Love Auckland's Queen Elizabeth Square

(Click this image to see the whole picture....)

This is the section of Queen Elizabeth Square that Auckland Council has voted, in principle, to sell, to Precinct Properties, so it has a larger site for its proposed downtown development. (It should be noted, by the way, that Precinct Properties has indicated that it has perfectly good plans for developing the site without having this section of Queen Elizabeth Square.)

These pictures were all taken about 9:00am on Friday morning, May 16 2014. So it's late in autumn. Sun is low, but for a while at this time of year QE Square is a nice place to be. It has been like this in public ownership since the 1970's, I understand. Before that the land was taken up with older style buildings not unlike those we can see still standing in Britomart.

A number of cafes have opened around the square, but you can see that the Downtown frontage to the square, and that from the both the HSBC Tower and the Zurich building, don't help the success of this part of Auckland. The kauri tree forest was a recent attempt to change things. Again, in my opinion, not very successful in terms of producing quality paved park space that is attractive to linger and meet up in by members of the public. (In fact it shares many of the poor design characteristics of Aotea Square which was developed around the same period.)

Other cities around the world recognise that ensuring success in public spaces is a constant challenge. They remain works in progress. Auckland now has the opportunity (with demolition of Downtown Centre and earthworks associated with the proposed Central Rail Loop) to improve Queen Elizabeth Square - but not to sell it.

Auckland Central is very poorly provisioned with good sized, centrally located, successful, civic spaces suiting a city of more than 1.5 million souls.

When I was there this morning, the police were there supporting a "Time4Youth" community fund raiser campaign "focussing on helping teens all over New Zealand..." Part of Blue Light youth charity's work.

You could choose to get locked up, and be photographed. These are the sorts of activities that can happen in the morning rush hour. Great in the sun. Perfect use for a paved pedestrian civic square. Like Queen Elizabeth Square....

It's not as if Precinct Properties are going to be short of passing trade when their development is completed. A pity perhaps that with its large proportion of overseas investment that profits will likely leave New Zeraland, but surely that is enough. Provide access to Auckland pedestrians, but don't let them have Auckland's public space as well. That's not a good equation.

Here's how the Square looks from Britomart building. When the bus interchange moves from here (as promised, certainly reduced, as other CBD interchange facilities are developed), you can see the scope for the whole civic area. You can see the grand civic space that can emerge, when this public area is not severed by a road for buses....

The pedestrian walkway can be shifted, or changed. perhaps its alignment would be better closer to the railway station - creating a larger coherent civic space.

Yes, this area is sometimes shaded, and it is sometimes windy - but nothing like Wellington. All built public spaces are in the shade for part of the day. What's new in that? But if Queen Elizabeth Square was widened, then parts of it would more often be in sunshine. In summer, when the sun is almost overhead, Queen Elizabeth Square is bathed in sunshine most of the day. Don't forget that.

These next 3 pics are from slightly higher in the Britomart building. Again, I draw your attention to the dismal outlook of the Downtown Centre. Its uninteresting, unarticulated wall does not attract interest.

Look at these pics and think. Surely it is right for Auckland Council to consider who these public assets - including Quay Street and Queens Wharf - can be seen in an integrated way, but from the view point of Auckland's citizens first, not from the point of view of how many bucks can be made from an overseas investor.

Interestingly we had Auckland Transport down here also, at the Glass Box, offering free bike checks. Thanks for that anyway.

Auckland Skyline With Precinct Properties Tower

This pic is from Princes Wharf on May 16, 2014. The Downtown Precinct is up for redevelopment. It appears that Precinct Properties now owns the HSBC tower (then one with the shadow of the ferry building tower), the Zurich Building (which is behind), and the entire Downtown Shopping Centre (which is built around the two towers, and averages about 3 stories in height.)

Auckland council has given "in principle agreement" to the idea of selling off Queen Elizabeth Square (or 2,000 square metres of it), so the developer has a bigger opportunity. The green star in this google picture shows the area of civic square involved. (This google pic was likely taken around noon, not in high summer - and you can see the shadow that is cast by the HSBC tower.)  (NB: The Zurich Tower looks a little odd in the image - it's the only high rise in the image that does not appear to have a 3D version in Google. The top of the Zurich Building is therefore the rather dislocated grey shape that appears directly below the star.)

This pic is a rough indication of the commercial tower proposed by Precinct Properties. (According to Auckland council briefing papers, it proposes a 36 storey commercial tower on the corner of Lower Albert Street and Custom Street West.) By way of scale, the HSBC Tower is 21 stories high - so the proposed Precinct Properties Tower is 15 stories higher than that. It is unclear what its proposed footprint is however.

And this pic is an indication of a smilar height, but smaller footprint commercial building as viewed from Princes Wharf.

Private Take-over On Princes Continues

Went inspecting the end of Princes Wharf today. Not sure how often Council goes looking, to check POAL and leaseholder, and tenant compliance with resource consent conditions. Complicated business....You can see here that I'm walking between the colonades that are required to be public, walking along towards pedestrian entry to the Hilton Hotel...

You come to these steps, and I know, from experience, that these lead to a public viewing platfrom. Part of the "extensive public space" that was committed to by POAL and leaseholders when Princes Wharf was developed...

Beautiful sunny day. Looks like someone has brought their own umbrella and table. For a picnic. fantastic idea. Shows real initiative. Wonder where they parked their picnic van?

So I walked a bit closer to check....

Two tables, and a couple more umbrellas ready to be put up....

Just putting you in the picture, this is a public deck. The Hilton (through the terms of its lease/ rental) paid good public money for the priviledge of being on Princes Wharf. But its property rights are limited. One of the quid pro quos of this deal was that parts of the wharf and of the buildings constructed would be for the public. But just how real is this public access, and how much amenity is available?

This is the view from inside the restaurant. Great isn't it. You would feel drawn to step outside and take some time under an umbrella.

This is the kind of public space that is deemed "world class" by those whose interests lie squarely with developers and investors. It is time that Auckland Council enforced its plans, and ensures that consent holders comply with consent conditions. Otherwise I believe there is no option but for Council to compulsorily purchase, or rezone, or otherwise protect, the public interest in areas or parts of Princes Wharf which are deemed public.

Council Banking on Market Failure?

This posting challenges Auckland Council presumptions and plans that arise from its growth assumptions, and which relate to its determination to incentivise and otherwise promote on a massive scale, residential development beyond the RUB and redevelopment within the RUB (RUB= Rural Urban Boundary).

I argue that Council's plans for residential development ( contained in the Auckland Plan, the developing Long Term Plan and the Unitary Plan) not only rely on market failure, but will increase the extent and impact of market failure already present in Auckland's property market.

I first of all present a simplified description of the economics, then, in that light, go on to consider what Auckland Council appears to be planning.

Auckland Property Market Economics

If Auckland's residential development market was operating as a truly free market, then it would typically be argued by economists that no local government (or central government) intervention would be required.

Market failure is the standard justification for local government or government action in neoclassical welfare economics. The basic presumption is that market processes work best to allocate scarce resources in the most efficient way. This assumes perfect competition, where price information will direct self-interested market participants to correct “mistakes” in resource use (Pareto optimal allocation).

And that when competition is imperfect, the consequent “market failures” can and should be corrected by local government (or central government). Such intervention is based on an implicit assumption that political actors (in local government or government) have both appropriate incentives and accurate information, so that Pareto optimal allocations of resources are then achieved. (Paraphrased here from KEECH et al, (2012), Market Failure and Government Failure)

This is a bit over-simplified.

Economists generally use the term market failure to describe a situation in which the invisible hand (Adam Smith's "invisible hand of the market") fails to allocate resources in a socially desirable manner, so as to maximize aggregate economic well-being. Market failure arises when economic agents face incentives that are distorted because of institutional failings or some other reason, leading to economic outcomes that are bad from society’s point of view. (I quote here from Jan Brueckner (2000), Urban Sprawl: Diagnosis and Remedies)

The classic example of a market failure is air and water pollution, where a factory has little incentive to take account of the environmental damage it causes and, thus, ends up polluting too much. In New Zealand we have institutions like the Resource Management Act, Regional Government, Central Government and the Parliamentary Commission for the Environment all involved because of this particular market failure.

An important consideration arises from institutional involvement in any market.  

We can distinguish "passive government failure," where government inaction results in inferior economic outcomes, from "active government failure," where government action results in outcomes worse than if government had done nothing.

It is oddly idealistic simply to expect that local government (or government) actions will be obvious improvements on market failures. In fact, such idealism is every bit as naive as “free market fundamentalism” that simply assumes markets will always perform optimally with zero intervention. It is better to recognise that because few processes - market or political - turn out the way we expect or desire, then we need to critically evaluate all local government policies that seek to intervene in a market.

Urban Development and Growth Market

The first question to ask is why is local government involved in the regulation of land use at all?

The right of individuals to control their property has long been recognised, but that autonomy is counterbalanced by the fact that property use sometimes must be regulated for the common good. The common method of land use control in New Zealand is zoning, which allows local government to divide its territory into districts or zones where particular uses or activities are permitted or prohibited. Zoning, which became common in the early 20th century, is the foundation of the modern local system of land use control. The prevalence of use zoning has tended to leave land use decisions almost entirely to local discretion.

What is interesting about what is happening in Auckland now, is that the local government institution that is responsible for zoning land, is the same institution that has the parochial interest in taxing (rating) the occupants (users) of the land. Before local government amalgamation in Auckland it was regional government (the equivalent of state government in other western democracies like Australia, Canada and USA) that had responsibility for deciding the zonings of land when it shifted from rural use to urban use, or from low density to higher density. And it was local government that enforced and regulated land uses consistent with regionally set zonings, and which collected rates to pay for publicly provided services.

Now it's a one stop shop in Auckland. But is that one stop shop capable of making economically efficient decisions about land use?

Internationally, and here in New Zealand, ratepayer groups typically favoured regional control of land use planning because they were suspicious of capricious action by local government and its parochial view of planning and development. On the other hand, ratepayer groups might prefer local control in the case of emotionally charged issues, such as the disposal of toxic waste, because it is easier to mobilize local residents than to persuade a remote regional agency to reopen debate on a difficult decision already taken. Business, too, can see advantages on both sides of the debate about local vs. regional control of land use. Business owners may prefer to conduct their affairs unhampered by a regional land use agency, but they recognize regional involvement in land use planning can work to their advantage by overriding local objections to development, and by creating predictability for landowners (who don't want investment values undermined by un-neighbourly activities.)

This debate has already been had in Auckland, and we now have an amalgamated local government entity, which has all the responsibility for land use planning (subject to legislation of course), for addressing any market failures which come its way in the property market, and, hopefully, not introducing additional market failings into that market.

Urban Growth and Market Failure

Considering urban sprawl (a critical description of development outside the RUB vs compact development inside the RUB), three market failures can cause excessive spatial growth of cities:

• The first arises from a failure to take into account the social value of open space when land is converted to urban use. 
• The second arises from a failure on the part of individual commuters to recognize the social costs of congestion created by their use of the road network, which leads to excessive commuting times for everybody. 
• The third market failure arises from the failure of real estate developers to take into account all of the public infrastructure costs generated by their projects. 

Additional to the second market failure is the social cost associated with having to travel large distances (compared with compact mixed use development) for life's basic needs including education, shopping, employment and entertainment.

Thus, development appears artificially cheap from the developer’s point of view, encouraging excessive urban growth. (Brueckner, 2000)

What is Auckland Council doing about these market failures that are internationally recognised as being associated with greenfield development? Or is it happy to go along with those sectors of the property development industry whose budgets and profit forecasts are predicated on the free lunch that comes with this package of market failures.

Open Space Market Failure

Taking these market failures one at a time: Ready access to open space is important for society’s well-being. Open space provides city dwellers with escape from the urban scene and a chance to enjoy nature. Such open-space benefits, however, are not taken into account when land is converted to urban use. Conversion depends solely on the land’s productivity in urban use (which depends on the value of the houses built) relative to the land’s productivity in agriculture (as reflected in the value of farm output). Since intangible open-space benefits do not constitute part of the income earned by the land when it is in agricultural use, the disappearance of these benefits does not show up as a dollar loss when the land is sold to a real estate developer. The invisible hand thus ignores open-space benefits, causing too much land to be converted to urban use and leading to excessive spatial growth of cities.

This is not an easy problem to solve. A simple form of government intervention could remedy it: charging a development tax on each hectare of land converted from agricultural to urban use (this tax is added to any fees already levied). The magnitude of the tax is set equal to the value of the open-space benefits that are lost when the land is converted. This might appear overly theoretical - eg how would you work out the value of this tax? Some jurisdictions charge an increased development levy for greenfield development vs urban redevelopment. This works to incentivise brown-field development.

The previous MUL and the current RUB boundary planning devices wilol always be prone to development leak across the line. A more robust and useful planning device is a green belt - such as is deployed around Vancouver and London. This is much more of a barrier to greenfield development leakage. Not only that but it provides more valuable greenspace in close proximity to the city. And this is what could be purchased using the sort of greenfield development levy described above.

Excessive Road Commuting Market Failure

The second market failure affecting the spatial sizes of cities arises through commuting. Commuters incur substantial costs, which include the outof-pocket expenses of vehicle operation as well as the “time cost” of commuting. The latter cost measures the dollar value to the commuter of the time consumed while in transit, which is mostly wasted. Together, these out-of-pocket and time costs represent the “private cost” of commuting, the cost that the commuter himself bears. And when the commuter drives on congested roadways to get to work, another cost is generated above and beyond the private cost. This cost is due to the extra congestion caused by the commuter’s presence on the road - which everyone else has to "pay".

We are facing this problem in Auckland now. Various think-tanks are considering alternatives. Some traffic could be diverted to off-peak hours (like heavy freight), when roads are less congested. Some car commuters would switch to public transport if it met their needs. In Auckland the average commute distance is too long from society’s point of view and should be shortened (not easy, but mixed land use policies can begin to address this). The problem with these solutions is though, is that they encourage people to commute long distances, the solutions effectively say "what you're doing's OK", and unless there are congestion charges or some sort of toll, road users never have to face the true costs of excessive road use leading directly to market failure, and lead indirectly to more urban sprawl.

Infrastructure Subsidy Market Failure

The infrastructure costs generated by new development are another source of market failure that affects urban growth. When a new housing development is built, roads and sewers must be constructed, and facilities such as schools, parks, and community facilities. The market failure arises because, under current financing arrangements, the infrastructure-related developer levy burden on new homeowners is typically less than the actual infrastructure costs they generate. The reason is that the cost of new sewers and schools is shared among all of the city’s residents rather than charged directly to those who require the new infrastructure. In effect, infrastructure is priced approximately at average cost rather than marginal cost. Because the developer levy burden on new homeowners is lower than if they fully paid for their infrastructure costs, these homeowners are able to pay a higher purchase price for their houses than if the true costs were levied.With their houses selling for more, developers are then able to offer more for agricultural land than would be possible if the true costs were levied on new homeowners. Higher bids for agricultural land in turn mean more conversion of land to urban use, leading to too much development and excessive spatial sizes for cities. Thus, by undercharging new homeowners for the infrastructure costs they generate, the current Auckland Council plan to subsidise growth related infrastructure will inevitably lead to more urban sprawl.

Auckland Council policy settings are likely to stimulate urban sprawl because they include incentives which encourage developers to undertake greenfield development.

Urban Regeneration and Market Failure

Which brings me to the urban regeneration and redevelopment policies that are contained in the Unitary Plan. Simplification and removal of regulatory red-tape loomed large on the list of political objectives that needed to be ticked off with the inclusion of four simplified residential zones in unitary plan. The vision behind the unitary plan was for a quality compact city form following quality intensification of parts of Auckland's existing residential urban landscape.

All sorts of economic efficiencies can be claimed from compact city approach including more efficient use of existing infrastructure, closer proximity for residents to amenities and employment.

But this is not just a pretty idea it's another part of the property market. And the way it's being handled by Auckland Council it also appears to be reliant upon market failure for success.

How so? It is well known that Council's combined policy of Special Housing Areas and upzoned urban neighbourhoods is designed to make redevelopment of existing residential properties attractive to developers. It is also well known that the objections that are coming from existing residents in those neighbourhoods stem from concerns over impacts of taller buildings on their houses, worries about the capacity of existing infrastructure (roads and schools for example), and fears that the value of their homes might drop because of the perceived impact of intensification. All of these fears are well grounded. Yet the Council does little in the way of active community and area planning and investment to compensate for such concerns, and stands back having created opportunity for the development market who will benefit from the set of market failures that will inevitably ensue:

• The first arises from a failure to take into account the loss in value of the existing sense of community and neighbourhood amenity when urban land is converted from detached residential to intensive use. 
• The second arises from a failure on the part of the first-off-the-block developments to pay for (compensate for) the loss of amenity their intensive project is responsible for, while benefiting from the premium of being first. 
• The third market failure arises from the failure of real estate developers to take into account all of the public infrastructure costs generated by their projects.

These market failures must inevitably lead to conflict between existing residents and would-be developers. At present Council appears reluctant to recognise this problem, or to do anything about it. Other OECD countries have plenty of examples. These always include explicit public development agency intervention in neighbourhood redevelopment, to get the planning right for the new pattern of land uses, and to build needed infrastructure. Such public actions are either funded by the new development and by a contribution from uplift in property values, or from levies that are charged on greenfield development.

One thing is for sure. Unless council addresses the market failures that are built into its current policies for urban regeneration, then developers will run a mile and concentrate on greenfield opportunities. We have a situation whereby Council compact city policies are driving sprawl.

Perhaps the council believes it has found an easy answer to rapid population growth in Auckland. That is just to give in to it, and allow the development industry to profit from it in the name of GDP growth and increased economic activity. And I don't think we want that. 

Bus Network Now, CRL Next

The advertising and publicity surrounding the launch of the new electric trains on Auckland's rail network have been very satisfying for all involved. Just about everyone's happy to be inside that tent.

Behind the scenes now there is a ferocious amount of work going on to deliver the Mayor's vision of a 2016 start to the City Rail Link (CRL) tunnel project.

In his "6 Priorities to get Auckland moving in 2014" speech, the mayor says this:

"The clearest message from Aucklanders in the past three years is that we need to get our transport problems fixed once and for all. Auckland has suffered from decades of under-investment in public transport and a lack of joined-up planning. We are only now beginning to put in place the foundations of a world-class public transport system.

Last year the government agreed to back the City Rail Link project (CRL) – this will be the central plank of our work to improve Auckland’s transport network.

The CRL will double the capacity of Auckland’s rail network - offering twice as many train journeys and passengers across the entire rail network and trains at most stations every 5-10 minutes at peak. We welcome the government’s backing for the CRL, but the fact is their proposed start date of 2020 is too long for us to wait. Without the CRL, by 2021 Auckland’s bus network will have reached capacity, and speeds on city roads will have dropped to a creeping 7km during peak time.

My number one priority is to bring forward the start date for the CRL to 2016.

Working with my political colleagues and Auckland transport I have developed a proposal to deliver this earlier start, without a direct impact on ratepayers. I will be taking our proposal to Prime Minister John Key next month to kick start discussions with the government this year...."

It would help communications and public relations if there was a little more realism in these comments. Even with the CRL and everything else that's planned for Auckland's rail system, we are never going to have a "world-class public transport system". For a start we have a narrow gauge rail system, that is barely double-tracked, small tunnels, and many protected road crossings. We just might end up with a reliable and frequent rail-based part of our public transport system, but we are too little and poor as an OECD city to afford something that could be described as "world class".

Secondly, transport systems are never finished. So the idea that we can get our transport problems "fixed once and for all" is unhelpful because it can never be true. Auckland's transport system consists of a set of networks (roads, rail, bus, pedestrian, cycling) which interconnect and integrate. Transport technologies are always changing as technologies develop and change, presenting new challenges and problems to solve. This is a never ending job.

The trick is to do the best you can with what you have.

The CRL is a huge single project for one of Auckland's transport networks. It has huge impact on Auckland CBD during construction. Offers major opportunities for land development. Comes at enormous cost. So it needs to be right. The planning that is. It is more important that it's planned right, than that construction gets started in 2016.

The map here - (Thanks for correction from Matt at TransportBlog: The map is from Auckland Transport and is their proposed frequent bus network which would have services running at least every 15 minutes 7am to 7pm 7 days a week. It has been agreed to in the Regional Public Transport Plan and has started going through detailed consultation. It started in South Auckland last year and more areas will be done this year.) - depicts an Auckland "frequent network" plan. Now that Auckland Transport (AT) has agreed to a strategic re-organisation of Auckland bus routes, the foundation work has been done to establish frequent services right across Auckland.

Not just on rail and the Northern Busway.

The low hanging fruit public transport priority now should be to deliver the frequency and promise that can be obtained from the new frequent bus network, with a modest investment in key sections (bus priority lanes, other priority measures, some network interchange stations, extended lanes, corridor widening, and additional bus stops and shelters).

I understand that all of these bus network corridor improvements have been planned and await funding in a package of works that will cost about $200 million to complete.This is an Auckland-affordable PT must do.

The political problem that I see is that the pressure to "start CRL in 2016" (especially in a substantial way) threatens a tight public transport budget. And threatens to delay the rollout to wider Auckland region of frequent bus services that might not be "world class", but they will be a lot more reliable and attractive alternatives to car than the bus services available now.

Surely it's time South Auckland benefited from the promised frequent bus service.

I am advised that the new electric trains don't just look good. They carry more passengers. In fact they can carry on average about 50% more passengers per train set than the equivalent trains they replace. What this means is that the existing rail network (without the CRL, but with electrification and the new trains) can carry about 50% more passengers/hour now than before. That's a significant increase in capacity.

Bearing that in mind, and the opportunity begging for improvements to bus corridors, surely it is the right thing to do to protect the budgets for those improvements and prioritise them, get them done over the next couple of years, complete the planning for CRL, and maybe go ahead with foundational tunnel works which will permit the Downtown Precinct development to proceed without un-neccessary delays, and plan to build the CRL in stages.

Watercare Heads for Sand over Report

This diagram is from a report about Water Sensitive Cities that it appears neither the public nor councillors are allowed to officially see, according to a story in today's NZ Herald. Having spent many years immersed in the region's sewage problems, and most of those years spent trying to "govern" Watercare, I am relieved that some action is being taken to shine a light on the traditional and expensive methods and systems favoured by Watercare, and to enable Auckland Councillors to become independently informed, so they can take decisions in confidence, and without being put under the pump of Watercare propaganda. (By the way you can read the report here.

According to the report, Auckland's water management practices categorise us in the diagram as a "drainage city". And that would have to be right when you think at all about the proposed Central Interceptor Project. Further explanation is contained about this in the submission I made (along with many community groups by the way) to the consent hearing.

The report contains this explanation of the diagram:

".....The more complex drivers on the right of the framework require new infrastructural and institutional capacities. Transitions research explains that the shift to this side is challenging, since existing technologies, institutions and knowledge typically create path dependencies that are difficult to overcome. A combination of technological lock-in, institutional inertia and fragmentation and the challenge of reorienting professional and organisational capacity towards a new approach all serve as barriers to sector-wide transformation. Success therefore requires concerted and ongoing effort, requiring ongoing commitment, monitoring and investment to steer change in desirable directions...."

Watercare - in my opinion - has been a dinosaur of an organisation for the past couple of decades, when assessed against modern water sensitive criteria. It has steadfastly resisted governance changes that might shift its "technological lock-in and institutional inertia". Big pipes, big pumps, big ocean discharges, big landfills for biosolids, big trade waste toxics disposal down the sewer, and big electricity consumption (biggest in Auckland region). The very opposite of water sensitive and environmentally sustainable. That is what makes much of Auckland drainage city.

Having worked with a number of organisations and community groups trying to get Watercare to change its ways (...in desirable directions.... ) I know to my cost how Watercare seems to have the discretionary budget to bring into its embrace each and every credible expert in town - and even from Australia. Most well funded, and well advised community organisations wishing to mount a professional challenge against Watercare's "path dependencies" and resistance to "a new approach", cannot find an expert witness for love or money. (Could be a career limiting move....)

Since amalgamation, Watercare's monopoly on water and wastewater services has extended to a monopoly on three water management ideas, thinking and spending. It is time for a rethink. Maybe this report is not the final word. In my time Auckland commissioned a similar independent report from Halcrow. My advice to councillors, for what it is worth, is this: You represent ratepayers. You don't represent Watercare. When next you decide Watercare budgets, ensure you have commissioned expert independent advice.

Challenging Auckland Council Growth Assumptions

I argue in this posting that rather than accept the Auckland Plan's growth assumptions as the basis and rationale for what Auckland Council does this term - these need to be challenged now.

The Mayor's direction setting paper for Auckland Council's review of its Long Term Plan was considered by Council's Budget Committee in March this year. The Mayor's paper calls for a major review of council activities, and that papers prepared in that major review are to be considered by Councillors in the build up to the draft long term plan. The mayor has indicated that he will consider officer reports that respond to his direction, and prepare from them his Long Term Plan Proposal in August this year, which it is planned Councillors will consider and adopt - as the Draft Long Term Plan - in December 2014.

That would then go out for public consultation.

The Mayor's direction includes this text:

1. This is a full review of all our budgets not just new proposals and savings targets....
2. The assumptions... of legacy organisations (old councils) can no longer be the basis... we now have a new starting point being the Auckland Plan...
3. There is no public appetite for large increases in rates or debt.... new programmes and projects will need to be funded by reviewing their relative priority against existing programmes and projects....
4. This exercise needs to be coordinated across Council and CCOs. In particular aligning our assumptions about growth, and infrastructure development to support that growth.... in a coherent manner that enables us to develop an integrated 10 year plan and budget... (bold added)

There is some general text about the Auckland Plan being the starting point, but there is this, in the Mayor's direction, about some "high level financial modelling":

....there will need to be a revisiting and updating of our assumptions around such issues as growth, interest rates, revenue from alternative funding mechanisms....

The mayor also asks for some work on PPPs. I will leave any critique of PPPs for another time. When will councillors understand the message that PPPs are just another "something for nothing" magic wand that is very high risk? Look no further than the Kaipara District Council and EcoCare.

I want to concentrate here on what the Auckland Plan means or requires, as it stands, as a "starting point" for the Council's Long Term Plan.

The Auckland Plan

This is what the Auckland Plan states:

A-1, S5: We are committed to shaping our growth to
support Aucklanders, rather than allowing growth to shape our
lives in an unmanaged way.

A-1, s37: Many Aucklanders still value the egalitarian principles that
our city and country were founded upon. However, in recent
years there has been an alarming growth in inequality and
the concentration of highly deprived communities in some
parts of Auckland. Addressing inequalities is a major focus of
the Auckland Plan. Nevertheless, we still view ourselves as
a classless society, and have a degree of access to decision
makers and figures of authority that is often not possible in
larger cities.

A-1, s 55 : Auckland’s population has grown steadily and is projected
to continue to do so throughout the period covered by this
plan. The impacts of this growth on the provision
of public services, infrastructure and our rural and urban
environments must be carefully managed, to enhance what we
value about Auckland.

A-1 Box B.2: Statistics New Zealand models three scenarios for the future
of Auckland’s population – high, medium and low growth.
Given Auckland’s history of rapid population growth,
Auckland Council believes it is prudent to base its future
planning on the high-growth scenario, and unless otherwise
stated, this model is used throughout the Auckland Plan.
The high-growth model projects a population of 2.5 million
in 2041.

A-1, 89: Further, by adopting a ‘place-based’ approach, the
Development Strategy focuses on delivering quality outcomes
by aligning investment in areas of change where the majority
of growth will occur. (Bold added)

It is unclear how the Council proposes to address inequalities as a major focus. However, the implications of the growth assumptions are summarised in a range of graphics and diagrams, and the overall Auckland Plan is that Auckland council needs to plan for (unsure exactly what "plan" entails at this stage, that's what will be coming in the Long Term Plan):

• between 280,000 and 240,000 new homes built within the Rural Urban Boundary between 2012 and 2041
• between 120,000 and 160,000 new homes built outside the Rural Urban Boundary between 2012 and 2041

The Auckland Plan continues. The graphic below shows the impact of this in terms of a massive increase in building consent and construction rates, and the text explains....

A-1, 108: Aucklanders have said they want Auckland to build on its strengths and ensure growth and change is well planned and of a high quality*. They seek a quality compact model of growth that prevents excessive expansion into our rural hinterland.

A-1, 156: These figures indicate the approximate scale of growth
needed to implement the Auckland Plan. These numbers
may be refined following more detailed implementation planning. They only apply to ‘urban dwellings’ (i.e. dwellings in rural villages, country living, and other rural areas are not included). The figures show the intention for 70% of growth to occur within the baseline 2010 MUL, and the possibility of needing 40% of new dwellings outside the baseline 2010 MUL.

Auckland Economic Development Plan
 
And then we get to the Economic Development part of the Auckland Plan, which is inextricably bound to the Population Growth assumptions. In the Economic Strategy, we have Strategic Direction 6, which includes these two targets:

1.  Improve Auckland’s OECD ranking
of cities (GDP per capita) of 69th
place in 2011 by 20 places by 2031

2.  Increase annual average real GDP growth from 3% p.a. in
the last decade to 5% p.a. for the next 30 years

369_ Measured internationally, Auckland’s performance is
relatively poor: it is ranked 69th out of 85 metro regions in the
Organisation for Economic Co-operation and Development
(OECD) in terms of GDP per capita. New Zealand’s economic
performance has declined relative to other OECD countries
in terms of GDP per capita to its position at 21st, but has
stabilised at around 80% of the OECD median.

370_ Auckland’s relative size is a disadvantage, because
the scale of cities affects output per capita and levels of
productivity.

The graphic to the left is from the OECD's report which compares 78 metro regions. It is a slightly earlier version than used in the Auckland Plan - but that has little effect on what I write here.... take a look at the graphic.... look for Auckland.... you will find it right at the bottom. It is the smallest city region in the sample.

The 400+ page report that is wrapped around the data contains a number of points that seem to get ignored in the excitement of growth:

At first sight, the relationship between population size and income is not a straightforward one. One of the most important features claimed for urban economies, including metro-regions, is their capacity to concentrate population that nurtures the development of a pooled labour market, as well as human and physical capital, income and infrastructure besides cultural and recreational amenities. However, an initial look at the data for OECD metro-regions does not support this argument; if anything, there is a slight negative association between the size of a metro-region and the income of its inhabitants. (Pg. 50)

In fact, bigger may mean richer until congestion reaches a certain level. It can be argued that in mega-cities, income is affected by population size, probably as diseconomies of scale and congestion costs appear. Congestion costs seem to outweigh centripetal forces after a certain critical value that can be regarded as a threshold.(Pg. 51)

Although most metro-regions appear to be characterised by high concentrations of wealth and employment associated with leading sectors and the focal points of their national economies, they also tend to concentrate a high number of unemployed residents. (pg 76)

The point being made in the OECD report about competitiveness of city regions is that it is NOT necessarily the case that bigger means more GDP/capita. The selective use of the OECD data in the Auckland Plan is all part of an unquestioning push for growth at all costs - especially if many of the costs (eg growth related infrastructure) can be born by Auckland Council and the ratepayer.

Another player in this discussion is Central Government. It is looking closely at how Auckland can become part of New Zealand's economic "growth engine" (alongside the dairy industry and the earthquake recovery industry). Ministry of Economic Development has produced a report exploring Auckland and which investigates a number of economic development indicators. It takes OECD data and applies its own local knowledge. This graph for example: "Auckland had a relatively high average annual population growth rate between 2005 and 2010, at 1.6 percent. Between 2002 and 2007, Auckland had the third highest average annual population growth rate of the sample of 78 OECD metropolitan regions."

And in relation to this graphic: "Auckland has one of the highest proportions of its population comprised of overseas-born residents, just behind Toronto and Vancouver."

Concluding Remarks

The seeds of the Auckland Plan are beginning to take root in the Long Term Plan. This is a problem because the Auckland Plan assumes and presumes that all growth in Auckland is good growth, and that it is going to be good for us all. But is it? Is bigger necessarily better? (The OECD analysis raises important questions about this - notably for Auckland with its peculiar congestion problems stemming from unusual geography). And even if it is, what is the justification for Auckland Council budgeting and raising rates to build the infrastructure apparently needed for all the new houses, and in effect subsidising growth. The Auckland Plan growth assumptions: high population growth scenario and 5% compound GDP growth are driving Council policies and budgets that will be ruinous.

Waterfront losing authenticity (2)?

A few weeks ago I blogged with a worry about Wynyard Quarter losing its gritty reality.

Losing the reality of the fishing fleet tying up at North Wharf. Losing the sight of fish being unloaded. Stuff like that.

Why this matters - if it's true - is because a lot was made of this in public consultations, and also with shareholders.

Back in the days of the ARC (Auckland Regional Council) we were briefed by Sea + City (precursor to Waterfront Development Agency). On the 11th of May 2009 we (Councillors) received a briefing from Sea + City's CEO about Wynyard Quarter redevelopment. These slides are from that presentation.

It was argued that a "key ingredient for success", was to foster real engagement with authentic maritime experiences....

The urban designers were big on reminding us that fishing nets and floats (their colour and texture) and all they stood for were important. (Maybe that could just be about paint....but I think there was more to it than that....)

This image told a strong story. Fish being sold, available, right there. At the waters edge....

And this diagram emphasised that these would be Real Fishing Boats. (ie not cardboard cut-outs or some other plastic imitation.) We're talking real.

The vision for Jellicoe Harbour was spelled out in this picture: no mucking about. No if's, but's or maybe's. PUBLIC FISH SALES. Maybe I'm too literal. But I think this image, and the words and slides before it, tell a very strong story, which we all bought into. Authenticity. We supported it. ARC supported it.

This slide adds more colour.

And this one does a good job of explaining how the different uses and activities would co-exist. How the reality of the transport needs of fishing boats loading and unloading on North Wharf would be provided for. So that's what we want to see down there. It's what we voted. It's also what the public said they wanted when we consulted them.