New Zealand's Building Boom—And What the World Must Learn From It

[Axulus]

Great article regarding New Zealand's successes in greatly easing zoning restrictions, its subsequent housing construction boom, and it's effect on prices:

Some highlights:

the 2016 Auckland Unitary Plan (AUP) upzoned 3/4 of the city’s residential land to legalize townhouses, terraced homes, or multi-story apartments in areas that previously only allowed detached single-family homes, helping to reverse decades of successive downzonings

...

upzonings in Auckland and elsewhere in New Zealand have set off a massive construction boom throughout the entire archipelago. In 2023, New Zealand (population: 5.2M) permitted 37k housing units, more than the San Francisco and Los Angeles metro areas combined (population: 17.3M). Auckland, a city of only 1.7M, permitted 15k units last year—while preliminary data shows the 5 boroughs of New York City (population: 8.3M) permitted a meager 9.2k units by comparison. In total, New Zealand permitted 9.7 new housing units per 1000 residents in 2022, a 45-year-high that was nearly double the rates seen in the US.

...

the evidence is overwhelmingly clear that upzonings have significantly increased housing production—the AUP is estimated to have created more than 43k extra housing units from 2016-2022, while the Lower Hutt upzonings increased total Wellington region housing starts by 12-17%. That, in turn, has significantly improved housing affordability—rent-to-income ratios in Auckland have significantly declined even as they have steadily risen elsewhere in New Zealand

In fact, after adjusting for inflation rents in Auckland have been essentially flat since the 2016 AUP—and Greenaway-McGrevy estimates that 2-bedroom apartment rents are roughly 26-33% lower than they would be in the absence of upzonings. That easing of rent pressures was felt most at the lower end of the price distribution—real rents of Auckland’s cheaper apartments fell faster than the real rents of its median apartment. From 2016-2020 rents in the Wellington region grew much faster than rents in Auckland, but even they have declined amid the steady rise of construction in Lower Hutt since the start of the pandemic.

Real home prices have also been constrained by the upzonings—after rising steadily for years, median sales prices in Auckland leveled off in 2016 and remain at those levels even 8 years later. Real prices in the Wellington region increased up until the early pandemic, but remain roughly at 2019 levels today.

https://www.apricitas.io/p/new-zealands-building-boomand-what

 

[bilby]

Great article regarding New Zealand's successes in greatly easing zoning restrictions, its subsequent housing construction boom, and it's effect on prices:

Some highlights:

the 2016 Auckland Unitary Plan (AUP) upzoned 3/4 of the city’s residential land to legalize townhouses, terraced homes, or multi-story apartments in areas that previously only allowed detached single-family homes, helping to reverse decades of successive downzonings

...

upzonings in Auckland and elsewhere in New Zealand have set off a massive construction boom throughout the entire archipelago. In 2023, New Zealand (population: 5.2M) permitted 37k housing units, more than the San Francisco and Los Angeles metro areas combined (population: 17.3M). Auckland, a city of only 1.7M, permitted 15k units last year—while preliminary data shows the 5 boroughs of New York City (population: 8.3M) permitted a meager 9.2k units by comparison. In total, New Zealand permitted 9.7 new housing units per 1000 residents in 2022, a 45-year-high that was nearly double the rates seen in the US.

...

the evidence is overwhelmingly clear that upzonings have significantly increased housing production—the AUP is estimated to have created more than 43k extra housing units from 2016-2022, while the Lower Hutt upzonings increased total Wellington region housing starts by 12-17%. That, in turn, has significantly improved housing affordability—rent-to-income ratios in Auckland have significantly declined even as they have steadily risen elsewhere in New Zealand

In fact, after adjusting for inflation rents in Auckland have been essentially flat since the 2016 AUP—and Greenaway-McGrevy estimates that 2-bedroom apartment rents are roughly 26-33% lower than they would be in the absence of upzonings. That easing of rent pressures was felt most at the lower end of the price distribution—real rents of Auckland’s cheaper apartments fell faster than the real rents of its median apartment. From 2016-2020 rents in the Wellington region grew much faster than rents in Auckland, but even they have declined amid the steady rise of construction in Lower Hutt since the start of the pandemic.

Real home prices have also been constrained by the upzonings—after rising steadily for years, median sales prices in Auckland leveled off in 2016 and remain at those levels even 8 years later. Real prices in the Wellington region increased up until the early pandemic, but remain roughly at 2019 levels today.

https://www.apricitas.io/p/new-zealands-building-boomand-what

Yeah, the problem in Australia and New Zealand has long been that wealthy and influential suburbanites are more effective at lobbying for protection of their property values, than homeless people are at lobbying for affordable housing.

Hence those "decades of downzonings" - your house is worth more if the neighbouring houses are detatched family homes with big backyards than it is if they are multiple occupancy units.

Public transport is an important element here; If everyone has to own a car, high density housing implies a severe shortage of parking (which in turn lowers property prices). The solutions to this include requiring developers to include adequate off-street parking, and to ensure that public transport is sufficient to discourage car ownership and/or use.

 

[rousseau]

I've heard Japan is a good model, too. I'm not sure what they're doing, but it sounds like they aren't getting in their own way.

 

[Harry Bosch]

I've heard Japan is a good model, too. I'm not sure what they're doing, but it sounds like they aren't getting in their own way.

Their population is going down.

 

[bilby]

I've heard Japan is a good model, too. I'm not sure what they're doing, but it sounds like they aren't getting in their own way.

Their population is going down.

Steady on, there's no need for threats.

 

[TV and credit cards]

That is a lot of "infill". I'm surprised they had so much vacant land available to build dense housing upon. I wonder if compulsory acquisition laws helped and *if wealthier neighborhoods got upzoned or downzoned in the process.
But I can't help circling back to the city centers themselves. Does any legislative action ever disadvantage them? It seems the sky is the limit when it comes to valuations per sqm. During and after the pandemic, governments had a golden opportunity to push for work from home. I know governments here were all over it but only for government employees. Work from home would have alleviated so many problems. But nothing happened in these regards. Almost as soon as a vaccine was found, corporations started harping about worker productivity levels as an excuse to get workers back in the office. Did they have much evidence in these regards? And why does zoning not incentivize secondary city centers, discourage increased office density within current city centers. Because it's all about the Benjamins baby.


*Psst. That's a leading question. The answer is downzoned.

 

[rousseau]

I've heard Japan is a good model, too. I'm not sure what they're doing, but it sounds like they aren't getting in their own way.

Their population is going down.

Here's a quick read about it:

Yes, Other Countries Do Housing Better. Case 1: Japan

 

[ZiprHead]

There are several public schools that have closed here, including two very large high schools, that could maybe be converted to housing.

 

[scombrid]

I'm posting from Palm Bay right now. An advocate for better planning wrote a nice article about it back in 2019. I can only say that everything in the article has gotten worse in the last five years. Palm Bay continues to expand outward while minimal infilling occurs.
https://www.strongtowns.org/journal/2019/6/18/hundreds-of-miles-of-roads

Happily the city where I actually live is bounded by other cities and cannot expand. We recently had a dilapidated 1960s era strip mall demolished and replaced with a massive apartment complex. Our city is improving and recovering from the blight that the flight to outlying areas caused. But we'll likely never get the transportation infrastructure needed for real good dense development. We still have as our primary conveyance a massive "stroad" where the 45 mph speed limit is met with multiple lanes of 60 mph traffic that piles up at periodic stop lights. It is dangerous.

I wouldn't mind keeping housing scarce for the selfish reason of driving up our property value so we get more when we retire, sell up, and get the fuck out of this shithole state. But I really like that our city is investing inward even if it is forced by geography to do so. At least I don't have to live down here in Palm Bay.

 

[Harry Bosch]

I'm posting from Palm Bay right now. An advocate for better planning wrote a nice article about it back in 2019. I can only say that everything in the article has gotten worse in the last five years. Palm Bay continues to expand outward while minimal infilling occurs.
https://www.strongtowns.org/journal/2019/6/18/hundreds-of-miles-of-roads

Happily the city where I actually live is bounded by other cities and cannot expand. We recently had a dilapidated 1960s era strip mall demolished and replaced with a massive apartment complex. Our city is improving and recovering from the blight that the flight to outlying areas caused. But we'll likely never get the transportation infrastructure needed for real good dense development. We still have as our primary conveyance a massive "stroad" where the 45 mph speed limit is met with multiple lanes of 60 mph traffic that piles up at periodic stop lights. It is dangerous.

I wouldn't mind keeping housing scarce for the selfish reason of driving up our property value so we get more when we retire, sell up, and get the fuck out of this shithole state. But I really like that our city is investing inward even if it is forced by geography to do so. At least I don't have to live down here in Palm Bay.

I'd bet that home insurance in Florida is a serious cost for you?

 

[scombrid]

Insurance is getting bad. Insurance costs almost as much as the bank note now. Granted we have a very small loan stretched over a very long time at a low interest rate. But still... It costs more for property insurance than it doesn to pay the bank.

 

[southernhybrid]

There are several public schools that have closed here, including two very large high schools, that could maybe be converted to housing.

There's an enormous amount of empty office space in ATL and I've been saying for a long time, it should be used to make small apartments for the homeless and poor. We also have a weird building in my small town that has been empty for over 20 years. I have no idea who owns it or why it sits empty, but if the city or county could buy it, it would be a wonderful location for small apartments. Our homeless population has been growing since rents have become insanely high, even in my small city.

 

[TV and credit cards]

There are several public schools that have closed here, including two very large high schools, that could maybe be converted to housing.

There's an enormous amount of empty office space in ATL and I've been saying for a long time, it should be used to make small apartments for the homeless and poor. We also have a weird building in my small town that has been empty for over 20 years. I have no idea who owns it or why it sits empty, but if the city or county could buy it, it would be a wonderful location for small apartments. Our homeless population has been growing since rents have become insanely high, even in my small city.

Cleveland has been doing these office to residence conversions for years, well before the pandemic hit. Living here most my life and seeing so many false starts, I was surprised to see something actually work toward revitalizing the city.

https://www.axios.com/local/cleveland/2024/01/03/cleveland-american-downtown-revival

 

[Tigers!]

Public transport is an important element here; If everyone has to own a car, high density housing implies a severe shortage of parking (which in turn lowers property prices). The solutions to this include requiring developers to include adequate off-street parking, and to ensure that public transport is sufficient to discourage car ownership and/or use.

Close to my church (in Melbourne) a three storey block of flats (that's 4 levels incl. ground for you yanks) was built as part of what are called suburban activity centres. They also added a basement car park. The ground level was to be shops/offices. The concept was originally to aim at the middle of the market rather than the high end. There is a train station about 1/2 block away, bus stop across the road, a high st 2 mins walk away, beach is 5 mins walk. Sounded great (and is a great location). The flats would be a mix of single and 2-3 bedrooms. Trouble is that the local council requirements are for 2 (two) parking places for each flat.
The original layout was
Basement - parking
Ground - shops/offices
1st floor - flats
2nd floor - flats
3rd floor - flats
With our daughter gone my wife and I seriously contemplated getting a 2 bedroom flat within. I was raised in the area in the late 60s-70s and my wife grew up nearby. We could never afford to live in there unfortunately. But perhaps now we could.
But due to the parking requirements the 1st floor became largely parking plus an extra office or two. So less flats were built, and all single bedroom, thus increasing the cost per flat.
We could no longer afford the increased cost. Bilby is correct that we need to improve public transport in areas but get people less wedded to cars. If this development with all its advantages on paper failed and was ultimately for the high end of the market then infilling will be difficult.

 

[TV and credit cards]

Bilby is correct that we need to improve public transport in areas but get people less wedded to cars.

To go from a POV to public transportation is difficult. An article in Nature claims 1.4–2.6 times longer for public transport. Tack that onto the beginning and end of the workday. That's a nonstarter. People just aren't going to do it. Even if employers were required to count an employee's transit time as being on the clock, it would still be difficult as it precludes running errands on the way home. Perhaps paid travel time and a four day, 36 hour work week would do it.
Flying cars are the answer.

 

[bilby]

Bilby is correct that we need to improve public transport in areas but get people less wedded to cars.

To go from a POV to public transportation is difficult. An article in Nature claims 1.4–2.6 times longer for public transport. Tack that onto the beginning and end of the workday. That's a nonstarter. People just aren't going to do it. Even if employers were required to count an employee's transit time as being on the clock, it would still be difficult as it precludes running errands on the way home. Perhaps paid travel time and a four day, 36 hour work week would do it.
Flying cars are the answer.

Make public transport free at point of use.

Like roads are.

Plenty of people will tolerate a longer commute if it means not paying for fuel, parking, road tolls, etc.

 

[Loren Pechtel]

Bilby is correct that we need to improve public transport in areas but get people less wedded to cars.

To go from a POV to public transportation is difficult. An article in Nature claims 1.4–2.6 times longer for public transport. Tack that onto the beginning and end of the workday. That's a nonstarter. People just aren't going to do it. Even if employers were required to count an employee's transit time as being on the clock, it would still be difficult as it precludes running errands on the way home. Perhaps paid travel time and a four day, 36 hour work week would do it.
Flying cars are the answer.

Make public transport free at point of use.

Like roads are.

Plenty of people will tolerate a longer commute if it means not paying for fuel, parking, road tolls, etc.

And add express routes. Same route as regular routes but they stop only every few miles rather than every stop. Some subways have such a system now, it should be done anywhere the volume will support it.

 

[bilby]

Bilby is correct that we need to improve public transport in areas but get people less wedded to cars.

To go from a POV to public transportation is difficult. An article in Nature claims 1.4–2.6 times longer for public transport. Tack that onto the beginning and end of the workday. That's a nonstarter. People just aren't going to do it. Even if employers were required to count an employee's transit time as being on the clock, it would still be difficult as it precludes running errands on the way home. Perhaps paid travel time and a four day, 36 hour work week would do it.
Flying cars are the answer.

Make public transport free at point of use.

Like roads are.

Plenty of people will tolerate a longer commute if it means not paying for fuel, parking, road tolls, etc.

And add express routes. Same route as regular routes but they stop only every few miles rather than every stop. Some subways have such a system now, it should be done anywhere the volume will support it.

We already operate express routes, many of them high frequency (10-15 min headway, 5-10 mins during peak); We also have "Rocket" services that duplicate the outer portions of regular suburban routes, and then operate non-stop to the CBD in the mornings, and do the reverse in the evenings; And peak hour "Sweeper" services that start half-way to the city and ensure that residents in the inner suburbs aren't just faced with a parade of full buses that were loaded in the outer suburbs. We even have "Bullet" services that go from the CBD non-stop to the suburban "Park and Ride" stations.

 

[Loren Pechtel]

Bilby is correct that we need to improve public transport in areas but get people less wedded to cars.

To go from a POV to public transportation is difficult. An article in Nature claims 1.4–2.6 times longer for public transport. Tack that onto the beginning and end of the workday. That's a nonstarter. People just aren't going to do it. Even if employers were required to count an employee's transit time as being on the clock, it would still be difficult as it precludes running errands on the way home. Perhaps paid travel time and a four day, 36 hour work week would do it.
Flying cars are the answer.

Make public transport free at point of use.

Like roads are.

Plenty of people will tolerate a longer commute if it means not paying for fuel, parking, road tolls, etc.

And add express routes. Same route as regular routes but they stop only every few miles rather than every stop. Some subways have such a system now, it should be done anywhere the volume will support it.

We already operate express routes, many of them high frequency (10-15 min headway, 5-10 mins during peak); We also have "Rocket" services that duplicate the outer portions of regular suburban routes, and then operate non-stop to the CBD in the mornings, and do the reverse in the evenings; And peak hour "Sweeper" services that start half-way to the city and ensure that residents in the inner suburbs aren't just faced with a parade of full buses that were loaded in the outer suburbs. We even have "Bullet" services that go from the CBD non-stop to the suburban "Park and Ride" stations.

Sounds like you're already doing what I would like to see.