Without extensive upgrading of public infrastructure, the flooding we have seen in Auckland will continue. Photo / Supplied
OPINION:
“Ay, there’s the rub”. This phrase, from Shakespeare’s Hamlet, describes a setback or impediment. It’s a phrase said to have originated from the ancient game of boules, where it’s used to describe a flaw in the playing surface that interferes with the ball’s progress towards its mark. Our mark in this case is developing significantly more housing to house an increasing population and doing so in areas where residents can affordably and equitably access social and civic services, education and employment opportunities.
In theory, “building up” and “building out” should both be possible. The value proposition of an integrated intensified urban form is well understood. The reality is, however, less simple. There are issues with both up and out. In Tāmaki Makaurau Auckland, planning tools like the Rural Urban Boundary (RUB), the soon-to-be-consulted Future Development Strategy and new development contribution rules are leading to perverse outcomes some say reduce the likelihood of new housing, and increase the price of it and of infrastructure.
Those working to get housing developments across the line report modelling on the potential of existing residential brownfield zones has historically overestimated its latent potential, because of assumptions about capacity and conversion that are just not warranted.
The first assumption on capacity is we can simply intensify a standard quarter-acre block. However, the rules around impervious areas and the constraints of the existing stormwater and wastewater infrastructure mean a brownfields intensification is not always as simple as it might seem.
It may be possible to accommodate and absorb the needs of the first few developers, but after those first lucky few, intensification at the scale required rapidly outstrips the capacity of the existing infrastructure.
Greening up, rain gardens and the like incorporated within well-sited developments and more thoughtful public realm development (trees and planting schemes) may help, but the existing water and wastewater constraints still operate as a brake on development (demand management is the only lever there). Without extensive upgrading of public infrastructure, the flooding we have seen in Auckland will continue.
And it’s expensive and complex to install new pipes in such areas. The cost of putting in new pipes — some suggest more than four times the cost of putting new pipes in new developments — rests with the public sector and is not fully recouped via recovered development contributions in these areas (Watercare assesses Development Contributions as contributing only 11 per cent of the cost of new development.) It’s hard too for all utilities to assess when and where infill development will occur, putting them constantly in catch-up mode.
The second capacity assumption is the scale of intensification that can be achieved. Developers in Auckland report that the way in which PC78 (Plan Change 78 — the council’s response to the National Policy Statement on urban development) is drafted means it is actually more likely to yield three dwellings per site (and may be limited to certain typologies) than the projected latent capacity of five many had touted. This is because of the raft of rules and restrictions that need to be considered.
The council’s models also have not historically taken into account the fact that not all theoretically developable sites will be intensified. Some developers call this the conversion factor — whether the business case for development stacks up. That is currently more difficult than ever to achieve with neither the current cost of capital (for developers and future homeowners) nor the prudential controls in play assisting. And that’s before we even factor in nimbyism.
Transport further complicates the picture. All things being equal, better transport and housing intensification are mutually supportive. The trick is where to start. Some thought it would be the removal of private parking requirements. In theory, this should drive residents towards other transport options and deliver more square metreage, thereby optimising site utilisation. However, the lack of viable public transport and active transport options mean many remain heavily reliant on their cars. Anecdotally, the removal of on-lot parking requirements seems to have pushed private vehicles into the public realm, in turn making walking and cycling more difficult and clogging our already congested streets.
Intensifying on small brownfield sites also has a tendency to attract small builders/developers with (generally speaking) smaller areas of influence, making it harder to achieve cohesive, well-considered urban design outcomes overall.
Building out is also not without its complications. Land prices are cheaper as you go out, but this is reflective of transport and infrastructure availability and costs.
Theoretically, the infrastructure should be installed before or at the same time as development occurs. And then there’s a question from some on who is paying for what.
Is the spend required to service greenfield infrastructure overstated when one bears in mind the reality that the council doesn’t pay for infrastructure within a greenfield development, only for the “trunk” infrastructure that feeds it?
Also, main arterial roads/motorways and rail upgrades are mostly funded by central government, aren’t they?
Add to that proposed changes to the development contribution rules, designed to disincentivise greenfield development because of the (flawed) assumption that housing needs can be met almost exclusively from an up, rather than out, policy.
This new policy is said to be designed to help ensure developers share (and pass on to homeowners) the cost of council investment in infrastructure. In more recent policy, that contribution is being revised by reference to a 30-year period of infrastructure need, rather than the previously, widely accepted, 10-year period (which corresponds with long-term plans).
There’s no discounting for the time value of money or apparent consideration of cross-generational subsidisation, so the council is keeping increasing the cost of development, which will inevitably be paid for by the customer, a future ratepayer.
Those developing the trunk infrastructure, so say the development community, would be better to purchase or requisition the corridors required now (by using their Public Works Act and other powers).
Failure to do so early means by the time they do purchase the necessary land the price of that land has increased significantly, increasing the overall cost of infrastructure delivery and reducing the ability to extract value from any pre-purchased corridor.
To further complicate the entire debate on up or out, Auckland Council has sought, and been granted, a right to pause (for one year) the Plan Change 78 process while it completely revisits and investigates the underlying causes of stormwater and natural hazard concerns arising out of the recent weather events.
The suspicion is the consequence of this review will be even less intensification (i.e. less housing) allowed for in existing residential zones.
Until the outcome of this review and the Future Development strategy process plays out, it is impossible to know whether rural-urban boundaries should change and new areas should be released for urban development.
Blanket expansion of the rural-urban boundary can lead to poor outcomes, but with the right planning can deliver high-quality integrated outcomes (infrastructure and housing) at more affordable price points. It certainly has an ongoing role to play alongside brownfield. The trick is the mix.
There’s the rub.
For more than 20 years, Adrienne Miller has worked as an adviser and executive in and around construction and infrastructure: working in waste (WMNZ), building products (CHH), construction companies (Downer and Fletcher), a public sector water utility (Watercare) and consulting (private practice and her own boutique consulting firm, Cupola).
As well as her executive roles, she writes and speaks on industry issues. She is serving her second term on the Building Advisory Panel at MBIE and is a trustee on the Board of Diversity Works New Zealand (in which capacity she chaired the project Steering Committee for the Construction Diversity Roadmap, a Construction Sector Accord project) and was recently appointed as a member of the Infrastructure Industry Reference Group for the Construction Sector Accord.
· Adrienne Miller is CEO at the Urban Development Institute of New Zealand (UDINZ).
Act MP Simon Court is looking at how the PPP framework can be improved.