The recent announcement that the government is looking at urban development authorities (UDAs) has to be seen as a step forward in terms of the range of tools to enable good quality, well planned, public good oriented urban development, even if first reading of the discussion document (http://www.mbie.govt.nz/info-services/housing-property/consultation/urban-development-authorities) gives the impression that the back story for re-consideration of development authorities is all about quantity not quality.
As I mentioned in my blog of of the 5 September 2016, the government has been signalling the possibility of reheating earlier ideas for urban development authorities, but with a twist in their purpose to enable private development.
The MBIE discussion document on development authorities notes that UDAs are a common tool in many countries. Generally they have been deployed to help address what could be termed some type of failure or blockage in the private development market. A blockage or failure in the sense of no development, or development that tends to replicate current problems (like spatial inequality arising from entrenched social deprivation) or poor design that breeds crime and health problems.
The classic case for an Urban Development Authority is where the recycling of old industrial land to new uses (residential or business) requires investment in land remediation and upgrades in public infrastructure before redevelopment can take hold - required preparatory actions that are likely to dissuade private development. UDAs are a tool to make this investment upfront and then reap the reward from that investment by partaking in subsequent development or selling on the sites with their improved value. The alternative is some form of blight as the land sits idle.
Advancing social objectives are also a common reason for UDAs, such as urban regeneration of declining areas, or strongly pushing on with agendas to expand the supply of affordable housing in market attractive areas.
UDAs have also been used to help promote the benefits of good quality urban design. They may be a tool to help demonstrate that urban intensification can work. Some of the first inner city flats in Auckland and Wellington were built as public housing, Waitakere Properties trialed medium density housing at Harbour View during the 1990s against industry advice and before it became a standard product out west. Hobsonville is a more recent example.
Elsewhere, UDAs have been used to help co-ordinate the development of large greenfields areas. This is on the basis that a high degree of co-ordination across landholdings and infrastructure networks is needed to ensure long term, efficient and effective urban forms, more effective and efficient outcomes than if left to normal market processes of site-by-site development.
The 2008 Sustainable Urban Development Units of the last Labour Government raised the idea of UDAs. The unit noted the same points as above. For example go to:
tohttps://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Resource-material-Building-Sustainable-Urban-Communities-7-Appendices?OpenDocument
Funding of such agencies always becomes the critical issue. All four models require some form of upfront public funding, with part of that funding a recognition of the strong public benefit component of the authorities work. The easiest method of capitalisation is to gift the UDA a bit of public land for free - an old military base or port area are the classic examples (Hobsonville and Harbour View). But if there is not much unused public land sitting around (and there doesn't seem to be that much in Auckland, despite the best efforts of MBIE to find some), then there is a need for capitalisation by other means - a government loan or grant, for example. But this then brings in an element of risk (as for any large scale development). What happens if the scheme goes bust? Who carries the can? Up to the GFC, the various state-based urban development agencies in Australia generated shed loads of cash, come the GFC and they generated shed loads of debt.
If the government is intent on reducing its debt, then the only route is to attract private investment. To do that there has to be an incentive for private capital to participate, an incentive that is greater than the returns available through ‘normal development routes'.
What are these incentives? Faster and more certain consenting routes, the ability to buy up ‘hold-outs’, get trunk infrastructure laid on even if the development is out of sequence and more easily shift around existing roads and public open spaces are good examples. Hey presto, the UDA is recast from something that does public good to something that does things faster. In the world of a so called housing crises, then doing things faster is seen as a public good. But once the crisis blows over, will the UDA be able to get back to its roots?
Well perhaps so, but maybe not.
The MBIE discussion document traverses these points, but is not very clear on how they are to be addressed. Apparently New Zealand needs UDA legislation to “enable faster and better quality regeneration of our major cities," The report is a bit unclear as to what it means by quality. Mostly it spends it time discussing how the authority will be able to develop its own planning rules without being subject to wide objection and appeal rights and have powers to rearrange things like roads and parks. It can request trunk infrastructure extensions and impose charges to pay for infrastructure. It feels like an update of Special Housing Areas, with a bit more thrown in to deal with all the pesky local authority run issues that tend to slow down SHAs.
It does mention that a social good like affordable housing may be an output but this doesn’t seem to be hard wired into the process. One of the strategic objectives for UDAs can be an affordable housing requirement - can, not must. Good quality urban design (carbon neutral, low impact, energy efficient well designed housing that offers choice and diversity ) - are those words even mentioned in the document? What about certainty over environmental enhancement, not just mitigation?
So the quick comment on the first read of the document: if we are going to use UDAs and their special powers, then let’s make them a tool that is fit for the long term, not the short term, and let’s not forget that their roots are in public good outcomes that are much wider than just “more housing, faster”.In fact to make them a realistic proposition UDAs need to have a stronger public good element to them. To exercise the powers that are available like compulsory acquisition of land, and ordering councils to extend trunk services presumably at a cost to ratepayers, then there has to be reasonable public good justification for these actions. Is telling a landowner that the UDA needs their land so that they can do a deal with a developer sufficient justification? There is a kind of moral justification of the greater good to take land for a highway that has to follow a particular route, but to build houses more quickly?
As an aside, it is interesting to note at the start of the document a shift in rhetoric around housing and planning. The apparent under build of houses in Auckland is now seen as a legacy issue from the GFC. This kind of matches recent statements from the Prime Minister that the national under build of houses may be in the order of 10 to 15 thousand, well below the 30 to 40 thousand often bandied about for Auckland. The justification for UDAs shifts to more of a matter of stimulating competitive land and development markets to help reduce price pressures. Planning rules are seen as the bane of competitive markets, and UDAs may help stimulate competition and development ‘at scale’. But from a different perspective are UDAs an acknowledgement that development needs a helping hand - good planning in other words? Watch this space.
