Council Economist tells it like it is

So, Auckland Council’s own Chief Economist gets it but the rest of Council is going to continue to act like a bunch of stubborn old stooges, and stick with the impossible dream of a building a compact city.

Auckland Council’s plans for higher density housing cannot succeed unless the city also expands further into the countryside, says the council’s chief economist.

Chris Parker said the only way to contain Auckland’s runaway house inflation – up $70,000 last month to $820,000 on a median price house – was to open up more rural land to relieve price pressure on a “dysfunctional” urban land market.

The council’s flagship compact city plan, based on more people living in apartments, terraced houses and townhouses within city limits, was necessary but unable to work by itself.

“Intensification won’t do it – not alone, it’s got to be part of a package,” Mr Parker told the Herald in an interview for the Home Truths series.

“Intensification increases the opportunities for what can be done on each piece of land and it increases the value of land underneath. The hope is that you can spread more houses on top of it, but the problem is we’re in a race we can’t win.  

“The rate of increase in land [prices] is always faster than the rate at which we can build houses on top.”

Mr Parker said public opposition to intensification made the process more difficult, as this further delayed the introduction of high density homes while land prices kept rising.

He described Auckland land prices as a vicious cycle: speculation caused land owners to hold off selling, which pushed demand “through the roof”, increasing prices and creating further speculation.

The only way to break the cycle was “good old-fashioned, school kid level economics, which is simply to increase the supply of rural land into the urban land market“.

I don’t even know Chris Parker and I like him. He’s also refreshing and he’s brass-balls brave. It’s great that he can spot a dead horse.

But I doubt the city planners and the big brass will listen to Mr Parker.

Those responsible for the compact city utopian crap sandwich don’t care.

They just think they know what’s best for everyone and they believe it is their right to control how we all live. ‘We know best’ is their mantra.

 

– NZ Herald

 


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • George Carter

    Chris Parker for mayor!

  • Seriously?

    He speaks the obvious truth, and that seems to happen less than it ought to, so good on him, but…

    Why is it the Auckland Council has an economist on staff, let alone a Chief Economist (and thereby others for him to be chief of)?

    • localnews

      And given they have more than one economist, why are they so appalling at planning?
      I assume nothing he says will be listened to.

      • biscuit barrel

        He wants to end ‘joint and several liability’ ,break the supply chain monopoly, allow foreign investors to develop very large (500+) lots etc etc.
        Most of it is really government/council getting into the development game . ha.
        Hes a dreamer

        • Raibert

          The governments been in the development game before, in fact they are historically the biggest developer of all time in NZ. There is absolutely nothing other than ideology stopping them from stepping in and fixing the Auckland property market.

  • Observer

    That’s fine, but how much rural land? Where does it end? Is it impossible for the government to tweak the target number of visas for people entering NZ? If each 1% population increase via immigration leads to approximately a 10% rise in house prices then easing population growth is obviously another option.

  • biscuit barrel

    Where are these large lots that can create new subdivisions. Most rural land was turned into lifestyle blocks long ago, and they are too expensive to develop into 600-700m2 lots, Penny packest of 5 lots at a time, buy owners who dont enough capital to put 5 letterboxes let alone a $2 mill project.

    Nick Smith flounced around thinking he could find 500ha of government land, he found 20ha.

    • one for the road

      Obviously you havent been out to NW Auckland recently! Take a drive through Scott Point by Hobsonville Point where the rural land is been developed for 6000 houses.. Or further out towards Whenupai, Kumeu, etc…

    • Uncle Bully

      You can buy my 65,000sq.m. lifestyle block on Auckland’s fringe if you like for $1.5m. Commuter trains and buses less than 2km away, town supply water at the gate. At 65% usage, allowing for roading, parks etc, that’s the equivalent of sixty 700sq.m. sections. Sound easy? No, because it’s outside the MUL and Auckland Council don’t like the idea,

    • GT

      Take a drive from Manukau to Papakura on Redoubt-Mill Rds and see the land that is not being used for anything other than land bank 100’s of acres 10 minutes to a train line or motorway. They know it’s going to happen but the council just don’t want it to soon or their much vaunted trains will fall over as they have cocked up roads & public transport for decades and just do small patch up jobs that take so long to finish they are out of date before they are finished. Take Melbourne they needed a new motorway down to Mornington get private enterpise involved (Toll road) and bang 2 years you have a 4 lane motorway for 30km’s. While here they are going to widen the motorway from Papakura to Hill road by 2 lanes and that is going to take 2 years just does not add up.

  • Phenandra

    One of the fundamental problem is that New Zealanders tend to have a strong aversion to living in high density housing – we tend to think of terraced houses and multistory apartments as being UK-type slums, no matter how flash they look.

    One of the reasons to stay in NZ is the detached housing and outdoor space. We’d all be off in a flash for much higher incomes and better weather if it wasn’t for the quality of the personal environment.

  • rua kenana

    The hopelessly bumbling Auckland Council along with their other deficiencies can’t even manage to hire a competent economist.
    His reported “good old-fashioned, school kid level economics …” clearly indicates his own level since it’s one of the more one-eyed attempts at economic analysis I’ve ever seen, and I’ve seen a lot.
    Look at half the problem, provide a quarter of a solution and then imply the whole problem has been resolved?? Very kid stuff indeed!! And my rates are paying for this rubbish.

    • one for the road

      He is either a decoy for the council to make good, or he will be unemployed very shortly!

59%