Distopian urban vision – Part One. National, Labour and Greens (NLG) are trashing affordability.
Comments on my previous article assume I am a dinosaur and have no idea about the future of cities; and there is no alternative to what the three headed political hydra dictates. So I reply.
I fully support densification of our cities, getting people back living in our central cities and along transport routes. Up zoning, to allow higher buildings is essential. This may be into mid-rises (5 to 12 stories – cost effective to build and houses lots of people – but there are issues about if people want that and is it good for them) or low rises but that may create another densification problem in the not too distant future. We can’t ruin more farmland with greenfield developmnents. And most importantly of all, I want ‘affordable’ housing in well designed, nice to live in neighbourhoods, in nice cities.
All this central city living will adapt people to not need or use cars, we get less congestion, less infrastrure costs pipes/schools/community facilities etc as when building in greenfields, less cost to build roads, less carbon used so we would be actively dealing with climate change; a core challenge our society is facing. And with less imports of costly oil we would be wealthier and healthier.
And I welcome new buildings being able to be well designed for all users especially those with special needs. I love the ideas of cities being people friendly for walking and biking like many cities in Europe. I do not have a car so I’m a full on public transport user or walker (too dangerous to bike) so this all 100% suits me and I enthusiastically support all the above.
But the National/Labour/Greens (NLG) law changes – zoning changes and Resource Management Act removing objections rights – will do nothing to deliver affordable housing or liveability. The purpose of changes is to stimulate the private market to build because we have an affordable housing crisis. But history shows a maximise profit ethos can’t deliver affordable housing. The market fails to deliver affordable housing or we wouldn’t have a crisis. I’ve previously linked to the acadmic research paper about Brisbane ‘We Zoned for density and got higher house prices: Supply and price effects of upzoning over 20 Years’. This shows affordable housing can’t be delivered by zoning and bully building law changes with an assumption more ‘supply’ brings lower prices.
Only government contracting to build has a histroy of making affordable housing. Governent aren’t out there looking to maximise profit; so that means lower mortgages or rents, which leaves more money in the domestic economy to stimulate other businesses.
And even with the current market going down the prices are still not affordable. Also first home buyers won’t pick up these ‘lower’ prices because the law changes are creating a maximise profit bonanza for developers to buy houses at a low price and then to ‘build to rent’ (rent for life). This ‘build to rent’ model is a massive tax give-away to larger developers where they get interest deductability for tax. And they will get relatively wealthy middle class people to pay high rents because those people now can’t afford to buy a house.
This highly profititable ‘build to rent’ (rent for life) model will suck huge amounts of our scare investment capital into this non-productive sector (housing) and New Zealand can’t get rich by selling housing to each other. This scare investment capital needs to go to productive export orientated sectors which are starved of capital.
The laws on ‘build to rent’ put no guidance on pricing rents to make sure they are affordable because, that will be hard to do. Market can do that?? This unleashing of the private sector is a classic National party approach to problems. Labour/Greens terrifed of the difficult to solve affordable housing crisis want to be on board with National believing they then won’t be blamed for the problem. Some people still believe in the tooth fairy. This is a weak fear driven strategy without economic insight.
This approach can’t fix the afforable housing crisis as new builds are not cheap. (They are also very carbon intensive, and to be cheaper – full of plastic). And the cost of buildng is compounded by stimulating the building market, as this will soak up scarce building resources (people and materials) which will drive up prices to build reducing the chances of housing being affordable.
Also investment demand for housing is still high (rentals are good income) and that drives up housing prices, and that means high mortgages, and that high cost is simply passed onto renters. There must be a reduction in investor demand to lower prices – removing interest deductability (I certainly pushed that) was an excellent move to stop investor demand but returning interest deducabiltiy to the ‘build to rent’ model simply redirects existing investment into that model leaving existing housing still subject to investment forces that push prices higher.
The correct and urgent strategy for Labour and the Greens is to distinguish themselves from National by rolling back the interest deductibity tax breaks for ‘build to rent’. Removing the zoning changes that allow private developers to bully build to 3 or 6 or 12 levels in our residential areas. Doing this will take all the heat and economic distortion out of the build market. Private developers or investors will pull back leaving build resources free to work on government Kainga Ora build contracts to actually build affordable housing. That releases the private investment capital that was going to be put into housing to be ‘available’ for investment in the productive economy, where it should be.
With less competition for building materials/people, build costs to government should be lower and with resources focused the affordable housing crisis can be dealt with more quickly. And government purchasing of existing housing can fix the crisis even quicker e.g. a scheme for housing investors to trade in a rental property for a long term govt financial instrument paying a good rate of interest while repaying capital and interest over a set period (in the same way an investor would get rental payments; because investors want income to live). Or even move into the reverse mortgage market to try and drive out the current vultures in that business. Government will guide the above investment by borrowing. If government holds the mortgages, e.g. through Kiwibank, the books of account won’t look too bad for the borrowing.
The fact that government has not done any of his reflects not only the scared lacking in vision politicians of these three parties but more importantly it reflects extremenly poorly on our mandarins, economists and commentators who our politicians rely on for ‘moral economic’ support. This is the core problem in our economy – the subservience and indoctrination of our economic advisors to neo-liberal market driven solutions. Almost everyone of them blinkered and holding our economy back.
Why did the government axe apprenticeships? The 20 or so years of trades training limbo versus ‘hospitality’ and I.T. courses in preparation for the virtual slave economy has left the houses, the roads, the Cook Straight ferries and everything else needing practical attention in tatters.
Sadly @ Stephen, this is a timely reminder of the results of what you aptly describe as ‘bully building’.
The old Westpac office in Adelaide Road which workers next door used to describe as little more than a flop house at times – a mixture of good and bad.
Questions – so many questions:
Why weren’t alarms heard or taken seriously?
Why were there no sprinklers in a 90 room boarding house?
Was there a resident caretaker there at all times considering its size and occupants’ circumstances?
How often were inspections by Council and the Ministry for Everything MBIE?
Were the ceiling tiles fire resistant – especially in the absence of sprinklers ?
Why no proper fire escape routes that residents were aware of (if any)
etc., etc.
The inquiry will be interesting.
Like you, I’m all for PROPERLY constructed SAFE apartments and accommodation spaces on public transport routes (such as Adelaide Road, above businesses – air space above is usually wasted).
As you know, youthful Councillors and staff with not much life experience want to ‘bully build’. Knocking down what they describe as heritage houses – many of which are in far better condition than some of the new builds. You’ll be aware of double glazed, double insulated heritage houses (such as the 130 plus yo
house I live in) not too far from a flock of abominations that required a rebuild after only a few years of their construction. An appreciation of heritage and history could have made them aware of various failings over the years (such as the Ballantynes Fire and others).
The neoliberal agenda makes it more important for ‘officials’ to prioritise risk and embarassment to business and officialdom than it does to people’s welfare and well being.
It’s going to take a while and a lot of waffle for that to change.
Actually, the recent media announcements from Council (such as Loafer Lodge having been inspected “earlier this year”) raise even MORE questions. Especially with regard to the penultimate paragraph above.
Property investors with multiple ‘JUST UP to SPEC and NO MORE’ properties around the place, with the attitude that they’re doing people a favour for providing accommodation.
-NO sprinklers for example when those involved have, or have had interests in a fucking plumbing business.
-Asbestos
What did the Council inspection entail. I’ll put money on it being a clipboard box ticking exercise, and if and when there were aspects that were a ‘fail’, there’d be several weeks in which they were given to comply.
Gregory Bruce Mein though, is by no means the worst of them AND there are quite a few that are better than this.
We should keep a watch on the Terms of Reference for the inquiry. Hopefully there are a few people shitting themselves
“I fully support densification of our cities, getting people back living in our central cities and along transport routes.”
But what happens if the rest of us don’t? You sound an awful lot like one of those pointy-headed urban planners who think they know what’s best for us all.
This country has a population density that is approximately one twelfth of the UK and certainly around the north of Auckland, there are vast tract of heavy clay, hilly land unsuitable for anything more than pony clubs, lifestyle blocks and … suburbs. However, I do support living near work where practical, so instead of moving people to the work how’s about easing the currently absurd zoning regulations in order to move work closer to the suburbs?
Lastly, it may be that central business districts are dinosaurs. It’s become evident that once businesses were forced to allow people to work from home during lockdowns, they’ve found it as productive as working in an office. I would guess that about half the traffic into the CBD still hasn’t returned. Now that everyone has got the hang of video conferencing and business software is able to securely operate from a remote laptop, how often does one need to commute?
As an example of how things should be done: I retired the year before Covid, and my last major project was a glass works expansion in Vietnam. I was the design verifier here in Auckland, the design team were in Melbourne, Sydney and Brisbane and the drafting contractors were in India. Only one guy went to site. He 3D scanned the site and took a bunch of photos. If engineers can manage design of a complex ‘brownfield’ factory expansion remotely, accountants and lawyers really have no excuse!
The first step is to end the immediate housing crisis, for which around 160,000 new homes are required (to at least eradicate homelessness and overcrowding, after which you can begin to restart slum clearance).
For $135m, Broad Group Co. of Hunan, China can construct a 57-storey pre-fabricated apartment block (950 apartments, 17 atriums), assembled within 20 days. (Working around the clock, with 1,200 workers, weather permitting.)
The government could find large foreign investors (e.g. $25Bn, for 170 new tower blocks), and guarantee they will receive rental income from new government tenants. And perhaps tax breaks.
Part of this money could then be used to purchase large tracts of cheap vacant land, via compulsory acquisition, outside the city limits (e.g. 12,000 acres, for ten new towns of 17 tower blocks each).
If the government could find 40 foreign factories able to produce the prefabricated modules, the parts for all 170 tower blocks would be shipped within around 22 months.
That would eradicate homelessness and overcrowding within two years, assuming global supply chains could keep up. Once there was a surplus, this process could be repeated to undertake slum clearance: demolish and rebuild entire suburbs all at once.
But the real estate lobbyists would try to overthrow any government that attempted this.
You’re on to something there!
Before kiwibuild turned into a fiasco a friend was involved in the planning for the delivery of complete prefab homes from a factory in Vietnam. BRANZ and government inspectors had gone over to the factory and approved the quality and price in principle.
However it turned out that the bottleneck in the provision of new homes was local government refusing to zone land: Nothing at all to do with building!
Even 5 to 12 stories is too much, result is alienated occupants, not quality neighbourhoods.
There is also a cultural aspect. There is (sadly or luckily?) no chance of us living in Mediteranean closely knit neighbourhood.
Relatively low housing density is still something NZ can offer as advantage, offsetting negatives of geographical isolation.
“Auckland über Alles” is just wrong.
20….30 Billion in-wasted in glorified tram would be wiser spent on regional hospitals, education, universal dental care etc.