One of Len Brown’s catch-cries, apart from ‘Meet me in the Ngati Whatua Room’, is that Auckland must have ‘smart growth’.
This he tells us is why we must accept his unitary plan.
The only problem with that is the evidence the world over says otherwise.
In 1950, Florida had only 3 million residents, ranking 20th in population in the country. By the mid-2000s, it boasted about 19 million residents and had moved up to fourth in state population, behind only California, Texas, and New York. Recent years, though, have seen this upward arc broken. Florida was hard hit when its housing bubble burst in 2007â€”ahead of the national meltdown that triggered the financial crisis and subsequent recession. When its economy imploded in 2008 and 2009â€”unemployment eventually rose as high as 11.7 percentâ€”Florida, long a haven of opportunity, became a less attractive place to stay in or to move to. The stateâ€™s six-decade run of positive annual net domestic migration (that is, more people arriving in the state than leaving it) came to an end.
Floridaâ€™s restrictive land-use policies (better known as â€śsmart growthâ€ť or â€śurban containmentâ€ť) helped inflate its property bubble to massive size, making its bursting all the more economically painful. Such growth policies limit urban expansion, prohibiting new housing except in small sections of already dense metropolitan areas. As Brookings Institution economist Anthony Downs argues, these policies can destroy the competitive supply of land, driving land prices up (other things being equal) as demand rises sharply in relation to supply. These higher prices get passed along to prospective homeowners in higher home costsâ€”often made even pricier by various other regulations and fees. The rapidly escalating housing prices, in turn, create the potential for extraordinary profits for speculatorsâ€”or property â€śflippersâ€ťâ€”who, jumping into the real-estate market in considerable numbers, increase the excess of demand over supply, driving prices higher still, until a bubble begins to expand. Itâ€™s no surprise that markets with more restrictive land-use policies have much greater housing-price volatility, as research by economists Edward Glaeser and Joseph Gyourko has shown. Â Read more »