Where’s the money coming from? Property owners question draft Auckland Plan

Press Release: Property Council Of New Zealand
Auckland Council’s draft Auckland Plan cannot be endorsed without Government support, achievable targets for intensification, an implementation plan and an explanation of how capital projects will be funded.

In a submission on the draft Auckland Plan, Property Council New Zealand argues Government buy-in is a fundamental test to whether the Plan will succeed or fail.

Despite inheriting an unrealistic timeframe for preparing such an important document, Auckland Council has engaged widely with the business community and Aucklanders. However, it is unclear whether the Government agrees with, or has confidence in the document.

Property Council chief executive Connal Townsend said the Plan contained many positive aspects and Auckland Council had worked hard to publish it under a challenging timeframe.

“Auckland Council deserves praise for bringing together a number of planning documents in an attempt to give effect to Mayor Len Brown’s strategy to make Auckland the world’s most liveable city by 2040. But uncertainty about the Government’s support and how large capital projects will be funded jeopardises the Plan’s delivery.”

The draft Auckland Plan has failed to account for unfunded capital projects including the proposed $2 billion City Rail Link.

The Plan is premised on Auckland becoming a ‘quality compact city’. It plans for how an additional 1 million people will be accommodated within the existing urban area and where the extra 400,000 dwellings needed to house them will be located.

“Despite a legal obligation to provide evidence to support decision making for Auckland, including evidence of trends, opportunities and constraints, Auckland Council is only now working on evidence to support the proposed ‘development nodes’.

“The Plan does not outline whether these nodes will be able to cater for the projected population demand. Nor does it analyse the capacity of existing urban areas – posing a serious risk of setting an unachievable target that the development community will not be able to meet.”

Mr Townsend said the urban form assumptions contained in the Plan were not evidence-based and the Council was careless when devising a growth strategy without first confirming the net amount of land available to redevelop within the isthmus.

A report prepared for Property Council identified low demand for intensification and redevelopment in about two thirds of the 80 town centres designated in the Auckland Plan, now and over the next two decades.

International experience shows that where growth cannot be accommodated, housing costs increase, house prices are volatile, business operating costs increase and cities are less competitive to attract new migrants and businesses.

Property Council argues Auckland Council should delay the draft Plan until it is able to analyse Auckland’s built form in more granular detail.

Analysis should include:
• Total land value in a suburb
• Land identified and developed as residential (percentage of total land resource in a suburb)
• Land identified and developed as commercial or another non-residential activity (percentage of total land resources in a suburb)
• Land with built form that has a high chance of remaining in its current form beyond 2041 (percentage of total land resources in a suburb)
• Number of dwellings in the suburb
• Growth rate as a percentage per annum (calculation of number of dwellings over time).

The analysis should also include a map of each suburb outlining the actual site activities and built form; a schedule of every site in the suburb, including land area and gross floor area; and recommendations for growth, and the actual population that can be achieved.

With this level of analysis, Auckland Council would be able to make informed decisions on upzoning to allow to height increases, zoning of residential and non-residential land, and determine whether the actual capacity of urban areas is less than forecast.

Greenfields industrial land
Property Council supports the Government’s position that more certainty about future land supply in a range of locations over the life of the Auckland Plan is crucial.

In particular, Auckland Council needs to clarify the timing of the release of land – bearing in mind the five to seven years it can take to rezone and develop business industrial land (taking into account regulatory and development costs along with marketing and tenanting needs).

“The uncertain global economic environment has temporarily slowed the uptake of business land, so it is realistic to assume Auckland is either close to or past time with the supply of industrial land, rather than being in surplus.”