Hard News by Russell Brown

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Hard News: Competing for Auckland

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  • Ian Dalziel, in reply to Kumara Republic,

    Capital investment...

    the ‘dying city’ remarks

    made by a prime minister and tourist minister !!
    Gawd, save us from those ostensibly in positions
    to help the country...
    hmmm is Mark Ford spread a bit thin too (SCIRT, Solid Energy, Watercare...) If he and Steven Joyce left the country who would be left to run anything?

    Christchurch • Since Dec 2006 • 7944 posts Report Reply

  • Matthew Poole, in reply to Ian Dalziel,

    If he and Steven Joyce left the country who would be left to run anything?

    Paula Rebstock is still here isn't she? Dame Margaret Bazely is still above ground, too.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Allan Moyle,

    If Mark Ford left the country we might actually get some things done...

    Auckland • Since Nov 2006 • 103 posts Report Reply

  • Steve Withers,

    It’s a guaranteed fail in politics telling stupid people they are stupid. They don’t think they are….however much the evidence may indicate they are in error.

    Politics is about showing respect, bringing people together, focusing on the goal and being positive….and persuading people any vision you might be touting is a good one. I completely understand how it should be done.

    Can I do it? Not very well. Most of us can’t. We tend to lack the emotional discipline to keep calm and carry on in the face of……..it all.

    Len Brown can do it. Plus I like his vision. Cameron Brewer can’t do it. He comes across like a raging party hack. People sniff that. No one I know on that side of the fence can…..and I doubt the Herald can push them over the top via propaganda. We’ll find out in any case.

    Michael Goudie is a rare guy. He and Wayne Walker won in Albany Ward despite neither of them getting even 10% of the votes. Albany Ward got the worst of it last time around with 80.5% of all votes cast electing no one at all thanks to First Past the Post. We should have been using STV.

    The outcome of the coming Council election will probably be affected more by the composition of the field of candidates than the actual votes cast. The ‘side’ best able to concentrate its support in any / all wards will win the day….even if it is with only 20% of the vote.

    Last election, 13 of the 20 on Council didn’t even get 30% of the vote in their ward. North Shore Ward saw George Wood elected on about 16% and Anne Hartley on about 14.5%.

    Hardly a ringing endorsement of any of them.

    “Our Auckland” saw 62.5% of all Council votes in 2010 elect no one at all last time round. I doubt this time will be any different. But I’ll vote anyway.

    Auckland • Since Mar 2008 • 312 posts Report Reply

  • George Darroch, in reply to Rich of Observationz,

    Wellington won’t get long haul flights even if we have a runway long enough for the Space Shuttle.

    Incidentally, Auckland International was a designated emergency landing runway for the Space Shuttle while it was still operational. It's one of the longer runways in this part of the world. Unfortunately, it's not suitable for taking off from...

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Rich of Observationz, in reply to George Darroch,

    I thought that was Christchurch, but then further research suggested both were a myth: http://en.wikipedia.org/wiki/List_of_space_shuttle_landing_sites#Transoceanic_Abort_Landing_Sites

    (Auckland has the longer runway though)

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Watson, in reply to FletcherB,

    "Asked if housing affordability was due to land shortage, high compliancing/legal costs, or property developers profiteering…"

    ...err, none of the above? Or were there more options? Loose macro-prudential policy, low interest rates, tax benefits to residential investment, shallow capital markets, development sector incompetence and luddism, unrealistic quality/size/location ambitions of homebuyers, collapse of mezzanine finance sector, or NIMBYs trying to block almost every new residential development?

    AK • Since Nov 2007 • 8 posts Report Reply

  • FletcherB, in reply to Watson,

    …err, none of the above? Or were there more options?

    I wont claim 100% recall, but I think they were the only options presented?

    I like your list, and maybe in this case it disproves my other comment not feeling directed to answer a particular way (which generally does apply to the other questions)… but I think it’s a complex and multi tiered issue that doesn’t lend itself to complete evaluation by one or two questions in a telephone survey…

    Just as a counter-point… while I dont think recent low interest rates have helped… I recall mortgage interest rates of around 15-18% back in the late 80’s/early ’90’s… and house prices kept rising all the same…

    Hang on-- I'll rephrase that. Low interest rates HAVE helped "affordability" of paying a given mortgage... but have probably encouraged price inflation... which affects affordability by raising the size of the mortgage required.

    West Auckland • Since Nov 2006 • 893 posts Report Reply

  • Watson, in reply to FletcherB,

    "it’s a complex and multi tiered issue"

    Yes, I agree. And of course, the other side of the affordability equation is wages. Maybe we just don't all earn enough - well, most of us.

    AK • Since Nov 2007 • 8 posts Report Reply

  • Stewart,

    Maybe we just don't all earn enough - well, most of us.

    If you restrict that to money that is truly 'earned', then I think it is a fair proposition & doesn't need the final caveat.
    Get all that un-earned income out of the equation - that actual workers are not paid well enough.

    Te Ika A Maui - Whakatane… • Since Oct 2008 • 577 posts Report Reply

  • BenWilson,

    I'd say housing affordability is more than just multi-tiered. It's an "entire economy" problem. Property is by far the biggest amount of capital in this country, and many others. It absolutely dwarfs the stockmarket. Therefore the value of it is by far the most dominant economic factor, drowning everything else. For a very long time, the main way that people have got into property is through borrowed money. Money lending causes inflation. On the massive scale that this is done for property, the inflation is massive. It is the main source of inflation in the world today, and also in NZ. The reigning orthodoxy here and in other countries has simply allowed banks to decide how much of this inflation there will be. They don't think that is what they have done, they think they are in control of it. But practically it doesn't work like that. Banks are too big to fail, so when they want more money to lend, it will always be given to them. No Reserve Bank governor would ever have the balls to let a major bank fail just because they felt that letting the bank create inflation was wrong. Instead they will come up with a sophisticated rationale for allowing it, indeed they will probably just alter their model to exclude this kind of inflation from even being calculated, and then advocate all kinds of policies to squeeze the corresponding inflation that must occur in all other businesses whose rentals have risen.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • Matthew Poole, in reply to BenWilson,

    Property is by far the biggest amount of capital in this country

    I was doing a bit of research into the proposal to change the Fire Service Levy from an insurance charge to a local rates charge, and came across the staggering figure that the aggregate value of residential property in NZ (a couple of years ago, too, IIRC) was around $650 billion. That's just residential property, never mind property that supports the revenue-generating economy.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Sacha, in reply to Matthew Poole,

    That's just residential property, never mind property that supports the revenue-generating economy

    One of the big barriers to acting strongly to correct our economy's imbalance towards housing 'investment' is that many small businesses are secured against the owner's home.

    Ak • Since May 2008 • 19719 posts Report Reply

  • BenWilson,

    That's just residential property, never mind property that supports the revenue-generating economy.

    Considering that most of our productive economy is in the farming sector, and a farm's value is very closely related to how much ground it occupies, and most farms are mortgaged up large too, it brings home my point that the affordability of property is basically a question that goes well beyond any mayor to control. It's not even something the government has under control. Indeed, if they refuse to put any controls on it, it fluctuates on the whims of the world economy. Why wouldn't you charge $x for your house, if the price of the same thing in a comparable country/economy is roughly the same? Someone from that country could come here and buy it, so that's going to be the price you set.

    I can't claim to have the answers on this question. There is no doubting the problem, but there may well not be a "solution" that any country could come up with, so long as most of the world is tied into the same crazy consensus that private debt ratios are not something to be controlled except via austerity. We have reinvented debt slavery, and built an entire theoretical orthodoxy to justify it, and are scratching our heads that the outcome is that we end up either debt slaves, or cold and starving.

    That said, every politician seeking office has to come up with a story about this problem and their solution. Certainly I much prefer the idea of intensification in Auckland, whether or not it solves housing affordability. I sincerely doubt that it will solve it. But it will still make Auckland a much better place, a much more productive place, and the effects of that will be felt throughout the country. I'll be voting for the people who will push this plan through.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • Sacha, in reply to BenWilson,

    most of our productive economy is in the farming sector

    Not

    Ak • Since May 2008 • 19719 posts Report Reply

  • Sacha,

    Interim deal with Auckland council prioritises sprawl to get extra housing in next few years. This pleases the govt.

    The legislation, to be introduced to Parliament as part of Budget 2013, will enable Special Housing Areas to be created by the Auckland Council with approval of Government. In these areas it will be possible to override restrictions on housing put in place by Auckland’s eight predecessor Councils, like the Metropolitan Urban Limit.

    ...

    The streamlined process will not be available for high rise developments that will need to be considered under existing rules until the Unitary Plan has been finalised in 2016.

    ...

    It is about getting on and building the least contentious 39,000 houses of the 400,000 identified in the draft Unitary Plan

    Ak • Since May 2008 • 19719 posts Report Reply

  • Rob Stowell,

    In a sense you’re both right :)
    Quick look-around finds:
    GDP – composition by sector: agriculture: 4.8%
    industry: 24.6%
    services: 70.6% (2012 est.)
    Source – CIA world ‘Factbook’!
    Sometimes hard to see how some services are actually ‘productive’ but still…
    A different picture looking at exports as this 2009 ’tree’ diagram of exports shows. But since it looks just at 'products' and not services (I'm assuming tourism is a service?) it's also not the whole picture.

    Whakaraupo • Since Nov 2006 • 2110 posts Report Reply

  • Rob Stowell, in reply to Sacha,

    #sprawlistheonlywaytomakesenseofourroadingpolicy :)

    Whakaraupo • Since Nov 2006 • 2110 posts Report Reply

  • BenWilson, in reply to Sacha,

    Not

    Well I guess it does very much depend on what you mean by productive, but more than 50% of our exports (in dollar terms) are primary produce. If you look at GDP, though, it's a different story.

    Snap, Rob.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • BenWilson, in reply to Rob Stowell,

    Sometimes hard to see how some services are actually ‘productive’ but still…

    Yup, especially the 25% of our GDP dedicated to "Rental, hiring and real estate services", which is basically people getting money out of already owning something. They don't have to "make" anything.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • Rich of Observationz,

    It isn't really valid to say that exports are the only important sector of the economy.

    If we had a total autarchy, except that we exported a small amount of cheese, would the cheese sector be "most" of that economy?

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Rob Stowell, in reply to Rich of Observationz,

    It isn’t really valid to say that exports are the only important sector of the economy.

    Health services, for example: do they ‘produce’ health!? Still pretty important, and not something Mr Joyce has (yet) found a way to export…

    Whakaraupo • Since Nov 2006 • 2110 posts Report Reply

  • Sacha, in reply to Sacha,

    Discussion of the 'housing accord' on TransportBlog. Looks like 'high-rise' in the announcement means anything over 6 storeys. Or 3.

    Ak • Since May 2008 • 19719 posts Report Reply

  • BenWilson,

    If we had a total autarchy, except that we exported a small amount of cheese, would the cheese sector be "most" of that economy?

    Or more poignantly, if it exported nothing, does that mean it has no economy at all?

    On the flipside, if for some reason every business broke even, would it make sense to say that there was no production whatsoever, no matter how much actual stuff they made? GDP as a measure of production has this issue.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • George Darroch,

    Health services, for example: do they ‘produce’ health!? Still pretty important, and not something Mr Joyce has (yet) found a way to export…

    Except, they can represent an export, in the same way that tourism does. A friend recently completed extensive gender reassignment surgery in in Thailand. Every dollar of his represented foreign income for Thailand.

    We'd be hard pressed to compete on that platform. We can't offer high quality services at a low enough cost. But in theory, it's possible.

    WLG • Since Nov 2006 • 2264 posts Report Reply

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