The worst performing business sector in NZ

As an urban planner and designer I’ve had the privilege of working across a wide range of projects, of varying scales across different countries. From this I’ve discovered that as city planners and designers, we don’t really understand the value of what we create, and therefore fail to capture that value for our shareholders (residents).

At the risk of antagonizing some in my profession, I think it’s time planning accepted the mantel of one of the worst performing business sectors in NZ.

Harsh? I don’t think so.

Somewhere over the last 50 years or so planning lost its way. Our District Plans have become tomes that rival the Lord of the Rings trilogy (but without the compelling story line) and we have increasingly relied on tax-and-spend approaches to achieve a level of financial stability (although Auckland’s horrendous infrastructure funding shortfall belies the failing in that).

If I said to you “I have a business idea – you put in all the money to get me started, I’ll drip feed you repayments on your capital costs and I’ll keep all the profits – oh, and just keep asking your investors for constant top ups to recover the difference” – would you accept the offer? Not likely. Yet we ask our ratepayers to do exactly that.

City development is a business. If you strip back land use to its core there is just town and country /rural and urban. The primary drivers that make the biggest substantive change to land value are planning and infrastructure investment, without which value is constrained to productive capacity. Both of these elements require public sector endorsement and active investment.

But investment needs vision – something that gives it an edge or point of difference. The way a city or town looks is one of the central elements to creating a distinct identity or brand – locally, nationally and internationally. Yet many of our cities have had to resort to PR and branding agencies to try and define or salvage some resemblance of identity because the elements that made them unique have been lost or subdued. Therefore, how urban development is shaped is critically important to creating value. For example, Auckland, the “City of Sails” had nowhere to celebrate this (or capture value from) until relatively recently with the development of the Viaduct Harbour and more lately the Wynyard Quarter – both of which are now central to the revitalization of the CBD. At the same time Queenstown is renowned as much for its town centre (waterfront and Steamers Wharf) as it is for its iconic landscape, while the Nelson “vibe” attracts visitor and residents alike.

Fundamentally the crafting of strategic visions and objectives really does matter. They are not just platitudes or slogans – they’re the foundations of a business plan to make urban centres distinct and attractive. While the plans are given effect to through a wide range of mechanisms it’s the shaping of the underlying structural urban form elements that have the greatest and long-lasting impact. So while iconic buildings are important, they’re not critical. For example, Dunedin’s Octagon, Raglan’s main street and Havelock North as an independent village all continue to drive wider city ‘brandscape’. Consequently it’s public realm elements which shape value - where a road goes, what it looks and how it’s used really does matter. Urban design is the toolkit used to help identify and shape the elements and forms which will then help attract both people and capital – add value.

But the ripple effects of good planning and design go much further than that and ultimately impact on the national measure of value add – Gross Domestic Product (GDP). Visions and strategies developed at the local level ultimately impact GDP. For example, encouraging walkability along with increasing public transport utilization (and/or the use of alternate fuel) reduce the demand for imported fuels and therefore affect the balance of trade and GDP – and the public’s decision to embrace such strategies is heavily influenced by the way the city is designed.

City leaders and planners need to adopt the mindset of identifying value through urban development and aggressively seeking to capture a fair share for their investors (residents). The community is an active partner in development whether it likes it or not and it wears the ultimate risk. Many social issues such as under-supply of housing, affordability and inequality are matters which can be addressed locally – alleviating these issues help make cities safer and feel more vibrant. These are matters that need to be led by the public for the public, and I applaud Wellington City’s decision to take a more active role in residential provision for the future of the city – it understands that the well-being of its residents directly impact on its ability to attract new residents and investment.

Yet the public sector can’t do it all, and so urban development requires a partnership with the private sector. The partnership works (versus a regulatory approach) because it reduces risk and optimizes value for all parties. And there are many good examples of successful public-private partnerships both in New Zealand (Auckland’s Britomart) and in Australia (Sydney’s Bangaroo) that have and continue to deliver win-wins for both parties. But the standards being set even higher internationally through the adoption of innovative approaches to planning with the likes of the Emirates Stadium Development in London or Barcelona’s 22 District proving the potential of a value-add approach for urban development at a much larger scale.

So my message to politicians, developers, managers and planners: urban development is a business – big business, and doing it well matters for all of us. Embrace it as a business and make it work for everyone.