Competitive Cities: A Decade of Shifting Fortunes

PwC recently released a report called Competitive Cities: A Decade of Shifting Fortunes. This investigated the economic competitiveness of ten New Zealand and Australian cities over the last ten years. They also produced summary documents for each city, including Christchurch. The reports focus on income and living costs, and how to maximise the difference between the two: discretionary income. This doesn’t tell the full story of what we should be trying to achieve in a city, but still provides some really insightful information, particularly in what it reveals about transport in Christchurch. Here’s a brief summary.

In terms of incomes, Christchurch is a real stand out:

“Christchurch incomes have been rising faster than most of New Zealand since the turn of the century. Real income growth has averaged 1.4 per cent since 2000, almost twice as high as Auckland. Median household income in Christchurch was just 87 per cent of Auckland in 2000, today the two cities are almost equal.”

We are the only city in New Zealand where real discretionary incomes are higher now than they were in 2012 (discretionary income is what remains after you deduct taxes, housing and transport costs, and basic expenditure like food).

In terms of affordable housing we’re doing well:

“Christchurch has kept house prices low. The city is unique in this regard, resembling pricing patterns of Brisbane, Perth and Adelaide.”

That’s the good, now onto the bad.

There’s only really one bad thing mentioned about Christchurch – we are doing poorly with our transport. Transport costs have risen higher than they should have, which cancels out half of our income growth.

“Unlike these Australian cities however, transport costs [in Christchurch] have increased significantly.

Transport expenditure has risen significantly. In the three years before the earthquakes, transport expenditure actually declined. Since the earthquakes however, transport expenditure increased 57 percent. The median household now spends $83 more per week on transport than in 2008, equal to approximately half of all real gains in income growth for Christchurch over the period.”

This graph shows that all cities in New Zealand have increased their transport costs (black portion), but none by as much as Christchurch.

The report suggests that this big increase in transport costs is due mainly to two factors;

(1) Christchurch choosing to grow exclusively outwards rather than upwards;

“Population patterns diffused following the earthquakes. Some of the fastest growing areas today are more than 30 minutes from the city centre, such as West Melton (21 per cent per year), Pegasus (15 per cent), Rolleston (10 per cent), Rangiora (3.5 per cent) and Kaiapoi (3 per cent).”

Christchurch statistics (SGA = Supporting Growth Area)

Firstly, this means people have to make longer trips. Secondly, it is more likely that those trips will be made in relatively expensive private vehicles, rather than the relatively inexpensive travel modes of walking, cycling and taking public transport.

(2), Christchurch continues to invest the vast majority of its transport budget in motorways and roads, and relatively little in walking, cycling and public transport.

This has resulted in a dependency on the private car for almost all travel. Our satellite towns of West Melton, Prebbleton and Rolleston have some of the highest car ownership rates in the country with roughly 80% of households owning two or more cars.

The PwC report concludes that fixing its transport problems is Christchurch’s biggest challenge right now. Note that this is the conclusion looking solely from a perspective of trying to maximise discretionary income – it’s not even considering things like climate change, air pollution, public health, inequality, road safety, and central city agglomeration benefits.

“The competitiveness challenge for Christchurch is maintaining strong income growth, while avoiding rising transport costs. Business growth forecasts are highest in the city centre, meaning that continued growth will create a significant transport challenge.

There are a number of options to consider, including greater housing choices with proximity to employment hubs and amenities and a greater balance in investment on the outskirts of the city, between highway infrastructure, public transport and walking and cycling infrastructure.”

The report suggests we need to be looking closely at (1) building up rather than out, and (2) investing more in public transport, walking and cycling.

Do you think these suggestions sound reasonable? How do we go about doing them? Is there anything else you would you do to get our escalating transport costs under control?