Auckland under pressure: How to solve Auckland's transport, housing and water problems

Cyclone Debbie’s trail of destruction this week once again exposed the fragility of New Zealand’s largest city. As unfettered growth clashes with creaking infrastructure, Bernard Orsman asks how we can transform Auckland into a city fit for purpose.

In the past three years, a city the size of Tauranga, or around 120,000 people, landed on Auckland's doorstep.

This being Auckland, a similar number of new vehicles have been registered on the roads, where the average speed on the motorways slowed from 64km/h to 55km/h between 2014 and 2016 and a quarter of the city's main roads are congested at peak times, up from 18 per cent three years ago.

The new residents all need somewhere to live, but with the average home costing about $1 million and the rent for a two-bedroom home now averaging $474, the city's housing crisis is as scary as ever.

If Aucklanders didn't need reminding about the state of the city's creaking infrastructure, the extreme weather in early March led to weeks of shorter showers because the city's main water treatment plant cannot cope with waterlogged soils.

"Until something is done to alleviate the gridlock, no more cars. We should be making it harder to build in Auckland and encouraging new housing in areas where larger populations are needed," Te Atatu resident Geoff Smith said in a letter to the Herald.

Smith's letter was prompted by listening on the radio about the problems preventing building more houses in Auckland while sitting in motorway traffic during a two-hour crawl from Te Atatu to Manurewa.

Multiplied across Auckland, the city's gridlocked roads are estimated to be wasting $3 billion a year in traffic congestion.

To address the long tailbacks, overcrowded buses and trains, the Government and Auckland Council have projected transport spending of $24 billion is needed over the next decade. Billions of dollars more are needed for housing and water.

The Government has said no to Mayor Phil Goff for a regional petrol tax to fund council's share of a $4b funding gap in the transport package, or $400m a year. The parties are meant to address the gap by July, but both say this won't happen. A congestion tax is a likely solution but will take years to set up and implement.

Auckland Mayor Phil Goff talks about his vision for Auckland. Photo / Greg Bowker

Goff says finding ways to pay for the basics so people can have a decent house and get around the city is the number one issue that keeps him awake at night.

"Auckland is a great city to live but its success in attracting unprecedented growth is putting the city's infrastructure under real pressure.

"You can't build infrastructure overnight and you can't build it all unless Government gives you the ability to raise the revenue, Goff said.

He says the $3.4b City Rail Link(CRL) will double rail capacity, but that's six years away. The $1.4b Waterview tunnel motorway connection will open in the next few months, but has taken nine years since getting the green light. Work on a giant $1b "central interceptor" pipes and feeder sewers to reduce diluted sewage overflows into the harbour will not be built until 2025.

"We needed to get these things up and running years ago and we are paying the price now for responding to crises instead of anticipating them," Goff says.

He says the city needs to bring forward construction of light rail carrying up to 450 passengers to replace convoys of buses on busy routes like Symonds St. He wants to start from Wynyard Quarter and up Queen St, Symonds St and Dominion Rd, but has no funding for it.

The Government is opposed to funding light rail any time soon, and announced a bus-first policy for rapid transit to the airport, possibly followed by light rail in 30 years.

Government ministers do not share Goff's urgency for addressing decades of underinvestment in infrastructure.

Transport Minister Simon Bridges acknowledges the pace of Auckland's growth requires significant investment, but says the Government is investing heavily in projects like the Waterview connection, CRL and $260 million southern corridor to ensure the city has the infrastructure it needs to meet the growth.

The joint transport programme to increase the efficiency of investment and smarter transport technologies will also help, says Bridges.

Building and Construction Minister Nick Smith says house building in Auckland is growing about as fast as it can with 10,000 homes consented in the past year - the fifth straight year of strong growth.

The city needs 16,000 new homes a year to meet a 35,000 shortfall and to cope with growth, but Smith says the 10,000 figure "gives me confidence we will have the number of houses increasing in line with population growth by the end of the year ... however we need three years of 10,000-plus homes being built before we can confidently say the problem is resolved".

Special Housing Areas (short-term), the council's new Unitary Plan providing for 420,000 over 25 years (medium term) and Resource Management Act reforms and a national policy statement on urban development capacity (long-term) show the Government's programme to increase housing supply is working, Smith said.

Different views on Auckland's infrastructure problems between Goff and central Government, and the failure of both sides to nut out a funding arrangement, is nothing new. It took more than five years for the Government to get on board the City Rail Link. In the mid-1970s, the National Government scuppered Robbie's "rapid rail".

It is time for the Government to shoulder its fair share of the infrastructure burden, says Dr Oliver Hartwich, executive director at The New Zealand Initiative.

Commenting on the latest Productivity Commission report on how to improve urban living, he said the Government has been content to sit on the sidelines, clipping the ticket on economic growth.

"The effects of this policy are writ large in our cities, with congested highways and astronomical house prices," Hartwich said.

The big issues

Water

A giant sink hole has opened up in New Lynn. Photo / Jason Valentine-Burt

Two events this year have highlighted Auckland's fragile water system.
In January, the Weekend Herald revealed diluted sewage floods into Auckland's glistening Waitemata Harbour from 41 points every time there's more than 5mm of rain.

There are fears the overflows - unusually frequent for a developed nation - will get worse from intensification in the inner suburbs where combined stormwater and sewer pipes are more than a century old.

Diluted sewage is also pouring into the Manukau Harbour at the Mangere wastewater plant during extreme wet weather when the plant reaches capacity. Watercare says the spills are still treated to internationally accepted safety levels. Opponents say the spills are affecting the health of the harbour.

The second event was the extreme storms in early March - dubbed the "Tasman Tempest" by meteorologists - which dumped more than two and a half times as much rain in the Hunua Ranges as they did during Cyclone Bola. Waterlogged soils poured silt into Auckland's water supply, placing huge pressure on the city's main water treatment plant at Ardmore. This led to calls for every Aucklander to save 20 litres a day while the silt settles. The savings target of 400 million litres a day - down from 450 million litres before the storms - is still in place.

What is being done?

Watercare has a $1.7 billion plan to build new "central interceptor" pipes and feeder sewers that will reduce wet weather overflows from St Marys Bay to Blockhouse Bay by 91 per cent and a "northern interceptor" to take wastewater from the growth areas in northwest Auckland to the Rosedale treatment plant on the North Shore.

Goff has asked for options on whether the central interceptor, not due to be finished until 2026, can be brought forward but indicated this could lead to higher water bills.

Goff has called for an inquiry into the March storms and questioned the resilience of the city's water supply. Watercare boss Raveen Jaduram says Auckland can have a water supply that can be relied on 100 per cent of the time, but it would require building a new water treatment plant costing hundreds of millions of dollars and consent to take more water from the Waikato River.

Housing

Auckland is the world's fourth least affordable city. Photo / Doug Sherring

The cost of the average home in Auckland is nudging $1 million, rents have risen to $474 for a two-bedroom house and $599 for three bedrooms in a city growing by 800 people a week.

According to the latest Demographia International Housing Affordability Survey, Auckland is the world's fourth least affordable city, sitting behind Hong Kong, Sydney and Vancouver.

The council's new planning rulebook, or Unitary Plan, provides for a possible 400,000 extra homes by 2041, or 16,000 a year. Actual permits hit 10,163 in the year to January and the trend seems to be levelling off as bank credit tightens.

Auckland is around 35,000 houses short and growing by 500 a month, says Labour's housing spokesman Phil Twyford.

The council is preparing a plan on the rural fringes that will result in small towns such as Warkworth, Pukekohe and Kumeu becoming mini cities at a cost of $20 billion for infrastructure, much of this unfunded. Factors such as the completion of the Puhoi-to Warkworth motorway in 2021 have brought forward housing plans in Warkworth, while soil testing at Takanini has pushed back 5000 new homes.

Special Housing Areas (SHAs) created by the Government, which gave fast-track consents in exchange for requiring 10 per cent of new houses are in the "affordable" bracket, had mixed results when the three-year plan wound up last year. Data supplied to the Herald showed developers applied for building consents in only 57 of the 157 SHAs by August 5.

What is being done?

On the election hustings last year, Phil Goff called on the Government to reduce immigration until the housing crisis and transport congestion could cope with population growth. This fell on deaf ears.

On becoming mayor, Goff set up a housing task force of experts to find solutions to the problem. Recommendations will be announced in May.

In February, the Government announced plans for locally controlled urban development authorities (UDAs) with compulsory land acquisition powers and fast-tracked consent processes to fight the slow speed of new city housing and infrastructure development
Labour wants to establish an Affordable Housing Authority with a fast-tracked planning process to lead large-scale developments and cut red tape. It promises 100,000 affordable homes under the KiwiBuild programme.

Transport

Traffic congestion in Hobson Street Auckland. Photo / Doug Sherring

Roads. Buses. Trains. Everywhere you go in Auckland is headed toward gridlock. The bright spot is the growth in cycleways, none more so than the $18 million pink cycle path that won a New Zealand Institute of Architects national award.

The city's dramatic growth - 120,000 people in three years and a similar number of cars - is placing enormous pressure across the transport networks. There are an extra 360,000 daily trips on the roads, motorway speeds have declined from 64km/h to 55km/h between 2014 and 2016 and arterial roads are becoming more congested at peak times.

Public transport boardings are growing by 22 per cent a year and reached 85.7 million trips in the year to February. Rail has grown faster, with boardings increasing by more than 70 per cent since 2014.

Auckland Transport's HOP card is now used for 91 per cent of trips on trains, buses and ferries, and in future there is the possibility of people using their credit or debit card to tag on and off on public transport.

A number of public transport services are facing capacity constraints, particularly bumper to bumper buses coming into the city from the suburbs and North Shore.

Long queues for the City Link in Queen St on Wednesday and growing bus congestion in the city-centre prompted Chris Darby, the councillor in charge of transport, to question a decision by Auckland Transport and the New Zealand Transport Agency (NZTA) to defer light rail to the airport for up to 30 years.

The same week Transport Minister Simon Bridges announced the airport plan - he will be 71 in 2047 - American theoretical physicist Brian Greene said we'll be sending people to Mars and back within 20 years.

Goff, and the Labour Party, are keen on light rail for mass transit sooner than National's buses-first policy, but the council has no spare cash and Labour is stranded on the Opposition benches.

What is being done?

Work has started on the $3.4 billion City Rail Link, the 3.4km rail tunnel between Britomart and Mt Eden railway stations that will double capacity and improve travel times.

The $1.4 billion twin-tunnel Waterview motorway tunnel is due to open in the next few months. The Government, through NZTA, has several other motorway projects on the go, including plans for an east-west link between SH20 at Onehunga and Mt Wellington costing between $1.2b and $1.8b.

This is up to $800m more than the cost in 2015, says the Green Party, which believes the money would be better spent on projects like the first stage of light rail from downtown Auckland to Mt Roskill.

A second harbour crossing and mass transit to the North Shore is not planned until the third decade(2038-2048) under a joint work programme agreed between Government and council.

The Auckland Transport Alignment Project anticipates spending $24b in the first decade, of which $4b is unfunded. The Government and council are meant to agree on how to fund this shortfall by June, but this looks unlikely.

The Government has ruled out a regional petrol tax to help plug the funding shortfall.

Q & A with Mayor Phil Goff

Auckland City Mayor Phil Goff inspects flood damage at New Lynn. Photo / Nick Reed

The Weekend Herald put a series of questions to Auckland Mayor Phil Goff about the three big infrasturcture problems - housing, water and transport. Here are his responses.

TRANSPORT

Traffic crawls on the Harbour Bridge. Photo / Greg Bowker

Q Do you think the transport investments agreed with the Government under the Auckland Transport Alignment Project(ATAP),in particular, $24 billion in the first decade 2018-28, will be sufficient to meet the city's needs, given the higher than expected population growth since the project's parameters were agreed on? If not, how much more spending may be required in the first decade, and for what? Are you discussing any changes to the plan with the Government?

A ATAP provides a joined up decision-making process between Auckland and Government and is a positive step forward. However, its calculation on infrastructure spent is based on 2013 population growth rates which are significantly below current population growth rates.

I believe the amount required to be spent will be higher and spending where possible will need to be brought forward.

The Government to date has declined to agree to a regional petrol tax to allow Auckland to fund its share of the infrastructure build. I still believe this would be the quickest, least expensive and administratively easy way to raise funds to bridge the funding gap.

However, the decision making power rests with the Government rather than Council.
In the medium term a congestion charge provides the advantage of helping reduce demand as well as raising revenue and Government and Council are agreed this should be implemented. It will however take some years to do this and in the meantime Government needs to negotiate with Council an alternative road pricing mechanism to allow new infrastructure build.

We also need to examine Public Private Partnerships (PPPs) as an alternative form of funding and the use of technology to allow better use of existing infrastructure such as apps to facilitate car sharing.

Q In particular, there has been pressure from local residents and the commercial sector to build Penlink sooner than now planned (2028-38) using a public/private partnership. Do you support that?

A A PPP for Penlink is a possibility and local residents have indicated a willingness to pay tolls to contribute to the cost of its construction. PPPs still appear as debt on Council's books if it owns or will own the infrastructure. Therefore Government would need to be the partner with the private sector.

This would require Penlink to be treated as a state highway or road of national significance which are fully owned and funded by government.

Q Trams or other mass transit down Dominion Rd and to the airport are also planned under ATAP for the second decade, but you promised in the election campaign to make this a priority - do you plan to bring it forward? What extra cost will that add to the $4 billion unfunded shortfall in the first decade?

A Government for the first time has agreed that light rail will be adopted to provide a rapid transit system from the CBD to the airport. I have pressed for this for some time and welcome the decision. However, it is a matter of timing.

Government believes that bus lanes or busways should be constructed first and then converted to light rail when passenger demand requires this. I believe this needs to happen much sooner than the two decades anticipated.

If light rail is required earlier, it would make more sense to move directly to this rather than disrupt the route by installing busways then later disrupting it again to construct light rail. Further studies are currently being done to inform this decision.

Q ATAP proposes a new harbour crossing and mass transit to the North Shore in the third decade (2038-48). Do you think that needs to be brought forward? If so, when should it be scheduled and how should it be funded?

A The success of the Northern Busway which now carries more than half of the commuters from the shore to the CBD in morning peak hours suggests that the next harbour crossing should be focused on public transport. This is a state highway so it will be funded by Government.

Auckland City will however influence the decision because of the effectiveness of the next harbour crossing will depend on avoiding congestion at either end of the tunnel. The timing of the tunnel needs to be evidence driven and determined by forecasts of demand growth.

Q ATAP provides for the Council and Government to agree on how to address the $4 billion funding gap for the first decade by mid-2017, i.e. the next three months. Do you expect to meet that target?

A I have started discussions with key Government ministers around the need to address the funding deficit gap in ATAP and these will be ongoing.

Last week I submitted Auckland Council's bid for the Housing Infrastructure Fund which includes transport funding.I look forward to making further progress with Government on transport funding as council starts to shape its Long Term Plan over the coming months.

Q The Government has ruled out a regional petrol tax, so what do you now see as the options to fill the funding gap?

A I have expressed my strong view that funding our transport system and new infrastructure should not be placed on rate increases and should apply to users of the transport system. Some form of road pricing - fuel tax, tolls or congestion tax - has to be part of the solution to allow Auckland to meet its share of the costs.

As some of Auckland's roads are major arterial routes carrying more traffic than state highways or roads of national significance which are fully funded by Government, government could make the decision to apply this status to some major roading projects under consideration as part of ATAP.

Q You talked during the campaign about infrastructure bonds - do you see these as contributing to closing the transport funding gap? Do you envisage these being held as debts on the Government's books rather than the Council's, so as not to breach the Council's borrowing limits?

A Infrastructure bonds are a mechanism which could be considered as a form of revenue raising. Council is however is restricted by the requirement not to increase its debt to revenue ratio. This has to be the predominant consideration in any form of revenue raising council considers.

Q How soon do you envisage introducing road pricing/congestion charges across the region?

A These decisions need to be made in conjunction with central Government, which has the statutory power to implement them.

Council needs a broader revenue base now in order to meet its share of the cost of new infrastructure. Government has to confront that need and act on it.

After declining to consider a regional fuel tax, the ball is now in the Government's court to empower Council to raise its share of the funds through other mechanisms.

HOUSING

The cost of the average home in Auckland is nudging $1 million. Photo / Michael Craig

Q The Unitary Plan has provided for a possible 400,000 extra homes by over the next 25 years, or 16,000 a year. Permits were issued for only 10,163 new homes in Auckland in the year to January and the trend seems to be levelling off as bank credit tightens. How can the city overcome financing constraints to build the required extra homes?

A Getting the Unitary Plan in place was a necessary first step. The next step is to bring forward infrastructure funding so we can turn land zoned for housing into actual homes.

I'm negotiating with the Government now on this and hope to see some real progress in the next two to three months.

Q The Council is considering a plan to sequence greenfield housing developments to keep up with the required infrastructure; this is another factor which means that developers may not be able to build the required 400,000 homes as quickly as they want to. How flexible will this plan be if some developers want to build in a different sequence from the one proposed in the plan?

A You can't build every piece of infrastructure you need for housing all at once so determining the areas where you can provide water and roading, and other facilities quickly are the ones we will prioritise.

The Mayoral Housing Taskforce is identifying barriers to growth and providing recommendations on how to address these.

Addressing the problem of the boom and bust housing cycle, creating certainty for industry and ensuring ongoing availability of finance for home buyers are among the priorities we need to tackle.

Q Can you confirm that you envisage using infrastructure bonds funded by targeted rates on new developments to fund some/most/all of the cost of infrastructure for greenfields developments? Do you envisage these being held as debts on the Government's books rather than the Council's, so as not to breach the Council's borrowing limits?

A The Council is constrained by a debt-to-revenue ratio. We are close to that limit and do not intend to breach it as that would have major implications for the cost of debt to ratepayers and availability of credit.

We are exploring other mechanisms to fund infrastructure including Government's Housing Infrastructure Fund and targeted rates on large developments.

Q Do you think the Council should directly provide any more housing beyond its agreement with Selwyn Foundation to "maintain at least the current level of Council provision"? If so, how much, for whom, and how will you fund it?

A Through our agreement with the Selwyn Foundation we will retain and upgrade the current number of housing units for the elderly. Sadly an earlier Auckland City Council privatised much of the housing stock for the elderly and we don't have capital available to increase the number of rental units.

Q What are you doing to overcome homelessness and overcrowding in Auckland?

A Auckland Council has put a couple of million dollars into the Liston Hostel for those without homes. It is working with social housing providers and the government to provide permanent houses for those sleeping rough and the wrap around services needed to address the reasons or people being chronically homeless.

Council will play a coordinating and support role, using government funding and NGO expertise to house an estimated 420 homeless people over the next there years.
This is an issue I feel passionately about. It is a priority because people shouldn't have to sleep on the streets or in their cars. Families shouldn't have to cram themselves into garages because of a shortage of warm, dry and affordable housing. We have a duty to tackle this problem head-on.

WATER

Public health warning sign at Coxs Bay. Photo / Dean Purcell

Q You talked about holding an inquiry into the water system. What do you want the inquiry to address, who do you plan to ask to conduct the inquiry, and when do you hope it will start and finish its work?

A I have given a list of key questions to Watercare relating to the problems caused by siltation of the Hunua Dam and the capacity of Ardmore Water Treatment Plant to treat the highly silted water supply.

While the weather bomb which caused the problem was unprecedented, we need to ensure that our water supply system is sufficiently resilient to deal with these problems while catering for a rapidly increasing population.

Watercare is now in the process of commissioning a wide-ranging review encompassing the issues I have raised with them.

Q You suggested that people may have to stop living in some areas prone to repeated flooding, such as the New Lynn area where the culvert blocked up. What are you doing to identify such areas? Can you identify any yet?

The flood prone areas are already identified on the Council GIS system. Where properties are prone to flooding, we need to examine whether that risk can be mitigated by upgrading stormwater systems. Where that is not possible Council needs to work with affected property owners on options which may include relocation of premises.

Q You were quoted when the water crisis first hit as saying that Auckland relied too much on one water treatment plant (Ardmore). What are you planning to do to reduce reliance on Ardmore and generally to provide greater resilience in the water supply system?

A Two thirds of Auckland's water supply is provided through Ardmore Water Treatment Plant. It is an efficient and cost effective plant but other options now need to be looked at to safeguard against the problems caused by severe weather.

These options include how to prevent further siltation, different ways to treat silt affected water, upgrading of other water treatment plants such as Huia and increasing treatment capacity of water sourced from the Waikato. It is too early to put a cost on these options.

Q Auckland Council has been spending less than its legacy councils combined spent and planned to spend on stormwater. Do you think this contributed to the recent flooding? Are you reviewing whether the stormwater budget is adequate? Do you have an initial view on whether the budget needs to increase, and if so, by how much?

A Significant work has been done on mitigation of stormwater overflows including recent building large capacity storage tanks such as those at Madills Farm in Orakei and Fred Thomas Drive in Takapuna and Glen Eden.

Separation of stormwater from wastewater has also recently been done in Franklin Rd and Waterview where separation can be achieved economically.

A major $1 billion investment is about to take place with the construction of a new Central Interceptor which will cut wastewater overflows by around 80 per cent.

Q Do you envisage using infrastructure bonds and/or public/private partnerships to fund any water, stormwater or sewerage projects such as the Central Interceptor and Waterfront Interceptor?

A Watercare is investing heavily in Auckland's water infrastructure over the coming decade, spending $1.9 billion on upgrading and expanding infrastructure over the coming ten years, and a further $2.8 billion over the following ten years.

This is currently budgeted and will be raised by Council Treasury to achieve the best credit rates.

Watercare is self-funded through water rates and an infrastructure charge on new developments.

Current investment includes:
• Expanding Waikato Water Treatment Plant
• Replacing Huia and Waitakere water treatment plants
• Building pump stations, water mains and reservoirs
• Securing new water sources in rural areas.

Q When the Herald reported on raw sewage overflows into the harbour from the old combined sewer/stormwater system earlier this year, you said you were seeking advice on whether the Central Interceptor and Waterfront Interceptor projects could be brought forward. What advice have you received on whether this would be feasible and sensible, and if so, how much they could be brought forward and how much it would cost?

A Given the scale of the construction work involved, construction will largely have to be carried out in the anticipated time frame of 2019 - 2025. The advice was that the project could be brought forward but the impact would be marginal in terms of a few months.

Q You also said Aucklanders might have to pay higher water bills to pay for these improvements. What advice have you had on how much water charges may have to increase to cover (a) bringing forward the wastewater projects, and (b) making the water supply system more resilient?

A Watercare is self-funding and its rates are adjusted annually in accordance with its need to meet costs of new infrastructure and maintenance of existing pipes and plants.

As a public supply water company it pays no dividend and all the revenue is reinvested into the provision of services.

Q What advice have you had on how much rates may have to increase to pay for any increased budget for stormwater? Do you see any other options for funding this?

A Watercare and Stormwater are working together to provide optimal outcomes for the water supply and waste and stormwater disposal. They will report in due course to council on whether there's a need to accelerate their investment programmes.

Q You also talked about replacing commercial forests with native forests in the water catchment areas. Are you doing anything to make that change? What will it cost?

A Watercare has already made the decision to buy up milling rights and replace commercial forests in the catchment area with permanent indigenous forest.

This is a sensible move which I applaud and will over time have benefits for reducing erosion as well as providing carbon sinks.