In praise of planning blight?

Time for a bit of idle thinking.

The decay and deterioration of an urban area due to neglect, crime and old age (urban blight) is generally held to be a bad thing. One of the functions of urban planning used to be to arrest and hopefully prevent urban blight from taking hold. The certainty over land use futures provided by planning and the management of negative spillover effects from new developments helps areas to resist the pressures of dis-investment and decay associated with blight.

Planning has sought to reduce the adverse effects of blight on urban neighbourhoods as there are a bunch of social and economic consequences for those 'left behind'.  Some of the early attempts at solving urban blight by public sector-led redevelopment ended up adding to urban blight. Overtime the emphasis has shifted to providing certainty to the property market by zoning. But has planning done too good a job? Is a degree of  blight a necessary condition for cities? While an area of the city gripped by urban blight is to be avoided, do cities need a bit of blight from time-to-time for city development markets to function?  Sometimes, places need to decline before they can redevelop.

Urban blight's cousin - planning blight - is also considered to be a bad thing, perhaps more by association than in actuality.  Could planning blight be a milder form of urban blight that helps along  the process of decline then rejuvenation? Planning blight has been described as the reduction in property investment and upkeep due to anticipated future rezoning. Sometimes planning blight can also be associated with designations for future public works that are not implemented for a long period of time. 

There is clearly an issue with regards to how Auckland is to redevelop and intensify, as there is with many first world cities. The easy options to accommodate growth have been used up, largely. Outwards expansion of the urban area is now costly and much less attractive than it was even 20 years go, given increasing length of commuting times back into main employment areas. Within the city itself, most easy infill type options (add a unit to the back of a section) have been taken up. 

Redevelopment is needed (scrap off and start again). Add in geographic constraints and community opposition to change and the pressures on the urban area mount. But redevelopment (apart from government-led projects like Tamaki and Hobsonville) appears costly and complex.  This is at a time when most commentators want the private sector to take up more of the slack with regard to house construction.  

Generally conditions for redevelopment are favourable when then is growing demand, zoning is enabling, existing development is getting old and worn out and the area is due to move up the urban density ladder. The ratio between land values and improvements (buildings) needs to be low (for example where land makes up 70 or 80% of the value of a property) for redevelopment to be viable. Older development is the most fertile ground for this type of ratio, but a small house on a big, expensive section is also likely to have a low ratio between improvements and land value.

However, is it just old development that is ripe for redevelopment?  Does there also need to be some uncertainty about where the area is heading for redevelopment to work? Older areas may just gentrify - for example the 'doer uppers' will move in and improve the old stock, rather than redevelop. Equally, signs of a turnaround in fortunes for an area may see current landowners sit on their land, reaping value increases. Why sell, unless the offer is huge? But if there is some uncertainty about the future of an area, then current landowners may be wanting to 'get out'.  

At least some of the old drivers of urban redevelopment that helped to create uncertainty  (and with it, urban blight) seem to have dropped by the wayside:

1. Absolute poverty is less of an issue that it used to be (so 'slums' are no longer an issue)
2. Economic conditions seem more stable, with the 'ups and downs' less pronounced than they might once have been
3. Building standards are much higher and so buildings do not deteriorate as fast as they used to
4. Industry is not longer dirty and smoky creating pockets of lower value areas in their vicinity.

Disasters are also a good precursor to redevelopment, but are not to be encouraged. NZ is free of military conflict, while widespread urban fires are a thing of the past; but we do, however,  have natural disasters.

In the past, these types of forces may have created a degree of uncertainty  in urban environments. Areas often need to go down before they came back up. Redevelopment was a natural process that followed decline, with risk taking developers (perhaps) the first movers into areas that have been left behind. Owners and investors would follow. Through this process of decline and renewal, new housing stock is added.

Since about the 1970s and this process seems to have been halted. Partly this is through gentrification and heritage protection. It may also coincide with planning  bringing a lot more stability to the urban property market.  

Some redevelopment has occurred within industrial areas close to the central city of Auckland, with apartments replacing industrial units.  Why there? Did uncertainty over future business demand for inner city industrial sites start to see some industrial landowners question whether holding onto land was a good idea?  Did some uncertainty creep into the market - 'better get out now'. At the same time that uncertainty created an opportunity for others to exploit. Developers did not have to compete against residential investors or owner-occupiers to buy land, as most would-be home owners and residential investors would not look at industrial sites. Demand for apartments  in industrial areas may have been uncertain, but for some the risk was worth taking (but has some of that pressure for redevelopment fallen back as industrial land values adjusted to the prospect of higher returns from apartment development?)

The question is what to do, if some of the old drivers of redevelopment are absent?

One reaction is the call to open up the city land market to much more 'competition'.  This is essentially the approach of the National Policy Statement on Urban Development Capacity. If most sites in the city could be redeveloped in some shape or form, then there must be some 'willing seller' options for developers across a city. At its simplest, if 5% of landowners actively want or need to sell and move out at any one time, then the bigger the pool of potential sellers, the more competition facing those who want to or need to sell. I don't know if 5% is the number.

However this strategy is all a bit scatter gun in its application, which makes infrastructure planning much harder and infrastructure upgrades more likely to lag development.  It is also relies upon making the redevelopment 'balloon' as big as possible in the hopes that within that balloon there will be a few folk who, for whatever reason, need to sell to a developer. But the bigger the balloon, the more the plan has to work hard to ensure that new development blends in with existing development - it is not really possible to identify areas of change if most of the city is up for change.  Hence the extent of change possible is often quite modest in its form to placate the locals. There will also be a bunch of people chasing the properties for sale - owners, investors and developers.  Generally owners and investors will out bid the developer. There is not necessarily much uncertainty as to future conditions to exploit.  

An urban redevelopment agency might be another tactic, one the Labour-led government is thinking about.  In the past such agencies have been used to help stimulate redevelopment of declining areas; to help accelerate the process of rejuvenation.  Most often this involved taking an area that had declined and adding dollops of public money to engender some confidence.  In a world of more limited public money and the need to redevelop existing stable areas, do such agencies need to be recast? Do they need to (somewhat contradictory) focus on the down side rather than the upside of cycles of urban change?

The other option is for the developer to test the boundaries of possible development on a site; to work through the consent and/or rezoning process to create a gap between a property's current value and what may be possible on a site.  That is, to exploit planning's scope for flexibility. This tactic creates the endless fun and games of the RMA process. It also creates an incentive for the developer to 'bank' the consent and sell the site, rather than bank and implement the consent. 

In this context, is there a role for planning to actively 'de-stabalise' some areas to help start a process of decline then rejuvenation?  Is planning blight actually a good thing?

There is no definition of planning blight. Generally it is taken to mean uncertainty and limited investment in an area due to uncertainty as to zoning and associated development. If landowners think there are zoning changes in the wind, then they may sit on their properties, not wishing to develop them until the future is clearer.  This may help generate the conditions for redevelopment. 

Another small example is the fringes of Takapuna. For a long time through the 1980s and 1990s, it was thought that Takapuna would expand - workplaces would grow and more shops develop. Residential landowners on the edge of the centre sat on their hands and hoped that the commercial centre would expand outwards towards them, raising the value of their properties. No point developing the section, just wait. A form of benign blight set it. But as the 1990s rolled into the 2000s, Takapuna's growth stalled. Other centres developed (like Albany), workplaces located elsewhere like Smales Farm.  At some point, landowners started to wonder if the centre was no longer going to grow. As time marched on they also wanted to realise their asset. So redevelopment into apartments began to look like an option. The rundown nature of some of the housing, plus rising land prices driven by Auckland's overall growth  changed the dynamics. A zone change to allow higher rise development was prepared. Opposition was limited. Now some apartment developments are mooted. This has been a 30 year process of hope, uncertainty, decline and a change of thinking.

Planning has kind of enabled this process, in a funny way. Identification of Takapuna as a sub regional centre helped fuel hopes of commercial expansion, while a tight rein on that commercial zoning helped to generate higher values within the centre and therefore a degree of hope on the edge of the centre that at some point these values would expand outwards and a reward for waiting would be obtained. But as hopes of commercial expansion receded, talk of apartments and rezoning facilitated a change of attitude.

Is this a small example of what needs to happen across the city in many areas and pockets?  Do we need to generate some planning blight to help facilitate urban change?   The possible expansion then contraction of retail and business areas seems a likely candidate. 

What would be a example of a plan-led approach? Do we need an suburban version of a greenfields 'future urban zone'? Large areas of greenfields land are zoned future urban so as to protect the land resource from incremental subdivision and development ahead of urbanisation and to ensure that when the land is urbanised, it is done so efficiently and effectively. There is a degree of blight associated with this process as landowners await rezoning from future urban to a live urban zoning. The costs of this blight are considered to be acceptable given the benefits of the comprehensive approach enabled. Would a suburban version be a good idea? Would a 'future, possible intensive mixed use zone' applied to areas like future LRT corridors be a helpful tool? Or should we encourage retail areas to expand, or hope to expand, in the knowledge that over time retail will wax and wan, opening up opportunities for alternative uses around their fringes?