Thursday 10 March 2011

Assorted earthquake updates

  • The fuel crisis is long over. We should have had price gouging from Wednesday through perhaps the Saturday immediately after the quake. But there was no need for it after that. Cut price fuel currently in Christchurch consequently doesn't much bother me - prices elsewhere in the country are up about 15 cents per litre, but they've held constant here.
  • On the other hand, rents for business properties really should be going up with the rather large shock to supply. Folks complaining about fairness ought remember that which renters were in earthquake destroyed or earthquake safe properties had a bit of random luck to it. Maybe it's not fair for a landlord to increase the rent for an existing tenant (contingent on what the lease terms are), but it also isn't "fair" which businesses had their premises destroyed. Is the allocation {decided by the earthquake} more fair than the allocation {decided by which business now values the premise most}? In the former case, recall that the lessee may well be the one to take the rents if he can sublet; is that more or less fair than the landlord increasing the rent?
  • Our place in South Brighton has power and water. But nobody knows the state of the sewers. We'll find out probably by the weekend whether things are working, or whether 1) sewage is pooling at the low point east of the Bridge Street Bridge; 2) there's some earlier point where sewage is pooling; 3) our drains back up. We can live with chemical toilets. But we'll have to make some other arrangements if the drains start backing up. This was the only real bit of useful information for us coming out of the South Brighton community meeting yesterday afternoon in the park. The rest was a hug fest about how resilient we all are. Some folks go for that, and I'm sure it was useful for them. But the only useful bit of information - about the sewers - I got by asking the Civil Defence guy after the huggy bit was done. At least I could read Twitter during the boring bits.
  • The Reserve Bank cut rates by a half point. That doesn't bother me as much so long as Nolan's right that they strongly signalled its being temporary and that their tightening will also go half a point tighter than otherwise. But the RBNZ eroded an awful lot of credibility on the "will tighten when we're legally and quasi-constitutionally required to do so" front back in '05-06 when they were experimenting with notions of the natural rate of unemployment maybe being negative seven percent. There, they seemed in collusion with Michael Cullen in ignoring the Policy Targets Agreement and the Reserve Bank Act. This time, they were under pressure from Key to cut rates. Hopefully it'll be credible that they'll start raising rates when they're supposed to.
  • University daycare still down. They only got the engineers' inspection reports yesterday, and now are getting Ministry of Education approval. Why they only got the engineering report yesterday when half of Christchurch had their reports and approvals already... very frustrating.
  • Still no access to the Commerce Building to get my stuff. Contemplating donning ninja garb and breaking into the building in the wee hours. I broke into Alan Woodfield's house once using ninja skills, scrawniness, and a partially open second story window when he locked his keys in. But he wouldn't have freaked out if I'd set off the alarm since he sent me to do it; not sure Campus Security would be as friendly.
  • The University is set to start classes next week in marquee tents with whiteboards set up in the parking lots. Lots of buildings on campus are closed. It'll be interesting to see how it goes if they don't let staff back into their offices to collect their materials until after some gawd-knows-how-long safety assurance procedure that may or may not finish before lectures start. Glad I'm not teaching this semester.
  • Peter Cresswell has been the best consistent blogger on earthquake rebuilding issues. Helps that he's out of town. See here and here for example. We'd do well to have a bit more respect for property rights. After September's quake, all the cool kids were all "Hey, don't let them tear down any old buildings! They stood up this time, they'll stand up again! Force the owner to bear costs of putting them up to code, even if it's not possible to meet both the building code and the heritage requirements!" This time they're all "Nah, tear em all down, sometimes without even telling the owner 'till after it's done. If it saves only one life it's worth it." Both are asinine. There are heritage buildings that deserve protecting. I'd be fine with Council paying a lump sum to the owners of such properties to put covenants on them. As for the rest, why not let the owner decide? Or, if you're really boffo for heritage buildings, set up a charitable fund that pays building owners to strengthen and restore old buildings that they'd otherwise tear down? Here's one heritage building owner who's working hard to keep his building up. I plan on helping him by continuing to buy his beer.

    Too many folks have grand schemes of what the city should look like. I always prefer the mix of styles and uses that come from private owners making independent decisions about what their property should look like. It's one reason I don't live in a developer-designed subdivision. I like heterogeneity. I worry that delays on rebuilding while trying to get some consensus on a scheme might well kill our window for rebuilding. Driving around, I see a lot of folks who're clearly moving out of town. I hope they'll come back. But the longer they're gone, the weaker will be the ties that would bring them back.
  • The Christchurch Press reports that prostitutes in town are doing a booming trade. One street worker interviewed claimed a $1400 night, with clients at $100 or $120 each. Folks in the taxi industry often claim that taxi drivers go home after they've made "enough" for the night, even if business is booming. It would be interesting to know at what point labour supply curves start bending backwards in this industry as well, so to speak.
  • Paying for this whole mess. The part picked up by central government - that's what debt is for - another reason it's rather silly to have EQC heavily invested in government securities. How to pay off the debt? Hopefully mostly through spending cuts, but I'd reckoned the government was spending too much prior to the earthquake too. I'm worried about the talk of increasing abatement rates on Working for Families as a way of saving money - the implications for effective marginal tax rates are not good. But I haven't the time or capacity now to run the numbers. The elder one's nap is almost done. And daycare's still closed. And I need to find my ninja suit...just in case. Blogging will continue to be as and when can until the current emergency passes...


  1. Good to hear that things are getting back to normal in your part of town. Do you have any comments on rental hikes for residential properties?

    Be careful when donning your ninja outfit. Security guys in campus are definitively unfriendly.

  2. Re rent hikes: if this effect is reliable (reliably predicted, reliably measured) I wonder if there is an opportunity for it to be part of insurance contracts? Property owners pay less for insurance against destruction in exchange for promising to give the insurer the benefit of rental rate hike opportunities.

  3. Check out the comments your Mayor made,
    He calls landlords who increase rents looters:
    Yes looters.
    Yes this is your leader the most promiscuous sanctimonious looter in town
    here is Farrar and discussion

    Also check out tough guy Stephen Franks site for more reality in the sea of WINZ handouts and oh God I can't stand it, somebody send me money.

  4. It is interesting the talk of rebuilding schemes. Did the original builds come from a grand vision? Not too sure they did.
    That's not to say there isn't a role for coordinating design competitions for public buildings in need of rebuild.

    Is labour economics now being taught at night on Manchester St this semester? Macro or micro models?

  5. @Luis: Depends if 4.5 aftershocks under the estuary are part of normal. My ninja-fu is excellent; my getting through alarmed and secured doors, not so much.

    A landlord who hikes the rent with no notice is a complete jerk. But if we were still renting, and the lease were due in a couple months, and the landlord said they'd had offers for a multiple of what we were paying, I'd understand. Whoever would be outbidding me was probably pushed out of his own house by the quake.

    @David: Neat idea. Would be tough to write up terms though.

    @V: I'd expect reasonable effort would go into proper design selection for public buildings and spaces like the former provincial chambers. As for labour econ - I'd just like somebody to be collecting the data :>