Monday 11 June 2012

Oh, Christchurch

As of November last year, more than 6,500 residential properties in Christchurch were in the red zone, indicating the land is not suitable for rebuilding. Residents have to move elsewhere. More sections in Southshore were red-zoned last month. Other properties have been red-stickered, indicating that the building itself is dangerous and not suitable for current habitation; some of those will be in the red zone, but others can be repaired or rebuilt on-site. Some of the red-stickered properties will be multioccupancy units, like the downtown apartment buildings now coming down.

We need a lot of new houses in Christchurch.

But, we're still exporting houses:
This red-zoned Burwood house will be the first of 50 an Auckland businessman will roll out of Christchurch on a truck from this weekend.
Quake Proof Solutions director Gary Muir is recycling and relocating red-zoned homes to minimise demolition waste and fill housing shortages in the South Island. 
He is moving his first two to Gore, but anywhere is possible. In the next year, he plans to move at least 50 houses. 
''Wherever someone wants a house, that's where we'll put it, " he said. "We're looking to move as many as we can."
Insurers and the Earthquake Commission have deemed at least 6000 homes too costly to repair.
Insurance companies needed the land cleared for rebuilding but instead of demolishing, sold them to Mr Muir to take away.
"This is mutually beneficial, " Mr Muir said. "We can recycle about 90 per cent of a house, for half the cost of rebuilding.
"It's either this, or we put a bulldozer through the middle of it." 
Cheap land, resource consents and stable sections were easier to find outside Christchurch. But Mr Muir would try and make any site work, even in the city.
..."We've had a lot of paperwork stoppages, " he said. "Every day they're changing the documents."
...He was one of the lucky few to gain accreditation for red-zone house removals. It took him 13 months to get the tick of approval for his first project. [emphasis added]
And, we've hardly started building replacements:
The first three months of this year saw local councils issue consents for just 60 new homes in the region, double the 30 issued in the last quarter of 2011, according to Statistics New Zealand.

Between the first quakes in September 2010 and the end of April this year, consents for 152 quake-related rebuilds were issued in Canterbury, as well as 149 consents for portable homes in temporary villages.
...The total number of homes needing to be rebuilt in Canterbury will depend on how many insurers deem uneconomic to repair, and these will join red- zoned homes and dangerous dwellings already brought down on the rebuild list.
Breaking down the consent data for permanent earthquake rebuilds month by month does show a shaky but upward trend:
2011 May 5 June 8 July 8 August 5 September 4 October 13 November 10 December 6 2012 January 17 February 24 March 16 April 17
We have to be careful to distinguish between the Stats NZ series on earthquake-related new building, cited above, with the total number of new dwelling units approved: Christchurch City had 1271 new dwelling units approved in total from April 2011 through April 2012, the most recent available stats. But it can take a while for approvals to turn into houses.

It really isn't hard to connect the dots from Council taking way too long to allow more subdivisions to current housing shortages.

Meanwhile, Environment Canterbury is barring people from installing logburners in rebuilt homes. ECan has been moving for a while to reduce the number of logburners in town in order to reduce the smoky smog that can sit over town in winter; you're not allowed to put logburners in new houses, but houses with existing logburners can keep and update them. Newer low-emission burners are supposed to be only a few years away; ECan might let people start putting those in when they're available. But, until then, you're barred.

I can understand ECan worrying that manufacturers might not be in a hurry to release worse-performing but lower emission logburners if they can still sell the old ones. But I would have thought the better way to keep the incentives straight would be to mandate the stricter standard only when some manufacturer brought a new compliant burner to market. That manufacturer, or importer, would then have a temporary monopoly. It would take a little while longer for older burners to cycle out of use and for emission levels to drop off, but we need also to put some value on the security of supply a logburner provides when earthquakes or heavy snow can knock the power out.

The Press's editorial nails this one:
The earthquakes have provided an opportunity to hasten the phasing out of inefficient woodburners which ECan has taken by sticking to the policy it has had since 2002 of not permitting woodburners in new homes.
This means that ECan is refusing to allow homeowners who had a woodburner and whose homes have been destroyed by the quakes to install another one in any new home they build. For many with access to a supply of cheap woodfuel the policy risks adding additional financial hardship to the many others they are already facing.
ECan said last week that its policy could change in future but this would not be until ultra-low emission woodburners were developed. That is not likely to happen for several years. As a practical concession to present problems it is useless.
Even the Parliamentary Commissioner for the Environment, Dr Jan Wright, recognises the inadequacy of ECan's response.
...Something other than continuing the ban adopted before the earthquakes would show that ECan truly understands that circumstances have changed.
Why not just deem on-site earthquake rebuilds to be a continuation of the existing consent for ECan purposes?

People with destroyed houses are caught by pre-quake regs that sought to slow any urban expansion; those able to rebuild are caught between pre-quake regs designed to slowly phase out logburners and power prices that keep ramping up as building new hydroelectric power dams for lower cost power supply seems effectively banned. It'll be interesting to see what power prices look like in a dry winter after everyone's switched to heat pumps if we've not increased supply.


  1. From the Close Up report several nights ago, it appears there is a low(no) emission burner that is ready for production, and for ECAN to blithely say leave a space in your house so if it is certified by them over next three or four years (!) you could then put it in.

    They're cold now: crazy, stifling, freezing, bureaucratic nonsense.

  2. of topic, but i was reading Gambling Harm Reduction Bill, musing that if we regulate access or price harder it would have a strong substitution effect to other forms of gambling in particular internet gambling, given ease of access etc. i then found this study, views?

    1. There are some problems there with sample drop off. I'd put a lot of weight on these kinds of results IF there were another two-wave sample taken that didn't span a policy change and if they found no change in problem gambling over that period. Sample drop off can drive the results in the absence of policy change if people are reluctant to admit twice in a row that they're gamblers but expect approbation (even if only self-approbation) for reporting having quit gambling.

  3. Whoops, I missed the end of that first sentence :) But I think my point is made regardless.

    1. I don't know enough about the claims made by that manufacturer to be able to comment. Plausible that ECan is being silly, but also plausible that a manufacturer about whom I know absolutely nothing could be stretching claims about his product.

  4. Eric, I got the wrong show. The low/no emission burner was on Campbell, not Close Up. It was last Friday night, first item in the clip below (after the 15 second add plays). Just if you want to have a look:

    1. Thanks a lot for that, Mark.

      I buy the case for having emission standards in Christchurch. What's going on with that burner seems bizarre though.

  5. There are two ways to approach such a crisis.. one way is for the authorities to "never waste a crisis" so as to impose tighter rules and/or the chance to put into practice all that you learned at Urban Planning school.

    Or you can say the crisis is simply too big for all but the most basic of rules.

    Frankly, both these scenarios horrify me so I guess we'll get some ungainly version of the the "buttered cat" bouncing between the two extremes..


    1. Hypothesis: A buttered cat will not bounce but rather will sit and lick itself until clean.
      Materials: One cat. Butter.
      Method: Butter cat. Drop from 1' height onto solid surface. Observe whether cat bounces or stops, sits, and licks self until butter is gone.
      Observation: Cats do not being buttered. Pointy ends matter.
      Conclusions: Do not butter a cat.

    2. Is there an economics blog hall of fame? If there is, this comment should be in it.

  6. Im in Invercargill - this week a local guy who got Radio New Brighton going did a piece on over 40 families living in cars in ChCh -

    Meanwhile I can shop here for ex ChCh houses and furnish them with ex ChCh Hotel chattels from a 2nd hand store.... ?? Nicki Wagner and Leanne D need to do a few less coffee mornings and do something a little more useful. Bloody shame. Good luck up there

    1. I put reasonable odds that if our house had wound up being uninhabitable, we'd no longer be Christchurch-based.

      Current zoning rules and land use policy across the country embeds massive fragility into our systems in case of earthquakes. They can happen anywhere. Getting this sorted out matters for more than just quakes; Auckland housing is now running higher than it did back in 2007.

  7. Watching from abroad, I've been pretty stunned at how slowly the rebuild is going. Admittedly, during our time there as renters, we had pretty much no interaction with the council, permitting processes, resource consents, or what have you. But I live in Los Angeles, which has a reputation as one of the worst places in the world for permitting, land use restrictions, and bureaucracy. We did a major remodel here in 2005 (basically added an entire story to our house), and I find what's going on in Christchurch (with a much smaller population and therefore what should be a more accountable government) simply staggering. Far worse than what we went through, even though Christchurch is in an emergency situation.

    17 permits a month is laughable. It should be at least an order of magnitude higher.

    It makes me question if issues like these are captured in rankings like the Index of Economic Freedom.

    1. Even if there were no consenting constraints, downtown would almost certainly still be a mess - they have to get the damaged buildings down and out, and there's a whole big mess of insurance issues to sort out. I've heard there are still issues over whether full replacement means replacement to building code as it existed prior to the quakes or building something that can serve the same purpose under the new code; I'm a bit surprised the government hasn't funded a test case or gone for a declaratory judgement here. Maybe insurance contracts are just too heterogeneous for any test case to be broadly applicable. Who knows.

      As for economic freedom and property rights, this is ridiculously depressing: