Joel Cayford: We're on the road to nowhere

9:30 AM Monday Sep 17, 2012

The Government plans to fund "roads of national significance" projects from loans because of declining revenues from fuel taxes and other tax revenues.

But is building more roads - and even taking out loans in desperation - the best infrastructure answer to questions confronting New Zealand's economic planners?

For example, new figures indicate a worrying increase in New Zealanders relocating to Australia. Are Kiwis more likely to stay and work in New Zealand if it builds more roads?

Housing is increasingly unaffordable because residential property prices are still going up. Perhaps it's because property is the only thing reliable investment in New Zealand. It's a heated market the Government is anxious to dampen.

However, an immediate effect of new roading projects in New Zealand is a proliferation of subdivisions and property development projects located a significant distance from existing urban environments. The lack of amenities associated with any resulting new housing means they don't meet the basic needs of those looking for affordable housing near employment opportunities.

We have a Government keen to deal with the issue of affordable housing on the one hand - but pressing ahead with infrastructure projects which simply fan the flames of expensive land speculation far from urban centres.

If the Government instead invested in urban infrastructure, rather than state highway infrastructure, it would trigger more commercial building development, an increase in skilled employment opportunities, the creation of urban environments attractive to skilled Kiwis and international visitors, and make medium-density housing desirable.

Auckland's Wynyard Quarter is an example of urban infrastructure investment. Public money came from the Auckland City Council and the Auckland Regional Council, and land came from the Ports of Auckland.

Public investment is in the streets and pavements, the gardens, public artwork, playgrounds and the like. Additional investment has gone into heritage buildings. It is all infrastructure.

The economic benefits are exceptional: for a start there is a huge commercial real estate boom going on.

The most obvious private sector development is the ASB Bank HQ. That's the tip of the real estate economic iceberg. But the anchor tenant was the public urban infrastructure investment and the creation of a quality public realm.

There's a lot else happening that has economic value. Go down and sit at a table outside the old netshed on North Wharf about 5pm on a balmy, sunny afternoon, Saturday, Sunday, Friday - whenever - and watch the promenading that's happening here in Auckland. You could be on the Mediterranean. Kiwis have style and they like to show it, given an opportunity.

Photos of this phenomenon are getting around the world. People want to visit. Business wants to invest. Everyone wants a part of it.

New Zealand needs to be investing in the infrastructure of its cities and its urban centres far more than new roads.

Singapore, Shanghai and Sydney are great examples on our doorstep. Municipal money was required for the urban infrastructure that encouraged private investment and the creation of great places to work, live and play. However, these cities would never have developed as they have if economic planners could only rely on council rates to fund necessary infrastructure.

Wynyard Quarter was only affordable by Auckland local government because it effectively got the land free.

Future city infrastructure building will come at a higher cost and require a mix of central government funding support or new funding powers. The proposed public transport rail loop infrastructure is one example.

Business has been calling for a convention centre in Auckland for a decade or more. However, in my experience it is not the lack of convention centre infrastructure that makes Auckland relatively unattractive for business conferences - it is because Auckland has not been a great place to visit.

Wynyard Quarter is changing that impression.

Many have mistakenly argued that a centrally located cruise ship terminal is an essential trigger for economic revival. It is assumed that because Shanghai, Singapore and Sydney all have significant cruise ship terminals, then Auckland needs one too to ensure economic success. But this is cargo-cult thinking. Success does not come from cruise ships. Cruise ships come to successful and interesting places, and they stay for long visits when passengers find much to do and great places to visit.

If the Government wants to stimulate private sector investment, bring business into our existing urban centres, attract high-value business into urban centres and make New Zealand cities as attractive and brimming with creative high-value employment and visitor opportunities as Australian cities - then it needs to find ways of investing in those cities and stop throwing money at roads.

* Dr Joel Cayford is a planning lecturer and former councillor.