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State sector efficiency is next Productivity Commission target

on Friday 2 June 2017 in Economy, Gainz, Productivity, Sectors

The Productivity Commission will undertake an inquiry into how the state sector can effectively measure & improve productivity in core public services, with a final report scheduled for August 2018.

The Government has asked the commission to provide advice on:

  • how to measure efficiency of the health, education, justice & social support sectors, at both sector & service levels
  • the appropriate role of these measures in public sector performance frameworks, and
  • any capability, culture or systems issues that will support agencies to measure, understand & improve productivity.

The commission said yesterday the Government spends about 2 thirds of its total budget on health, education, justice & social development: “This inquiry is an opportunity to provide practical, evidence-based advice about how to measure the efficiency of these services and improve services for all New Zealanders.”

The commission will publish an issues paper first.

Link:
Terms of reference

Attribution: Commission release.

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Productivity Commission goes back to first principles on urban planning

on Wednesday 29 March 2017 in Economy, Gainz, Land use, Planning, Productivity, Sectors, Spatial plan

The Productivity Commission said today it had taken a “first principles” approach to planning in its investigation of urban planning and what it might be. The commission issued its final report, Better urban planning, this morning.

The commission said: “This inquiry should not constitute a critique of previous or ongoing reforms to the systems or legislation which make up the urban planning system. Rather, it is intended to take a ‘first principles’ approach to the urban planning system.”

Its final report stretches to 498 pages and I haven’t read the whole document yet. Below are some of its key points and none of the recommendations. I’ll get into further detail over the next week.

The current planning system – the commission’s diagnosis:

  • Planning legislation lacks clarity & focus, and is prone to overreach
  • Too little direction & guidance from central government
  • Prioritisation is difficult
  • The system lacks responsiveness
  • Protection of Maori interests is inconsistent

What changes are needed?

  • New mechanisms & models to overcome supply failure
  • More responsive infrastructure provision
  • Better planning & better quality plans through spatial planning & reviews by independent hearings panels
  • More representative, less rigid consultation
  • Wider recognition and protection of Maori interests
  • Stronger & different capabilities & culture within councils & central government

At the end of that list of changes, the commission report says: “Central government will also need to substantially improve its understanding of urban planning and knowledge of, and engagement with, the local government sector. It will be under a strong obligation to exercise effective regulatory stewardship of the planning system.”

Central government role

Under the first heading on necessary changes, New mechanisms & models to overcome supply failure, the report says: “A clearer statute and clearer direction & expectations from central government will push councils in high growth cities to do more to meet the demand for development capacity.

“The recently published national policy statement on urban development capacity is a step in the right direction. But these councils will need more help to meet the challenge of their rapidly growing populations. That help should start with:

  • clear legislative purposes & objectives for the natural & built environments
  • principles to guide plan-making, planning processes & decision-making, and
  • systematic, independent & timely reviews of plans.

“In line with these objectives, principles & the reviews, plans should:

  • have clearer & broader “development envelopes” within which low-risk & mixed development is either permitted or is only subject to minimal controls
  • only apply rules that offer a clear net benefit, where the link to externalities is clear and where alternative approaches are not feasible
  • put greater reliance on pricing & market-based tools rather than rules
  • constrain attempts to force the creation of economic, social or environmental benefits through restrictive rules (eg, planning policies that attempt to promote density in the expectation that this will necessarily lead to higher productivity)
  • recognise inherent limits exist to what land-use planning can achieve, and give greater room & respect to the decisions of individuals & firms
  • have broader zones that allow more uses
  • make less use of subjective & vague aesthetic rules & policies, and
  • depend more on local evidence to support land use rules, instead of relying on heuristics generated from overseas studies (eg, assumptions that higher density urban areas necessarily result in their residents behaving more sustainably).”

To complement these improvements, the report says a future planning system should:

  • employ price-trigger mechanisms that credibly guarantee that councils will permit enough development capacity to meet demand at reasonable prices
  • deploy, where appropriate, urban development authorities to assemble & develop inner-city land at a scale sufficient to meet business, residential & mobility needs
  • enable councils to auction development rights as a way to achieve increased, but not excessive, inner-city density, and
  • create competitive urban land markets that open opportunities for the private sector to invest in out-of-sequence community developments. These can sidestep land bankers’ stranglehold on land supply and avoid additional burdens on councils for infrastructure.

5 critical goals

Productivity Commission chair Murray Sherwin wrote in his foreword to the final report: “As the inquiry progressed, it became clear that to make the greatest contribution to wellbeing, the planning system needs to deliver on 5 critical goals:

“First, it has to be flexible & responsive to changing needs, preferences, technology & information.

“Second, it has to provide sufficient development capacity to meet demand. The harmful effect of spiralling house prices is indicative of a serious imbalance between supply & demand.

“Third, planning systems need to allow mobility of residents & goods to & through our cities in order to get to jobs & other activities.

“Fourth, the system has to be able to fit land-use activities within well defined environmental limits.

“And lastly, the planning system needs to recognise & actively protect Maori interests in the built & natural environments arising from the Treaty of Waitangi.”

Mr Sherwin said the current system was failing to deliver on these goals:

“We can see that the system is under stress in failing not only to cope with the challenges of high growth cities, but also to protect important parts of New Zealand’s natural environment. These failures point to weaknesses in the design & operation of New Zealand’s planning system. Few of the many participants in the inquiry were happy with the current system, and many were strongly critical, believing the Resource Management Act had not worked out as intended, or needed a substantial overhaul.

“We set out what a future planning framework should look like. While some aspects of the proposed new planning architecture will be recognisable, much of it will not. We have taken the ‘blue skies’ mandate from Government seriously and offer fundamental & far-reaching recommendations for a future land-use planning & resource management system.

“We believe that following these recommendations will provide substantial benefits. Getting a planning & resource management system that is fit for purpose has the potential to deliver access to affordable housing & well paying jobs, in vibrant, dynamic & liveable cities and in a country where the natural environment is cherished & protected.”

Mr Sherwin said he and commission members Professor Sally Davenport & Dr Graham Scott oversaw the preparation of this report.

Professor Davenport is professor of management at Victoria University of Wellington’s school of management. Dr Scott is executive chair of Southern Cross Advisers Ltd, which specialises in advising on public sector reform globally. He is also a consulting director in the Sapere Research Group.

Links:
Productivity Commission, 29 March 2017: Better urban planning, final report
Productivity Commission, 19 August 2016:
What would a high-performing planning system look like?
Urban planning: What’s broken and how to fix it
Better urban planning, draft report

Related stories today:
Start with a figure you don’t know, then plan accordingly….
Productivity Commission goes back to first principles on urban planning

Earlier stories, 22 August 2016, on draft report:
Productivity Commission urban planning report blunt, measured & perceptive
Commission sees government change as essential for urban planning
Commission says everything English wanted on planning
Earlier story:
11 December 2015: Planning system is next Productivity Commission target

Attribution: Productivity Commission.

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Start with a figure you don’t know, then plan accordingly….

on Wednesday 29 March 2017 in Economy, Gainz, Land use, Planning, Productivity, Sectors, Spatial plan

How many people will migrate to New Zealand this year, and over the next 5 years? Nobody knows. The Government might – ought to – have a very good idea but hasn’t been telling anybody. Immigration is a very good tool for economic uplift and therefore supports central government political incumbents – albeit this can get out of hand, as it did in 2003-04 under Labour and again in the last 4 years under the National-led government, and it has an array of mostly bad side effects that our politicians and also bureaucrats have proved they are not skilled at grappling with.

The influx – a spike in population growth – is at the heart of land planning complications.

The Government sought an answer from the Productivity Commission in 2015 and the commission responded last August with a draft report which I thought was perceptive.

The commission has released its final report today. It runs to 498 pages and I haven’t read the whole document. After I have read it all, I’ll write more about it.

But a quick read through the main points, the summary of what the commission believed it should be looking for and some of the recommendations leaves me uneasy.

The central issue

Our central issue – a migrant spike 12-13 years ago and a second spike this decade, which was stretched out as Kiwis came home from the first seriously prolonged downturn in the Australian economy in nearly 50 years – is one that can be handled better in future but is causing ongoing problems of land supply, affordability & infrastructure demand in Auckland.

It’s been exacerbated by the low cost of debt and very ready supply of credit, both locally & internationally. Without being brought under some restraint, virtually free credit will continue to thwart financial & economic planning by concentrating investment in certain assets, such as housing.

The first planning question

In planning, the first question to be resolved is the accuracy of population growth projections. That’s mostly a question for the Government, but Australia’s economy is also relevant. Australia will start to grow again in a couple of years, and the reversal of migrant flow could be very quick.

Second is the immediate supply issue. Auckland Council’s unitary plan, post-independent hearings panel input, mostly provides for improved supply of residential land and partly provides for more business land, special housing areas are a further response to the residential issue and supply ought to improve over the next couple of years.

But availability doesn’t automatically lead to development. Developers get defeated by cyclical downturns which always start the day before they’ve cemented their financial position in place, without needing politicians to stare them down, demanding development on slimmer margins going into a period of great international uncertainty.

The public sector ought to have been involved for the whole of this decade in assisting the supply of truly affordable housing – not the piecemeal supply of “affordable” houses in a range of $6-700,000 on small sections (allowing for no extension).

The third issue is longer-term

And the third issue is the longer-term handling of community creation – not rushed suburbs, not long commutes by car, not “town centres” which are only shops.

The original Auckland Plan completed by the new super-city Auckland Council in 2012 went some way towards envisaging more & better communities, and the new one which has been in front of the council’s planning committee since shortly after last October’s elections will improve the focus.

Even so, too little work has been done on stopping Auckland from being the city of the long commute.

Today’s stories – and for the next week

Today’s story on the Productivity Commission’s final report highlights points the commission believed it should work on, from a ‘first principles’ basis, and changes it’s suggested.

While I was at the Town Hall for Auckland Council’s planning committee meeting yesterday, I spent a large amount of my time trying to digest a huge volume of documentation on a range of topics relating to both the unitary plan and the “refresh”, as it’s been called, of the council’s umbrella planning document, the Auckland Plan.

Today’s story on that will be extremely brief, pointing you to content and ignoring the questions & points made at yesterday’s meeting.

The full version will take several articles over the next few days.

Links:
Productivity Commission, 29 March 2017: Better urban planning, final report
Productivity Commission, 19 August 2016:
What would a high-performing planning system look like?
Urban planning: What’s broken and how to fix it
Better urban planning, draft report

Related stories today:
Start with a figure you don’t know, then plan accordingly….
Productivity Commission goes back to first principles on urban planning

Earlier stories, 22 August 2016, on draft report:
Productivity Commission urban planning report blunt, measured & perceptive
Commission sees government change as essential for urban planning
Commission says everything English wanted on planning

Earlier story:
11 December 2015: Planning system is next Productivity Commission target

Attribution: Productivity Commission report, Auckland Council committee meeting & agenda.

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Productivity Commission urban planning report blunt, measured & perceptive

on Monday 22 August 2016 in Economy, Gainz, Land use, Planning, Productivity, Sectors, Spatial plan

The bluntest finding in the Productivity Commission’s draft report out last Friday, Better urban planning, is this: The planning system shows considerable evidence of unnecessary, excessive & poorly targeted land use regulations.

The commission issued its draft report, Better urban planning, for comment, closing Monday 3 October. Its final report to the Government is due on Wednesday 30 November.

2 more commission findings get to the heart of the planning quandary:

  • Many local authorities in New Zealand discourage or prevent the development of commercial activity outside designated centres. Local & international experience with such policies suggests that they often fail to achieve their objectives and can act as barriers to competition & productivity growth, and
  • In trying to protect existing city & town centres, some New Zealand urban local authorities have sought to reduce retail & commercial competition from other locations.

In a car-dominated world, centres built up with features such as a town hall, library & close-knit retail can be destroyed by powerful retailers buying cheaper land outside the centre – and eventually becoming more of a focal point.

Foodstuffs’ 17-year battle to get permission for a supermarket outside the recognised centres in Takapuna is one example of that conflict. In Morningside, the Warehouse used an old warehouse just outside the recognised “centre” for a new shop – and on Dominion Rd through Mt Eden there is no centre, just an extremely long retail strip. At Silverdale, the Warehouse held its development site for so long before building that it became part of a new retail village – one of about 5 scattered “centres” between the motorway ramps & Orewa.

The Productivity Commission’s conclusion: “The planning system has an inherent status quo bias & risk aversion.”

The commission cites the original intent of the 1991 Resource Management Act – enabling, not preventative, saying this status quo bias is reflected in “an overemphasis in the implementation of the Resource Management Act on managing or avoiding adverse effects, which does not sit well with the dynamic nature of urban environments”.

Call for a cultural shift

Down the list to the final chapter, the commission recommended: “A future planning system should place greater emphasis on rigorous analysis of policy options & planning proposals. This will require councils to build their technical capability in areas such as environmental science & economics. It would also require strengthening soft skills – particularly those needed to engage effectively with iwi/Maori.”

On the surface, that recommendation makes sense. Against history, however, it’s a hard change, because the commission is asking bureaucrats (highly skilled) to make subjective calls on developers’ proposals, instead of making those calls based on black & white rules – not the (historic) New Zealand way.

A recent example (still before the Environment Court) concerns Queen Elizabeth Square in downtown Auckland. The council proposed selling the square to adjoining landowner Precinct Properties NZ Ltd for inclusion in its new Commercial Bay development. Among opponents (because you can only oppose or support), Institute of Architects urban issues group chair Graeme Scott suggested changes which he believed would provide a better outcome. Our system doesn’t allow for that, but the commission’s proposal would engage people to take a wider view.

And its final recommendation is telling: “Central government should improve its understanding of urban planning & knowledge of the local government sector more generally. An improved understanding will help promote more productive interactions between central & local government.”

Our government got stuck in a party political rut in point-blank opposing the city rail link in Auckland, and also in opposing the council’s alternative funding methods to transform travel. In the last year, government & council have stopped talking past each other, so progress can be made.

Sharing windfalls

Among other recommendations, the commission said council should be able to participate in windfall profits arising from its own upgrades, and they should also be able to use a range of infrastructure delivery models: “A future planning system should enable councils to levy targeted rates on the basis of changes in land value, where this occurs as the result of public action (eg, installation of new infrastructure, upzoning).

“A future urban planning system should give councils the capability to use a wide range of innovative infrastructure delivery models, including public-private partnerships. Councils, either alone or through joint agencies, will need to develop the capabilities to operate such models successfully. Future arrangements could build on current regional shared-services initiatives that increase project scale and develop project commissioning expertise.”

Call was for blue-skies approach

Commission chair Murray Sherwin said in his release on the draft report: “The commission was asked to take a blue-skies approach to what a future urban planning system could look like. Well functioning successful cities matter a great deal to the wellbeing of New Zealanders. This is about giving people the opportunity to live in well designed, well supported cities that respond to growth & diversity.”

The commission said its report reflected the challenges of the current system and where changes are most needed. Mr Sherwin said the commission had no intention of adding another layer of complexity to what was already a very complex & often conflicted system: “There is no simple fix – it’s not just a case of changing legislation. Effective urban planning is about the right mix of legislation, people with the right skills and strong relationships.

“Urban planning helps to maximise the benefits of cities, by providing essential infrastructure services & community facilities and by managing conflicts between property owners. Yet too often, the connection between planning rules & the wellbeing of communities is weak or difficult to justify, and the supply of infrastructure & zoned land fails to keep pace with demand in our fast-growing cities.”

Some conclusions

The commission concluded that a planning system should allow urban land to be used for different purposes over time, provide enough land & infrastructure to meet demand, ensure that residents can move easily through cities, and protect the natural environment.

“Planning is where individual interests bump up against their neighbours’ interests, and where community & private objectives meet. It is inherently contested and difficult trade-offs sometimes have to be made. These decisions are best made through the political process, not the courts. Our current planning system tends to be adversarial & reactive to the views of well resourced & mobilised groups rather than the majority. We believe that any future planning system would have less regimented, but more targeted consultation requirements.”

“Central government needs to set stronger boundaries around planning, and councils need to allow people greater scope to decide how to best use their land, subject to clearly articulated requirements for protecting the natural environment, and include processes for addressing conflicts between neighbours. The commission has recommended the establishment of a permanent independent hearings panel to help councils ensure their plans meet legislative requirements.

“What we need is a responsive system that aims to deal with competing demands for resources, competing citizen interests & values. The commission’s draft report suggests how to achieve this.”

Recommendations

The commission recommends a future planning system should:

  • make a distinction between the built & natural environment, with clear objectives for each (chapter 13)
  • favour development in urban areas, subject to clear limits (chapter 7)
  • develop a Government policy statement on environmental sustainability to provide the boundaries within which urban development can occur (chapter 8)
  • provide narrower access to appeals and tighter notification requirements (chapter 7)
  • make spatial plans a mandatory component of the planning hierarchy (chapter 9)
  • establish a permanent independent hearings panel to consider & review new plans, plan variations & private plan changes across the country (chapter 7)
  • include more responsive rezoning through the use of predetermined price triggers to signal when land markets are out of balance and rezoning is needed (chapter 7); and
  • make greater use of targeted rates & volumetric charges to fund infrastructure investment & maintenance (chapter 10).

Links:
Productivity Commission, 19 August 2016:
What would a high-performing planning system look like?
Urban planning: What’s broken and how to fix it
Better urban planning, draft report

Related stories today:
Productivity Commission urban planning report blunt, measured & perceptive
Commission sees government change as essential for urban planning
Commission says everything English wanted on planning

Earlier story:
11 December 2015: Planning system is next Productivity Commission target

Attribution: Commission report & release.

Continue Reading

Commission sees government change as essential for urban planning

on Monday 22 August 2016 in Economy, Gainz, Infrastructure, Infrastructure, Land use, Planning, Productivity, Sectors, Spatial plan

While Deputy Prime Minister & Finance Minister Bill English was congratulating the Productivity Commission on thinking just like him, the commission found the Government was a culprit – through inadequate legislation – in the failure to provide adequate infrastructure for growth.

The commission said: “Urban planning systems that effectively support the growth & evolution of successful cities:

  • ensure a sufficient supply of development capacity to meet demand
  • align land use rules with the supply of infrastructure (& vice versa) appropriately, and
  • provide the full suite of infrastructure assets required (city-shaping, structural & “follower”).

“New Zealand’s current system has struggled with all 3 tasks. The key sources of these problems are legislative arrangements that do not encourage integrated decisions, institutional & governance arrangements for water services that discourage responsiveness, and a lack of tools to resolve debates about large city-shaping projects.

“Proposed features of a future planning system outlined elsewhere in this report (especially changes to the regulatory system for land use as noted in chapter 7) will help to resolve some of these problems. But the commission sees the case for additional changes to help improve the performance of both the planning & provision of infrastructure. The first change is to give well conceived spatial plans greater legal status in Local Government Act & Resource Management Act plans & policies. “This is because spatial plans help to enable:

  • a high level overview and co-ordination among those responsible for supplying the various different sorts of infrastructure
  • those responsible for ensuring sufficient land for residential & business expansion, and
  • many other public & private parties with an interest in city growth & development.”

The commission praised the ATAP (Auckland transport alignment project) solution to resolving differences between central & local government:

“Fast-growing cities may sometimes need large, costly city-shaping pieces of investment that neither the NZ Transport Agency nor local councils are able to fund or finance out of their normal budgets. If these investments have wider benefits, as they sometimes will, then a partnership approach with central government is called for. The ATAP provides a promising governance model for these situations, and it could become a more formal part of a future planning system.”

Thoughts on efficient funding

The commission noted that efficient funding of infrastructure would enable infrastructure owners to cover the full costs from users & beneficiaries, and that this would require infrastructure providers to consider peak load pricing, connection charges & marginal cost of pricing.

However, the commission said: “Financial, legislative & political economy barriers are impeding the operation of efficient funding in New Zealand:

  • Councils argue that “growth does not pay for growth”, and available evidence suggests that infrastructure projects can fail to pay for themselves. Councils also face “demand risk”, where development fails to occur at the rate assumed when the project commenced
  • Current legislation limits the ability of councils to price wastewater use & road use, and to recover the costs of some community infrastructure through development contributions
  • Community resistance to higher council debt, rates increases & the pricing of water services limits the supply of infrastructure and constrains revenue sources.

“Some of these issues can be resolved by removing legislative barriers to pricing, making greater use of targeted rates to cover the costs of community infrastructure, and allowing councils to levy targeted rates based on land value uplift. Demand risk is best managed through the design, sizing & staging of infrastructure delivery

“Political barriers to infrastructure supply & charging could be partly addressed by creating a legislative expectation that councils should recover the capital & operating costs of new infrastructure from beneficiaries. Because of the technical issues involved in charging for some types of infrastructure, such an expectation would need to be subject to a practicality caveat.

Commission wants to explore funding options

The commission said it was interested in receiving evidence about the merits of exploring more far-reaching funding options, such as replacing or augmenting the rating system:

“One potentially desirable funding tool is the sale of development rights. This approach also has the potential to regulate intensity (eg, by restricting the number of multi-storey apartment blocks in an area) and provide revenue to fund associated infrastructure costs or additional services to ‘compensate’ affected communities.”

The commission said local bodies should be open to using a wider range of delivery models than the in-house or traditional outsourcing of construction that they commonly use: “Public-private partnership (PPP) delivery models or alliance contracting could be suitable for some transport & water infrastructure projects, and even for services such as street lighting.

“A future urban planning framework should provide institutions that give councils the capability to use a wide range of innovative procurement models, such as PPPs. The current expectation to consider PPPs for significant infrastructure projects could be extended to cover locally funded council works.”

Trunk infrastructure costs

Infrastructure costs by development density, assessed by the Centre for International Economics, a private economic research agency based in Canberra & Sydney.

Infrastructure costs by development density, assessed by the Centre for International Economics, a private economic research agency based in Canberra & Sydney.

Developers of new greenfield or infill sites usually provide local infrastructure within a subdivision, while councils provide extensions to trunk infrastructure. The commission said the costs councils incur to provide trunk infrastructure can be large: “For example, recently published research into the cost of infrastructure in Auckland showed that, on average, the marginal cost to Auckland Council of providing new infrastructure for housing in high density or infill areas is close to $30,000 for each lot. For low density or greenfield areas, the cost is close to $45,000 (Centre for International Economics, 2015).”

Efficient funding

On the issue of efficient funding, the commission 3 broad cost types that needed funding, and 3 pricing systems to consider – peak loading prices, connection charges & the marginal costs of infrastructure use.

“Ideally, governments will set prices for infrastructure [such as the 3 waters & transport] that encourage the efficient use of existing infrastructure and encourage timely investments in additional infrastructure capacity. A future planning system would therefore allow councils to recover the full cost of infrastructure from users.

“In this context, ‘full costs’ covers 3 broad cost types – operating costs (including maintenance), capital costs & spillover costs. It would also cover the cost of natural resources (eg, water) where infrastructure services provide resources for final consumption.”

Funding methods & legislative barriers

As an alternative to councils providing trunk infrastructure themselves and recovering costs through development contributions, developers can directly provide infrastructure through development agreements. Once completed, the infrastructure is vested in the council. In this case, the council doesn’t bear any capital costs for the infrastructure, but will need to meet ongoing maintenance & depreciation costs.

The commission said legislative barriers to volumetric charging for wastewater, and to the use of tolls & congestion charges to manage demand on existing roads, “impede the development of a more efficient funding system without clear rationales. They unnecessarily limit the revenue sources of local authorities & their ability to ensure the efficient use of their assets & resources.”

Link:
Centre for International Economics

Related stories today:
Productivity Commission urban planning report blunt, measured & perceptive
Commission sees government change as essential for urban planning
Commission says everything English wanted on planning

Attribution: Commission report & release.

Continue Reading

Government says it’s already implementing land for housing recommendations

on Friday 19 August 2016 in Economy, Gainz, Government programmes, Market, Productivity, Residential, Sectors

The Government confirmed yesterday it was already implementing most of the recommendations in the Productivity Commission’s inquiry, Using land for housing.

At the Government’s request, the commission reviewed the planning & development systems in the fastest-growing urban areas around the country, looking for ways to increase the supply of land for housing.

It sits alongside the Productivity Commission’s inquiry into urban planning, expected to be released this year.

Finance Minister Bill English said on the release of the Government response to the land for housing report: “The Government has adopted many of the commission’s recommendations into its comprehensive housing supply programme, which address a number of the issues highlighted in the inquiry.”

Key components of the Government’s response are:

  • The development of a national policy statement on urban development capacity, which will require local councils to ensure land supply for housing keeps ahead of population & economic growth. A draft was released in June
  • The creation of the Housing Infrastructure Fund, which will address constraints faced by high growth councils by providing access to finance for core infrastructure needed to unlock residential development, and
  • The development of urban development legislation for designated largescale developments anywhere in New Zealand.

Mr English said the Government’s response included workstreams already underway but also addressed the commission’s recommendations: “Programmes like the Better local services reforms, which are aimed at improving operational efficiencies, asset management & investments in council-controlled organisations, as well as the Auckland transport alignment programme and the Resource Legislation Amendment Bill, all meet the recommendations to improve alignment & efficiency.

“We’re going a step further than the recommendations by carrying out work to identify how local government debt constraints can be relaxed so councils can finance the costs of growth.”

Other new work commissioned as a result of the report included a look at arrangements for responsive supply of water infrastructure and improved asset management tools for infrastructure providers: “Together with a raft of other programmes, this Government response outlines a body of work aimed squarely at dealing with housing & housing affordability issues.”

Link:
Using land for housing, Government response

Earlier stories:
9 March 2016: Kaipatiki board tells Government to get on with fundamental tasks
11 December 2015: Planning system is next Productivity Commission target
5 October 2015: Commission sends land for housing report to Government
10 August 2015: Council has forthright message for Government on land for housing
19 June 2015: Key points from land for housing report
19 June 2015: Commission looks behind high land prices

Attribution: Ministerial release.

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Kaipatiki board tells Government to get on with fundamental tasks

on Wednesday 9 March 2016 in Economy, Gainz, Land use, Planning, Productivity, Sectors

A local board has vented its frustration that the Government isn’t proactive enough in advancing resource management, particularly on support for declining cities and secondly in how it will support infrastructure for growing cities.

The infrastructure requirements for the growth of the whole Auckland region were a powerful underlying reason for creation of the super-city.

Despite quibbles about local services and the failure to stay ahead of traffic congestion (much of that a central government problem), Auckland Council – with some Government support – has lifted funding of underground infrastructure and produced far more co-ordinated transport networks.

Yet, throughout this council’s first 5 years, a quality long-term funding structure has remained elusive.

The council applies rates to infrastructure, supported in some areas by Government funding, but also hindered by the lack of a long-term formula.

Arguments can be raised about proportions that should be raised centrally or locally, but all that money comes from the same people, just passing through a few different hands, via a few different decision-makers, on the way to the job.

However, Auckland’s rise & its growth needs are quite a different matter from the decline of many provincial centres, a decline which means fewer people are available to fund upgrades of failing sewers, for example.

The Kaipatiki Local Board said in comments on the Productivity Commission’s Better urban planning issues paper: “Planning rules are not going to address the issues of declining cities. These matters need to be addressed at a central government policy level, such as through the introduction of a population policy, and by consideration of incentives/ removal of several barriers with national urban planning policy in order to support declining centres. A good example of such an approach is the free tertiary education programme in Invercargill.”

On the second point, of growing cities, the Kaipatiki board said: “There must be clear understanding & certainty as to how central government will support infrastructure development for growing cities. It is imperative that central government improve its forward planning processes to respond to growth.”

The Kaipatiki board – which covers the area of the North Shore up from the harbour bridge, west of the Northern Motorway to Sunset Rd – also added some forthright points to the Auckland Council submission on the Productivity Commission paper on planning systems in general, reflections on the current system, local decision-making on resource management issues, and consultation & public participation.

The council submission, due in to the commission today, will be debated at the council Auckland development committee meeting tomorrow.

The commission will release its draft report in July and its final report is due to be tabled in Cabinet by 30 November.

Council submission

Auckland Council has set out 3 themes in its draft submission to the Productivity Commission on the commission’s issues paper, Better urban planning: certainty while maintaining flexibility, an evidence base, and an efficient & effective system.

That, in effect, is to take the commission back to planning 101, a reminder you’d think the commission hardly needs.

Nevertheless, given the volume of criticism over a few issues in zoning for Auckland Council’s new unitary plan, perhaps everybody needs this reminder.

The last of the batch of planning system components in the submission is to take a long-term view for outcomes to be effective.

Links: Productivity Commission, urban planning inquiry
Council committee agenda

Earlier stories:
11 December 2015: Planning system is next Productivity Commission target
5 October 2015: Commission sends land for housing report to Government
10 August 2015: Council has forthright message for Government on land for housing
19 June 2015: Key points from land for housing report
19 June 2015: Commission looks behind high land prices

Attribution: Council committee agenda.

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Planning system is next Productivity Commission target

on Friday 11 December 2015 in Economy, Gainz, Land use, Planning, Planning, Productivity, Sectors

The Productivity Commission released an issues paper on Wednesday on improving New Zealand’s urban planning system following a Government request.

The issues paper outlines the commission’s proposed approach, the context and a preliminary list of key questions. It’s seeking submissions by Wednesday 9 March, and intends to deliver its draft report in July and final report to the Government by 30 November 2016.

The Government’s terms of reference invite the commission “to identify the most appropriate system for allocating land use in cities. This includes the processes that are currently undertaken through the Resource Management Act, the Local Government Act & the Land Transport Management Act. It also includes elements of the Building Act, Reserves Act & Conservation Act that affect the ability to use land in urban areas. The inquiry will look beyond the existing planning system and provide a framework for assessing future planning reforms.”

Commission chair Murray Sherwin said: “New Zealand is one of the most urbanised countries in the world, with 86% of our population living in cities. A good planning system needs to reflect the needs of all cities, whether they are growing quickly or slowly, or if their population is shrinking.

“Planning includes decisions about how land is used, whether for housing, business or industry, and when & how infrastructure is provided, now & in the future. These decisions matter for the quality & affordability of our housing, the competitiveness of our firms and the health of our environment.

“This inquiry is an opportunity to take a new approach to the planning process, starting from first principles. Our goal is not to review existing laws, but to look beyond the current model to ask how a new model can be best designed to respond to future urban challenges.”

Link: Productivity Commission, urban planning inquiry

Attribution: Commission release.

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Propbd on Q Th22Oct15 – auctions – Barfoots, Bayleys, Colliers, Productivity Commission report link

on Thursday 22 October 2015 in Agency, Apartments, CBD and fringe, Colliers International, Economy, Gainz, Market, Productivity, propbd on Q, Sectors

8 intensive residences sell at Barfoots auction
3 apartments & Orewa development site sell at Bayleys
Colliers auction yesterday: Avondale warehouse sells at 6.7% yield
Productivity Commission releases final report on land for housing

10.42am:
8 intensive residences sell at Barfoots auction

8 apartments, suburban units, townhouses & cross-leased homes (as a group, what I’d call intensive residences) were sold at Barfoot & Thompson’s auctions yesterday, out of 23 offered.

The agency had 81 properties listed for 3 auction sessions, including one commercial property not sold, 7 sold prior and a couple withdrawn. Most of the properties offered were standalone homes – the market which has been the focus for speculative transactions based on windfall capital gains, which I haven’t been writing about, so I haven’t tracked how many of those were sold.

Barfoots was sprinkling apartments through its residential auctions, but recently started to group them at the end of the morning auction session. 4 cbd apartments were offered yesterday in that auction segment, and 2 sold. Auction results:

Kohimarama, 5 Kohimarama Rd, unit 7, sold for $1.2 million, Zdenka Zinajic
Mt Wellington, 31C Ferndale Rd, townhouse, no bid, back on the market at $685,000, Steve Hood
Remuera, 20 Armadale Rd, unit 1, passed in, Jane Wang & Angela Qi
Remuera, 189C Portland Rd, unit, passed in, back on market at $1.39 million, Fiona Lee
Mt Wellington, 68 Ruawai Rd, unit 5, passed in, back on market at $509,000, Jane Chen
Kohimarama, 46 Southern Cross Rd, unit 1, unit + self-contained flat, no bid, Thomas Weber
Parnell, 27 Birdwood Crescent, unit 8, terrace townhouse, sold for $940,000, Cheryl Burgess & Ian Griffiths
Beachlands, 38 Wakelin Rd, 2 shops + 3-level residence, passed in, David Sylvester & Kim Loo
Remuera, 4A Corinth St, sold for $880,000, Jill Jackson & Emma John
HarbourCity, 16 Gore St, unit 27C, passed in, sold post-auction, Jason Buckwell
Almora, 100 Greys Avenue, unit 1N, sold for $165,000, Mike Campbell
Meadowbank, 24A Archdall St, no bid, back on the market at $975,000, Amy Wilson-Chan & Dawn Buxton
Hobson Gardens, 205 Hobson St, unit 9G, passed in, Stephen & Leo Shin
HarbourCity, 16 Gore St, unit 10B, sold for $185,000, Jason Buckwell
Sandringham, 29 Lancing Rd, unit 2, sold for $640,000, Leonie Stabler
Sandringham, The Kingsway, 11 Kingsway Avenue, unit 2, sold for $430,000, Di Lynds
Sandringham, 11B Euston Rd, unit, no bid, Christine & Mark Wooding
Mt Albert, 17 Burch St, unit 3, cross-leased, passed in, Matt O’Rourke & Joanne Simpson
Henderson, 26 Swanson Rd, cross-leased, no bid, Dennis Law & Helen Lam
Titirangi, 81 Meadowvale Rise, cross-leased, sold for $570,000, Wayne Zhang & Anna Lechtchinski
Mt Albert, 1113A New North Rd, cross-leased, no bid, back on market at $839,000, Christine & Mark Wooding
Newmarket, Kings Square, 26 Remuera Rd, unit 409, no bid, Nick Guan & Richard Pearce
Mt Eden, 812 Dominion Rd, cross-leased, passed in at $950,000, Derek Helliwell & Cathy Giles

3 apartments & Orewa development site sell at Bayleys

3 apartments sold at Bayleys’ residential auction yesterday – one in the cbd, one a cbd hotel unit and the third in Grey Lynn.

A large development site on the western side of Orewa’s beachfront Hibiscus Coast Highway was also sold. Auction results:

The Carlisle, 7 Emily Place, unit 3G, sold for $725,000, Julie Prince & Diane Jackson
Grey Lynn, 10 Rose Rd, unit 8, sold for $1.045 million, Robyn Clark & Peter Tanner
Grey Lynn, 10 Rose Rd, unit 7, no bid, Robyn Clark & Peter Tanner
Orewa, 406 & 408 Hibiscus Coast Highway, 2247m² on 2 titles, sold for $2.9 million at $1291/m², Jenni Finlayson
Amora Hotel, 100 Greys Avenue, unit 5C, sold for $195,000, Marcus Fava
Te Atatu South, 223 Edmonton Rd, 2 single-level 2-bedroom units, sold for $797,000, Simon Spiller & Paul Berry

Colliers auction yesterday: Avondale warehouse sells at 6.7% yield

Productivity Commission releases final report on land for housing

The Productivity Commission issued its final report on Using land for housing yesterday. I’ll report on that tomorrow, but the link is below.

Link: Productivity Council, Using land for housing, final report

Attribution: Auctions, Productivity Commission.

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Commission sends land for housing report to Government

on Monday 5 October 2015 in Economy, Gainz, Government programmes, Land use, Market, Planning, Productivity, Residential, Sectors, Spatial plan

The Productivity Commission has delivered the final report on its inquiry, Using land for housing, to ministers and anticipates it will be released late this month.
The report outlines the commission’s recommendations for unlocking land for housing. Recommendations cover:

  • accommodating population growth by better use of existing infrastructure assets
  • better use of funding mechanisms for providing the infrastructure to unlock land for housing
  • removing central government’s exemption on paying rates
  • better cost:benefit analysis of land use rules
  • ways the planning system can be improved
  • more support from central government to enable councils to co-ordinate the release of land for housing
  • rebalancing the respective roles of central & local government in the planning system in the national interest.

Link: Productivity Commission, Using land for housing draft report

Earlier stories:
10 August 2015: Council has forthright message for Government on land for housing
19 June 2015: Key points from land for housing report
19 June 2015: Commission looks behind high land prices
2 June 2015: Productivity Commission draft on land for housing out in fortnight
30 March 2015: Transport specialist Litman itemises cost of sprawl
2 March 2015: Economic report for council an exhortation to relax land use rules
12 November 2014: Hawkins chief lambasts Government & lawyers for blocking productivity gains
7 November 2014: Productivity Commission launches land supply regulation inquiry

Attribution: Commission release.

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