Russel Norman
Nats want to subsidise urban sprawl with your rates and taxes

It’s a bit strange that National say they want to look after the environment but at the same time want to subsidise urban sprawl. Two ways they want to subsidise urban sprawl is to cut development levies and build more new motorways.

Nick Smith’s speech to their conference complains about development contributions increasing the price of sections, and so presumably he wants to cut them.

Getting rid of development levies means that he wants existing ratepayers to subsidise the cost of new urban sprawl. Development contributions were put in the RMA and the Local Govt Act so that new subdivisions should be charged the full cost of new infrastructure they make necessary – eg water, sewage, roading, footpaths. Anything else is making people who have already paid for existing infrastructure in their rates, pay for growth as well.

Which is part of National’s plan for more urban sprawl – not only will they allow it by getting rid of metropolitan urban limits but they will tax us to pay for it. Say goodbye to all the green space in the Waitakere ranges in Auckland. Nats oppose protecting the ecological values on private land in the Waitakeres and on top of that they want the existing ratepayers to subsidise the developers as they make a killing out of developing the private land in the Waitakeres.

The second dimension to their subsidy of urban sprawl is the motorway building that National (and Labour) are obsessed with. More motorways are part of the urban sprawl project and Nats (and Labs) want to use our taxes to build em.

43 thoughts on “Nats want to subsidise urban sprawl with your rates and taxes

  1. The obsession with “housing affordability” is terribly single minded: unless you’re a shut-in, housing is only a part of your living costs, and in many cases the “cheapness” of housing in the distant suburbs is more than offset by the additional transport costs.

    Perhaps one way forward is to look at things like “location-efficient mortgages”, which are offered in some parts of the US. They recognise that people living in homes with good public transport or walking options spend less of their incomes on transport than people in car-dependent suburbs, so they should have more available to service the mortgage: something not currently taken into account by banks. This would help people get into homes that they might not otherwise be able to afford.

    The concept could also be extended to “energy-efficient mortgages” – homes with lower energy requirements often cost a bit more to build, but while they make the money back in the long run, it’s hard for some people to justify the up front costs. If banks were able to recognise the ongoing savings, it might be easier to realise that building cheap, flimsy houses in the middle of nowhere is a false economy.

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  2. Nat’s want to make housing affordable!

    Did you ever consider that might be the reason for this policy Russ? or is it another example of your closed mind when it comes to the National party?

    What about a post from you that has as a headline, “Greens want to tax workers more so those on dole can lay about doing nothing”

    I bet this post is censored as well.

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  3. Big Bro,

    I don’t believe the Nats give a monkey’s about affordability: they just want to make it easier and more lucrative for suburban developers, and the recent housing boom has given them a convenient platform.

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  4. Tomsk

    Where are you going to house people? How much should that house cost? Who is going to take that risk? How much tax should we all be paying?

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  5. PEL – you increase density along your public transport routes and protect your green spaces. It’s time to accept that suburbs of sprawling quarter acre blocks and white picket fences is a crazy way to plan cities if we want to be able to get around them as oil prices go up. Proposing urban planning which will result in a population dependent on increasingly expensive car-based commutes from further and further away from our urban centres is neither good economics nor good environmental nor good social policy. It’s just a get rich quick scheme for developers and the road building lobby.

    It’s worth pointing out that Labour’s record on housing is not good. How few state houses this Government has built is an absolute disgrace. If they are serious about making housing affordable, they need to build a whole lot more of it. Oh, and change the tax rules around investment properties. The Greens are the only party offering half-way decent policy options on housing. They need to stick at it. Good housing policy will unite social justice and environmental sustainability and is crucial to building a sustainable, just society.

    molly

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  6. >>It’s time to accept that suburbs of sprawling quarter acre blocks and white picket fences is a crazy way to plan cities

    I agree – to a point- but the RMA and councils make it just as hard, if not harder, to infill develop and build terraced housing, etc. The land can be made available for higher density development, but we still need the land.

    >>How few state houses this Government has built

    The government should get out of home ownership. It’s an utter waste of capital.

    >>they need to build a whole lot more of it.

    No, they need to get out of the way so the market can meet demand.

    >>The Greens are the only party offering half-way decent policy options on housing

    Meh :)

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  7. The government is hardly helping the situation by not echoing the IEA’s warning (“absolutely imperative”) on tightening oil supplies. If the warning was relayed instead of being ridiculed (by Cullen), we may be leaning towards different policy decisions.
    jh

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  8. PEL

    The market will NOT meet the demand. Not until it has utterly and completely filled the demand for overpriced oversized McMansions on every available plot.

    You mentioned that you are Wellington local… so you’d be familiar with the Aotea subdivision. You realize then that while I CAN buy a plot there for $150K and I CAN order up a kit house for about $70K there is no way I can get a builder to build it, nor get the council to let me do it myself. The builders are all fully occupied, the investors building ‘spec’ housing on the Aotea plots have locked them up and are not building ANYTHING there for less than a half-million price tag.

    FWIW I actually hope they lose their damned shirts. The demand for the cheaper houses exists and is not, repeate NOT being filled AT all. Yet I have seen several of those half-million $ houses remaining on the market for months now. Maybe in a couple more months they’ll start to hurt because the damned things don’t sell all that well… and maybe not.

    They’re renting them out.

    The only good news in this is that I am not in such a hurry anymore. The landlord said we could have a dog and my kids will have that benefit while they are young. The landlord gets a nice fence added to the property and we pay a little more rent… I have a really GOOD landlord… but the business about the housing market? Nope… I am STILL p!ssed off at that do-nothing good-for-nothing Cullen and my opinion of English and Key is that they’ll be worse, and nothing they’ve said yet indicates that I am wrong about that.

    Cap-Gains or RingFencing or both… no foreign ownership.. a heap of possible ways to address this exist that don’t involve even MORE taxpayer money or other valuable considerations going to the banks and developers. So far I haven’t seen either Labour or National taking the side of the PEOPLE of NZ.

    respectfully
    BJ

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  9. Your obsession with controlling where and how people live is incredible busybodying and will keep you on the political fringes. It is bizarre to think that you guys think it is a terrible thing to actually want people to be able to live in their own homes. Are we at peak land already?

    Here’s a suggestion, why don’t you let me worry about whether I can afford a house and in what suburb and whether I can afford the transport required. I have no problem with the concept of developer charges. I’m not even sure why it is an issue for the nats – classic user pays.

    As for your peak oil paranoia, go back and look at the suburban landscape of 100 years ago. You might notice it is a wee bit different. Why? Because we adapted to changed circumstances. Just as houses can be built they can be knocked down and converted to other uses. Stop viewing our environment and cities as some monolith to be shaped in your world view. They are far more dynamic than that. It is your imagination that is the limiting factor.

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  10. Insider – Just what the F are you talking about. We want people to live in their own homes… is there you find something peculiarly nasty about us wanting them to be efficient and efficiently served (transport/water/electricity/heat) ?

    Knocking down houses that are too far from the beaten track? Sure, and replacing them WITH WHAT ? You’re talking about the same thing we are talking about, we’re just onto the idea of making it a little less painful by encouraging the building of more efficient and efficiently served housing BEFORE the invisible hand finally realizes that it’s given itself a 3rd degree burn. Greens look a hundred years into the future – A good developer looks out about 1 year and most corporates are hopeless past the next 2 quarters.

    It’s a bloody hand mate, it has no eyes, no brain and no soul, and the blood on it is often innocent. Good reflexes, and efficient with the things it can feel, but nothing more.

    The market punishes inefficiency, but it does a poor job of avoiding it when circumstances change. Times are changing.

    BJ

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  11. Insider

    “Your obsession with controlling where and how people live is incredible busybodying and will keep you on the political fringes.”

    So its all right for the self-interested, greedy, duplicitous bankers, real estate agents, builders, and property developers to tell US where WE have to live, when we’re the ones who will bear the end cost? Read bjchips post above.

    Obviously the leaky buildings syndrome escaped the Gnat’s collective memory. And the Gnats want those w@#kers to be given more freedom to f**k us over!

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  12. My impression of “the market”, when it comes to property is.. a bunch of collosal scumbags… worms… slimeballs…. The sort of shenanagins exposed by Jenman and the occasional TV program is a tiny section of what goes on (I suspect). :mad:
    There has been a PR campaign going on (and no doubt severe lobbying) lead by people such as Chch’s Hugh Pavlovich to try to “free up” more land… >make more money$$$$$, market to rich foreigners ….locals pay for new infrastructure. [According to The Press Hugh Pavlovich has The Skeptical Environmentalist on his shelves ...surprise, surprise]

    jh

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  13. fwwogs look at Europe,
    there people have villages which they self create,
    the people like space fwwogs,
    even them green like space fwwogs,
    and what is the problem you have with reality fwwogs
    are you there bj,
    do yous want to live in the concrete chicken coop,
    on the south side,
    it is cold and bitter fwwogs,
    fwwogs, you get water sorted out first,
    even people like little me can introduce your needed
    CAP GAINS TAX,
    and these house thing,

    i told yous before join party,
    join with future PM,
    John Key

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  14. jh

    “My impression of “the market?, when it comes to property is.. a bunch of collosal scumbags… worms… slimeballs….”

    Too true mate. Just reading Olly newland’s book “The Day the Bubble Bursts” very enlightening read if you can stomach his attitude.

    Too bad those Aussie investors hadn’t read it. The “market” strikes again.
    Funny how the head of the Real Estate Institute smoothly shifts the blame onto the investors rather than holding his agent’s accountable for their actions. Feckin typical.

    PQ.

    I know your heart’s in the right place, but I now would rather join the the Church of Satan before I joined any party that John Key was involved in now that he has revealed his true colours.

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  15. # PeterExitsLeft Says:

    >>How few state houses this Government has built

    >The government should get out of home ownership. It’s an utter waste of capital.

    >>they need to build a whole lot more of it.

    >No, they need to get out of the way so the market can meet demand.

    Sure, the market will react somehow, but history shows it doesn’t necessarily react by serving the demand.

    The reason state houses were invented in the first place is that the market was not providing houses for some people, because building or buying houses to rent to those people at prices they could afford was less profitable than other things investors could do with their money.

    When National sold off lots of houses in the 1990s, they knew that was the natural way for the market to react, but they thought they had the answer. They introduced the accommodation supplement, which is paid to low-income renters in proportion to their rent. This is effectively a subsidy to landlords, and the result it had was to push rents up, because the market reacted by maximising the subsidy it could transfer to landlords from the government. That’s still happening, and its very difficult for the government to get out of this situation the previous government has put it in (in economic terms, rent prices are ‘stickier’ downwards than upwards, which makes it hard to influence rents down other than by building lots or state houses to rent at lower rents and pull the price down).

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  16. Actually, there doesn’t seem to have been enough promotion of alternatives to sprawl… Most people probably aren’t familiar with New Urbanism, Smart Growth (or whatever).. A lot of older areas are thoroughly mucked up by builders and developers following the golden rule of real estate Minimum in; Maximum Out.

    http://en.wikipedia.org/wiki/Smart_growth

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  17. Oh dear, Russell seems to have adopted that most disreputable of practices beloved of the worst sort of politicians. Taking one sentence from an opponents speech and building a fiction around it.

    Smith complained that “Labour changed the law around development levies that has seen them rocket from $8,000 a section to $24,000.” Where did he get these figures from? Which council is he referring to? Surely they can’t all be charging the same amount, after all, as Russell points out, the fees are supposed to be recovering infrastructure upgrade costs. If developers are being overcharged or there is collusion amongst local authorities then the correct solution is an enquiry by the commerce commission.

    Smith doesn’t follow his criticism with any solution. Russell has just hopped, skipped and jumped to his own conclusions. Criticising Smith’s solutionless criticism would have served your purpose just as well, Russell.

    As I see it the fact that the Waitakere Ranges Heritage Bill is needed at all is proof that the RMA is a failure at protecting the environment. All the RMA seems to be good for is lining the pockets of lawyers and slowing the introduction of renewable energy.

    When did Nats (and Labs) announce that they want to use our taxes to build motorways? The last I heard Maurice Williamson was still hell bent on replacing the existing user pays system with electronic tolls and abolishing ratepayer contributions. This seems to be as good a way as any of introducing congestion pricing as a demand management tool. As for Labour. The last time any of their lot seriously suggested funding roads from general taxation was way back in 1927 when the House Committeee of Ways and Means was debating the Resolution to introduce an excise duty on motor spirits as a source of revenue for the Main Highways Fund. John A. Lee and Mickey Savage both argued that the petrol tax would be a tax on the small owner/operator and roads should be funded from income taxes (28/10/1927 pp 435-478).

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  18. >>The demand for the cheaper houses exists and is not, repeate NOT being filled AT all.

    I just did a search on RealEnz which returns 1208 properties in Wellington under 400K.

    Wellington isn’t the cheapest place in NZ, obviously. Sydney, New York, London, Tokyo….

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  19. How many NEW houses PEL.

    Sure, I CAN find some cheap piles of sticks that are optimistically labeled “houses” where the schools suck and my kids will get beat up. Aotea subdivision is selling 150K lots and nobody is building 120K houses on them.

    I repeat, the demand exists. The market is distorted beyond a joke and is not meeting the demand. I know a fair few people in MY income bracket who are not about to move to Cannon’s Creek or Porirua East just to have a property. We won’t “pay any price”. That’s for speculators and idiots.

    We have the ability to do the numbers. We’re sitting in our rentals and our deposits and waiting for someone to actually do something real about the immoral transfer of NZ taxpayer money to Australian Banking interests.

    Anything rational that gets done will kick the residential property market off the nosebleed plateau it’s at… it won’t have to drop the same way the US market has done… well maybe parts of Auckland… but it has to come down.

    respectfully
    BJ

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  20. I’m sure there’s a lot of demand for Ferraris at 30K, too.

    I take your point, but given council and government compliance costs eat up over a third of that figure, how much of a house does anyone get for 120K (90K)? Is there any margin left for the builders at that level?

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  21. Also from that article:

    “A survey author blamed tight land supply for New Zealand’s housing squeeze, saying excessive land use regulation had strangled subdivision expansion and artificially pushed up prices.”

    Wellington is 47th most affordable, with a median price of 331K is pretty good.

    The London comparison needs some context. In an average suburb (N3), with high transportation costs, you get a one bedroom flat in an ugly block for 200K(p) (550K), whereas in NZ you can get a house with garden for that price. Take a look through primelocation.com and compare.

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  22. PEL

    “A survey author blamed tight land supply for New Zealand’s housing squeeze, saying excessive land use regulation had strangled subdivision expansion and artificially pushed up prices.?

    No doubt. Take a look at the Kiwiblog thread on the subject, but unrestricted development isn’t the answer either. Its hardly the only reason though. Just one factor amoung many.

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  23. Talk about a conflict of interest for the comments in that survey. I thought I’d heard the name of the co-author of the study. I think PQ mentioned him recently

    “Hugh Pavletich claims that the Christchurch and Auckland City Council’s are limiting the supply of land and pushing up land prices by subverting the Resource Management Act. In Christchurch’s case Mr Pavletich suggests that the Christchurch City Council has “conspired” with the Canterbury Regional Council.”

    http://archived.ccc.govt.nz/mediareleases/1997/CityPlan.asp

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  24. PEL :
    Re : the London comparison. You may be interested that Brown’s government is launching a major push of affordable, energy-efficient, transport-aware construction to address the dramatic state of the UK housing market, especially in the London region. Heck, it’s as bad as Auckland over there!

    http://www.guardian.co.uk/uk_news/story/0,,2133059,00.html

    If only Clark/Cullen (or even Key) were that smart.

    Sadly, the package was watered down, in its affordability aspects, by lobbying from builders :
    http://media.guardian.co.uk/site/story/0,,2137231,00.html

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  25. BJ :

    You want to hook up with a competent individual who knows how to build a house, and is currently working in another trade, or pull one out of retirement or something. I’m currently hooking up a friend from NZ with some French friends who are in a similar situation to yours. They have the land (cheap, in a nice village within cycling distance of a TGV station), they have the plans for a small affordable ecologically correct house, they’re facing an 18 month wait for builders…

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  26. >>it’s as bad as Auckland over there!

    I lived there for six years.

    The fundamental problem is that there are simply too many people wanting to live in the the South East.

    We don’t have the land supply crisis. Our short-supply is self-imposed by regulation.

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  27. Mr Pavletich needs to learn the difference between conspiring and co-ordinating. If he finds the idea of Christchurch City co-ordinating its growth with it’s neighbouring district councils objectionable then he could always confine his activities to Auckland where internecine warfare amongst local bodies has been the order of the day for pretty much as long as there have been more two people living there.

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  28. Hi

    A few factual observations

    re taxes funding motorways: Currently more money (by about $50m pa last I looked) is going into land transport than is being raised by petrol taxes (all of them). road user charges, and registration. Fuel taxes used to be a rough, and woefully inadequate proxy for externality charges – now they serve no such function at all.

    re sprawl: there is no shortage of subdivision land in Auckland, Wellington or Christchurch. What is preventing subdivision at present is the requirement that some element of infrastructure user pays applies – through development contributions. Christchurch has enough subdivision already consented to provide for 20 years of growth. National’s policy is effectively a subsidy to developers at the expense of ratepayers.

    Pavletich is an ally of Wendall Cox, who occupies a slot on the extreme right of the US political spectrum and in common with them has no compunction about telling outright lies long and loud in the hope they will be accepted as the truth.

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  29. “… Auckland where internecine warfare amongst local bodies has been the order of the day for pretty much as long as there have been more two people living there.”

    At least since the days of the Waiohua City Council, the Ngati Whatua Regional Authority, etc. Though there is a historic precedent for peace : around 1825, when the isthmus was allegedly free from human inhabitants due to Hongi Hika’s unorthodox ideas on town planning.

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  30. jgg,

    The petrol tax was a very good pricing mechanism when it was introduced 80 years ago. Now that we have GPS and other modern technology there is no real reason not to replace the petrol tax with charges that better capture the actual time and place of travel and serve as a basis for effective TDM. ACC and other insurance could be be included to make the charges distance based rather than time based.

    Don’t forget that land transport spending includes non-roading items whereas land transport revenue is entirely roading.
    http://www.landtransport.govt.nz/funding/nltp/2007/national-summary/land-transport-funding.html
    LTNZ doesn’t pay GST (or at least Transfund didn’t), this saving is probably similar to the amount allocated to PT. Bizzarly, GST is lavied on the ratepayers contribution to roads and PT. Makes it almost impossible to work out how much the Crown is really making and spending on roads.

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  31. Kevyn, I quite agree re road pricing, and I also think the privacy issues are overstated given that the time and destination of every phone call we make is recorded at present :-). Besides, it is vehicle pricing not person pricing so for privacy there is always bus and cab!

    As to revenue – agreed. My point was that land transport revenue is all spent on land transport and then some more comes in from the Crown. The sometimes floated argument that all petrol tax should go on roads is a bit like arguing all cigarette taxes ought to be spent on growing tobacco :-).

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  32. jgg, With the crucial difference that the petrol tax was originally introduced as a user pays mechanism for highway maintenance, ie paying for the damage done. Since the petrol tax also pays for traffic policing it might be better to treat the tobacco and alcohol taxes the same way as the petrol tax. The alcohol tax should cover the full costs of policing alcohol fuelled crime. And all three taxes should cover their current costs to the health and welfare system.

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  33. Kevyn

    One of the bad things about GPS is that someone will realize that it theoretically does away with the need for speed cameras.

    This has already been used by rental car companies in the US. The means of defeating a simple system are many and varied, the integration a less vulnerable system into every vehicle would not IMHO, be cheap. The shadow industry that would rise up to defeat the systems would be… interesting.

    Channeling BB –
    GST is levied on ratepayer’s contributions to roads. Income tax is levied on the rates. A tax on a tax on a tax? There are times when I just shake my head sadly and walk away.

    It also serves the insurance companies. The person losing freedom here is the individual, who may no longer take the slightest pleasure in driving.

    Anywhere.

    respectfully
    BJ

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  34. bj,

    Guess I’ll have to sell my 300ZX then. On the other hand there are 3 big roundabouts on the way to work. Brm brm brm:-)

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  35. I’ve had two buddies of mine in the states who dropped small block V8s into the 280Z chassis. Just fit…. some suspension mods required, not much bigger than the straight six but … a very large fun to money ratio. I went for little cars though – even back in the 70′s I was aware of my consumption vs that of my future children and stuck with 4 cylinder cars… some with turbochargers, some just wickedly quick. No concern over warming… the finite reserves of oil were however, on my mind even before the Arab embargo.

    …then I got here…

    I took one look at the quality (lacking) of the roads and locations of speed cameras and police enforcement around Wellington and realized that my days of quickly commuting to work, and enjoying my commute to work, were over.

    I feel sorry for my kids… I don’t think that it’s going to be as much fun for them.

    respectfully
    BJ

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  36. BJ,

    Seems that deep down we are all boy racers at heart?

    I dont think the number of cylinders is an indication of power and fuel consuption. A four cylinder subaru (or honda or nissan or anything japanese) with twin turbo’s. electronic ignition and computer controls can easily get to the 800hp mark.

    I dont think that gps and transponders are going to stop personal freedom. A strip of lead over the offending parts and wallah they are useless.

    Couple that with the need for a tracking service the be equiped and staffed, with enforcement officers to catch offenders (whose numbers may add up to millions) and you have control paralyses by shear offender numbers.

    Off cource you could have alot of fun with the trackers, Take the lead strip off every now and then on a journey to really confuse them.

    “sorry officeer, the gps (or transponder if paying tolls) must be faulty, could be when I refilling the windscreen washer bottle and accidentally spilled water over the electrics.”

    Now that should be fun for the kids and the young at heart!!

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  37. if i could just join in this (now-’clean’) petrolhead-nostalgia moment..

    i used to have a (turbo-charged) rx3 done up to stage two rally specs..

    internal roll-bars/racing suspension..and the like..

    (it used to feel like it was glued to the road..)

    it looked really ‘straight’..

    the slightly wider/fatter wheels..and the (quite) fat exhaust pipe..

    being the only ‘gives’..

    and the noise…!

    (a turbo-charged rotary winding out..and out..and out..is quite fearsome in tone..

    and very very quick..!..)

    i did a long tiki-tour around the south island in it..(pre-speed-cameras..)

    (mmm!!!..)

    (then there was the caddy..)

    phil(whoar.co.nz)

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  38. >>I feel sorry for my kids… I don’t think that it’s going to be as much fun for them.

    Plenty of “back country” fun to be had :)

    Good handling is imperative here – Euro’ rides…. ;)

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