11 June 2012
Why Local Government Minister David Carter must allow the people of Christchurch, with its communities, to belatedly get the recovery underway
TIME FOR CHANGE...
For most people in normal times, Local Government issues are a “bit of a bore”. Just so long as the rubbish is collected once a week and the water still flows out of the taps...well... that’s about all that matters.
Little wonder then that as citizens have behaved like sheep – they have been governed by wolves!
But for those who deal with Local Government and develop an intimate understanding of it, the issues and problems surrounding it are very real and important indeed.
Following the first of the near 11,000 earthquake events starting some 21 months ago 4 September 2010, poorly served Christchurch citizens have learnt that all is not well with the Christchurch City Council – in large measure thanks to a diligent media, led by The Press. There is a growing awareness that systemic and cultural changes are essential – if the City is to recover.
Christchurch is at the crossroads. It is up to the citizens whether it succeeds or fails.
...AS THE PROBLEMS ARE WELL KNOWN
The writer has written extensively on these issues over the years, since the time of the first Annual Demographia International Housing Affordability Survey created with Wendell Cox of St Louis Illinois, USA back in early 2005.
Articles by the writer with respect to Christchurch include –
• Houston: We have a housing affordability problem - March 2010
• Christchurch: A Bureaucratically Buggered City - September 2010
• Christchurch earthquakes: Sound political leadership required - February 2011
• (Video You Tube) Canterbury Television - Jo Kane One On One - June 2011
• Christchurch earthquakes: Council stalled recovery - June 2011
• Christchurch recovery: The political circus - October 2011
• How Housing Bubbles Are Triggered - November 2011
Expressed concisely – the major “triggers” for the problems with respect to the Christchurch City Council are –
(a) Forced Local Government amalgamation back in 1989.
(b) Providing Councils powers of general competence in 2002.
(c) Extremely poor quality political management of the implementation of the Resource Management (Planning) and Building Acts. The bureaucrats have run riot.
BUREAUCRATIC OVER REACH
Political - and to an even greater extent - bureaucratic over reach - with copious quantities of lightweight “sun rises in the west” (“if it doesn’t work and people don’t want it – they will advocate it”) research has been the order of the day for two decades or so. Whatever it takes to expand and smother a small country and business / economy with bureaucratic and corporatist thinking and structures that don’t mirror the communities they are paid to serve.
Little wonder then that New Zealand had the highest GDP per capita in the world in 1920 and has nowslipped to number 32, with Slovenia, the Czech Republic and Greece.
CHRISTCHURCH – SHABBY CITY
Christchurch - a small City of just 370,000 people became increasingly “Shabby City”, as a result of the 1989 forced Local Government amalgamation. The median annual household income is just $56,000 (Auckland $72,000) – and a woeful $46,000 in the east, which experienced the worst earthquake destruction. The situation was worsened considerably by the unnecessary 2002 through 2007 inflating housing bubble, so that today, housing is “severely unaffordable” at 6.3 times annual household earnings.
Normal housing markets do not exceed 3 times (refer Demographia Surveys).
The residential development / construction sector in New Zealand is a shambles. Within the affordable North American urban markets, new starter stock is being put in place for about $US600 per square metre all up on the fringes, while here in Christchurch it is currently in the order of $NZ2,500+ per square metre.
WHERE ARE THE $50,000 FRINGE SECTIONS?
If Christchurch had been a normal housing market, with fringe starter sections / lots priced at $50,000 and below and proper infrastructure financing (and here) , there would be well in excess of 6,000 new affordable homes out on the fringes by now. And the earthquake events costs would be in the order of $10 billion – not the grossly excessive estimated $30 billion, due to a long history of poor quality urban governance and planning.
In the flight to affordability through last year on a population basis, there were 5 and 6 times the number of new residential consents in Selwyn and Waimakariri respectively than Christchurch according to Statistics NZ. This had exploded out to 8 and 12 times during the month of March 2011. Business will follow as the City is hollowed out.
Put bluntly – Christchurch currently cannot afford to recover.
To allow the belated recovery to finally start (some 21 months later), the following 5 steps must get underway as soon as possible –
(1) A FRESH LOCAL ELECTION
A recovery can only get underway when local citizens decide to take control of their own lives and communities, by putting in place elected representatives they have confidence and trust in to do what is required.
The “top down” approach with Wellington and CERA in place, progressively stripping the Local Authority of its proper functions does not work – as Christchurch citizens are learning to their cost.
Christchurch simply cannot allow the current situation to “drag on” with persistent population and investment flight, through to the scheduled September 2013 election. It is essential to restore public and business confidence as quickly as practically possible, to arrest and reverse the current population and investment flight.
An excellent illustration of the top down / bottom up examples are failed Tuscaloosa, Alabama and successful Joplin Missouri in the United States - both hit by tornados a little over 12 months ago, as explained within a recent Wall Street Journal article “Tornado recovery: How Joplin is beating Tuscaloosa”.
(2) REPLACE THE COUNCIL CHIEF EXECUTIVE
Public concern about the Christchurch City Council “erupted” following the Council announcement mid December of a $68,000 14% pay raise for Chief Executive Marryatt to $540,000. New Zealand Local Government elected representitives and employees are significantly overpaid in comparison with their counterparts in Australia and North America. Particularly when GDP per capita is factored in.
In turn, this led to local citizen Peter Lynch getting a 4,000 strong protest underway 1 February 2011, where the demands to the Government were clearly set out by the Protest Committee.
Instead of dealing with the issues head on, the Key led National Government continued with its usual “kicking the can down the road” approach. It appointing (under some obscure provision of the Education Act) a provincial political figure from Nelson (then Local Government Minister Nick Smiths electorate) to suppress the normal democratic process, so that responsible elected representativeswere forced to fall in to line with the failed Parker / Marrayatt regime – the real problem.
The first job of a newly elected Council must be to replace the current Chief Executive with someone having the skills required to drive the necessary changes at a staff level. Importantly too - on the instructions of the elected representative - not the current farcical situation where the reverse is the case.
(3) ABOLISH COUNCIL CENTRALIZED STRUCTURE AND REPLACE WITH A ONE CITY - MANY COMMUNITIES MODEL
Christchurch worked well prior to the forced Local Government amalgamation of 1989, with its manageable smaller Local Authorities (Waimairi; Heathcote; Riccarton; Paparua; City – Transport and Drainage Boards), functioning adequately (there is always scope for improvement). Much the same as the adjoining Councils of Waimakariri and Selwyn today (with population bases of slightly above 40,000 residents).
The optimum size for Local Government units appears to be in the order of 60,000 – 80,000 people, serving around 30,000 households with associated commercial / industrial areas. If they get much larger, local people tend to lose control and the bureaucracies dominate (refer UK Daily Mail The Great Inertia Sector - Parkinsons Law - The Cancer of Bureaucracy).
There are two types of Local Government in this world – the small and the bad. As they “bureaucratize”, the good people at elected representative and staff levels get driven out of them. The whims and wishes of the insatiable bureaucracy become the focus of the organisation – as it embarks on a war plundering its community and business.
So the power and control must be devolved to properly structured Community Councils - with the Central Office and Mayor having much reduced roles as “servants of the servants”. Elected representatives at all levels should only be required for 2 or 3 Council meetings a month, so that the role is clearly part time - as it use to be and still is in Australia.
(4) PROVIDE AFFORDABLE LAND FOR HOUSING AND BUSINESS
The urban land use and building regulatory environments have degenerated in to a “sick joke” – creating massive social and economic harm.
Local Authorities must not have any control of land supply, as it is an invitation for them to become incompetent and plunder the people they are paid to serve. Further to this, they must be required tofinance infrastructure appropriately as well.
With its small population of just 4.4 million, New Zealand has abundant land supply with just 0.70% of its land area urbanized. The land area in the United Kingdom is much the same with near 62 million people.
There needs to be open fringe land supply with post development zoning and “no go” areas clearly identified for solid environmental and other robust reasons. Internally – flexi zoning is required where zones can expand or contract as required – provided property owners along a zone fringe obtain the consent of neighbours a further 50 metres out.
This is particularly important for Christchurch, as it is endeavouring to move abruptly to the north, west and south – where there is abundant good quality land for construction.
Artificially inflating land costs unnecessarily triggering housing bubbles and decimating the performance of the residential development / construction sectors must not be tolerated.
Housing is a basic human right. A right that must be respected – particularly by public employees properly trained in public service ethics.
With the smaller Community Council Units of Local Government, it will be possible to have their Regulatory Units led by engineers and sound and simple performance standards instilled in to the regulatory staff. If staff as individuals fail to process consents efficiently and / or lack enabling attitudes and the capacity to solve problems, they must be replaced.
The current degenerate and infantile culture of impunity within the Local Government sector must be stamped out and replaced with a culture of consequences.
It needs to be noted that working for Local Government is generally regarded as “default employment” for those who fail to secure employment in the private sector. It is therefore critically important the roles and requirements for those employed within the Local Government sector are simplified as much as possible.
(5) AFFORDABLE RATES
As Jane Clifton of The Listener explainee recently, the Government is acutely aware of the shambles Local Government is in and is endeavouring to take steps to deal with the issues.
But Central Government can only do so much. The performance of Local Government and the responsibility for it rests with local people, their communities and businesses.
By taking the first four steps as outlined above, there is massive scope to reduce the Local Government cost increases here in Christchurch. And most importantly. to ensure Local Government has the financial capacity to meet its infrastructure responsibilities and cope with normal growth.
THE CHAMBER OF COMMERCE OR COMMEDY?
Last September Sir Robert Jones, an experienced and well known property investor, contributed a thoughtful perspective for The Press "The CBD can't be rebuilt" (confirmed by a recent CBRE / Lincoln University survey illustrating the dramatic fall off in office tenant return intentions). It will fall further – likely requiring just a City block or two. The Press Poll supporting Jones was the highest on record.
There had been a massive furore between the central business community through last year, as as the writer explained soon after the Jones perspective appeared in The Press.
Remarkably, the best the local Chamber of Commerce (representing supposedly 3000 businesses in Canterbury) could do through the recent Draft Annual Plan process, was generate this lightweight submission, followed by this rather lacklustre performance by its CEO Peter Townsend at the hearing early June.
Sir Robert Jones made the comment within his The Press perspective that serious developers and investors had left Christchurch years ago – leaving the City to “hobbyists and sentimentalists”.
It seems clear the members of the dysfunctional Chamber of Commerce need to sort themselves out first, prior to giving advice to the dysfunctional Christchurch City Council.
Business and professional groups in Christchurch need to lift their advocacy performance significantly.
The most important point to recognise is that the problems with the Christchurch City Council are systemic – and the sooner this is clearly understood across the community, the better.
There is nothing to be gained by blaming individuals associated with the organisation or outside of it. But they need to realize that the current situation is untenable and start supporting those acting responsibly in pressing for the changes required.
There is no reason why Christchurch cannot be the most affordable and dynamic City in New Zealand and Australia within 5 years.