Archive | Land use

Readymix production over 1 million m³/quarter again

Readymix concrete production was over 1 million m³ again in the June quarter, after the customary March quarter dip.

Statistics NZ’s production graph shows readymix fell just short of 1 million m³ in the June 2007 quarter, at the start of the global financial crisis, hit a low point in the first quarter of 2009 and stayed there for the next 3 years.

Production rose steadily until it passed 1 million m³ in the December 2015 quarter, then dived sharply in the March 2016 quarter. It fell again in the March 2017 quarter, but less dramatically.

Production in the June 2017 quarter was 1.03 million cubic metres, down 2 percent from the June 2016 quarter (when it was at a record 1.05 million cubic metres).

“Ready-mix concrete production has been running above 1 million cubic metres per quarter for over a year, except in March quarters,” construction statistics manager Melissa McKenzie said. “This June quarter, enough concrete was produced to build almost 69 Sky Towers.”

The Auckland region accounted for over one-third of the total – 377,000m³ of the total 1.03 million m³ in the June quarter. Both the national & Auckland production totals fell 2% below the June 2016 level.

In Canterbury, the 176,000m³ of readymix was down 17% from the June 2016 level.

Production nationally was 4.07 million m³ in the June 2017 quarter, up from a low of 2.64 million m³ in the December 2011 year.

Attribution: Statistics NZ release.

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Christchurch convention centre tender introduces Cimic to major NZ projects

When the Government awarded the $240 million contract to complete the design & construction of the Christchurch Convention & Exhibition Centre to CPB Contractors Pty Ltd last Thursday, few people outside the industry would have been much the wiser. CPB?

Except that, whoever this contractor was, it needed close watching, as the Minister supporting Christchurch Regeneration, Nicky Wagner, confirmed in her release: “CPB has committed to completing construction in the first quarter of 2020 and the Government will be closely monitoring its progress,” she said.

That’s not the kind of public warning you issue to someone you’ve supposedly had sufficient confidence in to award them a very large contract – unless the recent performance of New Zealand’s biggest contractor, The Fletcher Construction Co Ltd, is making you extra-jittery about every contractor. [Fletcher Building Ltd, Fletcher Construction’s parent, reports its annual result Wednesday morning.]

Ms Wagner said work would start soon on what would be “a world-class boutique facility, capable of hosting international conferences as well as community meetings, balls, galas & weddings.”

It will offer options of:

  • an auditorium for 1400 delegates (divisible into 2 700-person auditoriums)
  • a 1250-person banquet hall
  • 14 interconnected meeting rooms for up to 1400 people
  • 4400m² of pre-function spaces for up to 1400 people, and
  • a 3600m² multi-use exhibition hall for 200 exhibition stalls.

“The convention centre will be a cornerstone of the revitalised central city and help bring domestic & international visitors back to the central business district.

“The direct economic benefit of the convention centre is estimated to be more than $320 million in the first 8 years, and $57 million every year after that.

“It’s also expected to increase private sector investment, open up business networks & opportunities and create new jobs.”

The contract was let by Otakaro Ltd, a Government-owned company whose job is to deliver Crown-led anchor projects in central Christchurch and divest the balance of Crown land. The company bears the Ngai Tuahuriri name for the Avon River that runs through Christchurch.

Who is CPB?

As for the main works contractor, CPB changed its name from Leighton last year. The New Zealand company is a subsidiary of Cimic Group Ltd, which is 73% owned by Hochtief AG of Germany, which in turn is now 71.8% owned by ACS Group SA of Spain. Those stakes make the Spanish group 52.2% owner of Cimic.

All are big names in construction internationally, with current heavy focus on major infrastructure projects, especially through public-private partnerships.

Other international contractors have looked at New Zealand but uncertainty over the future order book has been a deterrent.

Attitude talks inclusion

Cimic Group chief executive Adolfo Valderas.

For the Christchurch job, Cimic Group chief executive Adolfo Valderas said: “Cimic & CPB Contractors’ market-leading & cost-effective capabilities in delivering major commercial & social infrastructure position us strongly for projects such as the Christchurch Convention & Exhibition Centre.

“Cimic is committed to delivering this project as part of the rebuilding of Christchurch. The project will deliver a vibrant & world-class piece of infrastructure supporting sustained economic & cultural benefits for the Christchurch community.”

CPB Contractors managing director Román Garrido said: “By utilising our international expertise & local project experience in Christchurch, our team consistently delivers value-for-money design & construction methodologies that ensure quality outcomes.

“We are focused on providing opportunities for local businesses, a socially inclusive procurement strategy to broaden community benefits, and enhancing local workforce capabilities to the benefit of future building & infrastructure projects in the region.”

Business model transformed

Cimic reported a strong first-half result last month and said it would lead to improved outcomes. The company lifted first-half revenue by 28% to $A6.3 billion, net profit after tax by 22% to $A323 million and operating cashflows up $A523 million. It has $A35.2 billion of work in hand.

ACS Group executive chair Marcelino Fernández Verdes.

Group executive chair Marcelino Fernández Verdes said: “The compelling numbers we reported today are a testament, not only to the transformation of our business model which we commenced in 2014, but also to the ongoing drive of our people to improve, innovate & grow.

“Through continually evolving how we deliver projects, we are achieving favourable outcomes for clients, which improves the position of our group to win further work. We have also substantially increased our net cash position, which allows us to better reward shareholders and more efficiently allocate capital.”

And group chief executive Adolfo Valderas added: “By securing new work of $8.9 billion during the period, we have brought work in hand to $35.2 billion – a level equivalent to more than 2 years’ revenue.

“We are in an ideal position to build on our strategy of providing clients with end-to-end solutions – from financing to engineering, construction, mining, operations & maintenance. Doing so will further diversify our income streams and add more recurring revenue through the expansion of our services business with the successful integration of UGL.”

New projects

Among its early scores in New Zealand is the design, construction & financing of a New Zealand schools public-private partnership – a $103 million project for CPB Contractors & Pacific Partnerships Pty Ltd. Cimic is also tendering for major Sydney rail & road projects and the deep tunnel sewerage system in Singapore.

In its half-year report, Cimic said it had won one of Australia’s biggest public infrastructure projects: “CPB Contractors is in charge of stage 2 of the Metro expansion in Sydney. Cimic’s share of the overall contract value of $NZ3 billion is 45%. The trust our customers place in us with major infrastructure projects was yet again confirmed by CPB Contractors’ recent selection as the preferred proponent to deliver a part of the Melbourne Metro tunnel, Victoria’s largest-ever public infrastructure project.”

Cimic Group
ACS Group

Attribution: Company & ministerial release, group websites.

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Billions astray, but political thinking on Auckland transport infrastructure is positive

The numbers don’t add up, but at least Auckland Council & the Government are trying to make progress on bridging the shortfall of several billion dollars in infrastructure funding to meet projections of higher population growth.

From 2 statements issued on Friday by Auckland mayor Phil Goff and Transport Minister Simon Bridges, you have these 2 sets of figures:

Mr Goff: “Council & Government have identified the need to lift transport spending from $24 billion to nearly $27 billion and bring forward a range of major projects to address growing transport congestion.”

Mr Bridges: “ATAP (the Auckland transport alignment project) agencies were asked to provide an update of how much additional funding may be required in the first decade to meet the challenges of growth. The update identifies an additional $1.9 billion of transport investment will be needed over the 10-year period.

“This is $1.1 billion less than the amount previously identified by Auckland Council. The total funding required for the decade is estimated to be $25.9 billion, of which $20 billion has already been committed to by central government ($13 billion) & Auckland Council ($7 billion).

“That leaves about $5.9 billion to be sourced from the Government, council & the private sector over the next 10-year period.”

Simon Bridges.

Mr Bridges said the ATAP update report “identifies faster growth is now expected to occur in North & South Auckland, requiring some transport investment to be brought forward to support the housing development in these areas. We will also need to bring forward transport investment to accommodate additional public transport demand.”

He said key initiatives from the first-decade package that would be brought forward into the next 3 years with this extra funding included:

  • Advancing development of the “next generation” of state highway projects, including the State Highway16- State Highway 18 interchange, Southern Motorway widening between Papakura & Drury, improved eastern airport access (State Highway 20B) and the North-western Busway
  • Accelerating Auckland Transport’s programme, targeting high priority & well developed investments including the Mill Rd, Ameti (Aukland-Manukau eastern transport initiative) Eastern Busway & associated Reeves Rd flyover, the earlier purchase of new electric trains, along with earlier completion of key city centre bus lanes & interchanges
  • Completing approximately $250 million of rail network infrastructure upgrades to cater for ongoing rapid growth in rail use and increasing freight volumes, including an additional track from Westfield to Wiri and a variety of key network resilience and performance upgrades.

“Current & committed investments include $3.4 billion for the City Rail Link, $1.85 billion for the East-West Link, and up to $1 billion in upgrades to the Northern & Southern motorway corridors.

“This is a very useful update of the agreed ATAP programme. I look forward to continuing to work with the mayor of Auckland on addressing the remaining funding required for the first decade.”

One major factor in the review is that Auckland’s population is projected to rise by 100,000 more over the next decade than the ATAP projections were based on last year.

Phil Goff.

Mr Goff said: “I particularly welcome the commitment of $1.2 billion in the first decade to mass transit on the isthmus, which I believe will be light rail.

“Busways in West & East Auckland and on the Northern Motorway will relieve traffic congestion by providing effective public transport alternatives.

“Penlink is also being considered as a tolled PPP (public-private partnership) road and new arterial routes are funded to service greenfields development.

“The increased budget & projects now go to the council & Government, and are expected to be formally agreed. Bridging the funding gap of $5.9 billion is now being negotiated between council & government.

“I welcome the Minister’s statement that Government has enough headroom in its budget to make a larger contribution to funding Auckland’s transport infrastructure.

“The hundreds of extra cars being added to Auckland’s roads each week, paying more petrol taxes & road user charges, will help fund the new projects.

“Auckland has to meet its fair share of the cost and we are considering the best options for how we do that.

“Road pricing, such as congestion charging, tolls or a fuel tax, in my view better reflect costs falling where there are benefits to the users of transport infrastructure than general rates. We are also exploring other options including targeted rates & value uplift.”

ATAP update, 11 August 2017: Auckland transport alignment project – update to reflect faster growth August 2017.pdf (pdf 804.72 KB)

Earlier stories:
16 September 2016: Brown leaves mayoralty with 2 huge transport wins
22 August 2016: Commission sees government change as essential for urban planning
22 June 2016: Government & council start lining up on tolls but transport report still has big failings
11 May 2016: Infrastructure council seeks rethink to improve transport & intensification
23 February 2016: Transport alignment starts off-track

Attribution: Mayoral & ministerial release.

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Governance framework review a leading topic for local boards

In this round of local board meetings, all boards will consider the governance framework review (links taken from the Orakei Local Board agenda for its meeting on Thursday):

12, Governance framework review recommendations  
Summary table of report recommendations    
Regional decision-making and policy processes    
Allocations and delegations    
Reserve Act land exchanges    
Local boards and Auckland Transport    
Confirmation of draft transport recommendations    
Waiheke Local Board pilot project cover paper    
Waiheke pilot project outline    
Funding and finance workstream paper 1    
Funding and finance cover paper July    
Funding finance description of 2 models    
Number of local boards    
Representation options    
Naming conventions

Who gets the name Wesley?

The Puketapapa Local Board will return this week to the topic of where in Auckland the suburb name Wesley should be used:

12, Notice of motion, official naming of Wesley suburb
Notice of motion, official naming of Wesley suburb    
Wesley boundary map 

Airport access

The Puketapapa board also has airport access – light or heavy rail, and the route – on its agenda this week:

17, Airport access
Benefits of LRT and heavy rail to Aucklanders    
Auckland Transport board resolution    
Progression pathway

Three Kings plan change

And the Puketapapa board has a request for its view on whether a plan change request from Fletcher Residential Ltd to amend the Three Kings precinct, and to rezone some land within the precinct, should be accepted as a private plan change or adopted as a council plan change.

The council’s planning committee will make the council decision on how the plan change request will be treated.

21, Plan change proposal for Three Kings precinct 

Sediment discharge

After a submission from the Friends of Okura Group, the Hibiscus & Bays Local Board has received a report on sediment discharges from the Envirofill cleanfill site at 1627 East Coast Rd at Redvale, and the Weiti village development nearby, which has concluded the developments meet their consent conditions.

12, Envirofill & Weiti developments, sediment discharge inquiry

Attribution: Local board agendas.

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Construction pipeline report continues to show high optimism bias

The annual national construction pipeline report acknowledges an optimism bias in forecasting, then doesn’t seem to take it into account.

In an election year, in particular, optimism about funding is a critical factor for all construction, but the Reserve Bank has had some success in dampening housing expectations and Australia’s Big 4 banks have been clawing money back to meet regulatory expectations of bank funding strength.

International expectations are anybody’s guess, depending largely on the reactions & impulses of one man, US President Donald Trump.

And a highly important factor in New Zealand construction – the level of immigration – depends on who wins the election. A government led by Labour is likely to see cuts, and a lift in Australia’s mining sector will result in a migration swing back to that country.

Those economic factors don’t filter through to the pipeline report, resulting in an even greater optimism bias this year than in the 4 previous reports.

The report, commissioned by the Ministry of Business, Innovation & Employment, is based on building & construction forecasting by BRANZ, and Pacifecon NZ Ltd data on known non-residential building & infrastructure intentions. It has a 6-year horizon.

Despite the absence of critical factors, the report does contain findings. These are its main 6:

  1. The national forecast shows a higher peak with a longer duration than previously forecast
  2. Dwelling unit consents are forecast to reach a new peak for the next 5 years (34,500)
  3. Growth in non-residential buildings is forecast to continue for longer and to a higher level than previously forecast
  4. Growth in building & construction in Auckland is expected to be sustained for a longer time than in other regions
  5. Dwelling consents in the rest of New Zealand grew 27% in 2016, and
  6. House sizes have plateaued & decreased in some regions in the last decade.

Earlier story:
27 July 2016: $200 billion construction pipeline forecast for next 6 years

Attribution: Pipeline report & release.

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Access matters most

On this website, access is the most important consideration. The real estate catchcry, “Location, location, location,” relies on your ability to get there.

In Auckland, a 30-minute car journey can take 90 minutes, but estimating timeframes is also hazardous at pretty much any time of day.

The Government resolutely opposed rail innovation until the super-city’s first mayor, Len Brown, won the support to proceed with the city rail link and forged ahead, notwithstanding the funding gap as the Government sat on the sidelines. Eventually, this year, the Government signed up.

Cars have quickly filled the extra lanes on a short patch of the Northern Motorway and will quickly fill the Waterview tunnel & North-western Motorway expansions.

As I wrote 6 years ago about travelling on the western, industrial side of the isthmus: “Occasionally I stray into Neilson St, Onehunga, and quickly realise it was a mistake. There’s no need to be quick about the realisation, of course, because it’s going to be a while before you can escape.”

Construction of the East-West Link, the State Highway 1-20 road route through that western area, is before a board of inquiry, Mill Rd between Papakura & the southern edge of Flat Bush at Redoubt Rd & into Murphys Rd is becoming a more significant arterial and is now the subject of upscale talk, but the arrival of still more congestion isn’t being beaten.

Now, it seems, the third track on rail’s main trunk line will be built, and perhaps the fourth track as well.

Labour’s new candidate for prime minister, Jacinda Ardern, upped the ante yesterday when she said Labour would build light rail between the city centre & airport within a decade, extending to West Auckland in the same timeframe and later to the North Shore.

She would introduce a regional fuel tax, infrastructure bonds & targeted rates.

National’s finance minister, Steven Joyce, again ruled out a regional tax, which he’s previously argued is inefficient. So, too, is doing nothing while Auckland’s population grows by about 50,000/year, with 10-year projections from Statistics NZ of 29,000/year (medium) to 35,000/year (high).

A party in power for 9 years has no room for innovative policy without the audience asking why these policies weren’t already in place and, while both National & Labour issued transport policies yesterday, Miss Ardern had to have the front running.

We are set up, then, for a serious battle of wits over primary infrastructure & housing in Auckland – and the skilful politicians will at least appease the rest of the country, if not produce some sound economic offerings, so the election doesn’t just become about Auckland.

For the voter who thinks more about policy than party allegiance – and these voters, I think, are likely to decide who comes to govern – there are questions not just about policies but about strategies, and particularly funding methods.

Among those questions today:

  • Why has it taken so long to introduce new central government funding for extra housing infrastructure support?
  • Why has the Government steadfastly opposed new forms of tax, or a greater sharing of tax to support regional initiatives & infrastructure?
  • Why have key Auckland transport decisions been delayed so long in the face of record immigration?
  • Why is a board of inquiry examining one proposed section of transport infrastructure – the East-West Link – in isolation from other components such as the third & fourth sections of main trunk rail track and the future port location & consequent transport links?

Those are questions which are obviously aimed at the incumbent government. Other parties have released policies on some of these issues.

Labour has a policy to build, or finance the building of, an extra 10,000 houses/year and Miss Ardern talked yesterday of using a regional fuel tax.

The key transport – access – decisions need further input from all claimants for the government benches. The central issue is integrated decision-making, and the absence of such integration has long been a feature of central government (including bureaucrats) versus Auckland.

Attribution: Party speeches & release.

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Housing altimeter sticks on 30,000

Consents for new homes exceeded 30,000/year in the 12 months to October 2016, the first breach of that round figure in 11 years, and there the altimeter has stuck.

While a crisis is normally something short, what in New Zealand has widely come to be called a housing crisis has run long – since the immigration spikes of 2003-04.

Construction hasn’t keep up with migrant demand since that spike, and has fallen well short of demand from the natural increase combined with the more recent spike that began 5 years ago after a net outflow of 3191 in the June 2012 year.

Net immigration of 72,305 people in the latest 12 months would require 26,780 extra homes at the national household average of 2.7 occupants.

According to Statistics NZ’s population clock, the population ticked over 4.8 million on 20 July and has since added another 2437 people (post-census estimates). The estimate at 31 December 2015 was 680 short of 4.6 million, so in 19 months our population has risen by 203,000, or 10,700/month, or 128,300/year, requiring 47,500 extra houses (net of demolitions)/year.

Stats NZ now estimates completion rates

Experimental dwelling statistics that Statistics NZ issued today, alongside its regular monthly figures, indicate a completion rate of 86.6% of consents issued over the last 5 years, rising to 88.8% over the last 2 years.

The experimental statistics (which Statistics NZ warns are not final and shouldn’t be relied on yet for decision-making), show 123,222 homes consented since the June quarter of 2012 and 106,746 completions. For the last 2 years, the figures are 58,415 consents, 51,863 completions. On the average of 2.7 persons/household, those completions in the last year would house 140,000 people – about 12,000 more than the net population rise over those 2 years, and excluding demolitions.

But, while the population clock continues to creep up, construction has stagnated. After passing 30,000 consents/year last October, the annual figure dipped below 30,000 in December and, since then, the strongest month was May at 30,645 consents/year.

Reduce it to actual built numbers (and that’s currently an average 10 months after consent is issued, according to the experimental figures), completions would be about 27,200/year – 57% of the required 47,500.

Home number down from May, annual rate stagnating

Consents for new homes dropped from 2794 in May to 2560 in June, taking the annual figure down as well, though it remained above 30,000.

Statistics NZ read the positive in its release: 30,453 new houses, apartments, townhouses & flats consented in the year to June, up 4.7% on the 29,097 in the previous 12 months.

I’ve read it as stagnation since the 30,161 in the 12 months to October, with an upward range of under 500 on a rolling 12-monthly basis since then, and a fall from the top of that range, 30,645 in the year to May.

Statistics NZ prices, accommodation & construction senior manager Jason Attewell said in today’s release: “Annual new home numbers are nearing those last seen in 2004, although they remain well below the all-time peak of the mid-1970s, when consents reached about 39,000/year.”

The secondary residential market in Auckland has softened in response to Reserve Bank measures constraining lending and the exit of Chinese investors who’d been prepared to pay top dollar without question, after unrestrained lending & the Chinese investment clamour pushed the market sharply upward last year and for a short revival this year.

That, in turn, should raise uncertainty in the residential construction markets, as price levelling if not sharp falls becomes more evident.

Suburban flats & townhouses jump again

One change in the overall new-build market has been in the market share of standalone housing, down from 81.1% in 2012 & 2013 to 69.25% in the latest 12 months. Apartment & retirement village consents are more volatile as they’re mostly for large developments, but the share of suburban flats & townhouses has risen strongly over the last 5 years, from 6.1% of consents nationally to 15.8%.

The national consent numbers for June and the year to June, compared to June last year, and the latest 12 months compared to the previous 12 months:

Total consents for new homes: 2560 (2752), down 7%; 30,453 (29,097), up 4.7%
Total values for new homes:  $1.05 billion ($1.08 billion), down 2.9%; $12.78 billion ($11.69 billion), up 9.3%
Standalone homes: 1691 (1863), 21,090 (20,828)
Apartments: 268 (236), 2913 (2261)
Retirement village units: 222 (289), 1651 (2206)
Suburban townhouses & flats: 379 (364), 4799 (3802)
Standalone share of consents: 66.6% (67%), 69.25% (71.6%)
Suburban townhouses & flats share of consents: 14.8% (17.7%), 15.8% (13.1%)

Auckland residential consents fall 1.6% for month

Consents for new homes in the Auckland region fell 1.6% this June compared to last June, but rose by 7.4% for the year. Consents for the month rose in 6 wards and fell in 7.

Auckland residential consents for June, compared to June last year, and the latest 12 months compared to the previous 12 months:

Region: 906 (921), 10,364 (9651)
Rodney: 105 (78), 992 (938)
Albany: 247 (211), 2585 (2270)
North Shore: 45 (70), 496 (526)
Waitakere: 45 (65), 606 (551)
Waitemata & Gulf: 61 (114), 1040 (957)
Whau: 91 (52), 378 (231)
Albert-Eden-Roskill: 160 (50), 841 (499)
Orakei: 12 (44), 248 (374)
Maungakiekie-Tamaki: 20 (24), 464 (495)
Howick: 32 (40), 393 (636)
Manukau: 23 (19), 401 (490)
Manurewa-Papakura: 19 (111), 973 (937)
Franklin: 46 (43), 947 (747)

All construction for June compared to June last year, and the latest 12 months compared to the previous 12 months:

Total: $1.536 billion ($1.847 billion), down 16.8%; $19.4 billion ($18.3 billion), up 6%
Non-residential: $451 million ($739 million), down 38.9%; $6.24 billion ($6.14 billion), up 1.6%

Earlier stories:
7 July 2017: New statistics show 97% of consents result in home
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
10 February 2017: Townhouses & flats dominate shift in home styles
19 January 2017: Building consent highs still don’t match migrant demand
7 January 2017: Intensive housing moves further ahead in suburbs
20 December 2016: Consents breach 30,000/year mark
29 July 2016: New home consents top 29,000/year

Attribution: Statistics NZ releases & tables.

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XLam to double cross-laminate production

XLam NZ Ltd announced plans on Friday to install an extra fabrication machine that will more than double production at its Nelson manufacturing facility. The first of 5 expansion stages is scheduled for completion in February 2018.

XLam chief executive Gary Caulfield said the company had ordered a Hundegger PBA 3 computer numerical control (CNC) cross-laminated timber (CLT) machine, which would improve the processing time and increase the volume of timber processed, more than doubling production outputs.

XLam’s first Australian plant, a 12,600m² factory in the 567ha Logic business zone on the outskirts of northern Victoria city Wodonga, is also scheduled for completion in 2018. It’s beside the Hume Freeway, the inland route between Sydney & Melbourne, and is on the Sydney-Melbourne rail & gas lines & main fibre-optic cable route.

Nelson brothers Robin & Ian Jack began the XLam business in 2010, started production in 2012 and began exporting to Australia in 2015 after getting financial support from Queensland timber company Hyne & Son Pty Ltd. Hyne acquired half of XLam in late 2015 and bought the whole company in early 2016.

Link: XLam

Attribution: Company release.

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Councillors air their views, oh, and agree to housing taskforce steering group

It could have taken Auckland Council’s governing body a couple of minutes yesterday to tick off the appointment of a 10-member steering group to ensure the efforts of the mayoral taskforce on housing isn’t lost.

But that’s not the way councillors work. Their habit is to talk about what they want to talk about, not deal efficiently with the business in front of them.

Their questions & debate, for a couple of hours, had nothing to do with who would be on the steering group, didn’t get to grips with the roles of either the steering group or the taskforce, but did venture near some of the direction mayor Phil Goff wants to lead the council on housing issues.

The steering group members, all but one from with the council & council-controlled organisations, will be: The mayor, Phil Goff, deputy mayor Bill Cashmore and 2 councillors, planning committee chair Chris Darby and regulatory committee chair Linda Cooper; council chief operating officer Dean Kimpton, strategy chief Jim Quinn, finance & policy director David Wood from the mayor’s office, Independent Maori Statutory Board chair David Taipari, and 2 senior managers from Auckland Transport & Watercare Services Ltd.

The targets: council process, and central government

The taskforce, on the other hand, drew a wide range of participants from the private sector who identified 2 council-related issues and another which would take considerable negotiation with central government.

The mayor said that if he’d led the taskforce off on some of his pet housing subjects he would have got nowhere: “I had some battles with the minister of housing development [I think that means minister of building & construction, Nick Smith], he didn’t want people there, but we were able to turn him & the Government around, they were able to attend as active participants and they were very active.”

There was a time when relations between central & local government were abysmal, but since the late stages of the last council term Auckland & Wellington have (almost) stopped talking past each other and have jointly confronted a number of issues – though still with a long way to go before regular sensible discussion & resolution occurs.

For instance, Mr Goff said: “Because we don’t have independent revenue, I keep having to go cap in hand to the Government. But the last council, getting the unitary plan through – that gives us credibility to say we’ve got the planning, let’s get on with the infrastructure.”

Topic was steering forward, but talk was about taskforce

The original recommendation before the council yesterday was for the steering group to report to the governing body “periodically”. This was changed to 6-monthly. The mayor talked about the taskforce being brought together again, which he said participants were enthusiastic about. However, that wasn’t up for debate.

The talk yesterday should have been about the taskforce’s recommendations, and who would be best to advance work on them. Instead, councillors commented on taskforce points – fine, but ultimately useless.

The steering group’s primary tasks will be to lead change in council processes that affect housing, ensure the zoning changes resulting from the new unitary plan are effective in opening up more scope for housing development and – the biggest task – negotiating change with the Government.

Jared Boow, housing portfolio manager in the mayor’s office, said in his report to the governing body on the taskforce, it identified 3 key areas where changes are needed to deliver more homes in Auckland:

  1. Remove impediments to the construction sector developing at scale, including identifying investors who can build through the dips to lift construction in the peaks
  2. Unlock the availability of land with appropriate zoning & infrastructure, at the right price, to enable more development, faster, and
  3. Deliver efficient & certain planning, consenting & risk management to reduce costs, enable innovation in construction & delivery and create communities with high quality built & urban form outcomes.

Tactics & systems

Within each category, he said, the taskforce identified a mix of ‘tactical’ interventions that could be done soon, without significant legislative or policy change, and ‘systemic’ interventions that participants believed might take longer to deliver but which would have the potential to have a large & long-term impact on housing supply outcomes.

“In their view, ‘delivering these interventions will require partnership & collaboration between Auckland Council (and its wider family of organisations such as Auckland Transport & Watercare), central government and the development sector’.

“They also point out that focusing on short-term interventions without addressing systemic challenges will not fully address Auckland’s housing supply challenges. They note that their recommended ‘tactical’ changes ‘can help create the platform for deeper policy changes, but are not a substitute for more fundamental change in a market that has not built enough homes for several decades’.”

The taskforce’s report contains 33 recommendations. Mr Boow said 16 of those recommendations were aimed at the council, and work was underway on two-thirds of them.

Among councillor comments & responses:

Cllr Cathy Casey looked for innovative ways to build cheaper housing: “I don’t see that in here [the taskforce report]. My worry is there’s an awful lot in here to do and no prioritising.”

Mr Boow: “One of the first tasks for the steering group is to prioritise.”

Former deputy mayor, Cllr Penny Hulse: “Is the list of to-dos to be done by the taskforce?

Mr Boow: “One thing we didn’t want to do was reinvent the wheel. 16 of the 33 recommendations are aimed at council, two-thirds are work that’s underway.”

Mr Goff said there were 2 fundamental points: “What we didn’t want to happen was to have a report that came out and everyone said, ‘Yep, great ideas’, and then it sat on the shelf. And 2, to ensure there is advocacy to central government. This was a high-powered group and they have said, can we reconvene in 6, 12, 18 months.”

Cllr Hulse: “The missing piece of the puzzle is still the Government & private sector response to this. Was any thought made to appoint an inter-party group?

Mr Goff: “We have asked the Government to appoint a points person to be responsible for liaising with us, and that should be the minister in charge of MBIE (the Ministry of Business, Innovation & Employment). The private sector is a little harder because there aren’t always organisations available. I think the value of the taskforce is the followup that we have agreed to do.”

Cllr Wayne Walker was concerned at the limited nature of what’s on the table: “’Meets the demands of the rate of population growth’ – what are the demands? What hopes do we have of influencing that? Very long-term assets that are normally funded intergenerationally… I don’t know if we’re going to get anywhere, so I endorse the comments Cllr Hulse made about the involvement of the Government in this.”

Mr Boow: “A role of the steering group would be advocacy to government.”

Cllr Walker: “Is this taskforce going to be making some observations around population growth, because you don’t know what you’re going to be responding to?”

Mr Goff: “I’ve got views on demand management & tax, and I wouldn’t have got anywhere with those because they’re not views shared by the Government. We decided to concentrate on things we could get movement on.”

Cllr Richard Hills: “Greenfield tips the balance away from the unitary plan. I think we need to be a little more creative. How are we going to be able to use the Panuku developments better? What can we do to make sure it’s first-homebuyers or affordable housing only, to make sure it’s not just investment properties?”

Council executive officer Megan Tyler on greenfields: “This report doesn’t sit in isolation of any other work you are doing. Rebalancing will be part of the work you do through the long-term plan. I see a great opportunity for you over the next 12 months to decide where the funding of infrastructure is best put.”

Cllr Casey: “One recommendation I don’t think is housing at all and that’s to implement congestion charging. That’s a long way away from affordable housing.”

Mr Goff: “That’s a recommendation of the taskforce. They are what they are. There was broad support for a fuel tax, broad support for a congestion tax. So the reason that it is in a housing report is to enable affordable housing, you need decent transport. There is currently a joint working group between council & government on transport charging.”

Cllr Casey: “This is a wide-ranging remit for a taskforce. The taskforce wasn’t a council report, even a mayoral report.

Mr Goff: “I wasn’t in the position to say no, you can only recommend what we like. It’s not for us to say what should or should not go into this report.”

Casey: “How do we get involvement?”

Cllr Alf Filipaina: “The governing body will end up deciding what we will be pushing for.”

Cllr Bill Cashmore: “We’ve done some of the work already – the unitary plan, the infrastructure shortfalls have been identified and the highlight numbers have been worked through by our staff.

The insufficient builds for many years have probably created a 30,000 shortfall, and that is causing stress. Immigration has also caused stress. We need to know the tools in the toolbox. What we do know is the investment needs to increase if we are to provide more affordable housing and more housing in this city. The financial arrangements we’ve announced in the last 2 weeks I’m not going to take a set position, I want to understand what all the tools are and what the options are. But the decisions to be made by this council? We will make.”

Cllr Hulse – “having lived & breathed housing for the last 6 years and being somewhat jaundiced” – supported putting the mayoral stamp on the taskforce and said it was well overdue: “What I’m hoping is we might end up with a more sophisticated approach. Deputy prime minister, now prime minister Bill English has had reports like this over the last 2 years and there’s been not a lot of action. What are the key changes that would actually change the central government approach to this? The council has almost wrung the cloth dry. But without the Government agreeing to put some serious building targets in place, and what I think is a seriously marginal Housing NZ building rate, if the Government are to make a serious difference they need to make the funding available for infrastructure.

“If we’re going to get houses built we’re going to have to fund infrastructure. We need to change some of the banking methodology and the structure to do that. Developers – how fine many of them are – are there to make money, and good on them. But if the banking sector will not allow that to happen, actually the banking sector needs to assist with that and the Government needs to assist with that.

“But the bit I’m interested in is, who’s going to be sitting around the tables in Wellington. I hope that is what the taskforce is focusing on.”

Attribution: Council governing body meeting.

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Councillors scrap over buying more trains as car imports skyrocket

As statistics were released on Wednesday disclosing that New Zealanders imported 2566 more cars this June than last June, an Auckland Council committee debated long & hard whether to pay a deposit of up to $25 million to import 17 new-style rail vehicles to meet anticipated higher rail patronage 2 years away.

Auckland Transport’s request for the deposit, and an overall shared payment of up to $207 million (cut to $198 million days before the meeting), came weeks after all the council’s long-term plans & budgets were cemented in place. After trenchant criticism from Cllr Desley Simpson for the surprise, Auckland Transport chair Lester Levy & chief executive David Warburton were apologetic, but also firm in their insistence that if the rail units weren’t bought, commuters would be left stranded on the platform.

Others at the council finance & performance committee meeting said it wasn’t really a surprise because increasing stock had been proposed long ago, while the tabling of a 79-page detailed business case was fair indication that the council’s transport arm had been working on the acquisition well before the end of the financial year.

Lee alone with questions about stock

Cllr Mike Lee at Wednesday’s meeting.

Just one councillor questioned the stock being purchased. Cllr Mike Lee, who was one of the council’s 2 nominees on the Auckland Transport board until new mayor Phil Goff decided councillors should no longer be nominated but could put their names forward for board positions like anybody else, believed Auckland would be buying experimental stock that wasn’t used in any of its comparator cities.

The units Auckland Transport wants to buy are independently powered electric multiple units (IPEMUs), which can run on electricity or battery.

Cllr Lee believed hybrid diesel-electric options should have been put before the committee for a comparison, but Mr Warburton said the diesel units weren’t compatible, and the IPEMUs were more sustainable and had been running in light rail overseas for some time.

Cllr Lee: “In my view they are experimental… We have to make a decision with no alternatives…. In terms of financial decision-making this is very poor decision-making. In terms of the strategic approach, this is ad hoc, done in a rush & deliberately so. This is not about new technology… The cardinal element is politics… Making this decision lets the Minister of Transport off the hook in completing electrification of the Auckland network.”

Council debt limit at risk

Auckland Transport chief executive David Warburton, responding to Cllr Lee.

The acquisition, if completed on the shared terms proposed, would lift Auckland Council’s debt ratio over its 265% ceiling to about 266.5% in 2019 unless other savings are found.

Mr Warburton said he’d mentioned battery electric multiple units numerous times on visits to the council chamber, but conceded that this proposal wasn’t mentioned in Auckland Transport’s budget documents in May.

He said the option for the council was to delay purchase and insert the proposal in a subsequent long-term plan – “and you won’t have trains until 2021”.

Auckland rail patronage has been on a steep upward curve, rising at 17%/year at the moment. Meanwhile, the road congestion it’s intended to defeat can only worsen, judging by the car import figures. Statistics NZ said national vehicle imports were up $118 million (31%) on a year ago to a record $505 million in June, led by an $86 million rise in new car imports.

Mr Goff said the rail decision would tie in well with infrastructure decisions between the council & government supporting housing growth in South Auckland, particularly beside Stevenson Ltd’s industrial subdivision at Drury.

Mr Goff said the infrastructure measures would bring forward construction of nearly 18,000 houses, and the provision of public transport was essential to move commuters out of their cars.

Deputy mayor Bill Cashmore said the addition of the new rail units was the culmination of 7 years’ work, and a “far more finessed outcome” than when planning for development from Papakura south to Pukekohe started.

The debate closed with 20-1 (Cllr Lee against) support for the purchase. It was dependent on the NZ Transport Agency committing to funding at least 50% of the capital & operational expenditure.

Attribution: Council committee meeting & agenda, images from council live stream.

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