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A Wellington-based former RBNZ Chair's suggestion about how to cut Auckland house prices is wrong

Former Reserve Bank Chair, Arthur Grimes, has made a suggestion about how to solve Auckland's housing affordability crisis. The NZ Herald has reported his call for the Government and Auckland Council to enact policies to deliberately 'collapse' the city's house prices by at least 40 per cent and intensify building along Tamaki Drive with Gold Coast-style towers. "I can't understand why that whole [area] from Orakei to St Heliers is not like the Gold Coast", Grimes says. "Basically, in my experience of other cities, you would expect anywhere with those sorts of beaches close to Auckland ... would have line-to-line skyscrapers all the way along there and that's the kind of Auckland I would expect."


No, Grimes, that's a terrible idea. Why? It fails to take any account of Auckland's geography. Thousands of people whose properties sit on the slopes of hills above beaches like St Heliers and Mission Bay would have their views wiped out. The value of those lost views certainly counts as a "cost" when doing any kind of cost-benefit analysis to assess whether building a wall of concrete along Auckland's water-frontage is a good idea. And that cost is immense. Since the devaluation of the affected properties would be billions upon billions of dollars, Grimes' proposal ranks as one of the most bizarre suggestions regarding how to solve Auckland's property affordability woes ever made.


Take Remuera as another example. It is a suburb defined by volcanic ridgelines. Apartment blocks up to around six levels high have already been zoned along much of the Remuera Road ridge. Why? It's actually a very good policy since those apartment buildings don't block others views. In my opinion, that height restriction could be made much higher, but the overall policy of allowing higher buildings on ridge lines in Auckland makes sense based strictly on cost-benefit lines. By the way, the Gold Coast to which Grimes refers is flat so houses just a few lots back from those beaches don't get a view regardless of whether there is a high-rise on the waterfront.


What's more, Grimes seems to think that folks in "Freemans Bay, Parnell, Remuera, Kohimaramara & Ellerslie" are strongly opposed to intensification because "they're the old population". Hang on. Every single one of the older people that I have known who lived in suburbs like Remuera over the many decades when I was growing up, including my own father and Aunty, are now living in apartment buildings or high-density retirement villages. It's actually the young people with children who like the family houses in Epsom that have some land to go with them.


https://www.nzherald.co.nz/business/why-the-gold-coast-is-the-answer-to-our-soaring-house-prices/ZT5CDK3ZHUTF2BZT6IIMBC2KMQ/