The false economy of sprawl

Written By: - Date published: 9:28 am, October 24th, 2012 - 95 comments
Categories: housing, transport - Tags:

Housing is too expensive. It has been driven up by ‘investors’ in pursuit of a safe, hands-off, tax-free return. 8% of the people own about 40% of the houses. That’s the problem – over-allocation of savings from the upper-middle class into housing pushing prices up, out of reach of the middle and working class, who become their tenants. The Nats’ solution: more sprawl.

The Nats’ logic is that if you need cheaper housing, you should build where the land is cheaper. But that ignores fundamental economics: the value of land for housing in different parts of a city will be in equilibrium once all costs and benefits are accounted for. So, when the price of land somewhere is lower than somewhere else, it’s because the other costs are higher.

Why is the land in Drury or Dairy Flats cheaper than the land in Tamaki or Glen Eden? Because the costs of using it for housing for an Aucklander are greater – if they weren’t then the market would cause the price of the ‘cheap’ land to rise. Basic economics that you would think National would understand.

You pay more for transport (which is much less likely to be public transport in sprawl suburbs), the council pays more for infrastructure, the government pays more for roads, and we all pay more in climate change causing greenhouse emissions from that extra transport.

An Aussie study shows that the non-land and non-construction costs of building additional housing are twice what they are for a suburb 40km from the CBD than 10km from the CBD. Applying that to Auckland’s existing sprawl plans means the country will pay an extra $40 billion that it wouldn’t pay if the houses were built within existing urban limits – half of that is transport costs, a good slice of which is imported oil (better hope the oil supply keeps up of those ‘cheap’ exurbs suddenly get very, very expensive).

So, this is the false economy of sprawl. The land is cheap and so you can buy a house cheaper, but the land is cheap for a reason – all the other costs associated with building a home on it. And those costs don’t go away, they build and build.

As JH Kunslter said:

“The infrastructure of suburbia can be described as the greatest misallocation of resources in the history of the world.”

What gets my goat is that National must know this. If they don’t understand the basic economics – that distant land is only cheap because there are other very large costs of building there – then someone must have explained it to them by now.

So, they’re clearly well aware that they are not proposing the most economic solution to the problem of how to house more people. What are they working for? Whose interests? Not ours, not the ratepayers’, not the poor schmucks who can’t afford to get into the housing market who won’t be able to afford to transport costs form the exurbs, not the taxpayers.

That only leaves the people who own the land and stand to make a nice fat profit from developing it.

95 comments on “The false economy of sprawl ”

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  1. Lanthanide 1
    24 October 2012 at 9:42 am

    Ok, great. So what’s your solution then?

    • crashcart 1.1
      24 October 2012 at 9:51 am

      Better use of existing urban land?

      • Lanthanide 1.1.1
        24 October 2012 at 10:10 am

        Ok, if it’s so simple, what’s stopping us from doing that now? Identify the obstacles and what is to be done to address them.

        • Colonial Viper 1.1.1.1
          24 October 2012 at 10:17 am

          Oh FFS every other major city in the world has sorted this problem out. If need be fly in a bunch of consultants from Singapore or Hong Kong and they’ll set not just Auckland’s affordable housing problems straight, but its transport systems too.

          • insider 1.1.1.1.1
            24 October 2012 at 12:05 pm

            So you are advocating near slave labour, massive property costs, very high population density, non democratic govt, very limited health and welfare systems?

            • Shane Gallagher 1.1.1.1.1.1
              24 October 2012 at 12:47 pm

              – try New York, London, Paris, Bilbao, Berlin, Edinburgh, Amsterdam or any other major city on the planet then…

              The main reason for there not being inner-city development here in NZ is the requirement for car-parks. There has been some work done on this – I just cannot put my hand to it.

              As long as you have nice apartments which are a decent size and affordable then people will live in them. When I was younger I always lived in apartments. Nice ones in the city centre, usually. I did not need a car and I had access to everything I wanted either on foot or by public transport. If I needed a car I rented one.

            • Draco T Bastard 1.1.1.1.1.2
              24 October 2012 at 6:11 pm

              The only thing in there that made any connection to what CV said was the bit about housing density. Everything else was pure BS and the exact opposite of what would actually happen.

          • aerobubble 1.1.1.1.2
            24 October 2012 at 1:24 pm

            Who might tell us that Auckland is an isthmus and a stupid place to start. S.Auckland should have more intensive housing, starting with the rail corridor south lined with flat apartments and ease of transport to beaches and forests, etc.

        • Draco T Bastard 1.1.1.2
          24 October 2012 at 6:09 pm

          easy, low rise (4 stories) to high rise (20+) housing and compact housing (you really don’t need that extra couple of feet of bare earth down the sides of houses).

      • McFlock 1.1.2
        24 October 2012 at 1:31 pm

        Maybe massive structures that integrate accommodation and community services, each building housing tens of thousands and a couple of hundred floors tall.
           
        You could name one of the blocks “Peach Trees“. 🙂 
                    
        Seriously though, faced with a growing population planning options are limited: either pack more in to existing space (sometimes can be done with better use of space, but can exacerbate social problems done poorly), or expand either up, down, or out.
             
         

    • Lightly 1.2
      24 October 2012 at 10:04 am

      stop speculation to bring down house prices, more government investment in affordable housing.

      English himself has noted that we haven’t built homes for working and lower-middle class families since the 1970s – sprawl won’t fix that because developers will always build the most expensive homes (with the fattest profit margins) that they can. Only the State is in a position to build affordable housing.

      • tc 1.2.1
        24 October 2012 at 1:21 pm

        ‘..more government investment in affordable housing..’ we could start by looking at the price gouging CHH and Fletchers indulge in on roofing, steel, wood, concrete, agregate etc.

        The cost/SqM in this country is a rip off due to these and a few other players who consolidated the market even more courtesy of rebshockers rubber stamping CommComm.

        • vto 1.2.1.1
          24 October 2012 at 1:32 pm

          Exactly tc, that is one of the components I suggested below that needs careful examination. Eaxmple – concrete (or rather, cement). Cement is supplied into our domestic market by Fletchers and Holcim. There is one tiny tiny player based in Wellington as I recall, but the reality is that just two firms supply NZ.

          Now tell me that they don’t take walks in the park……

          FFS, this is exatly what the Commerce Act is designed to prevent. But it hasn’t. Effect equals price-gouging. Ask anybody who tries to get into the cement industry in NZ what happens to them….

          complete and utter rip-off

          • Fortran 1.2.1.1.1
            24 October 2012 at 2:04 pm

            vto

            Aren’t Holcim Swiss ?

          • tc 1.2.1.1.2
            24 October 2012 at 4:24 pm

            You have Stevensons and other niche players like Bridgeman (remember their lockout in 09) and Allied but if ever Fletcher came knocking with enough wedge they’d get sucked up with our monopoly friendly comm comm.

            And Stevensons sold their precast business to in another rubber stamped deal some years back….begins with an F for y’all F’d kids.

            Yup there’s plenty of walks in the parks in NZ, geez we’re full of them….notice how most major RONS and other large infrastructure projects only ever go to a few entities, easy when they decide who gets what, no competition means greater margins.

            I recall a tender once where it was observed that the documents were eerily similar except when it came to the numbers….funny that.

            • vto 1.2.1.1.2.1
              24 October 2012 at 4:46 pm

              Stevensons and Allied source their cement from Fletchers or Holcim. There are plenty of concrete mixers but only two cement suppliers. This is the problem.

              It’s like have a whole bunch of bakers but only two suppliers of wheat …..

              • Draco T Bastard …
                24 October 2012 at 6:16 pm

                Which, of course, is what you’ll always get in a capitalist economy. As one supplier gets bigger they will buy out the others and/or make it so that no others can compete.

  2. crashcart 2
    24 October 2012 at 9:50 am

    “When asked what the Government were doing about housing affordability he said wages over four years, he said pressure has been taken off interest rates meaning repayments levels were lower”

    So the GFC which has resulted in low interest rates, which has reduced the cost of borrowing, which is resulting in Auckland house prices sky rocketing once again. And this is what the government has done to make housing more affordable?

    Hard to believe this guy is the minister of Finance.

    • felix 2.1
      24 October 2012 at 10:08 am

      Ha, and I thought the Nats were sticking to the story that Key had nothing to do with causing the GFC.

      Apparently not. 😉

  3. KJT 3
    24 October 2012 at 10:16 am

    Rather than making everyone live in highrises near Auckland central, which has its own costs, a better answer is to encourage both industry and people to set up in nodes/satellite areas further out or even in other towns in NZ. Similar to the original provincial development.

    For example. Living in Huntly and working in Auckland central, with a good commuter train service is cheaper in resources and gives a better quality of life than driving in from a high rise unit in Henderson.

    Biking to work in a factory or office in Ruakaka, even better.

    A sensible State housing policy, such as 3% RB loans can help.

    Development encouragement for businesses to set up in under-utilised housing areas like Turangi is another idea.

  4. Janice 4
    24 October 2012 at 10:30 am

    I wonder what a ruckus would be made if they were suggesting building cheap housing in the Wellington green belt?

    • insider 4.1
      24 October 2012 at 12:07 pm

      Well they are planning on putting a road through it and not many people had a problem with it

  5. Lindsey 5
    24 October 2012 at 10:34 am

    Intensification is not just about high rises in the CBD. It is also about medium density (4 to 5 levels) around suburban tranport nodes. This supports the public transport and gives choices to suburban people, not all of whom want to live in a detached house with a big garden. I have older friends who would love to sell the villa or the bungalow in Mt Albert as the maintenance and the gardens get too much for them, but they do not want to leave their friends and their services. They want an apartment so they can free up some capital, lock it and leave it so they can travel, and have someone else worry about painting the exterior.
    They would like their children or grandchildren to have an entry level opportunity to the suburb as well.

    I have other older friends who live in apartments in the CBD. They value the security, the public transport, walk to work and the supermarket, and have the library and the movies almost at the doorstep. They like the buzz of the city and the great views of the harbour. Always something happening!

  6. RedLogix 6
    24 October 2012 at 10:38 am

    In fact even if the land were free it would still be more expensive to sprawl.

    An old and close friend of mine has spent much of the last few years managing a significant subdivision of one of the last chunks of farmland in West Auckland. The land had been in the family for generations and cost essentially zero.

    But when you add in all the other costs of developing a greenfield site like this… and there are many … the breakeven price of his sections is not a lot different to where the rest of the market is. In other words ‘low cost land’ in the outer suburbs does not automatically translate into cheaper sections.

    Nor does it even result in more supply pushing prices down because all developers carefully stage their projects to manage their cash flows and ensure they never flood the market.

    The only reason why National are pushing this stupidity is that they get plenty of incentive from the big developers to re-zone their current rural land-banks into residential. That’s the point at which they make their killing.

    • tc 6.1
      24 October 2012 at 11:02 am

      +1 it’s all about the kickbacks to NACT with the accompanying spin. Look at Glen Innes also to see what this gov’t is about, long bay is another ugly blight on northern sprawl.

      I’ve got colleagues who work in the UK/Europe, they all live outside the Cities and train in. good quality of life with green and relatively stress free travel, good public transport is essential.

      Melb’s been caught out not investing in it’s infrastructure during huge growth over the last 10 years , there are no short cuts if you want a good quality of life in a city.

  7. vto 7
    24 October 2012 at 11:12 am

    Here are some options…

    1. Capital gains tax.
    2. Remove (or lower) GST on housing. (15% right there)
    3. Stop Councils imposing all lifetime costs of house use and infrastructure on the first purchaser i.e. spread the cost over the lifetime of the house.
    4. Stop Councils charging commercial rates for their non-commercial services.
    5. Investigate why housing costs so much more here than in Australia i.e. cartels in cement and other building supplies.
    6.

    Redlogix has it right with his mate and their zero-cost land for a subdivision, the land component of housing is a small component of the entire housing price. It goes more like this in terms of who gets what …

    1. Government receives 15%.
    2. Council receives about 12%.
    3. Land (raw, pre-subdivision) about 10-15%.
    4. Developer about 15-25%
    5. Dwelling cost about 40-50%.
    6. Sales and marketing 5%.
    7. Funding / finance about 5-10%.

    Each of those components need to be addressed if anyone is serious about bringing the cost of housing down.

    Oh, and of course the elephant in the room, the fractional reserve banking system which has driven up the prices of houses. That old saying that “a house is only worth what someone is willing to pay for it” is actually wrong today. The saying is “a house is only worth what a bank is willing to lend on it”.

    2c

    • Andrew Scobie 7.1
      24 October 2012 at 11:23 am

      I’m pretty sure you don’t pay GST on houses.

      • vto 7.1.1
        24 October 2012 at 11:32 am

        Yes that is the perception but not the reality. On new dwellings and sections GST is payable. If this was removed or adjusted then secondhand dwellings would similarly adjust in price.

      • lprent 7.1.2
        24 October 2012 at 11:45 am

        That is exactly what you do on new houses. Figure it out logically from the view point of a tax system.

        The builder has all of that GST they are paying on goods and services that they have to recover from an end-user. So of course they charge GST.

        You don’t pay GST on is the sale of a second hand house because there is no real “input costs” relative to the sale of the property value to the purchaser. From memory the seller does pay GST on the services of real estate agents etc. You also pay GST on repairs to a second hand house if you got a builder in to fix things up.

        • Andrew Scobie 7.1.2.1
          24 October 2012 at 11:54 am

          Of course there is a GST component in new houses due to the GST on goods and services that make up the house. But the point i was responding to was VTO saying:

          “Remove (or lower) GST on housing”

          How could the GST component on “new” houses be removed without completely distorting the effectiveness of our GST system?

          • vto 7.1.2.1.1
            24 October 2012 at 12:47 pm

            Don’t have the answer to that one mr scobie. GST is not payable on rent that people pay to live in a house and any distortion there is pretty much of nil effect. Quite why renters don’t have to pay GST but home-owners do have to pay GST I don’t know.

            If renters don’t have to pay GST on their housing why should home-owners?

            Drop the GST on housing.

            • Lanthanide 7.1.2.1.1.1
              24 October 2012 at 1:00 pm

              Home-owner pays GST, driving up their costs, requiring them to charge higher rents to recoup investment.

              Tenants don’t pay GST directly but are indirectly charged for it. Just like tenants don’t pay rates and insurance, but those are costed into the price of their rental.

              • RedLogix …
                24 October 2012 at 1:20 pm

                OK so the GST thing is a distraction. The big one that vto suggested is this:

                Stop Councils imposing all lifetime costs of house use and infrastructure on the first purchaser i.e. spread the cost over the lifetime of the house.

                Pre-1990 Councils more or less did just this. Most of the older established suburbs in NZ cities, like Mt Eden for example, would have been primarily ‘developed’ and funded by Councils. The cost of funding could be spread out over very long time frames because every new house added to their rating base.

                It was the 1990’s National govt that prevented Councils from ‘cross-subsidising’ their funding in this manner and drove them out of the business … handing it all across to their private sector mates.

                Who promptly drove the price of sections through the roof.

              • vto …
                24 October 2012 at 1:24 pm

                Don’t know if that is the situation exactly lanthanide. Was reference to the weekly rent payable – there is no GST payable on it. The landlord does not have to account for GST. If the landlord did have to (as with commercial rents) then all residential tenancies would be plus GST. This is the anomoly I was referring to.

                Of course the capital sum that equates to GST on new housing is reflected in rents but that is a different thing (though my brain is hurting today and could well be faltering …)

                • Lanthanide …
                  24 October 2012 at 2:38 pm

                  You made the point that rent doesn’t incur GST, while buying a new house does and asked why should there be GST on a new house but not GST on rentals.

                  I explained why there is no need for GST on rentals: because the occupants of the property will effectively pay for the GST. If it’s owner-occupied, then the owners paid when they bought the house (and the longer they live in that house, the longer the GST is amortized out). If the house is used as a rental, the tenants pay the GST through higher rents.

                  Saying rents don’t include GST, so therefore take GST off new houses, is the same as saying renters don’t pay rates, so therefore take rates off houses.

                  • lprent …
                    24 October 2012 at 2:57 pm

                    Pretty much as you say. The collection costs for rental properties were viewed as being too hard to collect especially as at the time most landlords would have been below the GST thresholds. They pass their partial GST costs on to the rent

                    But consider this. The largest cost in most rental properties is finance costs if only because most rentals properties are heavily leveraged until near retirement (when if they have multiple properties some are usually sold to make the rest near debt free). And guess what – no GST on interest.

                  • vto …
                    24 October 2012 at 3:00 pm

                    Well not quite. GST is payable on the house but it is not payable on the rent. Although the GST payable on the house is reflected in the quantum of rent, the provision of the house for rental purposes does not attract GST. It is subtle but real.

                    GST on residential tenancies is specifically pulled out under the GST legislation. Like it is for financial transactions, and should be for food some argue.

                    Anyway, if GST was removed on new housing there would be a massive hole in the tax take. My point was that many people don’t realise how much of the cost of new housing goes to both central and local government – it is massive. What’s the bet that neither central or local government will want to tackle their own inputs ……

                    Frankly, I see little being done by central government to bring the cost of housing down. The way it will occur imo is via a banking crisis. It is the world of debt that keeps house prices high and the collapse of that world of debt that will bring prices back. The other costs simply rise to meet the demand – a bit like everytime the price of butterfat rises all dairy farmers complain that so too does the price of fertiliser, vet, fencing, etc rise at the same time.

                    • Lanthanide …
                      24 October 2012 at 3:45 pm

                      I’m simply arguing with your question:
                      “If renters don’t have to pay GST on their housing why should home-owners?”
                      as being a false argument.

          • Draco T Bastard 7.1.2.1.2
            24 October 2012 at 6:28 pm

            GST should be removed. It’s a regressive tax that makes life harder for many while ensuring that the rich don’t pay their fair share.

    • Draco T Bastard 7.2
      24 October 2012 at 6:25 pm

      3. Stop Councils imposing all lifetime costs of house use and infrastructure on the first purchaser i.e. spread the cost over the lifetime of the house.

      You do understand that it’s physically impossible to do that right?

      7. Funding / finance about 5-10%.

      Why are house prices so high?

      And the actual solution.

      • Colonial Viper 7.2.1
        24 October 2012 at 6:34 pm

        You do understand that it’s physically impossible to do that right?

        You simply have a higher rates loading for the first 10-15 years. No big deal.

        • Draco T Bastard 7.2.1.1
          24 October 2012 at 7:51 pm

          My point is that the actual physical resources need to be there at the time of building:

          The workers need to be available and need to be fed, housed and clothed
          The materials used to build the roads, phone and power lines and other infrastructure need to be available

          and they all need to be there at that time. There is no possibility of paying later. That means that costs can’t be spread over the lifetime of the house. The idea that it can is one of the economic delusions that money has brought about.

          • Colonial Viper 7.2.1.1.1
            25 October 2012 at 8:07 am

            You have a point, re: the market system we have now. In olden times, all the villagers would come together to build a new house for a young couple; later on that young couple would also assist in the building of a new house for another.

      • swan 7.2.2
        24 October 2012 at 9:31 pm

        You have never heard of the financial system??

        • Draco T Bastard 7.2.2.1
          24 October 2012 at 10:50 pm

          here you go

          I did say physically impossible and money is just a tool used to distribute those physical resources. We can create as much money as we like but if the resources aren’t available then it can’t be done. The way those resources become available is by the community supporting workers to make them available at the time.

  8. Carl 8
    24 October 2012 at 1:46 pm

    There are other ‘forgotten’ costs associated with this sprawl. By allowing it to happen, you perpetuate the issue or problem indefinitely by hiking up the land value on which rates are levied which in turn hikes up the rates which hits nearby productive farmland and farmers in the nuts forcing them to sell by invisible but avoidable means. It’s a never ending story and will have to stop one day. Intensification is not about high rises and sardine can apartments. Done well, medium density intensification is highly desirable and affordable. Problem is how can we retro fit a proper plan and public transport system to suit Auckland’s weird geographic profile

  9. prism 9
    24 October 2012 at 3:43 pm

    I lived in a three storey, two to a storey, set of apartments in Melbourne. It was comfortable though plain. OK for renting. Also they had a good building unit called a duplex with ground floor house and another above it. Built in concrete. The section is divided so both have their own space and garage.

    NZ in contrast, has numerous ads from builders and developers with the same sort of individual house on its own section that I built in the 1960s. There needs to be some sober thinking on how to encourage good infill that doesn’t cost in large rates and that provides good living space with territorial boundaries that allow personal use only and give privacy.

    The local council has doubled the rates for my family because of a 2 bedroom flat built for gran in the back yard of an existing house. There should be some economies available surely that would bring a lower rate assessment on that portion of the property.

    In Christchurch there are many properties with multiple units on them. Many built on the two storey plan with beds upstairs, lounge and kitchen down. And they will probably have a small garden outdoor area. The width of the section would perhaps be average property of one plus half, length the same or double, and the site would contain six units with a carpark each and space for visitors to pull in for a short time.

    • RedLogix 9.1
      24 October 2012 at 4:15 pm

      Ironically enough prism it’s the massive development of retirement villages that actually fits very well with the idea of high density housing.

      Personally I’m thinking quite long and hard about moving into one as soon as I age qualify.

  10. BM 10
    24 October 2012 at 4:04 pm

    Just over 10 years ago you could buy a 800sqm2 section in a new area for around 50-70K,
    now a 450m2 section will cost you 200k+.
    We’re not short of land in NZ yet land prices are astronomical. it seems to be a combination of greedy councils and developers drip feeding properties on to the market that keep prices up.

    In this same period of time the cost of building the house has maybe increased 10-20%.

    • tc 10.1
      24 October 2012 at 4:30 pm

      ‘In this same period of time the cost of building the house has maybe increased 10-20%’

      Evidence ? bear in mind double glazing, insulation are mandatory now and the building material suppliers were already making a shedload back then.

    • Draco T Bastard 10.2
      24 October 2012 at 6:39 pm

      We’re not short of land in NZ yet land prices are astronomical.

      Actually, we are – they’re not making any more.

      • KJT 10.2.1
        24 October 2012 at 7:12 pm

        Housing land prices are driven by overseas buyers who think a quarter acre in the sun, near the beach, for a million is cheap, and banks who lend on income, not land value.
        Banks are quite happy to drive prices up as they make heaps on clipping the ticket for interest.

        House prices are high because of monopoly building suppliers. It is interesting that the price to build a house is the same or less in Australia even though builders labour rates are nearly double.

        NZ builders have to build high end houses to make a living. Cheaper houses do not have enough margin.

        I was contemplating importing kitsets, of New Zealand sourced materials, from Australia at one stage. Even with shipping back to NZ they were cheaper than sourcing them in NZ.

        Building materials have gone up at about the inflation rate, but they were overly high to start with.

        The immediate answer is for the State to move back into supplying reasonable priced houses.

        • thomas 10.2.1.1
          24 October 2012 at 9:42 pm

          “Housing land prices are driven by overseas buyers”? In some cases yes, in some cases no, but in general Mark Twain was correct in saying “buy land, they aren’t making anymore of it”. One thing “we” are “making” is more and more people who inadvertently need land for housing, food etc. Auckland’s population is projected to increase by ~500,000 in the next 20 years. If we continue to live at our current urban density of about 2700/km2 we’ll cover close to 200km2 in urban development. That is 20,000 hectares or about 3 times the size of all the Crafar farms. Plastering that much highly productive agricultural land in urban development is a crime against future generations.
          PS If those 600,000 people went out to the regions the area covered would likely be even greater…

  11. Robert Atack 11
    24 October 2012 at 4:40 pm

    James also said “We’re literally stuck up a cul-de-sac in a cement SUV without a fill-up”
    I think we should be trying to work out how to depopulate cities, though the more of you that stay and die there the better it is for us rural folk, so maybe build lots more energy dependent infrastructure and fill it up with lots and lots of people. In maybe 5 years most of this stuff will be so academic.

    Yawn

    And don’t forget Jevons paradox, if only we had time a?

    • Lanthanide 11.1
      24 October 2012 at 5:10 pm

      Cities are much more efficient users of energy than rural living is. Hence why cities exist in the first place.

      So you might want to re-think how people are going to be living in an energy constrained future.

      “In maybe 5 years most of this stuff will be so academic.”

      Which is the same sort of sentiment we had 5 years ago.

      I just don’t see a sudden collapse as being realistic, I really don’t. A shuddering, bumpy muddle-through looks more realistic for the next 15-20 years. Hard to predict much further out given the massive changes involved, as well as climate change.

      • Colonial Viper 11.1.1
        24 October 2012 at 5:39 pm

        I just don’t see a sudden collapse as being realistic, I really don’t.

        The long descent mate, as Greer has very aritculately described.

        Cities are much more efficient users of energy than rural living is. Hence why cities exist in the first place.

        So you might want to re-think how people are going to be living in an energy constrained future.

        Oh you’ve made a bit of a major boo-boo here.

        Cities don’t exist because they are more efficient users of energy. They exist because they are more intensive users of energy.

        When that energy intensity can no longer be maintained as a reliable supply, cities will shrink in size accordingly.

        • Draco T Bastard 11.1.1.1
          24 October 2012 at 6:44 pm

          The long descent mate, as Greer has very aritculately described.

          Except that it doesn’t have to be a descent – merely a change if we plan it correctly. It will be a descent if we try to maintain what we’ve been doing for the last few decades.

          When that energy intensity can no longer be maintained as a reliable supply,

          Loss of fossil fuels != loss of energy as renewable electricity generation proves.

          • Colonial Viper 11.1.1.1.1
            24 October 2012 at 11:48 pm

            Perhaps, if we had started in the 1980’s.

            • Draco T Bastard 11.1.1.1.1.1
              25 October 2012 at 12:13 am

              That would have made things easier for the entire world. NZ, though, can start the shift now without too much disruption.

      • Draco T Bastard 11.1.2
        24 October 2012 at 6:42 pm

        Cities are much more efficient users of energy than rural living is. Hence why cities exist in the first place.

        Yep. Cities have been around for 5000+ years and, last time I looked, 5000 years ago was somewhat more energy constrained than what the foreseeable future will bring.

        • TheContrarian 11.1.2.1
          24 October 2012 at 6:44 pm

          I don’t think you can compare the energy use of a city 5000 years ago with one today, dude.

          • Draco T Bastard 11.1.2.1.1
            24 October 2012 at 6:52 pm

            I wasn’t. I was merely pointing out that cities existed when we had far less available energy.

            The reasons cities exist are manifold but:
            1.) Agriculture produces surplus – surplus food and surplus people*
            2.) Those surplus people generally have to go somewhere
            3.) Arts and technological development do better in high density places due to increased networking allowing for more complexity

            * surplus to the need to produce food

      • Macro 11.1.3
        24 October 2012 at 8:31 pm

        Large cities are hugely inefficient uses of energy. They are developed on the back of fossil fuels. The cities of the pre-industrial era were limited in size to the distance one could walk or ride in half a day. Why? Because that was as far as one could transport food. London was the prime example. For centuries its population was strictly limited to about 1m persons max. Consider the Haymarket,, Convent Garden, etc all old markets and at the CENTRE of the city. With the advent of rail in the 1830’s – the city began to grow because it became possible to bring in fresh produce from outside the city, on a daily basis. Today’s cities see the location of supermarkets outside the cities and people drive out of the cities for food! There is a move – eg Wellington to locate “metro” in older disused buildings within the centre, as the centre of the city dies because people prefer to move out.
        Small towns around 7-10,000 are far more efficient from an energy point of view. Most people can walk to the town or are just a few minutes drive from the stores. Local produce is readily available and generally superior to imported fare. Personally having lived in cities and small rural towns I know that my food bill, my petrol bill, my energy bill all way smaller in a rural town. Of course one cannot argue from the particular to the general. But if my experience is repeated by the 7000 others who live alongside me, then I think that indicates that far less energy is being consumed in the smaller rural centre.

    • Robert Atack 11.3
      24 October 2012 at 8:44 pm

      This is a short skit that explains my thoughts about cities .. http://www.youtube.com/watch?v=ilVSAzFlf-c&feature=plcp .. to many people and not enough food and water will not be very nice. New York with the lights out ?
      Sorry you are talking slow crash, so NY dimly lit, I might be painting a to dark a picture to soon, but I’m reasonably confident an 18 yo Kiwi Saver will not see a return on his ‘down town’ investments.
      And no council of government is preparing ‘us’ for the inevitable, it is like we are laying in bed on a cold morning hoping we have another 10 min, but not knowing without looking at the clock exactly how long, and next to no one is looking, except the very few who are ignored, tick tick – enjoy the sleep in.

      • Lanthanide 11.3.1
        24 October 2012 at 10:20 pm

        There are plenty of large cities in India that don’t have reliable power supplies. American’s aren’t used to it, but there’s not a lot you can do in the face of necessity except adapt. I imagine NYC would become a very dismal, and probably depopulated, place in the winter, though.

        In the absence of a fast crash, it seems that the real problems are going to rear their heads in the adjustment phases, things like -5% to -10% GDP per annum and unemployment rising over 15-20% are pretty much impossible for our existing systems to cope with (we’d probably need to set up new things like government food assistance on massive scales). Play that same scenario out worldwide, with some countries faring even worse, and the situation could be very messy very quickly.

  12. TheContrarian 12
    24 October 2012 at 4:48 pm

    “8% of the people own about 40% of the houses”

    anyone got a source for this?

  13. Binders full of women 13
    24 October 2012 at 9:22 pm

    Problems= large effectively cheap (but priced high) ugly group build houses/ fixation with large (by international standards) sections/ lack of community spirit brought about by probe 1 & 2. All this causes cheap & ugly sprawl. (See the book- Suburbanation- The rise of sprawl and the decline of the American dream— most new NZ subdivisions do exactly all of the shouldn’t do’s!!
    Solution= higher density urban living but not under the two recent NZ failures- cross leasing & infill.. more cheap housing on smaller and smaller sections + ugly apartments.
    Best solution = Seaside Florida (name of a community) style.

  14. Lloyd 14
    24 October 2012 at 11:57 pm

    Think about living in most New Zealand towns if the price of pre-tax petrol and diesel goes up to $8.00 per litre. This is a reasonable assumption if some nice person decides to close down the Arabian Gulf with a few nukes.
    Are the shops in Matamata or Geraldine going to to be kept stocked?
    Are the residents of these small towns going to be able to go to where their jobs are?
    The answer is probably not or at least not as easily as it is now.

    OK, now think about Porirua. Are the shops there going to be stocked? Are the people of Porirua going to be able to work in Wellington? The answer is yes. Why? Answer, there is an electric rail line through the town going to Wellington where there are jobs and a port. You don’t think we will use railways to supply towns? We used to. We will have to do it again. Electric rail does not use imported fuel. Electric rail becomes more efficient the higher the population density along the route of the line. You don’t get high density with urban sprawl or with spreading your population into scattered small settlements. Cities are the only sustainable way of maintaining a population with a standard of living like we have today when the use of fossil fuels becomes unbearable. Getting ready for that day will never be cheaper than now.

    We don’t need to all live in tower blocks to increase density to useful levels. Two or three storey town-house and terrace house in-fill development will raise population density in Auckland to levels where public transport and especially electric rail is more efficient.

  15. xtasy 15
    25 October 2012 at 12:35 am

    I cannot get this fucking dumbness about NZ urban and other planning! It seems to be following the US example of spread, dream and pretend a life style orgasm, and then pay the high prive in the end.

    How dumb can this be, to allow yet more sprawl. Auckland is behind LA one of the largerst cities worldwide, by area. What we have is a bungalow and worse structure jungle over endless acres of fertile land, wasting land and resources. Has any town planner from this idiot country ever been to Europe, where town and city planning is more sophisiticated, where central structure planning, good infrastructure, sensibe investmets are day to day facts? No, the neo liberal right indulges in the hate agenda and always presents “Greece” as the abominable example how all went wrong all over Europe. Put your fucking propaganda aside, Key and wankers, as Europe is largely still functioning, despite of high debt, and it has for decades as did Japan.

    The problem is fucking Anglo Saxon ideological neo lib economic bullshit, that says the market will do it all, let it free and move as it should. Yet the same idiot countries, be this US, UK, Canada, Australia praise Mainland China and want more trade with that economy. Now, get this right, China is still running the show rather like a “planned” 5-year plan economy, allowing some and not more, while the west is idioticly sticking to Freemans’s ideology.

    Well, look at Germany too, where high investment under “structured” rules, favouring environmental and other investments, are taking the economy ahead, with hiccups admittedly.

    But laissez faire NZ is the prostitute on the street side, thinking, I wait for “demand”, then I plan and take action. That is also the end result of a “prostituted”, corrupt and hopelessly unenelightening and futile economy here. It makes NO sense, goes NOWHERE and is a lost opportunity, for real. SPRAWL as much as you want, NatACT, you just extend the jungle territory. Only short sighted investors come here, offering little for long term economic benefits for NZ. Wake up those that have remnants of grey matter!

    • Draco T Bastard 15.1
      25 October 2012 at 12:38 pm

      It seems to be following the US example of spread, dream and pretend a life style orgasm, and then pay the high prive in the end.

      The American Dream does seem to have been imported fully formed. Although part of it was from when NZ was colonised from Britain and everyone was getting hold of quarter acre blocks. We tried really hard not to move away from that amount of land for a home. It makes sense if the land was being used as it was first envisioned it would be – as productive land that would help support the family that lived there but that went out decades ago.

  16. TheContrarian 16
    25 October 2012 at 9:44 am

    “8% of the people own about 40% of the houses.”

    No one got a source for this claim?
    Come on, you should all know it is poor investigation/blogging/journalism/logic to pull at stat out of your ass without evidence or a source.

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