Downsizing Auckland’s Unitary Plan
Auckland’s new urban plan is already failing. History indicates renegotiating a new plan will be tough. Nevertheless a new plan will be needed to satisfy public expectations.
Auckland in 2016 agreed on a new urban plan for the city called the Unitary Plan. It was a hard fought battle of competing interests. In particular, leafy suburb types argued for nothing to change while representatives of a younger cohort wanted rules around building new housing in existing suburbs to be eased.
The painfulness in negotiating this urban plan is perhaps best captured by the following satirical comedy podcast based on an actual Auckland Council Unitary Plan meeting.
Given the difficulty in negotiating the Unitary Plan it is unfortunate that the plan has already lost 25% of its total zoned capacity and 50% of its up-zoned capacity. This was modelled for the National Policy Statement -Urban Development Capacity requirement, which uses a commercially feasibility snapshot or point in time modelling technique -the same technique which estimated the feasible dwelling supply from the Unitary Plan in 2016.
In just one year, from 2016 to 2017 the estimated new dwelling supply fell from 422,000 down to 336,000. Even worse, this fall was concentrated on intensification developmental supply, which fell from 270,000 down to 140,000.
Demand for housing over the next thirty years in Auckland is estimated to be between 350,000 and 410,000 additional households. So the reduction in the assessed feasible capacity resulting from the Unitary Plan means estimated supply is not enough to satisfy estimated demand.
These figures are from the below report.
Executive summary
2. The National Policy Statement on Urban Development Capacity (NPS-UDC) became operative in 2016. The policy requires the council to undertake a housing and business development capacity assessment (the assessment) by 31 December 2017.
3. The assessment is a key part of council’s evidence base. It informs the future development strategy and the feasibility targets which are to be included in the Unitary Plan. These requirements need to be completed by 31 December 2018.
4. Overall housing demand is assessed to be between 350,000 (Statistics NZ medium population forecast) and 410,000 (Statistics NZ high population forecast) households from 2016 to 2046:
· Plan-enabled capacity in residential zones in the urban area ranges between 120,000 (infill) and 1.07 million (redevelopment).
· Feasible development capacity in the urban areas is 140,000 residential dwellings
· Feasible development capacity in the future urban areas is 146,000 residential dwellings
· When including rural capacity of around 20,000 (not modelled) and redevelopment of Housing New Zealand land of around 30,000 (still being confirmed), total assumed feasible development capacity is around 336,000 throughout the region
5. The enabled feasible capacity for dwelling supply, as modelled for the 2016 draft Unitary Plan recommended by the Independent Hearings Panel, was for approximately 422,000 — being 270,000 (modelled) in brownfield existing urban areas and 130,000 (assumed feasible) in future urban areas, with the remainder being potential Housing NZ developments and future dwelling growth in rural-zoned areas. The new modelling shows, principally due to rising construction costs and flat to declining sales prices, that the brownfield enabled feasible capacity of 270,000 has since reduced to 140,000; and that the future urban feasible enabled capacity has changed slightly as it is now modelled, from 130,000 to 146,000 dwellings.
Bearing in mind the housing promises that both the Auckland Council and the New Zealand government have made, the reduction in the feasible capacity of the Unitary Plan below demand estimates cannot be ignored.
When demand for an asset is high and the quantity that can be supplied is inelastic, the result is price is used as an allocation mechanism. This can clearly be seen in Auckland with a growing homelessness problem and many employers -such as schools -not being able to attract staff due to the high cost of housing. These sort of issues made housing in both local Auckland council and national elections a key issue of public concern.
Taking into account that the Unitary Plan has not delivered affordable housing and now is officially confirmed as not expected to deliver, further reforms to housing supply and urban planning for Auckland will be necessary.
Yet many journalists treat the Unitary Plan’s 422,000 housing supply figure as a permanent given -they do not understand it was a provisional estimation, based on particular conditions, such as construction costs relative to sale prices, at a particular point in time (See the article -How to make rent cheaper for further discussion about how added costs affect developmental decisions and therefore its effect on prices and rents).
For example, a recent newspaper article on the pressure urban sprawl is placing on Auckland’s southern elite soils, quotes the 422,000 figure. The journalist didn’t realise that this figure is already out of date, meaning if nothing is done to make intensification easier, there will be even greater pressure on outward expansion into elite soil areas.
Another example was Rod Oram from Newsroom arguing the new Minister of Housing, Transport and Urban Development -Phil Twyford -housing reforms are an illusionary pot of gold. Because the Unitary plan has already created adequate urban expansion possibilities for Auckland -both up and out. Rod Oram stating;
The government has better things to do with its political capital than to force council and citizens to painfully compromise all over again for the sake of achieving greater density in random places.
It was difficult negotiating the Unitary Plan and it will be difficult re-negotiating it. Not only that, the plan itself was flawed -it didn’t go far enough in addressing issues like infrastructure funding. It will be a big job fixing Auckland’s and New Zealand’s planning, housing and transport woes.
The path of least resistance would be for Auckland Council and the newly elected government to come up with some excuse to kick the housing issue to touch -that is what previous governments have done. But morally that would be wrong. Decent housing is one of life’s necessities. In a prosperous country such as New Zealand, decent housing should be considered a human right.
I hope that New Zealand’s new government and Auckland Council have the political strength to take the hard road of providing genuine housing and urban planning reforms.
My personal opinion is that for housing affordability and environmental reasons New Zealand could learn a lot from Tokyo’s urban development model.
I believe that there needs to be a balanced approach between formal plans and structures and a freedom to develop informally in an organic manner. The following Next City report captures the spirit of this balance in a discussion on how to improve a Buenos Aires slum without destroying its informal structures which already provides many benefits.
Specifically, I think that Auckland in response to the loss of intensification housing supply, the following should be allowed across the whole metropolitan area;
- Reduced section sizes. Even sprawling, car centric cities like Houston have allowed this (and post Hurricane Harvey -some Houston urbanites advocate the city allow even more freedom to intensify), what is so special about Auckland’s leafy suburbs that even if owners want to develop their properties to provide more housing they are not allowed to?
- Mandatory car parking minimums rules should be abolished. How much car parking a private landowner needs should be a decision based on personal preference, it shouldn’t be a government regulated activity. Why should land be expensive for housing but free for car parking?
- Residential dwellings should be able to be built up to at least three stories high and divided into whatever combination of individually sized spaces, to satisfy demand, as of right. This sort of spontaneous incremental growth was how ordinary citizens were able to rebuild Tokyo into the largest metropolitan city post WW2.
- More promotion that neighbouring landowners in New Zealand now have the right to build up to a common firewall if both parties are agreeable.
There is an excellent academic review debunking housing supply skeptic arguments by a trio of US female professors -Vicki Been, Ingrid Gould, Ellen Katherine O’Regan from the NYU Furman Center, NYU Wagner School and NYU School of Law.
Also Professor Vicki Been is extensively quoted in a New York Times article about how
the expectation that homeowners should be able to reach beyond their property lines has become deeply embedded.
Urban planning rules around zoning and land-use being the main method that these expectations have grown (although private sector housing development covenants is another method). These rules are often created with the best of intentions to assist residents to become more invested in their community, but now urban land-use regulations are so extensive they have come at an cost, in the form of unaffordable housing, poor residential mobility and limited access to urban amenities such as employment and business opportunities. These costs are further discussed in my report -Why don’t we have Boomtowns anymore?
