Election time. How do the two main parties (National, Labour) intend to address urban issues?
National wants a new urban planning act to replace the RMA. This act will see faster development and more opportunities for housing and development in a way that improves the quality of the local environment, and makes them great places to live and work, apparently. Meanwhile, National wants more roads and more use of private-public partnerships in the cosy form of urban development authorities funded through special purpose vehicles (aka known as user pays).
What about Labour? It says that the Auckland urban growth boundary should be removed and density controls abolished. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds. Labour also wants to slow down foreign investment is housing and reduce immigration. A capital gains tax is a possibility. Light rail and public transport seems to get more support than roads, with the use of petrol tax to fund this. Labour wants to build more state homes.
Both sets of policies suffer from their own contradictions: National’s basic desire to ‘free things up’ sounds positive, but you get the feeling that this will get warped into freeing things up on the edge of the city. But the desire for a user pays approach to infrastructure and the inability to build roads fast enough will mean that land and housing on the edge of the city will remain expensive. Labour’s push towards public transport, removing density barriers and building more state houses perhaps better favours intensification, but they want to ban foreign buyers. So where is the money going to come from? Is Labour serious about quality urban design, better open space and improved amenities in existing urban areas? Do they know how much money will be needed to sort out the infrastructure?
Does either party address the issue of finance and the tighter lending rules being put in place by the main banks? Add in the difficulties of over-providing for growth (NPS-UDC), maintaining and enhancing freswater (NPS-FWM) and avoiding significant natural hazard risks (Sec 6), then its not an easy mix.
Does either party address the issue of finance and the tighter lending rules being put in place by the main banks? Add in the difficulties of over-providing for growth (NPS-UDC), maintaining and enhancing freswater (NPS-FWM) and avoiding significant natural hazard risks (Sec 6), then its not an easy mix.
Put simply, to help ‘solve’ our housing crisis we need to generate a glut of housing. A glut of apartments may be an easier task than a glut of stand alone houses. Apartments have to be built in ‘lumps’, once committed you have to build the apartment, you cant stop halfway. For stand alone houses, it is easier to slow production in response to changes in demand. Only if migration suddenly drops might an oversupply of stand alone houses eventuate.
We managed to generate a bit of a glut of apartments back in the mid 2000s as many small, cheap apartments got built in the Auckland CBD. They were built for investors and financed by the (dodgy) non bank finance sector (that subsequently collapsed). The apartments were also built because of the shift in office space demands down to the waterfront, leaving many sites on the southern and western fringe of the CBD with no obvious use. There is a theory that the failure of the finance sector that funded these apartments (often leaky buildings) has seen investors turn off new builds and instead focus on existing houses, hence the steady rise in the median house price since the mid 2000s.
The Australians have recently generated a glut of apartments in their central cities. The factors that have propelled this glut seem much the same as our mid 2000s boom . Factors like low interest rates, lack of alternative investments and growing demand for inner city living has seen a big inflow of money into apartments, so much so there are concerns about a big oversupply. Planning has helped lubricate the wheels. In their case foreign finance has been critical. As one report (1) puts it:
the big kicker in recent years has been the rise of the overseas investment. This has powered the Australian apartment market on both the consumer and the developer sides. The entry into the Australian housing market by the overseas development sector seeking more stable conditions to undertake their business, supported by a relaxed foreign investment policies and our increasingly permissive planning framework, is a new addition to our housing market.
Much of the apartment development is occurring in the former industrial areas that surround their central cities, perhaps equivalent to Newtown and Kingsland in Auckland, where the decline in manufacturing has seen large areas of land become free. Rezonings and regeneration plans have helped to give the market some certainty, but the main force appears to be foreign investors looking for a return.
The Australians have recently generated a glut of apartments in their central cities. The factors that have propelled this glut seem much the same as our mid 2000s boom . Factors like low interest rates, lack of alternative investments and growing demand for inner city living has seen a big inflow of money into apartments, so much so there are concerns about a big oversupply. Planning has helped lubricate the wheels. In their case foreign finance has been critical. As one report (1) puts it:
the big kicker in recent years has been the rise of the overseas investment. This has powered the Australian apartment market on both the consumer and the developer sides. The entry into the Australian housing market by the overseas development sector seeking more stable conditions to undertake their business, supported by a relaxed foreign investment policies and our increasingly permissive planning framework, is a new addition to our housing market.
Much of the apartment development is occurring in the former industrial areas that surround their central cities, perhaps equivalent to Newtown and Kingsland in Auckland, where the decline in manufacturing has seen large areas of land become free. Rezonings and regeneration plans have helped to give the market some certainty, but the main force appears to be foreign investors looking for a return.
We need investment in housing, so how do we shift investor demand from existing stand alone houses to new apartments? Rather than try to force out investors with restrictions on foreign capital and minimum deposits, do we instead need to harness the capricious investors for society's ends?
How do we support finance from the non bank sector? Has the mid 2000s collapse of the finance sector that funded the CBD apartment mini boom burned too many people for them to return to the new apartment market? We need foreign investment. Do we need to deliberately tip the playing field by limiting some types of foreign ownership (existing houses) but enable other forms of investment (new apartments in designated areas?). Do we need a coherent plan to free up more land in former industrial areas for redevelopment? One action could be more new industrial areas on the edge of the city to help promote re-locations. Increased height in the industrial areas that ring the CBD is another move (subject to good design and incorporation of public benefits like some affordable housing). Do we need some aggregation of fragmented land holdings? Do we need improvements to the public realm in the areas of change - better open spaces, improved road environments, better facilities for walking and cycling? Improved urban design must be a bottom line this time around.
How do we support finance from the non bank sector? Has the mid 2000s collapse of the finance sector that funded the CBD apartment mini boom burned too many people for them to return to the new apartment market? We need foreign investment. Do we need to deliberately tip the playing field by limiting some types of foreign ownership (existing houses) but enable other forms of investment (new apartments in designated areas?). Do we need a coherent plan to free up more land in former industrial areas for redevelopment? One action could be more new industrial areas on the edge of the city to help promote re-locations. Increased height in the industrial areas that ring the CBD is another move (subject to good design and incorporation of public benefits like some affordable housing). Do we need some aggregation of fragmented land holdings? Do we need improvements to the public realm in the areas of change - better open spaces, improved road environments, better facilities for walking and cycling? Improved urban design must be a bottom line this time around.
Are either party thinking of these types of actions? Are either really thinking of the next urban age?
Note 1
http://blogs.unsw.edu.au/cityfutures/blog/2017/03/im-forever-blowing-bubbles-has-the-sydney-apartment-market-finally-burst/
Note 1
http://blogs.unsw.edu.au/cityfutures/blog/2017/03/im-forever-blowing-bubbles-has-the-sydney-apartment-market-finally-burst/
