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Tuesday, June 28, 2011

Mayor Bob Parker and the availability of sections - not much help?

When the land package was announced, the mayor was quick to pronounce there was sufficient land available within the city for those who wanted to rebuild. If you missed that, here is an excerpt from a report in the Christchurch Star:
“Following the Government’s announcement yesterday on land damage in Christchurch, there has been much comment about whether we have enough property to satisfy people looking to move from the red zone to other parts of the city. And the answer is yes,” Mr Parker says.
He later qualifies the statement by saying these sections are a mixture of what is presently available and those that will become available. The article is here.

Nowhere was there evidence that he understood the feasibility, or otherwise, of his statement. The average value of sections in the Avon Red Zone is tens of thousands of dollars below the cost of new sections. Added to that is the hidden indirect cost for many families of having to buy smaller sections in sterile underdeveloped subdivisions as an inadequate substitute for what has been lost.

To purchase the sections will require many to increase their mortgage, assuming more mortgage monies and suitable paid employment are available. No one wants to increase their personal debt, and employment is a scarce commodity, especially the type that allows a family to support high debt.

The mayor did not mention this and the nearest he came to an economic analysis, if the Press article is anything to go by, is some free market babble:
Sellars told Radio New Zealand the law of supply and demand suggested that property prices could be pushed up in the region but Parker was doubtful that would be the case.
"The market will actually move to deliver outcomes that work for people," he said.
"There's a huge opportunity here and there will be some competition as different elements in the market move to capture that."
What the hell does that mean? Sounds like a parrot quoting from a Readers Digest book on new-right business jargon.

Roger Sutton was more realistic last night when addressing a meeting of residents. From the report in this morning's Press:
A "common theme" from the meetings was that many properties in the red zone, where land cannot be rebuilt on, had a rateable value under $100,000.
"There's very little land on the market for those prices at the moment," Sutton said. "We have to move as quickly as possible to give an assurance that there is actually going to be land and house packages, or at least land packages, to begin with, at prices you feel you can afford."
Potentially more sensible, from a purely monetary point of view, although what "at prices you feel you can afford" means remains to be seen. Also no mention of the potential quality of life in these places. The Press article is here.

Surely the mayor can show more leadership and initiative on this, or has he succumbed to the Peter Principle? If Roger Sutton and CERA have to take the lead on this why bother having a mayor?
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