Enabling Growth

Enabling Growth

According to the revised Unitary Plan, Auckland is forecast to grow from a population of 1.4 million in 2013 to approximately 2.4 million over the next 30 years. A Rural Urban Boundary (RUB) will clearly define where urban growth can and can’t go in that period. The plan also sets a goal of providing 60% of new homes being built within the existing metropolitan area, the 2010 Metropolitan Urban Limit (MUL) and 40% outside the MUL in new greenfield developments. The plan also sets goals for intensification, in  terms of lot size, building storey etc.      

Supporting the Unitary Plan are two key documents. One is the 2012 Capacity for Growth Study which is currently being updated to align with the Unitary Plan. The Capacity for Growth Study will determine the maximum development capacity in the Auckland region in terms of residential and commercial developments.

The other key document is the Population Growth Model, which forecasts the rate of growth, but does not include non-resident populations such as commercial, healthcare, educational and visitor activities which also impact on planning for growth.

To enable growth, there needs to be alignment with the essential infrastructure service providers of water, wastewater, drainage (stormwater), transport and power. This means alignment of capital programmes to ensure all the services are in place to enable the growth of the city, to provide for the residential subdivisions, schools, healthcare and commercial activities.

However, to align the capital programmes, there needs to be a clear understanding of the time phasing of this spatial development. In the short-term, that is relatively easy to ascertain. The areas that are already fully infrastructure enabled or can be enabled quickly have already been identified as Special Housing Areas (SHAs). It is also relatively easy to forecast the time phasing of growth based on historical population growth and the percentage of development capacity already developed.

Forecasting the time phasing of spatial growth in the medium term outside the MUL is significantly more challenging and requires a thorough understanding of the developer community, market drivers and development enablers such as programmes by other agencies to build education, healthcare and commercial centres. To identify, prioritise and plan for these developments outside the MUL may be harder with many developers wanting to benefit from the current upswing in demand.

Ideally, development should be market driven. Developers that have the right product at an affordable price in a desired location should drive growth. People buying what they want, where they want at a price they can afford.

But life isn’t that simple. For this to happen all the infrastructure to cater for all the growth over the next 30 years needs to be in  place now, and none of the infrastructure providers have the capital or human resources or time to enable that level of market driven choice.

The infrastructure providers need clarity on staged development - a planned approach whereby specific areas are scheduled for infrastructure upgrades and the land then released and re-designated to facilitate growth.

This approach is not without drawbacks, particularly if the growth doesn’t occur because the market was misinterpreted. There are plenty of examples in Auckland where the city invested in infrastructure and the subsequent growth has been slow and low. This approach also results in winner and losers in terms of land values. It is in the interests of developers with large land holdings to lobby Council to ensure the phasing of the release of land and re-designations are in their interests.

To circumvent these issues, previous councils, such as Manukau City, took the approach that the developer is responsible for providing the enabling infrastructure at their own cost. Thus a developer who wanted to develop a new subdivision was responsible for the design and delivery of all bulk infrastructure.  This would also service any  upstream developments. Rebates to the developer may only be distributed over time as Council raised developer contribution funds from subsequent developers. So, first mover advantages come with first mover costs. At best, this approach can lead to arbitrary, unplanned growth combined with high section prices as developers pass on costs to purchasers. At worst, it can stifle development as the cost of the enabling infrastructure is too high for a single developer to absorb

Therefore a debate is required between city planners, infrastructure providers and the development community. A debate to ensure there is planned spatial growth. That the infrastructure providers have the clarity and certainty required to implement and cater for the increased demand. But the debate and the plan must also be responsive to market demands and  not result in winners and losers among the developers who are ultimately building the future of the  city.

This thought leadership article is by Stephen Finnemore, a Technical Director at Harrison Grierson.

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