New Zealand’s Rack-Rent Housing Crisis, Part Three: Political Precommitment

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On the basis of a warning from his erstwhile lover, Circes, Ulysses instructs his sailors to bind him to the mast of his ship and block their own ears before sailing past the island of the Sirens, whose enchanting song draws sailors to shipwreck. Ulysses and the Sirens is a 1909 oil painting by Herbert James Draper. Source Wikipedia

The end of the John Key government was marked by a desperate scramble to reverse housing policy settings. Media reports showing homeless families living in cars shocked the nation. As a stop-gap measure, the homeless were housed in motels. The former prime minister was forced to contend with the consequences of his earlier housing attention being focused on middle-income earners and his assumption that building social housing was economic vandalism, when in fact housing as a human right was the political necessity.


New Zealand’s Rack-Rent Housing Crisis, Part Two: Economic Opportunity

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Former Finance Minister Michael Cullen recently wrote an opinion piece on housing and monetary policy. To paraphrase him: the Reserve Bank are the Jedi Knights of the economy with interest-cutting lightsabers fighting against the evil empire of inflation. This worked when the problem was stagflation — high consumer price inflation and poor economic growth — but it is not working now when the problem is poor productivity, rising inequality and high house price inflation.

The Reserve Bank (RBNZ) has rejected Finance Minister Grant Robertson’s proposal for its monetary policy remit to consider house prices as well as its current inflation and employment targets. …


Part One: Political Constraints

“We might make mistakes but we will make other things too”Michael Joseph Savage

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Renting in New Zealand is bad. The bottom 20 per cent of income earners spend a greater proportion of their income on rent than anywhere else in the OECD. For many decades New Zealand’s housing market has failed low-income earners due to rents inflating faster than wages.


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Contents

Executive Summary

Why Adding Multimodal Transport to Urban Land-Use Models is Important

Underlying assumptions of the proposed multi modal land-use model

  • Conceptual images of rapid transit effects on land use

Characteristics of Concentrated Urban Form

Characteristics of Dispersed Urban Form

Factors that help New Zealand make the most from the multi-modal land-use model

  1. Spatial Planning
  2. More Transit Hubs
  3. More Organic Urban Growth
  4. Allocate Scarce City Space More Efficiently
  5. Remove Structural Bias Against Rapid Transit and Multi-Modal Transport
  6. Promote an Urban Design Cultural Movement
  7. Rebalance bias that rewards investing in housing versus other investments
  8. Build Homes for the Full Housing Continuum

Appendix -Sufficient land pricing can pay for rapid…


Philip George Hayward response to the paper High Land Prices: A Feature or a Bug?

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Economist Paul Cheshire found that UK house prices increased after inflation five fold since 1955. But the price of the land needed to put houses on increased 15-fold over the same period. Source

High land prices because of value, is quite different to high land prices because of exploitation of powers to “gouge”.

Your history lesson is instructive as an example of an honorable government providing value; that is, they acted as land vendor in the process of “improving” the land with infrastructure and so on, paying for the improvements with the sale price.

The same is true of some governments at some times and places in history, and also true of private sector operators at some times and places in history. For example, urban growth was often driven in the 1800’s by railway enterprises acquiring land to which they then provided access, and sold or rented at prices that would recover the investment they made. The crucial factor here, in land prices being “of value” rather than exploitative, is competition. As long as there are multiple enterprises obtaining the initially-cheap land on similar terms, and competing for ultimate buyers or renters, the market structure is ideally established for profit to be sought on “volume” rather than monopolistic price-gouging. …


Societal reform is not genuine reform without land-use change

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Edward Gibbon Wakefield’s bust overlooking Wellington from Mount Victoria

The 2.6 kilometer long Lyttelton rail tunnel, built in the 1860s, used to perplex me because I could not understand how a tiny New Zealand province, ten years after European settlement, could afford such a massive project. Researching this puzzle reveals a lot about New Zealand’s land-use policies. It reveals that land value capture mechanisms are an under appreciated part of governance and infrastructure provision. It reveals that a dysfunctional compact between centralisers and localisers is a significant cause of inadequate infrastructure funding in New Zealand. …


Nation-building is back!

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Updated September 2020

The Green Grid has become an election issue. The Labour party have announced they are bringing forward the 100% renewable electricity system commitment five years to 2030 and they will invest a further $70m in detailed design and engineering work on the Onslow pumped hydro scheme based on the findings of the $30m business case that was announced earlier by the government in July.

Judith Collins the opposition leader of the National Party has claimed that the 100% renewable electricity system goal and pumped hydro will increase electricity prices. …


A follow-up post to From Ugly Car Parks into Loved Buildings based on a talk the author and Nick Lovett gave to the Tuesday Club in Christchurch and the feedback from that discussion.

The economic consequences of Covid-19 has put the Christchurch City Council in a seemly impossible situation.

If the Council cuts costs. This will be called a austerity budget that has a disinhibiting effect on the economic recovery. It will counter stimulus spending coming from central government. Government MP’s like Duncan Webb have been quick to publicly warn the Council against this course of action.

Yet CBD businesses are desperate for rates relief. Customers are down -tourists are not coming and many office workers are still working from home. Respected business figures like Richard Peebles are calling on the Council to cut costs and give rates relief to inner-city businesses. …


Christchurch’s earthquake damaged city exposes many underlying urbanism lessons. Minimising land wastage on car parking is one lesson.

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Up to 70% of Christchurch’s CBD buildings were fully or partly demolished as part of the earthquake rebuild. Many became gravel car parks often then leased out to private car carking firms. Photo Source

Christchurch often has local spats that generate more heat than light. The public argument about whether the Council continues to waiver inner-city development contributions is such a spat.

The policy since 2014 has cost the Council $12.9 million in uncharged fees and it has announced a further $7.1 million in funding.

Some have characterised this as “fat council handouts for property developers but austerity for the rest of us”. …


In 1988, at the height of the neo-liberal free market reforming era the MoW was dis-established and privatised. New Zealand may require the spirit of the MoW to be reinvented to recover from its current recession and crises.

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A US government poster from 1940, summarizing the Works Progress Administration’s achievements. This was an American New Deal agency, established in response to the Great Depression. It employed millions of job-seekers to carry out public works projects. Some political activists have called for a Green New Deal to respond to the Covid-19 Recession and the Climate Emergency.

For New Zealand to recover from the Covid-19 Recession will require a stronger expert-led public service to successfully guide the redeployment of the nation’s resources. Whole industries, like hospitality and aviation have sustained a body blow that will permanently change their nature. Sadly, wishful thinking won’t save tourism jobs. A certain amount of economic pain is unavoidable.

A new purpose will need to be found for the rapidly expanding numbers of unemployed. …

About

Brendon Harre

Trying to optimise amenity and affordability values for urban areas

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