Wednesday, November 15, 2017

MMC Housing: Auckland's Next Building Crisis?

We all remember Auckland's leaky building crisis. Newspapers are still carrying stories as cases wind their way through the courts. This site is a succinct and easy read on the topic.

Unfortunately, another housing crisis appears to be quietly developing in Auckland. The issue of housing affordability has increased interest, and investment, in the construction of what used to be known as prefabricated buildings, or buildings with prefabricated elements, or using modern methods such as panel walls to reduce construction costs. These are generically houses built using MMC (Modern Methods of Construction).

In the early hours of September 1st this year, an uncomplete apartment building at Hobsonville Point went up in flames and despite the presence of 14 fire fighting appliances, it was very quickly reduced to its framing. It is likely the presence of so many units was essential to ensure the fire did not spread to adjacent units. In fact the major prefabricated elements in this case were the party wall sections made from reinforced concrete. These did prevent the fire from burning adjacent buildings. Media reports at the time suggest that the cause of the fire may have been a timber drying fan left operating.

Interestingly, some of the media comments are from nearby residents who were surprised they hadn't even heard the fire engines arrive. They talk glowingly of the high standard of sound insulation in the houses at Hobsonville Point. What they don't talk about though is how safe and secure the medium density houses there - including apartments two, three or four high - are in the event of fire.

So why is this important?

Priory Hall is a controversial apartment project built less than 10 years ago in Dublin. Hundreds of occupants were evicted when it was found to be unsafe. Fire risk was huge. Now media reports suggest that HUNDREDS of apartment blocks built during the boom around the country could be as dangerous as Priory Hall. It appears many could be made safe with "remedial" work. One of the most common fire-safety issues in the structures is the failure to "compartmentalise" apartments, common areas and other rooms where fires might start. In many apartment blocks examined since the Priory Hall evictions, inspectors have found very similar problems around the failure to fire-proof the "risers" – the channels going up the buildings from the plant in underground car parks that handles heating, water and electricity and telecoms wiring.

The Priory Hall saga predates the awful events at Grenfell Tower in London. That enquiry is still proceeding, but anecdotal evidence indicates the presence of vertical channels up the sides of the building that very quickly funneled flames away from the starting point, and fueled it further because construction materials were flammable above a certain temperature.

But the issues with MMC housing in New Zealand don't end with them being a potential fire risk. They include: NZ's MMC building inspection regime, standards and compliance (noting that much of the fabric of an MMC building is glued behind panels which restrict inspection); the perception that MMC assembly does not require skilled workers; the ability of NZ's tiny MMC industry to consistently meet quality and supply needs; and whether MMC homes can be maintained and renovated cost-effectively in the long term - adopting a whole of life costing approach; and whether the resale value of an MMC home will hold up in the medium term.

There are all sorts of technical terms used now: Off-site Construction, Modern Methods of Construction (MMC), Modular, Unitised, Volumetric, Panelised, Kit of Parts, and Flat Pack. System-Built is another term used in the USA. Let’s set the scene by outlining what we might think of as the Construction Method Continuum. At one end of this continuum is entirely on-site construction. In New Zealand we think of this starting with foundations, then up goes the timber framing from sawn 4x2 timbers, roof timbers, tiling or corrugated iron, then exterior wall materials (could be brick or weatherboard), window frames go in etc.

Fast forward, and at the opposite extreme of the Construction Method Continuum lies wholly off-site prefabricated construction, delivered to site for connection to services. As an obvious example we might think of the ubiquitous office sheds so familiar on building sites, characterised by utilitarian design and basic creature comforts. Being robust, portable, reusable and economical, they have proven to be particularly well suited to these temporary applications.

In between these two examples, the continuum encompasses an array of almost limitless degrees of prefabrication, some of which are already commonplace in modern construction. Increasingly, practical, robust and scalable prefabrication options are being added:
  • Modular services units for an otherwise conventionally constructed office tower. These units are pre-installed with the requisite electrical, hydraulic and mechanical components and are transported to the site once the building core is complete and lifted by crane into the risers designed specifically to accommodate them. 
  • Built up and fully fitted bathroom or kitchen pods for delivery to apartment buildings and hospitals, where they are lifted onto each floor of the building, located in place, and connected to pre-designated services points. 
  • Flat-pack floor, wall and roof panels delivered to project sites for rapid assembly into completed buildings (typically by a team from the manufacturer). 
  • Complete modular homes lifted by crane into position and fully finished apartment modules which are trucked to site and lifted by crane and stacked into place on otherwise conventional base building elements (which may include lift core, stairs, car park and podium as required).
 The National House Building Association has been established in the UK in 2006. The NHBA Foundation "provides high quality research and practical guidance to support the house-building industry as it addresses the challenges of delivering 21st century new homes...." NHBC is the UK’s leading independent standard setter and provider of warranty and insurance for new homes. In a report surveying the building and housing industry about the use of MMC methods in the UK which was published in 2016, among the findings the NHBC states:
  • One of the key attractions driving the use of MMC is the perceived ability to build more quickly. While house builders reported that faster construction is being realised in practice, housing associations were less convinced; they did, however, believe that a weathertight envelope was achieved quicker with the use of MMC.
  • It was also felt widely that MMC would have a role to play in improving the quality of construction and overcoming current shortages in the availability of skilled labour. For those already using MMC these perceived advantages were being realised in practice.
  • There is some evidence of MMC leading to a reduction in costs and improved profitability, with 44% of house builders and 27% of housing associations pointing to benefits such as reduced preliminary costs, improved cash flow and faster sales revenues.
  • Most participants expect the role of MMC to grow or remain static over the next 3 years; only 3% expected it to decline. Over half expected the use of panelised systems, in particular, to increase during that period. Drivers to increased use include overcoming skills shortages, faster build, increasing output and improving build quality.

In the fine print, we read: "The main reason for considering use of MMC is to achieve a faster build programme...the top three other reasons for considering MMC include improving build quality, tackling the skills shortage, and improving health and safety." The "tackling skills shortages" reason is particularly interesting with its suggestion that work on site is regarded as unskilled by comparison with traditional building. Again the fineprint on reasons from the industry (building and housing associations) for concern about volumetric and pod systems is interesting:
  • Risk of unfamiliar systems and public perception (41%) 
  • Expensive (26%) 
  • Insufficient capacity in supply chain (12%) 
  • Market prefers traditional buildings and methods (12%) 

The report notes the relative success of MMC methods in Japan compared with the UK, particularly in addressing supply and quality issues, and suggests the reason Japan has a better record than the UK is because Japan has been doing it for longer, and because the market for the MMC buildings has been much greater. This observation raises the obvious question for New Zealand - are we too small to do this well? Before I reach the final challenge, it is sobering to read advice to home buyers in the USA, under the heading: "9 reasons to choose a new home over a resale". Here's a flavour:
  • "There is a lot of flexibility for [new home buyers] to kind of put their personal signature on the product," says Patrick Costello, president of Forty West Builders. "Those kind of things you can't do with a used house—it's just not possible."
  • "The most recent International Energy Conservation Code came out in 2009 [and] required roughly 17 percent more efficiency than the codes of three years prior," he says. "So using that as sort of a gauge to how newer homes should perform from an efficiency standpoint compared to older homes, it's pretty clear that just as homes meet code, they are going to be more efficient."
  • The more energy-efficient mechanics of the house also help reduce utility bills for new home buyers, Morrow says. Newly-constructed homes often include green systems and appliances—like high efficiency stoves, refrigerators, washing machines, water heaters, furnaces, or air conditioning units—that homes built years ago might not
  • "People will buy [previously-owned] houses and then the carpet needs to be replaced or it needs to be repainted, or it needs new appliances, or the flooring is shot," Gilligan says. "When they buy a new home in today's market, it really is new."
  • "You buy a used house you don't know what you are getting, you might have to do a lot of maintenance," Costello says. "We are trying to look down the road and make things as easy as possible for the homeowner so they can enjoy living there and not have to be saddled with maintenance."
  • “A new home is generally fully warrantied by the builder for a minimum of a year and most of all the other components are warrantied for extended periods,” says Jack McCabe. So if your roof starts leaking or the heater breaks during the warranty period, your builder will pick up the tab for the repairs. “When you buy a resale home, even if you have a home inspection done, it still does not turn up hidden defects that you don’t find out about a lot of times for two years,” McCabe says.
  • Newly constructed homes often include fire safety features that may not be present in properties built years ago, Gilligan says. "We use fire retardant in our carpeting and in our insulation," he says. In addition, all newly constructed homes are required to include hard-wired smoke detectors.
  • Buyers may be able to squeeze more concessions out of a home building company than an individual seller. That's because individual sellers often have an emotional attachment to their property that can blind them to its true value. "People usually think that their home is worth more money than it is," McCabe says. At the same time, builders often have greater financial wherewithal to absorb a loss on a sale than individuals.
  • "New home builders, in many cases the larger ones, have their own mortgage companies or they will offer paying points or closing costs and buy down certain rates for you," McCabe says. "The seller of a resale home is generally not going to do that for the buyer."

Got a wry grin after reading that lot?

Now for the final point. It was an architect who has worked on MMC projects across Auckland, who alerted me to the problems described in this post. He reckons it will dwarf leaky building, and will take a similar time to surface and become a national disgrace. He has noticed that very little in an MMC house can be taken apart. No screws or nails in construction. Just glue. Everything's glued together. Especially the panels. If a leak is discovered, or a wiring issue, or new cable or new pipe needs to be fitted, it's a major maintenance problem. If a window needs to be moved, or a door. Again. It's ma major. He sees that the kiwi approach to gradual maintenance and small renovations just won't be possible. The costs will be prohibitive. Nothing will be simple. And all that assumes that there are no problems or future fire risks hidden in the glued panels.

I'm unsure who is ultimately responsible for protecting the interests of MMC home buyers in New Zealand. But given Auckland Council and Central Government are advocating the construction of affordable homes "at pace" across Auckland, it is essential that appropriate regulation is in place to protect the health and safety of new home owners. It is almost as important that their investments in MMC housing are as secure and as safe and reliable over the long term as an investment in a conventional home. And if it is not as safe and secure, then there is a public duty to ensure that buyers of such homes are properly informed of any different risks.  Given the state's enthusiasm for affordable housing this should not be a case of buyer beware.

Don't let this issue be just another example of market failure in NZ's housing market.

New Government's Auckland Plan

When it comes to Auckland intervention, Central Government can legislate or spend. (Cartoon by RNZ cartoonist Toby Morris)

When it came to the affordable housing issue in Auckland, which included declining social housing stocks, the previous Government did indicate it was prepared to spend a modest amount of money, but mostly chose to legislate and regulate. It is important to remember that the planning and institutional context for Auckland's housing affordability issue includes: supercity reforms; new Auckland Council policies including the Auckland Plan (with a target of 5% GDP growth/annum for the region); the Unitary Plan; adoption of high immigration/high population growth scenario.

The global context post the 2008 financial crisis has also formed an important backdrop to Auckland (as it has for Sydney, Brisbane, Vancouver, London and other cities increasingly seen as safe places to invest the enormous capital accumulations that have been derived by private interests in China, Middle East, India and Russia).

Auckland's population growth strategy (drawn from Stats NZ's medium growth scenario) had largely served the region's planners well from the mid 1990's to 2010 or so - though I have seen analytical work suggesting that Stats NZ's population projections for Auckland have been consistently conservative. Since that time Auckland's population growth - both permanent and temporary - has accelerated sharply, leading to sharp increases in house prices, and putting at risk central government and Auckland Council economic growth plans.   

The previous Government's regulatory and legislative interventions to correct this burgeoning problem included: several changes to the Resource Management Act including a National Policy Statement on Urban Development Capacity (NPS UDC); the creation of Special Housing Areas (and accompanying fast track planning provisions). Ministerial responsibility for this raft of changes largely remained in the Ministry of Environment. Its wide-ranging and perhaps scatter-gun approach set of interventions are described by some as the "spray and walk-away" approach. On the sidelines, but increasingly centre stage has been the Ministry of Business, Innovation and Employment. Under the previous Government MBIE took on responsibilities for new provisions in the NPS UDC largely relating to economic and social outcomes. MBIE has also led reform initiatives that will allow the establishment of Urban Development Agencies with significant powers including compulsory purchase and land amalgamation to enable urban regeneration projects to proceed.

In the background, the Hon Bill English was responsible for progressing a further reform agenda developed with the powerful and well-resourced Productivity Commission (its work has included investigations into affordable housing, land for housing, and most recently a first principles look at NZ's urban planning system).

All of the above was underway when the Government changed at the General Election, since when announcements have been made and interventions proposed that could affect Auckland and its citizens directly, and which appear to have been prepared with little regard for Auckland's local planning processes and systems.

Key announcements which I think are highly problematic are:
  • build light rail from Queen Street to Auckland Airport
  • delete the Rural Urban Boundary from the Unitary Plan
  • change the public transport mode proposed on SH16 to Westgate from bus to light rail
I won't go into the reasons for my concern in much detail here. But just summarise drawing on my long experience of these issues....

Light rail from Queen Street to Auckland Airport. The idea of light rail starting in Queen Street has been round for almost a hundred years because of the trams that used to run there, and which were connected to tramlines across the isthmus. My principle concern about this proposal is that the SkyBus service already exists. I have used it regularly about once a month for as long as it has existed. Sure it can improve (run all the way down to Quay Street/Custom Street; do away with the feeder; insert a few bus priority signals along the route; improve the bus terminus at the airport; provide priority lanes for the bus at the airport so parking congestion doesn't slow it) but it provides a 12 minute frequency service now, about 35 minutes trip time pretty much any time of day, used already by mix of local and tourist passengers. Second concern: while the Central Rail Link doesn't run exactly parallel to Queen Street it does cover a smilar catchment as the proposed Light Rail route for part of the way. This must affect any cost-benefit assessment of the proposal. And thirdly, when I chaired ARC's transport committees, the most frequent advice about proposals for rail from airport to CBD, was that the best option was to take rail from the airport to the Puhinui Station (near Wiri), and provide an interconnection with the Southern rail line which goes direct to Britomart. I recall this option was part of NZ First's election program.  

Delete the RUB from the Unitary Plan. This announcement shows very limited understanding of what the Unitary Plan provides for, in terms of permitting development to occur outside the RUB. The Unitary Plan already provides mechanisms for such development - including structure plan processes and suchlike. There is no need to abolish the RUB if the objective is to enable development to occur outside it. There is general recognition among planners and those who have been engaged in regional planning processes that the elephant in the room for urban development on undeveloped land both inside and outside the RUB is who pays for the infrastructure needed. Primarily the cost of transport infrastructure - mainly roading. That is the fundamental planning issue that needs to be resolved through central government action. Adding uncertainty to the issue of rural land outside the RUB being urbanised in the near future, simply encourages further land-banking and speculation that has bedevilled implementation, investment and actual on the ground development.

Change the public transport mode proposed on SH16 to Westgate from bus to light rail. It has taken years to progress the land use and funding planning for a busway along SH16. A busway to a similar specification and equivalent to the very successful Northern Busway. Planning for the SH16 busway corridor - including all of the exit and entry ways - provides for land use developments at those points, but, more importantly it provides for those buses to leave the spinal infrastructure of the busway itself, and run along arterial roads and local connectors - many of which will include bus priority measures (such as traffic lights and bus priority lanes). Light rail trains cannot jump the tracks and run up arterial roads as buses can. Sure, in future, when capacity of the busway has been reached, that is the time to consider a higher carrying capacity mode - which might be light rail, but it might be something different. Transport technologies are changing very quickly. In 20 years better systems amy be available to upgrade to from bus systems - which is the pathway planned into the Northern Corridor busway.     

Perhaps it is important for a new Government to be acting, doing things in the honeymoon period. But it is disturbing to to see it stepping heavily into the role that Local Government legislation has allocated to Auckland Council. Its elected Councillors have already had their planning powers undermined by a steady shift of decision-making powers to an independent hearings panel, and by transport planning being transferred to Auckland Transport.

Relevant Ministers would be the first to object if their abilities to intervene were shifted to senior figures in their ministries. Elections, the responsibility for taxation, and the ability to decide how money is spent are linked in a democracy. The same applies to Auckland Councillors who decide on rates and other revenue gathering methods, and then decide how the money is spent, and are accountable for it. Those simple ideas of local democracy need to be respected.  

Auckland Can Learn from Houston

I participated a while ago in an interesting conversation about what we might learn from that big rain event that hit Houston in August 28, earlier this year. Dushko Bogunovich and Phil Hayward were among the active participants. The debate was partly triggered by Dushko’s support for spreading out rather than going up, and Phil’s concern that planners couldn’t organise a piss up in a brewery (that might not be totally fair, but it’s rough enough). It was mainly triggered by the wide-ranging debate that occurred over who or what was to blame for the impact of the storm event. And – I suspect in the background – was concern by some of NZ’s sprawl and anti-planning supporters who have for years cited Houston as the sort of development model that Auckland should follow.

Phil found an interesting article here, and these are his extracts from it:
• Harvey is the wettest storm ever to hit the continental US. Over 50 inches of rainfall and 1 trillion gallons of water fell during the event. No one builds a church for Easter, or a gated community for the zombie apocalypse. It’s pretty naive to expect people to expect the unexpected. 
• So far, there have been fewer than 50 storm-related deaths. Each of these deaths is tragic, but even if that number creeps higher, it is a stunning low fatality rate for such a major event in such a large city. The Houston region has more than 6.6 million people, and every year more than 40,000 of them die – so Hurricane Harvey increased the annual death tally by about 0.1%. Sad, but not catastrophic. 
• An estimated 30,000 people have been forced from their homes. This is approximately 0.5% of the population of the Houston region. In other words, 99.5% of people in the Houston region have been able to stay in their homes. Unfortunate, but not catastrophic. 
• The Trump Administration has estimated that 100,000 homes were damaged or destroyed. While it is unclear how that estimate was obtained – if 30,000 people were forced from their home, then probably 70-90% of those homes did not sustain enough damage to force an evacuation – the Houston region has more than 1.6 million housing units, so about 6% of homes sustained damage of some kind. Lamentable, but not catastrophic. 
• Economic impact estimates are all over the map at this point; initial estimates were in the $30-40 billion range, but have been rising since then. Let’s say they end up being comparable to Superstorm Sandy, which caused about $70 billions of damage in today’s dollars. The Houston region GDP is about half a trillion dollars a year, so Harvey’s economic cost would be about 14% of our total economic output. Expensive, but not catastrophic. 

A dispassionate weighing of these facts would tell you that while stressful events always help identify areas for improvement, by and large our infrastructure and leadership performed admirably well under extraordinary circumstances. It other words, the facts would tell you that Harvey was not a catastrophe for Houston; it was our finest hour. …

we are not rugged individualists; we are rugged communitarians. We know that when times are tough, you must rely first on family, then friends, then neighbors, and then – and only if you’re one of the few, unfortunate folks who cannot rely on any of those three – on the government. And if we have family, friends, or neighbors who can help, reaching out for government support is actually taking resources away from those who need them more. In short, the best governance to rely upon is self- governance. When the storm hit, I saw these networks in action… … 

Houston was able to absorb the wettest storm on record with remarkably little loss of life and property also because of good engineering, informed by the experience of previous storms. A good engineer designs systems that won’t fail when hit with an expected event; a great engineer designs systems that fail gracefully and non-catastrophically when hit with an unexpected event. Hats off to our great engineers. …

Of course, there is always room for improvement. By studying what happened, we will find ways to improve the system for the next storm – and there will always be a next storm. We learned a lot from Ike, Rita, and earlier storms. When I was a child, a couple of inches of rain would flood my neighborhood; today, that same neighborhood absorbed 25 inches of rain and made it through. We have come a long way… … 

Houston’s approach is not the “wild west.” We have land use that is managed from the bottom up, through a system of deed restrictions that often include local homeowners’ associations to police those restrictions. What we don’t have is a top-down, expert-driven, bureaucratic system of centralized planning. As a result, it’s easier to develop real estate than most cities, which keeps real estate prices – especially housing prices – low relative to the rest of the country. It is actually a more sophisticated and economically efficient system than the antiquated politically-driven zoning system that generally favors entrenched interests over new entrants. 

Over an 18 year period, Houston lost about 25,000 acres of wetlands. But this amounts to about 4 billion gallons of storm water detention capacity. As stated above, Harvey dumped about 1 trillion gallons; so the lost capacity represents about of 0.4% of Harvey’s deluge. But it’s also important to understand that the streets – a huge portion of the paved area – are used as detention, places to hold storm water temporarily when there is nowhere for it to drain. Houston’s strategy for many years has been to use streets as detention and runoff channels, the idea being that it is better to flood a street than a house. And the city’s performance under Harvey confirms the wisdom of that strategy. 

This is the most ridiculous of all the claims made by the narrative spinners. Mayor Turner put it best: “Zoning wouldn't have changed anything. We would have been a city with zoning that flooded.” 

This Houston conversation was interesting, frustrating, and stimulating all at once (and I've not done justice to it in this post - apologies). I was on the sidelines observing. This is often the lot of the planner – to observe and analyse and to research and critique – and sometimes to act proactively, but most commonly reactively… This conversation provided space for a variety of points of view, a range of assumptions about what happened, different assessments about who or what was to blame for outcomes. However there was a common thread that puts planners and the free market in opposite corners. So I start with this diagram:


There is a common misconception that economics is only concerned with money or market transactions and market forces.

However economics goes beyond market transactions and includes all choices by humans around the use of resources. Thus economics is concerned by outcomes in society (people, labour, wages etc) and the economy (resources, money etc). Much economic research is concerned with ‘market failures’. Which include things that planners are concerned with, negative externalities (pollution, flooding, congestion), positive externalities (agglomeration benefits derived from urban form) and so on. There is a lot of common ground between Planners and (most) Economists. Referring to the diagram, most economists and most planners understand and acknowledge that a function of planning is the achievement of a socially efficient allocation of resources that would not be achieved by free market forces by themselves. The largely uncontested economic point that is illustrated in the diagram is that the free market, left to its own devices, DOES NOT and NEVER CAN, deliver the most efficient economic and social outcomes in a city. Before I get into Houston and Hurricane Harvey, here is a rationale for planning provided by Nicole Gurran (an Australian academic)….
A primary justification for public intervention through the land use planning system relates to the potential negative impacts, or 'externalities' of an individual’s activities in the private use of land upon neighbouring landholders and the broader community (Bramley et al. 1995). In other words, 'one householder's environmental gain from a new or improved dwelling may well signify a loss of amenity for their neighbours' (Blake & Collins 2004, p124)…. .
Therefore, a clear land use plan, developed with public input, and setting out the rules governing future changes and the parameters for assessing particular development proposals, gives members of the community a degree of certainty and involvement about future changes. In other words; (The) certainty provided by a publicly accountable land use plan, supported by consistently applied development controls, may be seen as a social freedom outweighing the traditional right of the individual to develop land anywhere and in any manner (Blake & Collins 2004. p124).
In her review of the land use planning system in Britain, Kate Barker concluded that the planning system plays an important role in managing urban growth and particularly in addressing areas that are not effectively dealt with by the private market (Barker 2006). For instance, if it were solely up to the private market there would likely be an insufficient provision of important community infrastructure or protection of open space, or only those areas able to incorporate these amenities within private developments, such as premium master planned estates, would enjoy access to them, exacerbating social inequalities. The planning system can also directly contribute to socially fair outcomes in urban development, for instance, by structuring strategies to encourage the regeneration of areas suffering economic decline, or the promotion of socially mixed communities within new and changing areas. Planning is intended to provide a key mechanism for public participation and representation to protect all sectors of the community from developments that may have an unjust impact on them. It provides a process for generating and disseminating necessary knowledge needed to inform urban development strategies. Planning also provides a defined methodology and policy framework for coordinating and resolving the different components of urban development - housing, employment opportunities, public space, transportation, water, biodiversity protection, and so on. Often these matters seem to relate to rival objectives - for instance, the need to provide new housing and infrastructure, and the need to protect the environment. Planning provides a process and forum for resolving these competing issues. Finally, the planning system helps overcome blockages to essential development of land that could arise if landowners choose to act in a monopolistic manner (by refusing to sell sites needed for essential urban developments). Planning interventions including the compulsory acquisition of land can help to address this problem (Barker 2006, p26).

Now I can hear the nimby cries from here! However private property rights are a significant issue and raison d’etre for urban planners and urban planning especially when preparing for intensification. I accept that the “property next door” issue is less significant if cities grow out and not up – though the need for high capacity interconnecting transport infrastructure, or larger capacity stormwater drainage systems (to store or channel rainwater away from urban areas) is at least as significant an issue – because of the need for compulsory land purchases. (I note here - in retrospect - that there is a very live debate about the comparative amount of infrastructure and cost (storm and transport) needed per head of population for low density vs high density urban conurbation.)

One of the threads in this Houston conversation has been one about “risk” or risk management, and what role planners might have in that. I mentioned above that planners are typically put in a reactive role. The Christchurch earthquakes provide a good example. Christchurch Council and EQC documents report details of building damage (including Cathedral) and liquefaction incidence due to periodic serious earthquakes (about every 50 years) since the 1850’s. Liquefaction prone land maps were prepared decades ago. Planners all knew about them. But political pressures from land owners over time led to the suppression of this information, and ultimately to the urbanisation of Bexley and of areas in the catchment of the Heathcote River. The pressure from developers was in the face of planning advice of the earthquake risks. In the last couple of months MBIE released new guidance materials formed in association with GeoTech Engineers, by EQC, MBIE and MfE working together. This is a recent example of the emergence of the kind of multi-disciplinary approach to urban planning development that is associated with change.

Another example relates to Climate Change. A lot of advice has emerged in NZ from the Parliamentary Commission for Environment on climate change risks to low lying urban areas in NZ (eg South Dunedin, Wairau Valley North Shore etc etc). This risk is primarily one due to weather pattern change and storm surge related sea level change rather than permanent sea level rise. Again land owner and today’s developer pressures have pushed planning for the future into the too hard basket – despite inconvenient truths.More and more development occupies land that is at risk from flooding that is anticipated. (Again in retrospect - there's been an election, and - under the previous Government - some planning initiatives are underway which will enable a more proactive role to be taken to avoid property damage from climate change storm surge related effects.)

Another thread has been whether Planning is an “art” or a “science”. That is an interesting one. Most academics – if pushed – put planning between engineering and architecture. Auckland’s school of planning sits in NICAI (Creative Industries), though I understand that was hugely contested. There was a school of thought it should be with Engineering and Environmental Science or Geography (which is where planning is located in many planning schools in other parts of the world). Interesting though that the curricula for planning schools in NZ is much the same across the country. Planning education starts with what might be called declaratory learning (can be repeated and tested in essays and exams and suchlike); then moves into practice (which is much more highly valued and cannot be taught – and is for the whole of work experience – and first 5 years needed before able to be full member of Planning Institute); and then reflection (at simplest is the practical wisdom derived from reflective evaluation of the successes and failures of practice and what can be learned and changed). These 3 stages of education/development are what mark planning education and learning.

In my experience of planning (I start with a PhD in Physics) is that the “art” in a planning degree has very little to do with “art” as in design, and much more to do with “liberal arts” which stems more from an understanding of society and politics and policy development aimed at public participation and the delivery of measureable objectives related to social welfare maximisation.

And perhaps to end this reflection, it is useful to recall moments in history when planners have been “given” the painful job of giving effect to a legislative fix intended to patch up a wicked problem that has emerged. Starting with industrial Britain and quality of housing for workers in smokestack industries – this was at least partly driven by the economics of life expectancy and wasted human productivity – housing codes and minimum standards. Think of London’s pea-soup fogs and premature deaths and alternative and cleaner energy sources (gas and reticulation). There is not the space here to do justice to this aspect of planning. A recent eg in NZ has been leaky building problem. This problem was not caused by planners, but they have had the job of reverse engineering out of it. Blame has been allocated by courts conveniently between: architects, developers, Councils and buyers.

While there might be some planners or visionaries who can “see the future”, or have an opinion about it, they are all required to act within legislation. Their jurisdiction is tightly defined. The legislation is prepared at central level. Sometimes it’s to require planners to act in particular ways to avoid risks (earthquake and climate eg), sometimes it’s to require planners to compensate for market failures (eg in NZ through the National Policy Statement on Urban Development Capacity).

Which perhaps brings me to this: planning operates at various scales. Here in NZ Central Government is the national planning agency for the country’s economy (immigration levels, irrigation planning, dairy subsidies, roads of national significance etc); the Productivity Commission recognizes the need for the Regional level of planning – largely spatial planning (balance of conservation estate, horticulture, freshwater, energy generation, transport infrastructure, ports and airports and urbanized areas); and then there is city planning at local level. These all interconnect.

In the end, together these planning systems aim to maximize social welfare, and to regulate against risks arising from known market failures (like property developers building in risk prone areas and selling what are perceived as bargain-priced houses to unsuspecting first-time buyers). But these planning systems are imperfect because we cannot predict the future. And we can’t always protect people from their own imperfect decisions or from the creative or selfish actions of others.

Wednesday, November 15, 2017

MMC Housing: Auckland's Next Building Crisis?

We all remember Auckland's leaky building crisis. Newspapers are still carrying stories as cases wind their way through the courts. This site is a succinct and easy read on the topic.

Unfortunately, another housing crisis appears to be quietly developing in Auckland. The issue of housing affordability has increased interest, and investment, in the construction of what used to be known as prefabricated buildings, or buildings with prefabricated elements, or using modern methods such as panel walls to reduce construction costs. These are generically houses built using MMC (Modern Methods of Construction).

In the early hours of September 1st this year, an uncomplete apartment building at Hobsonville Point went up in flames and despite the presence of 14 fire fighting appliances, it was very quickly reduced to its framing. It is likely the presence of so many units was essential to ensure the fire did not spread to adjacent units. In fact the major prefabricated elements in this case were the party wall sections made from reinforced concrete. These did prevent the fire from burning adjacent buildings. Media reports at the time suggest that the cause of the fire may have been a timber drying fan left operating.

Interestingly, some of the media comments are from nearby residents who were surprised they hadn't even heard the fire engines arrive. They talk glowingly of the high standard of sound insulation in the houses at Hobsonville Point. What they don't talk about though is how safe and secure the medium density houses there - including apartments two, three or four high - are in the event of fire.

So why is this important?

Priory Hall is a controversial apartment project built less than 10 years ago in Dublin. Hundreds of occupants were evicted when it was found to be unsafe. Fire risk was huge. Now media reports suggest that HUNDREDS of apartment blocks built during the boom around the country could be as dangerous as Priory Hall. It appears many could be made safe with "remedial" work. One of the most common fire-safety issues in the structures is the failure to "compartmentalise" apartments, common areas and other rooms where fires might start. In many apartment blocks examined since the Priory Hall evictions, inspectors have found very similar problems around the failure to fire-proof the "risers" – the channels going up the buildings from the plant in underground car parks that handles heating, water and electricity and telecoms wiring.

The Priory Hall saga predates the awful events at Grenfell Tower in London. That enquiry is still proceeding, but anecdotal evidence indicates the presence of vertical channels up the sides of the building that very quickly funneled flames away from the starting point, and fueled it further because construction materials were flammable above a certain temperature.

But the issues with MMC housing in New Zealand don't end with them being a potential fire risk. They include: NZ's MMC building inspection regime, standards and compliance (noting that much of the fabric of an MMC building is glued behind panels which restrict inspection); the perception that MMC assembly does not require skilled workers; the ability of NZ's tiny MMC industry to consistently meet quality and supply needs; and whether MMC homes can be maintained and renovated cost-effectively in the long term - adopting a whole of life costing approach; and whether the resale value of an MMC home will hold up in the medium term.

There are all sorts of technical terms used now: Off-site Construction, Modern Methods of Construction (MMC), Modular, Unitised, Volumetric, Panelised, Kit of Parts, and Flat Pack. System-Built is another term used in the USA. Let’s set the scene by outlining what we might think of as the Construction Method Continuum. At one end of this continuum is entirely on-site construction. In New Zealand we think of this starting with foundations, then up goes the timber framing from sawn 4x2 timbers, roof timbers, tiling or corrugated iron, then exterior wall materials (could be brick or weatherboard), window frames go in etc.

Fast forward, and at the opposite extreme of the Construction Method Continuum lies wholly off-site prefabricated construction, delivered to site for connection to services. As an obvious example we might think of the ubiquitous office sheds so familiar on building sites, characterised by utilitarian design and basic creature comforts. Being robust, portable, reusable and economical, they have proven to be particularly well suited to these temporary applications.

In between these two examples, the continuum encompasses an array of almost limitless degrees of prefabrication, some of which are already commonplace in modern construction. Increasingly, practical, robust and scalable prefabrication options are being added:
  • Modular services units for an otherwise conventionally constructed office tower. These units are pre-installed with the requisite electrical, hydraulic and mechanical components and are transported to the site once the building core is complete and lifted by crane into the risers designed specifically to accommodate them. 
  • Built up and fully fitted bathroom or kitchen pods for delivery to apartment buildings and hospitals, where they are lifted onto each floor of the building, located in place, and connected to pre-designated services points. 
  • Flat-pack floor, wall and roof panels delivered to project sites for rapid assembly into completed buildings (typically by a team from the manufacturer). 
  • Complete modular homes lifted by crane into position and fully finished apartment modules which are trucked to site and lifted by crane and stacked into place on otherwise conventional base building elements (which may include lift core, stairs, car park and podium as required).
 The National House Building Association has been established in the UK in 2006. The NHBA Foundation "provides high quality research and practical guidance to support the house-building industry as it addresses the challenges of delivering 21st century new homes...." NHBC is the UK’s leading independent standard setter and provider of warranty and insurance for new homes. In a report surveying the building and housing industry about the use of MMC methods in the UK which was published in 2016, among the findings the NHBC states:
  • One of the key attractions driving the use of MMC is the perceived ability to build more quickly. While house builders reported that faster construction is being realised in practice, housing associations were less convinced; they did, however, believe that a weathertight envelope was achieved quicker with the use of MMC.
  • It was also felt widely that MMC would have a role to play in improving the quality of construction and overcoming current shortages in the availability of skilled labour. For those already using MMC these perceived advantages were being realised in practice.
  • There is some evidence of MMC leading to a reduction in costs and improved profitability, with 44% of house builders and 27% of housing associations pointing to benefits such as reduced preliminary costs, improved cash flow and faster sales revenues.
  • Most participants expect the role of MMC to grow or remain static over the next 3 years; only 3% expected it to decline. Over half expected the use of panelised systems, in particular, to increase during that period. Drivers to increased use include overcoming skills shortages, faster build, increasing output and improving build quality.

In the fine print, we read: "The main reason for considering use of MMC is to achieve a faster build programme...the top three other reasons for considering MMC include improving build quality, tackling the skills shortage, and improving health and safety." The "tackling skills shortages" reason is particularly interesting with its suggestion that work on site is regarded as unskilled by comparison with traditional building. Again the fineprint on reasons from the industry (building and housing associations) for concern about volumetric and pod systems is interesting:
  • Risk of unfamiliar systems and public perception (41%) 
  • Expensive (26%) 
  • Insufficient capacity in supply chain (12%) 
  • Market prefers traditional buildings and methods (12%) 

The report notes the relative success of MMC methods in Japan compared with the UK, particularly in addressing supply and quality issues, and suggests the reason Japan has a better record than the UK is because Japan has been doing it for longer, and because the market for the MMC buildings has been much greater. This observation raises the obvious question for New Zealand - are we too small to do this well? Before I reach the final challenge, it is sobering to read advice to home buyers in the USA, under the heading: "9 reasons to choose a new home over a resale". Here's a flavour:
  • "There is a lot of flexibility for [new home buyers] to kind of put their personal signature on the product," says Patrick Costello, president of Forty West Builders. "Those kind of things you can't do with a used house—it's just not possible."
  • "The most recent International Energy Conservation Code came out in 2009 [and] required roughly 17 percent more efficiency than the codes of three years prior," he says. "So using that as sort of a gauge to how newer homes should perform from an efficiency standpoint compared to older homes, it's pretty clear that just as homes meet code, they are going to be more efficient."
  • The more energy-efficient mechanics of the house also help reduce utility bills for new home buyers, Morrow says. Newly-constructed homes often include green systems and appliances—like high efficiency stoves, refrigerators, washing machines, water heaters, furnaces, or air conditioning units—that homes built years ago might not
  • "People will buy [previously-owned] houses and then the carpet needs to be replaced or it needs to be repainted, or it needs new appliances, or the flooring is shot," Gilligan says. "When they buy a new home in today's market, it really is new."
  • "You buy a used house you don't know what you are getting, you might have to do a lot of maintenance," Costello says. "We are trying to look down the road and make things as easy as possible for the homeowner so they can enjoy living there and not have to be saddled with maintenance."
  • “A new home is generally fully warrantied by the builder for a minimum of a year and most of all the other components are warrantied for extended periods,” says Jack McCabe. So if your roof starts leaking or the heater breaks during the warranty period, your builder will pick up the tab for the repairs. “When you buy a resale home, even if you have a home inspection done, it still does not turn up hidden defects that you don’t find out about a lot of times for two years,” McCabe says.
  • Newly constructed homes often include fire safety features that may not be present in properties built years ago, Gilligan says. "We use fire retardant in our carpeting and in our insulation," he says. In addition, all newly constructed homes are required to include hard-wired smoke detectors.
  • Buyers may be able to squeeze more concessions out of a home building company than an individual seller. That's because individual sellers often have an emotional attachment to their property that can blind them to its true value. "People usually think that their home is worth more money than it is," McCabe says. At the same time, builders often have greater financial wherewithal to absorb a loss on a sale than individuals.
  • "New home builders, in many cases the larger ones, have their own mortgage companies or they will offer paying points or closing costs and buy down certain rates for you," McCabe says. "The seller of a resale home is generally not going to do that for the buyer."

Got a wry grin after reading that lot?

Now for the final point. It was an architect who has worked on MMC projects across Auckland, who alerted me to the problems described in this post. He reckons it will dwarf leaky building, and will take a similar time to surface and become a national disgrace. He has noticed that very little in an MMC house can be taken apart. No screws or nails in construction. Just glue. Everything's glued together. Especially the panels. If a leak is discovered, or a wiring issue, or new cable or new pipe needs to be fitted, it's a major maintenance problem. If a window needs to be moved, or a door. Again. It's ma major. He sees that the kiwi approach to gradual maintenance and small renovations just won't be possible. The costs will be prohibitive. Nothing will be simple. And all that assumes that there are no problems or future fire risks hidden in the glued panels.

I'm unsure who is ultimately responsible for protecting the interests of MMC home buyers in New Zealand. But given Auckland Council and Central Government are advocating the construction of affordable homes "at pace" across Auckland, it is essential that appropriate regulation is in place to protect the health and safety of new home owners. It is almost as important that their investments in MMC housing are as secure and as safe and reliable over the long term as an investment in a conventional home. And if it is not as safe and secure, then there is a public duty to ensure that buyers of such homes are properly informed of any different risks.  Given the state's enthusiasm for affordable housing this should not be a case of buyer beware.

Don't let this issue be just another example of market failure in NZ's housing market.

New Government's Auckland Plan

When it comes to Auckland intervention, Central Government can legislate or spend. (Cartoon by RNZ cartoonist Toby Morris)

When it came to the affordable housing issue in Auckland, which included declining social housing stocks, the previous Government did indicate it was prepared to spend a modest amount of money, but mostly chose to legislate and regulate. It is important to remember that the planning and institutional context for Auckland's housing affordability issue includes: supercity reforms; new Auckland Council policies including the Auckland Plan (with a target of 5% GDP growth/annum for the region); the Unitary Plan; adoption of high immigration/high population growth scenario.

The global context post the 2008 financial crisis has also formed an important backdrop to Auckland (as it has for Sydney, Brisbane, Vancouver, London and other cities increasingly seen as safe places to invest the enormous capital accumulations that have been derived by private interests in China, Middle East, India and Russia).

Auckland's population growth strategy (drawn from Stats NZ's medium growth scenario) had largely served the region's planners well from the mid 1990's to 2010 or so - though I have seen analytical work suggesting that Stats NZ's population projections for Auckland have been consistently conservative. Since that time Auckland's population growth - both permanent and temporary - has accelerated sharply, leading to sharp increases in house prices, and putting at risk central government and Auckland Council economic growth plans.   

The previous Government's regulatory and legislative interventions to correct this burgeoning problem included: several changes to the Resource Management Act including a National Policy Statement on Urban Development Capacity (NPS UDC); the creation of Special Housing Areas (and accompanying fast track planning provisions). Ministerial responsibility for this raft of changes largely remained in the Ministry of Environment. Its wide-ranging and perhaps scatter-gun approach set of interventions are described by some as the "spray and walk-away" approach. On the sidelines, but increasingly centre stage has been the Ministry of Business, Innovation and Employment. Under the previous Government MBIE took on responsibilities for new provisions in the NPS UDC largely relating to economic and social outcomes. MBIE has also led reform initiatives that will allow the establishment of Urban Development Agencies with significant powers including compulsory purchase and land amalgamation to enable urban regeneration projects to proceed.

In the background, the Hon Bill English was responsible for progressing a further reform agenda developed with the powerful and well-resourced Productivity Commission (its work has included investigations into affordable housing, land for housing, and most recently a first principles look at NZ's urban planning system).

All of the above was underway when the Government changed at the General Election, since when announcements have been made and interventions proposed that could affect Auckland and its citizens directly, and which appear to have been prepared with little regard for Auckland's local planning processes and systems.

Key announcements which I think are highly problematic are:
  • build light rail from Queen Street to Auckland Airport
  • delete the Rural Urban Boundary from the Unitary Plan
  • change the public transport mode proposed on SH16 to Westgate from bus to light rail
I won't go into the reasons for my concern in much detail here. But just summarise drawing on my long experience of these issues....

Light rail from Queen Street to Auckland Airport. The idea of light rail starting in Queen Street has been round for almost a hundred years because of the trams that used to run there, and which were connected to tramlines across the isthmus. My principle concern about this proposal is that the SkyBus service already exists. I have used it regularly about once a month for as long as it has existed. Sure it can improve (run all the way down to Quay Street/Custom Street; do away with the feeder; insert a few bus priority signals along the route; improve the bus terminus at the airport; provide priority lanes for the bus at the airport so parking congestion doesn't slow it) but it provides a 12 minute frequency service now, about 35 minutes trip time pretty much any time of day, used already by mix of local and tourist passengers. Second concern: while the Central Rail Link doesn't run exactly parallel to Queen Street it does cover a smilar catchment as the proposed Light Rail route for part of the way. This must affect any cost-benefit assessment of the proposal. And thirdly, when I chaired ARC's transport committees, the most frequent advice about proposals for rail from airport to CBD, was that the best option was to take rail from the airport to the Puhinui Station (near Wiri), and provide an interconnection with the Southern rail line which goes direct to Britomart. I recall this option was part of NZ First's election program.  

Delete the RUB from the Unitary Plan. This announcement shows very limited understanding of what the Unitary Plan provides for, in terms of permitting development to occur outside the RUB. The Unitary Plan already provides mechanisms for such development - including structure plan processes and suchlike. There is no need to abolish the RUB if the objective is to enable development to occur outside it. There is general recognition among planners and those who have been engaged in regional planning processes that the elephant in the room for urban development on undeveloped land both inside and outside the RUB is who pays for the infrastructure needed. Primarily the cost of transport infrastructure - mainly roading. That is the fundamental planning issue that needs to be resolved through central government action. Adding uncertainty to the issue of rural land outside the RUB being urbanised in the near future, simply encourages further land-banking and speculation that has bedevilled implementation, investment and actual on the ground development.

Change the public transport mode proposed on SH16 to Westgate from bus to light rail. It has taken years to progress the land use and funding planning for a busway along SH16. A busway to a similar specification and equivalent to the very successful Northern Busway. Planning for the SH16 busway corridor - including all of the exit and entry ways - provides for land use developments at those points, but, more importantly it provides for those buses to leave the spinal infrastructure of the busway itself, and run along arterial roads and local connectors - many of which will include bus priority measures (such as traffic lights and bus priority lanes). Light rail trains cannot jump the tracks and run up arterial roads as buses can. Sure, in future, when capacity of the busway has been reached, that is the time to consider a higher carrying capacity mode - which might be light rail, but it might be something different. Transport technologies are changing very quickly. In 20 years better systems amy be available to upgrade to from bus systems - which is the pathway planned into the Northern Corridor busway.     

Perhaps it is important for a new Government to be acting, doing things in the honeymoon period. But it is disturbing to to see it stepping heavily into the role that Local Government legislation has allocated to Auckland Council. Its elected Councillors have already had their planning powers undermined by a steady shift of decision-making powers to an independent hearings panel, and by transport planning being transferred to Auckland Transport.

Relevant Ministers would be the first to object if their abilities to intervene were shifted to senior figures in their ministries. Elections, the responsibility for taxation, and the ability to decide how money is spent are linked in a democracy. The same applies to Auckland Councillors who decide on rates and other revenue gathering methods, and then decide how the money is spent, and are accountable for it. Those simple ideas of local democracy need to be respected.  

Auckland Can Learn from Houston

I participated a while ago in an interesting conversation about what we might learn from that big rain event that hit Houston in August 28, earlier this year. Dushko Bogunovich and Phil Hayward were among the active participants. The debate was partly triggered by Dushko’s support for spreading out rather than going up, and Phil’s concern that planners couldn’t organise a piss up in a brewery (that might not be totally fair, but it’s rough enough). It was mainly triggered by the wide-ranging debate that occurred over who or what was to blame for the impact of the storm event. And – I suspect in the background – was concern by some of NZ’s sprawl and anti-planning supporters who have for years cited Houston as the sort of development model that Auckland should follow.

Phil found an interesting article here, and these are his extracts from it:
• Harvey is the wettest storm ever to hit the continental US. Over 50 inches of rainfall and 1 trillion gallons of water fell during the event. No one builds a church for Easter, or a gated community for the zombie apocalypse. It’s pretty naive to expect people to expect the unexpected. 
• So far, there have been fewer than 50 storm-related deaths. Each of these deaths is tragic, but even if that number creeps higher, it is a stunning low fatality rate for such a major event in such a large city. The Houston region has more than 6.6 million people, and every year more than 40,000 of them die – so Hurricane Harvey increased the annual death tally by about 0.1%. Sad, but not catastrophic. 
• An estimated 30,000 people have been forced from their homes. This is approximately 0.5% of the population of the Houston region. In other words, 99.5% of people in the Houston region have been able to stay in their homes. Unfortunate, but not catastrophic. 
• The Trump Administration has estimated that 100,000 homes were damaged or destroyed. While it is unclear how that estimate was obtained – if 30,000 people were forced from their home, then probably 70-90% of those homes did not sustain enough damage to force an evacuation – the Houston region has more than 1.6 million housing units, so about 6% of homes sustained damage of some kind. Lamentable, but not catastrophic. 
• Economic impact estimates are all over the map at this point; initial estimates were in the $30-40 billion range, but have been rising since then. Let’s say they end up being comparable to Superstorm Sandy, which caused about $70 billions of damage in today’s dollars. The Houston region GDP is about half a trillion dollars a year, so Harvey’s economic cost would be about 14% of our total economic output. Expensive, but not catastrophic. 

A dispassionate weighing of these facts would tell you that while stressful events always help identify areas for improvement, by and large our infrastructure and leadership performed admirably well under extraordinary circumstances. It other words, the facts would tell you that Harvey was not a catastrophe for Houston; it was our finest hour. …

we are not rugged individualists; we are rugged communitarians. We know that when times are tough, you must rely first on family, then friends, then neighbors, and then – and only if you’re one of the few, unfortunate folks who cannot rely on any of those three – on the government. And if we have family, friends, or neighbors who can help, reaching out for government support is actually taking resources away from those who need them more. In short, the best governance to rely upon is self- governance. When the storm hit, I saw these networks in action… … 

Houston was able to absorb the wettest storm on record with remarkably little loss of life and property also because of good engineering, informed by the experience of previous storms. A good engineer designs systems that won’t fail when hit with an expected event; a great engineer designs systems that fail gracefully and non-catastrophically when hit with an unexpected event. Hats off to our great engineers. …

Of course, there is always room for improvement. By studying what happened, we will find ways to improve the system for the next storm – and there will always be a next storm. We learned a lot from Ike, Rita, and earlier storms. When I was a child, a couple of inches of rain would flood my neighborhood; today, that same neighborhood absorbed 25 inches of rain and made it through. We have come a long way… … 

Houston’s approach is not the “wild west.” We have land use that is managed from the bottom up, through a system of deed restrictions that often include local homeowners’ associations to police those restrictions. What we don’t have is a top-down, expert-driven, bureaucratic system of centralized planning. As a result, it’s easier to develop real estate than most cities, which keeps real estate prices – especially housing prices – low relative to the rest of the country. It is actually a more sophisticated and economically efficient system than the antiquated politically-driven zoning system that generally favors entrenched interests over new entrants. 

Over an 18 year period, Houston lost about 25,000 acres of wetlands. But this amounts to about 4 billion gallons of storm water detention capacity. As stated above, Harvey dumped about 1 trillion gallons; so the lost capacity represents about of 0.4% of Harvey’s deluge. But it’s also important to understand that the streets – a huge portion of the paved area – are used as detention, places to hold storm water temporarily when there is nowhere for it to drain. Houston’s strategy for many years has been to use streets as detention and runoff channels, the idea being that it is better to flood a street than a house. And the city’s performance under Harvey confirms the wisdom of that strategy. 

This is the most ridiculous of all the claims made by the narrative spinners. Mayor Turner put it best: “Zoning wouldn't have changed anything. We would have been a city with zoning that flooded.” 

This Houston conversation was interesting, frustrating, and stimulating all at once (and I've not done justice to it in this post - apologies). I was on the sidelines observing. This is often the lot of the planner – to observe and analyse and to research and critique – and sometimes to act proactively, but most commonly reactively… This conversation provided space for a variety of points of view, a range of assumptions about what happened, different assessments about who or what was to blame for outcomes. However there was a common thread that puts planners and the free market in opposite corners. So I start with this diagram:


There is a common misconception that economics is only concerned with money or market transactions and market forces.

However economics goes beyond market transactions and includes all choices by humans around the use of resources. Thus economics is concerned by outcomes in society (people, labour, wages etc) and the economy (resources, money etc). Much economic research is concerned with ‘market failures’. Which include things that planners are concerned with, negative externalities (pollution, flooding, congestion), positive externalities (agglomeration benefits derived from urban form) and so on. There is a lot of common ground between Planners and (most) Economists. Referring to the diagram, most economists and most planners understand and acknowledge that a function of planning is the achievement of a socially efficient allocation of resources that would not be achieved by free market forces by themselves. The largely uncontested economic point that is illustrated in the diagram is that the free market, left to its own devices, DOES NOT and NEVER CAN, deliver the most efficient economic and social outcomes in a city. Before I get into Houston and Hurricane Harvey, here is a rationale for planning provided by Nicole Gurran (an Australian academic)….
A primary justification for public intervention through the land use planning system relates to the potential negative impacts, or 'externalities' of an individual’s activities in the private use of land upon neighbouring landholders and the broader community (Bramley et al. 1995). In other words, 'one householder's environmental gain from a new or improved dwelling may well signify a loss of amenity for their neighbours' (Blake & Collins 2004, p124)…. .
Therefore, a clear land use plan, developed with public input, and setting out the rules governing future changes and the parameters for assessing particular development proposals, gives members of the community a degree of certainty and involvement about future changes. In other words; (The) certainty provided by a publicly accountable land use plan, supported by consistently applied development controls, may be seen as a social freedom outweighing the traditional right of the individual to develop land anywhere and in any manner (Blake & Collins 2004. p124).
In her review of the land use planning system in Britain, Kate Barker concluded that the planning system plays an important role in managing urban growth and particularly in addressing areas that are not effectively dealt with by the private market (Barker 2006). For instance, if it were solely up to the private market there would likely be an insufficient provision of important community infrastructure or protection of open space, or only those areas able to incorporate these amenities within private developments, such as premium master planned estates, would enjoy access to them, exacerbating social inequalities. The planning system can also directly contribute to socially fair outcomes in urban development, for instance, by structuring strategies to encourage the regeneration of areas suffering economic decline, or the promotion of socially mixed communities within new and changing areas. Planning is intended to provide a key mechanism for public participation and representation to protect all sectors of the community from developments that may have an unjust impact on them. It provides a process for generating and disseminating necessary knowledge needed to inform urban development strategies. Planning also provides a defined methodology and policy framework for coordinating and resolving the different components of urban development - housing, employment opportunities, public space, transportation, water, biodiversity protection, and so on. Often these matters seem to relate to rival objectives - for instance, the need to provide new housing and infrastructure, and the need to protect the environment. Planning provides a process and forum for resolving these competing issues. Finally, the planning system helps overcome blockages to essential development of land that could arise if landowners choose to act in a monopolistic manner (by refusing to sell sites needed for essential urban developments). Planning interventions including the compulsory acquisition of land can help to address this problem (Barker 2006, p26).

Now I can hear the nimby cries from here! However private property rights are a significant issue and raison d’etre for urban planners and urban planning especially when preparing for intensification. I accept that the “property next door” issue is less significant if cities grow out and not up – though the need for high capacity interconnecting transport infrastructure, or larger capacity stormwater drainage systems (to store or channel rainwater away from urban areas) is at least as significant an issue – because of the need for compulsory land purchases. (I note here - in retrospect - that there is a very live debate about the comparative amount of infrastructure and cost (storm and transport) needed per head of population for low density vs high density urban conurbation.)

One of the threads in this Houston conversation has been one about “risk” or risk management, and what role planners might have in that. I mentioned above that planners are typically put in a reactive role. The Christchurch earthquakes provide a good example. Christchurch Council and EQC documents report details of building damage (including Cathedral) and liquefaction incidence due to periodic serious earthquakes (about every 50 years) since the 1850’s. Liquefaction prone land maps were prepared decades ago. Planners all knew about them. But political pressures from land owners over time led to the suppression of this information, and ultimately to the urbanisation of Bexley and of areas in the catchment of the Heathcote River. The pressure from developers was in the face of planning advice of the earthquake risks. In the last couple of months MBIE released new guidance materials formed in association with GeoTech Engineers, by EQC, MBIE and MfE working together. This is a recent example of the emergence of the kind of multi-disciplinary approach to urban planning development that is associated with change.

Another example relates to Climate Change. A lot of advice has emerged in NZ from the Parliamentary Commission for Environment on climate change risks to low lying urban areas in NZ (eg South Dunedin, Wairau Valley North Shore etc etc). This risk is primarily one due to weather pattern change and storm surge related sea level change rather than permanent sea level rise. Again land owner and today’s developer pressures have pushed planning for the future into the too hard basket – despite inconvenient truths.More and more development occupies land that is at risk from flooding that is anticipated. (Again in retrospect - there's been an election, and - under the previous Government - some planning initiatives are underway which will enable a more proactive role to be taken to avoid property damage from climate change storm surge related effects.)

Another thread has been whether Planning is an “art” or a “science”. That is an interesting one. Most academics – if pushed – put planning between engineering and architecture. Auckland’s school of planning sits in NICAI (Creative Industries), though I understand that was hugely contested. There was a school of thought it should be with Engineering and Environmental Science or Geography (which is where planning is located in many planning schools in other parts of the world). Interesting though that the curricula for planning schools in NZ is much the same across the country. Planning education starts with what might be called declaratory learning (can be repeated and tested in essays and exams and suchlike); then moves into practice (which is much more highly valued and cannot be taught – and is for the whole of work experience – and first 5 years needed before able to be full member of Planning Institute); and then reflection (at simplest is the practical wisdom derived from reflective evaluation of the successes and failures of practice and what can be learned and changed). These 3 stages of education/development are what mark planning education and learning.

In my experience of planning (I start with a PhD in Physics) is that the “art” in a planning degree has very little to do with “art” as in design, and much more to do with “liberal arts” which stems more from an understanding of society and politics and policy development aimed at public participation and the delivery of measureable objectives related to social welfare maximisation.

And perhaps to end this reflection, it is useful to recall moments in history when planners have been “given” the painful job of giving effect to a legislative fix intended to patch up a wicked problem that has emerged. Starting with industrial Britain and quality of housing for workers in smokestack industries – this was at least partly driven by the economics of life expectancy and wasted human productivity – housing codes and minimum standards. Think of London’s pea-soup fogs and premature deaths and alternative and cleaner energy sources (gas and reticulation). There is not the space here to do justice to this aspect of planning. A recent eg in NZ has been leaky building problem. This problem was not caused by planners, but they have had the job of reverse engineering out of it. Blame has been allocated by courts conveniently between: architects, developers, Councils and buyers.

While there might be some planners or visionaries who can “see the future”, or have an opinion about it, they are all required to act within legislation. Their jurisdiction is tightly defined. The legislation is prepared at central level. Sometimes it’s to require planners to act in particular ways to avoid risks (earthquake and climate eg), sometimes it’s to require planners to compensate for market failures (eg in NZ through the National Policy Statement on Urban Development Capacity).

Which perhaps brings me to this: planning operates at various scales. Here in NZ Central Government is the national planning agency for the country’s economy (immigration levels, irrigation planning, dairy subsidies, roads of national significance etc); the Productivity Commission recognizes the need for the Regional level of planning – largely spatial planning (balance of conservation estate, horticulture, freshwater, energy generation, transport infrastructure, ports and airports and urbanized areas); and then there is city planning at local level. These all interconnect.

In the end, together these planning systems aim to maximize social welfare, and to regulate against risks arising from known market failures (like property developers building in risk prone areas and selling what are perceived as bargain-priced houses to unsuspecting first-time buyers). But these planning systems are imperfect because we cannot predict the future. And we can’t always protect people from their own imperfect decisions or from the creative or selfish actions of others.