Showing posts with label Hugh Pavletich. Show all posts
Showing posts with label Hugh Pavletich. Show all posts

Monday, 23 April 2018

3 questions for Labour's housing minister


In August 2017 Labour's Phil Twyford and his boss Jacinda Ardern told an electorate "fired up about housing issues" they would "remove barriers that are stopping Auckland growing up and out."
Labour [said Labour] will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering and holding up development. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds [said Labour]. … 
Eight months on there has been no action on either of these very important fronts. There is apparently, no urgency now their feet are under the Treasury benches.

Instead, the only action at all on the housing front has been  a xenophobic and ultimately destructive anti-immigrant ban on buying existing or funding new housing. Which was announced with an unseemly degree of urgency.

You can ask yourself what that says about this Labour-led Government's values. ("On this one," says one commentator who has answered the question for himself, "they have out-xenophobed Trump by miles.")

So there are three quetions that need to be answered urgently by this un-housing minister:

Q1. When are the Auckland Urban Limits being abolished ? 
Q2. When is bond financing for infrastructure to be introduced nationally ?
Q3: When will you remove your xenophobic and patently destructive anti-foreigner housing policy.
I think we should be told. Urgently.

[Hat tip Hugh Pavletich]
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Thursday, 7 April 2016

Lessons for Christchurch non-recovery from the Kobe earthquake

 

A new paper contrasts the recovery of Kobe, Japan, with the continuing non-recovery of Christchurch. “The article describes well known earthquake recovery initiatives that took part in Japan twenty years ago,” explains the author, Dr Ljubica Mamula-Seadon, Director of urban planning consultancy Seadon Consulting & Research, Auckland, New Zealand. “The results are there for everyone to see. It’s an interesting mix of rampant capitalism, enlightened democracy and traditional reliance on strong community networks.
    “I wrote the article to demonstrate by example what is possible, since it has been pretty impossible to convey the ideas in any other form. As I say at the end of the article, New Zealand is actually much better placed for this kind of partnership, in theory.”

Guest post by Hugh Pavletich

Kobe illustrates the critical importance of local community control for a successful recovery.

Even with the superior performances of the adjoining smaller units of local government of Selwyn and Waimakariri, the national and local authorities have yet to learn the critical importance of restoring local community control in Christchurch, New Zealand.

Years later, the order of the day is still what suits the bureaucrats.

Restoring community control was supposed to have happened following the February 2012 ‘Peoples Protest’ in Christchurch and the local government election late 2013. It never happened.

This important paper, explaining the community-led recovery management following the Kobe, Japan earthquakes of 1995, need to be read and discussed widely:

Community led opportunity for renewal — Kobe earthquake recovery 1995–2000
       – by Ljubica Mamula-Seadon

There are hugely important lessons within it for other urban areas from the Kobe and Christchurch earthquake events, with the contrasting recovery managements.

I am strongly of the view that events in Christchurch events have been less of an earthquake disaster, and more of a bureaucratic disaster.

Long-term poor-quality governance and planning from the time of the forced local government amalgamations of 1989, mean the Christchurch events will likely cost in excess of $NZ46 billion, when the costs should have been in the order of $NZ20 billion.

Little wonder that in a Local Government New Zealand/Colmar Brunton poll  taken in 2014 (but which was stalled by LGNZ for twelve months for its own reasons) it was found that only 28% of New Zealanders were able to say they were “satisfied” with the performance of local government. The 2015 Poll results have yet to be released by LGNZ. You may imagine why.

Not surprisingly, local government amalgamations suggested for Wellington, Hawkes Bay and Northland during 2015 were also and overwhelmingly rejected by the public. Unlike the bureaucrasts, they had learnt the lessons of the Christchurch and Auckland amalgamation disasters.

In May last year New Zealand Finance Minister Bill English acknowledged that   … the costs of the man-made disaster had jumped $1.1b in just a year.

To a question about subsidies or incentives to persuade businesses to come to Christchurch English said basic economics was the best way to attract people to the city.

"That means relatively cheaper housing, relatively cheaper business overheads."

In the discussion on Christchurch's competitiveness he acknowledged Government ownership of large chunks of land in the CBD was not helping.

"One of the more useful things the Government can do is carefully but decisively exit its land ownership interests in the CBD because we are an odd sort of owner.
    "It doesn't follow commercial incentives and in my view we've probably kept the land price too high in the CBD and if we got out of it, it would ultimately find the right level a bit quicker."

Nonetheless, central government still remains the dominant influence in the central city.

The other massively negative influence has been the way councils themselves have gone about their business. Selwyn and Waimakariri councils were open for business about the day after the first earthquake and had been  vehicles for growth " but Christchurch city adopted a different attitude that nothing had changed "so nothing did change". … read more via hyperlink above …

In 2012, former Christchurch Labour Central MP Brendon Burns had this to say within a The Press Opinion … Shining a light in the darkness

… extract …

For this city to best recover from its seismic nightmare, the process of decision- making needs to be inverted to truly empower communities. Such a radical change is very difficult to accept for anyone - of any political persuasion - who happens to be in power.

The most empowered minority in this  context, of course, should have been individual property owners. To date instead, the required response has been tokenistic and destructuve of entrepreneurial initiative. A top-down command and control system may be appropriate in the days immediately after a disaster (though even then folk were held back from effecting rescrues that didn’t otherwise happen) but not in a recovery that will by necessity take years.

It takes even longer when the man-made disaster continues…


 

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Monday, 11 May 2015

A Grand Plan: No people–no problems!

Guest post by Hugh Pavletich

New Zealand has a land area of 268,000 square kilometres and a population of about 4.57 million, with an urban density of near 1,900 people per square kilometre .

Near 1,800 square kilometres of New Zealand’s land area is currently urbanised … about 0.70% of the total land area.

Back in early 2012, as people were driven further and further out of the metros for affordable land and housing, Landcare Research at Lincoln University  found there to have been an explosion of 'ultra-light urban development’ (called lifestyle blocks). The number of lifestyle blocks had increased from 100,000 units to about 175,000 units over the preceding  13 years … an increase of nearly 6,000 units per year.

These lifestyle blocks are a creation of council planners, generally required by them to be at least 4.0 hectares ( 10.0 acres ) each. This suggests the minimum annual land requirement for new” planners units” is about 24,000 hectares or 240 square kilometres each year.

The current land area of Christchurch is about 185 square kilometres and Auckland about 540 square kilometres. The land area of Christchurch would only meet a year of land supply for lifestyle blocks before expanding. The Auckland land area would meet about two years of lifestyle-block land-supply requirements before breaking forth.

In this Mayor Len Brown of Auckland and his “political soul mate” Mayor Lianne Dalziel of Christchurch see opportunity to expand their fiefdoms.  It is understood they are now working with their in-house planners on their “No People – No Problems” Grand Plan so that people and businesses are driven permanently out of the cities … and a quarter of New Zealand’s land area is covered with ultra-light urban development / lifestyle blocks as soon as possible.

In a joint statement on progress to date with the No People –No Problems Grand Plan, both Mr Brown and Ms Dalziel said that “fantastic” progress is being made (there are 350 “fantastic”s within the short Grand Plan, demolition plans do not need to be too lengthy) indeed, fantastically better than expected.

Lianne Dalziel said they are pumping Christchurch Rates annually at 8.5% for the foreseeable future. Her Auckland counterpart Len Brown is even more successful with a 9.9% annual increase.

“I’m a bit peeved Len is beating me with the higher rates increase” said Ms Dalziel “but I have been out of the country on junkets, returning occasionally for a change of clothes. I know I could have cranked the rates more than 10% if I had actually been here” she added.

In a conciliatory response, Auckland Mayor Len Brown commended Ms Dalziel for her asset-stripping programme and deliberate avoidance of dealing with the bureaucratic blot issues.

“It is a great credit to her” said Mr Brown.

“We must be ‘comrades in arms’ in work together to look after our public service union mates” said Mr Brown, adding: “After all, they financially prop up our Party and tell us how to think.”

Both Ms Dalziel and Mr Brown are currently holding “under the radar screen” discussions with Labour’s “plant” in the National Party, Recovery Minister Gerry Brownlee.

This follows the outstanding development skills he displayed following the earthquake events.

Gerry Brownlee is seen as the right person to head up Labour’s Kiwibuld.

Ms Dalziel said he did an outstanding job, dealing with that “political irritant” Hugh Pavletich on TV3 recently ( here and here ).

Ms Dalziel said she constantly declines invitations from the TV media to explain herself. In any event, she is not in the country long enough to do so.

If Mr Brownlee does a good job and nationalises the building industry, the thinking is that Kiwibuild could be followed by Kiwifood, as the food distribution industry is nationalized … Venezuela style .

“Gerry has the charisma required for this sensitive political work” said Mayors Brown and Dalziel within the joint statement.


_hugh-pavletich-smlHugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia  International Housing Affordability Survey.
This post, it needn’t be said, is satire.

Wednesday, 15 October 2014

NZ Housing Crisis: Local Government Still Confused

Guest post by Hugh Pavletich

Early 2007, soon after the release of Demographia’s housing affordability survey showing NZ’s housing beccoming increasingly unaffordable, Local Government New Zealand® and the New Zealand Planning Institute® expressed concern about housing affordability, stating:

The New Zealand Planning Institute® strongly supports Demographia’s call for planners, local councils and developers to collaborate more proactively and effectively on the provision of an adequate supply of affordable new residential housing.

Now, some seven-and-a-half years later, 10th October 2014, Local Government New Zealand®  issues a media release stating … stating …

Local Government New Zealand (LGNZ) says local government, central government and the business sector need to work together with communities to address housing affordability across New Zealand.

The emphasis is mine. The sappy confusion is theirs.

My own assessment: Local Government New Zealand® is still lost and confused.

Wednesday, 23 April 2014

New Zealand’s Bubble Economy Is Vulnerable [updated]

Guest post by Hugh Pavletich

The recent Forbes e-edition article by Jesse Colombo assessing the New Zealand economy, “12 Reasons Why New Zealand's Economic Bubble Will End In Disaster” (about which we blogged here yesterday) seems to have created quite a stir, creating extensive media coverage in New Zealand.

One article alone, Michael Field’s major Fairfax article ‘NZ bubble 'going to burst', stimulated a remarkable 500+ comments.

It didn’t take too long for the politicians to react, with Acting Finance Minister Steven Joyce downplaying it, unhelpfully personally attacking Mr Colombo, with Labour’s David Cunliffe and David Parker largely agreeing with Mr Colombo’s assessment.

But then, they would all say that, wouldn’t they.

Mr Colombo’s initial assessment (a comprehensive report is to follow) was from a financial expert’s perspective, and rested largely on New Zealand’s level and fragility of mortage debt, and local banks’ exposure to it.

Let’s consider, looking specifically at housing affordability, whether Mr Colombo is correct from a structural perspective.

Wednesday, 26 March 2014

Strange Bedfellows: Christchurch Mayor Lianne Dalziel & the Rockefeller Foundation

Guest post by Hugh Pavletich

Former Mayor Bob Parker Goes … A Great Start …
Former Mayor Bob Parker threw in the towel mid-2013 (knighted thereafter for his services to public relations and for bending the knee to central government), and in the subsequent election nine of the 13 members of the Christchurch City Council were either replaced or withdrew themselves. Since then however new Mayor Lianne Dalziel has struggled in the job.

The Peoples Protest .. Clear Direction Forward …
The clean-out of the Council had its foundations in the 4,000+ strong Peoples Protest on 1 February 2012, with its demands clearly set out within their Christchurch Protest Committee letter to Nick Smith . These was later amplified with the op-ed ‘Christchurch: The Way Forward.’

In essence they  were at the time …

  • a fresh mid-term election
  • a replacement for the Chief Executive
  • restructure council from a centralised top-down agency to a “One City – Many Communities” model
  • affordable land for housing and business
  • affordable rates

It was clear to the citizens of Christchurch, if not to the new Mayor, that the “top down” layered bureaucratic approach to the recovery has been a total failure.  It was also clear that if a sound recovery was ever to get underway then a focused approach restoring control back to the people and their communities would be essential.

International Research Clear … Top Down Doesn’t Work …
There was already abundant international evidence that the “bottom-up” approach is the only way to go. For a recent illustration, see: Beito and Smith: Tornado Recovery—How Joplin Is Beating Tuscaloosa.

Strangely, the biggest disaster has not been the earthquakes themselves but the political and bureaucratic response. It still is. A series of earthquake events that should have cost around $15 billion will now be seeing costs upward of $40 billion, with delays commensurate with that magnitude (refer ‘Christchurch earthquakes: Council stalled recovery’).

With the capitulation of former Mayor Bob Parker last year, the resignation of then Chief Executive Tony Marratt and the unravelling of the team around them, a political vacuum was created into which Dalziel has been drawn.

Wednesday, 19 March 2014

The New Zealand Left Needs To Reinvent Itself [updated]

Guest post by Hugh Pavletich

image

This week’s big local political news is NZ Labour’s Travails. A fairly balanced Otago Daily Times editorial summarises, asking rhetorically:

Can it get any worse for Labour leader David Cunliffe … six months out from the September 20 general election?
    The results of the Herald DigiPoll survey released this week put Labour's support down to 29.5%, the lowest it has been since Mr Cunliffe took over the leadership from David Shearer in September last year, and Mr Cunliffe's individual support down to 11.1%, lower than the worst DigiPoll rating of former leader David Shearer (of 12.4%).
    The results will be frustrating and concerning for the Labour Party and Mr Cunliffe. His popularity has taken a major dive from the early days of his promotion (where he polled 37.7% in a DigiPoll survey).
    He has also been criticised for his performance in the House, where deputy leader David Parker, Grant Robertson and Shane Jones are the Labour MPs most visibly making an impact and confronting the National-led Government on issues. Even in election year, Labour seems to be stuck in the one role, that of attacking and denigrating, while failing to offer viable alternatives…
    In contrast, National's popularity remains strong (50.8%) and it seems Mr Key can do little wrong - his personal popularity is up to 66.5%, his best second-term rating, albeit down from first-term highs of more than 70%. And even with the fallout from Judith Collins' Chinese business meetings, the Government's continued asset sales push despite their substantially reduced revenue, controversy over the SkyCity deal and illegal spying, several contentious education sector issues, privacy breaches, and continued heartache and frustration for many Christchurch residents still battling with post-quake bureaucracy.
    How can National remain so popular, Labour must wonder?

The question is particularly pertinent in a media environment so saturated with the same big-government sympathies as the Labour left that they find the very question incomprehensible.

Perhaps the divergence is in large measure due to the expansion of the internet, with people having access to better quality information, and the enhanced ability to converse and debate public policy issues.

The declining heritage media is increasingly losing the capacity to control the flow of information, to push its own political agendas (most often favouring the failed interventionist  Left) and to protect institutional power and special interests.

The tool of the internet could be described as a “disinfectant for democracy.”

One result is that government is increasingly being seen as the problem, not the solution. (The irony, given the National Government’s own big-government failures, is that they are increasingly seen as best representing this growing view.)

As just one glaring example of obvious failure, the Christchurch earthquake non-recovery has been a cruel lesson for many in the incompetence of Government, both at central and local level. An lesson obvious to everyone except the media and political elites.

Monday, 2 December 2013

Why is this young couple subsidising the ‘Politicians Bankers Welfare Fund’?

Guest post by Hugh Pavletich from Performance Urban Planning

imageIn yesterday’s New Zealand Herald article “Buyers Turning To The “Bank Of Mum and Dad ,” reporter Russell Blackstock illustrates how young Kiwis are unnecessarily taking on excessive mortgages and pressuring their parents for financial support, eroding parents’ retirement savings and encumbering their own home—and all entirely unnecessarily.

The problem is housing supply.

Young Jamie Clark and Jenna Close have just purchased their first home for $450,000, with a mortgage load of $360,000—and a deposit largely covered by their parents. Within normal housing markets* however—i.e., those with properly functioning local governments that have not taken control of land supply while losing control of their costs—with their household income of $70,000, young Jamie Clark and Jenna Close should be able to buy a new home for about $210,000.

This would give them a sensible mortgage load of just $175,000 requiring a deposit of about just $35,000. (A $35,000 deposit is much less of an issue than an unnecessary $90,000 one.) And importantly, it would allow them to be financially independent of their parents—something no doubt all involved would prefer.

Deputy Prime Minister Bill English reminded readers in his Introduction to this year’s Annual Demographia International Housing Affordability Survey that Kiwi housing used to be about 2.0 to 3.0 times annual household incomes. The Andrew Atlins’s THE REAL DEAL poster illustrates how this is still possible, as do the Annual Demographia International Housing Affordability Surveys themselves, indicating that cities cities in which land supply is not restricted by local governments are cities in which the Jemma Closes and Jamie Clarks can still by affordable housing with a price/household income multiple of just 2.0 to 3.0.

Christchurch and Auckland however are currently touching a “severely unaffordable” 7.0 times.

This is dangerous bubble territory, as even Deputy Prime Minister Bill English and Reserve Bank Governor Graeme Wheeler have made clear. They are in no hurry to see the New Zealand economy wrecked like the Irish one.

Instead of being able to purchase an affordable home however, young Jamie and Jenna, both 25 with a $70,000 gross annual combined household income, have purchased their first home for $450,000 with a mortgage load of $360,000—and likely more, when repayments to both parents are factored in.

The 20% deposit required under Reserve Bank Governor Graeme Wheeler’s new rules was a course “a problem” for them at $90,000.

It appears that both parents came to the party—one providing $45,000 cash, the other offering security on their own home. Which means the first are eroding their own retirement savings, and the second are putting their own home at risk should the young couple experience difficulties down the track.

With young Jenna’s mum and dad not having the cash (clearly lacking retirement savings and financially vulnerable, which is of no concern to the Bank involved obviously), they were only able to put their own home up as security. This clearly makes Jenna’s parents extremely vulnerable to any difficulties Jamie and Jenna experience in the years to come.

Both the young couple and Jenna’s parents run the risk of losing both homes should things go wrong.

In addition to this, it seems likely Jamie and Jenna’s actual mortgage load will be 90% of the purchase price of the property, being $405,000, which 5.7 times their gross annual household income. (Remember, in a normal housing market it should be about 2.5 times. In this case $175,000.)

So young Jenna and Jamie’s mortgage load is about $230,000 more than it should be ($405,000 minus $175,000). The banks would be even more “generous” lending $430,000 (much higher lending multiples on higher incomes … check calculator hyperlink).

Allowing for interest over the life of the mortgage, roughly double it, so the total excess mortgage costs to the young couple will likely be in the order of $460,000.

imageOn their current household earnings, and assuming that young Jenna’s portion is about $30,000 as a childcare worker, that means about 15 years of her working life is “devoted” to being a “mortgage slave” entirely unnecessarily. Allowing for tax, even longer.

No doubt the Banks are extremely grateful to this young couple for their $460,000 excess mortgage cost “donation.”

And no doubt the governments central and local responsible for this disgrace are grateful for her contribution to their wellbeing.

This should properly be termed “The Politicians Bankers Welfare Scheme.”

Quite why dilatory politicians  and incompetent  local governments think they and the banks are more deserving of such a big chunk of this struggling young couple’s income is something of a mystery.

After all, the New Zealand public ( 75% of young and 62% of all Kiwis)  told politicians loud and clear early last December  to get on ALLOWING affordable housing to be built.

But that’s the great inertia sector of Government for you and our culture of impunity, where politicians are more interested in feathering their own nests.

In young Jenna and Jamie’s case, they are paying about $460,000 of THEIR hard-earned income for the incompetence of politicians across the political spectrum—most directed towards and “The Politicians Bankers Welfare Fund.”

What happened to our fair go culture ?

_hugh-pavletich-smlHugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia International Housing Affordability Survey, 2013.

* Normal housing markets, which land supply is not artificially restricted, have historically had housing prices just 2 to 3 times household income. The Annual Demographia International Housing Affordability Surveys indicate that with significant exceptions, in cities in which land supply is not restricted by local government, most English-speaking countries now have house prices in their cities of from 4 to 9 times household income!

Monday, 22 July 2013

Earthquakes & Density: Will We Ever Learn?

Guest post by Hugh Pavletich

With the 6.5 magnitude Marlborough earthquake events beginning a little after 5pm Sunday 20th July 2013,and the accompanying fore-shocks and after-shocks radiating in to New Zealand’s capital city Wellington some 56 kilometres away (USGS Information), Wellington’s central area and commuter train service was shut down, and the high-density central city turned into a ghost town.

A lesson to take from this and earlier earthquakes: High-density urban centres do not perform well in earthquakes on the “resiliency front.”

And a question for planners to ponder: What would or could happen if this significant and shallow earthquake event occurs in Wellington Harbour?

Following the 11 kilometre deep  7.4 magnitude Darfield event some 38 kilometres outside Christchurch on 4 September 2010, seismologists were generally of the view the worst was over, and aftershocks of diminishing intensity could be expected for another year or so.

Based on this professional assurance, most in the Christchurch area were rather pleased with themselves, and how they had coped with the 4 September 2010 event. Particularly pleased with themselves were the Authorities, from whom there was much political grand-standing.

Then about 5 months later on 22 February 2011, the shallow 6.3 magnitude earthquake stuck  (6 kilometres deep 7 kilometres from CBD) at the Lyttelton Tunnel.  And on 13 June 2011, a 6.4 magnitude event occurred in the Redcliffs, some 9 kilometres from the CBD at a depth of 7 kilometres.

Seismologists had remarkably little to say following these events.

Within months following the February event, the engineering profession, in conjunction with the Royal Society, released an important report The Canterbury Earthquakes. This report illustrated from accelerometer readings throughout the city the intensity of the g-forces experienced in specific locations.

The great untold story of Christchurch has been how the low and light structures in low-density areas coped remarkably well (often well outside their design limits), provided the ground underneath them remained stable.

In contrast, the high density and aged CBD did not cope at all well.

What the 22 February 2011 earthquake event failed to destroy in the central area, the Authorities did, by banning essential and timely  redevelopment and restoration.

Time was always a critical factor.

Instead – devoid of elementary commercial and urban development knowledge, the public bureaucracies at local and central level saw it as an opportunity to arrogantly engage in surreal “visions.”

The politicians were simply the parrots. (These issues have been extensively covered by the writer within Christchurch: The Way Forward (incorporating hyperlinks to earlier articles), and just recently, within a New Zealand National Business Review Opinion Christchurch: The political shambles.)

Since the first earthquake event 4 September 2010, near 3 years ago now, there have been some 13,500 tremors in the greater Christchurch area, as the Canterbury Quake Live website illustrates.

Urban Planner Joel Cayford explained with Councils Fudge Christchurch Seismicity, around the time of the release of the Royal Society report, how urban planners had ignored earthquake risks.

Earthquake risks had been well understood by those involved in urban issues for decades – particularly engineers and developers. (The Engineering School at Canterbury University had for decades following World War 11, been regarded as one of the lead research institutions international on earthquakes.)

In 1996, the TV3 Inside New Zealand "Earthquake!" documentary, provided a snap-shot of the understanding by that time.

With the follow-on Wellington earthquake events, one is reminded of the song by Royal Wood (Youtube Video) "Will We Ever Learn" … with the lyrics …

Will we ever learn?
From what we’re feeling
Will we ever learn?
As sorrows deepen

Will you ever see?
Just what you mean to me

Will we ever learn?
It all but breaks us
Will we ever learn?
When it forsakes us

Will you ever say?
How much you love me
Will you ever say?
No one above me

h my we’re wasting time
Oh my we’re wasting time
Oh yes we’re wasting time again
Will we ever learn?
Will we ever learn?

Will we ever be?
Behind the curtain
Will we ever be?
In a life that’s certain

Hugh Pavletich is the Coordinator for Cantabrians Unite the co-author of the Annual Demographia International Housing Affordability Survey, and the webmaster for the archival website  Performance Urban Planning.

Wednesday, 13 March 2013

Persistent lying about housing land supply

_hugh-pavletich-smlGuest poster Hugh Pavletich asks why people such as Mayor Len Brown of Auckland are persistently lying about housing issues, and points out however you want to measure the amount of immediately available building land, the only true measure of scarcity or abundance is price.

Supplying affordable new homes today is a very formulaic business indeed – and has been since Bill and Alfred Levitt created the modern production housing construction industry soon after World War 2.

This was a remarkable entrepreneurial feat, as the Levitts and many others had tried for decades prior to emulate Henry Ford’s production methods with respect to automobiles – and failed.  Bill Levitt finally “cracked it” by splitting the housing production process into specialist components, at a stroke advancing home construction from the realm of the “jack of all trades” (and master of none) cottage-building culture, bringing it into the modern industrial world.

Importantly, with the sub-specialization he encouraged, this allowed low and semi-skilled workers into the residential construction industry.

1101500703_400The “Levitt methods” were rapidly emulated throughout the rest of the developed world at the time, helping trigger the “democratization of prosperity” following World War 2.

The Levitts supplied new 80 square metre homes on 700 square metre lots for $US8,000 – about $US100 per square metre all up (land and services included). They supplied these homes to families outside New York with an annual household income of $US3,800—a ratio of just 2.1 to 1! ( The median household income at the time in the United States was about $US2,500.)

Generally speaking, in a culture in which social pressure was on the male to financially provide for the family, these houses were bought by folk on a single annual household income, allowing the mother to focus on the care of the children and fulfil the role of “home executive. The male was socially considered a loser if he couldn’t financially provide for his family.

Rather “quaint” thinking in today’s world of course, where, rather amusingly, women have since become “liberated.” Liberated in reality to become “mortgage slaves” because of the grossly excessive costs of housing.

Following in the tradition of the Levitts who supplied new starter housing at $US100 per square metre all up (land and services included) today, some 60+ years later, new starter housing is being supplied on the fringes of the affordable United States housing markets for about $US600 through $US700 per square metre all up.  In contrast, here in New Zealand, due to gross political and urban planning incompetence and persistent lying, the productivity and pricing performance of our residential construction sector has been wrecked.

imageIt currently costs in excess of $NZ2,500 + all up per square metre for new starter  housing on the fringes of Christchurch—and a stratospheric $NZ3,500 + all up per square metre on the fringes of Auckland!

No wonder so many would-be first-home buyers are renting instead.

Year after year, the Annual Demographia International Housing Affordability Surveys  (there have been 9 to date) illustrates with the standard Median Multiple method, that median house prices in normal housing markets do not exceed 3 times annual household incomes. Yet in Auckland and Christchurch, median house prices are well over six times the median annual income! (Auckland has a Median Multiple of 6.7, Christchurch 6.6, Tauranga-Western Bay of Plenty 5.9, Wellington 5.4, and Dunedin 5.1.)

A “crystal clear” Definition of an Affordable Housing Market is incorporated within this year’s Survey and on the front page of this writer’s archival website Performance Urban Planning:

For metropolitan areas to rate as 'affordable' and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer Demographia Survey Schedules for guidance).
    The critically important Development Ratio for this new fringe starter housing should be that the serviced sections cost about 17 - 23%  of the actual house construction.
     Ideally—to ensure maximum stability and optimal medium and long term performance of the residential construction sector—through a normal building cycle the Median Multiple should move from a Floor Multiple of 2.3, through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7...

So …  the only question that needs to be asked, as this morning’s New Zealand Herald article illustrates, is why are people such as Mayor Len Brown of Auckland, persistently lying about housing issues:

imageMayor does U-Turn on available housing land
Auckland has 2000 new sections ready to build houses on, says Mayor Len Brown, who last month claimed there was enough land for 15,000 homes.
    As debate grows about housing and land supply in Auckland, Mr Brown is no longer claiming the city has enough new land to build 15,000 houses "right now"…
        Councillor Dick Quax said Mr Brown had proclaimed to all who would listen that Auckland had 15,000 sections ready for houses to be built on "right now."
    "The mayor is now having a big helping of humble pie as he acknowledges that there are just 2000 sections ready for construction to begin.”

Brown should know the “years of supply” measure is misleading as well. He has now conceded there are only an appallingly low 2,000 “construction ready” lots available on the fringes of Auckland.

The only true measure of scarcity or abundance is price.

The evidence is “staring us in the face” that if New Zealand had normal housing markets, new starter housing would be available on the fringes of our cities for at or below $NZ1,000 per square metre all up. This would allow young families to buy 150 square-metre new homes for about $NZ150,000 … 200 square metre new homes for $NZ200,000 … and so forth … with sensible mortgage loads too.

A pipe dream? Not at all.

While the persistent incompetence and lying by politicians and planners on housing issues is often amusing, it is past time they started to “wake up” to the serious social and economic consequences.

The solutions are simple and are clearly outlined within Section 4 of  Christchurch: The Way Forward (see below).

The lesson is the same for every New Zealand city.

* * * *

Christchurch: The Way Forward (excerpt)
To allow the belated recovery to finally start (some 21 months later), the following 5 steps must get underway as soon as possible…
Section 4: The urban land use and building regulatory environments have degenerated into a “sick joke” – creating massive social and economic harm.
    Local Authorities must not have any control of land supply, as it is an invitation for them to become incompetent and plunder the people they are paid to serve. Further to this, they must be required to finance infrastructure appropriately as well.
    With its small population of just 4.4 million, New Zealand has abundant land supply with just 0.70% of its land area urbanized. The land area in the United Kingdom is much the same with near 62 million people.
    There needs to be open fringe land supply with post development zoning and “no go” areas clearly identified for solid environmental and other robust reasons. Internally – flexi zoning is required where zones can expand or contract as required – provided property owners along a zone fringe obtain the consent of neighbours a further 50 metres out.
    This is particularly important for Christchurch, as it is endeavouring to move abruptly to the north, west and south – where there is abundant good quality land for construction.
    Artificially inflating land costs unnecessarily triggering housing bubbles and decimating the performance of the residential development / construction sectors must not be tolerated.
    Housing is a basic human need. A need that must be respected – particularly by public employees properly trained in public service ethics.
    With the smaller Community Council Units of Local Government, it will be possible to have their Regulatory Units led by engineers and sound and simple performance standards instilled in to the regulatory staff. If staff as individuals fail to process consents efficiently and/or lack enabling attitudes and the capacity to solve problems, they must be replaced.
    The current degenerate and infantile culture of impunity within the Local Government sector must be stamped out and replaced with a culture of consequences.
    It needs to be noted that working for Local Government is generally regarded as “default employment” for those who fail to secure employment in the private sector. It is therefore critically important the roles and requirements for those employed within the Local Government sector are simplified as much as possible.

Friday, 5 October 2012

The political destruction of NZ’s residential construction sector in one graph

_hugh-pavletich-smlGuest post by Hugh Pavletich

Study the graph below comparing the rates at which houses are being built in Australia and New Zealand, and see how the politicians and urban planners have decimated the residential construction sector in New Zealand these past 30 years.

imageChart kindly supplied by Leith van Onselen (aka the Unconventional Economist)

The measure employed is the “build rate per 1000 population,” which of course appropriately factors in population changes over time.

It illustrates just what a truly massive hole this country has to dig itself out of since the industry began being bureaucratically bludgeoned back in to the Stone Age of cottage building.

It illustrates too just how incompetent the industry and professional groups have been these past few decades—more interested in political boot licking than being socially responsible.

Wednesday, 29 August 2012

“Here’s the offer. Have a nice day”–Roger Sutton

_hugh-pavletich-smlGuest post by Hugh Pavletich

In this mornings Press Marc Greenhill reports unwilling Christchurch  land-owners are about to get an ultimatum from government: Sell up or else.

Landowners unwilling to negotiate with the Government on central Christchurch blueprint buyouts will be told, 'This is the offer, have a nice day', the earthquake recovery boss says.
Speaking on Newstalk ZB yesterday, Canterbury Earthquake Recovery Authority chief executive Roger Sutton said most affected property owners were pleased with the process, and he denied post-quake market value offers were a "bum deal."
" I think the majority are really happy; absolutely,' he said."

NG building owner Roland Logan tells a very different story however.

"NG building owner Roland Logan, who is against compulsory acquisition, said he believed Sutton's view of the number of willing landowners was 'grossly inaccurate'."
"About 100 disaffected landowners had contacted him. “I bet you your bottom dollar you could times that by four or five with the people who are unhappy."

Sutton’s arrogance is unbelievable.

Talk about "bureaucratic brutalization”—that same theme that occurred throughout 2011 is now being played out with only slightly different variations this year.

There is a way forward. But the clearly "out of his depth" Roger Sutton first needs to be gently reminded New Zealand is not yet a fascist society, and that there are still neither costings, feasibility studies nor economic and social impact reports to support either his clownish bureaucratic bullying or his organisation’s top-down anti-recovery plan for central Christchurch—which, as anyone with an ounce of "development nous" would be able to tell him, is another disaster waiting to happen.

Please tell me - who is paying for this bureaucratic Central Area circus?

And how much?

Hugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia International Housing Affordability Survey, 2011 .

Thursday, 16 August 2012

Christchurch’s Anti-Recovery Plan: Theft based on threadbare analysis

_hugh-pavletich-smlGuest post by Hugh Pavletich of Cantabrians Unite

‘THE GOVERNMENT’S BUY-UP FOR the central Christchurch blueprint has been described as a "land grab" and the Canterbury Earthquake Recovery Authority (CERA) as a "den of thieves.”’
The Press reports:

Angry landowners say the Government will profit by selling their sites to someone else, in some cases leaving the original owners severely out of pocket... 
    Lisle Hood, co-owner of properties around Poplar St earmarked for the new innovation precinct, accused the Government of bullying tactics.
    "It's a land grab. They are nationalising private property and stomping all over our property rights," he said. "They are buying up all this land and they will flog it off to the big corporates and make a huge killing on it."
    Owners investing in heritage restoration had improved the city "only to be treated like crap, and that's obscene.”  "The Government should be looking after people, not ripping them off, and they've got a den of thieves [CERA] doing it on their behalf," Hood said.
    Roland Logan, part-owner of the Ng building in the path of the proposed stadium, said owners would be "subject to a serious injustice" if their land was resold at a profit.
    "Their property will be taken, their business destroyed, they'll receive what is as yet undetermined compensation, then [the Government] will on-sell it when the city has recovered."
    He said Cera was "basically flouting the rule of law" by impinging on property rights.
    "What they're doing is just mindboggling; it's appalling," Logan said…
    Property lawyer Hamish Grant, of Anthony Harper, said the blueprint had opened a "legal can of worms" and unhappy property owners could try to fight the buy-up. "
Grant said the Government could take land only for earthquake recovery, not "willy-nilly" or to benefit the city or the economy, and could be challenged by judicial review. "
" 'The courts have traditionally come down on governments because they are taking advantage of people's property rights," he said. "But it could be hard to argue. Until someone who is unhappy takes them to task, we just won't know."

In Sections 60 through 70, the Canterbury Earthquake Recovery Act 2011 sets out for confiscated property how little compensation can be paid. It needs to be studied closely and legal advice sought.

As Cantabrians Unite has made clear over recent weeks, from a commercial perspective, the Central Blueprint for Recovery is in reality an "Anti-Recovery Plan" based on theft of business owners’ property rights—to be partially paid for by that theft.

If it is allowed to proceed, it will do irreparable damage to Christchurch.

imageWITH WORK ALREADY BEGUN buying confiscated land at bargain prices, the Authorities have still to produce any detailed cost estimates, feasibility studies or robust social and economic reports. The reason for this is obvious: because they know as well as we know that this CGI-larded Blueprint would not withstand any kind of robust analysis.  It is nothing more than a politically inept attempt to ram through a hare-brained planners wish list based on nothing more than a bunch of pretty pictures.

The politicians involved unfortunately are nothing more than "parrots" for bureaucrats with neither expertise nor track record in urban development, who are clearly clueless and careless about the consequences. 

Several very good articles are already beginning to pull apart the threadbare underpinnings of this Anti-Recovery Plan.

A recent perceptive article by political scientist "Puddleglum" provided an inkling of how this whole sorry Blueprint saga is playing out, a fiasco in which the Central Development Agency (and it would appear CERA people) appear to have simply gone on an ego trip with no understanding or inkling whatsoever of urban development realities—delivering profits into the hand of a chosen few by taking the property rights of many.

Sam Richardson, economics lecturer at Massey University, has done substantial international research on the problems of these types of public projects. His short blog article with hyperlinks to further material is most helpful.

The "core problem" here has been weak and ill-informed governance at both the central and local levels right from Day One , 4 September 2010—nearly two years ago.  The writer has covered these issues, many of which began before the earthquakes destroyed the city, most of the threads of which are incorporated within a recent article: CHRISTCHURCH: THE WAY FORWARD.

Last Thursday as well, Jo Kane of Canterbury Television graciously asked me to explain some of these issues on their One on One programme.

As I tell Jo, from the outset the authorities’ priorities should always have been (1) people (2) housing and (3) business. 

In the wider context, the Central Area and its recovery is only a small component of the issues - with people and their housing being far more important. The Central Area property owners and associated businesses are more than capable of sorting out their own issues had they only been left free to do so.

imageIndeed, one of the few great "highlights" of these earthquake events has been watching the heroics performed by Christchurch’s central business people, so many of whom managed to get their businesses back up, running and relocated in the suburbs within a remarkable 7 to 14 days after the 22 February events.

A truly remarkable achievement !

Leave them alone and these same people are more than capable of making recovery happen back in the central area from which they’ve been barred—if only the authorities would allow them.

The authorities should remove their focus from grand plans formed over other people’s property rights, and focus instead restoring their own loss-making public facilities, at the lowest possible cost, in both central and suburban areas—a job, all too sadly foreign to bureaucrats now becoming used to Blueprint-driven power trips.  And in the suburban areas as well, where most people now actually do live and work.

AT A HUMAN LEVEL, one of the things that has distressed me greatly these past two years of disaster has been the sheer bureaucratic ignorance and arrogance.  It is not overstating it to say that far too many people, with their homes and their businesses, have simply been 'bureaucratically brutalised.

What the earthquake couldn’t do to them, the bureaucrats have.

This must stop. Now.

Recovery will not get under way until people and their communities are allowed to take back control.

One way to start is for ratepayers to talk to their local councillors, their employees, to instruct them and the staff they control to pull their heads in. Here are the contact details: http://www.ccc.govt.nz/thecouncil/councillors/index.aspx

Hugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia International Housing Affordability Survey, 2011 .

Wednesday, 8 August 2012

The bill to “rebuild” Christchurch is starting to emerge—and it’s huge

There were at least two glaring omissions in the grand announcement last week of “The Government’s Grand Plan for Central Christchurch.”  The first was any acknowledgement at all of those whose land is to be confiscated to make the pretty pictures reality. The second was any numbers telling us how much the pretty pictures will cost us.

This Guest Post by Hugh Pavletich begins to explain why.

The bill to “rebuild” Christchurch is starting to emerge—and it’s huge
Guest post by Hugh Pavletich

The Press this week reports the first public meeting to discuss the plan for Christchurch's new central city drew few people.

No surprise, because without initial costings, feasibility studies and wider economic and social reports there is very little of substance to discuss. Simply pretty pictures.

Further research will likely find that things are not so pretty though.
...
Property journalist Chris Hutching reported in the NBR the cost of the governments “extravagant” Christchurch central city rebuild plan is a whopping $1.6 billion.

$1.6 billion.

Little wonder when the plan was announced last week by Prime Minister John Key and Earthquake Recovery Minister Gerry Brownlee there was no hint about costs, and any questions along those lines were deflected with comments the plan was "broad brush." A better word, with so much at stake, would be reckless.

A planners’ fantasy destroying existing and successful businesses. A very destructive, very expensive fantasy.

Hutching was supplied with his figures by a reliable source who cannot be identified due to possible repercussions.
Nonetheless, the covered rugby stadium is tipped to cost $506 million, the convention centre $460 million and the metro sports arena $227 million, Other elements of the plan make up the balance of the $1.6 billion.

By contrast the recent parallel city plan based on the "Share An Idea" programme with residents allocated about $200 million for a rugby centre, $150 million for a convention centre and $120 million for a metro arena.

According to Hutching’s informant, the government has indicated it would come up with “roughly half” the money for the Rolls Royce plan. But subsequently there have been calls for the city sell assets to pay a greater share.
Community leader Reverend Mike Coleman (a trained economist before becoming an Anglican priest) described the scale of the plan as "bizarre."

It's Emperor's clothes stuff. To even talk seriously about a rugby stadium or convention centre at these prices is absurd. We are not a big city in the scheme of things, we are a large town of about 300,000 people. We don't want to end up stuck with millstones like the Dunedin stadium.

It is neither a big, nor a rich city. The average annual earnings of Christchurch households was about $56,000 compared with Aucklands $72,000. In eastern Christchurch average annual earnings were about $46,000. I estimate the government plan would cost an additional $600 per year in rates for households—six-hundred dollars extra per year per household!—to say nothing of the unseen costs about which all students of the "Broken Windows Fallacy" will be aware.

When the government’s destructive fantasy plan was announced at a televised cocktail function in Christchurch last Monday, civic leaders, businesspeople and dignitaries were however universally supportive of the plan.

Canterbury Employers Chamber of Commerce chief executive Peter Townsend exhorted Christchurch City Councillors to sell assets such as the airport and Lyttelton Port to help pay for it. Property Council chief executive Connal Townsend also supported the plan.

Ironically, it was just three weeks ago that Mr Key told local government delegates at their annual conference  to rein in their spending.

"And just as central government does, local government also needs to work on delivering better services to New Zealanders within tight financial constraints."
"Times are tight and ratepayers just can't endure unaffordable rates rises. We are not telling you how to do your jobs but we would urge you to think carefully about the capacity of your communities during these difficult financial times.".
"I know it's not easy and its tempting to think your council is an exception or faces special circumstances, but we all have to face up to making difficult choices." Mr Key said three weeks ago.

The Property Council's Mr Townsend echoed this theme.

We have long been calling for restraint on local government spending for the benefit of New Zealand ratepayers and small businesses" Mr Townsend said a couple of months ago.
"There is an absolute need to hold down the costs of local government, which has spiralled out of control in recent years," Property Council's Mt Townsend said.

That was then. Now apparently both view Christchurch Council as “an exception,” and Christchurch’s already hard-pressed ratepayers cash cows.

Let’s be frank.  With this "fantasy" of gross bureaucratic overreach being promoted by politicians who should know better, the costs will not stop at $1.6 billion. We know that.

Further, there is a world of difference between a bureaucrat’s CGI-powered fantasy trip and a real recovery. We all know that too.

Does the CERA legislation really allow politicians to go on fantasy trips clearly retarding the real recovery? Well, yes it  does; it encourages it.

So no surprise that recent local polling by The Press suggests that even at this very early stage, a surprisingly high percentage of the public is growing increasingly concerned about the costs and affordability of these proposed projects.

Christchurch’s council is not alone in considering itself an exception to the rule of restraint—and unfortunately the  local government reforms proposed by central government are, again, in large measure only "tinkering around the edges."  Well respected local government consultant Phil McDermott reckons the government’s proposed restructuring puts the cart before the horse—instead of setting up barriers in the way of building large, remote bureaucracies, it instead  sets up forces for further council amalgamations.  And yet the Auckland Experiment “will demonstrate sooner rather than later that restructuring is not the silver bullet that might put an end to run-away council costs – or run-away councils.” Note the "cost blowouts" with respect to the idiotic decision to amalgamate the Auckland Councils. Auckland is the only major City in the western world to have just one Council. This is a disaster for New Zealand.......

The reality is that the real recovery process can only get underway in Christchurch, as and when the citizens, and property owners, decide to take back control.

The 5 major objectives that need to be focused on are set out within this announcement by Cantabrians Unite "Christchurch: The way forward":

  1. A fresh local election
  2. Replacing the Council’s Chief Executive
  3. Abolish Councils’ centralised local structure, replaced with a one-city many-communities model
  4. Make it possible to provide affordable land for housing and business
  5. Make rates affordable.

It is not just Christchurch’s future that is on the line. It is the future for you and your family, whether as ratepayer or taxpayer, Christchurch resident or New Zealander watching the country’s second-biggest city going down the tubes.

The choice is yours.

Hugh Pavletich is the Coordinator for Cantabrians Unite the co-author of the Annual Demographia International Housing Affordability Survey, and the webmaster for the archival website  Performance Urban Planning.

Monday, 9 July 2012

GUEST POST: Cut-price sections for #EQNZ red-zone residents

"Cut-price" sections are being released in Christchurch for residents of red zones. Where in Christchurch? Rolleston. How many sections? Eighteen. What price is cut-price? $113,000 to $139,000. Still, let’s not be churlish.

Hugh Pavletich of Cantabrians Unite responds:

_hugh-pavletich-smlTHE TEAM INVOLVED WITH the Canterbury Cooperative Land Trust is to be applauded for bringing sections to market for Red-Zoners in Rolleston for between $113,000 to $139,000. This is is not as good as things could be, but it is an extremely helpful step in the right direction.

There is still massive scope to lower prices further, but only when the serious structural and infrastructure issues in Christchurch are effectively dealt with by the Authorities at both central and local level.

Back in early 2010, well before the earthquakes, I set out the whopping differences of new-home costs between an affordable North American housing market  such as Houston, where housing costs 2.9 times household incomes, and, Christchurch—where the multiple between housing and income is a "severely unaffordable" 6.3.

There’s a a huge difference in building costs. On the fringes of the affordable US housing markets, starter-housing stock has an ALL UP build price of around $US600 per square metre. Compare that to here in Christchurch, where we enjoy a staggering build-cost of $NZ2,500 per square metre  and beyond.

Our residential development / construction sector is a shambles.

In her lead article this week’s Listener, Rebecca Macfie illustrates just how woeful our residential development & construction costs are in comparison with those in Australia. Yet Australia is not even in the same ballpark for cost efficiency as the United States.

TO OFFER RED-ZONE RESIDENTS sections at the $113,000 to $139,000 quoted in The Press, the Canterbury Cooperative Land Trust has taken the approach of attempting to wipe out developer margins—while no doubt allowing within this pricing a risk/costs overrun contingency. No doubt there will be further "savings" to end purchasers if, in the final wash, costs are controlled and the contingency is not required.

The Trust is being somewhat generous in suggesting the savings are quite as much as 40%. After all, this is South Rolleston. Lets just call it novice developer enthusiasm! In having said that, all involved (for little if any personal financial reward in most cases) are playing a hugely important role: first, in bringing better priced sections to market; and second, in illustrating to the wider public just how this is possible.

This is, however, a “one-off” deal. The major impediments to allowing affordable sections at and below $50,000 are not addressed at all by the Trust’s initiative: first,  the urgent need to eliminate the artificial fringe scarcity values created by planners strangling land supply; and second, the need to finance new infrastructure appropriately. (These points were covered in more detail in my article "Christchurch: The way forward.")

IT’S NOT ROCKET SCIENCE. New housing construction internationally today is a very formulaic business, and has been ever since the creation of the modern production construction industry by Bill and Alfred Levitt following World War Two.  Professor Peter Bacon Hales of the Art History Department of the University of Illinois at Chicago outlines this remarkable history—the "democratization of prosperity" if you like.

The truly remarkable Levitts supplied new starter homes for $US8,000 to single-earner  young families (yes....single-earner) earning an average of just $US3,800 a year—that means starter homes selling at just 2.1 times annual household earnings, with a mortgage load of only 18% of the family’s annual gross income!

Our young people today deserve these same opportunities. Buying a house should be as easy as buying a car (although the former is of course more expensive and financed over a longer period).

The major reason this was allowed in Levittown—because even then in the States planners were out there arguing against what the Levitts were doing—was because the Authorities in the end were too frightened to deny affordable housing to soldiers returning from World War Two. They didn't want a repeat of the civil unrest that occurred with returning veterans following World War One, which in Europe helped usher in Mussolini and worse. Indeed, when politicians and planners got in the road, Levitt often called the Veterans Association in for support.

You would think there would be abundant political pressure around Christchurch to similarly focus attention!

ON THE FRONT PAGE of my archival website www.PerformanceUrbanPlanning.org I offer a clear definition of an Affordable Housing Market:

DEFINITION OF AN AFFORDABLE HOUSING MARKET
For metropolitan areas to rate as 'affordable' and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer
Demographia Survey Schedules for guidance).
The critically important Development Ratios for this new fringe starter housing, should be 17 - 23% serviced lot section cost, with the balance being the actual housing construction cost.
Ideally, to ensure maximum stability and optimal medium and long term performance of the residential construction sector through a normal building cycle, the Median Multiple should move from a Floor Multiple of 2.3, through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7.

So even with the commendable numbers at which the Canterbury Cooperative Land Trust is offering these sections—and I do applaud them for what they are trying to do—we are still a million miles from where fringe sections should be priced.

Recovery Minister Hon Gerry Brownlee is well aware of all this too, as he chaired Parliament’s Commerce Committee Inquiry into Affordable Housing Inquiry back through 2007/08.

He knows it, but he’s not prepared to do anything about it.

Hugh Pavletich
Coordinator, Cantabrians Unite

Thursday, 2 February 2012

GUEST POST: Christchurch people say “enough is enough!”

_hugh-pavletich-smlGuest Post by Hugh Pavletich

At noon yesterday some 4,000 local citizens gathered next to the Civic Building in Christchurch to express their anger at the poor performance of the Christchurch City Council. Many of these people had never attended a protest in their lives before—as New Zealand’s Television Close Up programme “Anger in Christchurch” (Video 3.45 min) explained last night.

Rev Mike Coleman (a leader who has emerged in the east of Christchurch and chairs  the Wider Communities Action Network representing the devastated people of the east) ably chaired the protest meeting, facilitated by Peter Lynch and his  team, who also spoke. Members of the public who wished to do so were asked by Rev Mike Coleman to express their views as well.

imageThe beloved Christchurch Wizard also spontaneously contributed his well-received views too.

This was very much a spontaneous outpouring by the wider Christchurch community. They left heartened and emboldened from this important gathering.

Within the Close Up programme, Andrea Cummings of North New Brighton is featured. Andrea and her husband, who run a small lawn mowing repair shop, spontaneously became the focal point of their community through the earthquake events – meeting the communities immediate needs and distributing food parcels where required.

As Andrea explains within the interview, this had to happen because the Authorities – and particularly the Christchurch City Council – were not set up to respond because of their centralised structure.

The Simmering Discontent Continues

While there had been deep concern in Christchurch for many years about the poor performance of the centralised Council structure, incapacitated by bureaucratic bloat [the writer has written extensively on these issues – latest October 2011 - Christchurch earthquake recovery: The political circus], the “final straw” was the Council’s decision on the advice of its consultants to award the Council Chief Executive Tony Marryatt a $68,000 14% pay rise mid December 2011.

The public fury was immediate.

Peter Lynch, a local resident with no prior involvement with politics, was so incensed, he set up a Facebook page  - No Pay Rise For Tony Marryatt - announcing publicly that there was to be a protest 1 February 2012.

The “blundering” Council decision announcing this extraordinary pay rise to a largely “invisible” Chief Executive of the Council Tony Marratt was followed soon after by an equally odd announcement by the Earthquake Recovery Minister Hon Gerry Brownlee, urging the local elected representatives and citizens to “settle down” and support the Council authorities. Brownlee “threatened” dissenting local representatives (those supporting clean local government) with dismissal, as reported by the local morning daily The Press soon after – “Quake Minister Gerry Brownlee Scolds Council.”

Normally, the summer Christmas breaks in New Zealand are when the country shuts down for a month and the media “goes to sleep” because there is so little news to report.

In Christchurch this year however, following the political blunders of both the local Council and the Recovery Minister Brownlee, the atmosphere was very different, with the public and the local media erupting with “enough is enough.”

South Islands major daily The Press led the extraordinary public conversation, with other print, radio and television media participating as well. The Press however had been covering these issues for a period of 17 months, since the time of the first earthquake event 4 September 2010.

In normal times, Local Government issues tend to attract little media or public interest. But with the earthquake events still persisting (in excess of 9,500 shakes to date), the performance of the political authorities at both the local and national levels, came under increasing scrutiny – as they failed to perform to an acceptable standard.

The Emerging Focus on Solutions

The critically important public conversation over this time has meant that the wider public has an increasingly better understanding of the problems and what the solutions need to be. While there is loose talk about the possibility of “rates revolts” and other approaches, the three major changes required are emerging –

(1) The need for a fresh mid term election as soon as possible – likely April / May.

(2) A replacement Council Chief Executive (realistically – only a newly elected Council can do this).

(3) Abolish the Councils centralised structure and replace it with a One City/Many Communities model – where the “control” is at the local level. This is clearly essential for both elementary reasons of risk management and because, as the TVNZ Close Up programme highlights, the importance of local communities being able to respond quickly and effectively to the needs of local people.

As the writer pointed out in a brief address to the people gathered at yesterday’s protest meeting, some 17 months following the first earthquake event 4 September 2010 the recovery has still not yet got underway in Christchurch  – simply because the “top down” approach, with bureaucracies incapacitated with bloat and weak political leadership, have not been able to respond to the community’s and businesses’ needs.

The atmosphere with respect to the Christchurch City Council bureaucracy is that it has long been At War with its communality and business.

In development and construction terms, Christchurch has long been considered a “disaster zone” well before the first earthquake struck September 2010. The writer has covered these issues extensively within earlier articles [see Performance Urban Planning].

The Christchurch Rebuild Disaster

The situation has only worsened since the time of the first earthquake – and is best illustrated by the new housing consent construction performance through 2011.

Christchurch, with a population of some 370,000 people, consented just 750 new conventional housing units over that period (with 150 relocatables deducted) – a miserable consent rate of just 2 units per 1000 population - well below replacement levels in a normal market, let alone through an earthquake recovery.

By contrast, to the south and west of Christchurch is the county of Selwyn with a population of about 40,000, which over the same period consentedwell  in excess of 400 new residential units through the year – a consent rate of about 10 units per 1000 population.

To the north of Christchurch is the county of Waimakariri, of (again) some 40,000 people, which consented around 500 new residential units in 2011 - a consent rate of about 12 units per 1000 population.

So the construction volumes in these two smaller and more responsive Local Government areas are some 5 and 6 times greater than Christchurch on a population basis.

Christchurch in essence is being “hollowed out” as people and businesses are departed for these adjoining counties and other centres throughout New Zealand and Australia.

New Zealand’s Woeful Home Building Performance

Statistics New Zealand announced recently building consents granted in 2011 represent the lowest level in 46 years.

The situation is even worse than these “bald figures” from Statistics NZ suggest – because taking account of the population changes over this 46-year period are not properly taken in to account. New Zealand’s current population is about 4.414 million, and with only 13,662 residential consents issued during 2011 this suggests a low consenting rate of 3.09 consents per 1,000 population. Some 46 years ago in 1966, New Zealand's population was 2.711 million. Adjusted for population, if the consenting rate per 1,000 population in 1966 was 3.09, that would mean that just 8,376 residential consents were issued in that year. It was likely substantially higher then.

The 2011 consenting rate per 1,000 population figure is therefore likely to be the lowest since the Great Depression, or in history. As noted above, the Christchurch situation is even worse still – throughout a supposed recovery.

Blundering Politicians Protecting Mates

To date, the political authorities have persisted with their “blundering responses” to the wishes of the earthquake ravaged city of Christchurch.

Within The Press today there is “Talk Of Rates Revolt as “serial political blunderer” Local Government and Environment Minister Hon Dr Nick Smith is reported to have said that a fresh new mid term election is “highly unlikely,” further compounding the political problems for his Government.

In essence, the current Government has just three options – first, do nothing; second appoint Commissioners; or third, allow a fresh mid-term election so that the locals can directly deal with the local political problems and inadequacies.

The current Council is clearly seriously dysfunctional, and the Smith “non-solution” of appointing Kerry Marshall as an “Observer” in a vain endeavour to dampen the protest down backfired by the Monday. When the Council’s Chief Executive Performance Review saw the light of day Monday, after it was “extracted” under the Official Information Act by the diligent media, Smith’s ham fisted plans were already in tatters. Contrary to earlier public statements by local politicians talking in glowing terms about his performance, justifying the $68,000 pay rise, the Review itself when it finally saw the light of day clearly illustrated otherwise.

The Government will not appoint Commissioners (contrary to the current public musings by Smith), because this would immediately collapse the local public support for the National Party, which did undeservedly well in Christchurch at the last General Election November 2011. The support for the National Party is in no small measure because the Opposition Labour Party is so internally conflicted and confused. As a political participant in local issues, it is currently “missing in action.”

Further to this, the appointment of Commissioners by the Government to the Canterbury Regional Council (Environment Canterbury), was not popular and has not been successful to date.

While Local Government Minister Smith is technically highly ranked in the Cabinet, in reality he is very much seen as “yesterday’s man” so far as political influence within Government is concerned.

Common Sense Must Prevail

It therefore seems likely, that as the local political pressure intensifies and Christchurch and citizens communicate directly with the politicians involved, that Prime Minister John Key and his Government, must see it as “desirable” to allow the local Christchurch people to sort out their own problems - with a fresh mid-term election.

Hugh Pavletich is a Christchurch entrepreneur, the owner of website Performance Urban Planning and the co-author of the Annual Demographia International Housing Affordability Survey, 2011 .