Archive | Land use

We have a super-city plan, now change it

Auckland council planners say the Government’s proposals for national planning standards will conflict with important features of the Auckland unitary plan, which took 6 years to formulate and is close to becoming fully operative.

110 pages of the council planning committee’s agenda last Tuesday were devoted to the draft standards and the council staff’s proposed submissions on them.

The big issue for councillors was to ask – or, to varying suggested degrees, tell – the Government & Ministry for the Environment the council would need more time to put the standards in place. The proposal is 7 years but Auckland wants 10.

The big issue for staff is the complexity, including likely needless doubling up of terminology for 2 large plan changes coming up soon, and that will mean extra cost.

Linley Wilkinson, the council’s lead planner on Auckland-wide planning, whose previous role was to lead the integration of the old councils’ plans into the super-city Auckland Council’s unitary plan, told the committee the idea of national standards had been around for a long time, especially when the Resource Management Act was introduced in 1991.

Now that the draft has been written, the Ministry for the Environment wants the standards gazetted by next April.

The draft’s aim is to standardise the structure & form, chapter layout, spatial planning tools, zone framework, metrics for noise & vibration and digital & planning requirements for plans & policy statements throughout New Zealand.

Ms Wilkinson said some of the standards would have significant impacts for Auckland, which had the most complex & largest plan in the country, combining both regional & district plans (assessments previously separated into the functions of regional & local councils).

“We’ve really scrutinised each standard to see what impact they will have on the unitary plan. There is quite a lot of significance. The zoning framework does not cover the full sweep of what our plan moves in. They are pitching these standards at more medium-sized councils. It has been a little bit disappointing for us, and we feel some of the standards will substantially unpick some of the unitary plan.”

She said that if the council was forced to produce a revised plan in 7 years, it wold have to start work on it 2-3 years earlier than projected.

Auckland Council’s planners generally supported the standardisation intent to achieve consistency & improve accessibility. But they said the standards would have a significant impact on the regional policy statement, regional coastal plan, zone framework & definitions.

Main points in the council submission

The standards:

  • would challenge the Auckland unitary plan’s policy direction
  • would reverse agreements or decisions made in partnership with iwi or other stakeholders
  • don’t reflect the outcomes the community anticipates
  • would reduce the number of zones
  • didn’t contain a section specifically on urban growth, and
  • didn’t contain a section specifically relating to mana whenua.

The council planners are concerned that reducing zone numbers will mean revisiting the whole underlying policy framework, after they’d gone to great lengths to harmonise the legacy zonings of the pre-super-city councils. Instead of relitigating those issues, the council planners say the council should build on work already completed through the unitary plan – that one, point 3.6 in the submission, is likely to leave the standards writers about as confused as I am at what is meant.

Perhaps the biggest conflict will come in the naming & basis of zones. The council used names to describe zones whereas the standards proposal is for residential zone names based on density.

The submission: “This does not make sense in the Auckland context, where 3 of the residential zones in the Auckland unitary plan have no density limit. Instead, the zones are names in accordance with the housing typology provided for.”

While the key concern at the committee was around how mayor Phil Goff might best convey the council’s unhappiness at conflicting versions, members generally ignored that – as with the way different versions of the old councils’ plans were worked through to reach an agreed formula – the best course might be a delay in gazetting the current draft.

In that case, the debate ought to have been about how to present a delay in a good light.

That good light could be:

  • To agree some more complexity for large urban regions than would be needed for smaller towns & cities
  • To spend another year getting more agreed uniformity,
  • Alternatively, educate members of Parliament before the draft is gazetted on what unworkable sections will cost the country, landowners, developers, home owners.

Links, Auckland Council planning committee agenda 7 August 2018:
12, Draft national planning standards – Auckland Council submission
Recommendation
Attachments
Process for developing national planning standards
Planning standards relevant for the unitary plan
Auckland Council submission on draft national planning standards

Attribution: Council committee meeting & agenda.

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Council committee insists on promised consultation over Tamaki reserve land swaps

Auckland Council’s planning committee agreed last week to remedy the council’s failure to consult the public over plans for reserves in the Tamaki regeneration area.

Consultation had been promised, but council staff arrived at last Tuesday’s meeting with a recommendation to notify the proposed open space plan change without that prior notification going ahead.

However, the committee agreed public consultation should be carried out on the Tamaki open space network plan before proposed rezoning & land exchanges of Taniwha Reserve, Maybury Reserve West & Boundary Reserve are progressed.

Planning team leader Tony Reidy said the council had acquired about 200 land parcels on subdivision over the last year, including the 3 Tamaki reserves & some land swaps in the Tamaki regeneration area.

The council-controlled organisation in charge of its land management & disposal, Panuku Development Auckland, had discussed with council departments & iwi the rezoning of 10 land parcels as part of its land disposal & rationalisation process, and intended to bundle them into one open space plan change to dispose of them efficiently & cost-effectively.

Quizzed by former Tamaki-Maungakiekie Local Board chair Josephine Bartley – who was elected as a councillor last year, replacing Denise Lee after she was elected to Parliament – Mr Reidy said the local board had consulted “at a broader level”.

He told Cllr Bartley the current batch of changes were for land swaps and were more straightforward than a number of others where more controversial changes were proposed, and on these later changes the board had asked for community consultation.

While Mr Reidy said the board had told staff they were comfortable with these 3 reserve changes proceeding, but wanted to see consultation on others, Cllr Bartley commented: “It’s a very piecemeal approach… They’ve almost given up hope on the consultation. I don’t think that’s good enough – the local board are just another tick in the box, and one that has implications for other areas of Auckland. It doesn’t make sense to do it this way.

“The only implication I can see is timing [for the Tamaki regeneration project], but this is just doing it the right way in the community that has lost trust. The good thing is that trust could be rebuilt.”

Links for 7 August 2018 planning committee agenda:
9, Auckland unitary plan (operative in part) – proposed open space plan change Recommendation   
Attachments
Proposed open space plan change maps [published separately]   
Proposed open space plan change section 32 evaluation report [published separately]   
Panuku land disposal & rationalisation process    
Open space zoning guidelines

Attribution: Council committee meeting & agenda.

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Greenland & Golden Horse start 1400-apartment job on old Goodman industrial site

Chinese state-owned developer Greenland Group & Golden Horse Group of Hong Kong turned the first sod on Thursday for a 6.9ha 1400-apartment joint-venture project at Erskineville in Sydney’s inner-west, on a former industrial site which Goodman Group sold to Golden Horse in 2014.

Construction partner for stage 1 of the Park Sydney development is local family-owned builder Richard Crookes Constructions Pty Ltd, which has worked on several Greenland projects.

Image above: Park Sydney masterplan, highlighting amenities.

The masterplanned residential community will be developed in 5 stages and will ultimately feature 9 development blocks ranging in height from 2-8 storeys.

Park Sydney, 4km from Sydney’s cbd, will have a 7446m² public park, a supermarket & specialty shops, a fresh food precinct, eat street, medical centre & childcare centre.

Greenland Australia managing director Sherwood Luo said: “Together with Golden Horse Australia, we’ve been planning Park Sydney since 2016, so it’s particularly exciting to see major projects of this scale starting to take shape and watching how they transform the local area.

“We are converting this large former industrial precinct into an engaging & inclusive residential community that will ultimately become home to some 3000 residents.”

The value to Goodman of its exit

Golden Horse Group expanded into Australia in 2013 and bought the former industrial site in Erskineville from Goodman Group the next year. For Goodman (owner of NZX-listed Goodman Property Trust’s management company & cornerstone investor in the trust), that deal was among many as the group sold $A1.9 billion of mostly industrial assets in a year, and reinvested the lot to generate higher development returns.

Builder with long list of staff support programmes

On a different tack, the builder on this project has a lot to say about how it treats its staff – an eye-opener at a time the New Zealand construction sector has been grumbling about contract arrangements, and this government (like the last one) is talking about increasing training for & numbers in the construction industry.

Richard Crookes Constructions says on its careers page: “RCC believes the success of every project depends on the ability of their personnel and the synergy of the project teams… RCC’s business is based on maintaining long-term relationships with clients, partners & subcontractors.”

It also lists a number of staff-supporting views that I’m sure would be novelties if espoused in New Zealand:

  • We build a talent pipeline
  • We expect our staff to engage in the business and be part of its success, growth & evolution. In return we invest in their growth & development. We give people autonomy, support & the resources they need to perform at their best
  • We maintain a flat management structure with an open door policy and an honest & collaborative culture
  • Fitness passport gives individuals & families access to multiple facilities (gyms, swimming pools) which allows you to go as often as you like
  • Exercise incentives, health assessments, mindfit programme, access to trainers, $A100 annual rebate & annual flu vaccinations
  • RCC offers corporate rates with BUPA to all employees in an effort to encourage healthy lifestyles
  • Every employee receives one day off every 6 months – employees are encouraged to use the leave for engaging in health & wellbeing activities, spending time with family & friends or to relax
  • Each employee has the ability to purchase an additional 2 weeks of annual leave/year
  • Maternity & paternity leave is offered when members of the RCC family start or expand their own families
  • We would like your salary to work as hard as possible; for this reason, we offer salary packaging options such as novated leases (a lease arrangement, usually for a vehicle, where the employer takes on the obligations of the lessee to the financier, which ceases if the employee leaves the job)
  • Our staff can access a range of discounts from partnering retailers
  • RCC has a financial advisor in-house who is available to meet with staff one on one
  • We believe in & support females at RCC; one of the programme offerings is our women’s leadership lunch & learns
  • We offer an array of learning & development for our employees through coaching sessions, formal mentoring programmes, external training, role-specific technical training & leadership development programmes across all levels.

Links:
Park Sydney
Greenland Australia
Golden Horse Australia
Richard Crookes Constructions

Earlier story:
17 August 2015: Urban renewal lifts Goodman Group

Attribution: Joint venture release, Greenland, Golden Horse & Richard Crookes websites.

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MBIE opens consultation on acceptable solutions

The Ministry of Business, Innovation & Employment (MBIE) opened consultation on Wednesday on proposals to amend a number of acceptable solutions & verification methods, and to revoke the simple house acceptable solution SH/AS1. The consultation period closes on Friday 21 September.

MBIE said in a release the changes were intended to update the documents to reflect the latest knowledge & current building practices, and also make editorial changes for clarity.

Amendments are proposed to the following documents:

  • Clause B1 Structure: B1/VM1
  • Clause B2 Durability: B2/AS1
  • Clause E2 External Moisture: E2/VM1, E2/AS1
  • Clause G12 Water Supplies: G12/VM1, G12/AS1, G12/AS2
  • Clause G13 Foul Water: G13/AS1, G13/VM2, G13/AS2, G13/AS3

Revoking Simple House:

On revoking the simple house acceptable solution SH/AS1, MBIE said: “SH/AS1 is now 8 years old and is no longer fit for purpose. It has not been updated in a number of years, meaning current knowledge & practices are not reflected, and it is inconsistent with other acceptable solutions.

“Anecdotal evidence is that few architects & designers refer to SH/AS1 because of its limitations on floor & roof shapes. SH/AS1 does not contain any information that is not available elsewhere in acceptable solutions or New Zealand Standards.

Link:
Full proposals & consultation MBIE corporate website

Attribution: MBIE release.

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Unitary plan already steering Auckland housing toward intensification, says council economist

Less than 2 years after Auckland Council’s zone-changing unitary plan started to become operative, council chief economist David Norman concludes that it’s been a major cause of housing intensification.

On the other side of the equation – which most on the council worried about as it wrote a plan encouraging more brownfield redevelopment & less new greenfield development – the urban fringes have taken a lower share of new housing.

The third important factor in the change of housing impetus is that intensification has spread through suburbia.

And the fourth is that developers have paid close attention to transport routes, especially rapid transit stops.

Image above: Auckland Council chief economist David Norman presenting to the council planning committee meeting at the Orakei marae.

The map below: The red dots represent intensification points around the Auckland region and the purple patches represent intensification along rapid transit corridors.

Mr Norman released a report on the unitary plan’s impacts on residential development at Auckland Council’s planning committee meeting yesterday – held at the Orakei marae – and spent over an hour answering questions from the committee about it.

The one councillor who would certainly have questioned Mr Norman’s view was Dick Quax, who died of cancer at the end of May, aged 70, after long advocating the removal of the rural:urban boundary and questioning intensification as a housing solution. The election for his replacement closes on 13 September.

Yesterday’s quizzing of the economist was more about the detail, not about the politics of greenfield versus intensifying use of the existing urban footprint.

The unitary plan became largely operative in November 2016, and the council now expects it could be fully operative next year, once the remaining 13 appeals are settled.

The changing market shares

Mr Norman said in his report it took about 9 months to begin to see the plan affecting what & where new dwellings were consented.

“In the 10 months since new dwelling consents began to surge in August 2017, total dwellings consented are up 27% compared to a year earlier. Almost all of the growth in consents has been in brownfield (existing urban) areas, reversing the trend toward more greenfield development over the previous 7 years.

“More intensive typologies, specifically apartments & terraced/townhouses, have grown to account for 54% of all new dwellings consented, compared to 37% 2 years ago. A disproportionate share of this denser development is around the rapid transit network.

Mr Norman said his analysis “provides an antidote to the view that relaxing development restrictions on the fringes of the urban area is necessarily the best way to reduce the housing shortage. People by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers are showing a preference for delivering development in brownfield areas.

“Land on the fringes is significantly cheaper. But once the lack &/or value of infrastructure and proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

The day most of the unitary plan became operative, it up-zoned thousands of brownfield (existing urban) properties.

“Altogether, the plan provided capacity for up to one million new dwellings although, at the time, only an estimated 422,000 were deemed to be commercially feasible for development. This feasible growth was anticipated to be spread across brown & greenfield areas in a roughly 2:1 ratio.”

The chief economist’s unit at the council had estimated an upturn in new residential building consents would begin around April or May 2017, but this didn’t start until August. Since then, growth has been strong.

However, Mr Norman said little information was available about the effects of the plan on development patterns: “This report provides information to support future discussions & decisions about important issues such as whether to remove or relax the rural:urban boundary.”

How does he know there’s been a change in development emphasis?

“Building consents for new dwellings grew remarkably steadily from 2012 through to April 2016. This pattern broke, and growth plateaued, 6 months before the plan became operative in part. Anecdote suggested that many investors had bought brownfield land in advance of the plan becoming operative and were waiting to lodge consents for more intensive development once the plan was operative.

“During the period from November 2016 to July 2017, the first few months of the plan being operative, consent growth was even weaker, against the backdrop of a housing shortage approaching 40,000 in Auckland at the time. The data indicates that this was because developers were still making plans for more intensive development.

“Residential construction began to surge in August 2017. The number of new dwellings consented in the 10 months to May 2018 is up 27% over the same 10 months the year before, and annual consents were only 5% below the all-time peak in June 2004. This annual total is despite a much tighter 2005 Building Code regulatory regime & building consent authorities’ response to the leaky buildings crisis.

“There is significant evidence to suggest the sudden resurgence in consenting activity is the result of the plan beginning to work:

  1. Brownfield areas dominate consents growth: 90% of all growth in new dwellings consented in the 10 months to May 2018 (since the upturn began in August 2017) is in brownfield areas where the plan delivered the bulk of potential for greater development
  2. The trend toward green and away from brownfield growth has been reversed: The share of total new dwellings consented in brownfield areas in the 10 months since August 2017 has grown from 62% to 69%. This has reversed a trend of declining brownfield development as a share of building consents over the previous 7 years
  3. More intensive building typologies enabled by the plan are being adopted: Terraced houses & apartments were 54% of new dwellings consented in the 10 months to May 2018. In the 10 months to May 2016 (ie, the comparator 10-month period before the plan was passed), it was just 37%
  4. In the urban areas, the desired compact city is emerging: In the urban area, around 66% of new dwellings are multi-units, precisely what the plan aimed to deliver.

Further, Mr Norman said, “a disproportionately large number of dwellings are being consented in rapid transit network catchment areas – defined as living within 1500m of a train station or northern busway bus stop. This highlights that people value rapid transit access, and that development enabled by the plan is responding:

  1. The share of multi-unit dwellings consented in rapid transit network areas is 16 times higher than the catchment’s share of Auckland’s land area. The rapid transit network catchment covers only 2.6% of Auckland’s land area, but accounts for 42% of all multi-unit dwellings consented in the last 10 months
  2. 11% of standalone homes were consented in rapid transit network catchments. This is 4.3 times more than the catchment’s share of land area
  3. 81% of all dwellings consented in rapid transit network catchments in the last year were multi-unit, helping to deliver the intensification that characterises transit-oriented development
  4. Overall, 40% of all dwellings consented in the urban area were in the rapid transit network catchments, even though the catchments account for only a quarter of Auckland’s urban area.

Mr Norman said this analysis highlighted that people by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers had revealed a preference for delivering development in brownfield areas.

“These findings provide evidence that counter the view that relaxing development restrictions on the fringes of the region, where few amenities exist, is the best way to reduce the housing shortfall. Land on the fringes is cheaper. But once the lack &/or value of infrastructure & geographic proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

Mr Norman said the central city was still the main target for developing apartments, but they were also becoming more common in the Albert-Eden ward and just across the harbour bridge in Takapuna & Devonport.

The exception was the Upper Harbour ward, where all 3 types of development were occurring. That ward includes Hobsonville, where all new housing is more intensive than the historical norms, including standalone homes.

Finally, there are changes in the south: “There are relatively large numbers of multi-unit dwellings being consented in the southern isthmus & southern local board areas. This suggests increased delivery of typologies in areas with larger Maori populations. Multi-unit developments are often cheaper on a per-unit basis than standalone housing, which may provide greater access to warm, dry modern housing for Maori in those areas.”

Another statistic, this one relating to the shortage of housing:

“In the period from April 2016-August 2017 we only saw 7.5% total growth in consents – 6%/year. What we’re seeing since then, in the 10 months to May 2018, is a 27% increase. Code compliance certificates are up 30% over that time period.

“We’re now generating code compliance certificates at a faster rate of increase than building consents, which means we’re catching up.”

Councillors’ questions

Cllr John Watson said intensification was one side of the equation, the other was bringing the price down: “Prices haven’t come down, they’ve probably gone up.”

Mr Norman: “A number of things colluded. We saw loan:value restrictions on investors. Investors are actually still in the market, but it’s largescale investors. Recent date shows foreign investors are still involved.”

At the same time as constraints were introduced, prices peaked in Auckland: “These 3 factors show they have played a part in decreasing prices. You also face the construction capacity constraints, which mean the cost of construction is going up 6-7%/year. About 4-5 floors, the cost is $6-7000/m² against $2500/m² for a standalone home.

“What is encouraging is house prices have not continued to accelerate, and I think the unitary plan is an important factor in that.”

Mr Norman said one factor affecting the provision of new homes – the time it takes to build – was much different because of the switch to multi-units: “Typically it was 6-9 months, a multi-unit can be 18 months.”

The value of special housing areas

Cllr Wayne Walker questioned the brief era of special housing areas introduced by former housing minister Nick Smith: “It dramatically escalated the value of land, sold & onsold by people who weren’t really interested in building on it. It’s in a situation where it’s not generating any housing and has escalated the value of neighbouring land.”

Mr Norman: “My personal view is that we probably didn’t get as much development out of special housing areas as we thought we’d see. The intent was around accelerating resource consent applications, but if I were to do it again, I’d require them to build in a certain time.

“What is different about what I’m talking about today [the widespread intensification], this is not land where you’ve had to get a private plan change request. This is a broad plan that affects the entire city, it immediately creates competition. Why should I pay this amount when I can get land cheaper 2 blocks over?

“What makes property valuable? You talk about the rural:urban boundary. I’ve seen very little evidence that accounts for land price differences inside & outside the rural:urban boundary. What we do know is that infrastructure makes it liveable [inside the boundary] and people pay for that.

“I’m far less convinced that we’ve been in a speculative bubble. We’ve had a huge increase in population and prices go up, helped by low interest rates. I think that is a factor.”

State of the construction sector

Mr Norman had some interesting observations on the calamity of the moment, the collapse of one apartment builder, Ebert Construction Ltd, into receivership and the questions being raised about the state of the vertical construction sector.

Mr Norman said he worked in the construction sector for several years, including 2 years as BRANZ (Building Research Association) senior economist, and built his own house. On the players in construction, he said: “These are businesses, like in every other sector, sometimes they make good choices, sometimes they don’t. It is not my view that it’s central government’s role to hold the hand of business.”

Taking a longer-term view, he said it shouldn’t be about keeping spending down, and the solution shouldn’t rest solely with the Government. The sector should use the spotlight on it as an opportunity to improve project management: “We are not talking about victims here.”

Nimby protests versus over-dominating structures

Cllr Chris Fletcher raised a specific issue which she suspected might be a more common anomaly in the unitary plan – the redevelopment of a former nurses’ home on Banff Avenue, Epsom, by new owner Housing NZ. She said the street had 40 bungalows, a church & a small church school. Understandably, she said, Housing NZ “are going to go for maximum yield”.

Cllr Fletcher said the neighbours would have been happy with 3-storey development, but Housing NZ intended to build to 5 storeys. Intensification was “a wonderful trend – but nor do I want to see it at any cost, and I want to see the continuing public support for the process.

“But if we have an anomaly, what is the route we take? I don’t believe it’s just nimbyism, they’re happy to see 3 storeys but not 5 storeys in a 3-storey street.”

This was a question for council plans & places general manager John Duguid, who thought the specific case was “probably long past the point where we can do anything. In other cases I certainly invite councillors & others to bring them to my notice and we can respond.”

When might prices fall?

Cllr Fa’anana Efeso Collins raised a question which is on the other side of the affordability equation from the clamour for an urgent increase in supply: “At what point – or what are the conditions – that will lead to a fall in house prices? Surely at some point there must be a fall in house prices.

Mr Norman: “Short of an economic meltdown that I am not forecasting, I do not see a reason why house prices should fall immediately or in the short term. I do think we will see 2 things. Firstly, why not a fall? The basics of supply & demand, we haven’t had the shortfall. You’ve got this floor propping up prices, that’s not going to disappear any time soon.

“The cost/m² is a lot higher in apartments. We are seeing a subtle change in typology. Over the last 5 years the average dwelling size has fallen from 210m² to 172m², a 38% reduction, and that’s because of the switch in typology.

“100m², we were able to do that before and live quite comfortably. A shortfall this size [which he estimated at about 45,000 homes], there is no incentive for anyone to build cheaper – why would you leave money on the table?”

Mr Norman’s second point was that a focus on building more expensive homes for greater profit ought to open up a market for different types of housing: “If the market would only deliver houses at $850-900,000, we’re potentially opening up a different type of housing – you don’t want a second living room, you just want to be warm & dry.”

Cllr Collins: “I accept the position but I think we have to accept there are people who will never attain that dream.”

Catering for large families

Cllr Desley Simpson asked what was being done to provide houses for large families, “given we are the biggest Polynesian city in the world.”

Mr Norman: “The way I estimate my housing shortfall is to calculate the number of residents in a household. Households are shrinking in Auckland and we’re seeing the number of people/household increasing, that’s because of our demographic input. So we’re very aware of the fact we are increasing housing and it affects some communities more than others.

“We’re also seeing it in terms of the typology. Our standalone homes are too large at an average 230m², but it is the way people are choosing to live.”

However, he had seen 5-6 bedroom houses where people were banding together to form bigger households.

Links:
Chief economist’s report to planning committee, 7 August 2018: 14, Impacts of the unitary plan on residential development   
Live stream of David Norman at planning committee, 7 August 2018

Attribution: Norman report, committee meeting.

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Unitary plan on track to be fully operational next year

Auckland Council’s unitary plan, promulgated in 2016, could be fully operational next year.

A report to the council’s planning committee meeting tomorrow says 13 appeals remain out of a total 119 to the Environment & High Courts, plus 8 judicial review proceedings.

The council formulated the unitary plan during its first 3 years, after the Government created a super-city council for the region to replace the former 7 territorial councils & one regional council.

The super-city council completed its proposed unitary plan in September 2013, sent it to an independent hearings panel to consider submissions, and the panel sent its recommendations back to the council in July 2016. The council publicly notified its decisions – some conflicting with panel recommendations – in August 2016, making the bulk of the plan operative and triggering appeals for some of it.

The council was served in September 2016 with 67 Environment Court appeals, 41 High Court appeals & 8 judicial review proceedings.

The Environment Court has issued decisions on 2 significant matters in the last 2 months, on the rural:urban boundary at Okura and rural subdivision provisions. The court decision found in favour of the council’s position on Okura, and Okura Holdings Ltd has been appealed the decision to the High Court.

The rural subdivision provisions decision went in favour of the appellants, and the council has appealed to the High Court.

The Environment Court ended up dealing with 72 appeals, and 6 appeals remain. In the High Court, there were originally 41 appeals, rising to 47 via Environment Court appeals, and 5 remain – plus the 2 new ones.

Of the 8 judicial reviews, 3 have been discontinued and 5 have been the subject of High Court decisions. 2 of those decisions have been appealed to the Appeal Court. Each of these High Court decisions related to a judicial review proceeding and a related High Court appeal. The council was successful in each of the High Court decisions.

Planning team leader Tony Reidy said in his report to tomorrow’s planning committee meeting all appeals were expected to be resolved in early 2019.

Links:
Planning committee agenda, 7 August
11, Auckland unitary plan (operative in part) – update on appeals & making additional parts of the plan operative
Recommendation   
Attachments

Attribution: Council committee agenda.

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Tamaki reserve rationalisation up for approval

Auckland Council’s planning committee will consider a proposal tomorrow to rezone open space, primarily arising from land exchanges under the Tamaki regeneration project and under Panuku Development Auckland’s land disposal & rationalisation process.

At Tamaki, changes are proposed to the 3 reserves in the regeneration area.

Planning team leader Tony Reidy says in his report to the committee the rationale is that many of Tamaki’s parks are poorly located with respect to the built environment around them.

“For example, many parks are located behind private residential properties. These parks generally have little street frontage, small alleyway-type entrances and are bounded by high solid fences.

“The shape & topography of much of the open space restricts its usefulness for recreation activities. Many of the parks consist of sloping ground, are fragmented by creeks and are of narrow, linear shape. Many open spaces also serve a drainage function and, as a result, become boggy during wet periods, reducing access & useable space.

“There is generally an unco-ordinated approach to the provision of amenities such as playgrounds & walkways within Tamaki. The varying quality of existing assets, missing sections of path network and poor surveillance of many parks greatly reduces the recreational potential of Tamaki’s uniquely connected network of open spaces.”

Links:
Planning committee agenda, 7 August
9, Auckland unitary plan (operative in part) – proposed open space plan change Recommendation   
Attachments
Proposed open space plan change maps [published separately]   
Proposed open space plan change section 32 evaluation report [published separately]   
Panuku land disposal & rationalisation process    
Open space zoning guidelines    
10, Request to make operative private plan change 9 to the Auckland unitary plan (operative in part)
Recommendation

Attribution: Council committee agenda.

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Rail network to take 9-carriage trains in future-proof agreed by council & Government

Auckland’s rail network stations will be expanded to take 9-carriage trains instead of the planned 6, in a future-proofing agreed yesterday by Auckland Council & the Government.

The price hasn’t been disclosed, and won’t be while the tender process to procure the work is underway. Auckland Council said yesterday exact costs would be known more precisely early next year once tenders are received.

The council’s governing body voted overwhelmingly to expand the scope of work to cater for increased capacity requirements of the city rail link, and Cabinet approved it yesterday as well. City rail link costs are shared equally between the 2.

The increase in scope follows a new estimate that peak capacity will be 50% greater than originally estimated – up from 36,000 passengers/hour at the peak to 54,000.

A council-government partnership, City Rail Link Ltd, is in charge of a construction programme that will make the downtown Britomart station a through station instead of a dead end. New stations at Aotea (Albert & Victoria Sts) & Karangahape Rd will be on the route round to a revamped Mt Eden station.

Consequences from the future-proofing for the city rail link:

  • Wider tunnels
  • Longer platforms at new stations to cater for the 9-carriage trains
  • A second entrance from the Karangahape Rd station, and
  • Associated station work.

Auckland mayor Phil Goff said: “Last year we achieved the milestone of 20 million passenger trips/year, 4 years ahead of schedule.

“The growth in popularity of rail travel in Auckland required council to take the decision today to increase our investment in the city rail link and expand new rail stations to cater for the huge number of people who will be commuting by rail in the next 10 years.

“Getting the work done now while the rail link is still under construction will avoid retrofitting the system, which would double the cost and require the tunnels to be closed for 2 years for widening within a decade of it being opened.”

Transport Minister Phil Twyford said increasing investment would ensure that when the rail link opens in 2024 Aucklanders get a modern & efficient rail service that benefits the entire transport network for decades to come: “A decade of under-investment in transport infrastructure has brought Auckland to a near standstill.

“Today’s decision has allowed us to avoid repeating the mistakes of the past when, within 10 years of opening the Auckland Harbour Bridge, it had to be expanded from 4 lanes to 8.”

Link: City rail link

Attribution: Council release.

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Sale of chip off old Herald site enables hotel development to proceed

An 1100m² central city corner – part of the site of the NZ Herald for over 150 years – has been sold for $31 million at a land value of $28,181/m².

Local development company Mansons TCLM Ltd settled the sale of the 1100m², at the corner of Albert & Wyndham Sts, to Australian company Pro-invest Developments Pty Ltd last week. The Sydney company is planning a 490-room dual-branded hotel development of about 37 levels on the site (pictured).

Bayleys senior broker Paul Hain in conjunction with the agency’s director of hotels, Nick Thompson, negotiated the sale.

Mr Hain said the transaction would enable a 22,500m² hotel building to be developed on the corner portion of the 4258m² former Herald site which Mansons originally put up for sale.

“While the sale agreement was negotiated last year, settlement was contingent on the issuing of a new standalone title for the land which Pro-Invest has purchased. This will now allow them to proceed with the construction of the hotel.”

Mansons confirms office plans for balance of site

All 15,000m² of the old Herald buildings have been demolished, and Mansons TCLM director Culum Manson confirmed the company intended to develop a lowrise large-format office building of 25-30,000m² on the remaining 3158m² of land, which also has frontage onto Mills Lane.

“We are currently in the design & resource consent planning phase for this building, which will be similar to our other recent office developments, with very large individual floor areas which are popular with tenants.”

The Herald vacated the property in 2015, when parent company NZME Ltd relocated all its Auckland media operations into a new office complex which Mansons developed on the corner of Victoria St West & Graham St.

$100 million of hotel sites sold or under contract

Mr Thompson said the sale was one of a number of Auckland cbd hotel development sites that

Bayleys’ hotel division has sold or has under contract at a total transaction value of over $100 million.

“We are receiving continuing enquiry from offshore investors for quality hotel development sites in Auckland in particular, with interest heightened by major forthcoming events such as the America’s Cup & APEC leaders’ summit.”

Pro-invest Development said last year the new hotel, which will have its main entrance off Wyndham St, would accommodate 2 InterContinental Hotels Group brands. It aims to have the Auckland hotel opened in 2020.

Managing director Tim Sherlock said there would be 290 Holiday Inn Express rooms on the lower levels and 200 EVEN hotel rooms on the upper levels, which Pro-invest would develop, own & manage under a franchise agreement with IHG.

EVEN Hotel Auckland will be the first for that brand outside North America, and also the first in Pro-invest Group’s plans for a portfolio of 10-15 EVEN Hotels in Australasia on behalf of the Pro-invest Australian Hospitality Opportunity Fund, in partnership with IHG.

Pro-invest Developments is part of Pro-invest Group, a boutique investment firm specialising in private equity real estate & real estate asset management.

IHG has developed the brand in response to what it says is a consumer shift toward holistic wellness – especially as it relates to travel. Features of the hotel include best-in-class fitness facilities, in-room exercise zones and nutritionally designed menus, with fresh & organic, ethically sourced foods.

IHG’s chief executive for Asia, the Middle East & Africa, Jan Smits, said wellness travel was a rapidly growing global phenomenon: “With EVEN Hotels, we have a created a brand that will deliver a local wellness experience to travellers for whom health & wellbeing is so important. I firmly believe that the EVEN Hotels brand will be a key driver in market share growth in New Zealand & Australia.”

Links:
Mansons TCLM
Pro-invest Group

Attribution: Agency release, company website.

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More moderate but sustained construction growth forecast, but new records seen for housing

The National Construction Pipeline Report 2018, out on Monday, forecasts a continuing rise instead of a tailing off in housing construction, a less optimistic future for non-residential & flatlining for infrastructure.

The report provides a projection of national building & construction activity for the next 6 years, ending 31 December 2023. It includes national and regional breakdowns of actual and forecast residential building, non–residential building and infrastructure activity. The report is based on building & construction forecasting by the Building Research Association (BRANZ) & Pacifecon NZ Ltd data on researched non-residential building & infrastructure intentions.

The 5 key findings in the report:

  1. Sustained growth is forecast for building & construction nationally
  2. National dwelling consents expected to exceed historic highs with 43,000 in 2023
  3. Multi-unit dwellings overtook detached house consents in Auckland in 2017
  4. Non-residential building growth expected for Auckland, Waikato & the Bay of Plenty
  5. Wellington experienced the strongest total construction growth in 2017.

MBIE said all previous reports had been adjusted to 2017 dollars for comparison.

Switch to more sustained growth

The report suggests growth will moderate, but be sustained: “For the first time since the report was initiated in 2013, a peak in total construction value is not expected within the forecast period. Instead a more moderate sustained growth is forecast for the next 6 years. The 2017 report forecast a peak in total construction value of $42 billion in 2020. This year’s forecast is for activity to remain at current elevated levels until the end of 2020, with growth expected from 2021 to over $41 billion in 2023. The forecast of sustained growth reflects strong researched project intentions nationally.”

How good was last year’s forecast?

The ministry asks in this year’s report how well did it do with the 2017 forecast. I noted when that report was released last August that it acknowledged an optimism bias in forecasting, then didn’t seem to take it into account.

MBIE bears that out: “The revised total construction forecast for the period 2017-23 is for moderate & sustained growth. The higher & earlier construction peak, which was forecast for 2020 in last year’s report, is expected to give way to long-term growth. This year’s forecast is lower than previously forecast.

“Actual national growth decreased by 0.3% in 2017, whereas the 2017 report had expected 10% growth. All 3 construction types (residential buildings, non-residential buildings & infrastructure construction) grew less than expected. Long-term growth is now forecast showing continued growth to 2023. This is unique compared with all previous reports, which have all forecast a peak at some point in their 6-year views.”

Housing forecast – true if KiwiBuild succeeds

While, in the 2018 report, the ministry acknowledges over-optimism last year, the forecast for housing consents is even more optimistic. Whereas the 2017 report showed consents peaking at about 34,000 in 2019 then tailing off, the 2018 report shows consents continuing the almost straightline rise since the market bottomed below 14,000 in 2011 (13,269 in the 12 months to July 2011).

“Over the next 6 years the number of dwelling units consented is forecast to increase by 39% to a forecast high of 43,000 dwelling units in 2023. Dwelling unit consents are expected to go past the 2004 peak (31,423 dwellings) in 2018 and grow year-on-year throughout the forecast period. This is considerably higher & longer-term dwelling growth than was forecast in the 2017 report.”

The latest consent figures, released by Stats NZ yesterday, show the pipeline report is correct on the first part of this forecast: consents for the 12 months to June totalled 32,860.

The dwelling unit forecasts are based on Stats NZ’s December 2017 household formation data, which provides estimates of the number of new dwellings required derived from population estimates. This information provides estimates of the number of new dwellings required to meet both expected population growth and to remedy already existing housing shortages.

One reason for the greater optimism: “KiwiBuild is expected to provide greater certainty of the forward pipeline of construction work and allow the sector greater ability to manage constraints and scale up to provide year-on-year increases in dwelling numbers into the future.”

Non-residential

On non-residential, this year’s report forecasts a lower peak in 2019, the same time as the peak forecast previously. The 2017 report forecast 12% non-residential building growth for 2017 nationally, but actual recorded growth was a fall of 3%.

Infrastructure to flatline?

The 2018 report’s forecast for infrastructure activity nationally is far lower, almost flatlining for 6 years at about $7 billion/year, whereas the 2017 report had infrastructure spending rising from $8 billion at the start of this year to $10 billion in 2023.

The new report says: “Last year’s report expected 6% infrastructure growth, where actual recorded activity was a 3% decrease. National infrastructure values are historically more consistent year-on-year than residential or non-residential building activity values.”

Smoothing out the optimism bias

Pacifecon recognises the optimism bias inherent in development intentions, and has been steadily reducing the size of project it individually scrutinises more closely. For the first report in 2013 projects over $100 million were individually scrutinised. This year & last year, projects over $50 million were scrutinised.

The report explains that all intentions in building & construction come with some level of overconfidence, but many projects may lag behind their original timelines or are occasionally cancelled. “This optimism bias of non-residential building & infrastructure construction intentions in the Pacifecon dataset can be seen in the raw (un-‘smoothed’) known intentions data. This shows in a higher than expected number of projects over the next few years, and a lower than expected number of projects over the longer term.”

Links:
MBIE, Construction pipeline reports
MBIE, 2018 construction pipeline report

Earlier stories:
9 August 2017: Construction pipeline report continues to show high optimism bias
27 July 2016: $200 billion construction pipeline forecast for next 6 years

Attribution: MBIE release, pipeline report.

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