Fuck your "family-sized flat" requirements

People yearn for bachelor pads, but are everywhere in flats.

I live, like most young professionals, in a flat with two other dudes roughly my age and social status who would all quite like to live on our own. I've known one for 15 years and the other for a fortnight (thankfully, he seems nice even if he despises cycleways). It is the nicest flat I've lived in, in the best location, and its even warm inside. I'd rather live alone, or with my girlfriend.

The primary shortage of housing is for 1 and 2 bedroom units, primarily in cities and inner suburbs. This is generally true across Anglosphere cities with housing shortages. Household sizes are smaller than the era when houses actually got built. But it is common for people to having flatmates for years. I've flatted for 9 years, in 7 flats, it was good when I was 19 and living with my friends from my hall and less so in my late 20s. And despite the indignity of living with others, fighting for enough fucking fridge space to have multiple cheeses a 28 year old on a 6 digit salary, people keep on saying that new housing developments should be required to offer family sized flats.

I don't trust property developers on many points, but I do trust them to try make money. If they see a way to make money selling 1 or 2 bedroom flats, they will. If they see a way to make money selling 3 bedroom flats, they will.

In Christchurch right now, flats with 2 bedrooms are very cheap and with 3 bedrooms are very expensive. Or is it the other way around? In any event, I trust its cohort of townhouse builders  to adjust and build slightly bigger/smaller units for the next 18 months to chase those dollars.

A lot of housing views come down to a basic divide in what property rights and regulations are for: do they emphasize the right way of living? Or do they serve liberal ideological and economic ends? That is, do property rights let you do what you want? My view, as a liberal and a free-marketeer, is that we should let people build housing and use it as they want.

Not everyone is liberal. Then, sure, demand that 17% of units in new developments have 3 or 4 units and get the renters - who want privacy, or dignity, or just a place to blare Kendrick or The Rest is Politics or /r/gonewildaudio - go fuck themselves in whatever you deign to allow. See how easy you make politics and how garbage you make policy when you go full Everything Bagel rather than just relentlessly pushing for housing policy to deliver massive amounts of well-located, tolerably good housing. Treat the people who have the money to pay the rent to make new developments pencil as undeserving.

Singletons, bachelors, young professionals, people dating but its early stages or complicated or non-committal; they all need housing and they don't really want shared housing. Just about everyone flatting in a shared flat would, quietly or eventually, prefer their own space. We need a truly massive number of 1 - 2 bedroom units in New Zealand. Maybe a million at this rate.

Just build housing. Quite a lot of it. In nice places, by other houses and stores and bus stops and bars. Tall. In boring boxes. And let people make money off building housing, because the alternative is people making money from not building housing. And that sucks, and if housing sucks then peoples' lives suck.

We need to stop making demands that new housing deliver other social goals . Urban regeneration is nice but does that justify the Tamaki Regeneration Company building a thousand houses in a decade (wait that sounds good?) when it was meant to do 400 a year (uh what?) at vast expense (hmmm)? Does it justify the dumb 'affordability' and 'social housing' requirements that hurt the viability of new housing in the US, the UK and Australia? Does it justify the dumb demands to build less lucrative family-sized flats in developments, when the demand is for bachelor pads? No, we'd be better off trying to flood the market with new housing so firms had to get into the niches.

Build housing. A lot of it. In nice places.

Mega Auckland 2050

Mega Auckland 2050

New Zealand needs Mega-Auckland - a Sydney-sized city of 5 million people that looks like Singapore, with the isthmus full of tall towers, modern metros and gorgeous green spaces. Change-makers need to make it happen over the next 25 years. 

Why? Two reasons. 

First, the Donovan dilemma: New Zealand can’t afford to maintain its current infrastructure as a thinly spread and slowly-growing country. New Zealand has stunted per-capita economic growth and productivity improvements. In the long-run our quality of life, power, safety and stability will decline unless this changes. 

Second, New Zealand needs to grow our economic and hard power as a nation by thinking bigger. Cozy backwaters in the south Pacific are unlikely to have a good time in international relations now. This generally reflects Matt Yglesias’s case for the USA to think bigger, but New Zealand is in a worse position with fewer options. 

New Zealand’s needs to address Donovan dilemma by going for growth, but it needs hard power to do it. As a small state ever less protected by the struggling rules-based international order, New Zealand should seek more raw power to defend its economic and strategic interests on a more even playing field. Our vulnerability requires us to aim to be a medium-sized economy with some weight and hard power; and improved international relations weight requires us to have a bigger economy with more hard power - more blood and treasure, as old-school IR nerds say.

This leads into the two ways of dealing with the dilemma - going hard on economic growth to maintain and upgrade infrastructure; or minimizing the burden on existing infra, accepting stagnation, and probably retreating to occupy less of New Zealand where it is cost-effective to do so. 

 

I’m going to suggest that New Zealand go for growth, by explaining what it would look like. 

The strong starting point

Auckland is a city of nearly 2 million people, the commercial and cultural core of the country, the largest Polynesian city on earth and home to migrants from all over New Zealand and the world. It has some solid public transport networks with the improving suburban rail lines and the impressive Bus Rapid Transit between the CBD and North Shore, some massive new commercial and apartment buildings along its waterfront,and is a similar size to the capitals of the mid-tier Australian states. Our firms are mostly headquartered there; most of our professional services firms biggest offices are there; much of our infrastructure spending is there.

Auckland has had recent big successes:

• The super city successfully amalgamated councils into a single local government area.

• Improved public transport, particularly the Northern Expressway and improving bus frequencies.

• Broad upzoning, used as a case study for the benefits of broad residential upzoning, maybe the most broad and studied in the Anglosphere.

• Waterfront revitalisation, based around Britomart, including the Wynward Quarter and Commercial Bay, soon to include the Downtown Towers (replacing a carpark).

When things change for the better in New Zealand, they usually change the most, and first, in Auckland. The current plan is something like a few new public transport routes, medium-density housing of townhouses and terraces in much of the city, some mid-rise apartments, a bit of greenfield growth and a population peak of maybe 3 million. Maybe a bridge. These are meaningful but not massive improvements, and we should think bigger.

 

Problems and potential

This piece is more propaganda than diagnosis, but the short story is:

• Auckland is broadly low-density, sprawling from a small core of tall buildings in the CBD, mainly along the waterfront and Queen and Shortland Streets. Even the inner suburbs ringing the CBD like Epsom which are almost entirely 1-2 storey houses.

• Aucklanders rely on cars to get around, especially outside the (mostly low-density) inner to mid-lying isthmus suburbs. This is despite being an increasingly big city and some successful big public transport projects (the Northern Expressway; the City Rail Link)

• Auckland is in a highly constrained area - it is an isthmus with a waterfront, limited space to go either west (the Waitakere ranges) or east (already gone out to the sea that way) and with the North Shore separated by the harbour and connected primarily by a single bridge.

• Auckland has a single, primary CBD with massive new commercial buildings and, generally, a pile of towers and good transit connections.

• Outside of the CBD, there are a range of smaller town centers, with limited high density. Jobs are spread thinly, often in suburban office or industrial parks.

• For the above reasons, public transport is mainly viable for CBD jobs and not the large number of more spread  roles.

• Auckland is next to very high value green land to its north and south, making it costlier to sprawl in the directions where there are land.

• Auckland has a fair number of reactionaries, NIMBYs, mediocrities and hypocrites who whinge about most good things, and we have political systems that empower them and planning systems that are gamed by them..

Auckland is the core of urban New Zealand despite these issues. But it could and should be bigger. If we stick on our current path, we will get a fair few new townhouses, some trams by 2050 if we are lucky, and otherwise nothing much will change. This won't change the underlying problems.

You don’t get Mega Auckland with our ongoing incremental reforms - things like focusing on “medium density” where almost all allowable heights will cap out at 6 floors. For a mid-rise, that is barely getting started - 8 and 10 storeys are common mid rise apartment heights. Costs spike at certain levels, such as above 4 or so floors when structural requirements get a lot more onerous. Allowing 6 storeys, when you need 8 or 10 to be viable, allows nothing. We’ve got to think bigger.

Right now Auckland has the density of a nice provincial town, which is nice for those who like that. But New Zealand Inc needs a big fuck-off city with big fuck-off economic power. 

What we're missing is ambition - we are missing massive housing, we are missing the modern metro, and we are missing public placemaking in good locations to serve the swarms of new and future residents.

Massing Massive and Modern Metro

Missing Massive is the lack of high-density residential apartment blocks. The gap is in how few high-density apartment blocks are outside the CBD. People would undoubtedly live in towers in Ponsonby - people live in a tower in New Lynn. All we need is to mass enable and encourage high-density apartments, on top of a base of mid density throughout the city, a hawker mall or three and we are there. 

Modern Metro is the light rail Aucklanders need, not trams. Trams are slow, generally in traffic and low capacity. There’s a reason some Melbourne public transport nerds considers Auckland’s system with a lot of frequent buses may be better, city-wide. Light metros fit more people in, go faster, and can serve longer routes and more dense areas. They can go along at street level ("at-grade"), or even on streets. But it can also go on elevated passages with sound shields, to quietly head through major bits of the city. 

[source: https://www.greaterauckland.org.nz/2020/08/27/buying-the-light-metro-ip/] - Look at these bad boys

 

Planning for Mega Auckland over 25 years lets us plan for heavier metro and high-density development along the lines. New metro complements the longer, less frequent, completely separate suburban and regional commuter rail lines. Improved speed and frequency will make the most of the existing heavy rail. But a true metro - underground or elevated - will boost capacity from different areas, and between hubs that don’t even exist yet. 

 

Heavy metro, how good

 

 

The case for a Big New Zealand

New Zealand is not in a benign strategic environment. The environment of expanding free trade with bigger and more prosperous trade partners has ended and started retracting. Protecting our interests requires us to be both richer and have more hard power. And New Zealand cannot get rich just by trading already built, already leaking houses to each other. It must grow, and have both a strong domestic and  import market and be worth exporting to. And part of that growth is to get the strategic and economic power to trade and engage with the world on better terms.

In a scary world, we need to do way better on the international stage. We are losing relative clout in the Pacific. Our two biggest trading partners keep clashing and are at times erratic. New Zealand needs more power to fend off competition just to remain a regional power in the Pacific. Singapore and Australia balance the same relations with us, with more people and power, and it seems to be working for them with strong ties in the east and west. Their greater size and wealth is an unsubtle lesson. 

New Zealand needs more power, more people and more money. These fit together and require a bigger, better Auckland.  

It is all about Auckland 

Why the focus on Auckland? Because a) people go to cities which are big job markets, Auckland is the attractive and obvious place to attract further migrants, and b) deeper markets with intense concentration are much better. 

One 5 million person city is more specialised, and more attractive for investment, than ten 500,000 person cities. Aldi exists in Australia because the scale of its cities makes it worthwhile. They fit in the niche of being complementary to and cheaper than existing duopoly full service supermarkets. Melbourne’s markets fall in the boutique niches remaining. What goes for supermarkets goes for many industries. 

Agglomeration effects - the economic benefits of big and compact cities - are hyper-location specific . It is not enough to have a big city: people have to head to the same cafes in the morning and the same bars after work for the spillovers of knowledge and connections to create virtuous cycles of growth and prosperity. But this means the most potential we can get is by being super connected, super compact and in appropriate places super dense. 

New Zealand has one realistic option for connected, compact, super dense growth: Auckland, mainly on the isthmus. Matt Yglesias argued for One Billion Americans, as a way of thinking bigger [https://www.vox.com/future-perfect/21449512/matt-yglesias-one-billion-americans]. But the US has tons of cities. It could get to a billion in a range of ways. It could focus on having a few mega cities (current or new); it could repopulate huge swathes of old cities and smaller state capitals. It could simply permit mild density everywhere, because its cities are so numerous, large and low density. It is also extremely powerful and extremely rich. By contrast, New Zealand only has one city of any size, unfavourable geography, less wealth, and a distant location from other markets.

Source: https://www.hud.govt.nz/assets/Uploads/Documents/Proactive-Releases/hud-2024003621-research-on-housing-as-an-enabler-of-economic-growth-and-productivity.pdf 

So Auckland needs to grow, and its commercial center needs to stay exactly where it is but triple in size and scale. Auckland has a gorgeous waterfront with a pile of new towers along it. Further intensification of the CBD as a gorgeous, well-connected area is already on the way. The suburbs immediately around the CBD (like Parnell and Ponsonby) should be entirely rezoned for high-density, and expect to be rebuilt.

Outside the CBD, Auckland should concentrate on high density transit oriented development and medium density infill. The city has space for dozens, maybe hundreds, of towers along existing transit lines (I’m told the ground is good around the Northern Expressway stops). We can take a complementary approach by connecting the major centers of Auckland with a metro, and build skyscraper parks around these stations. Medium density is appropriate in places without high capacity rapid transit. But this should enable 6 to 10 floor apartments, not just townhouses.

25 years is doable

It is realistic for Auckland to triple its size in 25 years, building high density towers throughout the isthmus connected by new metro lines.

The Taipei metro only started being built in 1996, months before I was born. It now has 5 lines, with a ton of elevated tracks. At the same time, Taipei has beautiful night markets and streets. Shenzhen was a town of 50,000 in 1990 and opened its first metro line in 2004; it now has like 20 million people and 17 metro lines. New Zealand isn't anything like that size or scale - even Taipei is twice the size of NZ now. New Zealand doesn’t require immigration much greater than the 2010s to grow this much. We can make a Mega Auckland by 2050. 

 

The rest of the country will be better off too

People who want small cities, or just Auckland at its current size, will have options. Christchurch may end up as populated as Auckland is now, as the South Island commercial hub and New Zealand's second city (second largest cities tend to be half the size of the biggest).

Smaller cities might be perfectly served by mid density intensification - Christchurch and Lower Hutt's have any amount of townhouses; a number of 6-floor or so narrow apartment buildings are now being developed in Wellington. Each of these are gorgeous and liveable typologies if they are in areas connected by transit and rich in walking-distance amenities. You can live by bus stops and train stations, on top of cafes and gyms, near your friends and with parks and schools visible from your balcony. Those can be supported by buses and trams.

And if you like even smaller places to live, the point of the growth response to the Donovan dilemma is to ensure there cities have the people and wealth to keep funding infrastructure and roads to small places in the provinces. Mega Auckland is the only way to be sure we can keep nice roads out to Thames or Castle Point. If we go for degrowth, we will likely have to do managed retreat on infrastructure rationing grounds, not just climate adaptation.

And maybe only Auckland will have a bougie shoe store, but at least you’ll be able to get some sick boots couriered down to Gore.

Conclusion

The Donovan dilemma requires NZ to commit hard to either growth or degrowth. We will all be a lot better off from growth. Auckland could be the capital of the Pacific, a regional peer to Melbourne and Sydney, and a southern counterpart to Hong Kong or Singapore. Auckland will be a bigger, better city, in a richer, more powerful country if we go hard on growth. It is doable. So, we should do it.

Thinking Bigger on State-led Urban Development

Thinking Bigger on State-led Urban Development

Kainga Ora is a state housing developer that now won’t build much state housing, so it should do something even better: refocus on building transit-oriented, high-density urban developments. This model, inspired by successes in Hong Kong and Singapore, would see KO build mixed-use developments in underused spaces by transit hubs—train stations, bus rapid transit lines, and, inshallah, future metro routes.


KO can already deliver this - it retains a unit that, as the Hobsonville Land Company, built a thriving master-planned urban development. It's time to demerge and double-down on HLC (who, for the sake of confusion, I’ll call KO for the rest of this piece) as an urban developer. The capacity is there; the model is proven. Now, it’s time to scale it up, make some money, and build some baller buildings.


From Scaling Up to Scaling Back


KO’s recent history is one of scaling up (including expansion and experimentation) and now scaling back (being targeted for a review and rescoping, ending its expansion and drowning its experimentation). It secured billions in funding, acquired land (sometimes at a premium), and tried out new trends like Project Velocity and modular construction. It also gained new powers under the Urban Development Act to masterplan or coordinate large-scale development. And it had both Large Scale Projects and the Land Programmes to run large developments itself.


But now, it’s been pulled back by the Coalition Government, after Bill English asked Chris Bishop to do a review of KO (with an investment banker colleague). According to English, NGOs and community groups can deliver good stuff closer to the ground. Shockingly, the guy who has always said that in the past—and wanted the job—came in and wrote a report saying exactly that. So, the Kainga Ora build program (and back office and half its other functions) are cut-back, to the bone.


This does not leave much space for urban development in the rescoped KO. For good measure, the only serious contenders for projects under the Urban Development Act were declined.


Below - basically everything you need to know about the review of KO from the Table of Contents


Kainga Ora's social housing management function is on the way out, and its social housing development function is barely hanging in there. English considered it was not cost effective to spend money to build and run social housing itself (more on its goldplating below).


But KO wasn't just formed just to do social housing. It has a more interesting history, and a bolder mission. It was meant to take the lead on housing (a mix of tenures, not just social) and urban development.


Remember Hobsonville? That worked


Kainga Ora's urban development subsidiary was previously called Homes, Lands, Community, a name that calls back to the Hobsonville Land Company in a peculiar level of acronymymystic continuity. And Hobsonville? It was a massive success. Such a success that Bill English felt the need to call it a crippling failure.


Hobsonville stands as a testament to what KO can achieve. Developed by KO’s predecessor, the Hobsonville Land Company, it’s a walkable, mid-density suburb centered around a transport link to Auckland’s CBD - a ferry link, of all things. While the ferry limits its scalability, Hobsonville demonstrates how coordinated, transit-oriented development can create thriving communities.


Hobsonville is quite lovely, even if it isn’t perfect. It is a low to medium density suburb based around a ferry, of all things. It is relatively walkable, full of nice, new brick buildings. It is the ideal of what a mid-lying Auckland suburb should be - 30 minutes on a pleasant public transport ride to the CBD for commuters, and pretty nice for a stroll around for people at home. While the ferry is its strength, it is also a weakness - it isn't on the way to anywhere else and ferries are only so capacious and cost-effective.


In contrast, Bill English’s favored Tamaki Regeneration Company has struggled to deliver. Hobsonville’s success underscores the value of KO’s development expertise—expertise that could be harnessed for larger, more impactful projects. My anti-TRC hate-rant is for another blog, or more likely a beer offline. But it is worth noting that Chris Bishop also agrees with me lol link.


If we have the choice between money-grubbing transit-oriented development with a government-aligned entity organizing, or a well-meaning social housing project like TRC with a range of goals but very few houses built, we should pick the former.


So, KO has the skills and capacity to deliver another Hobsonville and make it a success. Given the development limb is an extricable part, so why not extricate it and leave social housing to the orgs that the government trusts to do so, dirtily and cheaply? We should focus on this, given the reallocation of emphasis between Community Housing Providers and KO.


Finding a place for KO in a world of CHPs


Most readers will be aware that the big push in social housing, post the English review of KO, is for an expanded role of Community Housing Providers in basically all elements of social housing.


I’m not going to argue the merits of social housing provided by Community Housing Providers (CHPs) versus state entities like Kainga Ora and the last handful of council housing providers. CHPs seem to do a good job. But CHPs notoriously cherry-pick their tenants. If I was managing social housing, I'd pick the relatively easy tenants too. It seems like a hard job at the best of times.


KO handles the most challenging cases—those with complex needs and vulnerabilities. Concentrating high-needs tenants in KO developments can strain communities and undermine tenant outcomes.


A better approach? Let CHPs handle social housing while KO focuses on high-density, transit-oriented development. This wouldn’t solve the social housing crisis, but it would address New Zealand’s broader urban development challenges.


The Cost of KO: Gold-Plated Standards


Kainga Ora was spending quite a lot per dwelling, catering to a generally politically unpopular cohort, and obliged to goldplate certain specifications to placate a range of stakeholders. Even now, NZ First is outraged that wool carpets aren’t going to be standard on all new Kainga Ora housing (love wool carpet personally, it is great - but it is strictly inferior for durability and cost than wool). Between Homestar environmental standards, accessibility requirements, and the dictates of mid-to-long-term maintenance, the costs add up.


Why can generally small, generally zero-capital CHPs build cheaper? They’re just independent enough to avoid goldplating. They build stuff that is probably worse and definitely cheaper up front, without risking anything like economies of scale or experimentation.


But KO doesn't have to be high-spec for low-end housing and keep losing money: Kainga Ora could part-fund itself and build even more baller shit. Instead of doing probably the most loss-making business conceivable—building expensive housing for broke and desperate tenants—it could pivot to maybe the most lucrative business possible: using statutory powers to acquire land, upzone it, and develop high-density, transit-rich spaces that are not only nice in themselves but also extremely well-connected to other parts of the city.


KO can go high-spec, big-location, good design and placemaking - it just needs to do it as profit-seeking urban development to intensify well-connected locations. It should do this, because New Zealand cities need to look more like cities and less like pleasant provincial towns. And it can do this.


Learning from Hobsonville: Proof It Can Be Done


We know this is doable because we’ve seen it work before. Hobsonville is proof. There are literally people at KO who developed Hobsonville before, and can do it again. And versions of the model have worked overseas.






Hobsonville was a greenfield on an old airfield, connected by a ferry to the CBD and with pleasing mid-density brick streets and a gorgeous bay. HLC organised it, it went well, people made money and not too much litigation over development issues or defects turned up. Now quite a few people live in Hobsonville and it's seen as a nice place - not bad for a former airfield halfway between the West and the wrong side of the North Shore. Greenfield, low stakes, easy mode, but a success that can be replicated and built on.


The issue with Hobsonville is simply where it is -

If we are going to do it again, we need it somewhere that is between a couple of other places. That's how you locate places sensibly.


Shamelessly ripping off two exemplars: Hong Kong’s MTR and Singapore’s HDB


Two important exemplars show how this can work on a bigger scale: Hong Kong’s Mass Transit Railway (MTR) and Singapore’s Housing Development Board (HDB). Each approach is helpful and successful in its own right. Each can also be ripped off as the model for renewing city areas, by rebuilding them to be properly modern, dense, lucrative, and impressive. Now we're cooking with gas.


The MTR Model: Rail and Property


The MTR is a private, exchange-listed firm that makes 20 to 40% of its income from property. It’s a classic example of the rail-property business model: the MTR builds transit lines, acquires land around stations, and develops high-density, mixed-use spaces. The profits from property development fund the transit system, creating a self-sustaining cycle.

The HDB Model: State-Led Development


The HDB is Singapore’s public housing authority, but it’s also a master developer. It acquires land, plans entire towns, and builds housing, commercial spaces, and infrastructure. The HDB sells some market rate and some subsidized flats. As a matter of accounting, it relies on cross-subsidization from selling market rate units, as well as government grants. This shows how this new model could integrate with other housing policy goals.


New Zealand needs a massive number of new and nice apartments in good locations. Housing policy should focus, in the short to mid-term, on maxing out the number of market rate units. More redistributive policies and quibbling about affordability can wait until there are more units to redistribute and subsidize the purchase of. A state-backed urban developer can build large numbers of residential units in and around transport sites.

What, where, and why KO Should Build


The liveability of Hobsonville, connectedness of the Hong Kong approach, and the housing crisis-busting model of the Singapore model make me think the answer is:


Where - sites with land on or around a well-connected transit station or hub, serving a low-density area;


What - building some massive towers for housing and, depending on the area, upgrading or building new transit infrastructure if appropriate


Why - the art of transport and urban development is to put places between places. Make somewhere just viable in its own right, not just a depressing corridor, but also put housing in it by commuter transport so there are workers who can and will live there, and a link to a proper node, taking the lead some place-making around it to ensure it's nice, akin to the area around Britomart now.


This approach will ideally be lucrative, kickstart development in an area, make the most use of existing infrastructure and not crowd out private development. In appropriate cases, KO should do this in combination with developing its own transport lines - for example, a light metro line in Christchurch or Wellington, or by upgrading the Northern Expressway to rail or by building new BTR lines in Auckland. This would hew more closely to the HK model.


Ok but where first exactly?


Take Constellation Station, a Northern Expressway stop on the North Shore. It is, basically, a carpark that buses zoom through to Albany or the City every minute or ten (time of day dependent). It is also by Mairangi Bay, which is beautiful and where I have spent the most time on the North Shore, so I will vouch for it being pleasant. Not just pleasant, but a bit quiet. There is real potential for building a pretty big site with a metro supermarket, new flats for a couple of thousand people, and maybe a bar and cafe if demand is there. People can then roll down the hill to the beach in the evenings, after strolling a full 20 meters from the zoomiest bus stop in the country home from work.


Sunnynook is even more ridiculous. It is the smallest station and it is right next to not terribly new, nice, or noticeably larger than a common or garden shed. Fuck it, build up around it properly like around this MTR station

 The North Shore should be the Gold Caost of New Zealand - Takapuna as the dense downtown area, and with a long stretch of apartments (here, less on the beach and more stretched along a rapid transit line). It has loads of space to grow - up, and along.


A friend advises that all around the Northern Expressway, the ground is about as good for building tall buildings on as Auckland CBD. I can’t think of a funny name riffing off Commercial Bay for massive developments along the North Shore, but it would be incredible and make extend the joys of urban living to tens of thousands more people.


What Kainga Ora Could Be: A New Model for Aotearoa


There’s no particular reason for Kainga Ora to remain a Crown entity on this model. It could be a private or Mixed Ownership Model company. What it needs are powers of compulsory purchase and a viable model of building and developing land that aligns with new and improved public transportation.


There are times government does stuff because no one else can or will. MTR is a publicly listed company that subsidizes railways with property earnings. NHB is basically self-funding. Hobsonville made money. That isn’t the case here, government just has the time horizon and the broader motivation to do it. Precinct put a billion dollars into Commercial Bay, but it didn’t build Britomart. Conversely, the government often thinks it a good idea to build things like Britomart, why wouldn’t it want to put a billion into something like Commercial Bay next to such publicly-minded projects?


The intended mix of general urban development goals, but also as a profit-making venture, mean several structures could work. could be a Crown Entity like KO, but it seems perfectly valid to be a company and, if it is a company, why not take some private money? At that point, it can be a Mixed-Ownership Model company or it could eventually be partly publicly listed. I’d tend to think you want very patient money, so having, say, a 40% interest from superannuation and insurance interests (probably from a few Kiwisaver funds that don’t mind overweighting their portfolios towards NZ and commercial property).


The Urban Development Act permits compulsory acquisition for urban development purposes signed off by the government (by the current bit of KO that I propose splitting off, as far as I know). My own views that we should have a Private Works Act are slightly sidelined, because the Urban Development Act basically serves the same role in this context. But KO could apply to have UDA schemes approved by the government even if it was partly or wholly private.


The key to the model is to ensure that development is aligned with public transportation and high-density living. This aligns KO as a developer with any government shareholders and being a long-term complementary stakeholder with government agencies on transport and urban development. It also makes money and justifies the use of compulsory acquisition for the public benefit. Obviously KO should pay for land, but given the wider benefits, landowners shouldn’t be allowed to say no.


This model I have proposed is closest to the MTR mostly commercial model. I think the right sort of urban development projects are likely to cost a shitload, so they will need market-paying renters or buyers for financial viability. But if you tinker with the assumptions - more government funding directly, more focus on housing rather than specifically transit - and other options and models become more plausible. I quite like my idea, but your idea might be pretty good too.


Hot off the press - a NSW halfway-house


Or we can follow a new model from NSW: the Minns state government has offloaded some spare land in Camperdown onto a project to build 200 Essential Worker homes (from a fund with 450m$ for the subsidy) and 300 private or other affordable homes, on top of ground floor commercial or retail link link. This is in a high amenity and dense neighbourhood near hospitals (where presumably some of the Essential Workers [nurses] work) and the University of Sydney.


Its not quite what I am getting at above, given the amount of funding taken from other bits of government. This feels a bit more Bill English (maybe the subsidies? Also a bit Kiwibuild) than Hobsonville. In my vision, the developer would just build the 500 homes on its own land, then rent it out itself to make money and, inshallah, help fund another one next door. But if Aus Labor is on board with this sorta thing, then the Labour government we might get in 18 months could be on board with this sorta thing, which could be close enough.


Conclusion: Kainga Ora’s Next Chapter


Kainga Ora is better off doing fuck-off developments on and around transit hubs (that it may eventually plan and build, too). Rather than melting through money building politically unpalatable social housing, it could be a highly capitalised, highly profitable firm, propelling it forward without ongoing government support. In turn, this creates momentum for it to constantly build high-density, transit-oriented spaces to make New Zealand super baller. We’ve seen it work in Hobsonville, Hong Kong, and Singapore. We can see it work again.


This model isn’t just viable—it’s profitable. Hong Kong’s MTR and Singapore’s HDB show how urban development can fund itself. Hobsonville proved it can work here. With the right projects and political will, KO could become a self-sustaining engine of urban transformation.

Is Wellington Buggered? A Mid-Term Outlook for the Capital

Is Wellington Buggered? A Mid-Term Outlook for the Capital

Everyone agrees - Wellington’s vibes are cooked. And I think people are right to think its all a bit bleak right now. There are a few big themes: the public sector and its employees are bruised and broke; the formerly-fizzing hospitality industry inches having well-known spots close down; housing costs remain soul-crushing even for freezing flats; and all the councilors hate each other and possibly themselves too. But while the big picture is bad right now, I think looking closely at each detail shows the mid-term outlook for Wellington isn’t half bad. Let’s break it down.
 

The Private Sector: Gone to Auckland (and Beyond)

It’s true that Wellington’s private sector has largely been displaced to Auckland. This is a legacy of Roger Douglas’s reforms in the 1980s. Douglas famously celebrated the fact that businesses moved to be near their customers in Auckland, rather than clustering around ministers and government departments to suck up for subsidies and licenses. Before Wellington, these firms were in Dunedin (or so my grandad tells me). After Auckland, many ended up in Sydney. Who knows? Singapore might be next. Private firms and head offices are mobile and often global.

The private sector left in town is thin, although the actual firms are some of New Zealand’s most famous or successful. Infratil and Morrison & Co are successful but seem ever less tied to New Zealand, let alone Wellington. Xero has a strong base here, but it has made cutbacks. Weta survives on endless subsidies (that Treasury routinely recommends be abolished) and employment law exemptions. All these firms are successful, even if none seem tied to Wellington for any more reason than nostalgia.

But here’s the thing: Wellington is the city of government. And despite the occasional political whim to regionalise, there’s no serious move to decentralise the public sector. A few regional ACC offices, the Serious Fraud Office in Commercial Bay and some satellite offices scattered around Auckland don’t challenge Wellington as the home of the major agencies. Government employment is a reliable anchor for the city’s economy. 2024 might have been a bad year for public servants; 2025 may well be a bleak year too. But this is likely to be the low point. From there, the trajectory is probably upward.
 

Hospitality: A Flight to Quality

Wellington’s hospitality scene has taken a beating in recent years. High profile closures include Bordeaux, Mabels, and Shepard. The mid-to-late 2000s, often remembered as the glory days of Wellington by a certain crowd, feel like a distant memory.

But let’s not mistake change for decline. Volco has gone from zero to three stores in six months, and the two I frequent are consistently packed. The bakery scene is thriving with Glou Glou, Baker Gramercy, ever more Dough stores and the Shelly Bay Baker (in town rather than Shelly Baker) dominating Instagram feeds in a way Pandoro never did.  Plenty of great places now have parklets - there are more spaces at Swimsuit, Old Quarter and Puffin, in a massive win for first dates. On Cuba Street,  relative newcomers Regent and Ram are the busiest bars in town. Olive might be closing, but I was told over a wine at Astoria that a former chef at the Ram is running its replacement. And KC Cafe’s have opened a new restaurant, Hei, with a tight menu.

What we’re seeing is a flight to quality. The places that have closed were often relics of an older generation—people who now work from home in Kapiti or Greytown. People miss the chains and cool spots of their youth.Yet Dylan’s on Lambton Quay regularly has longer queues than Wishbone ever did. It’s a generational shift, and while it’s not without its casualties, it’s a great time to eat and drink in Wellington.

Housing: Progress Amid the Pain

Housing costs and council ineptitude are perennial complaints in Wellington. But here’s the twist: the council has actually gone hard on housing.

Nerds will know that Lower Hutt has become a global exemplar of successful upzoning, with a surge of affordable, modern townhouses along the train line. These homes are warm, well-connected, and often nicer than the overpriced and cold as shit “character” villas in Wellington City.

But “[t]he new Wellington District Plan is the biggest, fattest W in the history of the pro-housing movement in this country”. After a truly tedious and frustrating process (and despite a doomed judicial review on the way), Wellington has legalised a ton of housing. This is from two major wins: applying the Medium Density Residential Standards and similar rules to enable townhouses, terraces and low to medium rise apartments in much of the city; and shrinking character zoning in inner suburbs to apply much more high-density residential development in the central areas where people (me) want to live (and stroll and caffeinate and shop and work). And while the councilors themselves deserve a more than minor amount of criticism at times, they deserve credit for getting a bold plan over the line.

The build consent numbers for December 2024 shot up only for Wellington City Council, a mere six months after the new plan came into force. Leading local urban economist Stu Donovan thinks this may be the start of a strong period of new builds. This would make sense - apartments, townhouses, and terraces are now legal in most of the city, thanks to a pro-housing campaign that ultimately triumphed over NIMBY opposition. The result was so positive that developers would not have had, unlike in some other upzonings with more immediate affects, any idea how just how liberal the final plan changes would be. The result? We can hope for, maybe even expect, a wave of new, warm, modern housing in desirable areas. And this will help to keep rents down for older, less desirable units that our broke students, starving artists and new to the city graduates tend to take.

The new typologies the plan broadly enables —massed townhouses in the suburbs and mid- to high-rise apartment blocks in town and city centers —are a vast improvement over seeing the fucking Paddington a minute from Courtenay Place or Ghuznee Street. They’re key to creating a walkable, liveable, transit-connected city. Even the Paddington, with its pile of small streetfront studios, shops and hospitality places is actually not bad from a mixed-use perspective despite its lack of residential density. Wellington should expect more new residential and mixed-use developments in the mid-term than at any time this century.
 

Transport and the Golden Mile: A Brighter Future

The council has also kept the Golden Mile revamp on track. When completed (albeit years later than public surveys suggested), it will make downtown Wellington even more pedestrian- and transit-friendly. This is crucial for maintaining the city’s status as the region’s - frankly, the country’s - most popular place to stroll around, bump into an ex and enjoy absurdly good coffee. It’ll be easier to get to town, and better to hang out there.

Wellington has a good starting point on active and public transport, relatively mild congestion issues, and the problems feel solvable. Light rail would address capacity constraints in the mid-long term. Ideally, given the geographic size of the city, some major routes would have automated light metro (essentially light trains) on a dedicated route rather than slower, lower capacity trams that stop all of the time in the middle of the road. But planned and plausible changes to spread stops out further to spend more time moving, increasing the capacity of routes and ideally frequency too, and providing greater bus priority would keep most of Wellington moving for a while.

Transport improvements, combined with housing abundance, could transform Wellington into a more accessible and vibrant city. The Golden Mile project is a long-term and long-overdue investment in the city’s liveability and accessibility.

 

The Council: Effective Enough

Wellington’s elected councilors are not always effective as a unit. It may be due to political division, it may be due to individual incompetence, and it may well be due to bad advice from council staff or unreasonable burdens from central government. But compared to most local governments, they’re not uniquely terrible.

The thing about Wellington City Council is it is in one of two cities with a meaningful number of political journalists. Across the harbour, the Hutt City Council is rarely reported on even though it’s a similar size and growing rapidly. Thankfully for the region, Hutt City Council appears to be mostly competent. Its own ambitious upzoning (mainly years ago) was also a success, helping the region. You hear less about the Hutt’s successes than Wellington’s failures. But the Hutt’s success is complementary to Wellington’s success.

It isn’t clear to me that any council other than Wellington is doing better on difficult issues on water infrastructure or transport. Wellington has a shocking plumbing situation. But it has a massive program to fix and replace pipes. The salience of water issues is likely to trend down. Partly this is due to the program’s progress, and partly because new development will hopefully occur in areas with adequate water.

 

The Big Picture: Reasons for Optimism

Wellington has its problems, but the mid-term outlook is surprisingly positive. The early signs of a housing construction boom, sustained public sector employment, a competitive hospitality scene with great recent entrants, and the Golden Mile all point to things being materially better in a few years. I expect the next year or so to be a bit bleak. People will keep going and times will be tight. But for those who stick around, there’s plenty to be optimistic about.

That said, I’m joining the exodus this year, and I won’t be around Wellington for the mid-term. Maybe this is just cope so when I come back, it’ll be much better than when I left it. But I have hope, and I think I have some good reasons to have hope.

Conclusion: Wellington’s Not Dead Yet

Wellington has challenges, but it is not doomed. The city has confronted some longer term issues and started to make progress. The private sector might be thin, but the public sector remains a stable anchor. Hospitality is shifting, not dying. Housing and transport are improving, even if we are not there yet. And while the council might frustrate us, it has spent this term getting numbers on the board that will keep paying off.

So, is Wellington buggered? Not really, and not for good.

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