Planning failures in the Christchurch rebuild

After the Christchurch earthquakes, downtown was locked down by military cordon: hazards posed by buildings were deemed too perilous even for those willing to front the costs of their own SAR teams. The military cordon shrank and finally disappeared but the lockdown continued: a succession of master plans for the downtown prevented anybody from doing anything.

At the same time, the government decided to make downtown be expensive by mandating a green frame: they'd buy up land on the southern and eastern fringe of downtown and take it out of use, though subsequent revisions have the land more sensibly incorporating residential development.

Because nobody could do anything downtown while the planners argued about which master plan would be enacted (the council's, the Christchurch Central Development Unit's), where the master-planned precincts all got to be situated, and whether or not hotels could be rebuilt in a newly designated Arts precinct, development moved out of the planned zone TO Victoria St, Sydenham, Addington: the fringes of downtown, plus industrial parks near the airport.

While the council and CCDU's lock-down approaches to downtown planning were pretty destructive, at least businesses could move to the fringes. The alternative would have been to leave Christchurch: the planners made it impossible to do anything downtown.

The Press reports the Council's not happy. The headline: "Suburban development killing CBD."

The Christchurch City Council wants to stem the haemorrhage of business from the central city by clamping down on commercial growth in the suburbs.

However, it could be another year until the changes takes effect. Central city landowners have welcomed the plan, but say it comes far too late.

The new rules are in the city's draft district plan review, and would ban new office, retail and hospitality buildings in light industrial (business 4) zones.

This would halt construction in most parts of Addington, Lincoln Rd, Blenheim Rd and much of Moorhouse Ave, where new buildings have sprung up since the earthquakes. It would also affect many suburbs and land near the airport.

The plan, open for public feedback now, comes as developers complain of insufficient tenants to start rebuilding in the central city.

Where to start?
Blaming the suburbs for killing downtown, when the planners made it impossible to build anything downtown and figured everybody would be real happy to just hit a pause button for three years after the quakes, is more than a bit rich. If they'd also clamped down on the suburbs at the same time, they'd have thoroughly destroyed any chance of recovery. Fortunately they didn't. I wonder whether the council's hired Diana Moon Glampers as chief planner.
Downtown property owners worried about tenant flight to the suburbs and who helped convince the planners about the need to maintain high property values downtown by constraining supply, have only themselves to blame for that part. That developers now cannot put up properties downtown at prices tenants are willing to pay is a signal that property prices downtown have to fall.

The price of land downtown should be the present discounted value of expected rental flows. If the rent that the market can bear is lower, property prices have to drop.

Now, suppose that you're a developer who's still a bit iffy about Central City. You're sitting on a bit of insurance money and trying to decide whether to build downtown, build in the suburbs, or leave. You'd been holding off in hopes that the planners would start easing up downtown and making things there easier.

The council's just told you that, as of a year from now, you won't have the option to build in the suburbs. Were I in that spot, I'd now be rushing through to get things consented in the suburbs ahead of the ban on new developments.

A council concerned about the pace and nature of the recovery downtown would be implementing measures to make downtown more attractive: easing zoning restrictions, easing building regulations other than those affecting structural strength, reducing development contributions, getting faster consenting, and getting some certainty around the darned anchor projects. But they're constrained by the fact that they don't have much say in the downtown; it's CCDU's baby. Confusopoly reigns.

The latest news on the Christchurch Central Development Unit's website about the Convention Centre was a 2 October update saying that they're seeking an operator for the facility.

Dr Eric Crampton is a senior lecturer in economics at the University of Canterbury. He blogs at Offsetting Behaviour.