The shape of New Zealand to come?

Everyone says you can't predict the future. I say up to a point you can. You can look at technology, costs, consumer demand and from there you can make some comfortable assumptions.

Demand:

We know that over 80% of the general housing market wants a detached home as an ultimate ideal, in a suburban setting. And maybe they would even prefer a rural setting if convenience wasn't a problem, which some surveys have shown.

The following image was taken from the New Zealand Herald's 2013 survey, showing common housing preferences in New Zealand.

This should not surprise us. Everyone wants their own space, and most want to have part of their own space as outdoors, to wander into the sun and private garden at will.

We also know that the great majority of people like the ambiance of trees and gardens, and they don't like traffic noise. You only have to be human to see that.

So the question is: Why do we still live amongst traffic noise and look out so often at dominating roads, dingy lawns with usually equally dingy gardens, and a poor extended view, and too often tolerate a lack of sometimes sorely needed privacy?

Obviously we are compromised. Suburbia as we know it is a compromise from an ultimate ideal. We only have what we want, in part, because it costs too much money (and/or time) to live in a more perfected domestic setting.

Modern suburbia is not so much an expression of what we want. It's an expression of what we can afford. It's the best we can do with the tools and the climates we have.

Supply:

Well what we can realistically afford is about to change, and drastically. Google (and now other players) are in a race to deliver driverless car technology to the market. The technology itself is virtually here and it works. First commercial deployment will be presumably between 3 and 6 years from now. [excluding the ULTra system, which is available today and can be used for new-build villages].

You might have heard commentary that driverless cars are over-hyped because they will not be with us for another 20 years or so. May I boldly say these ill-informed commentators are wrong. I have made a 10 minute video to explain my case, as follows. Driverless cars are actually under-hyped, because most people do not realise the far-reaching impact this technology will have which is truly revolutionary.

The consequence of driverless technology, I confidently predict, will be an explosion of resort-style property development. Driverless cars support cheap, discreet, and environmentally benign full-automation electric transport. Imagine replacing most roading with garden and grass, because you just don't need it anymore. That is realistic.

See my post: "Green sprawl"

http://andrewatkin.blogspot.co.nz/2011/12/green-sprawl-why-not.html

So how can I be so arrogant with my crystal ball? Because I know people, and I know that what I'm describing is what most people want, and I know that we can now give it to them at less cost - not more. It's that simple.

Proximity to jobs and services will not be a problem with vast "sprawl" as you might imagine. This is due to the virtues of telecommuting (which is growing); the simple fact that services and jobs follow the people as cities expand (which has given us the modern polycentric city); and the fact that fully-autonomous vehicles can reduce real transport costs by a factor of 10 or more, and can turn the commute into a time to wind down - not up.

Resort-style sprawl would generally be built in 'clumps' as small satellite villages, on the fringes of major cities. This allows for private communities that are master planned. The good thing about this is that the developments can be built in an aesthetically coordinated way, and economically at scale.

Critically, the incentive is there for the developer to make the whole development look and feel good to live in, because they're concerned with the sale-value of every home within the development. You can appreciate that they won't want to build ugly houses that other people have to look at, as it will affect the sale-value of those 'other' homes which is of course their concern.

So where will the growth happen?

It will happen as clustered peri-urban development around our biggest cities.

Agglomeration advantages are clearly real. When you link people together in a city, each individual functions as a resource and opportunity for the others, and agglomeration facilitates the obvious advantages of competition and scale. This is why we generally earn more in big cities, and which is of course a key reason why big cities carry so much demographic gravity.

However, agglomeration advantages that are achieved by higher densities do saturate and can backfire at a point, because higher densities, when excessive, lead to aggravated traffic congestion and other problems such as expensive structures (up costs a lot more to build than out) and high rents, lack of space, and high living stress.

Appreciating this, and appreciating the nature of consumer demand, we will see that the lifestyle optimum will shift more heavily toward lower-density cities that are geographically massive. Future demand is going to be all about lifestyle, I predict.

If you're going to build a new township of resort-style developments, then you might as well do it next to a big affluent city. Why wouldn't you, when you can have the best of both worlds (small and big) and at the same or even less construction cost?

Note: Creating the "small town oasis" in a large metropolitan district is easy. It's simply a matter of structuring access to your development so that it's a place where people go to and not through i.e. don't run a thoroughfare right through the middle of it. Segregating cross-traffic is key.

Which cities will be favoured for growth?

In a world where accessory products are ever easier to come by, I believe that people will become more temperamental about where they live in terms of climate. There will be a strong growth preference for cities that have great climate and topography, and especially if they're coastal.

Queensland, especially Brisbane, should be a favourite for Australia, and expansion from the north of Auckland should be a favourite for New Zealand.

The politics:

Some cities in this world are dedicated to forcing high densities, and resort-style sprawl is the opposite of what they want to achieve. They want to replicate the atmosphere of Hong Kong - not Fiji. New Zealand, especially Auckland, is certainly no exception.

What can I say? If they want to fly in the face of consumer demand and commit economic suicide, then that is their tragic concern. But rather than suppressing sprawl you will find that they merely outsource it. It will go to other cities and states that allow for geographical expansion. Already we are seeing this trend in America, where cities like Houston, Texas have growth rates 5x greater than cities like Los Angeles, the latter of which severely restricts expansion.

And what happens when other countries, maybe developing countries, start to build private communities for internationals; like a 1,000 population "little New Zealand" in the Philippines - a highly economical home away from home, in a beautiful warm climate?

How can you suppress demand, long term, when that demand can too easily vote with its feet?

Conclusion:

So that's what I see as the future for New Zealand. Massive, clustered growth around big, metropolitan cities that can offer 'best of all worlds'. We will see major, green low-density urban expansion integrated with ultra-efficient and silent electric transport.

If you're not offering a fantastic place to live, and affordably, you will struggle to compete because the consumer will have no time for your city. And because this is what we can deliver with our rapidly evolving technology base, it will surely be delivered in time.

So Auckland will get massive, yet in an environmentally positive way, and the small cities will stagnate or decline. I can see a lot of ghost towns developing.

There will still be a place for high-density. Indeed, I think we will see a developing contrast of extremes.

The CBDs of big cities will possibly get more dense because full-automation cars allow for the removal of parking requirements, liberating development space and making walking easier. These CBDs will offer wildly varied recreation. Exciting centers of bright lights, which are so easily accessible, will further reinforce the appeal of the biggest cities.

With the introduction of fully-autonomous cars, it will be a fascinating evolution. But what the future won't be is the forced revolution of forced high-density living that we are dealing with today.

No matter what our modern planning fools wish for today, their childish anti-consumer dreams cannot survive long-term. Because what they're offering is just not what most people want, and people can vote with their feet.