New Geography

Author: Owen McShane

  • The Recipe for Unlivable Cities in New Zealand

    The Auckland Council’s great vision is to make Auckland one of the world’s most livable cities. Yet the outcome of its currently proposed plans will be a city which is second best for most Aucklanders.

    Some 60% to 80% of residents of New World cities state a clear preference for a single family home with its own backyard. In Victoria state, where Melbourne is located, 70% of the population, for example, preferred a single family home according to one government study. There have been similar findings from US based groups like the National Association of Realtors.

    Yet even when this is acknowledged, many in the media, taking their clue from planners and urban theorists, seek to change this reality.  The May 9 issue of the NZ Herald carried a story titled “The Dying Backyard Dream” tells us “Many Auckland suburbs will become home to high-rise apartment blocks with the quarter acre dream (1,000 sq m) reserved for the privileged few.”

    This fairly represents the intended outcomes of Council’s Spatial Plan as outlined in the discussion paper “Auckland Unleashed”.  But if this new vision is realized how can Auckland be a “liveable city” for all those residents who are unable to realize their preference for a low-density suburban home? Instead, they must “learn to accept” life in “terrace houses, duplexes, courtyard houses, maisonettes, and 4 -5 storey apartment buildings”.

    When working-class and middle-class households find they are priced out of the market for the housing of their choice, they will simply move to some other location, here or overseas. This has long been the case with British migrants to places like New Zealand and now people from China and the diaspora countries, currently the largest source of new immigrants.

    Yet these households provide the core labour force for the productive sectors, and for the manufacturing sector in particular. For some reason engineers and scientists tend to place more emphasis on home life and work life balance than financiers, and other members of the “creative classes”. (i.e. those who are creative with other people’s money). Hence, in the Bay Area, engineers and scientists gravitated to suburban Silicon Valley while the “creative classes” gravitated to downtown San Francisco.

    The New Geography team have documented the recent changes in the diverse states of the U.S. using the data from the 2010 U.S. Census. Their findings deserve careful study if we want to provide livable cities for the mass of New Zealanders, rather than for a wealthy elite.  In the U.S., according to the most recent Census, middle class people and companies have moved to Texas and the Southeast, because these areas are business-friendly, have low housing costs, reasonable taxation, and regulatory environments that encourage industrial expansion.

    This suggests it may be time to propose urban visions that are more humane for the vast majority by rejecting intensification and concentration in favor of the more adaptable and resilient environment of more dispersed cities and suburbs.  A key advantage of smaller dispersed cities such as Raleigh, Austin, San Antonio and Indianapolis, is their more affordable housing means up to four out of five households can afford their preference for a suburban house with a backyard.

    The densifiers insist that dispersal increases commuting times and yet the average commute in low-density urban areas like Salt Lake City and Kansas City is slightly above twenty minutes. (Aucklanders should be so lucky).  If the aim is economic growth and job creation, the transport system must provide genuine mobility throughout the entire labour market of the metropolitan area, not just to the central business district.

    Auckland’s Spatial Planners should take note of this recent research, and Christchurch leaders should seize the opportunity to be the Number One City in New Zealand if they don’t.
    A major source of evidence in support of Unleashing Auckland is the ARC’s “Future Housing Demand Study” which assumes that Auckland’s density must increase to develop a healthy and growing urban economy. Unfortunately these assumptions are not supported by any evidence from the rest of the New World. In fact, forced densification is as often as not a   recipe for failure.

    The Auckland urban area is already the second densest in the New World and the street network was never designed to cope with such high densities. Rather than reducing congestion, doubling the density on a given street increases the vehicle trips on that street by at least 70 – 90%. How can such densification reduce congestion?

    These surveys of housing preference also tell us that the growing number of smaller households will not NEED three bedrooms, and hence will not prefer them. Such inferences ignore the growth in the spatial demands of home occupations, home arts and crafts, telecommuting, and the need for spare rooms to accommodate visiting friends and relatives – not to mention a lifetime’s accumulation of stuff. Even single people will buy a three bedroom house to guarantee long term salability and value. The rooms soon fill it up.

    Aging couples are presumed to want to be rid of their backyard “burden”. Yet we are a nation of gardeners, and retirees are some of the keenest gardeners of all. It’s a healthy hobby.

    The Wellington Regional Strategy Report also assumes the need for intensification, and also presumes “need” determines “preference” as in:

    The eventual decrease in two-parent families will have implications in terms of reducing demand for larger dwellings on larger sections, resulting in a surplus of this stock.

    So larger dwellings must be getting cheaper. Sorry, they are not.

    The report also presumes that ordinary folk just don’t know what they are doing when they make their choices. Researchers find that people actually make their trade-offs very well – especially the trade-off between travel times and distances, and price and amenity.

    Evidently, the early development of Silicon Valley was a dreadful error because“ … having centrally located and compact form of residential development provide greater benefits to the city than lower density forms.” But what would those scientists and engineers know? They built the world’s premier technology region in the suburbs, just as had been done a half century earlier in Los Angeles or in scores of other tech belts scattered from Austin, TX to the outer rings of London, Paris and Tokyo.

    The report also claims a “large proportion of retirees are currently moving to Kapiti Coast, which indicates there is an insufficient housing supply in other locations to meet their needs.” Maybe these retirees have actually chosen to live on the Kapiti Coast, an area of smaller, low density development sixty kilometers from Wellington, because they prefer it. Many people would share their choice. Similarly, who speaks for the children who lose the freedom to enjoy spontaneous outdoor play, and to benefit from a free-ranging life?

    There is nothing wrong with medium and high-density living for those who make a free choice within a functioning and affordable market. Councils should be maximizing our freedom to choose by focusing on general affordability. They must start by reducing the cost of land by freeing up supply.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by Pat Scullion

  • The Public Transport Revolution – Why does it never Arrive?

    Since the oil spike in the early seventies, enthusiasts for public transport have predicted that high prices for petrol would trigger a public transport revolution as people finally broke their “addiction” to the motor car and changed their travel mode to buses and trains.

    Since then, price bubbles have increased public transport use, and lowered car miles traveled. But these changes have proved to be short-lived. More drive more.

    Yet standard theory says that people respond to prices. Surely people should respond to increased petrol prices by changing their mode of travel.  But why hasn’t it happened in the past? More importantly, will it magically happen in the future?

    The answer is that most drivers do respond to increased oil prices but they have many choices as to how to respond..  You may switch to public transport provided it takes you where you want to go at a reasonable price. The problem is that part of the “reasonable price” includes the price of the increased time it takes to get to the final destination. Also, surveys reveal that when people climb into their car at the end of the day they feel they have actually arrived at “home.” Bus and train travel significantly defers their arrival in their own private space.

    So, given time, people change their behaviour in many ways, so as to maintain the comfort, convenience, and overall efficiency of the car. For example:

    1. They may decide to buy a smaller or more fuel-efficient car.
    2. They may relocate either their home or their job to reduce travel costs and times – provided the land market is flexible.
    3. If the local land-market is inflexible they may move to another town, or another country.
    4. They may modify all their travel behaviour by better trip planning, commuter car-pooling (with prioritized parking) and general ride and task sharing.
    5. They may choose to telecommute, car-pool, park-share, and ride-share.

    Fuel costs are only a small component of total motoring costs. Cars today are lasting longer, are more reliable, are cheaper to run, and are kept in use longer. When oil was cheaper total costs of motoring were higher. That’s one reason why we are driving more.

    Sudden spikes in petrol prices do affect the transportation modal split, but these spikes carry less significance than media reports would suggest, and tend to be of much shorter duration than the advocates of transportation revolution predict. People know how they want to live and they value their personal mobility.

    This is not a trivial issue because councils – and the Auckland Council for example – are demanding that Government funds massive investments in public transport because of the current oil spike, the upward blip in public transport use, and of course “Peak Oil.”

    The Peak Oil pessimists seem to believe no alternative to the petrol driven car exists. They also seem to ignore the increasing evidence of vast oil and gas reserves being discovered from everywhere the eastern Mediterranean to the shores off Brazil and the American Great Plains.

    A host of emerging technologies will more than compensate for any increase in the price of oil-based fuels – even for vehicles that continue to run on fossil fuels. Think of the hybrid car topping up the batteries from solar panels in the roof. Robot cars and electronically convoyed trucks hugely increase lane capacity. There are so many it would need another column to list them. The pessimists complain that it will take far too long to ring such changes in the vehicle fleet. In the next breath they talk about reshaping the urban-form, mainly by the densification of our major cities. Short of another Luftwaffe arriving on the scene, such urban renewal is hardly likely to happen overnight. Technology churns faster than cities. Try buying a Gestetner, a Telex machine, a slide rule, or a film for your camera.

    Urban economist, Anthony Downs, writing in “Still Stuck in Traffic?” reminds us:

    "….trying to decrease traffic congestion by raising residential densities is like trying to improve the position of a painting hung too high on the living room wall by jacking up the ceiling instead of moving the painting.”

    Yet the Auckland Council, like their counterparts throughout the affluent world, seems determined to raise the ceilings – with no regard for costs.

    One of the arguments used against building more roads – and especially against more motorways – is that as soon as they are built they become congested again because of “induced demand.” Such “induced demand” is surely the natural expression of suppressed demand. It seems unlikely that motorists will mindlessly drive between different destinations for no other reason than they can.

    However, let us accept for a moment that “induced demand” is real, and suggests that improving the road network is a fruitless exercise. Advocates of expensive rail networks claim they will reduce congestion on the roads and improve the lot of private vehicle users as a consequence.

    But surely, if the construction of an expensive rail network does reduce congestion on the roads then induced demand will rapidly restore the status quo. Maybe the theory is sound after all. It would explain why no retrofitted rail networks have anywhere resulted in reduced congestion.

    This is the time to invest in an enhanced roading network while making incremental investments in flexible public transport. Roads can be shared by buses, trucks, vans, cars, taxis, shuttle-buses, motor-cycles and cyclists – unless compulsive regulators say they are for buses only. Railway lines can be used only by trains and if we build them in the wrong place they soon run empty. The Romans built roads and we still use them.

    In a techno-novel published in 1992, Michael Crichton pauses in his narrative to explain what an email is. That’s not long ago.

    The one certainty is that the internet/computer world will have the same impact on transport as it has already had on communications. Transport deals with bits while communication deals with bytes.

    The end result will be a similar blurring of the line between public and private transport that has already happened between public and private communication. The outcomes are beyond our imagination.

    We should get used to it, and realise that making cities more expensive and harder to get around in does not make them more liveable.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by Mark Derricutt

  • What kind of Cities do we Want, Sustainable, Liveable or Resilient?

    A critical issue from the dreadful earthquake that has severely damaged so much of central Christchurch, taken so many lives, and terrified so many residents of the whole urban area, lies in whether the Central Area should be rebuilt. Some believe it should be abandoned for some other location; others see an opportunity to set new standards in sustainability, urban design, energy efficiency, or whatever ideal urban form takes your fancy.

    Let’s put the issue of “sustainable cities” to one side because the can words means anything, and hence mean nothing.  It has become one of the most overused phrases in the English language.

    Not surprisingly, Many of Auckand’s leaders are thrilled by the recent official ranking of Auckland as the tenth most livable city in the world, and have announced their determination to make Auckland even more “liveable” than it is now. This target of livability is also surfacing in Christchurch, normally to bolster demands for urban rail, transit-oriented gentrification, promoting cycling and walking, and making the city attractive to the “creative class”.

    However this quote from a US urban blog should give the livability boosters pause:

    Much of the highly touted livability of Portland has come at the expense of making it unlivable, that is, unaffordable, to anyone without a six figure income. The creative and professional classes thrive in Portland because they are the only ones who can afford it, and they are the ones who appreciate the development style the city has tried to mandate.

    I first raised this issue of ‘rich folk’s livability’ in How Can Cities With Unaffordable Housing Be Ranked Among The Most Livable Cities In The World? here on NewGeography. Then Wendel Cox further quantified such city’s “unlivable reality" in Unlivable Vancouver, in NewGeography.

    Cities designed to be sustainable or livable are likely to be unaffordable for all but a few.

    The Case for Resilient Cities

    Many of us watched the devastation caused by the floods in Queensland, Australia, driven by major rainstorms inland, and Pacific Typhoons devastating the West Coast and the hinterlands. The combination of a strong El Nina with the Pacific Decadal Oscillation means such events will be more common and more extreme in this part of the world than we have become used to since the similar combination of 1917/18.

    However, Phil McDermott, on his blog Cities Matter was quick to comprehend the lessons to be learned by our political leaders and urban planners.

    He opens his blog comment Cities in Search of Resilience with:

    An age of extreme events?

    Without debating whether an increase in the frequency of extreme events reflects climate warming, such events can be catastrophic when they impact on densely populated areas. Natural disturbances, whether geophysical (tsunami, earthquakes, mudslides) or climatic (flooding, hurricane strength winds, tidal surges), become disasters if they strike heavily populated centres. 

    So do human acts of aggression. The tactic of terrorising civilian populations taken to new heights in the bombing raids of the Second World War and adopted by today’s extremists is most effective – and destructive – when directed at the heart of major cities.

    Later in the post Phil sets out the following vulnerabilities generated by the current "compact city" planning paradigm:

    It relies on sophisticated, centralised interdependent systems of services. This creates greater capacity for disruption when any one part fails. Economies of scale in utilities may come with increased risk of failure under duress.  This applies to sewage treatment infrastructure, communications, water, energy distribution, and power supplies. It also applies to public transport systems.

    Poorly designed intensification reduces permeable surfaces, intensifying flood impacts.

    Converting brownfield and even greenfield sites (such as undeveloped urban space) to housing or mixed use reduces the safety valve of open space and increases vulnerability associated with the concentration of buildings and populations.

    Crowding more people into smaller spaces around constrained road capacity reduces prospects for rapid evacuation from the city or into safe structures and areas.
    Lifting the density of buildings increases the consequential impacts of severe events by such things as the collapse of structures, the spread of fire, and the transmission of disease.

    Read the whole post here. You might think Phil was setting out a list of lessons to be learned from Christchurch – but that "extreme event" was still in the future. A few days later, Phil responded to this tragedy with a second blog post, that picked up the same theme, titled "A Cruel Blow to a Beautiful City" which offers this timely warning:

    We cannot resist the power of earthquakes, hurricanes, tsunami, and the like. But we can perhaps limit the devastation that accompanies them.

    The implosion of many of Christchurch’s beautiful heritage buildings is a tragedy on its own, the wiping from the landscape of much of the City’s and nation’s history. But seeing the collapse of more modern buildings is sobering. 

    What are the lessons of architecture and engineering that might be drawn from this?

    How much resistance can we realistically build into our structures?  Or should we be thinking less rigidly, and explore designs that deflect or reduce the impacts when buildings are faced with irresistible forces? Should we think more about the survival of the people in and around buildings and less about the survival of the structures? Are there innovations in design that offer refuge, protection, and escape even if walls crumble and floors collapse?

    This event in Christchurch must surely erode planners’ resistance to the decentralisation that is the mark of a prosperous, modern city, that makes it that little bit more liveable, and so much more resilient in the face of disaster?

    Surely, Hurricane Katrina, and these events in Australia and New Zealand suggest that planners should stop worrying about sea level rises that MIGHT, or might not, happen in 100 years – with plenty of warning – and start thinking more about making our cities resilient in the face of catastrophic events which we know can happen tomorrow – hurricanes, cyclones, blizzards, volcanoes, earthquakes and tsunami.

    However, the proper debate should not be as simple-minded as "high rise vs. low rise" or "old vs. modern". In Christchurch, liquefaction contributed to the collapse of some of the modern buildings. In the Kyoto earthquake some robust high-rise blocks simply fell over, because of the total collapse of the ground under the building, but remained in one piece.

    Such problems and issues are not solved by sets of simple rules but by the application of skill, experience and wisdom. 

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by Kym Rohman

  • Retro Rail Alert

    The New Zealand Government recently decided to follow the example of Montreal and Toronto by amalgamating the six City councils and the single Regional Council of the Auckland Region to create a united “Super City” of 1.4 million people.

    Like similar amalgamated bodies, the new Auckland Council, which came into being on the 1st November, 2010, has fallen for the notion of regionally determined smart growth built around a huge investment in heavy rail.

    Backed by a Regional Council totally committed to Smart Growth, every decision was driven by the need to “get people out of their cars” rather than to improve mobility. Since the 1990s they have fought for densification as a means of enabling more public transport. The bus lanes linking the north shore to the CBD are for buses only. HOVs are not allowed on and nor are shuttle buses. The planners openly argue that the near empty lane is to encourage people to get out of their cars on the congested motor way lanes and take the bus. Also they are inserting bus only lanes into our already narrow urban streets. Cars are just being crowded off the streets.

    Consequently, congestion has grown progressively worse, but this was seen as only further evidence of the need to invest in rail.

    Many of us thought that the election which replaced the Labour Government with a coalition of National and Act, two conservative-leaning m parties of the Right, would put an end to this “trip backwards to the future”.

    But, as has happened elsewhere, the Right adopted the policy while the Chambers of Commerce and similar groups championed the mega-amalgamation on the grounds of efficiency. They saw huge savings to be made in having only one Mayor and one council, and one plan, and one rate, and indeed, ideally only “one of everything”.

    Yet instead of searching for a new, modern way to develop this region, Len Brown, the left of center first Mayor of the Auckland Council has backed a “Vision for Auckland” built around an extensive rail network – including a rail link to the Airport, a CBD rail loop, light rail on the surface streets, and a rail tunnel under the Waitemata harbour.

    Residents of surrounding areas may not share this Vision – especially if they have to share the costs. This is the kind of division that led to Montreal’s recent de-amalgamation.

    The Mayor supports his Vision with claims that professional analysis and expert advice will show that these projects are viable and necessary and that Government must fund them.

    One has to wonder where he gets his advice from.

    No investment in rail in New World cities since the 1980s has resulted in a reduction in congestion. In most cases congestion has increased and public transport market share has diminished because the investment into rail has diminished funds for roads, buses and High Occupancy Toll lanes, measures that actually work to increase mobility

    The Government should also be aware that the international engineering firms at come in behind these proposals for rail investment (and similar major project works) have a proven expertise in getting a foot in the door with low bids then cranking up the costs afterwards. These projects routinely come in over budget.

    Furthermore, some research reveals that Heavy Rail (as is proposed for the Auckland network) has a worse record for cost overuns than Light Rail projects. Early projects have a worse record than more recent projects, possibly because the tendering firms have gained experience over time in how to fool the public, and the population with low ball estimates of cost and exaggerated estimates of ridership.

    “Megaprojects and Risks: and anatomy of ambition.” (Click on the link to read the Public Purpose review.)

    This has become a clearer pattern, as seen in projects as diverse as the English Channel Tunnel, the Great Belt rail-road bridge between Zealand and the Jutland Peninsula, and the Oresund road-rail bridge between Copenhagen and Malmo, Sweden.

    So this is not just an American problem.

    The “Chunnel” trains, for example, were projected to carry 15.9 million passengers in the first year of operation (1995) but by the sixth year (2001) ridership was 57% lower at 6.9 million. The cost overrun was 79%.

    The Flyvbjerg data set of international studies, including rail and road schemes, contained 258 projects.

    • 90% had significant overrun of costs.
    • Rail projects had the highest cost escalation (45% over)
    • Road projects had the lowest escalation (20% over)
    • The average ridership was 61% of forecast and the average cost overrun was 28%.

    The figures for rail alone were worse.

    An even more pessimistic summary of performance is contained in a power-point presentation by Lewis Workman of the Asia Development Bank, Predicted vs. Actual costs and Ridership – Urban Transport Projects, May 2010.

    This presentation notes that the problem is actually worse in developing countries. The Bangkok metro “actual ridership” fell short of the projections by 55%. The authors ask the question “Lies or Incompetence?” and their answer is “Probably Both.”

    New Zealand’s Minister of Transport, Stephen Joyce is well prepared to shout louder than the “one voice” of the new Auckland Council. In September 2009 he warned that the Government is committed to spending NZ$500m on the city’s rail electrification projects – but funding cost over-runs is not an option.

    His officials have identified up to $200m of potential cost over-runs in the NZ$1.6bn project, which is still on the drawing board.

    One of the first rail upgrade contracts demonstrates his concerns are justified.

    The Manukau Rail Link was initially estimated to cost NZ$40 million [2006] which subsequently rose to NZ$72 million [2008] and the latest figure is NZ$98 million. This is for a 1.8k link and station southwest of Manukau CBD.

    The Minister should hold fast to this position. But maybe he should also hold fast to the position that Auckland Council will not be compensated for any revenue shortfalls on account of lower than projected ridership.

    Maybe the Auckland Council would then take on board the remedies for these “foot in the door” feasibility studies, or get those who make the studies to stand behind them with some form of guarantees backed up by insurance.

    The recent experience with BART suggests that US politicians should learn to play equal hard-ball.

    Similarly the 5 km BART connection to the Oakland Airport (on the East Bay) was originally projected to cost $130 million and cater to more than 13,000 passengers daily. However, after a decade of delays, those forecasts have been changed to $484 million – a cost increase of say 250%, and 4,350 passengers a day – a ridership shortfall of say 60%.

    The crystal balls are not getting any clearer.

    Consequently, according to a study by transport planners Kittelson and Associates, each new passenger who uses the system during its estimated 35-year lifespan will be supported by a subsidy of $102 – on top of the fares they pay. This is more than 10 times the original projected subsidy of $9 per new passenger. This combination of cost overrun and ridership shortfall has had a catastrophic effect on the viability of such projects.

    But the boosters are not deterred. They say it should be built because “the community wants it”, which sounds familiar.

    The table below shows this the Oakland Airport rail link is clearly a project that should never be started. Even the “rapid transit” speed will not be delivered.

    Politicians’ Visions reward the citizens with nightmares.

    These large multi-national engineering consulting firms have become accustomed to treating Governments – both Central and Local – as giant ATM machines.

    It’s time to take away their plastic.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by bcran

  • Why We Have to Learn to Love the Subdivision – Again

    When did anyone last hear officials and professionals talking enthusiastically about the social and economic benefits resulting from the subdivision of land to create secure, clean and tradable title?

    Indeed, any planning document is likely to include a long list of potential problems caused by the subdivision, but will mention few, if any, of the benefits. Maybe it’s time to rethink this conventional planning wisdom. In Peru, during the eighties, Hernando De Soto and the Institute for Liberty and Democracy promoted land reforms that led to more than 1.2 million rural families being given titles to the land they worked. One major grant of titles to a whole village was celebrated on television. When the reporter asked a woman “Why is having title important for your family?” she replied “Having secure title means I can now go out to work.” She went on to explain that the family’s past “customary settlement” required continual occupancy and eternal vigilance. Some member of the family had to be on the property at all times, or else someone else could move in.

    During a recent BBC television news bulletin on the floods in Pakistan, reporter Orla Guerin said “Many here are bound to their land and their livestock, and will live or die with them. We spotted one young boy, clinging to the top of an electricity pylon. He climbed down to collect a bag food aid, but refused to be removed from the waters.”

    I suspect he was also concerned with the need to help maintain his family’s right to occupy.

    City officials and urban planners in particular are always claiming that their cities are “running out of land”. Of course they are not running out of land. They are surrounded with it, as any air traveler knows, just from looking out the window.

    However, they are short of land with a certificate of title that allows the landowner to develop the property for housing or anything else. One reason for this shortage lies with the costs and often onerous conditions of compliance are simply too high. The French Revolutionaries learned that when they fixed the price of bread at less than it cost to bake a loaf, the bakers simply stopped baking bread. When it costs more to gain a title than the lot can be sold for, we should not be surprised if people stop creating lots.

    Suburban residential development creates many jobs and the residents who move continue to create new employment opportunities for decades. Every home owner becomes a property developer as they add rooms, sleepouts, new decks and swimming pools and upgrade their kitchens, and so on. I should have emphasized that it’s the land around the dwelling that enables so many of these projects to take place over the decades and to create so many jobs.

    If Smart Growth policies force people to live in apartments, their opportunities to improve their dwellings become seriously limited.

    City governments appear to overlook the economic and employment impact of rejecting large-scale developments, but the cumulative effect of a multitude of prohibitions of smaller proposals is equally serious – especially in a small economy like New Zealand or a relatively unpopulated place like Montana.

    During the nineteenth century the key function of governments in the New World was to churn out titles as quickly as possible.

    Surveyors served as the true frontiersmen, enabling the migrants to arrive, put down their roots, and build. The post-war suburban boom repeated this experience, supported by an equal enthusiasm for creating a property owning democracy.

    Then during the 1990s, “The Age of Environmentalism” arrived and activists persuaded decision-makers in the developed world that the creation of titles enabled polluting humans to possess the Earth Mother and must be stopped, or be made as difficult as possible. These constraints on land supply created the short-term property boom, and the inevitable bust that led to the greatest financial crisis in recent history.

    The developing nations and their economists continue to recognize the value of title. The works of Hernando de Soto, the Peruvian economist, emphasize that the major problem facing people in poor countries has been their lack of secure title to land, which constrains their ability to borrow significant sums of money and put down secure roots. As he says, the family with title builds a dwelling; the family that squats invests in furniture. This has led to his founding leadership of The Institute for Liberty and Democracy in Peru.

    At the recent conference of international surveyors in Sydney it was quite exhilarating to hear surveyors and officials from Peru talking of targets of 150,000 new titles per year. They knew full well that titles generate wealth. Maybe it’s time for New World cities to set similar targets and share de Soto’s enthusiasm for the contribution of subdivision to ongoing liberty and the pursuit of happiness.

    Bankers have long recognized that many families’ main means of saving is paying off their mortgage. Equally, many aging citizens fund their retirement by subdividing their large lots to create a nest egg for the future. Most university-indoctrinated central planners regard this as an “inappropriate” activity.

    Unexpected Super Large-Lot zoning in rural areas can suddenly deprive thousands of people of a secure and active retirement. Of course the planners claim the landowners are still able to subdivide, but just have to go through an approval process. Then the same planners make sure the costs and uncertainties render the exercise prohibitive. Their environmental cost benefit analysis ignores this destruction of individual wealth – and dreams.

    I wonder if any advanced developed country planning school has Hernando de Soto on its reading list?

    Instead of encouraging the creation of titles, as history suggests we should, the Smart Growth central planners have persuaded our governments to penalise the creation of new lots by imposing highly expensive and highly regressive fines called “development contributions” – which are actually anti-development levies.

    We tax cigarette smokers to discourage smoking, and we fine speedsters to discourage speeding. Should we be fining the creators of legal title if our aim is to encourage development, promote employment growth, increase savings and promote personal well-being?

    Some politicians, like Maurice Williamson, New Zealand’s Minister for Building and Construction ARE determined to reduce the costs of building consents and inspections. But these are trivial compared to the costs of subdivision and land use consents.

    And there is something of an international movement away from rule based management of development and a return towards broader concerns of society and the people who inhabit it.

    But before any legislative reforms can be effective we need to learn to once again celebrate secure, tradable, private title. This remains one of Western Civilisation’s greatest contributions to our wealth, health and general well-being.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by Brenda Anderson

  • The Disappearance of the Next Middle Class

    Every week we read that yet another major housing project has been turned down by the Courts here in New Zealand because of the need to protect “rural character” or “natural landscapes”. This may well have profound short and long-term consequences for the future of our middle class, as it does for the same class in countries around the advanced world.

    Every week a multitude of smaller developers abandon their projects because Councils’ compliance costs and development contributions make the projects unviable – even if the land were free. And it’s not.

    The New Zealand Institute of Economic Research says the ten-year norm for New Zealand is 26,000 new dwellings built per year. Statistics New Zealand reported only 16,000 dwelling consents issued in 2009. The NZ Property Investors Federation says we are building only 7,000 dwellings a year.

    Some say the Property Investors Federation figures are too low given that Statistics New Zealand’s figures for the year to date suggest we shall issue between 13,000 and 11,000 consents this year, and that the “slippage” between consents and finished dwellings cannot be that great.

    However, this is rather like wondering whether you are driving towards a concrete wall at 100 mph or only 80 mph.

    Any current year estimates confirm we are on a slippery slope to catastrophe.

    Unemployment, especially among young unskilled males is on the rise. Given these dreadful build-rates, should we be surprised, since these workers depend on construction for economic opportunity?

    And why don’t we recognize the cause and do something about it?

    First let’s look at the statistics. A Google search under “construction multipliers” turns up statements such as “building 1,000 houses generates 2,300 permanent full time jobs”. Another will say “Every dollar spent in the sector has a multiplier effect between 2.1 and 2.8.” These “low multiplier” statistics seldom spell out what is meant by “the construction sector”, and most are annual figures, and focus on “permanent full time jobs”. But the construction sector generates a multitude of short-term contracts that presumably slip through the net.

    These low “construction” multipliers are reinforced by a post-modernist ideology that tries to persuade us that housing is an unproductive activity that takes productive rural land out of production and hence undermines the economy. This is the old “primary” industry myth, further reinforced by the quaint animist notion that subdivision causes “death by a thousand cuts”. The surveyors are out there wielding their long knives and watching the Earth Mother bleed to death.

    Smart Growth planners claim the “urban sprawl” that grew around our cities during the post-war decades was the terrible price paid for housing the baby boomers and must be replaced with Smart Growth (or perhaps more accurately, Dense Thinking).

    We have lost sight of the fact that those prosperous decades were actually in large part the result of those large-scale suburban developments.

    US economists generally explain the post-war boom as being driven by the work force switching from weapons to washing machines.

    In New Zealand we used to attribute those golden years to micro-management of the economy, and to import licensing in particular. In reality, our real genius was probably introducing the capitalized family benefit which led to our own “Levittown builders” such as Fletcher Construction and Neil Housing.

    Back in the late sixties, while reading for my thesis in urban development economics, I read a report on the drivers of the post-war boom in America, during the twenty years from 1945 – 1965. Wildavsky’s Oakland Project focused on behavioural analysis rather than econometrics.

    The authors concluded that the suburban development boom laid the foundations for the long-term development of the post-war American middle class.

    An equivalent thought experiment would now read something like this:

    • We begin with a clean greenfields site, presumably being farmed, or just open space of some kind.
    • A developer decides the land is well located for a new 1,000 lot residential development and hires consultants or staff to prepare an application. The process alone takes five to six years and provides unproductive employment for a host of highly paid professionals.
    • The project is then killed off by either the Council or the Courts.

    In a sensible world, as prevailed in the post war years, the project would move on to the next stage:

    • The land development teams move onto the site and start the final surveys, road-building, drainage and stormwater schemes, landscaping, and street-crossings, all required before the builders drive their first profile-pegs into the ground.
    • Then teams of contractors start building the houses, which will have been designed by architects, draughtsmen or architectural designers, and then processed through a simple consenting procedure.
    • The teams of carpenters, glaziers, plumbers, painters, roofers, stoppers, electricians and plumbers all move in to finish the houses ready for occupancy. A gang of maybe ten drain-layers could lay the drains for the 1,000 houses over a five year sales-and-build period – say 20 contracts a year.
    • These teams use products and materials cut from forests, mined from quarries, processed in mills, or produced in factories, or recycled products, all requiring employed labour.

    So after a few years the 1,000 homes may be built and occupied. The analysts in the sixties suggested the 1,000 houses would generate say 5,000 direct contract-jobs over those early years.

    However, they recognized that the real economic activity would continue for another fifteen years or more. The same happens today.

    • As the families move into the houses they buy kitchen equipment, drapes and light fittings, bookshelves, plasma TVs, computers, artworks and wine cellars and so on.
    • The owners lay paving, build decks, plant gardens, and landscape the property.
    • The gardens require lawn mowers, chain saws, hedge trimmers, nursery plants, and barbecues.
    • Then up go the Gazebos, the dog kennels, the play houses, the extra rooms, and so on.
    • And then come the swimming pools, spa pools, home offices, sleep-outs, and solar heaters.

    Many of these improvements are produced by the “sweat-equity” of the DIY owners and are a major means of increasing household wealth and well-being. They arealso a potent form of saving, provided the owners are investing in tangible improvements and not over-priced land.

    These suburban on-site improvements go on forever. Consequently, even today there are about 80,000 certified “alterations” a year in New Zealand – and many more that don’t get near a permit.

    All these activities create jobs for the people who make the spa pools, the plasma TVs, the gardening tools, the cars, and the Gazebos.

    After several years from start up the properties are likely to require a gardener once a week, and maybe a housekeeper one or two days a week, and baby sitters, and whatever else the modern family needs to manage its work-life balance. These are the on-site ‘jobs’, but the families also need teachers, doctors, day-care providers, retail staff and so on and so on.

    The sixties report concluded that every 1000 houses would generate a total of 40,000 contracts and jobs. Which seems outrageous until you divide the 40,000 by the fifteen to twenty years, which comes back to the multipliers of 2.0 to 2.6.

    The sixties thought-experiment reminds us that by driving our residential build-rate from 24,000 a year to a no more than 13,000 a year, and probably much fewer, we are turning off the boiler that regenerates our middle class.

    It also explains why an economy with a low “build-rate” is unlikely to enjoy full employment.
    Those suburbs were not “a sad price to pay for our post war housing” but were the economic driver of “the long summer of content” so well described by Bill Bryson in “The Thunderbird Kid.”

    So why are we allowing our institutions to destroy the ability to regenerate our own suburban middle class?

    Whatever happened to genuine sustainable development? Sustainable for middle class people and families too.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo by pie4dan

  • The Economic Significance of Village Markets

    Flea markets and garage sales have been around for years. But for most New Zealanders, produce markets have been associated with old European villages, or the ethnic markets of Hong Kong and other exotic locations. Village markets focus on locally made crafts, while Flea Markets are essentially centralized garage sales.

    At the true Farmers’ Market vendors may sell only what they grow, farm, pickle, preserve, bake, smoke, or catch themselves from a defined area. There are now over 50 “official” Farmers’ Markets in New Zealand. But when all the flea markets, village markets, and less formal markets are tallied up there must be hundreds throughout New Zealand.

    When I grew up they simply didn’t exist – unless we count the school “Bring and Buy” and Church fétes. We simply shopped in shops. Why is this? Why did my parents feel no need for such markets? I suspect my parents would have regarded such markets as somewhat old-fashioned and even primitive. This was the sort of thing our forebears left behind in Ireland in the 1830s.

    However, they are now a part of our lives. For the last few years I have routinely – effectively every Saturday Morning – shopped at our local market at Mangawhai, a nearby coastal village in Northland. It’s where people sell their own produce, but also sell books, bric-a-brac, power-tools, and other bits and pieces. The market works for me because it is just across the road from my excellent butcher, and next door to the local lending library.

    So what’s the new appeal? The conventional theory is that the rise of these markets reflects a desire for fresh healthy food, and fruit and vegetables grown locally, and in-season rather than imported from far away. It’s also considered green to buy local and support local cultivars, and growers of eco-sourced native plants and so on.

    These markets are also a good place to meet for a chat, and they also provide a convenient means of selling off numerous “priceless objects” now growing mould in the garage.

    Indeed, last weekend, my wife and I decided to win back some space and earn some ready cash. Setting up a stall at the Mangawhai market was easy. We simply phoned the market organizer (from the local Cheese Shop) and booked a trestle table.

    We thought our real cash-cow would be the plants and seedlings but the biggest and most regular seller was our collection of vinyl records dating from US pressings of jazz giants from the sixties. Our first major sale was a high-quality Akai turntable. It was fun to see grandmotherly types shuffle up to the table and enthuse over early discs by Oscar Peterson, Miles Davis, and Billie Holliday. As a bonus we gave the turntable buyer a 1950s 10 inch LP of Bill Hayley and his Comets – Don’t Knock the Rock.

    The last time I thought about these markets was two weeks ago when I wrote the sad story of the urban Onehunga Market that had to close because Auckland City demanded a resource consent that would have cost maybe $30,000 dollars.

    I presume our Mangawhai market operates without such costs because it is housed in the Village Hall, on public ground, shared with the Library and the Museum. Consequently our stall space and trestle cost us only $10 for the morning. But if the Council had demanded say $30,000 for a land use consent, then a twenty-trestle market at $10 a trestle would take 150 weeks to recover just the consenting cost. Obviously, there would have to be many more spaces, or the rental would have to be much higher.

    On our first morning we netted only about $80. (Being newcomers, we were outside and it rained) But even this represented about $20 dollars an hour – not huge but better than the minimum wage. On the other hand it was an $80 dollar return on our $10 dollar capital investment (using simple “homespun” economics). Remember the stuff we were selling had negative value, and I drive back and forth from the village every Saturday anyhow.
    And it was fun. But could such markets become an endangered species? As in so many areas, the culprit is heavy-handed regulation. The high costs of land and development, and the burden of consenting and development contributions already make it nearly impossible for small corner stores to make any return on capital.

    Yet, the stall renter’s capital-productivity is massive. But many regulators cannot stand to see such an opportunity slip from their grasp. So the Onehunga market had to close.

    These village markets remind us of the “power of markets”. As the heavy-handed regulators drive down capital productivity, entrepreneurs have responded by rediscovering the outdoor markets of much earlier times when capital was scarce and labour was plentiful. Market economies are like water-beds – push down on one corner and they bounce up in another.

    We are beginning to see similarly ad hoc responses in the residential and commercial property markets. The regulators have so severely constrained the supply of coastal land in New Zealand that people like my parents, who bought a batch at on the coast at Tairua out of their working class income, no longer have a hope of enjoying the sprint from the Kiwi bach straight into the sea.

    Those who have generated this scarcity then complain that only foreigners can afford to buy our coastal land. But many of us really do want to occupy a beach side property for the best weeks of summer, and then return home to our rural dwellings in the regional towns and villages. Enter the motor home.

    As farmers become more and more regulated by central planners who know nothing about agricultural economics but instead are determined to ‘save the planet’, enterprising farmers will look for new ways to supplement their incomes.

    Well, here’s one way we can solve our mutual problem. First, buy a quality self-contained motor home. Then use Google Maps to find what looks like an ideal bay, with a farm track connecting the main road to the beach.

    Then approach the farmer and negotiate a “right to occupy” this little patch of heaven. It could be no more than the right to park on the spot for perhaps eight weeks a year, but could include an obligation to fence off the area to contain any children or pets. No resource consent, no title, no lease – just a right to drive on to the farm, park on the spot, and drive away if it rains.

    Farmers supplement their income and Kiwis reclaim the low cost beach. The Environmental Puritans will gnash their teeth at the prospect of so many people having fun – but this time we might be ready for them. Markets and human ingenuity can still win in the long run.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

    Photo of Mangawhai Village Saturday Market by Sids1

  • Losing Touch With the Changing Definition of “Community”

    Mathew Taunton opens his review of “The Future of Community – Reports of a Death Greatly Exaggerated” (Note 1) with the observation that:

    “Community is one of the most powerful words in the language, and perhaps because of this it is frequently misused. A profoundly emotive word, it is also a coercive one, and a key political buzzword in modern times. That community is being eroded in modern Britain is a matter of cross-party consensus, and it is also widely agreed that one of the state’s roles is to devise means of counteracting the decline of communities.”

    It is refreshing to see a writer prepared to use ‘community’ and ‘coercive’ in the same sentence. Taunton reminds us that practically all urban architecture now attempts to force social solidarity into existence, and, by definition, condemns those who do not conform for daring to exercise their choice.

    Unfortunately many of these attempts to coerce community into existence tend to repress or subvert the informal processes through which people interact of their own free will.

    So why do so many influential people in the UK, the United States, and other countries of the New World, hold this ‘consensus’ that communities, like morality, are in decline, requiring government interventions to restore them to good health, within some reborn urban village?

    In the past, communities were primarily place-based, if only because people could not travel very far or communicate over any great distance. But as civilizations have developed, this interaction between transport and communication has reshaped the prevailing structure and meaning of communities, as each reacts with each other. The printing presses of Renaissance Europe enabled the development of scientific and religious communities, as well as a host of “communities of ideas” both conservative and revolutionary.

    Last century the establishment of national broadcast networks and television helped constitute national communities of listeners or viewers, which in turn reinforced the communities of “us” and “them” through the great global conflicts of that century.

    The Internet has now created a whole new class of virtual communities or tribes. Many wage their tribal wars with considerable venom.

    However, these internet tribes, too, simply build on the superior transportation technologies that have enabled us to physically flee to find more friendly groupings of associates, or to avoid the ‘neighbours from hell’. Of course, place remains important to communities based on activity – people continue to visit their golf course, football field, church, beach, or shopping mall. Modern transport has gifted us with ready access to them all.

    Similarly, communications technology plays an important role in communities of shared interests or ideas – the blog site, the book club, talk-back radio, and the specialist channels on cable TV or YouTube.

    However, rigidly place-based communities can also be coercive traps.

    In the late sixties I wrote a paper at U.C Berkeley drawing on surveys that showed that “neighboring” was more intensive in mobile-home parks than in most suburbs or inner city areas, precisely because the residents felt that if they fell out with their neighbors they could always move on. Neighboring is not without risk.

    Similarly, people in camping grounds felt free to share coffee, drinks and dinners around the barbecue, precisely because they know they need not meet again.

    Many retirees have discovered the pleasures of the summer nomadic lifestyle spent driving from location to location in a well-appointed motor-home.

    One retired couple (my American god-parents) were keen “rock-hounds” during the seventies and spent their summers driving their motor-home from one rock-rich territory to another, attending gatherings of rock-hounds along the way. They combined technological mobility, with place-based communities, and communities of common interests within the one retirement experience.

    However, these contemporary communities, no matter how plentiful and rewarding, fail to meet the expectations of urban planners trapped within their general theory of architectural or spatial determinism. They remain convinced that urban form and places determine our behaviour. Yet in reality, our behaviour and preferences actually determine how and where we chose to live, work and play.

    They may also be responding, in their reflexive way, to a genuine loss of sense of political community, a loss that may be more deeply felt that we think.

    For the last forty or fifty years, through most of the New World jurisdictions, ‘reform’ of Local Government has meant ‘amalgamation’ on the presumption that ‘bigger is better’, probably because this coincided with the management theories of the sixties, which presumed conglomerates were the way of the future, and that all corporate mergers would benefit the shareholders and customers alike.

    The track record of such local government ‘reform’ has given scant support to the theory. Forced amalgamations in particular have proved to be disastrous. And many of the voluntary ones – i.e. those driven from the bottom up – have fared little better.

    These reform programs have generally been prepared to dilute or even ignore the traditional emphasis on ‘community of interest’ in favor of ‘economies of scale’ or the benefits of ‘regional integrated planning.’ In the end citizens have generally, and genuinely, lost contact with their Mayors and Councilors. They used to meet the Mayor in the street and have a chat about their concerns. Now they have to phone, leave voice messages and wait for the return call that never comes.

    Political authority, now often housed in some distant place, is more remote than ever. You can’t meet it, let alone beat it.

    Citizens may know their ward councilor but their ward councilors explain they are always outvoted by a majority who has no interest in any ward but their own. This is why large councils are actually less effective at delivering satisfaction than small ones. A small council is likely to be serving a single community of interest. But if one neighborhood wants to build a municipal swimming pool, all those who live more than an hour’s drive away understandably wonder why they should pay for a pool they will never use.

    This bias towards larger and larger local bodies – enhanced by the rapid population growth in many peripheral areas and regional towns – has been given a massive boost in recent times by ‘Smart Growth’ planning theory. This approach necessitates large areas of regional governance so that people cannot escape from the planned densification that most independent areas would likely reject.

    The Metro planners also often seek to extend their boundaries into the rural areas so as to prevent people and businesses locating where they prefer. Instead it is all determined by where the planners say people and business should go – for their own good, of course.

    It may well be that when the central planners try to create “place-based communities” they are responding to a genuine problem, but have chosen the wrong tool-box to fix it. Community can not be imposed from above and large government is clearly the wrong way to nurture it.

    A better approach may be to create a new system of local governance controlled by smaller, truly local councils, based on identifiable communities of interest, which are able to freely associate with other organizations if they believe it will provide services and infrastructure beyond their financial means.

    We should learn to define the services we need, and then match them to the appropriate organization, rather than trying to find the one or two magic sizes that can cope with all our needs.

    We no longer need to accept being re-organized from above; the internet allows even smaller units access to sophisticated information. We have a wonderful opportunity to take control of our destiny through a new world of local government in which the people themselves decide on their common communities of interest and set up novel and innovative joint-management entities where economic efficiency and common sense demand such arrangements.

    Note 1: The Times Literary Supplement, July 31, Mathew Taunton’s review of a collection of essays “The Future of Community – Reports of a Death Greatly Exaggerated”, by Clements, Donald, Earnshaw and Williams, Editors.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

  • Playing with the Big Boys: The Costs of Fruitless Passenger Rail Tours

    In these hard times the New Zealand public is somewhat excited about the travel costs incurred by our Government Ministers and MPs. Overseas travel attracts particular rage and fury.

    A particularly galling example is a proposal by Christchurch City Mayor Bob Parker, his CEO Tony Marryat, and an urban planner, to visit the US to investigate the performance of light rail in Los Angeles, San Francisco Bay Area, Seattle and Vancouver.

    These cities seem unlikely to provide any relevant information, if only because their populations are many times those of Christchurch, a metropolis of roughly 370,000 and a downtown population of a mere 8000. In comparison:

    • Los Angeles – 13.8 million
    • San Francisco/San Jose – 5.3 million
    • Seattle – 3.3 million
    • Vancouver – 2.1 million

    The reason the Christchurch team cannot investigate a rail system in the US serving a metropolitan area of only some 350,000 people, and with a CBD of only 8,000 people, may be that because so far, at least, even the most enthusiastic Smart Growth planners in the US are not that silly.

    Randal O’Toole, who has made many studies of urban rail systems, points out in “Unlivable Strategies” that spending money on expensive forms of rail transit is fundamentally inefficient because other transportation systems cost far less to build.

    Light rail, he argues, has become popular in the United States precisely because it is expensive. Congress gives transit grants to cities on a first-come, first-served basis. So the cities that build the most expensive transit systems get the largest share of federal transit funding.

    Naturally, dozens of cities are in line to get their share of the pork.

    But that does not prove that light rail is worthwhile. Too many cities have built expensive rail lines and then found that, due to overruns, high operations and maintenance costs, or heavy mortgages, they have to cut back bus service. The result is that rail construction has actually led to reduced transit ridership in many, if not most, cases.

    The Grand Tour: My Version

    Los Angeles and San Francisco Bay

    Here is what the Christchurch Mayor and his team should learn from their visits to the Los Angeles and San Francisco Bay.

    • Los Angeles reinforces the Portland experience (a much smaller city) where cost overruns forced Portland to raise bus fares and cut bus service during construction of its first light-rail line in the 1980s. As a result, a smaller proportion of Portlanders ride transit to work and other places today than did so in 1980. A similar situation in Los Angeles led to a 17 percent decline in transit ridership between 1985 and 1995. The NAACP sued the transit agency for cutting bus service in low-income neighborhoods while building rail to middle-class neighborhoods. The suit forced the agency to scale back its rail plans and restore bus service, which led to a recovery of ridership.
    • In the San Francisco Bay Area, due to heavy rail debt, San Jose was forced to drastically cut bus and rail service in 2001 and lost 35 percent of its riders. The transit system had to make further cuts in 2007.

      Furthermore, despite (or because of) several extensions of the BART line, transit ridership in the San Francisco Bay Area has fallen by more than 10 percent since 1982. Several transit advocacy groups, including the Sierra Club (Piper, 2004), the Bay Area Transportation and Land Use Coalition (BATLUC, 2003), and the Bay Rail Alliance (Carpenter, 2007), actively oppose a proposed extension of BART to San Jose because they know investments in other forms of transit are much more cost effective.

    Overall, US urban areas with rail transit have not fared as well as areas with bus transit. Between 1990 and 2000, the number of people in regions with rail transit who commute to work by transit actually declined, while the number in regions with bus-only transit systems increased.

    The saddest part of these stories is that the people who lose tend to be those most dependent on transit due to low incomes or an inability to drive, while the people who end up riding rail lines tend to have higher incomes and plenty of auto-mobility. (Winston and Shirley, 1998, p. 9).

    Rail transit actually represents a transfer of resource from the poor to the well-off – Robin Hood at work in reverse gear.

    Seattle

    After getting voter approval for rail transit in 1996, Sound Transit began operating 31 miles of commuter rail service between Tacoma and Seattle in 1999. It also built a 1.6-mile streetcar line in downtown Tacoma at a cost of $50 million a mile, a third more than planned. As of December, 2003, Sound Transit also operates a 35-mile commuter rail line from Everett to Seattle.

    Sound Transit’s Seattle-Tacoma commuter-rail line is one of the least productive in the nation, carrying less than one seventh as many passenger miles per route mile as the average commuter-rail line. As a result it has one of the highest operating costs per trip or per passenger mile of any commuter rail line. Despite starting out with free service, the Everett line has been running more than 70 percent empty.

    Transit’s growth in travel and market share is almost entirely due to bus transit, not rail transit. But the growth in the region’s congestion is due to decisions made early in the decade to concentrate on rail transit rather than highway construction. Those decisions have harmed Seattle area residents in many ways, including cost overruns, congestion, transit’s cost ineffectiveness, and housing prices.

    Future plans: The Sound Transit agency originally projected that the cost of building a 24-mile light-rail line from the Seattle-Tacoma airport to the University of Washington and Northgate would be $2.4 billion. Shortly after receiving voter approval, the agency increased this estimate to $3.6 billion.

    After many stops and starts, last year voters endorsed an $18 billion Sound Transit plan for a 53 mile network which they hope will attract 25,000 daily riders by 2030.

    Our Christchurch team should learn from the Seattle story that, once embarked upon, these rail plans tend to eat ever increasing amounts of money.

    Vancouver

    We can only wish them luck on getting useful information out of Vancouver. There seem to be no collections of the statistics on the performance of the transit systems as are available to US researchers here and here (Excel files).

    However, we do note that in 2008 the operating cost of the Translink Sky Trains was C$773,737,000 and this was ‘covered’ by C$359,911,000 of fares and advertising, $262,298,000 motor fuel taxes,$255,741,000 property tax, parking site taxes $8,758,000 and others of $33,313,000.

    So the transfers from motorists and property owners are greater than the fare revenues.

    In 2008 the Long-term debt was C$1,822.7 million.

    Grand Plans

    Christchurch Mayor and his team are presumably looking at these rail systems as a means of supporting their Smart Growth plans for the Greater Christchurch area.
    If the Mayor and his team ask the right questions, and collect the right data, it will be evident to Blind Freddy’s dog that if these boondoggle systems have failed in these major cities, with their major concentrations of employment, then there is no way that light rail can provide a cost effective and efficient service to Christchurch and its environs.

    Sorry about that. Enjoy the trip.

    Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

  • Independence Day Greetings from New Zealand

    To my friends and colleagues in the US, it must be easy for Americans, in these times, to think that no one elsewhere in the world thinks about the principle on which America was founded. But many of us do.

    These Jacquie Lawson cards are created in England and you will see that she uses the 4th July cards to pass on some information to her subscribers. (She would be well aware that most Americans would be well aware of the contents of the Archives.) So when we say, “we are thinking of you” we mean that in both the personal and historical sense.

    The Anglo American tradition lives on, and at times like this we remember that American history is also British history. Queen Elizabeth the First, James Watt, and Adam Smith are part of our common heritage.

    View 4th of July ecard