by frog
In today’s Sunday Star Times, Joyce has an unsurprising reply to Rod Oram’s excellent piece last week (which critiqued the NZTA’s dodgy business cases for the Roads of National Party Significance). It’s a bit ironic because Joyce starts off making the case that we are in debt and we need to get out of debt.
Standard and Poor’s came along last Monday and reminded us of that very fact. Householders, businesses and the government have together been writing out too many IOUs to the rest of the world. We need to trade more to lower that debt.
Of course, his solution is to borrow billions to fund the very projects that are supposedly going to get us out of debt by making it easier to get our natural resources to ports so we can sell them to the highest bidder. (So we can spend more money importing cars and fuel to run them just to get around, repeat ad infinitum … or until we don’t have anything left to sell off.)
The piece is very revealing though, because in the end it’s clear that he just doesn’t understand the economics of transport. Instead of presenting evidence or arguments that support the claim that the most cost effective way to deal with “bottlenecks” and get freight from Northland to Auckland is by building a $2b inland motorway (which all the evidence suggests is not the best use of our precious transport dollars), he demonstrates that his world view is locked into the ideology of cars = personal freedom to live on a quarter acre section.
Some people believe the way our cities have grown is wrong. They think the quarter acre section is a fool’s paradise. People should live more in apartment buildings and less with a backyard, or heaven forbid, in a small town outside of the city.
It’s a philosophy that argues that urban planners should have much more say about how we live our lives; and it’s an agenda that the old ARC had in Auckland for a long time…
He doesn’t realise that it was actually planners and traffic engineers from the 1950s and 60s that set in place the standards that led to car dependence in the first place.
His suggestion that we shouldn’t invest in rail because only 2% of Aucklanders currently commute by rail displays an ignorance of marginal costs vs average costs.
We also should be wary about putting too much faith in a mode of transport that currently carries less than 2% of Auckland’s commuters to and from work each day, even after some quite spectacular growth.
The question isn’t about who uses what now, it’s what is the most cost effective way to accommodate additional trips. How can we move the most people and make the best use of the valuable land in the centre of our city, going forward?
Update: After penning this rather late last night I noticed that Jarbury had also blogged on the same topic, but in more depth.
Published in Environment & Resource Management | Featured by frog on Mon, November 29th, 2010
Tags: Debt, roads of national significance, steven joyce, transport
on the trolls and those who are unable to keep on topic
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I think the comments ‘fool’s paradise’ & economic ideas from the 1950-60s maybe the issue. Time to catch up to life in the 21st century. Sustainablity, public transport & living within your means, not in the ‘fool’s paradise’ ! Kia-ora
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So the 1/4 acre section is bad?
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Public transportists think so, and for good reason; the higher the population density, the better mass public transport can work, and the numbers work in favour of lots of public transport. It also makes car ownership not only almost impossible (no-where to put them), but (assuming the public transport works well) almost pointless. Stacking people up in high rises increases population desity per square mile dramatically.
Lots of people who live in Central London don’t have cars.
I, on the other hand, think its OK if others want to live in high population density areas, but I’m not part of that pack. I like my green space and privacy.
To make public transport work effectively in low population areas is more expensive, and the best schemes are things like park-and-ride, as long as where you are going to is a high population density area with decent public transport.
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I like the way Joyce not only complains of the government getting into debt, while announcing it’s fine for HIS government to do the same, but also blames ‘householders’ taking on debt to the rest of the world.
Joyce champions an ideology that proclaims the virtues of an unprotected economy, and sees no reason for New Zealanders to own their own banks, and to let the market push house prices to ridiculous levels, then complains about the results.
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Whereas if the government spent the money for new roads on new public housing (some later on-sold to private owners) – congestion would force people into commuter cars, buses or bikes and homes would become more affordable. Our BOP would improve and our foreign debt level would decline in real terms.
These are not the only areas where the government is going in the wrong direction.
It’s tax and investment policy is similarly distorted.
We need to ban non residents from owning housing or land. So homes are affordable and farming is a viable profit led bsuiness.
We need a CGT – family homes (cost) up to a capital value of $1M, land value up to $1/2M exempt (the value of the family home above the exemption subject to the CGT regime).
This raises funds for inflation proofing of savings before there is any tax liability on interest income. Thus people can be rewarded for saving and the necessity for a rising OCR is diminished – thus lower business borrowing costs. Also funds for a more generous R and D tax credit regime and bring in subsidy of on the job training – say as our business competitors in Oz have. Or does this pro investment policy not work to upskill their workforce and increase their incomes?
Another way to raise money is to make Kiwi Saver compulsory at 2% and end the tax incentives.
Of course the government opposes a CGT
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dbuckley, the problem is that the Los Angeles Metropolitan Area is denser than the New York Metropolitan Area, and yet public transport doesn’t work in Los Angeles, whilst it works in New York.
Of course, the reason for the difference is that Manhattan is as dense as anything, whilst the density in Los Angeles is spread over a number of various places (ironically in part due to interwar height restrictions in the CBD of Los Angeles).
What you need is trip density, and that is where items such as strong CBDs come in handy. That is why New York can have a lot of suburbs (remember, the modern suburb was born in New York) and yet have such a good public transport system.
Pray tell, how will Capital Gains Taxes solve the housing affordability problem? The last time I checked, the United Kingdom, the United States and Australia all had Capital Gains Taxes, and they went through the same housing boom we did.
And we would end up with crime ridden areas – remember that crime rates are very high where you have state housing. Need I remind you of Otara?
Sam, the market was only responding to the restrictions imposed by local government. In Auckland, we had the Metropolitan Urban Limit which really choked new housing development outside of set areas, but even outside of Auckland, there are enough planning restrictions to make new developments difficult at best.
No, it was people that stopped using the public transport system. It wasn’t possible to get from the southern suburbs of Auckland through to the CBD via a motorway until 1966, and it wasn’t possible to get from the western suburbs of Auckland through to the CBD via a motorway until the late 1970s. What you had was people that had, starting as early as the 1920s (although this became more commonplace after the war), bought cars for incidental use to places where they couldn’t go by public transport. Once they had the car, then they decided to use it to commute to work as well instead of taking the tram as they would have formerly.
Frog, here is a fact for you – five and a half out of the seven Roads of National Significance were on the cards under the last government. The only new roads that were on the Roads of National Significance were the Puhoi to Wellsford motorway and Transmission Gully (the other half of the Wellington Northern Corridor was already under planning under the last government as well).
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The reason LA has the transport modeshare it does is due to decades of nil investment in PT. Much like Auckland actually. Land use patterns matter far less than people think. For example Vancouver has the same density as Auckland and a lower proportion of jobs in its CBD yet manages 16% PT modeshare compared to our 7%
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Sam Buchanan says “…and to let the market push house prices to ridiculous levels, then complains about the results.”
Wrong government. Joyce has only been in a couple of years. The market peaked in 07. This is the first govt in decades that has put in place permanent measures that will dampen house prices.
If people want to bank with NZ banks, they can – there’s nothing stopping them.
And he’s right – NZ’s problem with personal debt is far more serious than govt or business debt.
And that’s come from people paying stupid prices for reduiculously overpriced houses.
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the Los Angeles Metropolitan Area is denser than the New York Metropolitan Area
That’s just wrong. It is so wrong it is almost impossible to explain how wrong it is in words. There is absolutely NO VALID comparison that would give LA an edge in density over NYC.
NYC is about 25 km x 25 km give or take a couple of rivers and a harbor.
LA is about 60 km x 100 km and people can have 140 km commutes.
Now someone may measure it other ways, but I’ve lived in both places, and this is nonsense. I am not arguing anything else here, but this has to be corrected before the thread gets any older.
BJ
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“This is the first govt in decades that has put in place permanent measures that will dampen house prices.”
A recession?
“Wrong government. Joyce has only been in a couple of years.”
I wasn’t blaming the government – I was blaming Joyce for his choice of ideology, which is much the same as that of the last government anyway.
“And that’s come from people paying stupid prices for reduiculously overpriced houses.”
Yeah right. They could pay ridiculously high rents instead, and just put up with New Zealand’s ridiculously low level of tenancy rights.
But the real problem with New Zealanders is that they are New Zealanders – and maintain a culture of wanting to have their own space – a house, a bit of lawn and maybe a few veggies or flowers – which is (mostly) under their own control.
This creates a demand for housing that spoils the working of the economy. How much longer are we going to put up with New Zealanders’ utopian pseudo-anarchist nonsense? They should learn to embrace powerlessness and ask “What can I do for the Economy?” instead of the selfish “What can the Economy do for me?”.
Except, of course, for rich people who can buy as many houses as they like, whether it pushes up prices or not – if you don’t like this it’s because you are envy ridden and want to deny other people their success – you small minded selfish Kiwi dimwits. Just stop being New Zealanders and learn to love your government, and rich people, who are your betters.
Of course, people do have a choice – they could choose homelessness. There’s plenty of cardboard boxes available for free.
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Sam Buchanan says “Yeah right. They could pay ridiculously high rents instead”
Actually rents are currently very low compared to house prices – only around 5% – that’s less then the currently low interest rates, and no insurance, rates and maintenenace costs to pay.
We keep hearing really stupid reasons for paying house prices way above what they are actually worth (and you continue with ranting nonsense).
There are several aspects to why NZ houses are overpriced.
1/ 1987 sharemarket crash meant people stopped investing in shares (and missed the huge gains since then)
2/ The tax system previously encouraged buying a rental house to the point of buying one even when it’s not profitable by itself.
3/ So we have lots of buyers competing to bid for houses even if they will make a loss on them.
4/ Lack of financial education among both landlords and live-in home buyers results in everyone desperate to climb onto the ladder when if they’d bothered to check the numbers they would have realised they were climbing onto a bubble
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bjchip, the valid comparison is Metropolitan Areas. Remember, New York is far more than just the five boroughs – a total of thirty counties make up the New York Metropolitan Area including counties that are in New Jersey, Connecticut and even Pennsylvania states.
Once you head outside of the five boroughs, your densities drop dramatically – for instance, on Long Island, Brooklyn (Kings County) has a density of 14,000 people per square kilometre; in Queens County, that drops to 8,000 people per square kilometre; in Nassau County, that drops to 1,800 people per square kilometre, and in Suffolk County, that drops even further to 620 people per square kilometre.
Of course, all that low density area out in the edges of the New York Metropolitan Area decrease the overall density in spite of the five boroughs being extremely dense. This compares to Los Angeles were the density is far more even (an exercise like what I did above is not possible, as of the five counties that make up the Los Angeles Metropolitan Area, two include significant areas of desert).
While New York City might be 25km x 25km, the New York Metropolitan Area is a much larger, less dense beast. I would also note that some of the commuter railroads heading into New York (Metro-North and the Long Island Rail Road) include lines that are in excess of a hundred kilometres long. Long commutes are definitely possible in New York, although I wouldn’t know how many people actually commute from New Haven to New York, or from Montauk to New York, or from one of these other distant locations.
I believe that you might have mixed up New York City with the New York Metropolitan Area. You are quite right to say that New York City is denser than Los Angeles City, but of course the more valid comparison to make is with metropolitan areas – i.e. the point at which the houses stop and the countryside begins.
Whilst they might be going gang busters, the public transport system is still very substandard. I’ll admit though that patronage is reasonable for an American city – being second to New York.
Thank you – that is exactly the point; once you have gotten to a certain density point (obviously, cars would be more successful than buses in rural areas), then public transport can work and most of our cities are dense enough for public transport to work, provided that it is provided.
House prices have dampened? They might have stopped going up, but house prices are still nuts compared with historical averages.
I’m with photonz on this one; most rental properties in New Zealand are loss making operations, and the few that make a profit are more likely to be the long term ones where the landlord doesn’t have a huge mortgage to pay.
And of course you forgot the most obvious one – planning rules that prevent the easy development of housing.
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“We keep hearing really stupid reasons for paying house prices way above what they are actually worth (and you continue with ranting nonsense).”
And we keep hearing people like you analysing house prices in purely economic terms and consequently getting everything wrong. For most of us, houses are things we live in, not factors on a balance sheet.
By the way, my rant was supposed to be nonsense, and I enjoy ranting nonsense at times.
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Sam – a good rant is probably good for stress relief.
But again you are coming up with reasons to support people paying silly prices for houses.
If people stopped doing that, then EVERYBODY would have more affordable housing.
Then we’d all have a lot more money to spend on other things – good for us and the economy etc.
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“But again you are coming up with reasons to support people paying silly prices for houses.”
That’s because there are reasons for paying silly prices for houses – as I noted above.
“If people stopped doing that, then EVERYBODY would have more affordable housing.”
Yes, collective consumer action is a good alternative to the individualism of the market, but that requires organisation, and in this case, regulation of those who would take advantage of a drop in house prices for speculative purposes.
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Frog’s incomplete knowledge of the history of the quarter acre dream leads to placing the car the wrong place in the puzzle. The individual family home on a suburban quarter acre section has been a central tenet of housing policy of most left and right wing governments since Seddon’s Loans for Workers Dwellings Act. Then Parliament introduced compulsory town planning when we had no qualified town planners. The result was a one size fits all standard plan in which factories were kept as far from houses and the central business district as possible. That made walking or cycling to work impossible for most workers. It also meant the traditional advantage the tramways got from having the majority of workplaces and shops in a single central location was lost.
More recently computer networks got rid of the need for CBDs anywhere other than in Auckland and Wellington and killed the usefulness of the remaining bus services for the majority of workers.
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Sam – you complain about house prices at rediculous levels, then come up with lots of reasons why people should pay those prices.
And in my opinion if you reasons for throwing away $100,000 is just because you want to own instead of renting for a few extra years, then you probably deserve to lose it.
Fool and his money …etc etc.
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Try reading this thread again Photo – I didn’t say people ‘should’ pay these prices – I said people will pay these prices, because the decision to buy a house isn’t purely economic.
And I wasn’t complaining about the prices (though I could) but about Joyce attacking householders for going into debt with overseas lenders.
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John-ston said:
So why are you saying that the difference between LA’s and NYC’s public transport use is down to their respective urban form? As I noted in my earlier post, Vancouver has a very low concentration of employment in its CBD yet does very well in terms of PT patronage.
In fact, having multiple employment nodes, like LA, can be very advantageous to public transport because it means you can have heavy flows in both directions at peak time: doubling the efficiency of your system.
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“Pseudo-anarchist nonsense”… Classic!
In fact stop being New Zealanders all together and become Americans… They’re so much better and the American dream (nightmare) is working out fantastically… Ain’t nuttin wrong with y’all caravan trash!
Less home ownership = less families = less New Zealanders.
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You have a two fold problem though. First of all, the number of corridors increases in a near exponential fashion – for instance, when you go from two nodes to three, the number of corridors goes from one to three. Going from three nodes to four increases the number of corridors to six – and that is just considering in between nodes, I have not considered the suburban aspect.
Second of all, because the number of potential corridors has increased, the level of trip concentration has gone down. If you only have a thousand people travelling on a given corridor, then public transport will have a limited viability. Ten thousand people, on the other hand, would improve the viability of that option.
Because of that trip concentration – you would be insane to drive into Manhattan Island, but it wouldn’t be so crazy to drive to a dispersed employment centre.
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Paris has multiple employment concentration areas and a very effective PT system. Los Angeles is heading that way too. The same is probably true for many large Asian cities, though I don’t know them particularly well.
Doesn’t the Epping-Chatswood railway line in northern Sydney help service a major non-CBD employment node?
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Unfortunately, because that is a relatively new railway line, the data on usage patterns hasn’t really come out. If the Cumberland Line is anything to go by, I would doubt that there would be much use toward that corridor with more of its use coming from those heading into Sydney’s CBD.
Although if we look at the king hitters, the likes of New York and London, a significant portion of their patronage is heading into a strong Central Business District. Even in the case of Tokyo, it is heading into quite a large core area.
When we look at cities a similar size to Auckland, the CBD focus becomes even more obvious. Something like three-quarters of Brisbane’s commuter patronage is heading into the various CBD stations, and that figure only increases slightly when you include South Brisbane and Vulture Street. I am not sure about Perth, but I would suspect you would see something similar.
Likewise, some of the German systems have a strong CBD focus as well.
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neither Joyce or Rod Oram consider the possibility that we will have fewer vehicles on our roads, not ever-increasing numbers.
Dozens of recent reports including one cited by Lian Dann in the NZ Herald on Saturday all point to an oil supply crunch in the 1012- 2015 timeframe
see http://oilshockhorrorprobe.blogspot.com/2010/12/staring-down-barrel-of-oil-shortages.html
for some interesting analysis
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