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Self-drive, the catalyst for monumental transformation

I read a US newsletter at the weekend that looked at change resulting from self-driving electric cars, but not just about the vehicles themselves. In this commentary, I take the possibilities further.

My conclusion: Change is not going to happen overnight, but it will be rapid, it will change how you regard your personal convenience and it will wring fundamental changes in property use, and therefore in property ownership, tenancy, value, design.

While you work through the questions & issues below, keep in mind that common use of land-based self-driving electric vehicles might become historic almost before it becomes common.

First, the questions:

Will you own a car – or, in families, multiple cars?

Will you expect to drive to work, as you do now?

Where will you park?

Who will provide that parking?

How do you shop? Mostly, weekly at the supermarket?

Do you use your car for lazy storage?

Do you use storage, music up loud, door-to-door as your excuses for an aversion to public transport?

How might pricing of vehicle ownership, journeys & parking change, and how might public transport be transformed?

Why own for minimal use when you can summons a vehicle at will, to take you door-to-door if necessary?

Now go through some answers:

While you might maintain that you need your car, most decisions of that nature have never really been yours to make.

The people who created mass production of cars were able to do so based on pricing low enough for widespread ownership. But think back to New Zealand’s brief era of carless days, when your vehicle had to be off the road for a stipulated one day/week, which roughly coincided with the start of mass importing of second-hand cars from Japan. Suddenly, from the inconvenience of having to travel by public transport occasionally, New Zealand was awash with cheap cars. You could go where you wanted, whenever you wanted.

Except, it’s reached the point that you can’t quite go whenever you want, because congestion has reached such a level that your journey becomes much slower. In response you look at passengers passing you in the bus lane and ponder joining them, or you drive to work in the dark.

In Auckland, if you cross the harbour bridge in peak traffic, you can see maybe 10 people near you – one per vehicle, all forced by congestion to travel slowly.

Parking made harder

The era of Uber is upon us – and the suggestion is that the Uber will lose its driver too. Pricing will dictate whether you travel as a solitary occupant in a car, or multiple. Either way, you will be taken from your door to your ultimate destination, or perhaps to a conveyance which carries more people.

Your own car will sit in its garage, and soon you will figure you don’t need it. One reason will be that you can order up a vehicle to suit your travel purpose – if you have more luggage, a bigger vehicle; travelling to the supermarket you don’t need space, but travelling home you do. Or perhaps you do all that shopping onscreen, without going anywhere.

You may see those possibilities as pure & unlikely conjecture until you consider the next point: the decision won’t be yours.

The next stage in your decision on how to get to a fixed place of work will occur when your employer, or the building owner, decides you don’t need a parking space because self-drives & public transport eliminate the need. Parked cars which do nothing but sit, waiting for you to come back in 8 hours, are a very large expense. The building owner will convert that parking space to other uses, especially if it becomes harder to fill every space.

Then, the road maintenance equation

It occurs to you that your journey could be much faster because there’s less competition on the road… Except, who pays for that road’s existence & maintenance? The motorist, the local council & the Government do – the motorist via taxes & levies, the council via rates & perhaps fuel taxes & targeted rates, the Government via those taxes & levies.

If there are fewer users, or use is far more efficient courtesy of the self-drive & decline of private ownership, government & council will pursue ways to lower their costs. And when they discover less road surface is needed, or they can get away with providing less, they will reduce maintenance. Much like Auckland Council’s decision not to mow the berm outside your house anymore, authorities will see the way clear to trim road surfaces based on saving money – 4 lanes back to 2 and, within suburbs, 2 back to a single lane.

This can happen because there will be fewer parked cars, and eventually none, the self-drives will be able to negotiate a single lane, and.. well, you’ll have even more berm to mow. The road surface that remains will be a coarser, cheaper product next time it’s laid, the maintained suburban road surface can be shrunk, and arterials – even motorways – probably can too.

You’ll turn your garage over to storage, or another bedroom, or a games room or home office.

The city end of the equation

Your decision on how to travel will be driven by external imperatives – council maintenance costs, shifts in tax spending, reduced provision of parking. Many of the parking lots around the inner city have existed because of property development downturns. The bungy site on Victoria St, right in the heart of the city, is vacant because the 1987 property & sharemarket crashes killed development plans, and more recent plans there have been more grandiose than real.

Feeding on to Victoria St East, the exit from the council’s Victoria St parking building is briefly on to High St – which is a popular nominee as one of the streets for a council project to trial more car-free areas. The council’s Downtown parking building has been considered for a number of years as a high value development proposition. Changes such as those would be dramatic, but no longer whimsical once self-drive vehicles start to appear.

Now to city occupants, and then to fringe centres

Offices & apartments without parking provided will become the norm, and those old basement parking floors will lose that value. Owners will look to new uses in old buildings and design parking out of new buildings. In the old buildings that will be an interesting exercise, because in many of them the ceilings will be too low. It will take ingenuity to find economic solutions.

For the individual, you’ve lost your parking floor in the office building, and all the other parking floors & parking buildings are being converted. You will be forced to seek other travel options – bus & train for distance or, as we’re starting to see, bike or scooter for shorter journeys.

But not everybody works in a central city office or shop. Suburban work centres are likely to face the same pressures for change, and industrial precincts might too. Think, as a property owner, what you can do with the space occupied by 30 or 50 employees’ cars. Tenants, especially in outlying areas, pay low rent for parking. Building them out will provide a better return.

Other consequences

If you accept that these kinds of change are not just on their way sometime, but more likely imminent – perhaps within a decade – you can turn your mind to other consequences.

Fewer cars, fewer motor mechanics, a whole sector of insurance becomes redundant. Car sale yards & car loans will be history. Tradies will become lords of the road, but their costs will also rise through higher contributions for upkeep. Delivery vans will have a bigger role.

Just the change from oil to electric is a revolution in itself. The oil industry has held sway for a century, but its decline will be swift if battery-operated travel can prove efficient, practical & cheap. That will ring in momentous change in international affairs, in economic relationships, in degrees of political power. Revolutions in self-drive & public transport will force local change.

Real or unreal? We don’t know yet. What we do know is that if change like this is catapaulted into our lives, it pays to start thinking of options early.

Attribution: Comment.

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Treasury positive about government investment & asset monitoring

A lofty ambition worth aiming for, and an acknowledgment that more, and better, can be done: Prime Minister Bill English wrote, while he was still finance minister, that progress on monitoring the Government’s investments & assets was encouraging, but added: “The job is not done.”

Then, in Treasury’s investment management annual report, out today, he wrote: “More action & innovation is needed to continue to improve in important areas such as benefits & asset management. I expect active stewardship from the [Government] corporate centre, so that the investment system delivers the best value for New Zealanders, not just today but for decades to come.”

Budget & public services deputy secretary Struan Little says in the report the Government is investing in 508 significant projects with a combined whole-of-life cost of $87 billion (up 9 projects & $13 billion from the starting point a year ago): “These investments are being delivered by 53 agencies, across 11 sectors, and 38% of them are being worked on collaboratively. In addition, the Government uses fixed assets worth $93 billion to provide public services and enable social & economic development.”

Immigration warning

One early warning in the report: Immigration will continue to rise. The report says: “Immigration is a critical enabler of New Zealand’s economic growth, and New Zealand has one of the highest per capita inflows of migrants in the OECD. Migrants create jobs and build diverse communities – they bring skills & talents that help make local firms more productive & globally competitive.

“New Zealand competes internationally for skilled migrants, students & visitors. Immigration NZ is a global operation that facilitates travel while managing immigration-related risk.

“Immigration volumes have increased by 51% since 2011-12, and are expected to rise further, which means growing demand for Immigration NZ’s services as visa applications increase.”

The report notes:

  • One in 4 of all workers in New Zealand are migrants; in Auckland the figure is 44%
  • 3 million visitors arrived in New Zealand in the June year 2016, the highest ever annual total
  • International visitors spent more than $10.3 billion in the last financial year
  • More than 105,000 student visas were approved in 2015-16
  • International education is worth $3.1 billion to the economy each year and supports 30,000 jobs
  • Business investor migrants have invested over $4.8 billion since 2009.

Immigration NZ said over 100,000 online applications had already been received on its transformed visa processing service.

The report says 55% of the portfolio by number of projects, and 48% by whole-of-life cost, is being delivered to benefit specific areas – referred to in this report as ‘regional investment’.

40% of regional investment ($16.8 billion by whole-of-life cost) continues to be targeted at the Auckland region, and $12 billion of that is in transport, including the new western ring route, a 48km alternative route around the isthmus to improve network resilience & travel time reliability. Its total expected cost of $2 billion makes it the biggest project ever undertaken by the NZ Transport Agency.

Agencies use a 3-point scale for their performance reports, while the corporate centre & gateway reviews use a 5-point scale to assess projects. Treasury says it’s considering how to better get consistency in assessing project performance.

Data on performance showed the portfolio continued to perform well based on agencies’ self-assessment. 69% of the portfolio was assessed as green, compared to 58% last year.

Treasury investment performance report to November 2016

Earlier stories:
27 July 2016: First ratings out on government agencies’ management
1 December 2015: Major project transparency brings Christchurch consternation

Attribution: Treasury report & release.

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Commission proposes radical change to help the most disadvantaged

The Productivity Commission posted a 4-corner chart in its latest research paper, More effective social services, out yesterday, showing how those at the bottom of the economic pile can’t help themselves up: “Complex needs but can’t navigate the system to co-ordinate services”.

In a section called A new deal for the most disadvantaged New Zealanders, the commission said the Government should create a new model to target these people with integrated services.

The Government agreed, though the 2 ministers who commented were talking less radical change.

Finance Minister Bill English & State Services Minister Paula Bennett said in a joint release: “The Government agrees with the commission’s analysis of the weakness in our current social delivery systems. These issues are why the Government has an ongoing programme of social services reform which focuses on better understanding customers with complex needs and changing public services & accountability to improve their lives.

“The introduction of national standards in schools, health targets, the investment approach in welfare, better public service results and more recently the social housing reform programme are all focused on getting better results from largescale social spending.

“We asked the commission to undertake this review because we expect the public sector to continually do better in supporting the most vulnerable in our society. It is clear that further, ongoing change is needed. These aren’t easy issues to deal with, so the Government will be carefully considering the commission’s recommendations. But this report provides a useful road map to drive further improvement.”

The commission said in the shortest version of its report: “A relatively small proportion of people fall into group D (the most at-risk group), but they experience consistently poor results across health, education, welfare dependency & crime. This can create a cycle of disadvantage that persists across generations. This is unsatisfactory for all of us – those in need, those tasked with helping & New Zealand society generally. We have the opportunity to do better.

“For these people & their families, just making the current system work better is not enough. They need an adaptive, client-centred approach to service design. They need ‘navigators’ who can engage with them & their family, understand their situation and support them to access the services they need.

“Yet the current funding & delivery of services through administrative silos makes this difficult. Navigator services work better if they, and agencies that commission services, have responsibility for improving outcomes for a defined population. Service decisions & a dedicated budget should be close to the clients and reflect their needs. Better information on navigator & provider performance, and clients’ needs & outcomes, will be required to guide funding & service decisions.

“The Government should assess & implement an appropriate model with the features required for successful integrated services targeted at the most disadvantaged. Whanau Ora is an important, but incomplete, step towards such a model. Our report outlines 2 candidate models with the required features – a Better Lives agency and district health & social boards. Implementing a new model will require a major shift in thinking & structures. It is both achievable & realistic, but putting it into practice will take time & persistence.”

Link: Productivity Commission reports, More effective social services

Attribution: Commission report & ministerial release.

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Vote me out of this traffic jam: The Green versus National views

It’s conceivable – though, on the multitude of poll results, improbable – that the Green Party will be part of the new government formed after the 20 September elections, so it’s prudent to pay some attention to the party’s view on the national transport network.

On the other hand, assuming National stays in power, the Green mix will be ignored and the road-dominant programme will continue.

The Greens proposed a big transport programme last week that would swing more money into public transport networks, especially in Auckland, and also into less grand improvements to roading, including highways, around the country.

National’s transport minister, Gerry Brownlee, seized on the Greens’ desire to end big-motorway thinking, saying: “The Green Party owes it to New Zealanders to identify which state highway projects would not proceed under its just-released transport policy. With $11 billion removed from planned state highway projects, it’s hard not to conclude it’s all of them.”

He said 97% of New Zealand’s passenger travel and 91% of freight movement was done on the roads.

And there you have it. One supposes that because the bulk of travel is by road, that’s the way it ought to be. The other supposes that opening up off-road alternatives would ease congestion, enabling better road movement as the alternatives provide cheaper transport.

What you are being given is a political option – the one in charge after 20 September does it their way. What you want is a better system, which may be more of a combination than National is offering both now & for the long-term future, and may be a different mix on closer investigation from that proposed by the Greens.

When Green MP Julie Anne Genter supports a transport proposal it might not just be because she’s green, the idea’s green. It might be because the idea is considered, practical, and would save the country billions of dollars while improving the overall transport network.

But it’s election time, so those in power feel obliged to mock. From another perspective, that mockery is cementing ignorance in place.

The alliance of alternative thinkers which has begun to lead debate on how people travel – the Congestion Free Network, a collaboration between the TransportBlog, Generation Zero and the Campaign for Better Transport – hasn’t just made an ideological proposal. They’ve said the country should apply the best means to the task, and that adding superhighways to fix congestion isn’t it.

They’ve said improving many other road connections would help, but the primary gains would come from increasing the off-road network. That includes providing off-road corridors for buses, and expanding the rail network in Auckland.

The minister’s response was that 97% of all passenger travel in the country is by road – and therefore road is best, not that that proportion might be better reduced.

Mr Brownlee said major roadworks around Auckland had reduced congestion, and completion of the western ring route would reduce it even more. Recent works, such as taking traffic off the Victoria Park viaduct by building the northbound tunnel, have given temporary respite, but congestion quickly resumed growing.

The Auckland peak traffic periods are longer than they’ve ever been because workers know they can’t make the job without leaving home in the dark, and the return is just as slow because all along the way there are exit bottlenecks.

What the transport network needs is considered – and transparent – evaluation, not ideological slagging.

As for ideology, you would have to wonder why travel needs to be ideologically based at all, but it is. Using the private car to drive to work equates to personal freedom. Providing mass transport that is comfortable & provides amenity (such as WiFi) could be even more personally uplifting, especially if it gets you to your destination more quickly & less harassed.

The Greens’ proposal, announced last Tuesday by party co-leader Russel Norman & Ms Genter, had 7 targets for Auckland to be completed by 2020:

  • Complete the city rail link, cutting train travel times by up to 28 minutes/trip
  • Build a rail extension to Mt Roskill (with further rail extensions to the airport by 2025 and the North Shore planned by 2030)
  • Electrify the rail network from Papakura to Pukekohe
  • Build a new bus lane on State Highway 16 (north-west)
  • Extend the Northern Busway to Albany & Newmarket
  • Establish a new high quality bus service across the upper harbour
  • Extend the Ameti (Auckland-Manukau, eastern) Busway into Ellerslie & Manukau.

The plan includes a $1.3 billion capital investment in the city rail link (60% of the cost) and $825 million into dedicated busways & city bus centre improvements. The party will follow up with plans for Wellington & Christchurch to be announced.

The Greens have taken their policy from the very independently minded participants in the Congestion Free Network, which they’ve proposed as a blueprint laying out an integrated public transport network in Auckland, staged at 5-yearly intervals through to 2030.

The network group said: “The current council’s $34 billion transport wishlist will not reduce congestion – even under its own analysis. However, the $10 billion congestion-free network will provide real choice. It’s better for people and cheaper to build.”

First, they asked: What makes a congestion-free network? The answers:

  1. It has high frequency of 5-10 minutes, no timetable required
  2. Physically separated from congestion, so it’s fast, like electric trains or the Northern Busway
  3. Works as a complete network, so it’s easy to transfer, like the London tube.

They added: “Quality public transport across Auckland will reduce traffic for when you need to use the road and provide relief from high fuel prices. It’s a real vision for a more liveable, low-carbon Auckland.

“Auckland’s current plan is contained in the integrated transport programme. This is both expensive & ineffectual – a road-heavy ‘build everything’ transport scheme that is currently unfunded.

“The Congestion Free Network will not only lead to a higher quality & better functioning city, but is also more affordable than the ineffective integrated transport programme. Investing in the ‘missing’ public transport network before further expansion of the road network will almost certainly turn out to be much cheaper & more efficient for Auckland, as well as being more in sync with the times.

“We think that many of the most expensive roading projects will prove to be unnecessary once Auckland has this powerful additional network in place. Our plan will also greatly improve Auckland’s performance in other harder-to-calculate but vital areas such as air quality, carbon emissions, oil dependency, urban form & public health outcomes.”

The Brownlee perspective

Mr Brownlee professed the Government’s support for public transport, said the Greens’ policy would take the country back decades, but lent on market choice to dictate the way forward. Market choice will not see anybody preferring a leap of faith into uncertainty; the status quo will prevail so long as that’s all that is realistically offered.

The minister said last week: “The National Government supports public transport and has provided $2.4 billion over the past 5 years. With the local government contribution, that is $3.5 billion spent on public transport, including commuter rail investment in Auckland & Wellington.

“The Green Party needs to explain which of the following roading projects it would axe first, or if it’s all of them. The Greens also propose to cut local road spending by over half a billion dollars, putting pressure on our communities and compromising safety.

“Since being elected in 2008, the National Government has been rectifying a 30-year deficit in road transport infrastructure. The Green Party proposal would put us back by decades.

“The National Government has a balanced land transport policy which gives commuters choice in the modes they use to travel and helps businesses to choose the most efficient way of getting their goods to domestic & international markets.”

Genter says let regions decide after proper assessment

Ms Genter said transport was the life-blood of the regions, and charged: “They have been starved under National. Over the next 10 years, we plan to increase regional transport funding by $423 million and we will invest $3 billion on state highways that will hugely improve safety.

“The bulk of National’s transport budget has gone on motorways as it pursues its obsession with roads of national significance, while regional transport needs have been ignored.

“Under the Green Party plan, regions will be able to bid for projects that best serve their transport needs, whether road, rail or a port project. That contrasts with National, which has indulged in naked pork-barrel politics. It announced 14 regional projects in June, paid for by the sale of state assets, which were selected on the basis of National’s political needs rather than any objective assessment of requirements.

“We will not direct the funding for the regions, as National has done. Regions will be able to bid to fund projects and they will go through Treasury for a rational assessment of the transport priorities & proper cost:benefit analysis – something completely lacking with National’s roads of national significance programme.”

Links: Green Party’s transport policy
Draft Government policy statement on land transport 2015/16-2024/25
Congestion Free Network
Transport Blog
Generation Zero
Campaign for Better Transport

Attribution: Party releases, Congestion Free Network website.

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Social bonds pilot begins

Finance Minister Bill English and Health Minister Tony Ryall said yesterday a step had been made toward the private delivery of social services through bonds, an alternative which has started to spread internationally.

The Government agreed to a social bonds pilot last year and people can now register their interest in becoming an intermediary in the pilot programme.

An intermediary is a person or group who brings investors & service providers together. The intermediary uses their skills in project management & finance to raise funds & drive performance to achieve agreed outcomes.

Mr English said: “The Government does not have all the answers to our communities’ problems, and social bonds are one new way to involve investors & private or not-for-profit organisations in improving social outcomes, while achieving value for taxpayers.”

The Government would pay a return depending on achievement of agreed outcomes.

Mr Ryall said: “This shifts risk from the taxpayer and provides an incentive for our investment community to use its expertise for generating results in the social sector.

“Social bonds trials are under way in the UK, US & Australia, where examples of their use include targets of reducing reoffending, increasing employment, improving outcomes for children in care and improving management of chronic health conditions.

“In New Zealand, service providers have submitted their ideas and a shortlist is being compiled by the Ministry of Health, which is leading cross-agency work on the pilot.”

Attribution: Ministerial release.

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Joyce wraps transport policy into summary document

Published 2 September 2011

Transport Minister Steven Joyce has released a summary of the Government’s intended policy direction for transport over the next decade, called Connecting New Zealand.

Mr Joyce said the Government had 3 main areas of focus in transport policy: economic growth & productivity, value for money and road safety: “Connecting NZ reinforces our commitment to these areas by clearly summarising how each of those aims impacts on the different parts of the overall transport sector.

Connecting NZ draws together the policy direction set out in a number of policy decisions & guidance documents over the last 2½ years. These include the recently released national infrastructure plan and Government policy statement on land transport funding, as well as the Safer journeys road safety strategy & action plan.

“This is not a new plan, but it ensures that the transport policy direction described across a range of strategic documents is pulled together in one place.”

Link: Connecting NZ

Want to comment? Go to the forum.


Attribution: Ministerial release, story written by Bob Dey for the Bob Dey Property Report.

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