Density real key to growth

APIA president Andrew Bruce in the June 2015 issue of NZPI

Yesterday Labour’s housing spokesperson Phil Twyford said Auckland’s urban growth boundary has contributed to the city’s housing crisis and needs to go to fix the problem.

The urban growth boundary creates an artificial scarcity of land, which means that land inside the boundary is up to ten times more valuable than rural land and drives up section costs, he said.

But Auckland Property Investors Association president Andrew Bruce said he was unsure what Twyford meant by the “urban growth boundary”.

“Is it the current Metropolitan Urban Limit (MUL) which almost everybody agrees needs to be expanded and this is currently in process under the Unitary Plan?

“Or is he talking about the Rural Urban Boundary (RUB) which has been modelled to accommodate growth through until 2040?”

He said that, if Twyford is talking about abolishing the MUL, then that is already happening.

“But if he is talking about expanding the RUB, I see no benefit in this as the RUB already allows for population growth through until 2040 and, if, within the next 10 years, it is seen to be insufficient land it can be reviewed.

“Within the RUB there is around 11,000 hectares of land, known as Future Urban Zones (FUZ), which the Council has zoned so that infrastructure can be planned.”

Bruce said he supports growth and the creation of more opportunities to build houses – but it has to be in conjunction with planned infrastructure.

“The problem with sprawl is that the costs of the necessary infrastructure are very expensive. It is all very well to build more houses.

“But you need to have the infrastructure, from roads and sewerage systems to schools and medical centres, in place to support it.”

For this reason, he believes there needs to be increased density of housing around transport hubs.

The Auckland Council also has a focus on density.

The Auckland Plan*, which is different to the Unitary Plan, aims for growth to be 60/70% up within the Metropolitan Urban Limit (MUL) and 30/40% out into the Rural Urban Boundary (RUB).

In Bruce’s view, this all means the key issue for Auckland is the Unitary Plan commissioners’ recommendations on July 22 and then the councillors’ vote on August 19.

“Part of this is a decision on density: the density decision is about how to accommodate 60%70% of growth within the MUL and it will be very contentious.”

However, many others - including ACT, the Green Party and BusinessNZ - have rushed to support Twyford’s abolition proposal.

Property Council chief executive Connal Townsend said artificial boundaries, like the MUL and the RUB, were introduced to prevent sprawl, but work against land supply.

“When considering the supply side, developers need to be able to freely determine where demand is likely to occur. Currently, an artificial boundary is restraining demand to within that boundary, even though there may be significant demand outside of it.

Townsend, who also supports increased housing density, said that while the Unitary Plan will not have a MUL, the fact that the RUB is likely to be retained is a concern.

“It is a barrier to entry into Auckland’s land market which will continue to distort market behaviour. An artificial boundary that chokes land supply is counter intuitive.”

Meanwhile, Building and Housing Minister Nick Smith said Twyford’s call for an abolition of city limits was a welcome repositioning by Labour.

“Tight city limits and not allowing intensification is at the core of Auckland’s housing problems. It is limiting new housing developments, driving up section and house prices and encouraging land banking.

"A broad political consensus that the policy around city limits needs to change is helpful to progressing the necessary reforms to increase housing supply and to make them more affordable.”

But Smith said it would be counter-productive to ditch all the work done on the Unitary Plan to date with a simplistic approach of just abolishing city limits.

“We still need some rules to ensure new urban areas have appropriate infrastructure and services and that we make separate provision for industry from housing.”

The next key step is gaining support for a more enabling plan for Auckland, he added.

“I hope Mr Twyford and Labour will join me in encouraging the Auckland Council to support the new Unitary Plan in July, when the Independent Hearings Panel reports back.”

*The Auckland Plan is a strategic document which has been adopted by the Auckland Council.