Is the environment to blame for the cost of housing?
image: Phil Bishop, CC-BY-SA, Wikipedia
Since the Prime Minister, Bill English, seems to think so, it’s worth asking the question.
But despite writing the headline, I’m not going to answer the question. I’m going to tell you why the question is misleading.
New Zealand deals with much of its environmental regulation and urban planning through a law called the Resource Management Act. Adopted in 1991, it took over the responsibilities of a huge range of previous laws, from regulating the expansion of cities to protecting the habitat of trout, to air pollution, to the care of soil and water.
It is our main “environmental” law. But it’s also a curious creature, since it deals with far more than what most of us would consider the “environment”. Explicitly, and deliberately so, and arguably for some good reasons.
Until 1991, people developing land for housing, or business, or industry, needed to get permits under several statutes, from several departments or local councils, each with different processes. Each process was separate. You could spend thousands or millions of dollars, and several years, to get all but one of your permits, just to be denied at the last minute.
What does that have to do with the environment?
The RMA was designed to combine planning processes into a one-stop-shop. All of your permits would be considered at once, and granted or denied at once. But we have planning for more reasons than just what we would normally think of as environmental issues. The RMA considers them all together. To that end, the RMA defines the the environment as
(a) ecosystems and their constituent parts, including people and communities; and (b) all natural and physical resources; and (c) amenity values; and (d) the social, economic, aesthetic, and cultural conditions which affect the matters stated in paragraphs (a) to (c) or which are affected by those matters
Paragraphs (a) and (b) are what we would normally talk about as the “environment”. Amenity values, social, economic, aesthetic and cultural conditions are things we may well want to regulate, but are not what most people think of as the “environment”.
Again, there’s a reason for this. We regulate all these things, so we want a single process to judge all of them for a single development. But it means that a lot of the regulations are not environmental, and as the public, we put a different value on them. It may be worth protecting the environment even if at the expense of affordable housing. Is it worth regulating aesthetics and “amenity” to the same cost?
Regulations that councils impose under the RMA almost certainly do contribute massively to our unaffordable housing (Grimes, 2007; Maclennan, 2009; New Zealand Productivity Commission, 2012). In major centres, this is chiefly by requiring housing to be larger or more expensive or use more land that it needs to. Minimum lot sizes, minimum parking requirements, minimum house sizes, minimum street widths, maximum density allowances. Height limits, recession planes, floor-area-ratios. They may be desirable in some circumstances, but not at any cost.
What’s the matter with blaming “the environment”, then?
The RMA is a cause of unaffordable housing. But that doesn’t mean that it’s our environmental protection that’s to blame. Most of the restrictions that that cause the worst impacts are not justified on environmental grounds, but rather as “amenity” considerations.
Indeed, one of the most critical blocks on increased density is concerns about traffic congestion, an “amenity” issue. But the solution that most RMA-based plans prescribe is to provide more parking and more roads. This is a recipe for for increased driving, and thus increased environmental degradation (Duany et al, 2000; Shoup, 2005).
Another is “character”. In many areas, it’s prohibited to build new buildings that are not similar in scale or form or expense to existing ones. This has nothing to do with the environment, and is designed around the aesthetic and cultural desires of existing residents to prevent newcomers, particularly those of a different social or economic class. This isn’t even desirable in the first place, but it’s still part of the RMA.
Why does any of that matter?
Because New Zealand is hugely concerned with our unaffordable housing, and we’re looking for something to fix it. Blaming “the RMA” is technically accurate. But thinking that “the RMA” means “the environment” is way, way off. But there is also a huge constituency who actually want the environmental parts gone as well, or instead, aside from housing considerations. Farmers, aquaculture, heavy industry, freight transport - there are many spheres of life regulated by the RMA that have nothing to do with the housing crisis.
Getting too keen on the idea that “the environment” is to blame will mean trashing aspects of the RMA that aren’t to blame, and do protect environmental values. While it’s preventing new housing, it’s also the RMA that controls how dirty our rivers get, what’s in the air we breathe, and how we protect our special places.
We also run the risk of getting housing “solutions” that do not work in the long run when their environmental costs are taken into account. We need to build more homes for people. We could build them in paddocks in the middle of nowhere with no public transport, requiring vast amounts of energy for people to get to and from them every day, vast amounts of new polluted stormwater runoff, eating up vast tracts of farmland and wilderness. It’ll also cost a fortune to actually live in them, and deal with the results.
This would reduce housing costs on paper, but it won’t make us better off.
Don’t get hoodwinked by people saying the environment is to blame for the housing crisis. There’s a lot of people who want to see environmental regulations trashed for their own unrelated benefit, and they’ll use the housing crisis as an excuse to get it. But trashing the environment is not desirable, or necessary, or sufficient, to solve our housing problems.
Duany, A; Plater-Zyberk, E; and Speck, J. 2000. Suburban Nation: The Rise of Sprawl and the Decline of the American Dream, New York: North Point Press.
Grimes, A. 2007. Impacts of land availability, housing supply and planning infrastrucutre on New Zealand house prices. Wellington, Treasury and Reserve Bank of New Zealand conference.
Maclennan, D. 2009. Auckland: planning, policy and housing markets, Auckland: Auckland Regional Council.
New Zealand Institute of Economic Research. 2015. Moving on up: relaxing land use restrictions can lift Auckland City. Retrieved from [http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/reports/technicalpublications/Documents/movingonuprelaxinglanduserestrictionscanliftaucklandcity.pdf].
New Zealand Productivity Commission. 2012. Housing affordability inquiry, Wellington: New Zealand Productivity Commission.
Shoup, D. C. 2005. The high cost of free parking. Chicago: Planners Press, American Planning Association.
Speck, J. 2012. Walkable City: How Downtown Can Save America, One Step at a Time, New York: North Point Press. ISBN 978-0-86547-772-8