The purpose of this post is really to collate a bunch of stuff I have been throwing up on twitter so there is a record of it.  Also check out Aaron Schiff’s very cool analysis of the overlays in the Unitary Plan (heritage, volcanic view shafts etc…) and the Herald Insights visualization of the residential zones, which overlaps a lot with I have here.  (Update: The Spinoff have a some amazing maps here).

All of the maps that appear below can be accessed directly here.

How the single house zone changed

The first thing I looked at was how the Single House Zone changed between the 2013 PAUP and the 2016 RUP.  I initially created separate static maps, but at Aaron Schiff’s suggestion I turned it into an animated GIF

This demonstrates how much of the Single House has been removed, it’s astonishing really!  Though note it still has a stranglehold around the CBD.  Those areas with the best amenity the CBD, and thus which would be most valuable if intensified, are being frozen in time.

I also made an interactive map combing the two sets of data, with RUP in solid red and the PAUP set to be transparent.

[iframe width=”100%” height=”520″ frameborder=”0″ src=”https://willisnz.carto.com/viz/f79674fe-590d-11e6-a0c9-0ef24382571b/embed_map” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen] Direct link to map

High-rises everywhere?

The big fear around the unitary plan is that we are going to get high-rise apartments in the middle of leafy suburbs.  The sentiment is nicely capture by this tweet:

In @nzlistener, @rumpole3 is absolutely right. #UnitaryPlan pic.twitter.com/MVyEADGsFc

— Matthew Hooton (@MatthewHootonNZ) July 28, 2016

I’m not sure what the average person would consider “high-rise”.  The famous “Painted Ladies” in San Francisco look to be 3.5 storeys and I don’t think most people would consider them high-rise (see below).

With this in mind, I did a map of the areas allowing residential development greater than (>) 3 storeys.

[iframe width=”100%” height=”520″ frameborder=”0″ src=”https://willisnz.carto.com/viz/570c4d14-5d05-11e6-ad8e-0e8c56e2ffdb/embed_map” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreeniframe]
Direct link to map

As you can see this is concentrated around public transport (PT) trunk lines and employment centres. The burbs are relatively unscathed, except the parts within walking distance of PT or jobs.

Where is Auckland Staying flat?

The flip side of the previous question is where will Auckland “stay flat”.  I’ve looked at this two ways:

• “Flat” = up to three storeys (i.e. the reverse of the previous high-rise map) ;and
• “Real flat” = up to two storeys

Flat (up to 3 Storeys)

[iframe width=”100%” height=”520″ frameborder=”0″ src=”https://willisnz.carto.com/viz/ceb673e8-5cf2-11e6-bf32-0ef7f98ade21/embed_map” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen]Direct link to map

Real flat (up to 2 Storeys)

[iframe width=”100%” height=”520″ frameborder=”0″ src=”https://willisnz.carto.com/viz/88b6bc08-5ce4-11e6-a59c-0ef24382571b/embed_map” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen]Direct link to map

Conclusion

Either way you define it,  residential Auckland is actually staying pretty flat, at least based upon a very unscientific eyeballing of the maps.

One map to rule them all

And the last map I did is probably the first map I should have done.  This map contains all the zones allowing residential development and allows you to turn certain zones on or off under “Visible Layers”, allowing replication of any of the maps above.  Note that because I am using a free version of Carto, I had to lump city/town/metro/local center into one layer.

[iframe width=”100%” height=”520″ frameborder=”0″ src=”https://willisnz.carto.com/viz/ee6f1b9e-5e74-11e6-959c-0e3ebc282e83/embed_map” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen]Direct link to map

To get a feel for how the SHZ effects Auckland, and therefore what reducing it might do, I’ve pulled together a map of the SHZ, as proposed by Auckland Council back in September 2013 (what is known as the “Proposed Auckland Unitary Plan” or PUAP).  I.e. the IHP is proposing to reduce what is shown in this map substantially. But the data that would allow me to draw that map hasn’t been released yet.  (You can view the maps with all the zones online here.)

Looking at this, it’s striking that the CBD is encircled by the SHZ.  So the land it is closest to where people work, and therefore would benefit the most from increased density, is precisely the land that can’t be unlocked for increased density.

Given all the discussion around NIMBYism that has surrounded the AUP process, I thought it would be interesting to look at where people actually own the homes they live in.  The first map below shows the proportion of households within a meshblock that either own/partially own the house or it is held in a family trust.  Including the latter category in my measure of home-ownership may cause some anomalies, such as with the leasehold land around Cornwall park.

It will be interesting to compare this the AUP when comes out and see whether the are any patterns in zoning in areas where there is a high % of owner-occupied dwellings vs those where people rent (i.e. investors own the homes).

The other map I pulled together uses household income data. For this map I looked at the proportion of households with an income over > $100,000. I.e. I was interested in “which areas had the highest concentration of wealthy households”.

Again, pretty much shows what you would expect, higher concentrations of wealthy households in the inner suburbs and waterfront eastern suburbs.   South and West Auckland on the other hand have lower concentrations of wealthy households.

The app is currently illegal in New Zealand

Just because the law hasn’t kept up with technological innovation doesn’t make Uber a bad thing. Now the real fear mongering comes when he talks about Uber’s “surge pricing”

The metering system isn’t authorised and they don’t want to change it because they want to be able to bring in surge pricing. For those people who complain about the cost of taxi fares, you ain’t seen nothing yet.

It’s our job to educate the drivers and the public that this is sugar-coated poison.

What is surge pricing? I’ll let Uber themselves explain it:

Without a surge pricing mechanism, there is no way to clear the market. Fixed or capped pricing, and you have the taxi problem on NYE—no taxis available with people waiting hours to get a ride or left to stagger home through the streets on a long night out. By *raising* the price you *increase* the number of cars on the road and maximize the number of safe convenient rides. Nobody is required to take an Uber, but having a reliable option is what we’re shooting for

So yes, surge pricing means Uber is really expensive when there is a large demand for car rides. You might pay more $ than you would for normal taxi at the same time, but this ignores the non financial cost you might incur waiting for a normal taxi. So we incur the opportunity cost today when we are trying to find a cab on Saturday night. Surge pricing gives you the option to pay a premium to avoid that. In total it may not be more “expensive” depending on how you value your time. Is that a bad thing? You still have the option of catching a normal cab….I can think of a few nights where surge pricing would have come in mighty handy.

Update: by pure coincidence Jesse Mulligan just tweeted the following from LA…turns out Uber can be cheaper than taxis too, no wonder the taxi industry is scared!

Taxi LAX to Venice $49. @uber Venice to LAX $13.

— Jesse Mulligan (@JesseMulligan) July 30, 2014

BCR ratios (aka CBA by another name)

One thing that has always intrigued me when I hear about transport projects is that rather than talking about the “net benefits” from a “cost benefit analysis” (CBA), they talk about “benefit cost ratios” (BCR). Now the BCR is just the calculated benefits divided the costs (B/C). The surprising thing to an economist is that the BCRs are often < 1.

This means one of two things:

1. The projects are money hole and shouldn’t be built (we get less benefits than we put in)
2. There are significant non-quantifiable (or difficult to measure) benefits, and bureaucrats have made the judgement call that the non-quantifiable benefits are enough to tip the balance to give a true BCR>1. So there is some objective analysis, and some “gut feel”, but this can’t be avoided.

Hopefully not many fall into the 1 category, but given the scope for politicians and bureaucrats to drive these decisions, I wouldn’t be surprised. Even for the category 2 projects, it’s quite possible we are going to get bad decisions made, as the decision is ultimately going to be subjective. Many projects depend on who wins an election, which I think illustrates the problems here quite nicely.

There is also another, frightening alternative which I will now discuss in the context of Auckland

Auckland’s transport package

The crux of the ATB post is some quotes by Brownlee in question time about the costs of the various projects and a table of the benefits (I’m assuming both are “gross” and not “net”) They correctly note that the benefit figures are in net present value (NPV) terms and the costs are not, so they aren’t directly comparable. However, if we assume the construction time isn’t longer than a couple of years and the NPV is discounted back to around the same period of time, it isn’t two outrageous to compare the two numbers (Using un-discounted costs does of course understate the BCR, depending on whether the benefits need to be discounted further so the start dates are consistent.).  Three things jump out

1. The projects seem to either have a BCR substantially less than 1 or only moderately greater than 1
2. The second harbor crossing costs $4.7b  yet only has benefits of $568m
3. The East-West link costs $1b and the project has the backing of the government even though the benefits are “yet to be assessed”

As mentioned above, (1) isn’t particularly worrying if you believe that the benefits of transport projects are hard to quantify.  On (2),  that is a hell of a lot of non-quantifiable benefits to make a 2nd crossing worthwhile. And (3) provides us with the 3rd category that could have been in the first half of this post “projects for which the benefits have not been assessed, yet someone has decided it’s a good idea anyways”. I’ll call this the “entirely gut feel” category. I don’t know about you, but $1b is a lot of tax payer money to spend on something without actually thinking about what the benefits are relative to the costs. (Sidenote: it will make my day if someone can point out that I have misunderstood and this isn’t actually the case!)

Update:  as this post went to press everyone has been talking about the Puhoi-to-Wellsford “holiday highway” (Herald and ATB). Looks like no attempt has been made to quantify the benefits, beyond estimates of saved travel time  for people going on holiday up north (which could be used to estimate a benefit if you have an estimate of the opportunity cost of people’s time, which if the stereotype of rich Aucklanders heading up north to holiday homes is true , it might be quite high!). This particular Road of National significance (RoNS) suffers from the same problem as above, i.e.  having politicians decide to build a road first, then think about whether it is a good idea afterwards. At least this road is going to be tolled. (Sidenote: is the same true for all of the RoNS? i.e. no CBA?)

Update 2: If you are interested in transport funding in NZ, this paper mentioned by detmackey in the comments looks to be great read. I will certainly be giving it a thorough to read to lessen my ignorance on the institutional framework for road funding in NZ

Source: Generation Zero

On its face, as an economist I am suspicious of any arbitrary restriction. Therefore my first question is “what is the market failure this is seeking to correct?”. Or in more simple terms, “why do we think the market will under-provide car parking?”. I don’t personally have an answer to this, but I haven’t thought hard about it, so I pose that as question to our readers (UPDATE: Eric Crampton rises to the challenge here).  In this context, I found this tweet by Pippa Coom about Cameron Brewer’s support of the restriction quite amusing.

No. 1 neo liberal on Council @brewercameron doesn't trust the market. Seeks min parking requirements in Apart zone #shapeauckland

— Pippa Coom (@pippacoom) August 28, 2013

Now the Gen Zer0 guys don’t tackle the market failure question, which  is fair enough, talking about a lack of market failure isn’t very sexy politically (even though an infographic about market failure or lack thereof would excite the authors of this blog!). As you’ll see from this inforgraphic they are mainly focusing on the unintended (or intended depending on how cynical you are) consequences of the policy.

Now I’m not an expert on Urban planning or any of the literature in this area, so I thought I would put my economist hat and on have a brief think about the problems they claim the policy will cause. From an economics perspective it sounds like this policy causes an over supply in parking or at least a distorted distribution of parking relative to what would occur in the absence of the ban (unless someone can tell me what the market failure this is fixing is!)

(1) Ridiculous cost

Building car parks add to the cost of building a house. As an economist the cost of something doesn’t worry me so long as people are willing to pay for it. But what happens when you force car parks to be built? You probably push up the total cost of building the house or developers cut back another part of house to try and hit a price point. I.e. you either have more expensive houses, or slightly worse houses that have nice parking. Check out Hanover seal coating pros for more.

I’ve seen people say that you are “forcing people to pay for something they don’t want”. This line of argument is correct and false at the same time. What is actually happening here is what economists call “pure bundling”. I.e. you can only purchase the two products together, not separately. (more on the economics of bundling here)

So it’s correct in that people who place zero value on having a car park may end up purchasing a bundle that includes a house and a car park. But it’s false because their valuation of the housing component of the bundle is just greater than the price of the bundle. So nobody is being held at gun point and forced to buy a car park.

But the knock effect of the bundeling is that because costs have increased, people who don’t value a carpark are likely to be squeezed out of the suburbs they would prefer to live in or they will have a crappier home. This sounds like a welfare loss to me?

(2) Poor use of Urban Space

This is the one that is hard for an economist not familiar with the urban design lit to talk about. They are basically saying that mandatory car parks will result in ugly buildings (e.g. this post, yet again at ATB) and urban spaces that aren’t fun to be in. In economics language, they are basically saying that there is an externality associated with good urban design and that we will get worse urban design. Whether this is true or not is a factual issue that I’ll leave to people who research this.

But based on my anecdotal experience when I have traveled, I think I agree with the argument that there are externalities associated with god/bad urban design. Areas designed for people rather than cars are generally more pleasant to spend time in.

However, we do need to be careful with arguments like this, as what I consider “good design” and “pleasant” may differ markedly to other people’s preferences. So the more work that can be done to make this kind of assessment objective and focus on commonalities in preferences, the better. As Matt noted here, we need to be careful that we don’t use externalities as a veil to impose our value judgements on other people.

On a more technical note, this means we need to make sure the externalities being discussed here aren’t “pecuniary”, what does that mean? Eric Crampton has covered that well here in his “Primer on Externalities”

 (3) Reduces transport choice

I would rephrase this to “distorts transport choices”. On its face building too many car parks doesn’t reduce people’s choices, it’s just now much easier to drive. In fact, products like a car sun shade can also be installed to improve the driving experience.

If you already own a car park, then the cost of that car park is sunk when you are deciding to drive or use public transport. So you rationally ignore that cost of your car park when you pull together your spreadsheet comparing the costs of driving or catching the bus (I’m assuming you are all like me and have spreadsheets for this kind of thing!).

So because the cost of parking is sunk, your decision is distorted towards driving. If it’s easy to rent out your car park the cost is of course not sunk, but it has a very low opportunity cost if every one else has a car park and therefore doesn’t need to rent yours!

Note also that is basically just the bundeling issue discussed above….to get a house you have to also purchase a carpark.

I was therefore interested to see the New Zealand Institute attempting to debunk the myth that Auckland has a lot of sprawl by posting the following graph, in their very useful “graph of the week” series

Source: New Zealand Institute

On it’s face, this is a bit of a home run against the argument that Auckland is a sprawling city. Though having been to a few of these cities, the relative rankings started to worry me a bit. For example, Auckland has the same density as Los Angeles and both are apparently more dense than New York.

This illustrates why you always need to look at how statistics are defined, so that you know whether the number is actually answering the question you are asking (which brings us back to the transport/cost of living debate). Which is why I found this follow up post by the NZI very interesting.  They note that for New York, the US census figures give a density five times higher than the Demographia figures (used for the graph), but the discrepancy can be explained as follows

Indeed, the 2010 US census put New York’s population density at 26,953 people per square mile. That’s five times denser that the statistics published by Demographia.

The difference is easily explained.  The US census measures population density inside New York’s metropolitan urban limit – the formal boundaries of the bustling and chaotic City that Never Sleeps.  This is an area of 303 square miles (488 square kilometres).

Demographia measures New York’s population density over a much larger area – an area of 4,406 square miles (7,091 square kilometres).   It uses techniques like satellite photos of suburban lights on a clear night to assess the extent of urban sprawl beyond the metropolitan limit.

They then go on to argue that the Demogrpahia measure is more appropriate for assessing “sprawl”

If the purpose is to assess the extent of urban sprawl, it does not make sense to stop at the city limit if this is not where the sprawl ends. Using photos of the lit-up areas at night to gauge where the built-up areas end makes sense.

That is why the Graph of the Week focused on Demographia’s measure of density.  It shows that Auckland’s population density must be greater in the outskirts of Auckland than in the outskirts of New York’s metropolitan limit [emphasis added]

Which brings me back to the point of what question we are trying to answer…what is “sprawl” and why do we care about it? What the two numbers illustrate to me is that New York has a very uneven distribution of population density (i.e. a very concentrated “core”). Whereas Auckland might have a more uniform distribution of population density (I don’t think I can make any firm conclusions on this without more data).

So the question is, when considering “sprawl” in the context of “an ever-growing population, increasing fuel costs and environmental concerns” as the NZI note in the opening paragraph of the linked article, what is the right measure? Both probably matter, but my hunch is that the distribution of density may be more important than the aggregate average, since it tell us what the “core” of the city looks like. A big city (geographic and population wise) with a concentrated core and very few people living on the periphery will have very different problems to a city of the same size that distributes its population evenly over the same area.

Update: The very knowledgeable folks over at Auckland Transport Blog have pointed out the concept of “weighted density” via twitter. This measures captures what I was talking about above. If you’re interested, check out a post they have done on the topic here as well as some Aussie stuff here and here. I also found this article in my follow googling quite useful.