Rebuilding Suburbia
Perimeter Blocks and Hyperlocalism Can Help
Perimeter blocks and hyperlocalism can be tools that helps convert old suburbia into new livable neighbourhoods.
A generation or two ago the aspirational vision of a good life included — a detached house in the suburbs, a new car, dad working, mum at home, a garden, a quiet culdesac where the neighbourhood kids could play.
Back then inner-city living was not aspirational, but this housing was affordable and there was a variety of choices catering for different segments of the market. For instance those on low incomes could rent low cost yet functional boarding houses.
Home ownership remains aspirational but the relative value of outer versus inner suburbs has reversed. Inner-city suburbs have become the preferred places to be. Walkable neighbourhoods close to amenities are labeled ‘livable’ and are highly desired. Yet now there is less affordable housing choices — especially for the low income end of the market.
Understanding why there was a switch in demand from car dependent outer suburbs to better connected inner-city areas is a multi-factor jig-saw. A good place to start is by considering the research from the Infrastructure Commission. They found that if Auckland from the 1970s had not down-zoned housing development opportunities and if the city had received investment in alternative transport modes then house prices could have been 69% lower. A full explanation can be read in The High Cost of Unreasonable Planning Restrictions paper.
In New Zealand there are many towns and cities that are having difficulty converting old suburbia designed for sprawling auto dependency into affordable multimodal connected livable neighbourhoods. Creating the right incentive structure is quite the task.
It has been difficult for policy makers to create new models of urban development with more responsive housing supply. Path dependency for auto-centric built environments is very strong and when that model runs out of road — when supply becomes less responsive — New Zealand does not have systems to replace it with. For instance — there is talk about creating affordable 15-minute city neighbourhoods. There definitely would be many environmental benefits as well as inequality and productivity gains for achieving this. But detailing how New Zealand cities could rebuild its suburbs into 15-minute city neighbourhoods is not clear.
Obviously, some sort of upzoning is required — but specifically what changes to the legal planning framework is needed?
In Auckland higher density new neighbourhoods — in Hobsonville for example — there is five times the amount of housing compared to older suburbs. Given this fact and the city has over 500,000 houses — mostly standalone housing on suburban plots of land. This means Auckland potentially has centuries of housing supply from converting old suburbia into new livable neighbourhoods i.e. Auckland should have a superabundance of housing supply.
Data shows New Zealand’s housing construction supply is improving, although it is not particularly affordable yet, and housing supply remains relatively inelastic in times of demand shocks — like the covid pandemic monetary policy stimulus — the greater response was escalating house prices rather than increased building.
Now the housing construction market faces the headwind of tightening monetary policy. Potentially these interest rate hikes and the following recession engineered by the Reserve Bank, like the hikes before the 2008 GFC recession could set back construction supply many years — a decade even.
There are more regulatory planning restrictions and market based impediments (site assembly issues) that affect intensification compared to greenfield sites. But these regulatory restrictions and market impediments should be reduced to improve supply responsiveness, especially given the coming construction headwinds. This would allow a greater proportion of housing supply to be affordably provided in desirable livable neighbourhoods — an important consideration in the equilibrium between transport speed, congestion, multi-modal transport provision, zoning and house prices that the Infrastructure Commission has identified.
It is these challenges that perimeter block development and hyperlocalism could help address.
Perimeter blocks have many advantages.
- They naturally manage shading and privacy externalities by keeping the buildings aligned with each other and the street front so that shadowing and overlooking is minimised. Further, for the street front there is a positive externality of ‘eyes on the street’ as described by the famous urbanist Jane Jacobs.
- They preserve back yard green spaces and are sympathetic to street trees so they can achieve a high degree of city canopy coverage. There is a concern in Christchurch that housing intensification will come at the expense of the city’s tree canopy — the Council is taking steps to impose levies on development that does not provide a minimum level of tree coverage. For this intervention not to reduce housing supply responsiveness the city will need to enable a form of urban development — like perimeter block development — that naturally preserves tree canopy spaces.
- They are highly scalable. They can range from being as simple as a row of two-story terrace houses, to a row of taller and larger townhouses, to even larger mansion buildings that contain many flats (in Montreal these are called tri-plexes or six-plexes). Perimeter block developments can also be readily adapted to mixed-use commercial applications. Some of the most intensive types of urbanism, such as, Barcelona’s super blocks are perimeter block developments. Because perimeter block urbanism is scalable it is suitable for different types of neighbourhoods and for suburbs that are transitioning to higher levels of urban intensity. Perimeter block development even at a relatively low intensity level is a good first step because it allows future incremental housing development.
Hyperlocalism is defined by YIMBYwiki as;
Controlling land-use at a more local level than local government, or shifting land-use powers to a more local level.
In recent years several people from around the world have independently developed related ideas that broadly fit into a concept that is referred to as hyperlocalism.
Reciprocal intensification is an idea that I developed in 2016 and is considered by the international YIMBY movement as a hyperlocal concept. My original idea was that neighbouring landowners could have the right to drop the recession plane and setback planning restrictions between their neighbouring properties if both parties agree.
The purpose of this proposal was to allow suburban neighbourhoods to increase their housing intensification potential in a way that was acceptable to existing landowners.
Reciprocal intensification has been partially legislated for in New Zealand. The Resource Law Amendment Act 2017 amongst other amendments allows a landowner to get their neighbour to sign off on their plans to build out to the boundary, which the council has to approve, regardless of what it says in the planning rulebook.
Unfortunately as the law is written, this doesn’t exactly provide for reciprocal intensification as the neighbour has no guarantee that the original landowner will approve their plans at a later date.
This law should be simplified. For instance by stating — property owners have a right to build a party wall that breaches height to boundary rules on or near the neighbouring property line if the neighbour agrees in writing to the buildings plan. Further, if a party wall already exists, then a property owner can automatically build a party wall of the same or smaller dimensions next to the existing party wall.
So far reciprocal intensification in New Zealand has not had much impact on house building. But if the law was further simplified as discussed above and if transaction costs were kept to minimum — for instance by preventing local government charging a fee for neighbours breaching setback and height to boundary rules. And if the concept was publicly promoted, it could provide a popular pathway to building more housing in existing suburbs.
Originally I thought that reciprocal intensification alone could set New Zealand on a path to building perimeter block developments. That like in the below picture of a French perimeter block, street front adjoining properties could incrementally add height and bulk in response to demand pressures. I now think that New Zealand can have incremental perimeter block development, but it will take a few more interventions, such as the proposal by the Coalition for More Homes group and a redefinition of what residential living entails — both of which will be discussed later in this report in the Other interventions to enable perimeter block development section .
Currently there are difficulties that prevent this responsive form of intensification happening. An examination of the underlying principles of intensification combined with New Zealand’s street and plot configurations exposes some intensification difficulties and some opportunities for improvement.
Externality loss versus developmental gain
Upzoning is not just about removing unreasonable planning restrictions as discussed in this paper. It is also about creating responsive supply rules even when the factor in question is reasonable in some situations. For instance — if a landowner bought a house on a suburban plot of land on the premise they were protected from their neighbour constructing a multi-floor building right up to their boundary.
Upzoning mechanisms need to manage genuine externality (nuisance) costs, such as, losing privacy or sunlight. Reasonable planning restrictions can be the most politically challenging to remove. But if no remedy is agreed upon and the planning restriction remains then this can be a major impediment for creating responsive housing supply.
In ‘spacious’ new world cities like Vancouver, Seattle, Auckland and Christchurch it may be unacceptable to do a Japan and largely ignore these externality costs with a nationwide planning system that gives a blanket right to build. The cultural norm in many parts of the new world, which has been converted to legal principle, is that landowners have a right to be protected from their neighbours building such ‘nuisances’. Also new world cities have very different streetscapes as illustrated below so it is not given that a blanket up-zoning would have the same effect in New Zealand as it does in say Japan.
How to resolve these issues? My big insight came when I realised that for land owners externality loss could be balanced against developmental gain. Being able to build more floor area and more dwellings on a site can add value to the property. That the ‘right-to-build’ with less red tape restrictions is an “enhancement of property rights” as National party MP Chris Bishop recently defended.
Creating new right-to-build legal pathways is the basis of London Yimby’s Better Streets campaign. They believe many London streets have plenty of room for more housing and would be more attractive, with the right designs. That just getting permission to build can increase the value of existing properties (note — it actually increases the land value) — whilst increasing the potential built floor space and dwelling numbers by an even greater factor thereby potentially reducing the per dwelling price for new dwellings.
In New Zealand landowners on a case by case basis may be interested in negotiating with their neighbours to drop some externality protections in exchange for being able to build more height and bulk. Note the externality protections that could be negotiated are those that do not spillover to the wider community. Boundary rules like recession planes and setback allowances are good examples of externality effects that do not spillover.
A complication is the gains from two neighbours cooperating using reciprocal intensification may be less than the development gains that a larger plot assembly could achieve. Schemes that assemble more plots in many situations could be the better option for providing greater development gains with fewer externality costs.
Whether the best development opportunity is provided by an individual plot intensifying (typically infilling or sausage flats in New Zealand), two or more neighbours cooperating to build up to a common party wall(s), or many neighbours — both side to side and front to back — working together (to create new laneways for example), very much depends on street layout and the dimensions of the plots of land.
The problem of cadastral form — the dimensions of city blocks and their internal plot structure
New Zealand’s typical suburban cadastral form creates ‘facts on the ground’ and a path dependency which is hard to escape. Low density autocentric culdesac and loop street suburbs can be very hard to reconfigure to become desirable livable neighbourhoods.
In my New Zealand city — Christchurch, pre WW2 urban blocks tend to be something like 80–90m wide and 150m or more long i.e. the oblong grid.
In more recent decades the residential blocks are even larger and culdesac or loop shape in form.
This street form is not as ‘porous’ for walkers and cyclists as it could be.
Research has shown that to maximise commercial and public interactions there should be more than 100 intersections per square kilometer or one intersection about every 100m. Also for public transport to maximise its catchment area it needs this sort of street network configuration.
Ideally larger New Zealand residential blocks should be broken up with more through-lanes. Reciprocal intensification cannot provide these lanes but larger hyperlocal plot assembly schemes can provide this public benefit. Older cities like Tokyo, Amsterdam and London are fortunate in already having walkable street configurations.
In New Zealand individual property titles tend to be 13–20 m wide at the street front and 30–50m long, although newer plot sizes are getting smaller.
These property title dimensions mean the housing development opportunity tends to be down the length of the section using a lot of space for driveways — rather than across the street front. Reciprocal intensification by itself does not change this New Zealand pattern of intensification — although that was my intent.
It is possible that two or three side-by-side neighbours could use the hyperlocal concept to cooperate with their backdoor neighbours to create a through laneway development, which would minimise space wasted on driveways and increase space available for green areas and housing. This is discussed in an article titled — Streetscaped laneways would be better than infill housing ‘sausage flats’. Local or central government should facilitate this process by offering to buy these laneways for the public good.
Other interventions to enable perimeter block development
The Coalition for More Homes group proposed that the new MDRS intensification rules should have enabled perimeter block housing rather than enabling more bulkier sausage flats. They outlined this could be achieved by only applying the more permissive rules for the first 20m of a property from the street front (or from the front setback line).
The Coalition for More Homes proposal compared to the infilling and sausage flat type of intensification could also be an incentive for neighbours to cooperate to create new public laneways in large suburban blocks because the new public right-of-way would have more buildable plots that are within 20m of a street front (the new through-lane).
In the long-run this approach might be the more responsive supply option because it supplies new public right-of-ways as well as new housing — also perimeter block urbanism is more scalable compared to sausage flat housing.
If legislation like the Medium Density Residential Standards (MDRS) was altered to encourage perimeter block development that are up to three floors tall and six dwellings per plot like the Coalition for More Homes have requested it could enable parts of New Zealand to develop a Montreal style of urbanism. Montreal compared to other large Canadian cities has more affordable housing. It demonstrates that affordability and good environment outcomes are compatible (btw Tokyo is another good example of this desirable combination).
For the case of using perimeter block development and hyperlocalism to rebuild suburbia— being able to build more dwellings ‘by right’ will increase the potential developmental gain that can offset any externality losses. This value increase will be a significant driver for neighbouring landowners choosing this development option. And this is why increasing the right-to-build from three — which the MDRS currently allows — to say six would be an important aspect of perimeter block and hyperlocalism land-use reforms.
A more elegant solution though would be for policy makers to shift planning rules from defining residential planning as x number of dwellings per plot or given land area — like the three story three dwelling Medium Density Residential Standards legislation does — to only defining the built envelope. Preferably an envelope that prioritises the retention of the backyard. Yet is inclusive in its definition of what residential living involves — to include all residential typologies that fit within the envelope and a wide range of mixed uses that enhances residential living — so local shops. services, accommodation providers etc. This is essentially the approach Germany takes to zoning.
A more advanced consideration is that conceptually hyperlocalism has similar underlying principles to land readjustment or land pooling which is a common infrastructure funding method overseas in places like Japan. In the land readjustment case, neighbouring landowners cooperate to reconfigure their land holdings to make space for the new infrastructure, they design the new public right-of-ways, the public spaces and private plot configurations to maximise the amenity and land value created, they then reallocate the land back to the original land owners in proportion to the amount contributed — with a share of the land being sold to fund infrastructure build costs. Like with hyperlocalism it is the increase in land value that incentivises land owners to cooperate with the land readjustment scheme. New Zealand would benefit from adopting land readjustment as another land-use reform that would work well in greenfield and brownfield (industrial renewal areas) locations.
It is the responsibility of local and central government politicians and their respective public services for ensuring that in response to public amenities like parks, schools, and multi modal transport choices there are systems in place — that as many as possible; houses are built, businesses start, customers are served and employment created. That allowing more people to connect to more city amenities like places of employment, commercial opportunities, educational services, healthcare facilities and social activities is an important duty.
Cities like Tokyo show re-engineering a city is a complex jigsaw involving many different factors, as described in — Japanese urbanism and its application to the Anglo-World.
For New Zealand I believe perimeter block development and hyperlocalism could be important pieces of New Zealand’s housing and urbanisation reforms.
Note this paper was majorly edited in November 2022 with new material from the Infrastructure Commission and the discussion around the new intensification standards.
