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.