Brash on land prices

May 28th, 2013 at 6:56 am by David Farrar

writes in the NZ Herald:

Of course Dr Hosking is right if the supply of land is fixed, as indeed it has been by council decision. But it doesn’t have to be fixed. At the moment, less than 1 per cent of New Zealand’s area is urbanised. We are one of the least densely populated countries in the world. The council has quite deliberately chosen to make land expensive.

The price of land in Auckland is not an accident. It is, as Don says, deliberate.

And the consequences of that decision are disastrous, socially and economically.

It’s disastrous socially because for most low and middle-income families, buying a house in Auckland is now not even remotely possible, and for those families who do make the attempt, it almost inevitably means both parents working outside the home. Most low and middle-income families can’t even make the attempt, and often live in over-crowded, poor quality rental accommodation.

Don asks:

Why is it possible to buy 500sq m sections on the outskirts of Houston for $40,000, whereas 400sq m sections on the outskirts of Auckland cost $400,000? The answer lies simply in the fact that in Houston there are relatively relaxed attitudes towards using land on the outskirts of the city, whereas in Auckland that has been prohibited.

Town planners turn their nose up at Houston, and claim it is an awful place to live. However families from all over the US are heading there – because they can buy a reasonably sized home at a decent price there.

The very first report of the New Zealand Productivity Commission was on the cost of housing. The commission concluded that there were various reasons why housing is so expensive in New Zealand – but overwhelmingly the biggest single factor is the price of land, and that in turn has been a quite deliberate policy choice.

There are multiple factors, but ignoring land supply is ignoring the elephant in the room.

Dr Hosking mentioned that four of the five cities in the Mercer quality of living survey are “intensified”. And the fifth is Auckland. What he didn’t note was that Auckland is already more intensified than one of the other five, namely Vancouver. In fact, according to the Demographia survey of many hundreds of urban areas around the world, no city in the United States, Canada or Australia has more people per square kilometre than Auckland has now.

Again, a deliberate choice by the Council. And the fact Auckland is one of the most expensive cities in the world to buy a home is deliberately linked to that. And politicians from the left near universally are opposed to doing anything meaningful about it.

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47 Responses to “Brash on land prices”

  1. wreck1080 (3,817 comments) says:

    Extremely poor planning by council.

    The council CEO gets paid megabucks because he is supposedly ‘clever’.

    Therefore, why did they not predict this 10 or 15 years ago and make appropriate plans back then? There should already be a lot more high density housing.

    Next time people argue the ceo should be paid more, just point to the most basic failure — housing residents.

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  2. peteremcc (341 comments) says:

    The Auckland Plan can be simplified to just a few sentences:

    1) In our opinion, living in the city is cooler than living in suburbia.
    2) Your opinion is irrelevant, we’re going to force you to do what we want.
    3) We’re going to make you pay and extra $400,000 or even more for your house for the privilege of our wisdom.

    Don’t get me wrong, personally I like intensification and think people SHOULD be allowed to build more high-rises. But that shouldn’t be the only option, people should be free to choose to live further away if they want too.

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  3. somewhatthoughtful (457 comments) says:

    There seems to be a consistency in these stories here, especially given the lack of evidence to back them up. Nick Smith must be getting desperate.

    [DPF: Are you crazy? lack of evidence. Go read the massive tome from the Productivity Commission if you want evidence.]

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  4. Manolo (13,517 comments) says:

    Nick Smith does not get desperate: he’s utterly incompetent.

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  5. Nostalgia-NZ (5,045 comments) says:

    ‘Again, a deliberate choice by the Council. And the fact Auckland is one of the most expensive cities in the world to buy a home is deliberately linked to that. And politicians from the left near universally are opposed to doing anything meaningful about it.’

    I didn’t realise that we currently have a Government of the left, I also didn’t realise the ex mayor Banks for example was a lefty – tricky buggers.

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  6. flipper (3,847 comments) says:

    It is interesting to look at the contributions yesterday in the Herald commenting on Brash’s analysis of land/house prices.
    They come from the usual list of left wing suspects, and spout the same Hosking garbage.

    Don Brash may be, or have been, many things, but having worked with/for him many years ago, I know that he is honest “to a fault”, in his analysis on any economic issue. That is one reason he served so long as Reserve Bank Governor, It is also a reason why he was totally unsuited to politics.

    As for Hosking, he is a classic example of a phud (NOTE that Don Brash abhors the use of his phud) using a jumped up academic sinecure to further clearly socialistic instincts, and to comment, gratuitously, on matters well outside his field of “expertise”.

    Brash is clearly a better analyst than Hosking, and makes much the better case.

    Brash 10; Hosking zip.

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  7. NK (1,138 comments) says:

    This is the result of the work of the RMA, and centralist planners: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10886644.

    And would people please stop referring to this as the Auckland Plan. It isn’t. That is an entirely different document. It’s the Unitary Plan.

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  8. rg (201 comments) says:

    Don Brash and the ACT Party campaigned on reducing the price of land by removing urbam bounfaries that are in place. Voters ignored ACT, as it turns out to their peril. Now they must live with high house prices, high interest rates, and a high dollar. Well done voters.

    Also to their peril is the new Labour Party (formerly known as National)

    With John Key’s new “you breed them, we’ll feed them” policy socialism gets further entrenched into NZ. If there are any voters out there who still believe in personal responsibility and who want cheaper housing for NZers, vote ACT.

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  9. Nigel (516 comments) says:

    If auckland opened up the land supply and sections dropped to 100k, with resultant drop in house prices.

    I’m curious just how much would the rate take for the auckland council drop. Self interest perhaps?.

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  10. Griff (7,013 comments) says:

    Flippy
    saying don is an expert and his words carry weight
    i agree and would still be a act supporter if it was brash not banks

    however i do suggest that flips pays the same respect to climate scientist and their expertise

    Do you see your hypocrisy Flippy

    flip flop

    its good to respect the experts all the time not just when it suits you Flippy

    Wingnuts reality and consistency are mutual exclusive.

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  11. Simon (718 comments) says:

    All this is known. The leftwing elite, the jobsworths, the highly paid groupthink apparatchik & their rent seeking “private sector” cronies.

    The only question remains is who is going to take a flame thrower against these den of thieves these councils.

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  12. flipper (3,847 comments) says:

    Griff ….

    You continue to live your life as a serial liar.

    Why do you not check in to the Mason Clinic. I am sure that they would make an exception and take you as a voluntary patient.
    They would need only to view your incoherent ramblings to know that you really should be with them. In another era, Lake Alice would have been the venue of choice for you – in the maximum security section where you would have slept on a solid steel “bed” without a blanket.

    Oh, just in passing Griff, Wingnut is one of the most successful of all New Zealand companies They might find your references to them offensive, as they are to all sane folks.

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  13. Colville (2,198 comments) says:

    Don (and indeed our slim host) misses the most simple reason for the difference between Dorkland and Houston.
    You can buy farmland near Houston for 5% of what it is near Dorkland.
    You can buy a 40 acre ranch with flash house for $1 mil on the outskirts of Houston with road frontage and services at the gate. Try finding that within 50kms of the skytower.

    Oh and all Houston appears to be flat and doesnt have 2 harbours to contend with. But I have never been there so I could have just missed the harbour when I looked at Google :-)

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  14. The Scorned (719 comments) says:

    Flippy
    saying don is an expert and his words carry weight
    i agree and would still be a act supporter if it was brash not banks

    however i do suggest that flips pays the same respect to climate scientist and their expertise

    Try looking at what the planets telling you…..NO warming happening!

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  15. hj (6,754 comments) says:

    Of course Dr Hosking is right if the supply of land is fixed, as indeed it has been by council decision. But it doesn’t have to be fixed. At the moment, less than 1 per cent of New Zealand’s area is urbanised. We are one of the least densely populated countries in the world. The council has quite deliberately chosen to make land expensive.
    ……………………..

    He’s talking about space but housing isn’t just space. If it was just about space we could build thriving cities in the Sahara.

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  16. Griff (7,013 comments) says:

    Flippy
    are you calling dpf a lier again
    you really should think unstead of flipping all the time
    banks is a expert on economics he has a phd
    Hansen et al are experts on climate sience and your dude monckton is a expert on climate denial.
    Flippy Flippy Flippy
    :lol:
    Wingnuts

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  17. hj (6,754 comments) says:

    Empirically, most areas that are widely regarded as supply-inelastic were found, in fact,
    to be severely land-constrained by their geography. Deploying a new comprehensive survey
    on residential land use regulations, I found that highly-regulated areas tend to also be geo-
    graphically constrained. More generally, I found recent housing price and population growth
    to be predictive of more restrictive residential land regulations. The results point to the
    endogeneity of land use controls with respect to the housing market equilibrium.
    Hence I next estimated a model where regulations are both causes and consequences
    of housing supply inelasticity. Housing demand, construction, and regulations are all de-
    termined endogenously. Housing supply elasticities were found to be well-characterized as
    functions of both physical and regulatory land constraints, which in turn are endogenous to
    prices and past growth.
    Geography was shown to be one of the most important determinants of housing supply
    inelasticity: directly, via reductions in the amount of land availability, and indirectly, via
    increased land values and higher incentives for anti-growth regulations. The results in the
    paper demonstrate that geography is a key factor in the contemporaneous urban development
    of the United States, and help us understand why robust national demographic growth and
    increased urbanization has translated mostly into higher housing prices in San Diego, New
    York, Boston, and LA, but into rapidly growing populations in Atlanta, Phoenix, Houston,
    and Charlotte.
    The Geographic Determinants of Housing Supply
    Albert Saiz∗
    (Forthcoming: Quarterly Journal of Economics)
    January 5, 2010
    http://real.wharton.upenn.edu/~saiz/GEOGRAPHIC%20DETERMINANTS.pdf

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  18. hj (6,754 comments) says:

    Government policies blamed for house prices

    Immigration and tax breaks for investment in residential property are being cited as the underlying causes of steep increases in the cost of housing over the past decade.
    New Zealand now boasts one of the highest rates of home unaffordability in the world as a result of prices rising far faster than incomes, and the government’s Savings Working Group blames that squarely on the policies of successive governments.
    Although “the favourable tax treatment of property investment” accounted for about 50% of house price increases between 2001 and 2007, the working group said, there was also strong evidence that rapid swings in immigration brought about price-rise “shocks”.
    There was a sharp spike in immigration in 2001, 2002 and 2003 and, said working group committee member Dr Andrew Coleman, it appeared that property prices did not fall anywhere near as greatly when immigration fell again.
    The report added that there was little evidence that immigration boosted local incomes. In fact, the need to build roads and schools meant that net migration contributed to the national deficit.
    http://www.stuff.co.nz/business/money/4622459/Government-policies-blamed-for-house-prices

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  19. hj (6,754 comments) says:

    Austin, a city with a vision and a plan, has already drawn flood maps for the future and enacted laws to address permeability. Regulation of this type says how much of a lot may be covered with a building or paving and how much must be left open to rain.

    Contrast that to Houston, where builders have organized to ensure that the status quo remains, meaning that whoever has the most money builds what they want where they want. What the paving over of Houston will do to flooding, no one can say exactly, but everyone knows it isn’t good, just as everyone knows that another Tropical Storm Allison-style storm is inevitable

    http://robertwboyd.blogspot.co.nz/2008/01/houstonians-against-houstonians-for_13.html

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  20. hmmokrightitis (1,572 comments) says:

    “Town planners turn their nose up at Houston, and claim it is an awful place to live. However families from all over the US are heading there – because they can buy a reasonably sized home at a decent price there.”

    Try spending a summer there. Then you’ll discover why land is so cheap. Thats not the issue Auckland faces – people want to live there becuase its our biggest city, work opportunities and the lifestyle for a reasonable sized city isnt too bad.

    Houston on the other hand is desperate for growth, and people live there in spite of climate and lifestyle opportunities.

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  21. Redbaiter (8,032 comments) says:

    “And politicians from the left near universally are opposed to doing anything meaningful about it.”

    Yep, but politicians from the left are what this country and its population of lemmings votes for again and again and again.

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  22. BlairM (2,307 comments) says:

    “Town planners turn their nose up at Houston, and claim it is an awful place to live. However families from all over the US are heading there – because they can buy a reasonably sized home at a decent price there.”

    Try spending a summer there. Then you’ll discover why land is so cheap. Thats not the issue Auckland faces – people want to live there becuase its our biggest city, work opportunities and the lifestyle for a reasonable sized city isnt too bad.

    Houston on the other hand is desperate for growth, and people live there in spite of climate and lifestyle opportunities.

    I never thought I would be defending Houston as a place to live, but frankly you are quite wrong. The Texas climate is fantastic. Nine days out of ten we are bathed in glorious sunshine. Yes, we have summer ten months of the year, and it can get above 40 degrees frequently, but a lot of people like summer, and nobody goes jogging. I would rather have Houston’s climate than Auckland’s any day.

    The population of Texas increased by 4 million people in the last ten years. That’s the equivalent of the entire population of New Zealand moving to Texas. Many of those people moved to Houston, because Houston is now the fourth largest metropolitan area in the United States, and offers huge opportunities for both employment and for business. There is no state income tax here, and, as mentioned, housing is cheap.

    If you want great architecture, or cultural edification, Houston is probably not your kind of town, but many Americans care nothing for those things, and good on them. The Texas lifestyle is still fantastic, and compares very favourably with Auckland, it must be said, even without the scenery and the beaches.

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  23. toms (301 comments) says:

    There is extensive information on Houston over at transportblog.co.nz if DPF can be bothered schooling himself up from his current role of a shrill ideological repeater coming from a position of pig ignorance. Why, I even already did the search for him -

    http://transportblog.co.nz/?s=houston&submit.x=0&submit.y=0

    I would suggest all the miserable dumb people here took the time to read through the informative and thoughtful posts on the site rather than rely on the zombie facts and arrant nonsense constantly posted by DPF on kiwiblog.

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  24. vibenna (305 comments) says:

    It is worth channeling Milton Friedman here. He opposed the draft as he saw it as an unfair tax levied on some young men. In a similar vein, this is an environmental tax levied on Auckland home owners by the city council. It is a regressive tax, as it imposes disproportionate burdens on the less wealthy. So as with many Green policies, it is the poorest people who pay the most.

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  25. BlairM (2,307 comments) says:

    I can get a perfectly good 4br house here in San Antonio for around $150k. Try doing that in Auckland!

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  26. mikemikemikemike (320 comments) says:

    Opening up land would do nothing for prices, and if they did you would all be screaming about how the leftist council is fucking over the private sector (again). Unless it was a right-ist council in which case you would then be happy as chuffed I’m sure. Those who actually know Auckland will know that the outskirts of Auckland are pretty hilly and an arse to build in (Ararimu anyone?) with the flat tracks of land mostly owned be farmers who are still working the land. Even if you did housing out there, and it was affordable for the great unwashed to be able to purchase, you then have a $2.20 per litre fuel bill because there is no public transport out there. The infrastructure out there is also inadequate and would require upgrades if you are going to invest huge amounts of money to make that happen (unless of course you allow the less scrupulous developers in to fuck it over ala Clendon)

    John Banks did nothing for land supply probably even less than Len Brown so the rants on here are hard to fathom really.

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  27. Chuck Bird (4,773 comments) says:

    The sensible individual solution is to move out of Auckland to places like the Waikato where there are reasonable employment prospects but houses less than half the cost.

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  28. hj (6,754 comments) says:

    Cherry Picking?

    “We’ve all seen the articles proclaiming that Houston is a low cost of living paradise, where jobs flow like milk and honey and houses are all the size of mansions.

    Well the job market is indeed good, and gas is cheap, and eating out is cheap, but what about housing? That’s the biggest single expense for most working people and therefore the most important. My professional geographer’s opinion is that the cost to own a house is NOT low in Houston.

    All the proclamations of low cost of living are based on house value statistics, which are aggregated spatially, but those aggregations don’t necessarily have meaning. The only value that matters is that of a house you actually want to buy. The vast majority of us would only want to live in one of two places, the suburbs or one of the good neighborhoods “inside the loop”. In between those places is a big sprawl of ghettos, strip malls, and various levels of urban decay and ongoing gentrification. ALL of that is included in the home value averages.

    Obviously houses are cheap in the suburbs, and that’s great for people willing to commute an hour downtown where the good jobs are, and are raising kids… But what about us younger people who want to live in the city? Look at the values of houses in Montrose, the Heights, Rice, the Med Center, Midtown. At $500,000 and up they’re just as high as in other cities’ urban neighborhoods and out of reach for most people.

    And what about property tax? We have some of the highest property taxes in the nation and it’s a big burden on both the urbanites and suburbanites. That $500k house inside the loop will require $15k property tax at 3% (for the life of me I can’t find the actual percentage). Defenders of the property tax say that it comes out to a smaller percentage of your income at a certain salary level. The problem is that while you can always afford an income tax, because it’s proportional to your income, it is possible to be taxed out of your home. If you get laid off and have to settle for a lower salary, or retire, the house you paid off a decade ago can suddenly become too expensive to live in. When you die, if your heirs can’t afford the property tax, they’ll have to sell the house! And what about gentrification? Your neighborhood improves and suddenly you’re priced out of it by the government.
    http://www.city-data.com/forum/houston/1768694-houstons-low-cost-living-myth-baytown.html#ixzz2Sn3kDfB2

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  29. scrubone (3,090 comments) says:

    But what about us younger people who want to live in the city?

    Trademe reveals inner city apartments start at $50k.

    Seems like a pretty durn good option to me for a young person starting out in the market.

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  30. Kimble (4,417 comments) says:

    Seems like a pretty durn good option to me for a young person starting out in the market.

    You misread it. That’s a parking space.

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  31. ross69 (3,652 comments) says:

    Why is it possible to buy 500sq m sections on the outskirts of Houston for $40,000, whereas 400sq m sections on the outskirts of Auckland cost $400,000? The answer lies simply in the fact that in Houston there are relatively relaxed attitudes towards using land on the outskirts of the city, whereas in Auckland that has been prohibited.

    Only a wingnut would believe such nonsense. To compare Auckland with Houston is like comparing champagne with prune juice.

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  32. ross69 (3,652 comments) says:

    Buyers can purchase a near new 4 bedroom 2 bathroom home in Invercargill for only $239,000. I’m surprised Don Brash didn’t compare Auckland with Invercargill. The old fella just lost the last remaining shred of any credibility he might have had.

    http://www.realestate.co.nz/1737391

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  33. freedom101 (481 comments) says:

    ross69 – please elaborate. If land prices are set by supply and demand, then if supply is constrained, prices will rise. Why would “only a wingnut believe such nonsense”? I don’t get your point at all. Seems obvious common sense to me.

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  34. Pauleastbay (5,035 comments) says:

    Who the fuck wants to live in Invercargill?

    Employment in the Waikato? That would be why hundreds commute to Auckland everyday.

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  35. scrubone (3,090 comments) says:

    You misread it. That’s a parking space.

    “It”?

    This one’s 50k
    http://www.trademe.co.nz/property/residential-property-for-sale/auction-597061286.htm

    4 pages later (ordered by price) this one is 160k and includes a carpark.
    http://www.trademe.co.nz/property/residential-property-for-sale/auction-566128530.htm

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  36. OTGO (526 comments) says:

    The housing problem will fade away over the next 10-20 years when the wave of baby boomers will either die or sell their 4 bedroom, 3 bathroom 2 car garage etc etc for 1 million + and move somewhere nice and live in a 2 bedroom holiday home in Queenstown or Wanaka or Omokoroa or wherever which they paid 500k for.

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  37. scrubone (3,090 comments) says:

    The old fella just lost the last remaining shred of any credibility he might have had.

    Better take this seriously guys: ross69 has a great deal of expertise on not having a shred of credibility.

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  38. emmess (1,398 comments) says:

    I’m surprised Don Brash didn’t compare Auckland with Invercargill.

    Houston has a metropolitan population of over 6 million in a far wealthier country, I accept that that the geography of Auckland may work against it but overall the comparison should overwhelmingly favour Auckland.

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  39. burt (8,037 comments) says:

    The elephant in the room is not the regulation on releasing land – it is all the politicians who have purchased property in Auckland as an investment who are now not prepared to see their own investment fall by slackening the restrictions to make property more affordable for everyone at their expense…

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  40. Fentex (909 comments) says:

    In fact, according to the Demographia survey of many hundreds of urban areas around the world, no city in the United States, Canada or Australia has more people per square kilometre than Auckland has now.

    I found that a hard claim to believe given New York cities appearance, so I went and looked at Demographia’s site where they explicitly contradict DPFs claim by stating:

    one city that has a higher population density than Auckland is Los Angeles.

    Although they do demonstrate that Auckland is more densely populated compared to other cities than one might have thought and more so than nearly all in the U.S because it is compressed into a small footprint. So the logic that land prices may be inappropriately inflated by planning is not disproved.

    The NZ Ministry for Culture and Heritage doesn’t seem to think Auckland is densely populated compared to some other cities as quoted from here:

    In terms of world cities, Auckland is small and sparsely populated. In 2006 the metropolitan area covered 1,000 square kilometres: less than Los Angeles (4,320), Sydney (1,657) and London (1,572). Auckland’s population density was also lower, at 1,210 people per square kilometre: London had 4,760, Los Angeles 2,846 and Sydney 2,548.

    I personally don’t find comparisons with London enthralling. Having lived and worked there I enjoyed some of it’s expensive suburbs near it’s greenbelt but it’s more dense urban environment is a grey and depressing place. But Sydney isn’t all bad.

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  41. ross69 (3,652 comments) says:

    Who the fuck wants to live in Invercargill?

    Probably not many Aucklanders…similarly not many Aucklanders want to live in Houston. :)

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  42. hj (6,754 comments) says:

    [DPF: Are you crazy? lack of evidence. Go read the massive tome from the Productivity Commission if you want evidence.]

    “In an Australian context, the Productivity Commission – hardly a hot-bed of xenophobia or populism – concluded that any benefits from migration to Australia were captured by migrants and there were few or no discernible economic benefits to Australians. And that was in a country already rich and successful and with materially higher national saving and domestic investment rates than those in NZ.”
    http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf

    Productivity Commision:
    We recommend that you:

    b agree that Commission’s second tranche of inquiries be selected on the degree that
    they:
    • are relatively uncontroversial given the desire to establish broad political support for the Commission

    http://www.treasury.govt.nz/publications/informationreleases/productivitycommission/pdfs/t2011-2000.pdf

    so don’t look at demand – that only leave one leg – supply.

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  43. hj (6,754 comments) says:

    So the much vaunted Pwoductivity Commision is a softy Commision a lap-dog for the politicians, making sure there’s no bone for that nasty racist Winston.

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  44. Fentex (909 comments) says:

    It occurs to me that Houston has been getting quite a lot of attention since I first saw NotPC bring up the idea it had cheaper housing due to lack of planning.

    It occurs to me that relaxing land restrictions around Auckland would imply two things – more traffic and/or mixing industry with housing.

    What cost more motorways? If Auckland expands it must locate industry where it expands otherwise it needs much more motorway (and industry needs roads anyway). Will Auckland ask New Zealand to fund that? If so, and a government keen on attracting Auckland votes agreed, might not New Zealand as a whole effectively subsidise Auckland housing via road funding?

    What does expanding Auckland solve that isn’t already by moving to Hamilton? Or Tauranga – if Tauranga Ports are noticeably more efficient than Aucklands, and New Zealand industry seeks foreign markets, why doesn’t business and employees move to Tauranga. Cheaper housing, cheaper transport…

    There’s obviously a benefit from concentration of people that enables cities to function, to provide services, to create and exploit markets that probably motivates planners to attempt to capitalise on. Does thwarting that create expenses in infrastructure and dispersal of people that have hidden costs? I expect such would be the argument of planners seeking to encourage urban life. I seem to recall a claim that urban populations are greener than rural for the efficiencies of scale, so I imagine people who like big cities with big concerts and handsome museums think it’s a good thing.

    I don’t much like big cities, and it seems that if they are efficient then wouldn’t their benefits attract people? Doesn’t Manhattan and London?

    I think planners need to answer the question:How does planning acheive what simple commerce would not?

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  45. Boglio (78 comments) says:

    Seems to me that the application by Stevensons to zone a large area to the east of the Southern Motorway between Drury and Ramarama ticks the boxes. They already have a quarry in the area. Easy to provide a rail link for both freight and passenger. Southern Motorway access at both Drury and Ramarama. The gas main goes through the area, the Drury electricity switching station and numerous pylon lines are on site and the Waikato watersupply passes close by if not through the area.

    Close to Papakura where there is very reasonably priced housing and surrounded by lifestyle blocks which can be subdivided for housing without affecting the productivity of the land.

    I think that private developers are way ahead of Council Planners!

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  46. lastmanstanding (1,241 comments) says:

    Somehow I don’t think the property owners of Auckland ( me included) are going to vote for a Council or Government that then goes and destroys the value of their biggest asset.

    And that’s the rub. If house prices in Auckland fall enough and quickly the following will happen

    1. Mortgagee sales on a grand scale further eroding the market prices.
    2. BBoomer unable to sell up and move to smaller cheaper houses thereby freeing up capital for investment to supplement their Nat Super or using some of the capital.

    Nope. Fact is no pollie is going to do anything to reduce Auckland house prices. Their future job opportunities hang on not so doing

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  47. Komata (1,142 comments) says:

    Wasn’t/ isn’t Len Brown a man of some standing in the labour party (especially in South Auckland)? If that is the case, then his actions would seem to make perfect sense:

    Housing for ALL, and down with the ruling classes.

    ‘Housing for all’ (a great rallying-cry BTW to the uneducated lower classes) presupposes the placement of large numbers of ‘poor’ in apartment blocks, and by placing said blocks in areas inhabited by the ‘ruling classes’ (St. Heliers, Glendowie, ‘The ‘Shore’), you automatically reduce (cheapen) the capital value of those areas and immediately hit ‘the ruling classes’ where they feel it most; in their pockets. Keeping house prices high mean that the council can screw the ‘ruling classes’ (who don’t dare leave, as they know they will never do as well anywhere else) for whatever costs they deem ‘proper’ while providing more money to enable the building of more apartment blocks in ‘ruling class’ areas.

    It’s a self-perpetuating cycle, and as a concept it’s brilliant. This isn’t about town planning gone mad, it’s about a careful, creeping and systematic imposition of labour party (socialist) policy.

    And we all thought it was something else (Which of course explains Brown’ aversion to anything that National suggested)

    BTW: There IS a local body election this year isn’t there? With support for such housing policies amongst his South Auckland working-class ‘friends’ , guess who will be returned on a landslide? Who else but Komrade Len.

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