Why the unitary plan is soiled

Roger Partridge
The National Business Review
14 October, 2016

In George Orwell’s dystopian novel, Nineteen Eighty-Four, the tyrannical state develops an artificial language called Newspeak to align thought and action with the ideology of the Party. Its aim is to entrench the tyranny of the Party by making other modes of thought impossible.

Last Wednesday, listeners of the early morning news may have felt they had woken up in 1984. The lead story featured the horticulture industry’s lobby group claiming a relaxation of Auckland’s metropolitan urban limit might cause food shortages. Could this really be true?

Granted, Auckland is blessed with some of the world’s most fertile farmland. But so is the rest of the country. And it is also sparsely populated.

The UK has 14 times more people in a landmass roughly the same size as New Zealand’s. Less than 1% of this is built on – including the roads. Of the remaining 99%, more than 50% is farmed.

Given this abundance of farmland, why does constraining our biggest city risk a food crisis? Do we really face importing lettuce from Australia? Or is there something else going on?

Some clues lie in Auckland’s planning framework, including the new Auckland Unitary Plan. As readers will know, the plan is a monster. At 7000 pages it is five times longer than the Bible, which itself is long enough to outline a plan for the entire human race. Some estimates suggest reading it non-stop would take 55 days. Its length makes it virtually unknowable for the average Aucklander. Big Brother would have been proud.

One of the plan’s key principles is that Auckland should not be allowed to sprawl. Instead, it should mainly expand by becoming denser.

This compact-city ideology is strong within the planning profession. It is based on two key tenets. The first is that densification is cheaper than expanding outward.

The second (you guessed it) is to protect scarce farmland on the fringes.

The New Zealand Initiative published research debunking the first of these tenets in a 2014 paper, Up or Out? Examining the Trade-offs of Urban Form. But the second tenet also deserves scrutiny.

The planners counter the wealth of farmland by inventing two rarer species – “elite” and “prime” soils. As fate would have it, these two soil-types are in abundance on Auckland’s fringes. Their enjoyment by the horticulture industry has already been impaired,and risks being irrevocably jeopardised by unconstrained sprawl.

Voila! As if by magic, the compact-city-champions have conjured up a reason for clipping Auckland’s wings. Building houses will not just spoil elite soils but smother them as well. Orwell could not have scripted it better.

Cheered on by the horticulture lobby, it is just one small step to assert that protesting this finite resource is “essential for the future wealth and wellbeing of Auckland.”

But wait, you say. Even a scintilla of economics expertise suggests markets are capable of working out problems like this. Indeed, that is exactly what markets are good at: allocating scarce resources when there are competing demands.


There is an alternative

A system of voluntary exchange confronts anyone who wants to put the land for farming with the value it has for housing. In this way the competing costs and benefits are taken into account. Preventing land from being put to its highest value use simply reduces our welfare and make us worse off.

Fears for the sustainability of our food supply are also misplaced. The choice is not between retaining our elite soils and starvation. It does not take a soil scientist to work out there is an alternative to elite soils: not-so-elite-soils. And we have lots of them.

They may not have the ease of cultivation of the Pukekohe silt loams or the frost-free feature of the slopes of the Bombay Hills. But it will come as no surprise that potatoes, carrots, and leafy greens grow both south of the Bombay Hills and north of the Brynderwyns.


Not at people’s expense

Horticulture is big business and we can be proud of its rapid export growth. But it should not come at the expense of ordinary Aucklanders, nor those who aspire to live there.

In August, the Productivity Commission released a draft report, Better Urban Planning, which identified weaknesses at the local government level in undertaking economic impact assessments. Nowhere is this more evident than in this contrived debate planners have engaged in about the sustainability of Auckland’s soils.

Their failure to consider even the most basic economic principles means they have been blind to the obvious: scarcity can be mitigated by substitution. Markets are good at this. It is not a problem that requires planning.

But there is an even more profound failure. Constraining the supply of land for new housing has caused a housing affordability crisis from which Auckland will take years to recover. In the meantime, the cost of housing has caused both overcrowding and poverty among Auckland’s poorest communities. Even worse, it is blocking unemployed New Zealanders from access to the country’s biggest jobs generator.

There are lessons in this for planners. Artificial constructs like “elite” or “prime” soils may be useful for a stock take of our resources. But they do not provide a sound basis for working out how those resources should be allocated.

Planners need to have a little more faith in markets. History provides ample evidence that markets provide effective means of allocating scarce resources among competing interests. In only rare occasions do they fail. There is no evidence that the allocation of land between urban and rural owners is one of them.

More importantly, interfering in markets has consequences. Good intentions are not good enough. If resources cannot be put to their highest economic use, or if the supply of critical resources is artificially constrained, then we all suffer. Unfortunately, those who suffer the most tend to be the poorest and most vulnerable.

For the rest of us, despite what Big Brother would have us believe, we can rest easy. Fears of using up farmland are as ludicrous as fearing that the sun might run out of light, that Ireland might run out of Guinness or that planners might run out of objections. That day may come but it is not one that requires planning for it now.

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