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Five signs the tide is turning on housing and transport

Apparently Jacinda and Metiria weren’t the only ones making political news this week. Simon Wilson has five things to say about some of the transport and housing bullshit that went down this week. 

1. The Auckland roads lobby cooks the numbers

Did you see that “Auckland traffic ‘pouring $1.9 billion down the drain’” front page of the Herald on Wednesday? It was bullshit.

That $1.9 billion figure popped up in other media too, reinforcing the bullshit. As for mayor Phil Goff, he was quoted saying he thought the figure was “conservative”. How does he know?

I’m not saying Auckland doesn’t have a massive problem with congestion on the roads. Of course it does. But the $1.9 billion figure is wrong, as anyone who properly read the report it comes from would be able to see.

The reason the claim is bullshit is that it’s based on what it’s like to drive on a motorway at 2am on a Sunday. That is, when you are completely unimpeded by other traffic. It’s called “free flow”. Anything less than free flow, according to the analysis that produced that $1.9 billion figure, is a cost to the economy.

This is clearly nonsense. There never will be, and never should be, enough roading to allow every truck and car to travel just as fast as it likes at any time. So why did that $1.9 billion figure get such currency?

It comes from a new report by the economic consultancy NZIER called “Benefits from Auckland Road Decongestion”, commissioned by the Employers and Manufacturers Association (EMA), Infrastructure New Zealand (INZ), Auckland International Airport, Ports of Auckland and the National Road Carriers Association. The report, which was described as costing “an awful lot of money”, was launched at a function at the EMA rooms on Wednesday afternoon.

Senior NZIER economist Christina Leung introduced the key points. She made a point of explaining that the report’s analysis uses a free-flow base line and warned the assembled crowd of business leaders to use it with care. That was odd. The figure inflates the nature of the problem, and they know it, but that knowledge hasn’t stopped them from using it anyway.

Why would NZIER and its clients do that?

Answer: because they wanted a big bold number to snag the public imagination with. Almost $2 billion is that number. Why did they want to snag the public imagination? Because its clients want the government to build more roads and if there’s an outcry over their big bold number, the government just might be panicked into doing it.

For the record, the report makes it clear that if Auckland roads operated “at capacity”, which means flowing but not free-flowing, Monday to Friday, the economy would benefit by $0.9 billion to $1.3 billion. It’s a lot, but it’s not as much as we are supposed to believe. (It’s not hard to find this in the report, btw: it’s the very first sentence on the very first page.)

Also for the record, even if the data is based on free flow, the cost of congestion is $1.4 to $1.9 billion. That latter figure, the one in all the headlines, is the high end of a range.

Good job, roads lobby.

2. The Auckland roads lobby is terrified of the implications of its own analysis

The reality is that Auckland loses a billion dollars or so worth of productivity each year, and that’s not to mention all the damage to our quality of life, family time and personal time utterly lost when we’re stuck in traffic. They don’t need to inflate the figures for everyone to know how bad it is. This is no way to run a city and it must be fixed.

But the second odd thing about the NZIER report is that it doesn’t go near recommending how to fix it. Why not? Did we really need another report about the problem? Ports of Auckland CEO Tony Gibson said at the launch that he’d read “22 reports in the last 10 years about this, and every one of them is now gathering dust”. So why did he allow his organisation to bother spending money on a 23rd?

At that launch, Gibson joined Kim Campbell from the EMA and other business leaders for a panel discussion. They said some telling things:

Campbell: A system that tolerates “1.1 people per car on motorways is absolute madness”.

Gibson: “We need creative thinking about what to do. No one size fits all the needs. We have a particular need for better rail.”

Campbell: “We absolutely acknowledge that we can’t asphalt our way out of this.”

Campbell: “We are muddling, boring and pettifogging the way we go about transport planning now and if we’d done something serious about this 10 years ago, we’d be $10 billion better off now.

So, as these business leaders have it, the current situation is madness, but more roads (asphalt) are not the answer, freight transport in particular needs better rail and the government has been sitting on its hands for the entirety of its time in office.

In questions from the floor, other things also became clear. One man suggested it would cost only $100 million to incentivise ride sharing. Another said we’re long overdue for congestion pricing. The theme was obvious: the key to dealing with congestion is to take cars off the roads.

Managing road use in the ways suggested is part of the solution, of course. But however it’s done, the people who stop driving their cars so often will need some other way to get around. And the key to that is rail.

The NZIER report doesn’t go there. Why not? Just look at that rollcall of sponsoring organisations again: Employers and Manufacturers, Road Users, Infrastructure NZ… These outfits have been, and continue to be, the cheerleaders for building more roads.

I asked Stephen Selwood from the INZ why they don’t take a high profile advocating for rail. The need is clear from the report and having voices like his doing that would make a real difference. He said INZ supports “all modes”. I pointed out that “all modes” has been the government’s way of describing its strategy for the last nine years and what it really means is this: we’ll do some spending on rail, ferries, cycling and walking but the focus will stay on roads. It compounds the problem. (If there was even a shred of doubt about that before, the government’s emergency transport funding announcement on Friday made it very clear.) Selwood disagreed.

But Kim Campbell is right: we can’t “asphalt our way out” and the sooner he and his colleagues start saying this loudly and clearly, to the public and to the government, the better.

(Oh, and that National Party announcement on transport? Hayden Donnell has some things to say about that

Jane Jacobs campaigning for a better New York.

3. City building is about making public spaces for people

Jane Jacobs, what a hero. The film festival had a terrific documentary on America’s foremost urban design advocate and if you get the chance, don’t miss it.

Jacobs campaigned in the mid-20th century against motorways in cities and tower-block housing schemes (what New York came to call the projects). Her theory: public spaces enable the growth of communities. What you need most of all is busy pedestrian street life. You build your cities around that.

One of the commentators in the film says, about fast-growing cities today: “This is an opportunity that will not come again.” True that, Auckland.

4. Steven Joyce is very tired

Finance minister Steven Joyce stood up in front of a building industry conference (hosted by the Registered Master Builders’ Association at the Langham Hotel) on Thursday morning and it was like someone had just hit him over the head with a mallet. He made the most appalling speech. Sure, he told them as he usually does that the economy was in great shape. He said the construction industry in particular was benefitting enormously and there was “a marvellous decade or 20 years ahead of us”.

But his delivery was awful. He mumbled his way through, his energy level so low you felt he might need to sit down. Perhaps he wasn’t well. Perhaps it was just starting to sink in how much of a problem Jacinda Ardern will be for National. Or perhaps he really didn’t know what they were going to do about her.

It’s worth noting how unusual this was. Steven Joyce is a very skilled speaker: usually he works from just a few notes, showing great command of facts and figures, projecting avuncular confidence and a canny mix of authority and self-deprecating humour. Not this time.

5. The construction industry is very frustrated

Joyce’s speech was notable for another thing: his message missed its mark. He was absolutely right that the construction industry has benefitted, perhaps more than everyone else, from the current settings of the economy. But they don’t see it that way. They see bureaucratic obstruction the government has not helped them overcome. They see lack of financing and inadequate mechanisms for overcoming that. They see unwelcome competition from overseas companies, problems with shoddy construction – not their own work, of course, but the work of half their competitors. They see a lack of skilled and willing workers.

It’s not that they’re right. Ingrates, eh. And after all the grumbling a lot of those guys (these meetings, they’re always nearly all guys) will probably vote National anyway. But how you talk to them still matters.

Labour’s Phil Twyford (left) and National’s Steven Joyce.

The measure of that came in the panel discussion that followed. Paul Blair from the BNZ, who was a member of the mayor’s taskforce on housing, explained that finance “is not a problem”. He said risk is the issue. “If it’s the government doing it [building houses] there’s no problem with risk. No problem with funding.”

He added, “I’ll just leave that there for the panel to think about.”

Joyce had criticised “people who are championing Housing New Zealand as the sole provider of social housing”. But is there even anyone who proposes that? Blair was responding directly: the government, he clearly believed, should be funding housing on a much larger scale than it has agreed to.

Then he said, “If I was you guys I’d be excited. We could have 5% growth. Plus. Sustainable for the long term. I think, what we need, if we could find a forward-looking government to get on board with that.”

He trailed off. Steven Joyce, sitting just two seats along on the stage with him, looked up and waved his hand. There was some nervous laughter. It was, clearly, a direct criticism.

Phil Twyford, Labour’s housing spokesperson, arrived at morning tea and gave the next speech. It was like duelling statistics in there, for a bit. Joyce had talked about New Zealand being the “fifth fastest-growing economy in the OECD”. Twyford said according to Yale University we have the “worst rate of homelessness in the western world”. We also have the lowest rate of home ownership, he said, since 1951.

Twyford knew it wasn’t a room of Labour luvvies, but he had a plan for them anyway: Labour wants to build a lot more houses, use government investment to smooth out the boom and bust cycles of construction, scale up the building programme to provide more reliability, upskill the local workforce.

“New Zealand was building more houses in the 1970s than it is now,” he said, “even though we had a million fewer people then. I don’t buy that you can’t train our young people.” He added that only 10% of firms at any one time have apprentices, and said: “It should be a requirement. Why not?”

Strangely, he didn’t say, “Let’s do this.” Maybe that’ll be next time.


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