Archive | Land use

Infrastructure solutions: Report from US tour suggests incentives & flexibility needed

It’s over a year since I introduced Bdeep – articles with more depth than the normal run of straight news – to The Bob Dey Property Report website, and nothing’s come of it. Over the intervening months I’ve been working on a number of Bdeep thoughts without producing the final goods.

At last, they’re about to start flowing. This article highlights points made in a 38-page report on a tour of 4 US cities organised by Infrastructure NZ. The link to that report is at the foot of this article. You can comment below, or send me suggestions on email to follow up: [email protected].

Infrastructure NZ took 42 public & private sector infrastructure leaders on a tour of 4 US cities with the same challenges as they meet here, but with different economic, social & environmental outcomes.

One conclusion in the 38-page report the organisation produced on their return: “The US urban growth system shows that New Zealand cities can grow responsively & affordably without large public subsidies. It is the policies we are pursuing which are undervaluing investment in growth and pushing up land prices.”

Another: “The rates-based approach [in NZ] has not only impeded councils’ willingness to invest, it has established a mentality & approach to city growth framed around costs, not around value.”

And a third: “The effect of comparatively higher transport subsidies in a city like Houston than in cities across New Zealand is a willingness to travel further. Longer distances allow residents to access cheaper land, so living costs are not necessarily increased (and may in fact fall). However, carbon emissions are high and long trip lengths have made citizens extremely sensitive to fuel tax increases.

“In New Zealand, the high proportion of funding contributed by private vehicles has distorted transport priorities. Rather than being viewed as a catalyst for economic development & connectivity, transport has become a debate about what mode best reduces congestion. Light rail in Auckland, for example, has been marketed as a solution to gridlock, rather than its real purpose which is urban regeneration, because the funding source is private vehicle users.”

Selwood says NZ cities need flexibility & tools

Stephen Selwood.

Infrastructure NZ chief executive Stephen Selwood said on the release of the report (link below) last week: “New Zealand’s urban growth system is broken and must be revised to incentivise cities to grow, and city leaders must be given the flexibility & tools they need to succeed.

“We took 42 public & private sector infrastructure leaders to Portland, Denver, Dallas & Houston – 4 big, fast-growing cities facing the same challenges as New Zealand cities. The US cities may not be able to match New Zealand centres for liveability, but they do know how to grow. Homes are being built, roads & public transport are being delivered and homelessness is down by a third in the last decade.

“The key to US success is an urban growth system which is incentivised to want growth and has the tools & flexibility to overcome challenges.

“The metro areas of the US, including the constituents & governments, benefit from growth. Sales & income taxes complement property taxes. More homes, residents & investment means more revenue for local authorities. Federal & state agencies sweeten the deal with grants & funds to encourage performance.

“America’s thin welfare net doubles the importance of successful urban performance – if cities don’t grow & succeed, homelessness, unemployment & social costs fall much more heavily on local institutions. Cities are not only better incentivised, they have the ability to respond.

“Different revenue streams provide flexibility of funding. Innovative financing is used to transfer the costs of infrastructure to beneficiaries who repay debt over the long term. Regional governments evolve to meet citywide challenges, special purpose infrastructure districts fill resourcing gaps.”

For Mr Selwood, the big difference is that, in New Zealand, central government collects the benefits, through tax, of infrastructure that local councils have to provide: “New Zealand’s urban growth system, by comparison, is poorly incentivised. Central government captures the tax benefits of growth, leaving councils reluctant to invest in costly upfront infrastructure.

“Councils that try to grow have to rely on rates paid by those with homes in order to fund services for those without homes. Debt ceilings constrain finance and hard regulatory instruments become the preferred tool to manage growth.

“Overdependence on urban boundaries & density restrictions has undermined competitive land markets, preventing affordable housing, and there are no price signals to ratepayers about the consequence of council policies. Overall, the American system is far more collaborative, innovative, aspirational & effective at responding to growth.

“We simply must revise our governance responsibilities & funding. It is not working, having a multiplicity of small councils with limited capability manage limited funds for such an important task. We must re-gear local governance so that local authorities benefit from growth and have the tools to respond. A review of local government funding & responsibilities should be launched as part of the review of planning statute and alongside the Tax Working Group.

“In the meantime, central government has to intervene with grants & transfers, like the Provincial Growth Fund and city & regional deals which allocate funding to councils who support economic & urban growth.

“Responsibility for financing costly growth infrastructure needs to shift away from ratepayers. Activities which provide a revenue stream, including water services & toll roads, can be used to finance investment without compromising council borrowing costs. Crown Infrastructure Partners needs to have a wider scope to finance infrastructure delivery and rate future property owners.

“If we combine these measures with emerging urban development authority legislation and get on with delivering attractive new cities & centres, like a satellite city in South Auckland, we can remove planning regulations and allow competitive land markets to deliver housing New Zealanders can afford.”

A conclusion on decionmaking: “The second system-level strength of the US system for responding to & supporting urban growth is its flexibility. Institutions have at their disposal a wide range of tools to overcome funding, financing, planning & delivery challenges as they arise. When existing tools or even the institutions themselves fail to support growth, the US system itself has shown an ability to adapt with new institutions & governing solutions.”

An NZ problem: “Cities experiencing local issues have limited scope to reassign core public services to meet need. Central government must be engaged to effect change. Once committed, central government has very strong capability to address issues, but is compromised when issues are local. Most recently, central government has been politically challenged to respond to chronic Auckland housing & transport issues without providing equivalent funding for regions with lesser problems.”

And 2 US solutions: “Umbrella governments can be established (or expanded) to provide services across different territories. Portland’s Metro and Denver’s Regional Council of Governments have both been established & enhanced to integrate & align across their respective city-regions.”

The second solution, special districts: “Special districts are independent units of local government that can enable programmes or projects to be financed and the debt repaid over time. Repayment is made by ringfencing user charges & special taxes to repay project bonds, and do not require a guarantee from wider taxpayers or councils. They can be established to fund, finance & operate a wide range of local services, including water services, roads, public transport, parks, libraries or recreational facilities.”

And the third solution, revenue bonds: “Revenue bonds are a form of project financing where investors lend against a revenue stream linked to a project. They are distinct from traditional – ‘general obligation’ – bonds in that they are ‘non-guaranteed’, that is, they are not tied to a local council’s overall taxation capability. The specific revenue bond will have a rating from a major ratings agency to estimate investment risk. In the US, no federal or state tax is payable on municipal bonds, which helps to keep financing costs low for public projects.”

But it’s not all perfect over there, as this conclusion on Houston’s weaknesses illustrates: “Houston suffers many of the same externalities from its growth model as Dallas-Fort Worth. Its urban form is likely influenced by fuel tax policy which sees all modes of transport heavily subsidised by land, sales & other taxes. Houston city centre lacks the vibrancy that would normally be expected of a city of 7 million, and residents almost certainly make housing & employment decisions based on a low cost of travel.”

Link:
Infrastructure NZ report

Attribution: Infrastructure NZ release & report.

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Property Council award a tribute to Maurice Clark’s reinvigoration skills

The Property Council’s supreme award last night, to the former Dominion Post building on Boulcott St in Wellington, now known as Waikoukou and the headquarters of Transpower NZ Ltd (pictured), is a tribute to Maurice Clark for his determination to salvage tired buildings and light them up for new users.

He also salvages old names. According to a Dominion Post story in 2015, Boulcott St was once a stream running down from bushclad hills, and the place it met Manners & Willis Sts was called Wai-koukou, for the pool where forest birds bathed.

I recall the Evening Post building (in 1969, well before the 2 Wellington newspapers merged) as a chaotic joining of structures, where reporters & sub-editors were separated by a chasm and a back staircase somehow dropped you at the door of the Britannia. And Boulcott St was the first place I drove a company car, a Fiat bubble car, managing to terrorise motorists & pedestrians on all sides before making it to the Holeproof factory at Shannon & back. But back to the awards:

Maurice Clark.

Mr Clark was developer through Cheops Holdings Ltd. [Cheops, the Great Pyramid of Giza, is the oldest of the 7 wonders of the ancient world. It’s notable as the only one of those 7 to remain largely intact.]

He bought McKee-Fehl Constructors Ltd in 1987, remains its owner & managing director and has focused its work in recent years on restoration, especially of quake-damaged structures, including Transpower’s former premises (originally Shell House) on The Terrace.

The construction company has a long series of building salvages to its name. Earlier projects include the 1904 Victoria University Hunter Building, the 1876 Law School (Old Government Building) and the 1908 Public Trust Building, now occupied by the Ministry for Culture & Heritage.

Mr Clark’s also had his engineering skills tested on the strengthening for the Victoria University Rankine Brown Building, Museum of Wellington City & Sea, and structural testing before redevelopment of the former Defence building at 15 Stout St, now occupied by the Ministry of Business, Innovation & Employment.

Mr Clark, 74, was made an officer of the NZ Order of Merit in 2016 for his services to heritage preservation & the construction industry.

Multiple awards for Waikoukou

On Waikoukou’s way to winning the supreme award at the Property Council-Rider Levett Bucknall industry awards, it was also best in the commercial office category and won a merit award for green building.

The awards judges said the Waikoukou project team had rejuvenated what was a largely vacant & obsolete collection of buildings, refurbishing the existing and adding a new office structure on top. They also added a hospitality courtyard & laneway, Press Hall, linking Boulcott St through to Willis St.

The judges commented: “Not only does the building’s superior structural resilience ensure Transpower uninterrupted operations in the event of an earthquake, the project team have transformed the property into a modern, seismically upgraded office environment.

“A ground-to-roof central atrium with connecting bridges between the north & south buildings and generous internal stairwell creates a unique social environment.

“The judges believe this project successfully integrates multiple challenges, delivering a thoughtful design, quality execution, and anchored with a long-term lease to a recognised tenant, resulting in a high quality investment asset.”

Supreme winner:
Waikoukou, 22 Boulcott St, Wellington, developer Cheops Holdings Ltd, along with project partners McKee-Fehl Constructors Ltd (Maurice Clark is sole director of both Cheops & McKee-Fehl), Architecture + Ltd, Jasmax Ltd, BlackYARD Engineering Ltd, Beca Ltd and tenant, Transpower NZ Ltd

Civic & arts, sponsor Warren & Mahoney:

Excellence & best in category: Ellen Melville Centre & Freyberg Place, Auckland
Excellence: Justice & Emergency Services Precinct, Christchurch; Matuku Takotako, Sumner Centre, Christchurch
Merit: Dunedin law courts, Dunedin; Manukau bus station, Manukau; Objectspace art gallery, Grey Lynn; David O McKay Stake & Cultural Events Centre, Hamilton; Salvation Army Christchurch City, Christchurch

Commercial office, sponsor RCP:

Excellence & best in category:
Waikoukou, 22 Boulcott St, Wellington
Excellence:
12 Madden St, Wynyard Quarter
Genesis Energy, Hamilton
Ministry for Primary Industries, Auckland
Pita Te Hori Centre (King Edward Barracks), Christchurch
Merit:
AA Insurance, Auckland
Alpine Energy office building, Timaru
Maori Television, East Tamaki
QBE Centre, 125 Queen St

Education, sponsor GIB:

Excellence & best in category:
King’s School centennial building, Remuera
Excellence:
Otago Business School, Dunedin
Te Auaha NZ Institute of Creativity (Cuba Dixon redevelopment), Wellington
Wakatipu High School, Queenstown
Merit:
Rangiora High School – Rakahuri building, Christchurch Ara Kahukura, Christchurch
Unitec construction, engineering & trades building (Mataaho), Mt Albert
Unitec Hub (Te Puna), Mt Albert
Auckland University Science Centre, Auckland

Green building, sponsor Resene:

Excellence & best in category:
Ara Kahukura, Christchurch
Excellence:
Pita Te Hori/King Edward Barracks, Christchurch
Te Pa Tauira – Otago Polytechnic student village, Dunedin
Merit:
Waikoukou, 22 Boulcott St, Wellington
Goodman fitout, KPMG Centre, VXV precinct, Wynyard Quarter

Health & medical, sponsor Fagerhult:

Merit:
Whenua Pupuke – Waitemata Clinical Skills Centre, North Shore Hospital, Takapuna

Heritage & adaptive reuses, sponsor Hawkins:

Excellence & best in category:
Dunedin law courts, Dunedin
Excellence:
Melanesian Mission, Auckland
Merit:
94-96 Queen St, Auckland
Air NZ airport campus, Auckland Airport
Bishop Selwyn Chapel & St Mary’s Church, Parnell
Christ’s College kitchen tower restoration, Christchurch
Mona Vale homestead, Christchurch
Sign of the Kiwi, Christchurch

Industrial, sponsor Yardi:

Excellence & best in category:
Röhlig Logistics, Mangere
Excellence:
Fonterra Co-operative Group, 109 Fanshawe St, Auckland
Merit:
Ministry for Primary Industries, Auckland
Potter Interior Systems Ltd, The Gate Industry Park, Penrose

Multi-unit residential, sponsor Arrow International:
Excellence & best in category:
Sale Street Apartments, 70 Sale St, Auckland
Excellence:
Hereford Residences, Freemans Bay
North West Quarter, Kensington Park, Orewa
Merit:
Centro, Sugartree, 27 Union St, Auckland
Millwater Central Terraces, Millwater, Hibiscus Coast
Te Pa Tauira – Otago Polytechnic student village, Dunedin
The Foundries, Freemans

Retail, sponsor RCG:

Excellence & best in category:
The Hub Hornby, Christchurch
Excellence:
Huami Restaurant – SkyCity Auckland Ltd, Auckland

Tourism & leisure, sponsor Holmes Consulting:

Excellence & best in category:
Ramada Albany, Albany
Excellence:
Auckland International Airport pier B extension project, Auckland Airport
Merit:
Bug Lab, Auckland Zoo, Western Springs

Urban land development, sponsor Natural Habitats:

Excellence & best in category:
Beaches – Coast Papamoa subdivision, Papamoa
Merit:
Jennings St-Jersey Avenue redevelopment by Housing NZ Corp, Mt Albert
Richmond subdivision (stage 1), Mt Wellington

Links:
Transpower, 11 June 2015: Maurice Clark to develop Wellington building for Transpower
McKee Fehl, Press Hall – a new landmark
McKee Fehl projects
Dominion Post, 20 July 2015: Many Maori names for Wellington landmarks lost – 150 years of news

Attribution: Property Council release, McKee Fehl, Dominion Post, Wikipedia.

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Commission opens investigation into Fulton Hogan’s Stevenson acquisition

The Commerce Commission has opened an investigation into Fulton Hogan Ltd’s proposed acquisition of Stevenson Group Ltd’s construction materials business.

The commission said yesterday it would consider whether the acquisition would be likely to result in a substantial lessening of competition in any relevant market in breach of section 47 of the Commerce Act. The acquisition is due to be completed by 31 July, but the parties haven’t applied for clearance for it.

Fulton Hogan is one of New Zealand’s largest roading & infrastructure construction companies. The commission said it would focus initially on the potential competitive effects of the proposed acquisition on quarry markets in Auckland & North Waikato.

It would also consider whether any competitive effects arise from Fulton Hogan’s proposed acquisition of Stevenson’s concrete plants, transport, laboratory services and associated plant & equipment.

The commission seeks input to its investigation by Friday 29 June.

The sale would leave Stevenson’s with its property development & mining operations. Its biggest property interest is the 360ha Drury South industrial park it’s begun developing.

Related stories:
7 April 2017: Kiwi Property plans new town centre next to Stevenson’s Drury development
30 August 2013: Drury South industrial area plan change & MUL extension approved

Attribution: Commission release.

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Residential statistics – some taken with salt, some seriously

Statistics – be wary of them.

Colliers issued its latest figures on the residential markets yesterday, and on Auckland in particular. The first statistic was population growth, and it turned out to be first in a series of national statistics, this March & last, not Auckland statistics.

It concerned me because it showed net migration down 5.5% (71,932/year down to 67,984/year). But for Auckland, Statistics NZ put the fall in net migrant inflow at 3.7% (35,772/year down to 34,448/year, a decline of 1324/year). That is also an uncertain figure, because Statistics NZ has started trying to map movement of immigrants to see where they actually end up.

So, first statistic on which to base conclusions raises an alarm bell.

After that, it looked best to ignore the prognostication and stick to statistics of what has happened.

Except, Colliers’ statistics include a construction cost index rise of 4.6%, which Colliers national research & consulting director Alan McMahon told me was national.

According to Statistics NZ, the construction cost index rose 4.7% nationally in the year to March, but only by 0.3% in both Auckland & Wellington. Auckland’s rise was the smallest for the region since December 2012.

That puts paid to some of the assumption on which Mr McMahon based a broad commentary about market constraints: “Slower presales & rising construction costs make achieving a positive feasibility more difficult and bank funding harder to secure. If sale prices are steady and building costs go up, the only variable left to balance the equation is land cost. The problem is that a lot of land sold in Auckland between about 2013 & 2016 was priced on the assumption of continuing house price inflation. Since then, house price inflation has slowed, while construction costs have increased by 5% in the last year alone. As a consequence, some landowners can’t sell for a profit, nor can they develop at a profit, so they are essentially sitting tight for now.”

The Colliers chart shows residential consents for Auckland at 11,629 for the 12 months to April, which was up from 10,226 in the previous 12 months, a 13.7% rise. Statistics NZ’s breakdown of residential sectors is national, so I can’t show a comparison for apartments in Auckland.

The apartment sector

However, Colliers has monitored the supply of apartments, a sector in which it has become more active in the last 3 years.

It shows 10 apartment projects completed in the December 2017 & March 2018 quarters, 75 under construction and 28 at the marketing & design stage.

Looking forward, Colliers estimates 57 projects completed in 2018 & 2019, resulting in the addition of 4534 units. For the following 2 years to 2021, it estimates 46 projects & 4122 unit completions.

The notable feature of this is the decline in the central city’s dominance of the apartment market – down from 59% to 55% of supply by 2021, while suburbia rises from 16% to 21% of supply and the city fringe slips a point to 24%.

It puts the median apartment sizes at 97m² for 2 bedrooms, 146m² for 3 bedrooms and median asking prices at $10,955/m² for 2 bedrooms, $11,877/m² for 3 bedrooms. Those figures are for “all individual developments tracked”.

Colliers has identified 31 apartment projects that won’t proceed under original plans. 6 of those sites are being remarketed for sale or have sold, 10 have been abandoned under current proposals and 15 have been deferred.

Colliers also looked at suburban growth areas Hobsonville Point, Manukau & Mt Wellington and found median floor areas for terraces & detached homes of 113m² for 2 bedrooms, 162m² for 3 bedrooms, and median asking prices of $7462/m² for 2 bedrooms, $6571/m² for 3 bedrooms.

Attribution: Colliers report & release.

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Draft national planning standards out for consultation

The Government has released the first set of draft national planning standards, which Environment Minister David Parker said would make plans under the Resource Management Act (RMA) easier to use & prepare.

The closing date for submissions is Friday 17 August.

“The aim is to make plans simpler & more efficient to prepare, and easier to understand & comply with,” Mr Parker said.

“Standardising plan format & definitions is long overdue. It will reduce compliance costs and address some of the justified criticisms by those who find Resource Management Act plans unduly complex.

“The standards will not determine local policy matters or the substantive content of plans, which remain the responsibilities of local councils & communities.”

Mr Parker said the standards would improve how the act operates, reduce costs to both councils & plan users and improve the public’s internet access to planning documents.

The Ministry for the Environment will seek formal submissions on the draft standards from the general public, councils, professionals & iwi over a 10 week period that will include meetings nationwide.

Once public consultations are complete, the final standards will be approved in April 2019.

“To implement the standards, councils will have to redraft their plans. We are proposing a 5-year implementation period for most plans and a 7-year period for councils that have recently concluded a major plan process. This allows the standardisation to occur as plans are routinely reviewed.

“The cost of updating plans to meet the standards will be vastly exceeded by the cost savings to those who use them.”

Link: Draft national planning standards consultation

Attribution: Ministerial release.

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Twyford creates new housing & urban development ministry

Housing & Urban Development Minister Phil Twyford.

When the new Government allocated portfolios last October, Labour’s Phil Twyford won housing & urban development and the separate transport role.

On Friday, he announced that housing & urban development would get its own ministry, to be established on 1 August, operating from 1 October.

Initially, the Government will move functions from existing agencies, and will look at using funding from their existing operational budgets:

  • From the Ministry of Business, Innovation & Employment: the housing & urban policy functions, the KiwiBuild unit and the Community Housing Regulatory Authority
  • From the Ministry of Social Development: policy for emergency, transitional & public housing, and
  • From Treasury: monitoring of Housing NZ & the Tamaki Redevelopment Co Ltd.

The changes won’t affect where people go to for help with housing. The Ministry of Social Development will continue to assess people’s need for housing support and manage the public housing register.

The aim is for the new ministry to help deliver on the Government’s priorities of making housing more affordable & cities more liveable. Mr Twyford said: “Addressing the national housing crisis is one of the biggest challenges our government faces. The new ministry will provide the focus & capability in the public service to deliver our reform agenda.

“Too many New Zealanders are hurting because of their housing situation. Many are locked out of the Kiwi dream of home ownership. Others are homeless or suffering the health effects of poor quality housing.

“The new ministry will be the Government’s lead advisor on housing & urban development. It will provide across-the-board advice on housing issues, including responding to homelessness, ensuring affordable, warm, safe & dry rental housing in the private & public market, and the appropriate support for first-homebuyers.”

Mr Twyford said the new ministry would provide the Government with strong leadership & fresh thinking. It would also end the fragmented current approach caused by involving a number of agencies.

Then he rattled off 7 aims of the new government:

  • Ramping up efforts to house the homeless
  • Building affordable homes through KiwiBuild
  • Modernising & building more public housing
  • Reforming the tenancy laws to make life better for renters
  • Setting minimum standards to make rentals warm & dry
  • Adjusting the tax settings to discourage speculation, and
  • Setting up an urban development authority to lead largescale urban development projects.

In sum, he said: “The Ministry of Housing & Urban Development will help us deliver our bold & ambitious plan to build much-needed affordable housing, and create modern & liveable cities ready for the future.”

Earlier stories:
25 March 2018: Unitec land transfer kicks off KiwiBuild
23 May 2016: Is it really a faraway boundary that’s raising inner-city house prices?
8 November 2015: Twyford talks ideas which unitary plan & council funding review likely to resolve

Attribution: Ministerial release.

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Decision Monday on how to meet building consent flows

Auckland Council’s strategic procurement committee will decide tomorrow (noon Monday) whether to renew its overflow delivery model for building consent services.

The item is listed in the committee’s open agenda but the main discussion will be confidential.

The question for the council is how to provide an efficient service at peak times without employing its own staff to cover those peaks.

The council’s head of physical works & technical services procurement, Peter Cunningham, says in his meeting report: “Building consent services are currently provided through a combination of inhouse delivery, an overflow delivery model that operates across the Auckland region and a legacy outsourced provider model that operates exclusively in Manukau.

“In the central region, in addition to the overflow model there is also an agency provider to manage building consenting volumes.”

The current contracts expire on 30 June.

In further explanation, Mr Cunningham says: “The preferred regional service delivery model for building consents is one where third-party suppliers are used to process consents and inspect buildings that council staff do not have the capacity to process, eg, an overflow delivery model.  In an overflow model, the suppliers would act as an agent of Auckland Council.

“Due to restraint on additional staff and to manage risk of over-capacity, the overflow model is considered an essential component to ensure the delivery of an efficient, quality, timely building consenting service.

“The overflow model is considered a more feasible alternative to delivering the full service inhouse, as it provides flexibility during seasonal peaks & troughs in building consent volumes.”

Also listed in both the open & confidential sections of the agenda are:

  • an update on the 48 council projects with a budget over $5 million, and
  • the council’s vertical construction procurement category strategy
  • an update on the Westgate town centre integrated library & community centre.

Web notification issues

Through Auckland Council’s changes to its website it’s been hard at times to track the whereabouts of information such as resource consent application hearings and submissions on them.

The latest trick I’ve stumbled upon under submissions is submission documents with an opening date for submissions – but no closing date.

I’m writing this on Sunday, so ringing the council to check today would be pointless.

Similarly, the Eden Park Trust’s application for resource consent for a concert at Eden Park stadium on the evening of Waitangi Day (6 February) next year has the submissions period opening on Wednesday, no closing date.

The closing date will very likely appear on the website once the opening date has passed. But tell me, which would you, as a submitter, find the more useful?

Links:
Strategic procurement committee, Monday 11 June at noon, 135 Albert St
11, Update on capital projects over $5 million (addressed further in confidential agenda)
12, Procurement of building consents overflow services (decisions to be made in confidential agenda)
13, Status update: Westgate multipurpose facility (integrated library & community centre) construction (addressed further in confidential agenda)
14, Vertical construction procurement category strategy (addressed further in confidential agenda)

Attribution: Council committee agenda.

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Construction slowing – but still on growth track

Figures out from Statistics NZ on Wednesday on construction activity indicate slowdowns – but still growth – across all sectors, and specifically residential.

But an overall call on the direction of construction activity – residential & other, nationally & in Auckland, quarterly & annually – proves impossible. For starters, Statistics NZ doesn’t run actual residential figures for Auckland, just seasonally adjusted & trend, which longtime readers of these pages know I steer clear of.

Auckland construction (all sectors) jumped almost 15% from the March quarter to June last year, then plateaued for 3 quarters.

For the national picture of all construction sectors, looking back 4 years shows leaps in 2 years, lower growth in 2.

Residentially, the March quarter was the quietest since September 2015 but still showed growth.

The detail

Total building work put in place, March quarter: $5.28 billion ($5.6 billion & $5.5 billion in the previous 2 quarters, $5.16 billion in the March 2017 quarter)
Quarterly percentage shifts: Up 7.0% in the March quarter after 3 quarters of lower gains, a 10.9% rise in the March 2017 quarter and above-20% increases in the 3 quarters before that
Total all buildings for the March year: $21.57 billion, up $1.2 billion (5.9%) after leaps, since the $13.15 billion in the March 2014 year, of $2.5 billion (19.1%), $1.5 billion (9.5%) & $3.2 billion (18.7%)

The residential figures nationally, March quarter:

New: $2.92 billion ($2.71 billion in the March 2017 quarter), up 7.6% from the March 2017 quarter, the smallest quarterly increase since September 2015; increases in the last 3 quarters of 2016 were in the range of 24-28%, slipping to 14.8% in the March 2017 quarter
Alterations & additions: $568 million ($542 million in the March 2017 quarter), up 4.9%; this segment of the residential market has put $5-600 million of work in place in 9 of the last 10 quarters
Total residential: $3.49 billion ($3.25 billion), up 7.2%, the smallest quarterly rise over the last 3 years

The residential figures nationally, March year:

New: $11.78 billion ($10.82 billion), up 8.9% after a 22% rise the previous year
Alterations & additions: $2.31 billion ($2.23 billion), up 3.8% after a 12.9% rise the previous year
Total residential: $14.09 billion ($13.04 billion), up 8.1% after double-digit annual rises in the previous 4 years, including 21.1% in the March 2017 year & 26% in the March 2014 year

Auckland & Canterbury drive construction activity

Construction statistics manager Melissa McKenzie said Auckland & Canterbury accounted for $3 billion (56%) of the national value of total building activity in the March quarter: “Total
building work in Auckland was about $2 billion/quarter for the last year, while values in Canterbury were down from post-earthquake highs. However, these values were boosted by higher construction costs.”

In Auckland, she said, the value of residential building work had been growing strongly, with the March 2018 quarter value of $1.39 billion almost double that in the March 2014 quarter. Meanwhile, non-residential building work has shown moderate growth. Offices, education & accommodation buildings accounted for over half of Auckland’s $632 million total non-residential building work in the March 2018 quarter.

In Canterbury, the value of building work in the latest quarter was $941 million – the lowest quarterly value since the March 2014 quarter: “Residential building activity value in Canterbury has been generally falling since the March 2015 quarter. Non-residential building activity has been variable, but reached $440 million in the March 2018 quarter. The latest value was boosted by several projects on social, cultural & religious buildings.”

Auckland:
All buildings, March quarter: $2.02 billion (up 14.8% from $1.76 billion in the March 2017 quarter; the last 3 quarters have all been just over $2 billion)

Links:
Statistics NZ, 2 February 2018: Conferences, culture, and tourism boost consents
Statistics NZ, 31 July 2017: More hotels on the way

Attribution: Statistics NZ tables & release.

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Giant Auckland Plan revision completed, task programme to come, omission already spotted

Auckland Council adopted the Auckland Plan 2050 yesterday, replacing the original plan adopted in 2012.

A reader asked me yesterday where this plan dealt with public spaces, and protecting & developing new ones.

It ought to be in the environment & cultural heritage section, starting at page 171 of the 362-page draft document, but the message there is small. In the fourth of the 7 paragraphs on green corridors, the network of public spaces & parks, and cultural heritage sites, the draft comment is one of hope & aspiration, not of practical intent: “As Auckland grows, additional pressure will be put on these spaces, and additional spaces will be needed.”

Exhorting Aucklanders to add open spaces amid the rush to lay a carpet of houses over the region is akin to the more directly obvious exhortation for residents to mow the public berms outside their homes: “You do it.”

When you look more closely at these messages, you will see an abdication of responsibility in places where, for example, council staff mowed those berms (not everywhere – in Rodney, it was taken for granted that residents did this). But the message needs to be clear that provision will be made in development plans for new areas of open space, and it’s not there.

Planning committee chair Chris Darby said in a release post-plan adoption yesterday: “The plan sets the direction for Auckland’s growth & development over the next 30 years, responding to the key opportunities & challenges faced by Auckland.

“The Auckland Plan 2050 focuses on the critical issues that we & our children will have to deal with over the next 30 years – the unprecedented pace of population growth, how housing & infrastructure needs are met, ensuring that our prosperity is shared among all Aucklanders, and dealing with the increasing pressures on our stunning environment, not least climate change.”

Cllr Darby said early engagement with communities on the new plan identified better housing, reinventing transport & a healthy natural environment as the fundamental issues for Auckland’s future.

Feedback in March led to the development of a new ‘quality of life’ focus area and changes in the timing & number of areas for development. Transport outcomes now reflect the 2018 update of the Auckland transport alignment project (ATAP), a partnership between central government agencies & the council.

Cllr Darby said that, using a new digital-first approach, the plan would be website-based and available by August.

What you see on the website today is a draft containing rewrites, demonstrating the extensive effort that has gone into the plan – despite the criticism of over-exhortation, less of feet on the ground.

Cllr Darby again: “The confirmation of the Auckland Plan 2050 & the 10-year budget 2018-28 (on Tuesday) is the culmination of 8 years of integrated planning for Auckland’s future. Auckland Council is the only regional authority to undertake planning on such a detailed & long-range scale.

“The work isn’t over. An implementation framework will follow later this year, along with a set of targets & priorities. This enables us to move into a massive ‘build-it’ decade.”

Planning committee agenda 5 June, Auckland Plan items:
9, Adoption of the Auckland Plan 2050
Auckland Plan 2050 text
Auckland Plan 2050 maps
Submissions overview
Summary of feedback & response
Auckland Plan 2050 website improvements
Local board resolutions
10, Bringing the Hauraki Gulf Islands into the Auckland unitary plan
Planning committee resolution – place-based spatial planning programme
Options analysis – process for bringing the HGI into the AUP

Attribution: Council committee agenda, draft plan, release.

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Bob Dey Property Report diary, week 4-10 June 2018

Foiling inquiry – with great skill

I’ve foiled Auckland Council’s website inquiry detection devices just long enough to track down a handful of resource consent hearings coming up over the next month.

The council has invented this wonderful means of deterring visitors, called the circular helping hand. Simply, it takes you from the page you were on, through some pages you don’t want to visit and back again. And then the nice page asks, “Did you enjoy that wasted effort as much as we did?” (or something along those lines).

The same device operates the council’s consent submission pages, but is less adept at fobbing off visitors.

Mt Eden application back, Meadowbank retirement village up for hearing in a week

The new consent applications listed below include a reconvened one on the Panuku (council) application to remove 2 “character-supporting” buildings and construct 4 buildings containing 102 apartments & 9 retail units for the Dominion-Valley Rds corner in Mt Eden. That application’s back at the Town Hall on Thursday.

Summerset’s application to build a retirement village in Meadowbank containing buildings ranging from 3-7 storeys is scheduled for hearing starting 14 June, also at the Town Hall.

Auckland Plan – what it’s about

The council planning committee meets Tuesday morning to adopt the refreshed Auckland Plan – the view 30 years hence. Story: Revised Auckland Plan up for approval

Value for money

The value for money committee (that added part of the title seems to be taking precedence over the more hum-drum ‘appointments’ & loftier ‘performance’ parts of the title) meets on Thursday and has a series of updates before it.

This diary is updated weekly and lists auctions, council meetings & agendas, hearings & submissions, economic release dates, events, Parliament order paper items and securities.

Council links

All Auckland Council agendas can be reached via http://infocouncil.aucklandcouncil.govt.nz/. The council livestreams (and archives) Town Hall meetings and some other meetings. You can check those at http://councillive.aucklandcouncil.govt.nz/.

Auckland Council

As Auckland Council makes changes to its website, hearing & submission pages can be hard to find. This is the new link to the page for submissions on consent applications:

https://www.aucklandcouncil.govt.nz/have-your-say/have-your-say-notified-resource-consent/notified-resource-consent-applications-open-submissions/Pages/default.aspx

Committees

Appointments, performance review & value for money committee, Thursday 7 June at 9.30am, 135 Albert St:
9, Value for money (s17A) quarterly progress reports
10, Value for money (s17A) review programme
11, Value for money (s17A) forward work programme
12, Board performance review framework
C1, Approve the council-appointed board member to the Auckland Regional Amenities Funding Board (in confidential agenda)
C2, Shortlist candidates for chair vacancies on Auckland Council’s council-controlled organisations (in confidential agenda)
C3, Chief executive’s employment review: Part 2 (in confidential agenda)
Finance & performance committee, Wednesday 6 June a 9.30am, Town Hall:
9, Auckland Council group quarterly financial report & financial results
10, Council-controlled organisations, third quarter report
11, Auckland Council parent performance report 1 January-31 March
Third quarter appendices 1-7
Appendix, capital projects report 
Planning committee, Tuesday 5 June at 9.30am, Town Hall:
9, Adoption of the Auckland Plan 2050
Auckland Plan 2050 text
Auckland Plan 2050 maps
Submissions overview
Summary of feedback & response
Auckland Plan 2050 website improvements
Local board resolutions
10, Bringing the Hauraki Gulf Islands into the Auckland unitary plan Recommendation

Planning committee resolution – place-based spatial planning programme
Options analysis – process for bringing the HGI into the AUP
Aotea Great Barrier Local Board resolution and Waiheke Local Board resolution February
11, Auckland unitary plan (operative in part) – update on appeals and making additional parts of the plan operative
List of additional unitary plan appeals resolved
12, Regional historic heritage grants programme 2017-18 allocations Recommendation
Regional historic heritage grants programme 2017-18
Regional historic heritage grants programme 2017-18 recommendations
13, Appointment of a replacement member of the planning committee for structure planning political reference group Recommendation
Structure planning – political reference group – Cllr Sayers  (Cllr Greg Sayers resigned from this committee, the audit & risk committee and the structure planning working group on 27 February, citing the “very heavy workload… along with my comfortability of their operations”)
Planning committee forward work programme
14, Summary of planning committee information memos & briefings
Attachment B, schedule of June planning committee workshops
Attachment C, council’s submission on the draft government policy statement on land transport 2018/19-2027/28
Attachment D, council’s submission on the Local Government (Community Well-being) Amendment Bill
Attachment E, memo on plan update to the Auckland unitary plan (operative in part)
Attachment F, Auckland Plan refresh workshop 23 documents
Attachment G, Auckland Plan refresh workshop 24 documents
Attachment H, Auckland Plan refresh workshop 25 documents
Related story, 5 June 2018: Revised Auckland Plan up for approval

Hearings:

Hauraki, 297-299 & 301 Lake Rd, application by BP Oil NZ Ltd to upgrade & expand the service station, hearing Wednesday-Thursday 4-5 July at 9.30am, Takapuna, ex-council chamber, 1 The Strand

Mangere, 63 McKenzie Rd, application by Chinmaya Mission to construction & operate a community centre; hearing Tuesday 26 June at 9.30am, Manukau civic annex building, 31-33 Manukau Station Rd

Meadowbank, 55 & 57 Ripon Crescent, application by Summerset Villages (St Johns) Ltd for a retirement village comprising 7 buildings with 344 residential units (apartments & care beds) with heights between 3-7 floors & a 2-level basement; hearing Thursday-Monday 14-18 June at 9.30am, Town Hall

Mt Eden, 198-222 Dominion Rd & 113-117 Valley Rd, application by Panuku Development Auckland to remove 2 “character-supporting” buildings and construct 4 buildings containing 102 apartments & 9 retail units; the sites are in the business – local centre and terrace housing & apartment building zones; hearing Thursday-Friday 5-6 April – hearing reconvened, Thursday 7 June at 9.30am, Town Hall

Mt Wellington, 12-26D Barrack Rd, application by Austino Parkside Ltd (Chen Yawen) for 7-level building containing 138 apartments, basement parking; council planner Katherine Exeter has recommended consent; hearing Friday 8 June at 9.30am, Town Hall

Submissions:

Henderson, 31B Garelja Rd, application by Solution Street Ltd (Gary Gordon) to construct 6 residential units and subdivide to create 6 freehold lots around the approved residential units & a jointly owned access lot; and a section 127 application to change conditions 10, 11, 12 & 14 of application SUB6006895 as they relate to consent notice conditions; submissions close Thursday 21 June

Herne Bay, 113 Jervois Rd, limited notification of application by Artifact Property Ltd (Liam Joyce) to demolish existing buildings and construct a 5-storey mixed-use building with ground-floor retail unit & 9 apartments – one on the ground floor & 2 on eac of the 4 upper floors; parking for 16 vehicles on 3 half-level basement levels with vehicle access on the south-eastern side; submissions close Wednesday 13 June

Mangere, 72 Tidal Rd, application by Ambury Properties Ltd to establish an integrated bed & foam manufacturing facility, now down from the original application for 53,000m² to 48,900m²; the proposal includes a 107m-long retaining wall up to 5.8m high at the base of the Crater Hill outstanding natural features overlay; the bundled application & land use application went separately out for submissions last year, but the notified proposal has since been modified – revised building footprint & reduced gross floor area, reduced earthworks within the outstanding natural features overlay, manufacturing facility building moved to central & northern portions of the site, parking location changed, landscaping updated, and pedestrian link introduced along paper road running along the southern boundary to the Waokauri watercourse; submissions close Tuesday 5 June

Rosedale, 54 Parkway Drive, application by Lucy Li (of Li NZ Investments Ltd & Kayes Development Ltd) to construct 3 5-storey buildings on a 7291m² site to provide a mixed-use development including commercial floorspace & 84 apartments; the site backs on to Sunset Rd and is beside the North Shore police station; submissions close Wednesday 20 June

Rosedale, 52 Rosedale Rd, application by Rosedale Apartments Ltd (Zhang Chenggang & Zheng Lu) to construct 55 terraced dwellings and subdivide the site into 9 lots (to be broken into individual lots around each dwelling), to be developed over 10 stages; submissions close Thursday 14 June

St Marys Bay & Masefield Beach improvement project, 94 Shelly Beach Rd, St Marys Rd Park & Pt Erin Park, application by Auckland Council (Healthy Waters department) to install & operate a new underground stormwater & sewage conveyance & storage pipeline, via 3 shafts, replace & extend a marine pipeline outfall in the Waitemata Harbour, establish a weir & pump station structure & odour control in Pt Erin Park and smaller weir structure & odour control in St Marys Rd Park, and install a new rising main in the road reserve along Sarsfield St, Herne Bay; submissions close Tuesday 19 June

Te Arai Pt, 205 Lake Rd, application by Pacey Family No 2 Trust for consents to expand the existing quarry activity on the site to provide for an increase in annual production to about 130,000m³/year (increasing over a number of years), and associated cleanfill activity; the proposal would increase the quarry area from 15ha to about 38ha, with a quarry pit of about 20ha; submissions close Friday 22 June

Westhaven marina, application by council-controlled organisation Panuku Development Auckland to extend the north-western breakwater & causeway (via land reclamation) to connect to the north-eastern breakwater to create public open space, a carpark area for public & private use and access to new marina berths, including some which will replace existing pile moorings; submissions close Wednesday 20 June

Auctions:

Barfoot & Thompson, apartments Thursdays at 10am, residential Tuesday-Friday at 10am & 1.30pm; 34 Shortland St
Bayleys, Commercial, Total Property 4, residential, Wednesdays at 2pm, Bayleys House, Wynyard Quarter, 30 Gaunt St
CBRE, commercial, Thursday 31 May at 11am, ANZ Centre, 23 Albert St
City Sales, apartments, Wednesday 13 June at 12.30pm, 445 Karangahape Rd
NAI Harcourts, commercial, Thursday 31 May at 1pm & 6.30pm, Takapuna, 128 Hurstmere Rd
Ray White City Apartments, Thursdays at 12.30pm, 2 Lorne St

Economy:

Accommodation survey: April, Wednesday 13 June
Balance of payments & international investment position: March quarter, Wednesday 20 June
Building consents: May, Friday 29 June
Building work put in place: March quarter, Wednesday 6 June
Electronic card transactions: May, Tuesday 12 June
Food price index: May, Wednesday 13 June
Gross domestic product: March quarter, Thursday 21 June
Local authority statistics: March 2018 quarter, Wednesday 6 June
Manufacturing, economic survey: March quarter, Monday 11 June
Migration, international travel: May, Friday 22 June
National accounts (change in assets): 2008–16, Thursday 28 June
Property transfer statistics: March quarter, Thursday 7 June
Story, 28 May 2018: First statistics on property transfers out in 10 days
QV house price index: May, Thursday 7 June
Reserve Bank, official cashrate: Thursday 28 June
Trade – overseas merchandise: May, Wednesday 27 June
Transport vehicle registrations: May 2018 – Infoshare tables, Monday 18 June
US Federal Reserve, open market committee: Tuesday-Wednesday 12-13 June
Wholesale trade survey: March quarter, Friday 8 June

Events:

Property Council, Rider Levett Bucknall national property awards, Friday 15 June, Spark Arena

Property Council, annual conference, Wednesday-Friday 29-31 August, Rotorua

HotelsWorld 2018, Sydney, Tuesday-Thursday 24-26 July 2018

Listeds – NZ:

Argosy Property Ltd, annual meeting, Monday 6 August at 2pm, Royal NZ Yacht Squadron, Westhaven Marina
Arvida Group Ltd, annual meeting, Friday 6 July at 10.30am, Stamford Plaza
Investore Property Ltd, annual meeting, Wednesday 27 June, Auckland – venue to come in notice of meeting
Kiwi Property Group Ltd, annual meeting, Thursday 7 June at 10am, Eden Park, South Stand, Kingsland, 42 Reimers Avenue
Ryman Healthcare Ltd, annual meeting, Thursday 26 July (time not yet advised), Pukekohe, Possum Bourne retirement village

Parliament

Parliament resumes sitting Tuesday 12 June

Click the email tab – [email protected].

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