A report summary states:
- zoning restrictions, such as urban limits, have been quantifiably shown to increase land supply shortages and dramatically reduce housing affordability. According to Demographia, the three least affordable cities in the world are the compact cities: Hong Kong, Vancouver and San Francisco.
- New Zealand’s main cities are characterised by severely unaffordable housing markets, with Auckland particularly unaffordable due to urban growth constraints and inner-city height limits.
- high land costs in ‘superstar cities’ have been shown to create a property inflation cycle where prices exceed wage growth, only affordable for wealthy residents, forcing lower income residents from the inner city.
- all urban residents share the cost of land prices in rent and mortgage costs, not just property owners, as businesses have to pass on higher operating expenses through prices.
- far less restrictive planning regimes in the United States and Europe have consistently nurtured affordable housing markets for decades.
The conclusions are no surprise. The Productivity Commission has also concluded that the artificial scarcity of land for housing is the largest factor in house prices. There is a wealth of evidence that this is the biggest single factor.
They also look at the claims that compact cities have less congestion:
- US cities that have chosen to pursue compact development strategies tend to be more congested than dispersed urban environments (urban areas in North America most resemble New Zealand cities).
- research by the Reason Foundation, which quantitatively analysed 74 US metros over a 26-year period, found investments in public transit systems had little impact on overall traffic congestion.
- public transit, such as buses and trains, cannot replace the utility of cars for groups in society who have needs that extend beyond public transport routes, such as young families, working mothers and those who don’t work in the CBD (87 per cent of Auckland’s working age population are not
- employed in the inner city).
They also look at the claimed health benefits of compact cities:
- there is a weak relationship between high population densities and low obesity rates.
- some of the world’s most dense and compact cities in Asia are struggling with obesity epidemics similar to that of their Western counterparts, despite high levels of walking, cycling and public transit
- landscape and climate have a bigger influence over walking and cycling activity levels than urban form.
- quantitative research in Vancouver, a compact city, shows urban areas with high walkability are exposed to significantly higher primary pollutants than suburban areas.
- green spaces and vegetation within cities, proven to provide health benefits, are likely to decline as population densities increase, particularly gardens, parks and playgrounds.
Central planners tend to have a holy zeal to try and regulate a city so it is compact. That makes the job of the local authority easier. But it doesn’t make it better for residents.
My belief is that cities such as Auckland need to be able to build both up and out. You need both. Building up is great for younger people without kids who like inner city living. But many families don’t want to live in an apartment block, and are quite happy to live some way from the CBD. As the Initiative points out, only 13% work in the CBD.
Many will attack this report simply because they don’t like the conclusions. But will they be able to back up their beliefs with actual data that refutes these findings?
The full report is only 48 pages, well references and documented, and a good read.Tags: house prices, NZ Initiative