Monday 5 September 2022

Local government games

Councils find accommodating urban growth to be costly, so they use what tools they can to restrict it. Until that underlying problem is solved, they'll keep finding new ways to obstruct growth in places where people want to live, but where accommodating growth is just too hard.

Thomas Coughlan picks up on Auckland's move to designate too many houses as being under 'special character areas.'

It is understood the Government thinks what Auckland Council notified in August is unlawful, breaching the spirit and the letter of both laws, mainly because of the way the council has applied "special character area" protections liberally in Auckland's villa belt.

Government can keep setting new rules on top of councils, but it's balloon-squeezing. Until and unless they sort out the underlying mess that makes councils behave like this, they'll just keep reaching for other tools. We've already seen Greater Wellington Regional Council pull in greenhouse gas emissions as reason to block new subdivisions. 

How to fix it? 

  • Recognise that it's a deep structural problem in councils caused by decades of misaligned incentives, which have encouraged strongly anti-growth cultures to develop within councils.
  • Change the underlying incentives to make growth a benefit, rather than a cost, for councils. Do so by:
    • Providing grants to councils for every new dwelling built, so they share in the benefits of growth;
    • Enabling councils to issue long-duration revenue bonds to fund infrastructure, financed by revenues from that infrastructure's beneficiaries, separate from council main balance sheets.
  • Recognise that, until those incentives have time to work their way through, councils are going to need constraints. 
One simple set of constraints, until the cultures have time to update, which may require a lot of staff turnover, would set UDAs on top of councils as competitive issuers of resource consents and building consents. 

For councils where the median home sells for more than 8x median household income, UDAs could be instructed to disregard viewshafts, frontage setbacks, height limits, balcony requirements, floor-to-ceiling limits, and whatever it is that design panels normally do when issuing consents. For councils where the median home is between 5-8x median household income, there could be a smaller set of "without regard to" things. 

These are just indicative. Don't ask me; I'm not a property developer. Ask someone like Matty Prasad. Or Arthur Grimes, who'd done the work showing the shadow cost of all the darned restrictions. Void the most costly ones when and where housing is unaffordable. Where housing is less than 5x median household income, the UDA wouldn't be put into operation.

Basically treat it as training wheels. When Council's demonstrated it can't drive the bike without crashing and making a mess of everything, put training wheels on that constrain against the most costly things they get up to. The training wheels come off when housing's affordable. 

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