NZ's demographic timebomb

These slides are from a compelling presentation made at the New Zealand Planning Institute conference in Dunedin this year. Many attendees - including me - found it very enlightening and disturbing. Up there with climate change in terms of its remorseless and over-whelming effect.

 Structural ageing was a key theme. This relates to the proportions in a given slice of population that are of child-bearing age. It requires an understanding of the different age cohorts there are in different parts of the country, and what that will mean in future years - and future generations - for the makeup of the population. This graph really tells the story of NZ's baby boomer demographic structure. It shows the changes in the proportion of different age ranges across the country over the next 10 years. Thus there will be 70% more people aged between 75 and 79, and 10% fewer people aged between 40 and 50. Analysis of these numbers leads to assessments about the numbers of births in future years less the number of deaths in those years, and to predictions of zero and negative population increase (when deaths exceed births in a community).

The population structure in different parts of New Zealand is very different. These two examples are Thames Coromandel and Hamilton. The former has the greatest proportion of older people in the population in New Zealand.

 The data in this rpesentation is largely drawn from NZ Statistics. ie it is readily available. However in my experience not a lot of attention has been focussed on it by planning and planners at territorial authority level in preparing for the future needs of communities. This may be because of the very short-term focus that predominates in New Zealand today.

This OAG comment notes that the demographic situation NZ is entering now, because of its baby boomer origins, is not a situation we have experienced before, and one we may be ill-prepared for in planning terms.

Parts of New Zealand (notably Auckland) are like Sydney and Melbourne and London - cities where 30 to 40% of the population were born overseas. Brexit has led to all sorts of analysis - one question might be why was it that 70% of voters in many inner city London suburbs voted to remain, while many outside London did not. A consideration in this analysis must be the very high proportion of Londoners who were not born in the UK. These globalisation changes present challenges. Urban areas not affected by/suffering from/benefiting from sharply increasing immigration tend to worry about the way their country is changing - "doesn't feel like home anymore...". Demographic changes in parts of New Zealand will be similar, and this graphic, and others like it, are harbingers of that future. It is a debate that needs to be had in New Zealand, and it needs to be had and settled before any consequences are immutable.

 This slide draws attention to the fact that as the age makeup of a community population changes, so too do the proportional needs and requirements that need to be met. This change is not about size and increasing numbers, but about changes in the occupancy of different age groups. Taking Thames Coromandel as an example - it has a very high proportion of people older than 65, and a low proportion of working age people.

 NZ Stats has provided maps of the changing areas of New Zealand.

 NZ Stats has tabulated population projections. Today NZ Government is primarily focused on parts of NZ that are growing strongly - in overall numbers - such as Auckland, Tauranga, Hamilton, Christchurch and Queenstown. These are the areas of NZ that are experiencing greatest net population growth and related economic activity growth. Government's $5,000 offer to relocate away from Auckland is a trivial start in countrywide demographic planning and population management.

This is an interesting snippet of what is happening in Australia, parts of which are encountering similar demographic challenges. This is a recognition that TLAs have different abilities to fund their activities. Having an ageing and retired population on fixed incomes makes it difficult to raise rates needed to fund local services.

 This slide outlines some of the approaches that are adopted in different countries. I think the message here is that NZ is firmly in the "build it and they will come" camp.

 Interestingly, the demographic analysis also applies to the labour market. Different occupations in a country require/rely upon a steady supply of skilled entrants to pick up the work that needs to be done. It is critical to a country's economic future that it has the workers it needs to do the jobs that need  to be done. One reason - perhaps - why immigration of skilled workers is supported.

 This was an intriguing reflection By Natalie - for the planning conference - on her demographic assessment of the age profile of resource management planners.

And here's her summary of take away points. Key recommendation here: begin the dialogue. We need a national population/settlement strategy and plan in New Zealand. Just turning on the immigration tap to keep GDP bubbling along, and then expecting Councils to respond to the market thus created is not the sort of dialogue and cooperative approach that is needed.

Council Public Space Sale Unjustified

You'll have to wait until July 18th to see the evidence and hear the legal arguments for and against Auckland Council's decision to sell Auckland's Queen Elizabeth Square, but it's time for an airing of some of the information that has emerged.

After it's 15 May 2014 "in principle" decision to sell Queen Elizabeth Square, Auckland Council began a flurry of post-decision justification activities, including commissioning a piece of work from Gehl Architects. That work was presented to Councillors a month later, along with other studies. The Gehl report findings were encapsulated in two pages:

I would describe this assessment as reasonably balanced. The urban design evidence that will be presented at the environment court hearing in three weeks time is wide-ranging and extensive and thoughtful. However one opinion expressed in the expert evidence for the proponents of selling Queen Elizabeth Square (Auckland Council, Auckland Transport and Precinct Properties) and for using the money on alternative spaces on Queens Wharf or Quay Street - spaces that are already in public ownership - uses these words:

...it is irretrievably damaged...

The purpose of this posting is to examine what has happened in the last few weeks, to share some of what has come to light, and to challenge that assessment.

The first things to share are the renderings of downtown redevelopment proposals that don't presume the sale of Queen Elizabeth Square, and which propose to redress the first of the Gehl problems.

This image is part of the information describing the Precinct Properties proposal to redevelop its downtown land without developing Queen Elizabeth Square (well - not above ground - carparking is proposed under QE Square which will make up for carparks lost under the tower because of the CRL tunnel).

This proposal was consented on a non-notified basis on 6th June 2015. If you look closely you will see two laneways that access QE Square in its South West corner. One of these is East West (to Lower Albert), the other is North South ( to Custom Street). Combining these lanes with proposals to activate the edges of QE Square in this development, will completely transform the feel and function of QE Square. As the Precinct Property and Westfield renderings accompanying their respective consent applications show:

The first of these relates to the non-notified Precinct application, the second to Westfield's similar non-notified application granted in 21 April 2008. You can see that the proposed redevelopments completely transform the function and feel of Queen Elizabeth Square.

Which brings me to shade....

This diagram is a factual representation of the shading experienced downtown on the 22 December of any year, between 9:00am and 5:00pm at hourly intervals. Thus the top left diagram shows that QE Square is almost entirely bathed in sunshine, and that significant areas and edges of QE Square get sun throughout the day. Similar sunlight patterns will exist November through January - the summer months - when it's holiday time, cruise ships visit. And so on. Yes - QE Square is shaded in the middle of the day when the sun is lower at other seasons, but it experiences morning sunshine throughout the year, and in the mid afternoons. At other times the square is bathed in reflected light from Zurich Tower windows. This effect - common in public spaces in cities like New York - will be increased when the new Precinct Tower goes up. And contrary to popular myth - apart from when the wind is from the North East, QE Square is sheltered from wind.

Which brings me to the bus shelter problem...

The bus shelter structures & barriers have gone. Demolished. And that bus interchange moved and relocated in Lower Albert Street. Auckland's downtown civic square is in the process of being reinstated as it was.

So much for "irretrievably damaged".

But QE Square will be irretrievably damaged if Auckland Council sells it to Precinct Properties.

The zoning for QE Square that is being sought by Precinct Properties allows the building bulk and location shown in outline in this photomontage. This additional retail development would irretrievably damage Auckland's downtown and CBD.

So. The problems identified by Gehl are already being addressed and can be solved by implementing the consented plan. The potentials for this part of Auckland's downtown civic space - as identified by Gehl (above) - would be lost if it was sold. And in exchange the $27 million sale price is ear-marked by Auckland Council for public spaces on waterfront land that are already in public ownership.

Members of Auckland's design community have organised to challenge the basis of the statutory processes needed to allow this sale to go ahead. We oppose the sale and do not support what it will lead to Auckland.
That challenge comes to a head in the environment court on Monday 18th July. A Give A Little campaign has been set up by Auckland Architectural Association to raise necessary funds.

Readers and supporters of this blog are encouraged to donate, and to donate soon.

It's not just your money that we need.  It's your name as well - though we respect and understand the need for confidentiality and GiveALittle allows you to donate anonymously.

For the sake of Auckland, and to SaveOurSquare from being turned into a shopping mall, please donate.

Save Our Square

Interesting what you find when you google Queen Elizabeth Square. This postcard image forms part of the extensive evidence that has been filed with the Environment Court in the lead up to a 5 day hearing scheduled to start on the 18th of July. (It's contained in Graeme McIndoe's evidence for Precinct Properties.)

Earlier this year, the Auckland Architectural Association (AAA) appealed private plan change 79 which seeks to change the public open space zoning over a portion of Queen Elizabeth Square so that it can be developed by Precinct Properties as part of its proposals to redevelop other parts of the downtown block. The AAA also objected to Auckland Transport proposals to "stop" that part of Queen Elizabeth Square from being "road" - a planning status the land has held since it was vested as a public square in the 1960's in exchange for the stopping of Little Queen Street and the downtown section of Sturdee Street. This objection is being considered by the Environment Court at the same time as the AAA appeal to the plan change decision.

Four other incorporated societies have joined the action in support of AAA. These are:

• Urban Auckland Inc / The Society for the Protection of Auckland City and Waterfront
• Civic Trust Auckland Inc
• Walk Auckland Inc
• Auckland CBD Residents' Advisory Group Inc

Statements of evidence filed with the court for Precinct Properties (Senior Counsel Derek Nolan) have been prepared by:

• George Crawford;
• Andrew Buckingham;
• Doug Faigray
• Blair Johnston;
• Roger Nelson;
• Chris McDonald;
• Adina Brown;
• Neil Jamieson;
• Tim Wedmaier; 
• Rachel de Lambert;
• Graeme McIndoe; 
• Karl Cook.

Statements of evidence filed with the court for Auckland Council and Auckland Transport (Senior Counsel Paddy McNamara) have been prepared by:

• Timothy Watts 
• Clive Fuhr
• Gregory Milner-White
• Daniel Newcombe 
• Simon Lough
• Jason Evans 
• John Fellows
• Ralph Webster
• Garth Falconer
• Mark Vinall

On Friday 10th June and Monday 13th June statements of evidence filed with the court for Auckland Architectural Associations (Senior Counsel Brianna Parkinson) have been prepared by:

• Graeme Scott
• David Gibbs
• Bridget Gilbert
• Jeremy Salmond
• Brian Putt
• David Serjeant

This is a very important public interest matter. My role has been as coordinator and also as fund-raiser.
Your financial support and sponsorship of this action would be valued and appreciated.
Please contact me to assist.

NZ: A Tale of Two Economies

The last couple of months have been interesting as the media and politicians have got access to facts and figures about the political economy of housing in New Zealand. For too long the powers that be, and those that should know better, have been able to evade scrutiny by exploiting the absence of good data.

Bouquets are due to NZ Herald for its recent sequence of especially insightful editorials here (27 May 2016), here (31 May 2016) and most recently here (11 June 2016). There's also been a robust economic critique from Fallow, and excellent analysis from Professor Spoonley - especially of the economic effects of immigration.

A recent example of good new data was reported in the March 2016 issue of Property Quarterly (the Journal of the New Zealand Property Institute - not to be confused with the remarkably ill-informed and ideologically driven Property Council of NZ). At page 12 (pdf pg 14) of that issue is a report of research (conducted by Department of Property, University of Auckland, researchers) which revealed the extent of speculator involvement in Auckland's residential apartment and stand-alone house market.

I have been thoroughly absorbed in my job as policy analyst at the NZ Planning Institute, working with members to  research and prepare submissions to the deluge of policy initiative streaming from central government - many of which target NZ's housing issue. The most recent of these is the National Policy Statement (NPS) on Urban Development Capacity - which some joke is just another central government Auckland Policy Statement. See Rudman in 1 June.

It's all got me thinking. Partly because much of the discussion sidesteps the elephant in the room. And that's the importance of the housing market now to NZ Inc's economic wellbeing at multiple levels. With the increasing Government rhetoric about leaving it all to the free market and requiring local government to let go the urban planning reins (which the NPS champions and threatens to force) it has gradually dawned on me that we are living in a country with two economies. One is heavily planned. The other is left to the market.

At national level we have an economy that is centrally planned. Nothing to do with market forces. Ministers routinely talk now of pulling levers to achieve national economic objectives. These objectives largely focus upon promoting GDP growth (between 2% and 3%) and employment (unemployment below 6%). And while these objectives might generally be agreed upon by the public, there has been little public debate about what alternative development options, and economic levers, might be best for the country and its citizens in the long term, to achieve these objectives

The levers pulled since the 2008 GFC first concentrated on the Official Cash Rate (my blog on this comparing what happened across the Tasman here), then focussed on dairy farm intensification and centrally planned irrigation strategies (avoiding local regulation, damaging rivers and aquifers), and relaxed a bit when earthquakes hit Christchurch. Why? About $20 billion flowed into the NZ economy from EQC, re-insurance and other overseas sources. For a while this national income, the economic activity it generated, GST and tax revenues, bailed out the national economy and contributed heavily to funding the welfare state.

But that revenue stream has dried up now, and so, for that matter, has new investment in the dairy industry. If anything the dairy industry is going backwards and many farmers are looking at negative equity.

Central government's focus is now firmly on urban development as being the sector of the economy to target to achieve its national economic plan objectives.

It wasn't always so. Just as it wasn't always so in Australia. I attended its Planning Institute Conference a month ago where delegates heard presentations from advocates and politicians (Federal and State) talking up "Australia 50" and "Big Australia" - visions of a country whose population would double from immigration in little more than 20 years. They argued that just as Saudi and Russian oil oligarchs had invested in London real-estate, and Syrian's wealthy sought safe-haven for their profits in Dubai real-estate, so too were the uber wealthy in India and China looking to South East Queensland, Sydney, Melbourne and Perth to invest. And that the competition was on between those "city states" to do whatever was necessary to provide safe-haven for foreign investment in Australian real-estate.

Australia's mining industry is suffering a similar commodity price crisis as NZ's diary industry. It's all hands to the national economic pump there to keep the country afloat, and urban development is the sector of the economy being targeted.

Which brings me back to NZ's national centrally planned economy where levers are being pulled to increase immigration, to remove barriers to foreign investment in urban development, and to remove planning barriers in the way of the domestic development and construction industry building what investors want.

Question. What are the qualities of NZ's urban political economy that would attract foreign investment and immigration (away, for example, from investing in development in an Australian city)?

• safe-haven
• easy to find opportunities for urban investment
• higher and more certain annual return on investment
• fewer and less expensive disincentives and taxes and levies
• more commitment to and support for foreign investment 
• more welcoming of more immigration

These might be among the qualities and measures that NZ's national planned economy needs to ensure rate highly in the eyes of foreign investors. These have become the priority measures for NZ's national economy. You can see why the national political economy cannot abide a situation where property prices drop, or go into decline. That would be a red flag. You can also see why it is essential - as is the case in Australia - that elevated immigration levels are maintained if not increased. As Spoonley argues in his OpEd (referenced above) there is more than just a correlation between GDP increase and immigration. One causes the other. Turn on the immigration tap and you turn up GDP growth. If the objective is 3% GDP growth, the lever is increasing immigration - and if not that - then the next best policy option is to open the country to overseas property investors.

Which brings me to the other economy in New Zealand. The local urban economy. Which is increasingly unplanned. Subject to, and victim of unregulated market forces. Anything goes. Red tape gone. Not quite chaos but getting there when it comes to those members of the population on very low incomes.

An indication as to what importance the national political economy (centrally planned) attaches to the local political economy (market forces) are the measures that local councils will be required to report to central government when the Urban Development Capacity NPS becomes operative. These are:

• The relative affordability of housing, including the ratio of house price to income and the relative cost to rent;
• The increase in house prices and rents;
• The number of resource and building consents granted relative to the growth in population;  
• Vacancy rates for business land;  
• The ratio of the value of land between rural and urban zoned land; and
• The ratio of the value of improvements to the value of land within the urban area.

The national political economy is not interested in reporting the housing status of those on low incomes. Nor on the changing provision of affordable housing. Nor on the reporting of other quality of life indicators where the urban development occurs.

In Australia there is a growing backlash from local communities that are being targeted for urban growth. There are calls there for a national and coordinated settlement strategy - rather than leaving the increased population to the whims of market forces there are moves to properly plan at city level, at local level, for population change. So that planning is not just at national level, it is a conversation that engages at local level. The conference heard a number of presentations where urban community liveability benchmark measures were discussed and described. These include development criteria including numbers of jobs created in an urban area (not just numbers of houses), average distance to work, area of park space and such like.

Here in New Zealand, at local level, as a concession to planning, we have the reductionist idea of Special Housing Areas - SHAs. But it's all about numbers of houses. Numbers of resource consents. Proportions of resource consents processed without notification. Little to nothing about quality of life. And perhaps here I should acknowledge that Auckland Council (and TLAs throughout the country) are going to great lengths to build liveability and good urban design into urban development. But it's a struggle, and its deeply ironic, when those in charge of central planning criticise and mock these local efforts at planning good development.

In Australia - not perfect - but in their local urban political economy at least there the talk is of PDAs - Priority Development Areas. And master-planning and spatial planning and integrated planning for communities, not just to deliver nationally planned economic objectives.

Need to wrap this up. I think the worm has turned in New Zealand. Our centrally planned national economy is sending bigger ripples through local communities, and local institutions are rocking - and not in a good way.

It may be that NZ's economic well-being and future is dependent on increased levels of immigration for a period of time. But there needs to be far greater transparency about this central planning because it affects communities throughout the country. If it's the right thing to do, then surely the whole country, its urban communities, and its people, should be aware of it and buy into it explicitly.

Immigration cannot be the only long term economic development strategy for NZ's future.

Mangawhai Clive on NZ's Courts

The Mangawhai Ratepayer and Resident Association (MRRA) campaign for justice has road-tested much of NZ's justice system. There's been a High Court judicial review, a Court of Appeal hearing, and numerous stoushes in the Whangarei District. And they've tried to get the whole thing in front of the Supreme Court but been rejected there. One of the key figures behind MRRA's legal research is Clive Boonham. A retired lawyer. His belief and commitment to NZ's system of law has been tested by his experiences at Mangawhai which span more than a decade trying to right the wrongs that he has so carefully and diligently analysed and chronicled. On 5th May this year, uncharacteristically, Clive penned the following reflection:

" As a lawyer with a firm belief in the rule of law I found it hard to believe that our courts could be politically influenced. I was brought up believing that the separation of powers was a given in our society. In legal disputes fair play and legal argument would prevail.

As it turned, out most of my ideas were proved to be a fantasy. We had an excellent case that should have swept the field before a court that was open-minded, independent and versed in the law. But that never happened..

The real sufferers are the people of Kaipara and ultimately the people of New Zealand. In addition the rule of law has come a real cropper. We pride ourselves in this country on being liberal, democratic, uncorrupt and supporters of the rule of law, but for those who scratch the surface and probe below it is a very different picture.

In my dotage I am discovering that many of the things things that I cherished have been exposed as frauds. I used to have the greatest respect for senior office holders such as the Auditor-General, but have discovered, along with many others, that the persons holding that office have limited competence, questionable ethics, and are driven by purely political motives.

The sovereignty of Parliament is a principle that is held high by lawyers, being the backbone of our constitution. But I have learned that Parliament is nothing more than an uninformed rabble, performing like a bunch of rowdy, spiteful school kids, again driven by political motivation, personal point-scoring, and very little else. Its status in our constitution is totally unmerited. Its betrayal of the people of Kaipara by passing the inept and ludicrously drafted Kaipara Validation Act will be a huge stain on Parliament's reputation for generations to come.

In Law School I developed an admiration for the justice system and a certain reverence for many Judges. I studied law in England when Lord Justice Denning was at his height trying to bring some new ideas into the law. I developed this belief that the courts would resolve the problems of the people when oppressed by government of central government when there was a clear breach of the law. I believed that the courts were blind to any outside influence and would dispense justice impartially. In that belief I persuaded the MRRA and other ratepayers to put their trust in the legal system and claim their day in court to expose the persistent and blatant wrong-doings of the Kaipara District Council.

I have, sadly, been proved wrong. Justice in New Zealand is indeed blind but not in the way that it should be. I have been dismayed and even appalled by the performance of our judiciary from the District Court through to the Supreme Court. The approach of some of the judges clearly showed an antipathy against our claims, and even a bias, irrespective of the merits of our legal case and the strength of our legal arguments. The various judgments are remarkable because they glossed over the legislative history and the clear meaning of the enactments in question and superimposed a regime of implicit powers that met the expectations of local government, the banks, and the government. We were warned again and again by senior lawyers that irrespective of our case we did not stand a snowball’s chance in hell of succeeding, and they were right.

The other major loss in all this is to the law in relation to the legal obligations of local authorities. The courts, in their alacrity to deal to rebel ratepayers, have set in concrete judgments that effectively nullify many of the obligations of local authorities under the Local Government Act and the Local Government (Rating) Act. The Court of Appeal has now established beyond any doubt that where money is borrowed, compliance with the LGA and the LGRA are not required. Not only that, a local authority can borrow money for an illegal purpose and the ratepayers of the district are compelled to pay rates to fund the unlawful debt.

But its not all bad. There are some things left to cherish. There has been some wonderful support from the Mangawhai and Kaipara community – those dedicated souls who had a strong sense of justice beating in their chest. There has also been much support from around New Zealand and from overseas. People are realising that democracy as we understand it is gradually and imperceptibly being whittled down.

The government bulldozer is crushing all before it. But most people are so busy looking ahead that they haven’t seen it creeping up behind them."

Thought these thoughts merited a wider audience.

Queen Square Big Picture

Queen Square as seen from Ferry Building.