"In Tokyo, good things [like affordable housing] have been created through private initiative.”

EMERGENT TOKYO: “This book demystifies Tokyo’s emergent urbanism for an international audience,
explaining its origins, its place in today’s Tokyo, and its role in the Tokyo of tomorrow”

"'As the Japanese government attempted to rebuild their devastated capital city [after the War], they initially drafted a comprehensive plan, but soon concluded that they lacked the budget to carry it out. And so, in areas where neither the government nor the country’s real-estate and transportation mega-corporations could properly fund reconstruction efforts, whole neighbourhoods instead rapidly rebuilt themselves. Working on a small scale, residents rebuilt homes and shops using scraped-together funds while relying on little more than their collective grit and inventiveness, and black markets full of micro-entrepreneurs sprung up around the city’s major train stations. These neighbourhoods were not initially planned, per se—they emerged, and their ramshackle, spontaneous spirit can still be felt today when walking Tokyo’s backstreets.
    "'This approach was adopted out of harsh necessity, but the resulting neighbourhoods have a striking charm: intimate townscapes with exceptional vitality and liveability, featuring a fine-grained urban fabric comprised of numerous small buildings.' ...
    "Because of Japan’s light touch, zoning it is relatively easy to build housing in Tokyo, and thus the city is not as 'unaffordable' as you might expect.*  Tokyo has also avoided the bland uniformity of the major cities in China....

    "Two full-time workers earning Tokyo’s minimum wage can comfortably afford the average rent for a two-bedroom apartment in six of the city’s 23 wards. By contrast, two people working minimum-wage jobs cannot afford the average rent for a two-bedroom apartment in any of the 23 counties in the New York metropolitan area. . . .
    "Some cities, like Singapore and Vienna, have bucked the trend by using public money to build affordable housing. Almost 80 percent of Singapore residents live in public housing.*
    "In Tokyo, by contrast, there is little public or subsidised housing. Instead, the government has focused on making it easy for developers to build. A national zoning law, for example, sharply limits the ability of local governments to impede development. . . .
    “'In progressive cities we are maybe too critical of private initiative,” said Christian Dimmer, an urban studies professor at Waseda University and a longtime Tokyo resident. “I don’t want to advocate a neoliberal perspective [sic], but in Tokyo, good things have been created through private initiative.”

~ Jorge Almazan, from his book Emergent Tokyo, NY Times from their article on 'How Tokyo Achieves Affordable Housing 'and Scott Sumner, from his post discussing both: 'Emergent Tokyo'

* 

RELATED:

 

Fix spec building to make Auckland affordable again - NOT PC, 2013
"The key to making Auckland liveable is to make it affordable—a fairly complicated and heavily politicised subject, so let’s try to make it simple: we won’t have an affordable Auckland until the model for “spec” building is viable once again.
""Spec building being 'speculative' building—a builder buying land, building a house and “speculating” he can sell it to a buyer for a reasonable profit. This is how the vast majority of NZ’s cities have been built, by small builders hoping to make a modest profit.
""But in recent years this model has broken. A simple back-of-the-envelope analysis demonstrates why...."

 

More than 1 million refugees have already fled Ukraine., and that number could easily double. Fortunately, says  Thibault Serlet in this guest post, there’s a concept called refugee cities that may be able to help these people help themselves -- help them, he explains, by seeing them as more than just mouths to feed. Can these cities help fleeing refugees? Yes, he says, if they are done right...

Image Credit: UN Women Europe and Central Asia - Flickr | CC BY-NC 2.0

Can Special Economic Zones Help Ukrainian Refugees?

by Thibault Serlet

More than 1 million refugees have already fled Ukraine. Experts warn that number could double if the conflict continues to escalate. Fortunately, there’s a concept called refugee cities that may be able to help those fleeing the conflict.

The idea goes something like this: first, create a Special Economic Zone (SEZ) near a refugee camp. The SEZ will have incentives to facilitate doing business—such as tax incentives, less-restrictive labour laws, exemption from currency controls, and such. The goal would be to incentivise businesses to hire refugees and generate economic growth by enhancing economic freedoms.

The most well-known advocate of refugee cities is Dr. Michael Castle Miller, a well respected SEZ legal consultant who has contributed towards the creation of many of the best known SEZ frameworks in the world. He is the director of the Refugee Cities foundation dedicated to promoting the concept.

International support for refugee cities is growing. The World Bank has created a $2 billion USD fund to “support refugee haven countries.” A new European think tank called Solidarity Cities is also advocating for individual cities to step up and offer incentives to businesses who hire refugees.

There are a number of high profile success stories around the world, such as the Kigali Free Zone in Rwanda or Shenzhen in China, where SEZs have been used to promote economic freedom and have achieved incredible results.

Having said that, it’s important to caution that more government support might increase attempts at central planning, destroying the core principles of economic freedom required for a project like this to be successful. The third of SEZs that are not state funded are already doing great. According to an International Labour Organization and World Bank study from 2008, more than half of the world’s manufactured goods are produced in SEZs. That same study found that SEZs that are privately managed have lower vacancy rates, are less corrupt, and more efficient.

As one example, the government of Jordan has already created SEZs to create jobs for Syrian refugees. The programme has received significant support from the international community, with development finance institutions contributing more than $1.7 billion USD. The Jordanian government announced in 2016 that it hoped that its SEZs would create 200,000 jobs for refugees by 2021; however as of 2022 only 80,000 jobs have materialised. This is still 80, 000 more than would have otherwise been created.

Critics however argue that the infrastructure in the refugee zones is of generally poor quality, the incentives do not go far enough, and that without adequate job training programmes the zones can only act as low-wage labour camps. One critic explained that:

Even when opportunities have been advertised through job fairs few Syrians have taken up roles. Part of the problem is that the jobs available in these industrial parks are often in the garment sector or similar areas, low-skilled, low-paid jobs that commonly employ women. Many Syrians don't want these jobs: they'd rather take work in the informal sector, where pay and conditions are better.

The problem seems less to do with the concept, than with the general level and type of capital investment in Jordan itself -- and the 'institutional' reasons that this is so limited.

Ethiopia is also considering a similar programme, although it has yet to formally take off.

Refugee Cities Can Help Ukrainians… If They Are Done Right

With better institutional support -- more secure property rights, sounder contract law etc. -- European countries are well placed to consider reviving and revamping the idea of refugee cities to help Ukrainians fleeing the Russian invasion of their country -- to help them by freeing them to help themselves.

Refugee SEZs also have a major geopolitical advantage: neutral countries that want to avoid taking sides, like Switzerland, can safely create them without fear of compromising their neutrality.

To avoid repeating the mistakes Jordan made when attempting to create SEZs for Syrian refugees, they will need to ensure that:

• refugee Cities / SEZs have adequate infrastructure
• employers enjoy strong incentives (tax breaks, labour law exemptions, etc…)
• there is adequate coordination with global development finance organisations (World Bank, UNHCR, and ERDC)
• the focus is on creative private-sector jobs, not government-driven growth
• there is a path for refugees to return to Ukraine when the war ends

The problem with past attempts at creating refugee SEZs or cities is that they did not prioritise economic freedom. They will succeed if refugee cities enshrine liberty, rather than infringe on the freedoms of investors and refugees. More money from the government will likely be counterproductive, yielding far worse outcomes for the people that these projects supposedly try to help.

In order to both improve the economies of their home countries and advance freedom -- and to give the best long-term support to fleeing refugees -- SEZs only need to do three things:

1. Be entirely privately funded and managed
2. Be located on land that is purchased on the market rather than seized through eminent domain or privatisation of informally owned land
3. Be allowed to fail if market conditions do not favor the development of certain zones

Zones that follow these three rules will either succeed or fail, depending on whether or not market demand exists for what entrepreneurs therein have to offer. They will not become bloated state-sponsored leviathans that continue to survive year after year despite high vacancy rates. Only then, when zones are truly subject to market forces, will they begin to do what they are supposed to do, and quietly advance freedom.

Hopefully, there will soon be peace in Ukraine. But if the war continues, then hopefully refugee cities along these lines can help mitigate some of the human suffering.

* * * * * 

Thibault Serlet is the Director of Research at the Adrianople Group, a business intelligence firm that focuses on Special Economic Zones and master planned cities. He is also the architect of Open Zone Map, the world's largest SEZ dataset. He advises for Pronomos, a VC fund that invests in new city projects and co-founded the Startup Societies Network, a charter cities think tank. He frequently writes about SEZs, economic history, and the open data movement.

A version of this post previously appeared at the Foundation for Economic Education.

Another post-disaster disaster: Brownlee’s failure the only thing that keeps building

 

Christchurch Disaster Gerry Brownlee [pic Getty Images]

Christchurch City’s Earthquake Gauleiter Gerry Brownlee has been a bigger disaster for the city than the quake.  Instead of enabling investors and property owners to do their own rebuilding, since Day One he has squatted over them all and stamped down any signs of entrepreneurial breakout. He has simply refused to learn the lesson that cities only grow and flourish because of private energy and investment, and the post-disaster lesson heard from around the world: that public inertia and uncertainty kills private effort and investment – that handing a city over to self-declared experts is the best way to kill it, whereas taking a city off welfare and making it an enterprise zone allows it to rebuild. And fast. (Unlike here.)

No wonder then that, more than five years on, recovery is still a dirty word.

Brownlee’s busybody “plan” for the city was to throw taxpayers’ money into government “anchor projects” in order to suck in private investment. Yesterday’s announcement that “progress” is finally being seen in building his much-delayed new convention centre, progress that will cost the taxpayer around $300 million plus cockups and without any private involvement whatsoever – a pig in the middle of a big empty carpark -- tells you once more how well that strategy is going. As a fellow twitterer sagely observed:

This is a man who could make a pig’s breakfast out of a private drinking party.

A walking disaster.

He should resign, along the the policy he walked in on.

.

Misreading Special Economic Zones [updated]

[UPDATE: SEZ report is launched tonight at the Mac’s Function Centre in Wellington at 5:30pm. Get along.]

I welcome the welcome that Local Government NZ, the councils’ counsellors, have given to the NZ Initiative’s idea of Special Economic Zones.

Local Government New Zealand (LGNZ) welcomes The New Zealand Initiative’s new report, In the Zone: Creating a Toolbox for Regional Prosperity which recommends the use of Special Economic Zones as a way to test new regionally tailored policies and encourage regional economic development. …

Lawrence Yule at LGNZ however seems to be on a very different page about the actual point of the proposal

“This innovative report is about leading a principled discussion with our key partners around more fit-for-purpose funding options.”

Ah, no, Lawrence. It’s not about just another way to put your hand in ratepayers’ and taxpayers’ pockets.  Consider the Initiative’s leading example:

China’s Shenzhen SEZ has proven to be a spectacular success and showcases the possibilities of an SEZ. Shenzhen itself was partially inspired by Hong Kong’s example. Innovations developed in Shenzhen spread outward, benefitting broader regions.

The success of China’s Shenzhen SEZ was not due to “more fit-for-purpose funding options” for council, whatever the hell that might mean. As the report itself makes clear

The zone came about as part of Deng Xiaoping’s wider goal to open China to the rest of world… The zone’s establishment within a traditional, centrally planned economy symbolised Deng’s commitment to liberalisation…

Since, as the report’s authors say, “New Zealand simply suffers from too centralised an approach that inhibits policy flexibility and policy evaluation,” that’s just one simple example of Mr Yule’s myopic misreading of the manuscript. Maybe he should read it more thoroughly before commenting further. As you can here: ‘IN THE ZONE CREATING A TOOLBOX FOR REGIONAL PROSPERITY.’

UPDATE: Report’s lead author Eric Crampton clarifies how the Enterprise Zones encourage council’s to participate:

On SEZs, here's the basic mechanism:
1) Council proposes an SEZ to Central (what regulatory carve-out they want, or what policy change);
2) Central approves, or not;
3) Local government gets a minor kickback from central government for part of the increase in tax revenue sent to the Beehive from their region. They only get it for increased growth, not for baseline. Amounts of money at stake are small from a central government perspective but could be large from local government's perspective, encouraging some changed mindsets about how important it is to consent new businesses, and new houses, quickly and efficiently. 

I’m guessing that bureaucrats like our Lawrence are eyeing up the ‘kickbacks’ that are there as incentives for growth, with no thought to the fine print of how they might achieve that…

More here at the NZ Initiative’s blog:

We suggest using existing district and regional councils to test-bed policy reforms in the places that want to try them out. Instead of changing the overseas investment act for the whole country, and buying a big ideological fight over it, why not loosen the rules for the Greater Wellington area and evaluate what’s happened? RMA reform has proven impossible. But if the West Coast of the South Island wanted to try a different version of the RMA making it easier to consent sustainable mining activities, and if Auckland wanted to try one focused on achieving housing affordability, why not let them try it?
    We couple the policy trial zone suggestion with a tax sharing mechanism so that local councils would have strong incentive to propose the kinds of special economic zones that would do the most good for their regions. Councils presiding over stronger economic growth should receive some of the increased tax revenue that otherwise flows only to the Beehive. We do not flesh it out in great detail, as there are many ways that could work and that would satisfy the principle. But if median regional GDP growth for Auckland has been around 5%, then it could receive a small share of any growth in remitted taxes below 5%, but an increasing share for increases above 5%. And regions that have grown more slowly would face lower benchmarks.
    Two principles:

1. While we give a few suggestions of policy trial zones that we think would be good ideas, the zones should really emerge from what locals see as the central government regulations and policies holding them back.
2. Central government should only authorise a policy reform zone where it would be happy for the policy to be taken up by any other region wanting it. Otherwise, it could turn too easily into dirigiste central-government winner-picking.

The report has received decent initial coverage. Oliver talked about the report on Q&A on Sunday; the video is embedded below. NBR provides an excellent transcript.

The Dom’s Collette Devlin covers the overall idea, and the Wellington application, in two nice pieces.
    Nevil Gibson at NBR also likes the idea; we’d first mooted the idea at NBR a year ago.

RELATED POSTS:

• Are enterprise zones finally “a thing”?
• GUEST POST: Make Christchurch an Enterprise Zone not a Ward of the State
• A conclusive experiment with a crucial lesson for Christchurch
• What would entice them back? 

Are enterprise zones finally “a thing”?

Ideas percolate slowly.

So it's encouraging to see the Government is at least entertaining the idea floated publicly this week by Local Government New Zealand (LGNZ) [and for many years by many others] for 'Special Economic Zones.' It shows the Government may be relaxing its more purist and laissez faire approach from before the Northland election and looking at some more pragmatic ideas.

The reason the thinking in that quoted paragraph is so confused is because it’s written by the frequently befuddled Bernard Hickey (an idiot who seems to think the best thing about a Special Economic Zone is the cut the government gets!), but the story he reports is still a good-news one.

A 'special economic zone' could allow a struggling region such as the Manawatu/Wanganui or Northland or the East Coast to trial the relaxation of either national or local laws or revenue raising measures to see if it might kick-start economic growth. Any local Government in that region would in exchange for relaxing the law then get to share in the benefits of economic growth, possibly through some sort of income tax or GST sharing arrangement.

Clearly, Hickey shares the idiot-focus with LGNZ.

LGNZ did not spell out exactly how they might work or who might use them [if central Christchurch isn’t screaming out to you right now as the obvious first candidate that can only be because your brain is switched off], but the idea is out there now and, unusually, has not been rejected outright as other regional development suggestions have been in the past.
    The idea was initially run up the flagpole in New Zealand last September by NZ Initiative Head of Research Dr Eric Crampton after a visit to Hong Kong. China has used special zones extensively to try out new ideas on relaxing taxes and other regulations, and with great success, especially across the border from Hong Kong. He also pointed to a special zone used in Honduras to allow free trade and different types of government. Dr Crampton suggested local Governments could relax Resource Management Act (RMA) rules in such a zone.

And so they could. And much more besides.

The NZ Initiative has since circulated more detailed economic zone ideas amongst policy makers in Wellington and received a positive reception from all sides. Another suggestion was for rules restricting overseas investment to be relaxed for a specific region.
    LGNZ President Lawrence Yule then included the idea in the association's 10 point plan for local government funding reform released at this week's conference in Rotorua. He later said such a zone could include minimising RMA rules or fast-tracking consents, or even the potential for tax or rates relief.
    LGNZ also suggested in its funding reform plan that the central Government share the fruits of any extra economic growth generated by such a zone, to provide an incentive for Councils to 'go for growth'. That could include granting Councils a share of income taxes or GST generated in their region from the extra growth.
    The lack of incentives for growth in many regions is more of an issue than many think.

And this, really, is all that encourages Hickey and LGNZ and, no doubt, the likes of Looney Len to get excited. They read a proposal containing the words “granting Councils a share of income taxes or GST generated in their region” and they simply start frothing at the mouth.

Mind you, at least in that same proposal we also have the words “the fruits of any extra economic growth generated by such a zone,” which is the most recognition you’ll ever get from bloviating blowflies like Bernard that liberty and spontaneous order might just be better for humanity’s progress than regulation and central planning.

And if it takes a bit of rates/income tax ju-jitsu from Dr Crampton and the Initiative to get the grey ones on board, so be it.

A conclusive experiment with a crucial lesson for Christchurch [updated]

Occasionally a situation will appear in the sphere of the social sciences that has all the features of a laboratory experiment. One such “experiment” with direct relevance to Christchurch has just appeared—two American cities torn apart a year ago by tornadoes, one rebuilt by the pursuit of “selfish” profit and the other by planning experts who know what’s best for everyone.

The “experiment” and its results are described by Jerry Kirkpatrick with the help of the Wall Street Journal:

[The first] of these two cities is Tuscaloosa, a “showpiece,” as the city’s recovery plan states, of  “state-of-the-art urban planning,” with “unique neighborhoods that are healthy, safe, accessible, connected, and sustainable,” anchored by “village centers”… The Tuscaloosa plan however (as the WSJ notes) “never mentions protecting property rights.” It’s the monument that counts, the “state-of-the-art” plan.

Sounding familiar? This is exactly what we’ve been hearing from the “experts” in Christchurch, isn’t it—the monuments, the “state-of-the-art” plans, the telling of property owners to go to hell.

[The city of] Joplin, on the other hand, took the free market route by suspending licensing and zoning regulations and allowing home and business owners to make their own decisions as to when and how they were going to rebuild. No monuments were built in Joplin.

This too should be familiar---it’s the Enterprise Zone some of us have been crying out for in Christchurch ever since the first quake.

RESULTS: So with the experiment set up, how did it proceed?

Joplin is thriving, largely revived and rebuilt. Tuscaloosa, on the other hand, still has un-demolished ruins, vacant lots, and businesses awaiting permit approvals to rebuild.

CONCLUSION: The conclusion is dramatic, and is confirmed by the blundering dunderheadedness in Christchurch (which hasn’t even progressed as far as Tuscaloosa—handing a city over to self-declared experts is the best way to kill it. Whereas taking a city off welfare and making it an enterprise zone  allows it to rebuild. And fast.

This is an old story, of course: West vs. East Germany, South vs. North Korea, the US vs. the USSSR. So why is the lesson never learned that capitalism works and socialism—central planning of any kind, including urban planning—does not?

 Kirkpatrick has the answer here too.

UPDATE:  Daniel J. Smith, economics professor at Troy University, studied the rebuilding of Joplin, Missouri in the months following the tornado. Watch as Professor Smith discusses how economic freedom can help areas recover from natural disasters.
"I think one of the key factors in the recovery process in Joplin, from the tornado, is that the government officials allowed the community to start rebuilding itself." -- Daniel J. Smith

[Thanks to reader R.C. for the link]

The earthquake was a natural disaster. Everything since has been man-made. [updated]

The Grey Ones have done everything wrong since the Christchurch earthquake.

They barred people from their city.¹

They evicted people from their homes.²

They slowed down their repairs and insurance pay-outs.³

They slowed down reconstruction.⁴

They first banned the demolition of any heritage building (killing many people during the second big earthquake) then carried out themselves, by order, the demolition of all heritage buildings!⁵

They made a lottery of which home-owners would be paid out, and how much.⁶

They talked about “rebuilding” but have made it virtually impossible.⁷

They have barred for months the building of new commercial buildings 0n existing central-city land.⁸

They have barred the building of new commercial buildings on new land around the fringes.⁹

They have barred the building of new homes on new land at all.¹⁰

They handed monopoly status to Fletcher Building et al, locking out local contractors from work they know well.¹¹

They encouraged the demolition of the Cathedral instead of leaving the ruin as a memorial.¹²

At a time when financial pain could not be worse they hiked rates instead of lowering them. ¹³

At a time when financial pain could not be worse they hiked their own salaries instead of lowering them. ¹⁴

Instead of allowing innovative prefabricated housing to be installed around the city, they have insisted on conformity and encourage “a tsunami” of construction workers to head to the city.¹⁵

Instead of allowing enterprise to flourish in a city on its knees, the Government instead appointed a central-planning Czar to kneecap whatever enterprise did emerge. ¹⁶

Instead of dismissing the dysfunctional Christchurch bureaucracy the Czar instead compounded the  problem by adding a new bureaucracy on top. ¹⁷

Instead of giving entrepreneurs certainty about all the decision-making being done—decision-making that should have been left in the hands of those entrepreneurs—businessmen have instead been left in the position of supplicants to whom information is doled out only when the Czars and their courtiers deem it necessary-even now being required to “hurry up and wait” for months while the Czar decides what they will be told to do.¹⁸

Every single thing they could have got wrong, they’ve got wrong.¹⁹

The job the earthquake started, the Grey Ones have been doing their best since 2010 to complete. The have virtually destroyed the place as a functioning city—with only the heroics of local businessmen keeping it running at all.

And now?

Now the Grey Ones are arguing amongst themselves about who should implement their “plan.” Their top-down plan.  Their centrally-planned plan. Their “vision” for the city formed in a void—without any cognisance whatsoever of the hopes, dreams, ambitions, plans and investments of the property-owners, entrepreneurs and citizens of Christchurch whose lives, plans and property they wish to control.

And arguing too about who should wield the “coercive power”²⁰ they deem necessary to bludgeon unwilling property-owners, entrepreneurs and citizens to follow the Grey Ones’ plan(s) instead of their own.

The grey ones really do need a simple message:

Get the hell out of the way!

Let people make the most of what they do have now by minimising the difficulties they face in doing something with it, not giving them more burdens to slow them down.

Let them be free and unencumbered to move to where they need to, and build what needs to be built.

In short, abandon your top-down “plans” and centrally-imposed “vision” and allow the visions of entrepreneurs to connect the needs of one person after another with their own capacity to meet it.

In other words, declare an Enterprise Zone and get the hell out of the way. Make Christchurch an Enterprise Zone, not a Ward of the State.

And if, you must, re-emerge from your holes in two years time to take credit for the success.

But for Galt’s sake allow some success to happen in what was once New Zealand’s second-largest city.

Before it’s too late.

* * * * *

FOOTNOTES:

1. In those first crucial hours they barred rescuers from rescuing. And in the following days they then tried to shut down student volunteers from helping out, and tried to ban volunteers’ “unauthorised” importation of food, supplies and port-a-loos into desperate parts of the city. And in all the months since the earthquake they have barred owners from their own buildings using military power, eventually giving owners access only after repeated protests, and only for a very, very brief time.
2. Conceding only belatedly that the likes of Joe Bennett could take responsibility for his own life, thank you very much.
3. By EQC’s inept duplication of what the insurance industry was already doing, and incompetent and long-delayed signing off of what they should never have been involved in, for which everybody needed to wait.
4. Builders have ben sitting on their hands for over a year while they wait for council and government to allow folk to do what they already know needs to be done.
5. Neither time with even any consultation with the owners of these buildings—even before demolition of their buildings was carried out!
6. To this day, few can find any logic to the “system” used.
7. Yes, they talk well.  This is, for example, Bob Parker’s only skill. Talking. But what rebuilders need is not polished words from politicians who are TV presenters but the certainty that comes with recognition of the rights they have in their own properties.
8. Property owners in the central city have been treated exactly like mushrooms: kept in the dark and fed bullshit. Not one could make a sensible decision regarding their own property—not because of the earthquake but because of council and government intransigence. And all will very soon be liquid by virtue of the insurance payouts that should soon be arriving. How many do you think will want to reinvest that liquidity in a place from which it’s been made clear they’re not wanted? All that might keep them there is loyalty.
9. Chch businessmen have done wonders working out of whatever space they can find, much of which was commercial space on the fringes empty before the earthquake; but council “planners” have done all they can to resist any new commercial space going up anywhere else than in the places designated in their “plans”—which is for the most part in places either not wanted by by businessmen as commercial space or not capable of being built on as commercial space.
10. With demand going through the roof and the supply of housing around the city having been hobbled by planners even before the quake, rents and house prices around Christchurch are going through the roof.  The response of planners has not been to realise their cherished “zones” for new housing (which are misguided fantasies at the best of times) are now as obsolete as the dodo, but instead to instead ever more firmly that “no new land will be released for housing.” So instead of new land at $50,000 around the fringes being available for rebuilding, there  is little land and what there is remains unaffordable for most.
    UPDATE: Eric Crampton: “It is criminally insane that Council barred developers from building new houses on the outskirts of town after the quakes. More than a year on, how many new houses do we have compared to the number destroyed?” Answers on the finger of one foot.
11. The mantra of this Government has been “letting business work”: by which they mean “doing deals with businesses they choose.” This is now known as “picking winners.” In Mussolini’s day it was called something starting with an ‘F.’
12. Leaving a ruined cathedral as a memorial worked as a real catharsis for cities like Berlin, Liverpool and Coventry. So why not try it here?
13. A massive 7.5% rates rise, on top of huge projected increases in “development levies.”
14. Only a massive protest put off some of these rises, which may have only delayed some of the highest-profile rises until protestors have other things to worry about.
15. Using prefabricated building technology to supply the housing shortage, building workers can be anywhere in the country--or even anywhere in the world. But using traditional labour-intensive techniques, that tsunami of workers will all have to come to Christchurch—exacerbating the already dire housing shortage. (This is just what govts do. When the Australian government wanted to fix housing problems in the Northern Territory the first thing they did was send thousands of bureaucrats to the Northern Territory to fix them—whose arrival in the form of all that new housing demand immediately made the already dire problem worse!)
16. Former woodwork teacher and now Senior Gauleiter for for Earthquake Recovery Gerry Brownlee has done nothing at all with his extraordinarily extensive powers to remove bureaucracy, and instead has just added his immense weight to enlarge the existing bureaucratic stew and increase the meddlesomeness of all the bureaucracy that previously existed. While adding more. And not one of the people added or involved realises that for a city to thrive and cope with adversity, it must be resilient, affordable and flexible.
17. Christchurch was already “a bureaucratically buggered city" before the earthquake, and now with several new layers either added or mooted it’s more so, not less so. And it’s not like this Government hasn’t got a record of dismissing councils it doesn’t like.
18. Even in recent days we witnessed Deputy-Czar Sutton telling a strangely docile business audience their job was not to get on and do things, but to counsel patience in others.
19. And believe me, I’ve only scratched the surface here with these examples!  Feel free to add your own in the comments.
20. Listen to Chch East Labour MP Lianne Dalziel relish the phrase “coercive power” in this interview this morning—her only objection being that she thinks it should be her chums wielding the power instead of Gerry’s.

UPDATE:

“Screwed?” asks Eric Crampton:

While Council's made some (*) great efforts in getting the sewers and water supply working again, onanistic light rail visions and new stadium plans seem more important to our Mayor and Council than things fundamentally more important to anybody on the East side of town, to commercial property owners downtown, and increasingly to the West-side folks now inconvenienced by rental price increases from East-side refugees.
Wellington ought to be awfully worried about getting EQC fixed before they get their earthquake. And, adopting the Productivity Commission's recommendations about easing up the regs around land use policy isn't just sound policy for housing affordability, it also makes the whole country less fragile in case of earthquake.

“Christchurch is so screwed,” says Bill Kaye-Blake:

The government is doing what bureaucracies do. It is creating processes. It is making sure that everything is correct, that all the boxes are ticked, and, above all, that their asses are covered. So it moves slowly, carefully. Safer to keep people from doing something than allow them do the wrong thing.
Insurance companies are doing what they do. They are minimising their expenses and protecting their bottom lines.

Even dear old Chris Trotter recognises Cantabrians are being screwed—but he disregards entirely that those who will actually rebuild the city (if they are not restrained from ever doing so) are not the Grey Ones but the very entrepreneurial “class” who built it in the first place; he still deems a centrally-planned paradise possible; and he doesn’t realise how govt has been encouraging insurance companies’ intransigence. Still…

If politics is mostly about perception, then, looking at Christchurch, this Government’s in big trouble. Because, perception-wise, this Government’s handling of the rebuilding of New Zealand’s second city hasn’t just gone from Bad to Worse; Worse is sending Gerry Brownlee post-cards.
    The “reality” of the situation may be very different from people’s perceptions – it usually is. But the very fact that Cantabrians are having immense difficulty translating the reality of their everyday lives into anything remotely resembling the Government’s spin is a problem in itself. If disaster management isn’t grounded in telling disaster victims the truth, the whole truth, and nothing but the truth, then it isn’t management – it’s mismanagement.
    And that’s the problem this Government’s faces: an awful lot of people living in Christchurch appear to have stopped believing that they’re being told even a fraction of the whole truth….

One year on, and Christchurch is still on welfare [updated]

I think I agree with Lindsay Mitchell and others who feel uneasy about the mawkishness of the widely publicised public commemorations one year on from Christchurch’s February 22 earthquake. As she says,

The commemoration of tragedy, not confined to Christchurch by any means, is starting to take on a strange religiosity in a largely secular country.

To which reaction I add my disgust at the entities grandstanding in the commemoration who have done nothing since the tragedy but get in the way of individuals trying to recover from the disaster.

The earthquake was the first disaster. It has delivered a second one: the political decisions made in the aftermath.

From day one on, the earthquake has delivered to the kind of person who feels drawn to clipboards and jackboots the power over others they could never get in real life. In fact, virtually the whole panoply of government, central and local, has been ranged against those trying to recover—from Gauleiter Brownlee and Boss Parker on down, with the clipboard wielders in the van: standing athwart individuals trying to rebuild staying “Stop!”

Folk in houses only partially damaged, or not damaged at all, are told by council thugs to “Get Out.”  “By order!”

Folk in other houses are still waiting to be told by government’s minions whether or not they will be allowed to rebuild, repair or remove themselves, or whether (or not) EQC will bother paying their repairers.

Builders have been left to sit on their hands while all this happens, since there’s precious little rebuilding going on, or allowed to go on.  Not just due to the dithering of  EQC et al. Right round the city, while people desperately seek new housing and queue for the few rentals around, there is good land to build houses on. But it can’t be built on and it won’t be built on, because the council’s overlords and underplanners have deemed it all off limits: “off limits” because to build here would violate their precious “strategic plan” for the city—after earthquakes strong enough to shake the city to the core, but not strong enough to shake a “strategic plan” drawn up long before earthquakes were even thought about, and dangerously infected even then with the poison of so-called “Smart Growth.”

Meanwhile, those belatedly selected by the government’s mandarins to build “temporary accommodation” for Christchurch’s evicted hordes have finally coughed up around the city what can only be called refugee camps—the all-too predictable sub-standard apologies of places that will quickly become the slums of tomorrow, while helping to kill residents’ dreams of todays. [Read David Haywood talk here about his move into the spirit-killing Linwood Park “Temporary”  Earthquake Village he’s photographed at right.]

Touring around the outskirts of Christchurch one year on an outsider can only be impressed at all the energy and activity going on. Going on in all the homes and businesses located and relocated there on the outskirts, frequently over the opposition of planners who wish them elsewhere.

This is where the real business of Christchurch is now being done—in rubble used as concert chambers, garages being used as factories, in factory units being used as offices, in offices being used as shopping malls, in houses being used as shops offices, factories and over-cramped boarding houses.  But the council’s town planners and earthquake mandarins haven’t helped any of this process in any way at all; in the days after the earthquake they stopped owners demolishing dangerous buildings, and since the second they’ve done all they can to hinder these necessary and spontaneous “re-zoning” of activities within the city.  And it’s fair to say the council, CERA and Gerry Brownlee have treated business owners with property still inside the CBD with nothing but contempt.  Little wonder these business and property owners have been protesting for virtually the whole of the twelve months since the second big earthquake, and for four months before that.

So to see all these various lackies and sawdust caesars standing up on their hind legs today spouting about their good works keeping Christchurch on its knees is too much for me to stomach.

One year on Christchurch continues to struggle. What the earthquake couldn’t do, governments central and local have done instead. The first disaster was the earthquakes. The second disaster is the political decisions made in their aftermath.

Give people back their lives. Give them back their property rights. Discard this pathetic idea that only government can do things—when all it does do is either tax, ban or subsidise. Take Christchurch off its knees, take it off welfare, make it an Enterprise Zone for Galt’s sake …. and then get the hell out of the way.

That’s my advice for the mandarins one year on. Just get the hell out of the way.

UPDATE:  Auckland council without an earthquake is considering doing what Christchurch council after an earthquake is not considering, i.e., relaxing (albeit only very slightly) the planners’ ring fence around the city.

But even these baby steps are beyond the pale for Christchurch’s planners.

What would entice them back?

Recovery authorities are asking business, property owners and customers what would entice them back into Christchurch's quake-stricken CBD.

An Enterprise Zone would.

But never in a million tears would they consider that…

GUEST POST: Make Christchurch an Enterprise Zone not a Ward of the State.

In this timely Guest Post, Peter Osborne questions the conventional wisdom that “the gummint” must rebuild Christchurch, and suggests instead it remove its shackles that restrain New Zealanders rebuilding themselves.  It involves something sometimes called an Enterprise Zone . . .

Thought is already being given to the recovery of Christchurch, and the repercussions that this disaster will have on the New Zealand economy.

The direction taken now will set the tone for generations to come. Rather than proceed with the standard taxpayer bailout for Christchurch, we should pause and question whether this is efficient or even effective.

Rather than provide an adrenalin shot, bailouts have proven to be expensive placebos.

The situation with Christchurch has thrown us all into a higher level of vulnerability. Even before the earthquake, New Zealand industry had slowed and looked to be settling into stagnation. We were already feeling the pressure of higher costs across the board, and with events in the Middle East rising fuel prices will compound our problems.

New Zealanders can ill afford increasing taxes or forced levies to help its second biggest city back on its feet, as if it were just another welfare case. Such a drain of individual resources would finish us off as a first world nation, and deny the industry and expertise contained and presently lying shackled within the city itself.

The Prime Minister has already hinted how “the government” is going to inject some financial life into Christchurch’s recovery. However, in actuality, this makes it a taxpayer-sponsored injection—taking money from one group trying to build their own economic recovery to sacrifice to another trying to build an earthquake recovery.

It is a recipe for long-term and possibly permanent stagnation. It is also quite possible that many New Zealanders will regret having being so generous in voluntarily donating money and resources in the last few days, when the government will force them to pay again further down the road.

If we factor in the reality that Christchurch is already experiencing an exodus, be it more from trauma than economic strife, the struggle for recovery is compounded.

It is my opinion that for the good of Christchurch and New Zealand, our government must readdress their thinking on state-mandated economic “stimulus.” It has already failed everywhere it has been tried, and with the unique problems that Christchurch faces not only will it fail again there but it will take the rest of New Zealand with it.

If we are to make the best of a bad situation I can only see that government take a massive rethink and consider that neither rebuilding nor recovery requires any sacrifices from anybody. What that requires is that government reconfigure itself more into a moral boosting and motivating force only.

As we have already seen, when put to the test, New Zealanders are very resourceful and are very quick to help when others are suffering. In the long term, this is our chance to shine. We do not need our government to shine at our expense.

Rather than simply expanding the machinery of wealth redistribution to another round of “soak the rich,” and rather than expanding and raising again all the existing hurdles to growth and economic progress, I say it would be far better to remove hurdles altogether, and allow wealth to transfer freely and voluntarily.

What I’m talking about is making Christchurch an Enterprise Zone instead of a ward of the state.

• Christchurch must attract resources. Grant Christchurch a complete 3-year tax-free status, to be extended at discretion. Do this and the problem of attracting resources will disappear. The object is to change our view away from a coercive patch job to a freewheeling environment of entrepreneurial opportunity.
• Christchurch must have thousands of new and rebuilt homes. Our government should make immediate steps to remove  the bureaucratic hurdles that have stifled growth and rebuilding, and made building affordable houses completely unaffordable. This includes the existing regulatory system of permits and inspections.
  Let those who own their own property determine between them and their insurance company what they wish their building standards to be. Such a system can be set up very quickly as it already exists in reports.
  Building is productive. Letting things lie idle while waiting for permission from people who have no genuine interest is not.
• Cantabrians don’t needs the grey ones breathing down their backs. Make Christchurch an ETS and RMA free zone.
• Cantabrians don’t need to be told where and how they will rebuild their city—they don’t need another centrally-planed “worker’s paradise.” Bus town planners out of Christchurch permanently and allow the city to reinvent itself spontaneously. This would be a wonder to see.
• Cantabrians don’t need barriers to employment. Remove the minimum wage. In a situation like Christchurch’s it is better to be earning something than nothing at all. And it is better to be achieving something with the diminished resources available than achieving nothing at all.
  We must trust that consenting adults can come to their own voluntary financial agreements.

We have two polar directions in which to take things from here: either central planning, or the unleashing of “spontaneous order.” I fear however that vested interests will instead prevail and take us down a road to third world status. For all concerned this would be a grievous mistake for which all New Zealanders will pay dearly now, as will generations that follow.

After every tragedy our preconceptions about human nature are re-evaluated. We realise the benevolence and strength of the average human being—and we’ve seen the power of voluntary cooperation even in the face of disaster, and of overbearing authority.

If the disaster experienced by Christchurch has bought out the reality of the average Kiwi, then we have already begun moving forward.

PS: What Peter is talking about in essence is this: Instead of impoverishing New Zealanders by rebuilding Christchurch from the top down in the image of the central planners (Galt forbid!), let’s unleash the power of spontaneous order and produce a new city the likes of which no-one presently thinks possible. The sort of spontaneous order John Stossel talks about here: