So, why does the property industry hate the compact city?

Auckland-Housing

The property industry hates Auckland’s compact city dream. The loathing is substantial.

There are a few players who like the compact city idea – but those people have more to gain from restricted supply that boosts the value and demand for their investments.

And there are the gravy train troughers who sit on committees and feel important and cherished. They like the idea too. But they are mostly consultants.

The rest of the property industry thinks the compact city sucks. It’s like dog poo on their shoes.

Partly the loathing is universally influenced by the seething hatred that the property industry has for planners and the processing hoards of hairy-foot hobbits in the Council organisation. These meddlers and haters of the world cause mayhem and angst 24/7 for the property industry with slow processing, crap decisions and constant niggle.

But the compact city is the incongruous icing on the cake. ?

What the property industry wants is momentum. It wants growth and volume. It also wants to reach as wide an audience of buyers as it can.

What the property industry doesn’t want is to be held back, pushed into ever higher price brackets and forced to capitalise into vastly more expensive intensive projects.

The Productivity Commission a few years ago noted that 80% of all housing in New Zealand is delivered by sole traders – the local builder with his small gang of staff. They lack the capital to build intensive housing. And they lack the appetite for the risk associated with it.

The industry is mostly set up to deliver standalone houses, not a compact city.

And that industry needs land.

Imagine being in a business where you struggle daily – not to sell product but to find product to sell. The biggest issue is land. And there isn’t any because every parcel of land has a building or house on it.

The compact city has stuffed things royally for the property industry. If it weren’t for immigration the industry in Auckland would be on its knees.

There isn’t any land to build on. And it’s so expensive to develop housing that the buying market is shrinking every day. The very thing the property industry wants – volume – is being choked by a Council who want to rebuild a city that can’t and won’t be rebuilt.

And so the property peeps hate it. Intensification is a cup of cold sick.

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