Dey Turk Er Land!

By Eric Crampton 18/06/2013

I sometimes point out to my Economics & Current Policy Issues class just how little land in New Zealand is taken up by all the things folks like to worry about.

It’s pretty common to hear worries about how we’re going to run out of land. Back of the envelope, I’d reckoned that if Christchurch burned through a Kate Valley every year instead of every 30 years, and even if they decided to put it all on prime dairy land instead of out in the scrub, the cost of buying land for landfill for Christchurch would still be about $2 per person per year. And so exhortations to recycle in order to save our land seem a bit overwrought.**

Luke Malpass points out just how much room we here have:

If someone asked you how much of New Zealand was built upon, what would your guess be? 5% or 10%? More? Less? And to what extent would this affect your views on urban development and expansion?

There is a widespread view that too much of New Zealand is being built upon: along with cows, the main thing we are growing are houses, and that not only are there too many houses but they are also eating into valuable farmland and nature.

There are many reasons for this view, but at a popular level the main reason might be that growth and development happen in areas where people tend to move or travel. People also tend to go where other people are and then complain about there being ‘too many people’. Many folk see new development and extrapolate out to development they cannot see, which often does not exist.

A look at the numbers bears that out: less than 1% of New Zealand is built up, including landfill and highways. Clearly New Zealand is not filling up. Compared to other countries in Europe, New Zealand has very few people and very little land built upon. About 9% of the United Kingdom is built up and 15% of the Netherlands. Even the United States, with more than 300 million people, has only 5% built on land.

Of course, not all of New Zealand can be developed, but the notion that there is cause for concern at this point in time (or in the next few hundred years) is untrue.

There is absolutely no absolute shortage of land in New Zealand. There is a shortage of land on which city councils will allow development, but that’s a regulatory phenomenon, not a fact of the physical world. As land gets bid away from agriculture into housing, the price of agricultural land rises. That makes it more expensive to turn the next bit of farmland into a subdivision and makes infill densification incrementally more cost-effective.

Dey Turk Er… (explained)

** I rather like Steve Landsburg’s suggestion that we not turn these sorts of things into moral crusades.