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Insights 30: 23 August 2019
Media release: NZ Initiative praises Government for fiscal watchdog
Oliver Hartwich speaks on Magic talk about how we can gain inspiration from overseas to enable a thriving New Zealand nightlife
New Report: Living After Midnight - For a better night-time environment

Housing despair
Dr Eric Crampton | Chief Economist |
The New Zealand Initiative has been a staunch supporter of the coalition government’s housing agenda. While we warned that Kiwibuild would not fix the housing crisis but rather risked diverting the government’s attention from more important reforms, we have had every confidence in Minister Twyford’s wider vision.

Unfortunately, the past week has brought worrying National Policy Statements on sensitive agricultural land and urban development.

Where to begin.

Fundamentally, New Zealand’s housing affordability crisis stems from not building enough houses because restrictive zoning rules and other regulatory constraints prevent cities from either building up or out. These constraints flow from incentives facing councils: growth can be costly for councils.

Twyford’s vision promised radical change. Better infrastructure financing mechanisms to make growth less of a burden for councils. Ending urban boundaries that constrain cities against growing out, encouraging density within cities to allow growing up, and introducing congestion charges to ensure not only that traffic can flow but also that choices of where to live reflect costs. And work on infrastructure financing is underway.

Last week’s National Policy Statement on sensitive soils began from a reasonable premise: It is better to rule out development in a small number of places, and to allow it everywhere else, than to require litigation of every proposed development. But the potential scope of the soils NPS is vast: Category 1, 2 and 3 land covers about 15% of New Zealand. By comparison, our major urban areas take up less than 1%. A city near agricultural land wanting to constrain outward growth would need only designate the surrounding area as sensitive.

The National Policy Statement on urban development talks a good game about the need for more housing but does not change the incentives facing councils. The shift in the early 1990s from the Town and Country Planning Act to the Resource Management Act encouraged councils to pour the old planning wine into new bottles. It is now not hard to imagine councils defining “quality urban environment” or “appropriate, safe, and resilient” development in ways that rebuild many of the old constraints. Without a change in council incentives, we need rely on the Environment Court to prevent councils from undermining the intent of the National Policy Statement.

The Initiative will examine the two National Policy Statements in more depth in building our submission, but the preliminary outlook is worrying. Together, they risk scuppering the chances of restoring housing affordability.

Living after midnight
Nataneal Rother | Research Fellow |
Imagine you wanted to establish a bar.

Before you could worry about vintage, décor or music, local activists might scare you away. Like the 500+ people protesting against a proposed bottle shop in Wellington’s Khandallah suburb this month.

If you managed to tap your first beer eventually, constant hassling from neighbours might still drive you out of business.

Quite disheartening for anyone who wants to run a bar – and for all those who want have a drink in that bar.

But imagine you were not the bar owner or patron but a resident in the same building. What would you think about a new tavern, assuming you will not be visiting it every night?

Music travels quickly through New Zealand walls and windows. The bar would ruin your sleep at night and make you grumpy during the day.

Anyone who wants to follow the medical advice of 8 hours of shut-eye every night will then surely lose their peace of mind, not to mention overall wellbeing.

New Zealand’s cities need to end this deadlock. To find solutions, we looked abroad in our latest report, Living after Midnight.

And we found some no further than in Melbourne.

As part of its 24/7 strategy (yes, all night and all week), Melbourne implemented the ‘agent of change principle’. The party bringing new use or developments to an existing environment is now responsible for noise attenuation.

This means developers of a residential area close to an existing music performance venue need to plan appropriate noise-minimisation measures for future residents. Developers can choose whether it is more practical to insulate their own building, or soundproof the existing venue. The scheme applies to any housing within 50 metres of live music venues and requires a 45dB maximum noise level, about as loud as a bird song.

Similarly, party planners opening a new venue close to residential areas are responsible for dealing with any noise effects caused by their business.

Establishing a rule about who must adapt thus breaks the deadlock.

Nimbys who like to live close to urban adventures but want others to bear the burden that comes with it can no longer appeal for pre-existing noise levels. Bar owners can open a bar if they soundproof it to legal requirements.

Our report discusses more solutions like the one being implemented in Melbourne. Nightlife comes with its challenges. Tackling them head-on is smarter than limiting everyone’s fun.

We Prefer Potato!
Toby Fitzsimmons | Research Intern |
“It is a mistake to think you can solve any major problems just with potatoes,” said Douglas Adams of the Silastic Armourfiends of Striterax in The Hitchhiker’s Guide to the Galaxy.

The aliens believed they could control their anger by punching potatoes. Alas, once they started doing that, it did not take long for them to get bored and shoot people instead. Our government on earth seems to be taking policy advice from the Armourfiends, pursuing a potato obsession without care for the consequences.

The National Policy Statement for Highly Productive Land proposed last week gives local councils new powers to prevent building on our most fertile land – constituting 15% of New Zealand.

We cannot be too cautious. How can we continue to eat potatoes if we have built on all our farmland? Loyal Fans of the vegetable (or is it a tuber?) are concerned construction could pinch their chips.

Despite claiming the policy would not hurt housing, the Environment Minister fried critics with a crisp defence: “We actually prefer potatoes [to housing].” He also inadvertently sparked a tater war between those who love their mashed potatoes and those who ‘actually prefer’ to live in a house.

Newly hopeful home aspirants quickly rebuffed the policy: “Potatoes can be imported but not houses.”

Spudders wanting to safeguard one half of their vanishing meat-and-potato staple said New Zealand could not rely on potato imports, what with Trump’s trade wars. Have we not learned from the 19th century Irish Potato Famine?

Moreover, importing houses is easy. It is called moving to Australia.

An Irish saying goes: “Only two things in this world are too serious to be jested on – potatoes and matrimony.” Let me be sacrilegious – growing potatoes is not that serious an occupation here. Only 0.3% of New Zealand land is used to grow vegetables, let alone potatoes. 

Unlike the native industry of housing, which began with Kupe arriving on these shores a thousand years ago, potatoes were imported from South America in the 18th century. Is it so shocking for New Zealand to import potatoes again? Regardless, if the Incas could grow potatoes on mountainsides 4,000 metres above sea level, surely New Zealand can find somewhere in the 99% of land currently not used for growing spuds.

The policy on productive land ultimately will hurt housing affordability for a few chips.

Potatoes cannot solve all major problems, but they sure can cause some.

Darn, I need to punch some potatoes now.

On The Record
All Things Considered
  • Graph of the week: Government spending track from 2017.
  • John Roughan: Show me the money when you get a clue. ($)
  • Will the RBNZ’s doom and gloom be self-fulfilling? ($)
  • Blood test to predict how likely you are to die within 5 to 10 years.
  • The cost to New Zealand of banning smoking in cars.
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