Take another look

There has been a lot of noise in the last fortnight about how, suddenly, overnight, to solve problems which have been festering for decades.

They’ve been festering because of an unwillingness – and an ignorance – about how to run a country, a province, a region, a city.

The solutions need to be long-term, derived from serious, considered thought & debate. And to be long-term, they will take time to piece together.

Finance solutions

One of the oddest “solutions” to anybody’s problems, to me, has been the immense & widespread desire for the Reserve Bank to keep cutting interest rates. Sure, everybody wants to pay less interest, but even the Reserve Bank has recognised that in taking this step it has helped push property prices higher. Buyers of houses borrow to the max, and a lower interest rate means the house price can be higher.

The housing minister can point proudly at the growth of new housing, in dollar terms. But who stops to consider why billions of extra dollars are being spent on housing because of an artificial inflation?

This affects other parts of the economy, so other solutions ought to be considered, but the interest rate cut is the choice that’s been taken.

It’s not just residential property, either. The best way to assess pricing on commercial property is by the yields, and 5% is now a benchmark, yields in the 4% range are occurring more frequently, double digits now a universe away.

Land supply

Auckland Council stands accused of multiples crimes it hasn’t committed.

The first is to create a shortage of appropriately zoned & serviced land for both residential & business development. The shortage has been decades in its creation, by predecessors of this council, using the 25-year-old Resource Management Act in the opposite way to that intended. It was to have been enabling, it’s been used to restrict.

In the near-6 years of the super-city, Auckland has had a welter of plans produced and the most important of these, the unitary plan, is nearing fruition.

This government decided the form the super-city council would take, set timeframes for certain actions and required the unitary plan to be written by this year. The independent panel that heard submissions on the plan the council proposed 3 years ago will deliver its recommendations back to the council on 22 July and the council will make its decisions on those recommendations before the October local body elections.

The outcome will include a serious attempt at consistent zoning, measures to provide for the provision of a future supply of appropriately zoned land – not just for the next few months, but a formula to stick by as population growth rises & falls over decades – and measures to retain rural land.

One of the failings of many critics of inadequate land supply for housing is to see rural land as vacant, available whenever the urban need occurs, to be taken on a whim. From the other side of the fence, where the cow or the sheep stands or the crab or the fish swims, the bulldozer is not a friend, not a creator, but a destroyer.

Threats to enforce thoughtless land supply, without considering effects, should be treated with the scorn they deserve.

Completion of the unitary plan won’t mean the automatic & immediate opening up of vast tracts of land for housing – large areas may be rezoned, but owners still have to want to use that new zoning.


Provision of infrastructure such as sewers & water supply, and of adequate access, has been poorly delivered throughout New Zealand for many decades. Auckland has areas where flooding and the mixing of storm- & wastewater have long been issues but are now, gradually, being addressed.

Because these services are underground & unseen, nobody ever seems to worry that they might be inadequate. Funding of the fix is therefore always slow – but under this council it’s been re-examined, sped up, though still too slow, and that’s in areas already developed.

Suddenly, it’s wise to fling houses into paddocks wherever, to link them to all infrastructure even though doing so will be highly uneconomic & highly inefficient.

“Public sector can’t perform”

It’s common for critics to dismiss the performance of the public sector – first, because the public sector cannot perform as well as the private sector, and second because people who work in the public sector are slow-minded deadbeats.

Anybody with half a brain would know both of those criticisms are nonsense but, said often enough and with enough venom, they stick.

Much public sector performance can be criticised, questioned – but not for being public. Think Singapore for an answer. Large corporates have their deadbeats too. The solution is to work towards improving the performance, rationally & with shared goals in mind.


An issue important to many questions of concern is access – important to housing, to affordability, to business, for residents to reach shops & amenities & jobs. Forget, for the moment, the mode of getting there, think instead of where you want to go and where you’re likely to want to go in 10 years.

One solution to housing supply is to provide greenfield land – those large tracts of “vacant” land, unused except for agricultural production.

For 30 years the mantra has been to centralise, to grow main centres, to turn small towns into villages, to take away job opportunities locally.

Yet New Zealand can never compete as a high volume producer of manufactured goods – for supply internationally or against imported supply. It is a country made for small business, for ingenuity, for adding value instead of supplying bulk.

To that end we should be able to live pretty much anywhere, and therefore small communities should be able to thrive. We should be well advanced in providing novel infrastructure solutions for such small communities, and therefore for out-of-the-way developments which, at the same time, have enough infrastructure to be a community. What is seen as the solution, though, is bulk greenfield supply with transport – access – solutions a poor second.


My comments above from seeing many lines thrown away recently on how those in charge of solutions are doing poorly, and what better solutions there are.

Transport is one of those areas – the city rail link is maybe good for the central business district but not for anywhere else, and everyone else is paying for it; Auckland Transport does absolutely nothing right, although it’s been presenting a new look to access around the region; Auckland is in housing crisis and nothing is being done to fix that, although there are many steps being taken – the shift of many elderly into retirement villages and freeing up existing homes is one, development of apartments & townhouses in suburban centres is another, and many small building companies are producing a growing supply of homes.

From this commentary I’ve provided 4 links below. One is to a column by economist Rodney Dickens, managing director & chief research officer of Strategic Risk Analysis Ltd, who questions the policy on interest rates and its effects on both the productive economy & the housing market.

The second is to Market Economics Ltd founder Doug Fairgray’s comments in an article in his company newsletter on housing affordability.

Dr Fairgray led Auckland Council’s economic analysis for the council’s submissions on the unitary plan. He has plenty of critics, especially for his work on calculating the availability of land supply, and therefore the capacity for urban Auckland to grow.

The third is Auckland Transport’s latest update on work being done in the eastern suburbs to improve access, and the fourth is to Auckland Transport’s overall projects & roadworks section.

The misguided OCR cuts pose a range of opportunities and threats
Auckland housing affordability
Auckland Transport, Ameti – eastern suburbs projects
Auckland Transport, projects & roadworks

Attribution: Commentary.

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4 Responses to Take another look

  1. Jonathan A Wednesday 8 June 2016 at 1.23pm #

    100% in agreement with your summary above Bob. The transparent blame game and finger pointing that’s currently going on is unbelievable.

  2. GM Wednesday 8 June 2016 at 8.33pm #

    Can’t say I agree with your CRL comment. The CRL benefits the whole rail network. It enables capacity to increase improving frequencies. It cuts travels times to the city immensely from the west.

    Its an absurd point to make saying only the central city benefit but we all pay. This is the same with any infrastructure built.

    Public transport is a key infrastructure component to allow for more houses across Auckland to be built without creating a traffic bomb with more cars in these houses hitting the streets.

    • Bob Dey Wednesday 8 June 2016 at 10.30pm #

      Thanks GM. That was an overly shorthanded paragraph so I’ll add a few words to that first part of it: Critics say city rail link only good for cbd. I agree with you, that completing the loop will make for more efficient travel over a wide area, not just the cbd.

      • MA Thursday 9 June 2016 at 1.26pm #

        What is the actual CRL network? AT have never confirmed – show western/southern combining, which gives extra capacity ie removes one line in/out, but all western times given in the spin are to aotea etc, whereas 40% of western line go to grafton/Newmarket. Western line trains only half full when they get to Britomart now.
        And CRL tunnel shared by Onehunga on lower frequency – so hard to see real improvements.
        Dwell time whne 40% get off to tfr to a 20min frequency train back around to grafton won’t help network.

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