Financing infrastructure

Last week, we put out a short(ish) research note on better ways of funding and financing infrastructure. Look back at NZ's history. It's how NZ used to do things.

A community wanting to build infrastructure, from roads and sewers to town halls and flood protection works, would hold a vote of property owners who'd be levied over decades to cover the cost of the debt taken on to provide the works. If those benefitting from the works were willing to pay the price for them, the works would proceed. 

Sometimes it would be coordinated through councils. Sometimes people would set special purpose local boards to run it. Either way, you got to what was needed: a way of triaging viable projects from white elephants, ensuring the support of those levied for the projects, and spreading the cost over decades rather than years. 

You'll have caught similar themes here and from me on Twitter before. But I also cover it in a column over at the Herald.

The research note drew heavily on work where I was a minor contributor a couple of years ago. Associate Minister Twyford set an Urban Land Markets Group to provide advice into the Resource Management Reform process. The group put out two reports and a submission on how carbon ought to be considered in council zoning and consenting. 

The second report, on infrastructure funding and financing, was publicly released a little while back via the University of Auckland. I drew heavily on this one.

The first report was on urban planning more generally. 

I'd attached the group's submission on carbon in consenting to a submission the Initiative made on the Natural and Built Environment Act and the Spatial Planning Act. 

The Group's submission argued that councils should be responding to their best guesses about how residents will want to live and travel when carbon prices are a lot higher, rather than trying to regulate for lower emissions directly. 

The two might lead to similar outcomes, but it's really a different way of thinking. You could ban new subdivisions while upzoning for a lot more density, figuring that zoning has to require people to live in low-carbon ways. Or you could remember that all urban emissions are in the ETS and that carbon prices will automatically encourage people to make choices. There could be less demand for suburban living, or there could be more demand for public transport to connect new subdivisions to town. 

Let carbon prices pull the rope, rather than trying to make zoning push on a string. 

I'd mentioned the Urban Land Markets Group in a book chapter a couple years back. I'm not sure now whether we put the chapter up anywhere ungated. The book's here though.