A claim which is made from time to time is that Auckland housing is unaffordable because "land is made costlier by planning regs" which is not really true. There are broadly two kinds of activities constrained by planning regs: rural to urban conversion, & intensification.

'Urban Growth Boundaries' are a common mechanism in cities to limit the effects of "urban sprawl". Auckland *used* to have such a mechanism called the Metropolitan Urban Limit, however it was replaced by the Rural Urban Boundary with the introduction of the Unitary Plan.

The purpose of the RUB is to signal 30 years worth of land for urban growth in areas that are not ecologically vulnerable, allowing certainty about the provision of long term infrastructure. The premise is that this certainty can in fact produce *more* greenfield growth.

An important question is "why is some urban land more valuable than other urban land?". The answer, simply put, is that some locations are more desirable than others. Some places are near schools, employment, food, beaches, or anything else that make somewhere pleasant or useful.

A consequence of this is that land in the centre of the city will always be more desirable than land on the fringe: basic geometry tells us that the centre of the city is the place in which its easiest to access everything else.

We can see this when we look at a map of land values per square meter: land on the fringe is worth a few hundred dollars to a thousand dollars per sqm, while land around Britomart and the universities is in the ballpark of $15,000 per sqm

Now, there is a discontinuity at the urban fringe. Is that explainable by the RUB? Mostly, no. Even in a theoretical laissez-faire environment, converting rural land into urban is not a costless endeavour. Urban land requires vastly more infrastructure, notably roads and water.

This cost amounts to in the range of $75k to $208k per plot, with an avg of $115k. Modelling these infrastructure costs and amenity value, a report by Auckland Council's chief economist found the RUB costs accounted for just 0.8% to 5.2% of the value of inner fringe residential.

In words, artificial land scarcity contributes fairly minimally to our unaffordability. This research was also conducted prior to central government's attempts to make rural/urban plan changes & infra provision easier. So what does cause our unaffordability?

When an input to a process is scarce (ie expensive), a business will try to produce more output relative to that input. The same is true of developers: when land is expensive, more dwellings are produced on a plot of land. Except when it's illegal to do so.

Through zoning, the council effectively bans denser building typologies that allow more people to live in desirable (ie high land value) areas. The effect of this is that land costs represent a greater proportion of the cost of a dwelling.

eg: if you have a plot of land worth $1m, then a developer might be inclined to build a $1m apartment block of 10 units, meaning each unit costs $200k. Instead, if you mandate that only a single house be built on that land, and that costs $100k, then that dwelling will be $1.1m

So not only does this make for a terribly inefficient use of our land, but it also created an artificial scarcity for dwellings, pushing up the cost across the city.

didn't proof read any of this like a legend