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To fix Auckland’s shambles, let’s begin with the Wellington Problem

The Auckland Council has long been blamed for the myriad of issues facing the country’s largest city, in particular the housing crisis. It’s about time central government took some responsibility, argues AUT Pro Vice Chancellor Ian Shirley

It is difficult to take the Government’s housing policy seriously when a central plank of that policy is a continuing series of threats aimed primarily at blaming the Auckland Council for the current housing shambles, as if Council (and Auckland) is the problem. It is a political strategy familiar to the citizens of Auckland and one that I first confronted at an economic development conference in Timaru, 2003. Auckland was portrayed at the conference as the basket case of the country and delegates were subjected to a large dose of anti-Auckland rhetoric. When Auckland representatives challenged the rhetoric, our arguments were dismissed out of hand with the comment: “Well the stats might not be accurate but it was a bloody good story wasn’t it?”

Tensions between Auckland and Wellington are not new, nor is anti-Auckland sentiment. The Economic Development Agencies from Auckland returned from the 2003 Timaru conference determined to do something positive. We invested our time and energies in building an evidential base recording Auckland’s economic and social development. I wrote a draft of what eventually became the Metropolitan Auckland Project – a project that was advanced as a partnership between the Auckland University of Technology, the Auckland Regional Authority and the Committee for Auckland.

The Metro Project engaged a wide range of citizens and groups in exploring the region’s development and it built an action plan aimed at advancing the capacities and potential of the communities that populate greater Auckland. The process involved the eight territorial authorities (both politicians and administrators), business leaders, a wide range of industry groups, economic development agencies that reflected the different priorities of neighbourhoods across Auckland, and a series of voluntary groups in the not-for-profit sector who have historically contributed to the life-blood and energies of community life. A considerable effort was expended in engaging Māori and Pacific communities in this collaborative programme as partners in development.

Rush hour traffic in Auckland City

Rush hour traffic in Auckland City

An international team was brought to Auckland to offer insights from comparative cities overseas but the major focus and impetus for the project came from within Auckland itself. It was a realistic appraisal based on the strengths and obstacles to the city’s development as well as an attempt to advance policies that would reinforce Auckland’s role as New Zealand’s major urban centre and gateway to the global economy.

The obstacles to development in the region were defined as: the lack of investment in the region’s physical infrastructure and utilities, especially transport; the challenges involved in accessing investment for the productive economy; the disconnection of Auckland from the regions and from those provincial economies on which business and services depend; the increasing disparities between different neighbourhoods and communities across the region and the declining social infrastructure evident in the gap between “work rich” and “work poor” households and in the financial burden being carried by particular social and cultural groups in Auckland.

It was in this context that a Royal Commission was established to address “the Auckland Problem” with the main assumption being that the structure of governance in the region was the central issue. While many of those involved in the Metropolitan Auckland Project did not agree with Wellington that the governance of Auckland was the major problem confronting the region’s development in this the 21st century, the Royal Commission produced a comprehensive report that directly confronted the major constraints on the region’s development going back many decades.

The problem had been identified as the fractured nature of governance in the region and Auckland’s inability to speak with “one voice”, but the past six years have refuted that assessment – as our recent report on Auckland suggested, since the formation of the unitary council, Auckland has spoken with one voice, particularly on the deficits that the region incurred and the priorities now being articulated by the regional government.

The problem is that Wellington did not like what that one voice was saying.

And so what we have today is a government in Wellington that has embarked on a series of strategies that have directly undermined the leadership of Auckland, from a reluctance to support Auckland-led initiatives in areas such as public transport, to blaming Council and even individual Councillors for the housing problem, to a series of ministerial threats suggesting that if the Auckland Council does not endorse government’s solution to the housing crisis then central government could legislate to impose its own solution. This would be bad enough if Wellington did in fact have a solution to the housing problem but it is painfully evident that there is no comprehensive plan and the Emperor – in the form of central government – has no clothes.

The physical and social deficits experienced by Auckland and its regional council have been exacerbated by central government’s policies. In terms of housing, government’s contribution to the crisis is many faceted: a ghung-ho approach to immigration, the sale of state houses, the extraction of a dividend from Housing New Zealand, subsidies to landlords without rental stock warrant of fitness obligations, continuing tax advantages to investors and speculators in the sector, and allowing overseas buyers to buy land, housing and commercial buildings, pushing up demand and prices. Collectively, central government policies have directed investment away from the productive economy into housing, and created a crisis on many fronts: emergency housing, state housing, rental housing and home ownership levels.

AN ABANDONED STATE HOUSE BOARDED UP READY FOR REMOVAL ON APRIL 8, 2016 IN AUCKLAND, NEW ZEALAND. (PHOTO BY HANNAH PETERS/GETTY IMAGES)

AN ABANDONED STATE HOUSE BOARDED UP READY FOR REMOVAL ON APRIL 8, 2016 IN AUCKLAND, NEW ZEALAND. (PHOTO BY HANNAH PETERS/GETTY IMAGES)

While much has been made of the fact that there are many baby-boomers who have benefited from the escalation in the price of Auckland homes (now among the most expensive in the world) it is clear that this generation will be the last cohort for some time to see their wealth increase through property ownership. Given the uneven tax status among investments, memories of the 1987 share market crash and more recent finance company collapses, and calls to provide for your own retirement, for many baby-boomers it was a rational decision to invest in property. But these advantages for existing home owners will inevitably be out-weighed by the economic and social deficit incurred by New Zealand as a whole as we front up to severely disadvantaged populations and groups that have little prospect of the security and prosperity that home ownership affords, and must make do with expensive, unhealthy rental homes and insecure tenancies.

Those of us who remain in Auckland are forced to deal with the consequences of the housing crisis in the region. Perhaps we should also devote some time and energy to reforming central government and that includes those government agencies that have failed to provide affordable housing options or adequately understand, let alone address, homelessness in Auckland? Either way it ultimately means addressing “the Wellington Problem”.  

Ian Shirley is Professor of Public Policy and Pro Vice Chancellor of the Auckland University of Technology, and Director of the Policy Observatory, a national centre for public policy research and advice.

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