Housing Affordability and Urban Density

I came across an interesting paper the other day, when I was preparing a presentation for a conference on the same subject. It's worth sharing...

There has been increasing interest and research into house prices in New Zealand. Recent work has focused on the movements in market prices for houses, for land, and for house construction costs especially as these price movements affect consumer inflation, and housing affordability. To date the work released has not directly addressed the role of resource pricing in the allocation of urban land, and other matters affecting affordability with increasing urban density....

...paper discusses the issues around housing affordability in the context of increases in urban density, with consequent effects on resource pricing of land, industry profiles, residential density, employment participation and incomes.

The paper is written in reseanably dry academic tones and notes previous work in relation to housing affordability by one Arthur Grimes et al, known for their strident criticism of controls like the Metropolitan Urban Limit, and their economic arguments that the MUL is one of the single most influential causes of housing unaffordabiliy, by constraining the supply of land.

Sanderson's research looks at the effect on housing affordability - particularly medium density housing provision in town centre environments - of the fact that medium density homes use less land/home than the more life style homes seen at the edge (and of less expensive homes in new subdivision at the edge which nonetheless are representative of the the 1/4 acre pavlova paradise "ideal", and of the fact that people who live close to, or in town centres benefit economically from agglomeration benefits and reduced network costs (including travel).

Key quotes include:

These observations do not provide incontrovertible proof that in these areas of higher density housing is more affordable, but they do indicate that there is a need to investigate further these behaviour phenomena, in the interests both of housing affordability and of urban and economic development in a broad range of our urban centres.

Thoughts raised in the paper include these:

1. The land price per resident is generally lower because the density increase is greater than the land price increase.
2. Household income opportunities are greater because, firstly with agglomeration,
industry includes a broad range of business services producing higher incomes for employees, rather than low density, lower income ‘bulky’ industries like manufacturing and warehousing. (The average GDP/FTE in the industry profile of inner Wellington is over 10% higher than for the City as a whole. It is likely that incomes reflect the GDP/FTE.) Secondly the range of employment opportunities is wider, and consequently labour force participation is very high, allowing higher
household incomes. Of the total population in the inner Wellington city, 68% are in the labour force, whereas for the country as a whole, there are 47% employed.)
3. Some other basic living costs are lower because e.g. the costs of providing
networked infrastructure declines per person; and the opportunity for using active transport modes (walk, jog, cycle) in a range of journey purposes increases. (In most urban areas about 6% of the travel-to-work journeys are by active modes whereas in inner Wellington and Auckland the figures in 2001 were 50%-62%.) For other journeys, public transport is more likely to be a viable option in the more-dense areas.

I hope that more research is done exploring these matters further. It is essential that the narrowly focussed economic analysis of the Grimes, Wendell-Cox, Pavletich, is set aside through broader based analysis that takes account of all costs and benefits of different housing options and alternatives.

You can download the paper from: Kelvin Sanderson Paper

Housing Affordability: Introduction and Research

Introduction:

I have been doing some research into housing affordability in Auckland. This is the first of a little cluster of blogs about this. You will find others following. Link to the full report is below, at the end of this blog.....

Research:

....While segments of the Auckland housing economy function more or less in accordance with freemarket rules of supply and demand, there are notable exceptions where some sort of intervention or regulation is required to correct failures in the housing market to address issues that arise.

Significant among these is the issue of affordability.

In its Auckland Regional Affordable Housing Strategy, the Auckland Regional Council (ARC, 2003), defined housing as affordable: “if households can access suitable and adequate housing by spending a maximum of 30% of their gross income.”

In its recent Auckland Regional Community Outcomes report, the Auckland Regional Council (ARC,2009), reporting against its “Proportion of households that spend more than 40% of net income on housing costs”, reported that:

In 2007, an estimated 21.7% of households in the Auckland region spend more than 40% of their net income on housing costs (this includes mortgage, rents and rates), significantly higher than the national count at 17%, and higher than the other selected regions on Waikato, Canterbury, and Wellington…. The overall proportion of net income spent on housing in Auckland households was 31.7%. When this is broken down by tenure, it appears that households who are renting carry a higher financial burden, with an estimated 45.8% of net income spent on housing compared to 23.6% for households who owned the home in which they lived. (ARC, 2009, Pg 28)

Affordability – measured in this way – is one of the issues that can arise in the housing market. Other issues, some of them associated with stress, can arise as a consequence of households attempting to make housing affordable by adapting homes to make them more affordable. Key among these issues is crowded housing: when too many people live in one home. In the Auckland Regional Community Outcomes report mentioned above, the Auckland Regional Council (ARC,2009), reported that:

At the 2006 census, 15.7% of the regional population was living in housing that required one or more additional bedrooms – a total of 190,017 people, of which 33.3% were children aged under 14 years… the proportion of people living in crowded households varies considerably across the region, and Manuku has the highest proportion. This is linked to the large Pacific population in Manukau city.

On the face of it, Auckland has a significant affordable housing problem.

A Housing Market Assessment which addresses the problem appropriately can be a useful tool in making related policy decisions. The DTZ HMA Manual was developed to present: “a framework for undertaking housing market assessments in New Zealand”. In relation to affordability and stress the manual recommends that:

Affordability / stress and estimates of housing need should be derived for the following groups:

- renter households;
- first home buyers; and
- owner occupier households (DTZ, 2009, pg 22)

The manual lists a number of measures of housing affordability and housing stress (caused by household costs being above particular thresholds). The manual suggests that housing need includes, at least: the number of financially stressed renter households; plus financially stressed owner occupied households; plus Housing New Zealand households.

The challenge is to find this information from existing data sources and available reports.

The approach taken in this research is to consider this challenge from a range of perspectives. Because DTZ’s advice for New Zealand has been drawn from the experience it has gained in the UK – where Housing Market Assessments are an established practice in certain parts of the country – we have first of all briefly explored a typical affordability tabulation prepared in the Cambridgeshire Region as a sort of exemplar. This includes an account of the innovative work conducted by Queenstown Lakes District Council in preparing an assessment of the need there for affordable housing for itinerant workers and new residents. (See Housing Affordability:Exemplary Practice blog)

The Housing Affordability: Auckland Report blog contains a summary of relevant data identified in other reports that have been prepared in relation to housing affordability in New Zealand.

And the Housing Affordability:Manukau City blog contains an assessment of housing affordability and stress in Manukau City.

The summary findings of this research:

While more work could be done in terms of producing reliable, location specific data quantifying affordability, it is evident from the reports that are available that New Zealand – and Auckland in particular – has a very serious housing affordability and stress problem.

It is equally clear that there are no serious and effectively funded policy initiatives in place – either at local, regional or national level to address the issue.

The key findings of this work are summarised below:

- Manukau City is home to more than 20,000 households living in housing that is not affordable (ie household expenditure on housing related costs is more than 40% of household income), with the greatest proportion of these living in homes rented from a private sector landlord;
- Manukau City will require 200 new affordable homes each year into the future to ensure that its affordable housing problem does not worsen, but there is no matching commitment from either Housing New Zealand or Manukau City Council to build these homes;
- At least 10% of all households occupied by Maori and Pacific Island Peoples are crowded, requiring 1 or 2 extra bedrooms to accommodate the occupants appropriately


The whole report (which contains tables and references and etc) can be downloaded from:
http://www.joelcayford.com/JoelCayfordHMAAucklandHousingAffordabilityandStress.pdf

Enjoy.

Housing Affordability: Exemplary Practice

Cambridge England

This section briefly describes exemplary strategic housing market assessments in practice in Cambridgeshire, UK. The purpose being to indicate the direction that Auckland Council could aspire to in its practice and process of carrying out Housing Market Assessments, and also to highlight good practice data and monitoring requirements.

Cambridgeshire’s housing market assessment activities are being carried out broadly in line with the guidance contained in Strategic Housing Market Assessments: Practice Guidance prepared by the UK Department for Communities and Local Government (CLG) in August 2007 (UK, 2007).

Cambridgeshire’s experience in conducting and using Strategic Housing Market Assessments (SHMA) is helpful because it indicates the kinds of difficulties Auckland might encounter along the way with this process. Forewarned is forarmed. For example in the Identifying Housing Need section of its 2009 SHMA update, we find the following advice:

…the SHMA is designed to be built on and updated as time passes and information changes and improves. So this iteration is bound to change, adjust and improve as its foundation data does the same… the CLG Guidance is written as just that – guidance, rather than a detailed roadmap of how to do it. For example, some sources of data do not provide the detail or the cross-tabulations needed to work out the figures for a specific sub-region or district. For this reason we have supplemented secondary sources of information with our primary MRUK household survey where necessary, to try to provide a more realistic local picture of housing needed for our sub-region…

…we are still looking to evolve our approach, to investigate:

- more frequently updated sources of information
- ways to analyse data using mapping and GIS systems
- data systems to track changes in the housing market and in factors such as inflation, land prices and incomes (Cambridge, 2009, Chapter 27 Pg 2)

The outputs from Cambridgeshire’s SHMA include a section reporting on affordability by tenure and size, for each of the districts that make up the Cambridgeshire region. These outputs are based on data sources that have developed over time, and are presented in tabular form which provides for rapid cross comparison between different districts.

The full assessment report contains similar tabulations and analysis for each of the districts within the region, and these are then compared and cross tabulated to give a comprehensive regional picture of relative housing affordability, by tenure type.

Queenstown New Zealand

While it is interesting to understand and learn from what is happening in other countries in regard to measuring housing affordability and stress, there are also some interesting and effective SHMA initiatives being undertaken here in New Zealand – which use local data systems.

The Housing Our People in Our Environment (HOPE) strategy developed by Queenstown Lakes District Council (QLDC) contains actions that the Council intends to take to address the issue of housing affordability in Queenstown. The purpose of the strategy is: “to help address the growing problem of people and households in the District not being able to rent or buy houses due to the growing gap between incomes and rental and mortgage costs..” (Queenstown, 2007)

Interestingly, one purpose of this SHMA work is to require that new developments in Queenstown contribute a specific quota of affordable homes as part any development, following an assessment of the likely demand for itinerant and other workers that the new development will cause. Thus a nexus is established between the new employment demands established by the development, and the need for the developer to take specified responsibilities regarding the provision of affordable housing that will be required by a proportion of those new employees.

QLDC retained the services of a consultancy – Rationale – to assist in assessing the current and future demand for affordable housing within the Queenstown Lakes District. The aims of the assessment include:

- district wide demand for affordable housing including existing and future demand;
- demand defined on a rental and ownership basis;
- demand projections on a catchment basis

The data, and assumptions used to prepare these assessments are broadly as follows, by each of several sub-areas of Queenstown District:

- a maximum of 30% of household income to be spent on housing
- the proportion of ‘owned’ to ‘non-owned’ homes (as in 2006 census)
- number of occupied houses in each sub-area over 10 years (from LTCCP)
- portion of home-ownership in each income bracket (as in 2006 census)
- income distribution of new arrivals (as in 2006 census)
- house price inflation rate drawn from MAC Property – 2007 Update
- tabulation of 1st Quartile house price Vs mortgage available over time provided by AMI

My understanding of the Rationale report indicates the following process details were broadly followed in the assessment:

- The proportion of owned/non-owned homes in Queenstown is approximately 40% (compared with 33% for the rest of NZ), and was assumed to remain constant throughout the assessment period;
- The number of occupied houses in each sub-area (lifted from the LTCCP) was effectively treated as a proxy for the growth of each area within Queenstown – and assumed to accommodate new arrivals to the district;
- The split between renters and buyers was assumed to stay the same as the 2006 census shows now;
- The ability of new buyers to buy the 1st quartile home took into account earnings inflation and housing price inflation, and the proportion of new arrivals to the District with sufficient capital to put down the necessary deposit (from 2006 Census data for households by income bracket with no mortgage)

This broad approach was applied. However there were a host of minor adjustments and detailed modelling ‘fixes’ agreed between Rationale and QLDC in the process. These were generally to deal with gaps in the data. This is an extraordinary initiative with lots to commend it.

Housing Affordability: Relevant Auckland Reports

There are a number of reports that address the issue of housing affordability in Auckland. This section considers some relevant findings. For example, a report prepared for the Social and Economic Research and Monitoring Team of the Auckland Regional Council in January 2008, which analysed various CHRANZ (Centre for Housing Research, Aotearoa New Zealand) housing reports prepared beween 2003 and 2007, notes:

While a number of articles have been prepared by CHRANZ on the theme of affordability, Housing Costs and Affordability in New Zealand by DTZ Research (2004) and Local Government and Affordable Housing by CRESA and Public Policy and Research (2007) are the only reports that have specific findings relevant to Auckland region. (ARC, 2008, pg 23)

In relation to affordability in Auckland, the report summarises the 2004 DTZ findings as follows:

…over the last fifteen years, affordability across a range of measures has declined in New Zealand and of all the regions, Auckland has experienced the greatest decline in affordability for both owner-occupied housing and rental tenure. Furthermore, Auckland has been seen to have the worst regional affordability since 1989. For example, in 2000/2001, 22.8% of households in Auckland spend more than 40% of their net income on housing related costs compared to the national average of only 14.8%….

These statistics support those reported in the introduction to this draft report. Of more immediate relevance to the present research though, are the recommendations for further research that is needed to address Auckland’s housing affordability issues. It is one thing to have overall regional statistics about affordability, but it is quite another to have locally specific data which can drive or enable policy initiatives to deal with those local issues. (Note the specific data obtained by Queenstown Lakes District Council previously reported in this research).

The future research needs that are identified in the report cover the issues of definition, measurement, causes, and solutions. The report notes that DTZ (2004) recommended three areas of research, which are summarised below:

- Affordability defintion and measurement – including the development of measures that can be used at local level and with key stakeholders, and which allow for in-depth analysis of trends in affordability and local variations in affordability;
- Barriers to accessing affordable housing – focussing on the five main barriers (regulatory, governmental, institutional, land values and other market factors);
- Potential solutions.

CRESA’s (Centre for Research Evaluation and Social Assessment) work followed in 2007. This involved a survey among local and regional authorities, and included an Auckland report. Of concern was the finding that: “few (councils) were aware of the relationship between their statutory, regulatory and planning responsibilities and impacts on housing affordability…” (ARC, 2008, pg 25)

The CRESA report concluded with a set of recommendations relating to the need for councils to take a more active role in addressing local issues of housing affordability.

These are set out in full here:

- The role of local and central government needs to be agreed and clarified with regard to the promotion and provision of affordable housing.
- Central government needs to take into account approaches used overseas and ensure legislation does not hinder councils from implementing effective tools.
- An agreement between local and central government regarding new approaches to fund vulnerable groups such as people with disabilities, young people and working families.
- Local and central government needs to adopt a new housing response by working together with community and private sector agencies and organisations.
- There needs to be commitment by central and local government to capacity and capability building.
- Councils need to develop a housing strategy and relevant policies and actions for population groups who are vulnerable to unaffordable housing, leveraging housing outcomes in the community and linking housing outcomes to transport, sustainability and infrastructure outcomes. (ARC, 2008, pg 25)

Among other organisations conducting research into the issue of housing affordability in Auckland and throughout New Zealand, one that stands out is the Social Policy and Parliamentary Unit of the Salvation Army. According to its website: “New Zealand needs to develop and implement policies to permanently improve its social climate and reduce social need….”. Two of its reports are used in this report’s Housing Affordability Assessment for Manukau City.

In 2008 the Social Policy and Parliamentary Unit of the Salvation Army produced Housing Update 2008. Its introduction states:

This brief report is intended to provide those people interested in housing issues with a statistical overview of housing markets in New Zealand. Such an overview is intended to provide a basis for discussion around the future direction of housing policy over the short to medium term. The data for this report is taken entirely from public sources but has been collected and analysed in such a way that we hope will provide some useful insights for future policy discussion. (Salvation Army, 2008)

Then in 2009 the Social Policy and Parliamentary Unit of the Salvation Army produced Into Troubled Waters: A State of the Nation Report. Its introduction states:

This report Into Troubled Waters is The Salvation Army’s second annual state of the nation
report. As with the first report, What Does It Profit Us? this report tracks New Zealand’s social progress through a series of indicators. These indicators are relevant to five topic areas, our children, crime and punishment, work and incomes, social hazards and housing. (Salvation Army, 2009)

Both reports provide useful data relating to housing affordability in Manukau City.

Housing Affordability: Manukau City

Statistics New Zealand provides these 2006 census housing data for Manukau City:

- the city had 95,118 occupied dwellings
- 51.8% of households own the dwelling they live in
- the average household size in Manukau City is 3.4 people, compared with an average of 2.7 people for all of New Zealand.

Applying the ARC’s analysis that 21.7% of households in the Auckland Region pay more than 40% of household income on housing (Introduction, above), then Manukau City is home to more than 20,000 households living in housing that is not affordable.

Figure 7.2 (see download version of this research report) is drawn from Statistics New Zealand Housing Affordability tables for the whole of New Zealand. This demonstrates a significant increase in the numbers of households in private rented accommodation deemed unaffordable. Contrast this with the same data trends for homes privately owned with a mortgage shown in Figure 7.3 (see download version).

Assuming this national picture applies in Manukau City, then it is reasonable to assert that the sharpest increase in affordability difficulties are being experienced by households that are renting privately.

Further information relating to how the housing market is responding in Auckland Region is contained in Into Troubled Waters a – “State Of The Nation Report” from The Salvation Army Social Policy & Parliamentary Unit which was prepared last year. This draws attention to changes in the numbers of houses being built, at a time when Auckland’s population growth is showing no signs of slowing. The report notes in particular:

The housing market appeared to have peaked in the third quarter of 2007 and it has been more or less down hill since then. Levels of building consents have fallen to a 30 year low of around 15,000 new dwelling consents for the year ended September 2008. The downturn is especially serious in Auckland where it appears that a housing shortage of 2500 has arisen over the past year because construction rates have not kept pace with population growth. Of this shortage around 1200 are in Manukau City alone….(Salvation Army, 2009, Pg 35)

The data analysis that led to these conclusions is available in another Salvation Army report Housing Update 2008: A Report On New Zealand Housing Markets, also by The Salvation Army Social Policy & Parliamentary Unit. This reports on undersupply and oversupply of housing based on Stats NZ Growth stats. In particular, it provides the following information in relation to Auckland’s major municipal areas.

Estimates for new dwellings required are based on the current growth path each city or district appears to be on (ie. Statistics NZ low-medium-high scenario) and the 2006 average household size for each city or district…. The Auckland region’s cities (North Shore, Waitakere Auckland and Manukau) will experience a growing housing shortage if current building rates (for the year ended September 2008) are maintained. This deficit is around 2,500 houses per year with North Shore City having a deficit of 500 houses annually, Waitakere City a deficit of 400 houses, Auckland City (400 houses) and Manukau City a deficit of over 1,200 houses annually on present trends. (Salvation Army, 2008, Pg 18)

Assuming 20% as a conservative estimate of the proportion of this housing shortage that would be needed to meet the needs of those on low incomes (based on the ARC’s implicit policy that no more than 40% of household income should need to be spent on housing, and its finding that 21.7% of households in Auckland are now spending in excess of that amount), then the annual shortage of new affordable housing in Manukau City for its growing population is about 250 homes.

NB: It should be noted that this figure relates to future housing needs and does not describe those families who are now living in conditions deemed unaffordable.

The question then becomes - how might this shortage be met?

Manukau City Council’s 2009-2019 Long Term Council Community Plan (LTCCP) sets out the Council’s own plans in regard to Council Housing.

The “Big Picture” section of the LTCCP sets out Council’s population projections as follows: 2006 (329,000), 2016 (417,000), 2026 (490,000) etc.

The “Housing for the Elderly” section of the LTCCP lists the locations and numbers of around 500 Council Homes that are provided in Manukau City by the Council. The Ten Year plan explicitly provides for the maintenance and renewals of these assets. However there is no policy to increase their numbers. (Manukau LTCCP 2009, Community Services, Pg 66)

It is difficult to discern the precise intentions of Government in regard to the provision of affordable housing in Manukau City through its agency Housing Corporation of New Zealand, however its intentions regarding the future of state housing numbers in the neighbouring area of Tamaki are clearly set out on the Frequently Asked Questions section of its website:

Will the numbers of Housing New Zealand homes be reduced?
Housing New Zealand Corporation currently owns 56 per cent of the state housing in Tamaki. While more houses will be built over time, the existing number of state houses is not going to change. This is a commitment by Housing New Zealand, through the Programme, to the Tamaki community. A greater mix of housing will be encouraged, including private ownership. (HNZC, 2009) (Emphasis added)

This gives effect to the general thrust of Government’s Housing policy which was established under the previous Labour Party led Government in 2005 (HNZC, 2005). The foreword of this strategy, entitled: “Building the Future: The New Housing Strategy”, includes these statements by the then Minister of Housing – Steven Maharey:

…while the state retains its long-standing role as the largest landlord in the country, most New Zealanders house themselves without government assistance. The Government remains committed to ensuring those on low or modest incomes or with special housing needs receive the help they require to find and stay in affordable, good quality housing…

…Housing is more than building houses: it is as much about building community as it is about people’s homes…

…The shift towards increased community-based housing, more affordable homeownership opportunities, and a mix of new housing reflecting community diversity is re-mapping our landscape…

…State houses have been an important feature of New Zealand housing since the late 1930s and will remain so. Increasingly, they will be alongside housing provided by other community partners. Housing choices and designs of the future will inevitably grow from what has gone before… (HNZC, 2005, Pg 2)

The language used here is the language of change and of choice. In respect of state housing in the absence of clear and strong commitment to continuity and expansion of provision, the language expressed in this foreword is equivocal at best.

If neither Housing New Zealand nor Manukau City Council are committed to matching the increasing affordable housing needs of a growing population, who will?

Then there is the matter of stress. As noted previously in this report, crowding, or over-crowding in a home can lead to social problems such as poor health (due to people living in close proximity), to learning difficulties (children being unable to find space to do homework), and conflict (one bathroom being shared among a number of adults for example). ....

The crowding problem among European households has halved from 5% of European households in 1987 to under 2.5% in 2004, while for Maori households it has only dropped marginally from 16% of all Maori households being crowded in the late 1980’s and early 1990’s, to just over 10% in 2004. It is likely the same crowding issue applies to a similar proportion of households occupied by Pacific families also.

Research summarised in other parts of the report suggests that while some crowding may be attributable to the extended family culture of Pacific Peoples, it also stems from economic necessity – the more earners in one household the more affordable it becomes. Uncrowding today’s crowded Pacific family occupied houses may only result in an increase in the numbers of families living unaffordably.

Of Demographia, Bottlenecks & Capital Gains Taxes

This blog is a bit late, but I just wanted to make a few comments before I forget them.

You may remember about 10 days ago - I think it was after the new Alpurt motorway opened and there was a big queue and eveyone was a bit surprised by the fact there was only 1 lane North Bound through the tunnel. The new Minister of Transport The Hon Joyce spoke of the need to get rid of bottlenecks in Auckland's State Highway network.

At the same time that rather disreputable outfit based in Christchurch which calls itself Demographia came out with its oft repeated claim that the main cause of houses in Auckland being so expensive was the fact that land supply is constrained. They want the MUL (Metropolitan Urban Limit) released. Demographia stated that people should be able to buy a house for $130,000 - made of $30,000 for the land, and $100,000 for the improvements. Crazy I thought at first - then I remembered that CBD apartments in Auckland have been going for around that figure at auction (and sometimes much less).

And then there was in the media a little discussion about the need for a capital gains tax to remove some of the economic incentives that presently exist around property investment.

These three sets of ideas are all linked. But the dots are not being joined up.

Before I write anymore, I need to note here the fantastic piece of journalism that was in the last Saturday Herald about the Demographia claims. It was written by Chris Barton. You can see it here: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10554387

Going back to the bottleneck thing. Everybody wants to get rid of bottlenecks. But the thing is, if you have a bottle, you always have a bottleneck. A road contains cars. It's a container of cars. They get tipped in, and tipped out. You can't have a road without a bottleneck. The only decision that's rational is to decide where the bottleneck will be, rather than where it won't be.

And the other thing about bottles, is that you can always think of a situation where what was once a nicely flowing bit of road suddenly grinds to a halt. In other words every road has limits in its ability to maintain free flow. Increase the demand - more cars, faster cars - and that limit will be reached. While traffic demand is on the increase we can expect more bottlenecks.

Please don't talk about eliminating bottlenecks. Unhelpful.

The interesting thing about the Herald cost of housing article, is the comparison between similar home costs in Auckland and Houston. While the capital value of each home is similar, the real difference is in the service rates payable. In Auckland the figure was around $1,500/annum, but in Houston it was more like $8,000/annum. Also in Auckland the cost of getting to work in public transport was about $1, while in Auckland it was $4. These costs need to be weighed in with capital or purchase cost when looking at the true costs of housing.

A major problem we have in Auckland is our ability to pay for infrastructure, and who pays. Will stop this now. But will come back to it.