Akl Unitary Plan: the good, the bad & the debatable

39 comments on “Akl Unitary Plan: the good, the bad & the debatable ”

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1. Green Viper 1

   17 March 2013 at 11:51 am

   Regional development is all but dead in new Zealand. Auckland’s Mayor and Deputy Mayor are both proselytizing growth in Auckland when we should be talking about dealing with the death of small town New Zealand. Real long term vision not piting Auckland against the rest of the country is what’s needed – not short term arguments that enable the Mayor and Deputy to grandstand.
   • Colonial Viper 1.1

     17 March 2013 at 11:58 am

     2M people in Auckland by 2035, a smidgeon under 40% of NZ’s total population in 0.3% the land area.

     While, as you say, small towns and cities all through the provinces struggle and struggle.
     • Pete 1.1.1

       17 March 2013 at 1:32 pm

       I read an interesting article yesterday calling for the Reserve Bank to increase loan to value ratios in Auckland, but keep them low in other centres. This would keep Auckland house inflation in check through reducing the amount of capital available to borrowers for their mortgages. It would also encourage people to consider moving elsewhere, reducing the growing demand on Auckland’s infrastructure. Plus if the Reserve Bank is the one who does it, then the political risk would be minimal compared to the government pissing off Aucklanders.
       • Colonial Viper 1.1.1.1

         17 March 2013 at 1:41 pm

         Clever thinking
       • The Chairman 1.1.1.2

         19 March 2013 at 11:44 am

         The notion (regional LVRs) has merit and would largely make a capital gains tax (and the risk it carries) redundant.

         However, first home buyers would have to be exempt.
   • karol 1.2

     17 March 2013 at 1:30 pm

     I don’t know that the mayor and deputy are grandstanding. They are fulfilling their allotted roles. However, I think the focus on growth, and growing Auckland is a bit misplaced.

     I agree with their focus on keeping Auckland compact. However, I also agree that they should be coordinating with regional provisions. Isn’t this the responsibility nationally of Chris Tremain? And will he do anything other than endorse Joyce’s priorities, as expressed in the House in February?

     Joyce’s idea of regional development is Ultra Fast Broadband, oil and gas, Wellington film industry, and RONS.
   • ghostrider888 1.3

     17 March 2013 at 1:35 pm

     Yes Green Viper. Yes
2. DH 2

   17 March 2013 at 12:51 pm

   “However, I am a little concerned about the 18 storey upper limit, and about the possibility of it becoming widespread.”

   Do you think it too high or not high enough Karol?
   • karol 2.1

     17 March 2013 at 12:56 pm

     Too high. I had envisaged something like up to about 6 storeys around New Lynn and similar Auckland suburbs.
     • mickysavage 2.1.1

       17 March 2013 at 1:03 pm

       Interestingly there is no height restriction right now and the Plan is the first to set limits. I am comfortable with high rise very close to the train stations although this should level out as you get further away.
       • karol 2.1.1.1

         17 March 2013 at 1:21 pm

         Yes, micky, I don’t mind so much if it’s kept to one or two fairly high rise buildings near the station – that was what I meant by being concerned about it becoming widespread.

         I guess it hasn’t been an issue before because the buildings were never that high.
       • Draco T Bastard 2.1.1.2

         17 March 2013 at 1:59 pm

         I have no problems with the height just so long as it’s done well enough so that sunlight isn’t blocked from the ground too much and that there’s enough green space to go with it. I am fully against the concrete jungle type that we see in L.A. and Manhattan.
     • DH 2.1.2

       17 March 2013 at 1:23 pm

       “Too high”

       Ok. It does sound pretty high but you might want to look into the numbers for affordable housing sometime. In most built-up areas you need to buy both land and existing dwelling to build apartments. The dwelling has no value in that case, it will be demolished, but you still have to buy it to get the land below.

       It’s very expensive land and I can’t see 6 stories being enough to amortise the cost of the land down enough for an apartment to be what we here would call affordable. I don’t know New Lynn prices but I’d think you couldn’t buy the land & dwelling(s) for a 6 story block for under $1million. At that price you’ve got a land cost of $166k per unit there already with improvements to come.
       • ghostrider888 2.1.2.1

         17 March 2013 at 1:36 pm

         they must go up (not down to Wellington) for approvals
       • karol 2.1.2.2

         17 March 2013 at 1:40 pm

         I don’t know about the cost of the land and who has owns it. here are some prices for the apartments about to be built in the 6 storey block at the centre of New Lynn – they are selling them beforet hey build them:

         NZ Herald article: apartments selling from $246k.

         Barfoot and Thompson (who have somehow made the Library and CAB building to the right of the block disappear:):

         Realestate.co.nz gives details of the kinds of apartments on offer:

         Freehold Unit Titles, comprising 1 bedroom, 1 bedroom plus study and 2 bedroom options, 110 units in total and 100 units with balconies and great views not seen before from buildings in New Lynn.
         Priced from $246,000, they all include window furnishings, whiteware as a bonus!

         Some for $400k.
         • DH 2.1.2.2.1

           17 March 2013 at 2:07 pm

           So cutting through the RE sales BS it’s $246k for a tiny 47m2 one bedroom apartment. $35k extra for a carpark!!

           25yr mortgage of $250k at 6% is $486 a week. Plus unit fees. A lot to pay for a single brdm unit, as an investment the rent wouldn’t be much less.

           The Herald article notes the bodycorp fees average $1786 a year. They’d go up with inflation too whereas the mortgage doesn’t. $1786 is an extra $34 per week – $530 a week for a 1brm, $584 if you want to park your car.

           It’s housing for the middle class. At 14 stories the units are grossly overpriced in relation to what they cost to build, developer is making a killing on them.
           • karol 2.1.2.2.1.1

             17 March 2013 at 2:17 pm

             Thanks. Interesting analysis. So we wouldn’t want to see too many of those sorts of apartment blocks.

             I think more terraced style housing, or 2-3 storey apartment blocks are planned for elsewhere in the area.
             • DH …

               17 March 2013 at 2:34 pm

               Karol I think that realistically we’ll only see affordable housing if the Govt or Council underwrites the builds, preferably owning the land beneath and contracting out the design & construction. Those units are being sold at ‘market price’ which has no relationship whatsoever with the cost of building them.

               The cost of building multi-level apartments is much lower than people realise. The big developers aka finance companies who all went broke a while back had nearly 100% financing cost on top of their construction costs, interest etc literally almost doubled the build cost. And they still made a killing when their developments were completed & sold.

               I guess it depends on how people see it, those buying the units obviously don’t see any problems. A those sorts of prices though I can see low income earners being squeezed out of New Lynn. They won’t be able to afford the rents.
               • karol …

                 17 March 2013 at 3:47 pm

                 A those sorts of prices though I can see low income earners being squeezed out of New Lynn.

                 That is a worry. There does need to be some guarantee of affordable rents, and of increased availability of state housing, along with the return of some industry to wider Auckland.

                 New Lynn used to be an industrial and working class area. It now is a transport hub, and a lot of the development is around the commercial centre, which ia planning to expand in the near future.

                 Those new apartments will also deliver consumers to the neighbouring mall. I find it a little disturbing that LynnMall is owned by (the misleadingly named “Kiwi Income Properties Ltd”. Their ultimate parent company is The Commonwealth Bank of Australia.

                 And I don’t see any plans for retirement housing in the central area – maybe they want to attract mainly middle-class salary earning consumers…?!
                 • DH …

                   17 March 2013 at 4:14 pm

                   Totally agree but what’s the answer? You can’t argue the arithmetic and the private sector isn’t going to provide ‘affordable’ housing. They charge what the market will pay and always will. Welfare isn’t the answer, the taxpayer just underwrites the market that caused the problem in the first place and makes it even worse.
                   • Draco T Bastard …

                     17 March 2013 at 5:24 pm

                     State housing is the answer and for the state to build enough to run a 2% to 3% excess of housing rented out as a percentage of household income. Best way for the government to do that is high density housing.
           • Colonial Viper 2.1.2.2.1.2

             17 March 2013 at 2:22 pm

             Notice what the middle class has to accept as realistic is declining year by year by year. Deflation in action.
3. ghostrider888 3

   17 March 2013 at 1:55 pm

   here are some Hickeys / non-realpolitik pipe-dreamshttp://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10871689
4. ghostrider888 4

   17 March 2013 at 1:57 pm

   here are some Hickeys / non-realpolitik pipe dreams
   http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10871689
   • karol 4.1

     17 March 2013 at 2:21 pm

     Yes, I saw Hickey’s article a little while ago. He makes some interesting suggestions – eg opening up lots more green and brownfields for development. Shouldn’t we be looking for more industry in brownfields? And to keep a lot of our greenfields?

     An Auckland land tax to stop developers sitting on land til the price goes up, seems a good idea. these ones sound worth considering, too:

     3. Introduce macro-prudential controls to slow high LVR lending, including extra capital requirements for mortgage lending and making banks fund all their lending locally through term deposits. These tools are used by Hong Kong, Singapore, Israel, Sweden and Norway.

     4. Restrict or control migration so fewer migrants from offshore and other parts of New Zealand are able to move to Auckland. That could include a regional development strategy.

     5. Restrict non-resident investment in houses in Auckland, as Hong Kong and Australia have done.

     6. Encourage the development of, or build, one or two large-scale pre-fabricated house manufacturers to drag down the cost of building.

     7. Launch an apprenticeship training scheme in Auckland for trades staff to build the 400,000 dwellings needed over the next 30 years.

     I don’t know what the impact would be of raising the official cash rate.
     • ghostrider888 4.1.1

       17 March 2013 at 2:30 pm

       hows the sinuses?
       • karol 4.1.1.1

         17 March 2013 at 3:50 pm

         Still streaming, unfortunately. Thanks for asking, ghost
     • KJT 4.1.2

       17 March 2013 at 8:42 pm

       Basically Hickeys ideas are good except for raising the OCR.

       The OCR is a blunt instrument.

       Raising the OCR bludgeons our productive industries. Raises the exchange rate and raises their interest rates, compared with offshore competition, at the same time as it takes money from the internal economy and cuts demand for all goods..
       It adversely affects those who have already borrowed, and cannot change their borrowing to react.

       The sole use of the OCR to fight inflation should have been changed long ago.
       • Draco T Bastard 4.1.2.1

         18 March 2013 at 9:13 am

         The sole use of the OCR to fight inflation should have been changed long ago.

         True, as it obviously doesn’t work. The whole point of the OCR is to control the amount of money in circulation and it’s just not doing that. The higher the OCR, the more the banks borrow from overseas to fund their reserve base which is then used to further increase the money supply through the Fractional Reserve system.

         Not that the banks are increasing the amount of money in circulation all that much – just the amount that being passed from bank to bank in a game of musical houses.
         • DH 4.1.2.1.1

           18 March 2013 at 12:56 pm

           “True, as it obviously doesn’t work. The whole point of the OCR is to control the amount of money in circulation and it’s just not doing that. ”

           Agreed, partly. You’d be one of the few I’ve seen who’s actually asked how & why the OCR works and seen the flaws. It has worked but for all the wrong reasons. Milton Friedman, arguably the architect of monetarist policy, made it clear in his work that the path to controlling inflation was to keep growth in the money supply closely aligned to growth in economic output. The RBNZ have never done that, they simply used the OCR reactively whenever the CPI started wobbling.

           The consequence was that consumer inflation was held down by cheaper imports, courtesy of the high OCR pushing up the $NZ, and the money supply grew out of control via the banks offshore borrowing. We did see rampant inflation from that uncontrolled growth in M3, as Friedman postulated would happen, but it was in the property market which isn’t shown in CPI figures so the RBNZ donkeys had the gall to keep telling us that inflation was under control.

           It’s one of the reasons I don’t have much time for Hickey. He doesn’t put all the pieces together, too shallow for my liking.
           • KJT 4.1.2.1.1.1

             19 March 2013 at 12:43 pm

             Hickey is unfortunately a product of his upbringing. He is firstly, part of the finance industry.

             All the more credit to him though, for eventually seeing the woods, and starting dialogue about the failing neo-liberal system.

             His other ideas in the article are valid solutions to overly inflated land and housing prices (Note that dairy farms are equally priced way beyound earnings value).

             Also unfortunately, we have become too dependent on land as savings, for perfectly understandable reasons, but no one is going to like the correction.
5. Lefty 5

   17 March 2013 at 7:11 pm

   Nationalise all land that could be used for housing in the Auckland area.

   Only allow building by the state,not for profit organisations and individuals for the use of their own families.

   Stop growing. We don’t need as many migrants as we are getting at present. It is a nonsense that we need to grow to prosper.

   Stop trying to kid ourselves we can build housing skyscrapers that will not quickly become slums and will not end up producing some severely disturbed people because of the unnatural situation they are living in. It hasn’t been done anywhere else so why would we be able to do it here.

   Its also completely unnecessary unless you are trying to base your housing planning on how you provide the cheapest possible housing while still allowing big profits for developers. The second part of the equation is unnecessary and those public commentators and politicians who persist in doing this are a big part of the problem.

   There are better ways of intensification.

   Have greater local community participation in planning – not fucking consultation over massive complicated plans that are just a license for lawyers to make a lot of money, speculators to find holes in and highly paid senior council staff to pull the wool over everybodies eyes with. Instead start listening to people, like the tens of thousands of homeowners who already own land and try to find solutions for extended families on their own land but are forced into building illegal structures because of the fuck wit control freaks who actually set council policies to the background sound of the pointless middle class jabbering and confusion of our elected representatives.

   Put in rent controls and stronger tenancy protection.

   Outlaw hypocrysy. Too many of the middle class people making a fuss about housing are hyprocritical capitalist bastard landlords (including a big percentage of our politicians from most of the parties).
   • Draco T Bastard 5.1

     18 March 2013 at 9:28 am

     Stop trying to kid ourselves we can build housing skyscrapers that will not quickly become slums and will not end up producing some severely disturbed people because of the unnatural situation they are living in.

     But, we can.

     It hasn’t been done anywhere else so why would we be able to do it here.

     It’s been done in many places around the world.

     Sure, need to put some thought into it but it can, and should, be done.

     Its also completely unnecessary unless you are trying to base your housing planning on how you provide the cheapest possible housing while still allowing big profits for developers.

     Ah, no. Compact cities are far cheaper to run which is why cities went upwards several centuries ago.

     There are better ways of intensification.

     You may not have noticed but the Auckland Plan uses all of them and not just skyscrapers.

     Put in rent controls and stronger tenancy protection.

     Best forms of those that can be put in is state housing – lots of state housing. Some people don’t like it though as they think that they’re entitled to live on other peoples work.
6. Michael Wood 6

   17 March 2013 at 9:03 pm

   This is a useful post on the issue and I think that the point about the marine environment being somewhat sidelined is valid.

   John Minto’s critique of ‘growth’ in the plan is more problematic. The growth that the Unitary Plan is talking about is not some kind of construct, it is demography. There is large population growth in Auckland, and there will be something like 1 million more people to accommodate in the time period under consideration. The UP (primarily) is about how we do that well. In this respect quality intensification is a no-brainer. In any other situation in which you are dealing with a valuable resource, you will look to use that resource as efficiently as possible, getting the best possible value out of each unit. Why would we treat land any differently?

   I’m convinced that affordable housing is not something that can be ‘nudged’. The incentives for developers to go in the other direction are just too strong. It requires direct action from central government, and for stronger tools to be given to local government.
   • karol 6.1

     17 March 2013 at 9:18 pm

     Thanks Michael for you valuable assessment of the plan.

     It seems to me that the notion of economic “growth” is indicated in Len Brown’s speech, part of which I quoted in the post. In that quote, Brown is referring to the Auckland Plan’s aim for regional economic, export led development. I had in mind to look at how much this includes revitalisation of manufacturing in the Auckland area/region.

     I think maybe affordable housing needs to be related to a return to the kinds of industries that were doing well in New Lynn before the Rogernomics shift to “free trade”. That as well as the central government increasing the state housing stock. This would go some way to counter the housing developments becoming another wave of gentrification of the areas most accessible to the CBD.
     • Colonial Viper 6.1.1

       17 March 2013 at 10:42 pm

       I think maybe affordable housing needs to be related to a return to the kinds of industries that were doing well in New Lynn before the Rogernomics shift to “free trade”.

       However – there is no economic pathway or political leadership available back to the import substitution model of industry. I’m not familiar with what used to be manufactured in New Lynn, but when I think of all the apparel, foot wear, domestic item manufacturers and all the engineering services that those factories around the country used to use…they’re all gone and not coming back.

       Also, since Rogernomics occurred, China has become the low cost manufacturing power house of the world.

       Len Brown has minimal power over all of these factors.
       • karol 6.1.1.1

         18 March 2013 at 9:00 am

         New Lynn was notable for its thriving clay & ceramics industry. Crown Lynn/Ceramco was the most notable. It moved to South East Asia in the 80s, I think. There was also the Astley tanneries, Cambridge Clothing (still in New Lynn) and others like a chocolate factory I think.

         Yes, it requires the government to contribute to developing manufacturing. Back to the tensions between Brown and Smith & Co.
   • Colonial Viper 6.2

     17 March 2013 at 10:34 pm

     In any other situation in which you are dealing with a valuable resource, you will look to use that resource as efficiently as possible, getting the best possible value out of each unit. Why would we treat land any differently?

     Bravo – I know many a dairy farmer who hold exactly the same sentiments.
7. The Chairman 7

   19 March 2013 at 10:05 am

   A capital gains tax carries the risk of being passed on.

   Property investors would want to offset the burden.

   High demand coupled with the property shortfall will give scope for this.

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