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5 April 2009 Back to the Drawing Board

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Last month UMR Research released a report on New Zealanders’ living preferences. The results showed that 49 percent of us live in the suburbs, 20 percent live in small towns, 17 percent live in rural areas, and 13 percent live in the central city. In response to the question where would you like to live, 39 percent said the suburbs, 26 percent wanted to live in a rural area, 22 percent in a small town, and 11 percent in a central city area. 2 percent were unsure.[1]

These results reflect a cultural heritage shaped by our long-term love affair with space and the great outdoors. It means that most New Zealanders are not naturally attracted to the sort of high density city living that can be found in countries all around the world. Instead, with our temperate climate, we are more inclined towards smaller, more neighbourly communities with a slower pace of life, a barbeque and garden outside the back door - and, if we are lucky, a pony in a paddock for the kids.

These findings are completely at odds with the demands that have been set down in the newly released report of the Royal Commission on Auckland Governance. The report - which recommends that all Auckland-wide councils and community boards be abolished to be replaced by a single 23-member mega council and six associated local councils - says that “densification” is the answer for Auckland.

This concept, which forces people to live in high-rise buildings, is based on a misguided belief that public transport is the solution to a big city’s woes. The problem is that not only is New Zealand’s population too small for most public transport schemes to be profitable, but Auckland’s congestion problems can be traced back to the fact that only one third of the planned roading network was ever completed.

In an extraordinary example of central planning and social engineering all rolled into one, the Royal Commission has chosen to ignore where Aucklanders might want to live, by proposing that they should be forced into high density housing so as to ensure their public transport schemes are affordable!

The report states that a spatial plan will be used “to identify locations within existing urban areas where densification is appropriate in order to make public transport viable”. They explain that allowing more houses in suburbs or outlying rural areas “would have an undermining effect on the provision of public transport and could make improvement unaffordable”. They also note that these policies will require “significant enforcement efforts”.[2]

The Commission is aware that there will be public opposition to densification and the imposition of public transport, but it states that “these attitudes must change”.

It is also aware that that the imposition of urban limits - which is at the heart of their policy recommendations – can push up the price of housing. But rather than listening to the advice of the Reserve Bank, which has clearly identified constraints on land supply in Auckland as a key problem and suggested that ‘urban fences’ need to be relaxed[3] - the Commission has chosen to impose the sort of controls it found in the cities it visited like Toronto, which has a metropolitan population of 5.5 million!

According to Wendell Cox, an international public policy consultant and Heritage Foundation Scholar, municipal amalgamations rarely work. In an article “The Toronto Megacity 10 Years Later - financial woes exacerbated by municipal amalgamation” he observes that after ten years of amalgamation, the predictions of major efficiencies did not eventuate, costs have increased, rates have risen, and Toronto now accounts for only 5 percent of the metro area's growth compared with 30 percent before amalgamation.[4]

It is a similar story with amalgamation in Winnipeg, where 13 smaller municipalities were merged into one “Unicity”. As local government expert David Barber describes, “The evidence shows the policy there to have been an abject failure. The result is a deadly mix of high taxes, high debts and unresponsive government, all factors which helped contribute to that centre’s relative decline against other cities, falling from third largest city in the late 1960s to the eighth largest today”.[5]

In reflecting on the 800 page report and the hundreds of recommendations, it should be remembered that the Royal Commission on Auckland Governance was set up in 2007 by a Labour Government that had just emerged from an embarrassing fiasco over the Rugby World Cup stadium contract. And before that, there had been the on-going controversy over excessive rates rises, which in some parts of Auckland were threatening to drive property owners out of their homes: in the three years between 1999 and 2002, rates had increased 9.5 per cent from $2.1 billion to $2.3 billion, but in the three years from 2003 to 2006, following Labour’s 2002 reform of local government, rates increased a massive 25 percent from $2.4 billion to $3.01 billion.[6]

These events had created a perception for the Labour Government that Auckland was dysfunctional. The fact that this view was not a widely held by anyone outside of the government was immaterial to their plan to impose greater controls on Auckland. 

Of key importance in all of this is the fact that the main reason for a change in the efficiency, performance, and cost of local government over recent years is the amendments to the Local Government Act made by Labour in 2002. These transformed local government from having a focus on maintaining infrastructure, providing core services and carrying out regulatory activities, to being responsible for the social, cultural, environmental and economic well-being of their communities. In addition, they were given the power of general competence, which enabled them to undertake virtually any activity they fancied, even if it had little to do with their core functions.

But rather than ask the Royal Commission on Auckland to consider the effects of this legislation during their inquiry, the Labour Government specifically excluded any investigation of the Local Government Act 2002 from their terms of reference.

This should have set off warning bells for the National Government, since the National Party vigorously opposed the 2002 reforms during the marathon thirty-hour debate in Parliament. They warned that there would be a dramatic escalation in the cost of local government, through massive increases in bureaucracy, planning and consultation with staff and lawyers gradually taking over the decision-making process. They also warned that the introduction of a range of ‘special’ privileges for Maori would create a divisive race-based role for local government, and they stated that an incoming National Government would “look forward to repealing much of this bill”.[7]

In light of this, it is virtually incomprehensible that a National Government could even consider adopting the recommendations of the Royal Commission without the report going back to the drawing board so that the effects of the legislation can be factored in. This is the only sensible approach given the radical nature of the sweeping changes that are being proposed, including the imposition of three race-based seats.

This week’s NZCPR Guest Commentator, local government expert Owen McShane, the Director of the Centre for Resource Management Studies, has also expressed deep concern about the report: “The promotion of a single Uber-City with a single Uber-Mayor, reflects the classic fascist advocacy of “strength through unity.” Many of the advocates of the Unified City State argue that Auckland needs to be ‘strong’ to deal with Wellington, and to be able to “speak with one voice”. Amalgamation is normally driven by the desire to reduce costs and increase efficiency. We cross an important line when the amalgamation is designed to increase the ‘strength’ of the City, the unity of its leadership, and the presumed unity of the people who are being spoken for.

“So we now have a proposal for a single Uber-City, with a single Uber-Mayor, so that the City State “speaks” with one voice. The Uber-City Council will strike one rate, and write one plan. There is no right of appeal against the Plan’s objectives policies and rules. The One Plan must be put in place directly, and be firmly enforced to direct all the people’s actions in accordance with the plan. And of course the plan must promote the monocentric city model even though Auckland is naturally becoming multi-nodal as are the vast majority of cities in the world.” To read Owen’s full article, please click here >>>

This is a very important point that Owen has raised. Some of the world’s most successful metropolitan areas have highly fragmented governments. Paris, with seven regional governments and more than 1,300 municipal governments, has developed a governance structure that would be the pride of any area. Tokyo, the world’s largest metropolitan area, has more than 225 municipalities that stretch through the parts of four provinces. The Milan area has more than 150 cities.[8]

In the end, the best plan for any part of New Zealand is one that enables people to live where they would prefer to live and commute using the sort of transportation they would prefer to use. On top of that people need local government to be efficient, cost-effective, and responsive to local needs. If it takes reform of the Local Government Act to bring that about, then there is no time to waste.

This week’s poll asks: Do you think a mega Auckland council will actually reduce rates?  Go to poll >>>  

FOOTNOTES:

1.UMR, Are You Happy Where You Live
2.Royal Commission Report, Planning for Auckland
3.Reserve Bank, Housing Affordability Submission
4.Wendell Cox, The Toronto Mega-city 10 Years Later
5.David Barber, Low Expectations For Municipal Amalgamation In Ontario
6.Muriel Newman, The Burdens of Local Government
7.Gerry Brownlee MP, Local Government Amendment Bill, p3177, Hansard 17 Dec 2002
8.Wendell Cox, Reassessing Local Government Amalgamation

Further Reading:
Reigning in Local Government
Housing Affordability Crisis

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