New residential subdivisions

Almost without fail, whenever there's news of a new subdivision underway in the press, the  majority of comments are negative and hostile to the development.  It doesn't matter how much care the developer is taking to bring to the market a quality product, or to meet demand in some other way, there's always the naysayers.  The news of a new development for Halswell in Christchurch for instance by supermarket chain Countdown is a case in point.

In my opinion such negativity is almost always founded on ignorance, or false sense of entitlement from existing homeowners.  I've detailed below some of the objections I commonly hear, and my answer to them.

1. "New subdivisions are sterile and lack character" - Every house anyone owns in an urban area of New Zealand was once part of a new subdivision.  New subdivisions typically do lack the established plantings of older areas, but this can only come with time, as trees and other vegetation matures.  Character develops organically  - it's more something new residents bring to the area, rather than something a developer implants.
   
   
2. "We already have enough houses in Christchurch - why are they building more?" - This one is founded on ignorance of the basic economics of supply and demand.  The reason that Christchurch house prices have been reasonably stable, and haven't experienced the massive inflation of other centres such as Auckland is that there is plenty of product on the market, largely a result of a lot of land being rezoned for development following the earthquake.  Supply is not exceeded by demand, and so prices have not escalated to the same degree.  Planners typically think that land has to be rationed, rezoned slowly for development, and only in response to known demand.  The problem with that is by the time there is known demand, there's already typically a shortage, and the result is escalating prices, as we've seen in Auckland.   This is fine for older existing homeowners who see their asset appreciate, but it's not good for the younger generation of new home buyers, nor it is good for the economy overall for more money than necessary to be tied up in an asset bubble.  Plenty of competition is key to housing affordability.
   
   
3. "Our city is big enough as it is, we should be putting a cap on growth"  -  This is similar to the above objection - except raised when clearly there aren't houses to meet demand, and existing residents don't want that demand to be met!  Almost all the comments on the Laurel Hills development in Queenstown are a case in point.  Big enough for whom I ask?  Big enough for some perhaps, who own their house and are happy for their town and city to stay the way it is; not progressing, and locking out the younger generation from joining them.  But clearly not big enough for prospective new residents who want to live in the city - and would be locked out if the older generation had their way.  Why should the older established generation have the right to lock out the younger generation?
   
   
4. "The land is flood-prone / liquefaction prone / etc" -  Behind this often lies no appreciation of the amount of work that has to be done to bare land before it can be developed, to minimize these risks.  All new developments in Christchurch have to be at least TC2 equivalent, which requires ground improvement in a lot of cases. Detailed modelling also has be done to ensure the houses are above all but the rarest of floods.  Low lying areas are typically filled, stormwater drainage installed, and overland flowpaths for flood flows developed.  Regardless of what the land was like prior to development, it's very different post-development, and safer in terms of earthquake and flood risk than most older residential areas.
   
   
5. "The section sizes are too small" - Development costs have increased markedly in the last 20 years, and affordability now requires section sizes to be minimized.  Good results can be obtained on smaller sections when the house and outdoor areas are well designed, and many these days are not wanting a massive backyard to maintain.  The reasons for the this increase in costs are numerous, but at the top of the list is compliance costs rort by the RMA, and the time it typically takes to get permission from Council to start construction (usually many years).  Any developer has to have deep pockets and ready to take on significant risk to bring any new development.  A secondary reason is that subdivisions now need to be built to higher standards.   They are engineered minimise flood and earthquake risk, stormwater is treated before being discharged, power lines are underground rather than overhead, footpaths are wider, etc.  All this comes at a cost.

Finally, there's typically a complete lack of appreciation of how difficult, costly and complex land development is these days.  It's easy to sit on the sidelines and criticise when it's not your responsibility, and not your money at stake.