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Phil Twyford Speech to NZCID

"Labour's plan to build more and build better: how new approaches to housing, transport and urban development will deliver cities that work"

Phil Twyford, Labour Party spokesperson on housing, transport, Auckland issues, and cities.

 

I want to talk today about how a new approach to building our cities will unlock some of the most difficult challenges we face.                 

It is a story about how we approach investment in urban infrastructure in the coming decade.

And how we have to rethink the role of government in relation to urban development.

In my patch of West Auckland I often ask my constituents what is the most important thing they want fixed. They almost always say it's the traffic. They tell me to fix the gridlock.

An interesting thing has happened in the last decade or so. Aucklanders have come to the conclusion that we cannot just build more and more motorways to ease congestion. As well as good roads we need a decent 21st century public transport system.

Perth has built one in the last 20 years. So has Brisbane. Sydney has one. We need one too.

A recent poll showed more Aucklanders by a margin of 4 to 1 wanted the Government to focus on public transport rather than roads in fixing congestion.

The other issue hanging over Auckland like a dark cloud is our out of control housing market. It now takes 50 years to pay off the average Auckland mortgage.

The average house went up by $75,000 in the last year. We’ve priced our kids out of the market.

On this issue too, public opinion has shifted. It used to be that people thought rising house prices meant we were getting richer. No longer. The market has failed. Policy has failed. People want change.

On these two issues, the current government seems to be stuck in neutral.

The last Labour Government from the mid-2000s ramped up investment in transport infrastructure after decades of under-investment.  We hypothecated the National Land Transport Fund and increased government investment in land transport by over 180%.

The following projects got the green light, or were funded or begun under Labour:

  • The completion of Spaghetti Junction.
  • The Western Ring Route
  • The Northern Gateway
  • Newmarket Viaduct

By 2008 government investment in public transport was over 15 times higher than in 1999.

·         We rescued the rail.

  • Double tracked the western rail line, upgraded stations (New Lynn, Newmarket), re-opened the Onehunga Line, and set in place the funding for electrification.
  • Put in place the funding for the new electric trains.
  • Built the Northern Busway

The current Government has spent the last six years opening projects begun or signed off under Labour. It hasn't initiated a single new piece of public transport infrastructure in six years.

In the recent $800 m package of transport projects it announced in the Budget, there wasn't one public transport component. They even rejected officials’ advice to include the extension of the hugely successful Northern Busway from Constellation Drive to Albany.

On housing their record has been about as lacklustre.

This Government talks a lot about increasing the build rate, and the number of consents, but more houses were built every year under Labour than in the first five years under National. It is only the Christchurch rebuild that is now pushing consent rates up.

Their response to Auckland’s acute housing shortage hasn't worked. Fourteen months after announcing the Accord not a single new house has been built in the Special Housing Areas that anyone is living in.

Economists say that labour productivity is a key indicator of the success of a city’s economy. The two important determinants of productivity are the availability of affordable housing, and mobility. Without both these things, people cannot get to the optimum range of jobs that match their skills.

And for all sorts of other reasons, the failure to crack these two problems, and get Auckland’s built environment sorted out, is holding back the city’s growth and prosperity.

The picture though is not all negative. There are some exciting developments that show the way forward:

Wynyard Quarter, the Britomart, and Ludo Campbell Reid’s shared spaces have shown Aucklanders what our city could be like.

The Northern Busway is an extraordinarily successful piece of transport investment. It is moving 41% of the people who cross the bridge every morning. It has taken three lanes of traffic off the bridge.

The new electric trains and all the upgrades to the rail network have given public transport a huge lift.

Hobsonville has demonstrated how good big high quality developments can be. They are building high quality medium density housing and they are selling like hotcakes.

These are glimmers of hope, but even when you add them up they don’t amount to the step change we need.

Our biggest city is at an interesting juncture.

The Royal Commission and the Auckland Plan both spelled out an attractive vision for the city. An engine room for economic development. A vibrant dynamic gateway city. A city better able to manage its growth.

The two big challenges we have: to make housing more affordable, and to increase mobility by improving the transport network, are intimately connected.

If we can crack both of them, we will set Auckland up to be truly the most liveable city, and unleash its economic potential as our international gateway.

We need to build more and build better.

It is going to need a bold new approach.

And it will need central government working together with Auckland.

Part of the problem is that for six years National has spent more time picking fights with Aucklanders than it has listening.

Yes there is now a housing accord. But it took months of public arguing and bullying by Ministers.

Yes the Government has given some ground on the City Rail Link, but only after years of attacking it. And they are still out of step with Aucklanders on the issue, refusing to even get started before 2020.

We’ve been talking with and listening to Aucklanders, and our reform agenda is based on those discussions:

1.    We are going to just build houses

The market is broken right now. Tinkering with the planning rules and hoping it will fix itself won’t cut the mustard. Labour is going to build 10,000 affordable homes for first home buyers each year for a decade.

We’ll finance it through a revolving loan fund that will be spent 20 times over the decade and be fiscally neutral. It will put a new generation into their first homes, and ease the shortage that drives prices up. 

Building at scale will allow the growth of a group of larger companies who can scale up, and build better using offsite manufacturing. It will also allow us to drive the price of materials down by bulk buying.

We have done it before. In the 1930s and 40s the First Labour Government’s house building programme housed generations of Kiwis and improved the state of the nation’s housing stock. In the 1950s, 60s and 70s successive governments used State Advances loans to stimulate new home construction, and help young families into their first homes. Those policies gave us the highest rates of home ownership in the western world.

2.    Reform planning rules

One of the root causes of our ridiculously expensive housing is planning rules that constrict land supply, and inhibit density. If you stop the city growing up and out, and you add a growing population, only one thing is going to happen. Steep increases in the price of land and houses.

This of course provides wonderful opportunities for speculators and land bankers.

Labour is going to publish a National Policy Statement on Affordable Housing under the RMA that will give clear and strong direction from central government to local authorities that they must increase the supply of land for development, increase the build rate, the supply of housing, and improve affordability.  When they make their RMA plans, like Auckland’s Unitary Plan, and when they make consenting decisions, they must give effect to this direction.

3.    Reduce the effect of speculation

Since Auckland’s early settlement this town has been a speculator’s paradise. But it is time for change. We are never going to get rich as a country by selling houses to each other. We have priced our kids and our grand-kids out of being able to buy their own homes.

It now takes 50 years to pay off the average Auckland home. To take the steam out of the speculative forces Labour will bring in a Capital Gains Tax excluding the family home. And no it is not a panacea, and yes Australia has a CGT and they still have high house prices but don't forget there are many variables in the market.

Westpac’s chief economist the other day calculated Labour’s CGT would reduce the value of a rental property compared to other investments by 23%.  A CGT will also tilt the playing field away from unproductive real estate investment, and towards enterprise that creates exports and jobs. 

We will also put a stop to offshore speculators bidding up the prices of New Zealand houses.  I am also keen to implement a use it or lose it provision by way of a sunset clause on zoning rules so that if land bankers hold on to residential land too long it may revert to its prior zoning status.

4.    Build a decent public transport system for the 21st century

Auckland has spent 60 years building a motorway network while systematically under-investing in public transport. Cities this size cannot function without decent public transport. They are not liveable. They are not efficient.  They are not fair – lack of public transport penalises the poor, the young and the old. 

Our motorway network is more or less complete. Now the task is to build a complementary and integrated rapid transit network. Labour will build the City Rail Link immediately, because it will mean trains can run as often as every five minutes. It will double the productivity of an immensely valuable sunk asset.

We will add to the network with bus rapid transit especially to open up new areas for development, and support the city’s growth in the South and North West.

5.    Government as enabler of large scale urban development

We have to get serious about urban renewal: revitalising suburban and town centres around the rail network, building vibrant communities that attract business, and offer a range of housing styles and price brackets.

It is very difficult for the private sector to initiate or drive these kinds of projects. There is too much risk and uncertainty. But Government can be an enabler. By doing the master planning like at Hobsonville. By investing in transport infrastructure like New Lynn. By using its capital assets like at Tamaki. 

By putting in place the network and social infrastructure, the civic amenities and the green space, and by handling the regulatory issues, the public sector (central government or local or both) can create opportunities for private capital to do what it does best and that is design, build and market great places for people to live work and play.

6.    Build a city that is fit for people to live in

Good design will help us get there. The Britomart and Wynyard Quarter have shown the way. They have given Aucklanders a taste of what the city could become.  Ludo Campbell-Reid’s shared spaces have demonstrated what a difference it makes when streets are designed for people, and not just for cars. 

There is now a public appetite for more investment in walking and cycling infrastructure. 

The appalling downtown apartments of the 1990s set back the market for density. Is it any wonder the public are fearful of height and density? Good design, and the urgent need for affordability, can win them back. The Ockham apartments in Grey Lynn are a good example.

For the last six years central government has been absent from any kind of leadership on the built environment, and urban design. Auckland Council and the private sector and the community have pushed ahead. Under Labour central government will get in behind and champion good design.

So the challenges are big. It is going to take bold reform on a number of fronts to untangle the knot.

It is going to take the political will to tackle both the planning rules that constrict the supply of new houses, and the power of real estate speculation.

It is going to take a government that is willing to be more hands on in the development process – both by building affordable houses, and being an enabler of large scale urban development.

It is going to take a government that will invest as pro-actively in Auckland’s public transport system as successive governments have invested in roads for the last half century.

And it is going to take a commitment to good design: architecture, urban design, quality buildings and public spaces, walking and cycling.

We have the policies and the political will. It is all costed in our 10 year alternative budget. It is all paid for, and we are in surplus.

I wanted to finish with that last point about design and liveability.  I started off saying that housing affordability and mobility were the two critical factors underpinning labour productivity in the city.

But there is another insight from the new urban economics and that is that liveability, and a city’s attractiveness for skilled migrants and visitors and investors, is vital to its prosperity.

By building more and building better, we can make Auckland a city you can easily move around, that you can afford to live in, and that is exciting and fun to be in.

I think that is worth doing.