Closed cities of despair or open cities

17 October 2006

Our choice: Closed cities of despair or open cities of opportunity

This article is contributed by Hugh Pavletich, co-author of the Demographia housing affordability survey, and is published on 15 October 2006

New Zealand is a tiny nation of just 4.1 million people where 80% of our population is urbanised within a land area of approximately 269,000km². Well less than 1.4%, or 3766km² of our land area is urbanised, based on a generous overall urban density estimate of 870 people/km².

This estimate should be considered “generous” as the urban density of our mid-sized city, Christchurch, with a population of 340,000 people & an area of 188km², is about 1800 people/km², with the northern cities of Wellington & Auckland having higher densities of around 2200 people/km².

Just recently, there was detailed research using satellite photography of the urban footprint in the US, where it was found that only 2% of that vast country, with nearly 300 million people, is urbanised. Earlier estimates had been in the order of 2.6%.

It is therefore likely that the New Zealand urban footprint may well be as low as 0.75% of our land area.

New Zealand’s annual population increase is slightly less than 1%, or 40,000 people/year – comprising a natural increase of approximately 30,000 and 10,000 net immigration.

Let’s be generous and assume that we need to accommodate a further 50,000 people on our urban peripheries each year for the foreseeable future. How much land would be required?

Again – let’s over-estimate and assume that we accommodate these 50,000 people at an urban density of 1700/km², or slightly lower than Christchurch’s current density. This would require just 29.4km² of urban peripheral development annually, throughout the entire country – or one hundredth of one percent of our total land area.

We couldn’t urbanise more than half a percent – or in total 2% of our land area over the next 50 years – if we tried!

These “simple facts” are ones most New Zealanders would not have a clue about, as those with ideological & political agendas within government, and associated with it, have been more than happy to create the erroneous impression in New Zealanders’ minds that we are “running out of land”. Sadly, too many within the old media have willingly acted as their cheerleaders.

As the co-author with Wendell Cox of the annual Demographia housing affordability survey, our adversaries, in being completely unable to refute its findings, have suggested instead that the annual survey is “simple”. They are hoping of course that others will be persuaded that the survey is “simplistic” and better still – written by “simpletons”!

This 2006 survey clearly proves that to achieve affordable housing at or below 3 times household incomes, land supply at the urban peripheries cannot be strangled. Houston – without zoning – proves this, as do the 23 other open-zoned urban markets throughout middle North America. The survey also illustrates how our urban markets within Australia & New Zealand were affordable 20 & 30 years ago. As the co-author of the survey, I was surprised too, that monetary policy is impotent within an environment where urban land supply is strangled. It is pleasing to see the Reserve Bank of New Zealand now researching the housing sector and, as part of this research, exploring how the “urban bubble” is impacting on household savings, debt levels & other economic aspects of this issue as well.

Perhaps the 2007 Demographia survey needs to be written in both English & Greek – so the latter version better meets the needs of those who prefer complexity & confusion!

Put rather bluntly – the “complication & confusion” approach has been deliberately employed & expanded as a way of controlling people.

We are now seeing the re-emergence of common sense, facts & disciplined thinking, as rapidly growing numbers of soundly trained researchers globally are focusing their attention on urban issues. Belatedly, they are recognising that our urban areas are the engine drivers of a modern economy. Before too long, urban planners will be overwhelmed with factual information – and recognise that the “complication & confusion” days are over.

The deliberately “simple” annual Demographia survey should be seen as just one measure. We need to see others developed too – so more easily understood factual information is generated, to assist the public & policymakers to refine land use regulatory administration performance, so it better meets people’s needs whilst protecting the environment.

The policy focus needs to be on returning our urban areas to affordable levels of 3 times household income or less, on a phased basis over a reasonable time. I have suggested local authorities be required to meet housing affordability targets over a reasonable period of 10 years. Put rather bluntly – we have spent 20 years creating this mess, so it is not unreasonable to ask that we spend the next 10 years, working together, to unwind our way out of it.

The “regulatory culture” must change too, where these people are trained & retrained within newly established “land use law schools” set up between our current schools of economics & law. The focus must be on “rigour” & “impartiality”.

The current fall-off in home ownership at near 1%, or 14,000 homes/year, due to the artificial urban land scarcities, must be reversed as soon as possible. With a housing stock of 1.4 million houses – this suggests that each year a further 30-40,000 New Zealanders are being denied the opportunity of home ownership.

This is equivalent to turning the entire population of either Manukau or Christchurch into “renters” every 10 years!

We need to move as soon as possible from closed cities of degradation, disruption & despair to open cities of opportunity.

Thankfully – our Housing Minister, Chris Carter, is providing the leadership required and we look forward to his address at the local government housing affordability summit, Wellington, on 30 October.

* Hugh Pavletich is managing director of Pavletich Properties Ltd, Christchurch. He was president of the Property Council’s South Island division from 1991-95 (when it was called Boma) and was elected a fellow of the Urban Development Institute of Australia in 2004. During that year he felt there was a need for an international measure of housing affordability and teamed up with Wendell Cox to develop the survey.

- Demographia is the website of Wendell Cox, US campaigner for choice in urban development and opponent of the smart growth concept. Apart from the many articles on his website, he also runs an extensive list of links. He also runs The Public Purpose, a transport website.

ENDS

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