Thursday, 22 January 2015

Auckland SimCity

Some reports make you want to find a city planner and beat it with a heavy muddy stick.

Arthur Grimes and Ian Mitchell's latest MOTU report is the latest. They demonstrate just how badly Auckland Council has wrecked housing affordability. Stupid "it was a good idea at the time" rules compound on one another to make it impossible for developers to innovate in providing affordable housing.

Read the whole thing. But Table Two has the main effects.

Every one of these things would have seemed like a good idea to somebody at the time, but nobody stopped to think about the cost.

  • Height limits appeal to NIMBYs, maintain viewsheds (the notion that there's infinite value in being able to see some mountain in Auckland from some point on the Harbour Bridge), and appeal to idiotic planners who reckon nobody would want to live that high up anyway.*
  • Floor to ceiling height limits appeal to planners who think that it's not fair that poor people's apartments would have low ceilings; they ignore that tenants could otherwise choose between higher ceilings and higher rents and lower ceilings and lower rents. Some people prefer the cash in hand; planners imagine this stuff's costless.
  • Minimum balcony area regs appeal to planners' sense of aesthetics; they ignore the cost and cannot imagine that others might prefer the cash.
  • Delay is costless to planners, who imagine the costs of a poor (ie, not what they like) design to be huge because buildings last a long time. 
Grimes writes:

In some cases, developers felt that they may even face additional challenges gaining planning consent if their proposal includes innovative solutions that are not typically included in other developments. Specifically, developers considered that being innovative in order to reduce cost heightens the risk and uncertainty when trying to obtain a consent, both in terms of the time required to work through the consenting process and the ultimate outcome in terms of the number of dwellings. Developers commented that urban designers do not like small uniform dwellings which are easy to produce and which reduce costs.

He also specifically cites Grey Lynn people as part of the problem around NIMBY activism.

While I broadly support Nick Smith's look at how the RMA might be fixed so it stops enabling this kind of Council ridiculousness, I doubt it goes far enough. Underpinning all of this is that Councils have zero current incentive not to behave this way. The RMA was never intended to enable this kind of mess; planners used it to set rigid district plans and to fob off blame for lengthy processes. If Councils instead had better incentives, so that growth were in their interest instead of just NIMBY-appeasement, we'd have better outcomes. 

* I'm not exaggerating. That was one of the reasons behind Christchurch CBD height limits. Never mind that it's developers' money on the line if they're the ones wrong about what customers might want. 


  1. As a practicing planner worried about dodging your muddy stick, I'll note that planners work for Councils, who are elected by the public. Some, but few, planners may be dreaming up ways to drive up the cost of housing through delay and idiosyncrasy, but in large part Table 2 is showing the preferences of the (vocal, engaged portion of) the public, as expressed via their electeds. Don't hang it (all) on the planners, who are often more in alignment with the forces of change that help cities evolve, than you're giving credit to in this piece.

  2. I am pretty sure that both Bill English and Nick Smith initially made statements to the effect that removing the MUL was the key. Actually, height and land use restrictions are much more important, as they effect use of land near where the jobs and, institutions and cultural capital are. Hopefully they are coming around.

    As an aside, keeping Epsom zoned as two storey houses on 600-800 sqm while putting 40 storey apartments on the few areas where NIMBY opposition can be overcome will lead to a pretty stupid-looking city.

  3. In a sense they (the vocal + engaged portion) trying to use the vagaries of the democratic process to create property rights that didn't formerly exist.

  4. Agree entirely. That's why I reckon we need to fix local body funding arrangements so that the elected officials have some reason to care about things other than NIMBY-placation. Then the directives would filter down to the planning bodies.

    If Councils got some share of increased local income tax or local GST, they'd start having more interest in facilitating development.

  5. I think the solution has to restrict standing for objection to notified consents, upzone the whole city, then let developers pay off the few neighbours who do have standing. So long as only neighbours experiencing real disamenities and not made-up stuff, and not heritage activists from half-way around town, have standing, it's possible to strike Coasean bargains. Where the range of potential objectors is not limited, anybody can be the hold-up and block things in hopes of being paid off.

  6. That'd be a good start.

  7. I think one of the problems now is that council planners seem so risk adverse. They just cant use common sense to make a lot of straight forward decisions - they now require mountains of paper and reports to satisfy every possible eventuality which has only crept in, during the last 10 years or so. A related issue to this which always seems to go unnoticed, is the increasing role the legal profession has had within the planning process. They seem to have an ever increasing presence into the planning process which invariably drives up costs to reduce risks around notification/ judicial review etc.

  8. Jolly good. It looks like (from that table) that Motu happliy guess at costs without assessing benefits, including long term benefits, of such things as green star houses, trees, and such like. And try to pass on the costs caused by crap applications by developers (surprisingly comon from ehat I see). Good thing economists are ideology free in their analysis.

  9. Economist: "You know that regulation mandating that the only car we could buy in NZ is a Mercedes? Well, we've noticed that only rich people can afford cars now. And while nobody really thought about the costs of the reg when we put it in, it turns out that this adds about $50000 to the cost of a car. Maybe we should let people buy Toyotas."


  10. Read the whole thing? It's 66 pages long!\