Thursday, August 28, 2014

The Costs of Consolidation - Watching a Slow Train Wreck

The perils of Thinking Big
Creating a single city to administer Auckland’s local affairs was always going to be an expensive exercise.  Efficiencies were possible, but by no means guaranteed, and unlikely to exceed the increase in costs.  As decision making becomes more centralised, it becomes less sensitive to the needs of those it is meant to serve.  Auckland is well down that track.  And announcements of cut-backs around the Mayor’s latest budget – and the coincidence of ever-expanding rates and debt – highlight the fallacy of chasing efficiency by creating large administrative and governance structures that become remote from the community.

Administrative efficiencies?  It doesn’t appear so
Let’s revisit that prognosis.  First, administrative efficiencies are not guaranteed by consolidating councils as the tiers of administration build up and channels of communication proliferate (along with opportunities for miscommunication) in a large council. The need for internal alignment begets managers and higher employment costs, impedes external alignment, and slows processes. Its interesting that according to Statistics New Zealand local government employment in February 2013 was 38% higher than in 2010.  So much for the much heralded reduction in jobs.

Technical efficiencies – for whom?
Second, consolidating councils suggests that technical efficiencies can be pursued by way of economies of scale from consolidating the delivery of some local services like supplying water, maintaining roads and road corridors, and looking after parks.  But not if competition diminishes, labour markets are diluted, and monopolists (council owned or otherwise) come to dominate local services and utilities.  All too often possible technical gains from consolidation in the slow-moving, predictable, and unchallenging market for local government services get captured by the suppliers in higher wages, fancier buildings, glossier PR budgets and bigger dividends, and not the public. Increasing costs suggest that something like this is happening in Auckland.

Misdirected spending?  Too right
Third, there is a risk that the consequences of inefficient resource allocation will have further reaching effects in a large council than a small one. 

A local council investing, say, $30 or $40m in what may become an under-utilised sports stadium, for example, is less damaging than a larger council spending many more millions on super projects or major infrastructure of doubtful merit.  The risks of getting it wrong and the regrets from doing so are much higher.  A council with a larger revenue base may be subject to less fiscal discipline than a council with a small one.  It may favour larger “regional” projects with lower pay-back than the same sort of resources allocated more smaller local projects.

And region-wide projects subject to greater debate as a result of their impacts on multiple local councils areas may be better scrutinised and tested than if they are conceived and delivered without the same level of debate by a large single council.  The delays and deferrals associated with contestability by constituent councils in a region may deliver better outcomes than the full-steam ahead approach of a single agency.

So is Auckland still on track?
Unfortunately, Auckland has been hit by a triple whammy. Council employment has been growing.  The costs of utilities and services have been increasing.  And we are getting ourselves into some debatable capital commitments, lifting our long-term liabilities. 

The central rail link is one of these.  And even as council costs continue to rise, it seems that this uber-project is sacrosanct.  Yet the case for it is constructed on highly debatable assumptions about where we might live and where we might work 10, 20, or 30 years hence. 

All aboard?
We are assured, though, that planned stations will double the number of people with access to the rail. Let’s look at that.  For a start, these stations are planned mainly in inner city areas already well served by bus and with relatively high public transport patronage. 
 
However, let’s assume that passenger numbers do double as a result of better connections.  In 2013 that would have lifted rail commuters by 9,500 to 19,000.  According to Census figures this would be equivalent to just 4% of private transport users in 2013 (a gain of 2%) and less than 60% of the 33,000 bus users. 

Because the rail is ultimately focused on the CBD even this is dreaming.  Why? Because according to the Census one third of commuters to the CBD already use public transport and in 2013 another 13% walked or biked to work.  That’s a pretty good penetration rate of non-car modes.  Spending $2-3bn is not going to lift it significantly.
 
All at what cost???
And I’m not sure that the bill for the rail link will stop at $3bn.  Large, complex projects have a habit of running over time and budget.  The estimates for this one keep changing, highlighting the uncertainty and consequent fiscal risks around it. 

Given an uneconomic investment to start with, we are faced with raising funds elsewhere.  The taxpayer has already been lobbied, and now we are looking at alternative taxes (or tolls) simply because we know that charging users for the true cost of services is a fast track to running on empty. 

As well as additional charges on ratepayers and commuters (whether on public transport or in cars) we will further ramp up city debt.  Alongside the resulting interest commitments will be a raft of recurring costs – operations, maintenance, and depreciation – which we know will never be met by users.  This is a very real threat to a sustainable Auckland.

The CBD: going for bust
On top of all that, the rail connection is justified primarily as a service to the CBD, where much of the Council’s planned capital spending is already concentrated. But only 2% of the city’s population actually lives there, and 12% of its workforce is employed there.  The residents tend to be young, often immigrants, and transient.  The employees tend to be better paid and potentially more mobile than many of their counterparts in the suburbs. 

This vision of a city defined by its CBD raises major resource allocation questions for Auckland.  The CBD is the geographical choke point of the Isthmus, itself a regional bottleneck.  It is an area of ageing infrastructure, reclaimed land, and high building densities served by arterial roads that are increasingly congested, with critical roads subject to occasional inundation. 

I note that the driver of this singular vision, the Mayor, was elected into office by only 24% of eligible voters, or 17% of the population.  That, I would expect, should lead to a more measured approach than one that seeks a place on the world stage with a strategy that calls for sacrifices from the many to pander to the gratification of a few.  The CBD is already a great place to visit, but how much more must we mortgage as a community to pursue this particular vision. 

The risks grow 
To sustain the vision of a city defined by its CBD we are cutting back on the quantum and quality of works and services that have a more direct impact on the majority of Aucklanders. Deferral of drainage works for example, reduction of maintenance of our suburban corridors, a failure to expedite completion of critical roads not focused on the CBD, or a lower level of care of suburban parks and reserves are the things most likely to impact on the most Aucklanders on a daily basis. 

Can a strategy of spending, growing indebtedness, and increasing rates to finance the nice-to-have, me-too adornments (and liabilities) of much bigger cities really offset the reduction in the liveability that will come from cutting back on the basics while boosting the long-term cost of living in Auckland?

 

 

Saturday, June 14, 2014

Planning on a Wing and a Prayer

Shaken beliefs
The Minister for the Environment’s submission on Auckland’s proposed unitary plan is only a surprise insofar as it was a long time coming.  The development gap resulting from relying heavily on residential intensification to cater for growth, the contradictory nature of the heritage provisions, the equity issues raised by backing off intensification in more desirable middle class suburbs, and the procedural challenges raised by over-complicated overlays all point to a plan that will make Auckland a lot less liveable for many more people.

And a history of artificially driving up the price of land for employment by rationing it in the hope that demand can be met by higher densities looks like being compounded by unrealistic rules that will further boost the cost of investment in Auckland, prejudicing output and productivity.

These are just a couple of examples that reflect the increasing unease expressed from various quarters over the proposed plan.

The historical record
The problem is not so much that the unitary plan is deficient in one or two areas and can be patched up by an amendment here and there.  The two deficiencies cited are critical in their likely impact on Auckland’s development (or un-development as the case may be). The more fundamental problem is the expectation that one plan will miraculously resolve Auckland’s development issues.  How did we reach this station?
It’s a belief that goes back in time, and has spread throughout the land.  It was first articulated about 15 years ago with business lobby Competitive Auckland suggesting that development was impeded and competitiveness undermined by having seven territorial councils, and seven different district plans.  Worse, these councils were regularly at loggerheads with a regional council which intruded on their land use mandate as a means of fulfilling its environmental responsibilities, with development mired in an unwieldy and litigious planning process as a result.

This belief that eight fiefdoms was seven too many was codified through the deliberations of the regional council-sponsored Metropolitan Auckland Project in 2006.  An international panel was invited to work through the plethora of documents assembled for that project, and explored the cross currents behind it by talking with key figures.
 
The panel decreed that One Plan for Auckland should pave the path ahead, over-riding differences in development within the region, in its physical and human geography, and in the contrasting and often conflicting ethnic and cultural values as these influenced local plans and practices. 

The reformation
The government then summonsed a Royal Commission to enquire into options for Auckland’s supposedly fractured governance.  As a result of its deliberations the Commission delivered an intelligent design for the super city, declaring that the only way to the fulfilment of one plan was with the one true council, a council that must be directly responsible for the fulfilment of its edicts across the land.
This was endorsed in a more grounded fashion by central government, in an act that effectively reversed the logic behind the 1989 local government reforms.  These had been based on the principle that transparency is served by separating responsibility for regulation from responsibility for operations, and the crafting of environmental rules from the practice of development.

The same reforms promoted modest amalgamation as the basis for administrative efficiencies, carefully avoiding the diseconomies and loss of local democracy associated with super-sized councils.  Operational efficiencies could be sought through the provenance of quasi-commercial council controlled organisations for service delivery.
 
The 1989 model did not set out to suppress the controversy and debate that naturally surrounds contentious development.  Indeed, in the seeds of administrative competence it sowed the capacity to articulate and debate differences and potentially moderate outcomes improved, potentially lifting the quality of decisions.  

The Conceit of Goliath
Internalising conflict in ever-bigger, centralised organisations like Auckland's super city does not resolve it.  Rather, it hides it, and allows dissonance to grow – as many now defunct corporations have found out.  Large organisations become uncoordinated, slow witted, and slow moving.  They are vulnerable to manipulation, even corruption.  They drive dissatisfaction onto the streets (or the social media), favouring the activists, the articulate, and the well-heeled in the battle for favour.

And that seems to be what’s happening in Auckland. Why stop there?  The ultimate in effective government if we believe bigger is better is one government, with power concentrated among the political and executive elite of a single central regime – or party – increasingly remote from its citizens.  Autocracy as government, however, must eventually fail. 

The Book of Rules
Let’s set that grim vision aside and return to the immediate issue. This is the belief that we can assemble a comprehensive set of rules that will in some way anticipate, regulate, and manage all forms of land use activity and development in what is, in fact, a diverse and constrained physical environment settled by diverse peoples in divergent circumstances and holding to a variety of values and beliefs.
Our planners and politicians as scribes are over-ambitious not just in what they seek to achieve, but in what they think they can achieve in the face of human multiplicity.  The proposed unitary plan looks increasingly like a sub-national canonical treatise – a set of laws that take us well beyond those mandated or intended by the state.  The irony is that in its sprawling complexity, this plan will be dissected, debated, and litigated by believers and non-believers for years to come.  And all the while the promised land will remain an illusion.

Wednesday, December 11, 2013

Do density and transport resolve congestion?

(First Published January 2013)

The compact city/transit answer to the urban sustainability question

Expensive – and usually loss-making – public transit is enjoying a resurgence in the face of uncertainty over the supply and price of oil, concerns about the proliferation of private vehicles and greenhouse gas emissions, and  questions over the sustainability of our cities.

Transit is generally promoted as part of a programme to increase city densities.  In Auckland, for example, the plan is to recreate a compact city in order to get people out of cars.  A commitment to increasing the capacity of rail-based public transport is intended to support residential densities and justify concentrating public investment in the CBD.
I have addressed some of the issues this raises in earlier blogs.   (E.g., Rethink the Link, Five More Reasons, Thin Edge of the Tunnel Wedge, Derailing Auckland)


Exploring the relationship – the data
Using the Tom Tom international congestion index it is possible to explore the association between congestion and city density.  I analysed Q2/2012 morning congestion figures for 25 North American and 51 European cities covered by the index.  The index is based on the real time experience of drivers in areas of high usage of Tom Tom car navigation systems.  Congestion is measured as the deviation in travel time on individual routes at peak times compared with when they are flowing freely (generally at night).  The higher the deviation, the greater the congestion.

I looked for relationships between morning peak hour congestion and city size, population, and density using the Demographia July 2012 compendium of world urban areas data.   

Here are some summary figures for the second quarter, 2012:
Source: Tom Tom, 2012; Demographia, 2012
Congestion is additional peak hour travel time compared with free flow travel over the same routes.
 
(Out of interest, the comparable density figures for Auckland, Hamilton, Wellington and Christchurch are 2,400. 2,200, 1,900, and 2,000 respectively). 


Note the greater range of congestion figures among European compared with North American cities, and their significantly higher high and median figures.
 
The North American evidence:  higher density = more congestion?
I undertook simple and multiple regressions in each case to establish how far differences in congestion depend on the physical size of cities, how far on their populations, and how far on residential densities.
 
Among the North American cities only population density was statistically significant, explaining 52% of the differences in morning congestion among cities.  By and large, as densities increase, so does congestion (Figure 1).  The inference is that transport efficiency is no better among more compact cities, and may be worse.

Figure 1: The relationship between density and congestion, North American Cities

Does transit help?
It would take more comprehensive evaluation to establish how far transit systems might modify this relationship between density and congestion. The US News website provides a ranking of the top ten US transit systems based on ridership, safety, and government spending.  Only five are in the Tom Tom sample. 

Figure 2 orders the cities from worst to best performing on the ground of the difference between congestion that would be expected on density grounds alone (as predicted by the regression equation in Figure 1) and the actual congestion recorded.  Hence, Boston has higher levels of congestion (48%) than predicted (27%) on the basis of its density (just 800 persons per square km). And like poorly performing Seattle, it has one of the top ten transit systems as ranked by US News (4th and 9th respectively).  

Figure 2: Congestion performance, North American cities

The other poor performers based on this analysis include both high density Montreal, Ottawa, and Vancouver, and low density Atlanta. 
This is not a definitive analysis.  Rather, it suggests propositions for further consideration.  Among these, higher densities do not necessarily mean less congestion – more likely the opposite.  And leading edge transit does not necessarily fix the problem. 

The European Evidence: there is no evidence
The results for European cities were completely different, adding weight to the argument that context matters: what works in one setting will not necessarily work in another.  Across the 52 cities there is no relationship between density and congestion.  (There is, however, a weak relationship with cities’ physical size, r2=0.25). 

Figure 3 plots morning congestion as a deviation from the median for the 51 cities and includes a plot of densities.  It isn’t easy to read. In summary, the poor performers are Warsaw (density 3,100), Marseilles (1,300), Istanbul (9,700), Toulouse (1,100), Rome (3,400) and Brussels (2,600).  The better performers include the smaller cities of Malmo (density 3,600), Zagreb (5,700), Valencia (3,000), Seville (5,600) and Bern (2,300).

Figure 3: Congestion Performance, European cities

Does transit help?
A listing of the world’s top ten transit systems in 2011 included only four from the European sample (and only the New York subway from North America).  The London Underground comes in third, but London Metro Area comes in at a low 39th on the European congestion rankings.  The Paris Metro is rated fifth , but Paris sits at 46th among the 51 European cities for congestion.  The Berlin U-Bahn sits at 9th place and the city's congestion 21st in Europe.  Copenhagen is 10th in the world transit stakes and 16th in congestion ranking.

While the results are quite different from the North American analysis, the European evidence also offers no grounds for suggesting that density is a prerequisite either to better commuting conditions or that congestion reflects the quality of transit systems.

(A contrarian might argue, of course, that transit creates a commitment to a land use pattern that promotes congestion, delaying or distorting the decentralisation of employment that might otherwise occur in a well-connected city). 

Pursuing poorly performing precedents
If nothing else, the analysis raises issues which deserve much closer analysis, especially in Auckland where they do not support plans for a high cost transit system to support a compact city.

While planning – and planners – in Auckland have a tendency to cite overseas precedent to support expanded rail-based transit and higher residential densities, the variability of overseas experience suggests that this is a highly risky strategy.  Context really does matter – not only here but also among the precedent cities our planners love to cite. This is especially the case when poor performers on the congestion scale like Vancouver and Seattle in North America and London and Paris in Europe are touted as paragons of integrated land use and transport planning. 

So why do our planners and politicians continue to gamble the city's fiscal future on an economically flawed project which overseas data suggests has limited prospect of meeting its objectives?       

 

Sunday, July 14, 2013

City of bites: urban design and eating in Auckland

The café culture in action
For some time now Auckland’s planners and politicians have been spending up on the central business district to attract people back to the city.  A major element of the CBD sell has been the attraction of a burgeoning café, bar, and restaurant culture. 

Well, as I said a year or so ago, it’s working:

The irony is that the new Queen Street reflects the inner city café and restaurant culture so extolled by those who promote central city revitalisation: Queen Street from Mayoral Drive north looks and smells a bit like a glorified food court, a strip of fast food joints, where inner city residents and visitors can wander up and down and grow fat.”

And now KFC wants to join the 42 fast food outlets counted by a Herald reporter on Queen Street, the heart of the CBD.  (This count excludes ethnic food shops - I have no idea what the moral or nutritional grounds were for this exclusion). 

Better design equals better eating??
How reassuring that Auckland Council is responding to this travesty of taste.  Its urban design champion Ludo Campbell-Reid said it would speak to KFC in an attempt to avoid ‘visual pollution’. 

Because evidently we’re not getting the eating culture that Mr Campbell-Reid expected or intended.  He says that there is still work to be done to see a “better mix of retail and healthy eateries”.  

"In the future, wouldn't it be amazing if there were restaurants in the middle of the street (and) the street was closed to the traffic in places? Wouldn't that be wonderful if people were able to sit outside and there would be high-end restaurants like the French Cafe, but also cheap and cheerful as well?"

Well good luck.  Let’s not let economics get in the way of good design; that way we can spend even more public money on urban design solutions to problems of public taste.

It’s all about demand and supply
It’s fine to take the nutritional high ground – and I empathise with obesity experts concerned that takeaways on Queen Street are contributing to growing waistlines. But that’s about personal taste and means, market offerings and messages, education, and perhaps even food regulation, but not urban design.  It’s about what individuals choose (and can afford) to eat.

Anyway, the proliferation of fast food cafes is not surprising.  The development of new, up-market precincts off Queen Street promoted by the Council to pander to middle class tastes has left something of a vacuum there.  Couple this with the restructuring of retailing and what is a poor Queen Street landlord to do?

Well, an obvious option is to lift yields on high value properties losing business to other precincts by intensification: subdividing and refurbishing ground floor space to increase rentals.  And it just so happens that fast food outlets (and trinket shops) can generally attract enough custom to carry the resulting small space rentals. 

And don’t forget that the Council supported this restructuring of Queens St retailing with a $43 million facelift aimed at making the street more pedestrian friendly.

And now they seem worried that it is not leading to the Auckland – or Aucklanders – that the designers evidently want.

But others seem to be more than happy with it – some lease the space out, others take up the leases, and yet others consume the goods.

Beer and burger, cocktails, coffee and desert
Coincidentally, there was a neat little advertisement placed in Canvas Magazine in the weekend Herald by “BIG Little City”.  This is the central city marketing campaign funded by Auckland's Downtown Business Association, Heart of the City.  Heart of the City is funded primarily by rates targeted on inner city properties.

The advertisement listed “191 reasons to love your city” (for city, read CBD).  It’s not a bad advertisement, and I have no problem with the BIG Little City campaign.

But here’s the interesting bit.  At least 98 of the reasons involve food or drink (or both), with plenty of pizzas, burgers, sweets and beers among them.  (The figure may be higher – I couldn’t quite work out some of the offerings).  The other reasons, incidentally, covered mainly movies and shows, beauty treatments and shopping. Nothing unique in that lot.

Selling the CBD – our very own city of bites
So how are we selling Auckland’s CBD?  Why, as a great place for a bite and a shake, or a beer.  And that’s exactly what Queen Street is offering.  It may not be to your personal taste, and it may not be particularly healthy.  But does that make the more expensive off-Queen Street bars and restaurants, their steaks, pork bellies, desserts, wines and liqueurs any more healthy or any less indulgent? 

Is that what defines Auckland?
So let’s not get too precious about our CBD.  Surely we don’t plan to design a city that excludes half the population? The 2006 Census showed that 48% of Aucklanders earned less than $30,000 a year.  (The median was $26,000). I doubt that many of them could afford the French café, or even cheap and cheerful restaurants offering al fresco dining in the middle of main street. 

And by the way, the 191 reasons to love our city apply to most largish cities in the world.  That’s okay – it’s good to remind Aucklanders, at least, that our city stacks up on measures of middle class living.  But it’s not going to sell Auckland to others.

An alternative vision
The 191 reasons aren’t going to make Auckland’s CBD stand out from the pack.  Perhaps a livelier, less indulgent, and more diverse downtown is called for (check out Wellington waterfront for an example).  Let’s have more action, assert our city of sails, indulge in our distinctive seascape and landscape, and acknowledge, embed, and celebrate our city’s Pacific and Polynesian heritage.  The real Auckland is a smorgasbord of places, people, and experiences, not just a smorgasbord.

So if we must get down to micro-planning (and I don’t think we should), let’s plan for urban spaces and amenities that are inclusive rather than aiming for a sanctuary of gentility remote from the real Auckland.

And let's recognise that cities, like eating, are a bit messy: and that we can't urban design them to order.

 

Monday, July 8, 2013

Cities Don’t Consume Resources, People Do

Urban form or urban consumers?
If we want to reduce the environmental impacts of modern society let’s prioritise consumption, not city form.  The evidence suggests that large cities (and especially city centres) are associated with a bigger environmental footprint than modest cities or suburbs. 

This post looks at incomes and consumption, especially the consumption of housing and transport services, asking how far can local regulation really influence environmental impacts?

What can local governments do about the environment?
Local governments have two core roles.  One is to ensure that the infrastructure and services necessary to sustain everyday life and commerce are in place and working well.  In fulfilling this role they should aim to enhance the quality of the urban environment and limit any environmental impacts of infrastructure. 

The other role is to plan and manage development in a way that reduces conflict among land uses.  In doing that they should aim to contain or control adverse spill-over impacts. 

However, for councils to use their investment in infrastructure and land use regulation to determine in detail how and where people should live and consume pushes the boundaries of these roles, particularly when they try indirectly to reshape household behaviour by reshaping the city.

The key to understanding the environmental impacts of urbanised society is not urban form but household consumption, a function of income, not city plans.

Urbanisation and environmental impacts
In my last blog I showed how policies to increase residential densities around city and town centres assume a relationship between urban form and environmental impacts that is not supported by the evidence . In Australia, for example, residents of the New South Wales state capital, Sydney, particularly central Sydney, have by far the largest environmental impact per head.  Much lower levels are recorded in suburbs, smaller cities, and towns. (The same pattern is evident in all Australian states: have a look using the Australian Consumption Atlas).

The environmental impacts of intensive urban living outweigh any advantages of increasing scale and density. This means that policies that push agglomeration and intensification will increase rather than lower the impacts of urban living.

Household spending is the issue
The Australian study confirms that a city’s environmental impacts simply comprise the collective impacts of its residents.  Income is the driver of their consumption and thereby their demands on the environment. 
If we really believe city form can in some way over-ride income- and consumption-driven environmental impacts, then we should heed the evidence, and plan for modest, small scale, dispersed urban settlement. 

Spending on housing and transport in New Zealand
Household Expenditure Survey data for New Zealand (and elsewhere) provide an opportunity to explore the role of income in consumption generally. 

First, take a look at the distribution of spending on housing, transport, and discretionary goods (recreation and cultural services is used to represent the latter category) according to household incomes in 2010. Average spending levels have been organised by income decile for this purpose, each group containing 10% of households. Average incomes increase from decile 1 (the lowest earning 10% of households) to decile 10 (the highest earning 10%).

The pattern is pretty predictable.  Housing dominates the spending of low decile households.  It accounts for 34% in the lowest decile, falling to 22% in the ninth.  It rises again (to 24%) in the highest earning decile (10). This lift between decile 9 and 10 households no doubt reflects higher discretionary spending in the latter group by way of additional space, the quality of fit-outs, and second homes. 

Shares of Household Spending to Selected Categories, by Income Band
   
Do lower housing costs lead to higher transport spending?
Rent theory suggests that lower household spending is offset by higher transport spending.  This is because low income households can only afford cheaper, less accessible properties and so end up commuting further at a higher cost than high income households. 
It turns out that it’s not that simple.  Contrary to the theory, higher income households actually spend more of their income on transport.  That makes sense when we realise that commuting accounts for only around 25% of time spent travelling by New Zealanders.  The capacity to take discretionary trips is a bigger determinant of transport consumption than non-discretionary commuting and work-based trips.

The Relationship Between Spending on Housing and Transport
 
 

 
Lower incomes leave a lot less to spend on discretionary goods and services once housing and essential transport spending are covered.[1] Higher income households can and do travel more and consume more.  Their behaviour is unlikely to be significantly influenced by changing city form.  

Who spends how much?
Not surprisingly total consumption in New Zealand is dominated by higher income households: the 20% highest earning households (deciles 9 and 10) account for 35% of total spending on goods and services, while the lowest earning 20% (deciles 1 and 2) account for just 20%.

And decile 10 households account for 7 times more spending on transport than decile 1 households.  They spend 5.5 times more on recreation and cultural services, and 3.5 times as much on food.
 
The Contribution of Household Total Expenditure by Income Band, Selected Categories

 
The highest income households spend three times more on housing than low income households, an average of $476 per week compared with $161.
If refurbished housing in high amenity inner city living is expensive, guess which income groups will be living there?  The high consumers, obviously.  And in Auckland, at least, it seems that city planners and policy-makers are keen to deliver them the high order consumer services that will promote ever-more discretionary spending around the CBD(although much of central city resident travel may be taken up with recreational and social trip-making away from there).   

A high social cost for little environmental benefit?
The conclusion is straightforward: higher incomes mean more expenditure on additional housing, transport, and discretionary goods and services with correspondingly high environmental impacts.  If incomes are higher in cities, then their collective impacts will be high too. 

Planning policies won't change that much - except to the extent that they erode consumption by inflating the basic costs of living, something that impacts most heavily on lower income households.  

Fiddling with city form is unlikely to significantly reduce the impact of higher incomes and associated spending on the environment.  Increasing dwelling and living costs by promoting larger cities, higher residential densities, and uneconomic transit systems simply penalises low income households already committing substantial shares of their spending to housing and transport.  And this is the group that, by dint of constrained consumption, has the lowest impact on the environment. 

Better to address environment issues directly
From a policy perspective, environmental issues are better tackled directly.  This may mean promoting environmentally friendly goods and services, promoting low impact technologies (including low impact housing, fuel efficient vehicles, and the like), and encouraging responsible consumption. If we are really serious about environmental threats, we need to examine the efficiency of current pricing practices and even taxation measures, rather than leaning so heavily on clumsy, indirect, and ultimately spurious urban planning policies. 








[1]           Overseas spending is omitted from discretionary spending here as it is included in the catch-all category “Other Expenditure", which accounts for 6% of decile 1 spending and 11% of decile 10.