Is Christchurch the model for affordable housing in New Zealand?

In Feb. 23, 2011 Murray, left, and Kelly James look at their destroyed house in central Christchurch, New Zealand, a day after a deadly earthquake.

When New Zealand’s Prime Minister is questioned about the country's housing crisis he frequently tries to avoid answering the question or reframes the answer to one of it being a problem of success. But when really pushed, liked in the extended interview on the TV show The Nation, Bill English gives a set of answers which indicates he thinks Christchurch is the successful model to follow for New Zealand’s urban development.

Greater Christchurch is New Zealand’s second largest city. It has an estimated population of 375,000 in the city and 110,000 in the surrounding districts of Selwyn and Waimakariri. Greater Christchurch is recovering from a series of serious earthquakes in 2010 and 2011.

Specifically, the following answers are what Bill English uses to explain to the public his thinking about New Zealand’s housing crisis;

• “It is difficult to estimate the size of the housing shortage but the answer to New Zealand’s housing shortage (which is not a crisis or a shortage of a knowable size) is to build more houses.”
• “Local government should respond to price signals. When house and land values rise Councils should rezone more land residential.” Bill English is alluding to, but not explaining the little known and rather bureaucratic RMA-UDC, created last year by Nick Smith, Minister for Building and Construction. The RMA-UDC is a not very transparent way of directing local government to incrementally rezone more land.
• “That local government should approach central government if it has infrastructure constraints, as the government has a $1 billion fund to be used where local government can demonstrate that it needs additional funds to open up new housing supply.” The problem is that the fund is not a grant -it is only a low interest loan -so it is only of marginal benefit to local government. Also $1 billion doesn’t go very far when Auckland alone has a infrastructure deficit in the tens of $billions. Further, because the fund is specifically set up to dish out funding on a case by case basis, participating towns and cities do not have the opportunity to have a discussion about how to implement an overall vision or strategy for their built environment. It is possible that this sort of short-term piecemeal approach may in fact be more expensive over the long-term.
• “That Christchurch demonstrates that when enough houses are built then a housing shortage gets eliminated causing rents to drop back and house prices to stabilise, which has occurred in Christchurch, in 2017.”

So should the towns and cities in New Zealand suffering from the housing crisis look to Christchurch as a model that they can copy?

Maybe?

Many houses damaged in Christchurch’s earthquakes could not be repaired on site because the underlying land was geologically unstable -some land like in the above picture unless extensively engineered is prone to liquefaction in any future earthquake event.

The Christchurch experience was a demand shock to the residential housing market. Two earthquakes in Sept 2010 and February 2011 caused major damage to the city’s housing stock. Further there were some quite significant aftershocks in the rest of 2011 and going into 2012 which caused more damage and delays to the rebuild. Following this demand shock there was a supply response. Ministry of Business, Innovation and Employment (MBIE) modelling in October 2015, estimated the size of Christchurch’s housing shortage and predicted this shortage would be eliminated by 2017. This has turned out to be broadly true.

The “shortage of households” in the June 2015 quarter was 8000, compared with 10,000 the year before. The figure did not mean that 8000 households were homeless, but rather that those people had been “absorbed into the existing housing stock in some way”, the report said. Half of the new dwellings built in the greater Christchurch area since the 2010 and 2011 earthquakes were in the Waimakariri and Selwyn districts.

Rolleston in Selwyn is a satellite town of Christchurch (distant background). Townships like this in Selwyn and Waimakariri provided half the new houses for Greater Christchurch since the 2010 and 2011 earthquakes.

House building rates in Canterbury increased from 2012 to 2015 with consents outstripping the rest of the country. By the year to June 2016, Canterbury had the highest level of new homes consented per capita in the country. According to Statistics New Zealand, 11 new homes were consented for every 1000 Canterbury residents.

The next highest number of consents per capita were Bay of Plenty and Waikato, tied at eight consents per 1000 residents. Auckland was tied with Northland for the lowest number per capita, with six homes consented per thousand residents. The national average was also six -double what it was in 2011 (the bottom of the post GFC construction slump).

The house building rate per capita in New Zealand has returned to historic norms for the post 1978 period of around 5 to 6 houses per 1000 residents, following a post GFC construction slump during the period 2009 to 2013.

Unfortunately the population boom is larger than the building boom. The above graph shows the increase in the number of dwellings per increase in the population -thus, 0.4 means one new dwelling added for each additional 2.5 people. The average house occupancy rate in New Zealand is 2.7 people per house or 0.37 houses per person. When the house build rate dips below this 0.37 rate, like it has since 2013, it indicates the average occupancy rate is rising -i.e. overcrowding in housing is increasing.

Unfortunately for Bill English international experts are beginning to pick up on the fact that the house building rate is not keeping up with the immigration boom. They are not buying his carefully constructed set of housing answers and they are suggesting the voting public may not either.

Problems with applying the Christchurch model to the rest of New Zealand

Firstly, the demand shock to Christchurch’s residential housing market was a short series of one-off events.

Fortunately for Canterbury the earthquakes which destroyed so much housing did stop. For the rest of the country the demand shock hasn’t stopped.

Immigration induced housing demand is increasing not decreasing. Each month New Zealand is experiencing new records in the numbers of people coming to the country. The immigration boom has yet to peak, each month we are seeing a higher figure. Population growth is faster now than New Zealand has experienced at any time in the last 40 years -hence why New Zealand needs a higher build rate than what it has delivered for the last 40 years.

New Zealand’s population grew by 97,300, or 2.1 percent, in the year ended June 2016…. This is the largest annual increase ever. New Zealand’s estimated resident population was 4.69 million at 30 June 2016. “Annual population growth over 2 percent is high by New Zealand standards,” said population statistics senior manager Jo-Anne Skinner. “The last time we experienced population growth over 2 percent was in 1974. And before that, at the peak of the baby boom in the 1950s and early 1960s.”

In simple terms the rate at which New Zealand is building new houses is not keeping up with this increased rate of population growth.

So perhaps the lesson from Christchurch is not to build more houses but rather to stop the demand shock? Maybe New Zealand should reconsider its immigration settings or adopt a population target which would allow the country to better plan for where it is heading with respect to population and infrastructure?

Secondly, the Christchurch house building model is very much weighted to car dependent peripheral urban development. Which I am not sure the rest of country wants. In fact, I am not sure Canterbury wants it either.

Christchurch being overweighted in the direction of peripheral development has been true for at least the last 20 years, as can be seen in the graph showing the slower population growth for Christchurch city in comparison to the neighbouring districts of Waimakariri and Selwyn.

Christchurch is surrounded by a green belt of privately owned farmland where residential development is refused zoning permission. Selwyn is to west of Christchurch and Waimakariri to the north. The green belt has failed to contain urban development within Christchurch as can be seen by 20 years of lower population growth for the city compared to the surrounding districts.

Urban development plan for Greater Christchurch as initiated by Gerry Brownlee. Note the large number of sections in Selwyn -Lincoln, Rolleston, Prebbleton and West Melton is as large as in Southern Christchurch. To the North of Christchurch sections in Waimakariri -Kaiapoi, Tuahiwi, Pegasus and Rangiora are almost as great as in Northern Christchurch.

Greater Christchurch’s existing pattern of extreme peripheral growth has been doubled down on by Gerry Brownlee -the Earthquake Recovery Minister, who has advocated for the pictured urban development -Land Use Recovery plan -with its abundant sections for new housing in a variety of peripheral townships and its relatively restricted options within Christchurch city itself.

Red roads are existing state highways, dark blue lines are current upgrades to the Western and Southern road corridors and the light blue lines are future upgrades to the Northern and Southern road corridors. On none of these corridors is there set aside land for future busways for a rapid transit network. The black line is the train track corridor -only used for freight -no plans currently to upgrade this to passenger rail.

Steven Joyce back in 2008 with his Roads of National Significance plan, also contributed to this extreme peripheral growth plan by laying out a network of expressways and motorways. In others words a roads only urban development network for Greater Christchurch.

This road network has been sold as facilitating access to the port of Lyttelton. Which may well be how Steven Joyce sees it -he supports those who have a particular view of Christchurch being a rural market town not a commercial city.

Steven Joyce’s Christchurch appointee to the powerful national body -the New Zealand Transport Authority is Gill Cox who a few years ago set up the Committee of Canterbury to advocate for Christchurch to be a rural market town.

“Christchurch is a market town,” says Cox simply. “Christchurch would struggle even to have a reason for being if Canterbury were not there. The economic driver is not the city but the region.” This is why it ended up as the Committee for Canterbury rather than the Committee for Christchurch, he says. The divergence from the “committee for” movement’s city-based template was quite deliberate.

In my opinion this approach risks missing city-based opportunities for economic growth.

Regardless of the opinion of decision makers, on the ground there are tens of thousands of households in Waimakariri and Selwyn that are not there for rural reasons. They are part of a greater city. These residents want to engage with the city and with the current planning and infrastructure setup the only feasible option for how they can do this, is by traveling by automobile. They have no other transport choices and affordable housing closer to the city is not available.

This urban development approach will increasingly direct at highway speeds tens of thousands of cars at the heart of Christchurch. It is a recipe for road congestion in Christchurch and the dominance of the built environment by the all powerful automobile, which by its speed, mass and the vast amount of public space it consumes -both driving and parking will mean other transport options like cycling will be further inhibited.

Ideas were shared at a two-day Community Expo, online, by leaving a message, filling out a questionnaire, posting a letter and there were more than 100 meetings involving 1000 people in May 2011. The result: 106,000 ideas from the Christchurch community .

It is unlikely this Greater Christchurch plan will produce the kind of city which residents have expressed they want in the Share-an-Idea campaign. The most extensive community engagement exercise undertaken since the earthquakes to gauge what Christchurch residents want from their city.

There is this real fear that Christchurch is not getting the city it dreamed of, that the rebuild lacks the fine grain, people centred development that it hoped for. The narrator, in the following short video expresses similar fears to that which I tried to articulate in 2015, with my case study of how New Zealand’s government approached urban development in post earthquakes Christchurch. $1 billion Fletcher/Crown housing development -Christchurch CBD.

Amongst all this change and earthquake rebuilding Christchurch’s older transport and built environment legacy is fading into memory.

On 14 February 1929, the electrified line between Lyttelton and Christchurch was opened using a 1.5 kV DC system, with an electrical substation at Woolston. This was originally intended to be the first stage of a larger plan for Christchurch passenger services. But Christchurch’s commuter rail network was gradually disbanded through the post WW2 period.

Urban growth in Christchurch in part followed tramlines pre WW2

Colombo Street in Central Christchurch in the 1910’s. Photo taken from page 260, from the book “The Big Smoke -New Zealand Cities 1840 -1920” by Ben Schrader

Christchurch 1937 — Cnr High and Hereford Streets. In this period Christchurch was known as a southern hemisphere mecca for cycling.

What are New Zealand’s options for building affordable and liveable cities?

In my opinion a city’s built environment is a reflection of what is easy to build. Not what is hard to do. Cities respond better to carrots than to sticks. Christchurch’s green belt for instance as a policy to create a compact more liveable city has failed. But that does not mean that cities do not have a variety of constructive and less constructive choices available to them. Such as;

1. Make it easy to build roads and motorways and easy to build cul-de-sac subdivisions of large expensive 4 bedroom houses with double garages, such that a city grows to being a very spread out and automobile dependent environment.
2. Or make it easy to build new communities around expanding rapid transit networks. Residents in these sort of cities have a choice of mobility and residence options. Double garage properties with large driveways are not in so much demand, residents close to rapid transit hubs are willing to choose more compact properties. These collective decisions create a different sort of amenity value -walkable, dense neighbourhoods supporting more commercial and retail activity.
3. A city can make it easy to build additional houses within the built environment, by removing restrictions on denser development. Then a city will grow up as well as out.
4. If none of the above is easy, if a city has a culture restricting new builds within the existing urban area (NIMBYism -’Not in my backyard’) and a culture of restricting new builds on the periphery (BANANA -Build absolutely nothing anywhere near anything). Then a city will have expensive housing and decent homes will be rationed away from the poorest and most vulnerable members of society. New residents will be discouraged from living in the city -some will leapfrog to neighbouring districts, but many will give up completely on the city, moving elsewhere in the country or even offshore. For New Zealanders, when employment conditions are good, they are especially prone to migrating to Australia where they have a right to work. Note according to the Australian census, the largest New Zealand-born community in Australia is in the state of Queensland, with 192,037 people. In 2013, there were about 650,000 New Zealand citizens living in Australia.

I think the first option most accurately describes Christchurch, although at times we flirt with option number four.

Option number one is very much the Auckland post WW2 choice, in this period Auckland chose not to use and expand on its existing train and tram networks, as a framework for providing transport for the expanding city. It built many motorways and its ‘urban sprawl’ was characterised by cul-de-sac neighbourhoods and car dependency. In recent times, Auckland has gone through a process of retrofitting a rapid transit network and trying to promote more densification growth. This is not only expensive to do ‘after the fact’, it is also difficult because Auckland’s early growth period had a streetscape of only 72 intersections per square km. Well under the recommended 100. Such cities are considered;

weakly planned cities, without proper quantities of public space and lack of streets to connect the different parts of the city. That generates a very irregular block pattern and plotting which reduces the potential for a prosperous urban economy. The distances between crossings tend to be very long, which reduces street life, urban intensity and mobility -and facilitates congestion.

Some people in the affordable housing community -such as Joel Kotkin who is an author who promotes suburbs argues that option number one is the only one which can be done affordably. Arguing all the other options will be unaffordable. I think the likes of Joel Kotkin represents a kind of unhelpful culture war about the built environment. I write about that in my article, “For the young freedom means a smartphone not an automobile”.

No doubt that New Zealand’s Prime Minister -Bill English would like New Zealanders to also think that option number one -which is what his government provides -is the only option. But it isn’t true. There is plenty of evidence that a balance of options one, two and three can also achieve desirable social outcomes such as affordable housing, greater choice, better environmental outcomes, a more diversified, dynamic and finer grained, liveable city.

Places in Asia like -Tokyo have achieved affordability combined with an impressive amount of intensification. In Europe -Germany has a good degree of housing affordability and as many kiwis who have lived there during their OE can attest -many new European housing areas are arranged around public transport and cycling.

Brisbane although not particularly affordable by international standards, provides a better package of affordable housing and fast, convenient access to a dynamic city. Duncan Garner a New Zealand journalist last year discussed his visit to Brisbane where he saw kiwis buy family homes for between $400,000 and $500,000 in places where you can travel to the city centre in 30 minutes by car or train.

In Christchurch, unlike Auckland we can match Brisbane’s house prices in the satellite towns of Selwyn and Waimakariri. What we can’t match is the ability to access a dynamic city in 30 minutes from these affordable locations. It takes between 40 and 60 minutes by car depending on congestion to get into the heart of Christchurch from the various satellite towns of Greater Christchurch and there is no rapid transit service provided.

Duncan was mainly directed his criticism at Auckland, because of its high price of housing but I think the criticism applies equally to Christchurch due to its lack of choice of fast, convenent transport infrastructure.

We are bloody idiots. With houses must come transport links. We have been let down. Our councils and Government need to build roads, trains and bus lanes to these subdivisions. Not in ten years, Now.

So in summary is Christchurch the model for affordable housing for New Zealand? Well there are some lessons to be learnt from Christchurch’s rebuild but overall there are significant flaws in the model, so the answer would have to be no from me.