Auckland’s growing pains

Auckland’s growing pains

Total Property - Issue 4 2017

Auckland is facing a range infrastructure challenges as it gets to grips with a surging city.

The numbers are mind-boggling and speak for themselves:

• Auckland’s population has grown by more than 120,000 in the past three years - equivalent to adding a city the size of Tauranga - and has resulted in many more vehicles on our roads. Gridlocked roads are estimated to be wasting $3 billion a year in lost productivity.

• An estimated $24 billion of new infrastructure spending will be required from 2018-2028 to tackle congestion. This calculation is based on 2013 population growth rates which are significantly below current rates. Approximately $4 billion of this allocation is unfunded at this stage and Government and Auckland Council are having trouble agreeing on how to bridge the shortfall.

• Watercare has a $1.7 billion plan to build new piping and sewers to reduce diluted sewage flows into the Waitemata Harbour every time there's more than five millimetres of rain.

• To meet population growth, the council's new Unitary Plan provides capacity for more than 400,000 extra homes by the early 2040s, or around 14,000 a year. Housing strategist Leonie Freeman says council statistics indicate only 7,200 dwellings were built in 2016. There must be concerns how even this level of new building can be sustained. Bank credit has tightened noticeably for development, particularly for high rise apartments – just at the time it is most needed to give full effect to the plan’s new framework for growth.

Still, rapid growth is a much better problem to have than slow stagnation and there is no turning back for Auckland. The reality is that it’s the city’s momentum that draws people to live and work here. Therefore, we need to find better ways to cope with, and cater for, growth.

A reasonable question to start with is: Why does it take so long to build big, important projects? The much awaited $1.4 billion Waterview tunnel and associated Western Ring Route motorways have taken nine long years since getting the green light, with last minute software glitches creating further delay.

The new City Rail Link (CRL) is at least another six years away and, based on past delays with big infrastructure projects, a 2023 completion date looks a very optimistic target. In the meantime, many CBD businesses face considerable disruption from multiple street shut downs.

Take a weekend walk from Britomart past the hole in the ground that is the Commercial Bay site and head up a fenced-off Albert Street and perhaps wonder why the construction machinery is sitting idle and nobody is working. Contrast that with the 24/7 working model used in some other big cities – Dubai being an obvious example.

No doubt a host of reasons can be trotted out as to why we can’t build through the night and on a Sunday, and nobody is suggesting the Dubai approach is necessarily the right one for Auckland. But we have to come up with improved models for progressing these big projects more quickly and look at ways of building greater speed into the process.

MASTER PLANNING

New Zealand’s globally uncompetitive building industry, with its ever-spiralling costs, is not helping. It’s a turn off for big international players and, understandably, is resulting in some of them calling for a more open market in which they can import both construction products and labour.

Greater local and global private sector investment in housing, tourism and transport infrastructure projects needs to be encouraged. New Zealand has been a slow adopter of public private partnerships (PPPs), with Wellington’s Transmission Gully project being the first motorway to be developed and managed under this well-accepted international practice. If it proves to be a success, then it should become a model for facilitating other roading projects – with most of us willing to pay tolls if it leads to a less congested and safer journey.

Central and local government are often criticised for getting involved in property development, but there are some excellent recent examples involving partnerships with private sector developers. The council-controlled Panuku Development is doing a stunning job with its Wynyard Quarter rejuvenation and Housing NZ offshoot HLC has also received plenty of plaudits for its Hobsonville Point development.

Both organisations have focused on master planning and partnered up with private developers to undertake the work. Given the success of these projects, it’s hardly surprising these two entities are now looking at transporting this approach across Auckland. It could be argued that more should be done to further resource organisations such as these and bring in greater international expertise to ensure that best global practice is being applied to shaping the city’s future.

Another example of public-private sector collaboration highlighted in our Ticket to Ride feature is Auckland Transport’s teaming up with Countdown to trial grocery “Click & Collect” points at five transport hubs across the city which service more than 95,000 commuters daily. Groceries can be ordered online in the morning and collected on the way home, with a plan to roll out the service to more locations if successful.

HUGE OPPORTUNITY

This is just one small example of the many benefits that come from living in a rapidly growing major population centre. As the article outlines, Auckland Transport has big plans for further large-scale commercial and residential developments around transport infrastructure hubs. The real game-changer is the estimated $10 billion worth of possible development planned along the 3.5km CLR corridor. We are already seeing wily investors and developers taking positions in this location, particularly close to the stations.

It represents a huge opportunity for Auckland to really stamp its mark on the world. Let’s not only do it well – but also as efficiently and quickly as possible.

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