern stations cannot come soon enough.

What to do? National is promising to streamline the Resource Management Act, reduce council delays and increase the supply of land. Its infrastructure investment plan will “go hand in hand with our efforts to confront the housing affordability crisis,” leader John Key told the Auckland Contractors Federation conference in August. “Is New Zealand really going to stop building houses on the grounds that it will require investment in roads, public transport, sewerage and water systems? National will have more vision than that.”

Housing Minister Carter does not rule out adjustment to the urban limits on a case by case basis. But he is adamant that unfettered sprawl is more costly when you include the costs of extending infrastructure, schools, community facilities, added motorway congestion and pollution.

The housing affordability bill due to be unveiled next month will include incentives for developers to include an affordable housing component in subdivisions. Known as inclusionary zoning, examples are already occurring at Hobsonville and a planned subdivision of former Army base land at Papakura involving Housing NZ, developer McConnell Dowell and the Housing Foundation.

Developers who feared a compulsory quota will be relieved to learn the Government intends only to give councils the “option” of offering incentives - such as granting extra floors or reducing development levies in return for an affordable housing quota of, say, 10 per cent.

But will councils take it up? Auckland City planning manager Penny Pirrit says not charging developers for the cost of extending services raises the question of who pays. Asking existing ratepayers to fund new residential development - and amenities such as footpaths and cycleways - may not be equitable.

Carter touts other moves the Government has made to assist low income earners to borrow for a house and a planned shared equity pilot in Auckland next year.

Some economists say macro as well as micro economic measures are needed. Tax cuts are an obvious way to boost lagging incomes. High lending rates have failed to deter property speculators and a capital gains tax on investment properties would help.

While applauding the Government’s effort to solve the affordability problem, the Property Council’s Townsend says carrot and stick incentives are not enough. A comprehensive debate is needed, involving developers, Government, councils, the design community and residents.

“If the town centre is the future for Auckland then it has to be a place where people want to live, not a place where people are forced to live.”

Says McConnell’s Udale: “If we don’t get a well-designed, attractive city New Zealand will fail. People, and dollars, don’t have to come here and they don’t have to stay here.”

<<< RETURN TO PART ONE