The most recent paper published by Auckland Council’s Chief Economist Unit takes an excellent look into the economics of greenfield development and how to more fairly fund the costs of roads, pipes and other infrastructure that is necessary to enable this development.
It starts by reminding us how expensive all that sprawl enabled by the Unitary Plan actually is:
Infrastructure is expensive
The Auckland Unitary Plan identifies about 15,000 hectares of rural land for future urbanisation (10 per cent reserved for business uses) with the potential to accommodate roughly 137,000 dwellings. Because this land is currently rural, it requires substantial investment in infrastructure before urbanisation can occur. The indicative total cost of new bulk infrastructure required is $20 billion – or about $146,000 per dwelling on average.
Remember that this is just the bulk infrastructure (so excludes local streets that are built by developers) and doesn’t include things like hospitals and schools. So roughly $150,000 of spend on bulk infrastructure for every single dwelling. Given how expensive housing is in Auckland at the moment, even $150k/dwelling might make up a relatively small part of the purchase price if it was all covered by the developer. But how does the cost of this infrastructure “split” between the developer and the ratepayer? This is what the paper looks at next:
Development contributions (DCs) are currently the main recovery mechanism for infrastructure costs. Developers pay DCs to council at the time of residential sub-division. DCs in greenfield areas currently range between $21,900 and $27,500 per dwelling, plus an additional $11,300 per dwelling in water infrastructure growth charges. This means if DCs remain at current levels, they are likely to cover only a fraction of the total infrastructure cost.
Okay so there’s a pretty big cross-subsidisation from the ratepayer to the private developer here. At most the developer is paying around quarter of the cost and the ratepayer is picking up the tab on the other three-quarters. No wonder developers are screaming out to get rid of urban limits!
The article goes on to look at how the “benefits of infrastructure investment” are spread. In other words, how much more valuable is land that has infrastructure compared to land that doesn’t – and how does this compare against the amount of money the landowner/developer has contributed to the infrastructure provision.
Infrastructure servicing adds between $138 and $265 per square metre. For a 500 square metre section, this amounts to an increase of $68,750 to $132,500.
This is over and above the value uplift that occurs when land is rezoned from rural to future urban land. Using REINZ data as a starting point, we estimate the value of rural, unserviced land at about $5 per square metre. This means the total value of announcing imminent infrastructure, and then providing that infrastructure, ranged from $110,000 to $160,000 (a multiple of 44 to 64 of median farm land value) for a 500 square metre section across Auckland.
Wow what a deal! For an average site, a landowner just needs to chip in around $40k per section and the Council comes to the party to subsidise the infrastructure that lifts the land value of each section by up to $160k per section. Or, put differently, the land value increases up to 64 times what it previous was!
Crazily though, that’s not even the worst bit. After dismissing some of the arguments often used to justify these sprawl subsidies, the article goes on to explain why development contributions are such a terrible way of recouping even the small fraction of infrastructure investment that landowners have to pay for.
DCs are the main mechanism whereby developers contribute to the costs of new bulk infrastructure. DCs are paid at the time of sub-dividing as a lump sum at a pre-determined per-dwelling rate. Because DCs are charged as a ‘lump sum’ payment at the time of development, they can create a number of issues:
- Uncertainty of timing: They are only paid when development occurs, which can be many years after infrastructure is built. General ratepayers end up funding the infrastructure in the interim.
- Slower development: When land values are increasing much faster than the holding costs of land, the incentive to develop land quickly is weak. DCs can act as a further incentive to land-bank as they are only charged when development occurs.
- Higher upfront section prices: As discussed in the previous section, because a DC is charged as a lump sum, it may be added to the cost of a section, increasing upfront section costs.
The Unitary Plan has dramatically expanded the areas where growth can occur. But there is no guarantee that actual development will match forecasts. If revenues only come in several years after debt has been issued, it affects council’s ability to finance infrastructure projects. This makes DCs a risky mechanism for funding infrastructure.
It certainly seems like development contributions are a terrible way to charge landowners for the infrastructure that makes their land so much more valuable. They essentially incentivise land-banking and discourage the construction of housing that is so desperately needed and the whole reason why the greenfield land was opened up in the first place! Fortunately, there is a much better alternative available – targeted rate:
It might be time to consider greater use of an alternative funding mechanism – targeted rates. Targeted rates recoup infrastructure costs over time and are imposed specifically on the land owners who benefit from infrastructure that enables urban growth.
There are several benefits to targeted rates:
- Incentivise faster development: Where land that is re-zoned to allow urbanisation has increased in value, targeted rates provide a stronger incentive to develop rather than land-bank.
- Stabilise short-term affordability: Using targeted rates to recover infrastructure costs might also be effective in addressing concerns about housing affordability and disruptions to housing supply in the short term. They spread the costs over time and developers pass on the responsibility of paying targeted rates on sale.
- Provide timing of funding certainty: Targeted rates provide more certainty to council about the timing of funding.
- Provide inter-generational fairness: Targeted rates spread the cost of repayments so that those benefitting from the infrastructure over the life of the assets share in the costs as well.
It certainly seems like a no-brainer to move completely away from development contributions and towards targeted rates for funding this growth, and to ensure those targeted rates much better match the land value uplift that is being derived from the infrastructure investment necessary to enable urban development.
Fortunately, moving in this direction is not just an idea permeating from some pointy-headed economists buried deep within the Council, it was also a key change to the Council’s financial policy that was made in the 2017/18 Annual Plan. Here’s what the Annual Plan says:
Changing our funding policy to allow for targeted rates to fund infrastructure for new developments
This change to the funding policy now means that the council will be able to implement targeted rates on large-scale developments. None have been agreed yet, as any targeted rate would be subject to a consultation process before it is implemented. 66 per cent of submissions supported this proposal.
Thankfully, it seems the days of massively subsidising sprawl (in Auckland) are coming to an end.
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Thanks Matt. Sound like appropriate use of user pays
Thanks Matt. It doesn’t appear that the report includes the huge cost car-centric greenfields development place on the existing road infrastructure within the rest of the city – notably by generating traffic throughout the city’s roads. Am I right in thinking this is not included?
I’m interested as to when greenfields becomes less efficient. A thought experiment – imagine a brand new town – everything by definition is greenfields and the infrastructure provided gives windfall gains to the previous owners, but it’s still more efficient than doing nothing (as there’s nothing to intensify). As that town expands, when does green vs. brown become a thing?
Does this not lead us (logically) to a view that the most efficient infrastructure for any given nation state would be a single city containing 100% of te population? Or are there other factors?
Of course there are other factors, but what you are describing are the efficiencies of Hong Kong and Singapore.
“I’m interested as to when greenfields becomes less efficient.” Probably it’s when you start thinking about preserving soil for food-growing, and about climate change, and when travel times become unpleasant.
I would say there are at least two other factors pulling the other way, the geographic distribution of natural resources (in the case of NZ, pasture land and environmental amenity, in others fresh water, minerals, fishing grounds etc) and the distribution of transport and trade links (harbours, highways, mountain passes etc). However those are perhaps quite diminished as technology develops. We no longer need an agrarian population to run intensive mechanised farming, we don’t need to live next to a sea port to eat fish because we have cargo trains and refrigerated trucks, etc.
And maybe not at the nation-state level, because those are often somewhat arbitrarily defined with borders due to historical or happenstance reasons. But perhaps at a regional/economic unit level.
You can see this in Australia, where the states are fairly evenly distributed economic units, and each of the states has a primate city with some 80% of the regional population. That might be close to the current ‘natural’ order of things in the current context, an 80/20 split between centralised agglomeration efficiencies and geographic coverage.
Australian monkey cities are a proud and noble tradition
What is sprawl and how is it the same, or different to unsustainable development patterns? Is Almere, a city built on the outskirts of Amsterdam sprawl or is it a place that was built with enough density and transport connections to be a sustainable place in it’s own right? Is Papakura sprawl? Is Ranui sprawl? Where is the sprawl vs non-sprawl line?
We need more houses, we know this. And developing all of these over existing footprints is a huge process also. And it appears we cannot build apartments quickly enough. And apartment towers don’t suit everyone.
Let’s use Dairy Flat future urban, as identified in the UP, as an example. This will either be low density, car oriented suburb with not enough residents to pay for the services or, Auckland Council can make sure it is developed as a medium to high density place, with quality transport connections – transit / cycling as well as the existing motorway, that can be at least partially self sustaining whilst providing travel options to and from local businesses and housing.
More residents per hectare = lower cost per person. So, do we build sprawl or do we build sustainable development? It’s in Auckland Councils own hands to decide which it will be. If you need an example of current Council thinking, take a trip to the newish Riverhead subdivision.
RE: Dairy Flat – That really troubles me. Unless there is a lot of education on the ground around buses transferring to the busway / future light railway, many people born or raised in this country would be inclined to take their cars – NZ is not a nation of PT users. This is of course assuming that people won’t have substantial employment in the local area. SH1 is already badly congested @ Albany…
Diary Flat is to me an example of expanding available land, with insufficient consideration given to the impact of that decision. I’d hate to see Dairy Flat Hwy turned into another Albany Hwy/Bush Rd type monstrosity. Also hate to see the aero club close down once the complaints roll in… All in all, I see it becoming another Albany – Cloistered and cut off for a decade or two.
What you describe is pretty much how Auckland Council and Auckland Transport see it. Which is a waste of land and just creates more problems.
It’s time to do things differently. Goverment / AC and AT are the organisations to make the change happen. If you ask a person what kind of dwelling they want, 95% will say a ‘stand alone house’ with good access to the motorway. We simply cannot do this in Auckland (and many other places) any more. Developers will build what they think the market wants, not what the city needs.
I’ve tried to kick off the discussion around this area over here: https://www.greaterauckland.org.nz/2017/09/26/dairy-flat-future-urban-zone-planning-transit/
I’ve also been in touch with local paper so I’ll see if we can get some more traction.
“What you describe is pretty much how Auckland Council and Auckland Transport see it.”
I think both AT and Auckland Council are a bit more extreme than that. Their view seems to be that it is ok for people to live in cars or on streets. We had very little homelessness before regional planners were given teeth. Homelessness seems to be the direct result of the growth management policies of the ARC. It started with the Auckland Growth Strategy but only really became a problem when the ARC got a veto over urban expansion. Now these same twits have infested Auckland Council and the ARC.
Well done Bryce. I completely agree with you. Another hidden aspect of how NZ subsidises sprawl is we allow greenfield developments to have very poor permeability for walkers and cyclists. There should be a rule that for every square km of greenfield development there is 100 intersections -at least for walkers and cyclists- if not for all transport users. That would mean every 100m there would be an intersection.
Bryce combine this rule with your rapid transit corridor proposal -this would maximise the area available to be developed into transit oriented development (TOD).
Automobiles are hugely space hungry -if we stop the hidden subsidies for this urban form then costs should decrease. If we stop incentivising automobile oriented development then we do not need the ineffective bodge solution of rationing housing development opportunities with artificial growth boundaries -again this should help decrease costs as the land banking gains to original land owners are competed downwards.
Note other hidden subsidies for automobile oriented development are car parking minimums, not have congestion road charging, not removing artificial restrictions on urban land-use intensification. There are probably more -what do others think?
“many people born or raised in this country would be inclined to take their cars – NZ is not a nation of PT users.”
Meh to education, just provide decent PT and people will use it. This isn’t a innate cultural thing, it is a behaviour that is thrust upon us.
NZ was a world leading nation of PT users when we had an extensive PT system. Then when we pulled it all out and replaced it with motorways and widened roads, we became a world leading nation of drivers. How people in Dairy Flat get around will be determined precisely by what transport we build in Dairy Flat. Build big roads and motorway extensions people will drive. Build busways and light rail and they won’t.
Yip. Basically, we’ll get what we build for. It’s a pretty flat area and cycling / walking would be perfect choices, then transit, then cars.
Hi Nick, I think that your impression of culture vs nurture is coloured by big city living.
In many parts of the country, the public transport was never fantastic. Taupo and Hawkes Bay to name two examples. I can only speak for mid-60’s – late-90’s buses in HB, they were used mostly by school kids and retired folks. There was once (until the late 80’s) two companies providing bus services between Napier and Hastings, so it’s not really a case of not providing the service…
If you look at Tauranga (the most car dependent city we have) or Hawkes Bay, the mentality is that the bus is the “loser cruiser”. That I chose to take the bus during my initial study was seen by many as a case of too poor to drive, the fact that parking was tricky or expensive never entered into their minds.
An example of the anti-PT mentality, when my brother visited from Tauranga last year I advised him to take the train to meet me. His response: “I’m not that kind of person.” Imagine his surprise when I showed him Ellerslie train station disgorging dozens of people, dressed for different occupations, demonstrating that the train is _the_ way to travel (if it serves your area).
I contest that for those outside of our larger cities, it _is_ cultural and has been since the 50’s, with the car being seen as aspirational. Remember that the motorways were built to decongest the local roads and to allow motorised freedom, which resulted in sprawl so that we could keep the Kiwi 1/4 acre. We’re three generations on since then, that’s long enough for a change to become cultural. Whilst Auckland is changing it’s attitude fast, other cities (and even more so for small towns) will take longer to adjust. Perhaps another generation.
As you say, how residents and visitors use Dairy Flat will come down to what we build – Let’s hope that it’s PT and active mode focused.
if by “larger cities” you mean Auckland, Wellington, Christchurch and Dunedin then you are describing the vast majority of NZers. All those cities had excellent public transport by way of trams until the 1950s. In addition, Christchurch was one of the biggest cycle cities in the world.
So yes, a minority of NZers may have lived without good PT (but with high levels if cycling) but a sizeable majority used PT and cycling every day. Even in the 1980s, cycling in Christchurch was widespread.
There is nothing inherently anti-public transport about NZers, only choices made by politicians with little to no consultation at the time, that turns us from a nation of tram and cycle riders to car drivers. That can be reversed by different decisions, which is slowly happening.
+1. This describes exactly the transport-conundrum which political decision-makers so often get us into because they start from an erroneous premise, such as, “You’ll never get Aucklanders out of their cars”.
This in reply to Nick R not John K, though what Jon says has validity also.
Yeah, never get Aucklanders out of their cars… I had the same viewpoint before I moved here, even though I’d been visiting several times a year for almost six years.
It actually took me a couple of years before I got out of my car, though that had more to do with the fact that the nearest bus stop was over 1km away and didn’t always get me to work in time (shift worker back then). It all changed when I moved from Albany to Kingsland. Sometimes walked the 4.5km to work then, was nice and gave me time to think.
“over 1km away” – amazing that could be thought of as a barrier. 10 min walk or 2 min cycle. We really are in a bad way in this country when it comes to transport.
No wonder we are one of the most obese countries.
It’s not unique to us, though. In “The Pattern Language” (US, 1977) for example, “We reckon that everyone should be within 10 minutes’ walk of the countryside. This would set a maximum width of 1 mile for the city fingers.” And specific to transportation they say:
“Establish a system of small taxi-like buses… Make bus stops for the min-buses every 600 feet in each direction, and equip these bus stops with a phone for dialing a bus”.
I stopped reading when I got to the graph. When I calm down a bit I will come back. The graph is misleading as it suggests the difference is due to the installation of infrastructure. It isn’t. The biggest difference is having an operative zone. The FUZ is a constraint that is placed on land. It limits subdivision to try and preserve big blocks for later. The big change in value is at the point where you get an operative zone approved. They only reason that I can see for them leaving that part out is because they are selling a narrative. By far the biggest problem we face is one of regulation, not one of infrastructure. People with an axe to grind use infrastructure to justify their preferred zoning. It costs less to get shit from Westgate to Rosedale than it does to get it from the CBD to Mangere. It costs less to get water from the Waitakeres to Westgate than to the CBD. Arterial roads cost more but the benefit is you get arterial roads.
“When I calm down a bit I will come back. The graph is misleading as it suggests the difference is due to the installation of infrastructure. It isn’t. The biggest difference is having an operative zone.”
Given that he operative zone requires the infrastructure…….
Yes but infrastructure has no intrinsic value, it is valued at cost. The uplift in value is the opportunity to use the land which comes from the operative zoning. The authors know this but have produced the graph in the form it is to tell a story. They wish to hide the fact it is regulation that depresses land value and are trying to say the owner is getting a free lunch out of the community. I know you are smart enough to spot bullshit when you see it.
” The uplift in value is the opportunity to use the land which comes from the operative zoning.”
And the operative zoning can only come from the construction of infrastructure. Either you argue that we should zone without infrastructure, or you accept that the infrastructure raises land values by enabling the zoning.
We could settle this with a simple experiment. Just install a bunch of pipes and roads into land that can never be used for housing due to planning restrictions (maybe a regional park) and see what value you add. Almost none. The value uplift is the opposite reaction of the value reduced by urban restriction. The authors of the graph above know that, they are just trying to provide spin for their masters.
Now rezone some land but forbid the installation of any pipes or roads into the land and see what value you add. Almost none. The author of the post above knows that, he is just trying to provide spin for his profession.
Is this fair, goosoid? I can see the merit in discussing these ideas.
“the benefit is you get arterial roads” – sorry, how is that a benefit? Then it just fills up with traffic and we “need” to expand it or build another one.
+1!
Does this mean we can pay for the CRL with a special rate on the CBD?
Sounds good to me.
Only once we have drivers paying for the health, land, road-building, social and climate change costs they’ve placed on past, present and future residents. Then we could discuss finding a fair way to pay for the CRL.
Good plan Heidi. Perhaps we can add in the costs of all the coal burnt in trains for 150 years not to mention all the asbestos used in the carriages, the diesel used in the empty buses that ran around this city for years and then we can talk about the cost of cars. But then I am purposely missing the point. The point of the sort of normative economics this post is based on is to justify their employers entrenched position.
This coming from a guy whose whole professional depends on more people driving so that more roads need to be built or expanded. So completely neutral then?
Maybe you don’t like the argument being out forward as it basically goes against everything you have ever been told is true?
Is this fair, goosoid? I can see the merit in discussing these ideas. 🙂
Sure, we can charge a targeted rate for anyone within 1km of any train station, and a higher charge for those in the west, and higher again for those in the CBD.
+1
No doubt the same targetted rate system should be used for brown fields development and where improved public transport (light rail, bus express routes) are provided.
Yes and how do you quantify that – if you live 500 metres from light rail you pay x amount, 200 meters you pay more? Wouldn’t it make more sense to include ‘user pays’ into the fare?
User pays (including targeted rates, road tolls, etc) is very rarely a fair or more affordable approach IMO.
Well it certainly doesn’t work when there are entrenched subsidies.
Maybe users pays would work. $8 to drive in the peak, $1 to drive off peak, $12 to ride the train in the peak, $100 to ride the train off peak.
What do you think these users are paying for? Health costs associated with emissions and inactivity and social disconnection? How much would climate change cost to sort out even if we suddenly found the will to do so? $1 to drive off-peak? That’s some fantasy.
I suspect you and I have different ideas about fixing climate change. I think in terms of raising some roads and bridges, moving houses away from the coast and giving a bit of aid to our Pacific neighbours to build some bunds. You might be thinking that the world is somehow going to stop carbon emissions and stand on a hilltop somewhere with arms linked singing Kumbaya. Problem with that view is people like living an energy rich life, they like the mobility they get, they like cheap heat and they like to eat meat. In Canada and Russia they are looking forward to having more cropping land and warmer weather so they will go right on producing fossil fuels. People will pretend to care but every country will exempt their own industries and go right on emitting. As far as NZ goes there isn’t much downside, so expect business as usual regardless of who forms the next Government.
Miffy, you can be incredibly bitchy when you want to. I also hope that you’re wrong.
Meanwhile some countries *actually are* moving away from fossil-fuelled lifestyles and transport. Wind and Solar generation is up Up UP. And electric public transport (already well-established in these countries) is being encouraged and expanded. Electric cars too.
So happily not everyone is taking mfwic’s approach of ‘do nothing preventative while we can, just wait until a far larger problem whacks us over the head’.
Yes that was far too bitchy. My apologies to Heidi. I was still cross about the nonsense from Auckland Council. But I don’t think I am too far wrong about how many people see climate change. For a lot of us it is like flooding in Bangladesh or war and famine in Africa – something we would all prefer didn’t happen, but not something we can do anything tangible about other than make a few symbolic gestures. Give me a choice between spending on symbolism and spending on housing for people who live in this country then I choose housing. That includes allowing sprawl.
Thanks mfwic. I was most surprised that you think that as far as NZ goes there won’t be much downside. The effects that I am most worried about for NZ are the socio-economic ones. Trivial international events can rock the economy here – with climate change we’re talking huge international events like resource wars and environmental calamity. At the very least we can look at insecure markets and supply chains, plus financial burdens of accepting war, climate and economic refugees and needing to send aid and peacekeeping troops.
Add local events like crop wipeouts by more frequent cyclones, drought events and pest outbreaks (I personally have experienced the devastation caused by varroa mite, potato psyllid and vinegar fly – but climate change related pest outbreaks will be frequent and one of the biggest effects here) and we’ll be seeing horticulture and farming businesses hit. Finally add in the political shift to the right that is likely to happen when resources get more scarce and greed takes over, and I can’t see anything other than the shrinking privileged class holding onto power more fiercely and providing less and less welfare to those hit the hardest. (For now, just look at how the owners of high-value coastal land have managed to retain dishonest LIMs and low insurance premiums which mean they are not taking the drop in property value they should and they are not paying their fair share of the coming damage to coastal properties.)
I like to hope that citizen pressure can lead to international agreements that actually have an effect. The earlier more action like this can occur, the more effect such action can have. To tell the truth, I think we’re doomed, but that’s because making change affects the status quo of who has power and money.
Meanwhile get thee to a hillside, link arms, and if you’re bored with Kumbaya, sing:
“The Earth is our Mother / We must take care of her /
The Earth is our Mother / We must take care of her /
Hey yanna, ho yanna, hey yanna ha / Hey yanna, ho yanna, hey yanna ha”
But what is the tune Heidi? As Max Cryer would say it is always the tune! I have been amusing myself lately by pointing out to indignant yanks that their National anthem was just a drinking song that Francis Scott Key knicked to set his poem to. Not only should it be acceptable to take a knee during the Star Spangled Banner it is also acceptable to quaff booze during it. I have been reading a lot about climate change recently, according to the IPCC there will be fewer tropical cyclones worldwide but more cat 4 and 5’s. But in the south west Pacific fewer cyclones and fewer 4s and 5s as well. The main changes expected here are sea level rises, more precipitation and in the south Island higher winds. Not too much for us to worry about, more an issue for us of trying to help in the Pacific where sea levels truly matter. I take the view that climate change is a done deal. All the international agreements are simply scams where big countries try to shaft small countries. The whole 1990 baseline was just Europe making sure they were never held to account for 200 years of coal burning. As for the move to the right, unfortunately it has already happened. National can lie about water charges, lie about Labour’s tax and leak people’s private details and they still get back in, in fact they get it by lying to frighten people. The issue we face isn’t climate, it is poverty.
The tune? It wouldn’t pass a Max Cryer sniff test. Maybe look for it on Youtube, then take off your shoes, put on your orange clothes (don’t you have any?) and play your tambourine. You’ll find it quite emotional. 🙂 Is it online you are talking to these Yanks who are indignant about the National Anthem stuff? All those I know personally are hugely amused.
Yes, I agree with most of this – didn’t know that we’re not in line for cyclones; that had been a big part of NZ’s expected outcomes, so thanks for that. Does the IPCC say nothing about pests? As I understand it, slightly warmer temperature in a less robust environment of less genetic diversity will lead to terrible pest problems here. (Also I didn’t mean to say vinegar fly – I meant to say guava moth, which is the one affecting my feijoas, apples, peaches, loquats and other fruit big time at the moment.)
I care as much about poverty as anyone I know. I’ve just always felt that dividing poverty issues away from environmental issues has been the strategy of greedy short-term money-makers. Divide and conquer, when in fact both environment and people are the victims of the greed. Throughout the world, big business has managed to pollute environments by convincing locals that the jobs were necessary. Then by the time big business moves out, the environment has been so desecrated all the traditional jobs and livelihoods (eg fishing, gardening, gathering) are no longer viable.
Agree about National’s lies. That’s standard dirty politics from them. Similar stuff each election. If Peters goes with National, he’ll be doing so despite the fact that L, G and NF voters were all voting for a change from National. The three parties have remarkably complementary policies (while none of them are complementary to National’s.)
But to get back to the point – how can you propose those user pays charges like $100 for taking the train off-peak? Off-peak train services are required to make the whole train system work, and the whole system reduces carbon emissions. So were you just stirring, and why?
Just stirring because I was cross about the Auckland Council spin. The $100 off peak is because those that believe in economics think goods should be priced at marginal cost to achieve an efficient allocation. So if an off peak train costs $500 to run and carries 5 people then you would want an average of $100 each. Off peak cars cost the running costs of a car.
How much to drive down fanshawe street off peak?
a) Is it fair that new developments have a targeted rate while existing houses benefit from infrastructure that was largely paid for by rate payers?
b) If there is a targeted rate to pay for the infrastructure, surely it would be unfair to then charge for the likes of water, sewerage, roads, etc, where most of the cost is infrastructure. Would targeted rates people get a rates / watercare rebate also?
We have all benefited by previous rate and tax payers paying for our infrastructure, it doesn’t seem fair to not repay the favour to new houses.
However there does need to be processes in place to stop land banking. I would think the council should look into temporary zoning – allow development for say 10 years, any land not built in that time defaults back to farmland.
To my way of thinking, Auckland is already full. Auckland already has to much urban sprawl for Auckland’s topography and it needs to stop. If most of Auckland electorates voted National, it will be difficult for Auckland Council to get rate payers to pay for infrastructure costs in new subdivisions, if voters didn’t support regional fuel tax to help in paying for Auckland’s transport infrastructure costs. The NIMBYs will make sure that rate increases wont happen.
Auckland’s existing water and waste water infrastructure is already not coping now and needs serious funds to upgrade the infrastructure to meet current demands. How is Auckland going to pay for it?
Auckland needs to consolidate, not grow.
They sound like the kind of problems every growing city around the world deals with, and every other city in NZ that would grow in Auckland didn’t would then have to deal with.
You seem to be suggesting the best way to tackle the existing infrastructure issues is to not grow the rating base at all.
Yes, I do. Whilst I don’t live in Auckland, I have been in Auckland on many occasions and have noticed on some days there is a light colour of yellow haze which usually means car fume pollution.
The problem with Auckland, there is an under lying deep divide between the NIMBYs who want their piece of ‘Auckland paradise’ and the city uncontrolled population growth that is demanding housing and a National government slow to sort the housing and population main immigrant growth.
Auckland needs to become more assertive with urban planning, population growth.
I don’t agree that Auckland is full, though I definitely think that we’ve a problem with NIMBYs attempting to hold back intensification.
Mind you, I didn’t think of Mong Kok in Hong Kong as full either… Considering that it’s the most densely populated place on the planet, perhaps that says more about me than anything else… 🙂
Auckland growing is not the problem per se. The neglected maintenance on infrastructure due to caps on rates for political reasons – that’s a huge part of the problem. Existing development needs to pay for the upgrades that are required to bring our infrastructure up to standard – and I include here water, wastewater, walkability, safety for cyclists, as well as bringing our infrastructure up to low carbon emissions standards. New development is not the way to pay for this improvement, increased rates are. New development needs to pay for the additional infrastructure it requires, but we’re putting our heads in the sand if we’re looking at any greenfields development, when we have a city ripe for improvement through intensification. We don’t need a physically larger city, that’s for sure.
Kris, I think there are some mixed messages in what you’re saying there.
“Auckland is already full”
“Auckland already has too much urban sprawl”
“Auckland needs to consolidate, not grow.”
Surely Auckland could grow in population, without growing in physical size (outwards), by growing up? It is, after all, a very sparsely settled city. By doing that, Auckland could consolidate and grow, at the same time.
There are no mix messages. There are already to many people located on a narrow strip of topography in regards to land space and its environment to support continual growth with out something giving. Until the NIMBYs are prepared to give up their slice of ‘Auckland Paradise’, it will be a struggle for Auckland to grow upwards in the affordable and medium house price range. That means it has to grow outwards which more urban sprawl to support population growth.
NIMBY ratepayers do not want rate and regional fuel increases to pay for housing and infrastructure upgrade costs which is apparent with National taking most of Auckland region electorate seats, wealthy want their houses by the harbour or in high rise apartment buildings similar to the one being proposed for the CBD, dividing Auckland between wealthy and not so wealthy city, with the not so wealthy to pushed to the outer limits.
Hobson Point is the classic case to what future Auckland will be like. Starting off as a mixture of affordable and medium pricing house in a compact designed environment, has turned out to be expensive compact housing development with public transport infrastructure problems and is still not completed.
Auckland Council is already nearing its maximum debt level, so where is the money going to come from to pay for upgrading existing and new infrastructure? Most likely it will come from the rest of NZ at the expense of the regions.
What is driving Auckland problems is uncontrolled population growth. Auckland Council needs to say to central government, the city need controlled population growth to enable the city to develop long term urban growth and upgrade the city’s infrastructure plans.
Completely off-topic. Anyone else get an email from AT about the latest top-up errors, with the banks not actually paying the money over even though it looks like the transaction went ahead? It feels like I’m going to have to take screen shots and keep a dossier of what I believe I’ve done… I can’t even look at the card involved because I get an error message. Dear oh dear. I’m kind of over it, AT…
No, because AT don’t have any contact details for me, but I’m just as worried. I put $50 on my Hop card before I left Auckland last month – for the convenience of having it there waiting for me next time I go to Auckland. There is, after all, no facility for topping up your Hop at Auckland airport (domestic terminal). If I find my card’s stash has been deleted next time I’m up in the big smoke I’ll be pissed off.
I have visited vancouver and I realised although the population is similar to auckland, Vancouver is better planned with better public transport, with excellent bike sharing and more vibrant city centre. The arterial roads are walkable with shops lined up both sides continuously for few km from city.
There is no compromised in suburb living, suburb is very green, relax and beautiful with standalone town houses that has little courtyard, yet the town centres and city near transit is vibrant and high density, with all sorts of shopping and cafes similar to melbourne. It really gives the best of both worlds.
The public transport is useful with train frequency every 3 minutes and B-bus every 4 minutes. It can travel faster than cars without congestion and low dwell time. It really means cars are not essential.
People can still drive car for leisure lifestyle as most regular commuters uses PT to free up road.
I would say auckland has a lot to learn from it.
Citizen pressure to say no to the motorway expansion 50 years ago is the main difference between Vancouver and Auckland. We’ve got to get political about stopping road building, and about reducing roads.
Thinking on a different angle, the infrastructure cost is very expensive because we build the service manually.
Are there prefeb roading blocks with pre-manufactured water, seweage, power, storm water, internet that can be automatically lay in blocks using machines similar to puzzles interlocking.
I saw chinese government build highway and bridges using automatic machines and prefeb blocks.
So if all the rezoning and main infrastructure adds a few hundred $$ per SQM to the land price…then how do we explain greenfield communities such as Hobsonville and Whenuapai acheiving prices for empty sections of $1600 per SQM?
Perhaps we should think about accounting for the other $1300/sqm?
“This week, Queenstown’s council announced it’s proposing to make it harder for people to drive into town by drastically raising parking charges and removing free all-day parking from the likes of Queenstown Gardens and One Mile carpark.
The council – trying to push a new $2 bus service which it’s partly subsidising – is discussing the controversial plan at its meeting in Wanaka today.
Asked about Skyline’s plan, councillor Alexa Forbes says “it doesn’t hurt our plans at all”.
“We do need carparks in town – we have a bunch of carparks suggested in the [town centre] master plan, so we don’t see cars completely disappearing off our roads.
“The thrust of what we’re trying to do is make sure that people have a wide variety of [transport] options, and the most difficult, or the one that’s most expensive, is actually the private car.”
Forbes doesn’t believe the council should be subsidising carparking, but applauds Skyline’s initiative.”
Bizarre! Revolutionary stuff in this bastion of capitalism in the South Island.