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Doug Fairgray IN THE MATTER of the Resource Management Act 1991 AND IN THE MATTER of Proposed Private Plan Change 2 to the Hamilton City Operative District Plan: Te Awa Lakes Private Plan Change STATEMENT OF EVIDENCE OF JAMES DOUGLAS MARSHALL FAIRGRAY FOR THE APPLICANT (ECONOMICS) 29 OCTOBER 2019 1 EXECUTIVE SUMMARY In this statement, I have examined the likely effects of PPC2 from an economic perspective. The proposed change would potentially reduce the land area available for future industrial growth, and enable residential and other business uses on the land. Accordingly, I have considered the implications of PPC2 for industrial capacity and growth in the Hamilton-FPP area, as well as the implications for residential growth, and Hamilton’s urban form. For this, I have updated estimates of demand for industrial land in the Hamilton-FPP area over the next three decades, and considered recent take-up of available land, in order to understand the overall demand-supply context into the long term. I examined the quantum of capacity of the PPC2 land, and its location and attractiveness in relation to other industrial areas. I also modelled potential different outcomes, if the PPC2 land were not available for industrial use, and industrial activity located instead on other industrial zoned land. I find that if the PPC2 land is not available for industrial use, there is considerable vacant capacity elsewhere to accommodate growth, and the absence of the PPC2 land from the mix would not constrain industrial growth in the Hamilton-FPP area. Industrial activity would locate instead within the Te Rapa North – Horotiu node (predominantly) or in other areas including Ruakura. A pattern of industrial activity which did not include the PPC2 land would likely not be less efficient, nor would it result in lesser agglomeration benefits. That is because the pattern of development would be broadly similar, and see industrial growth still occurring in established, substantial areas of activity. In regard to residential development, while the PPC2 site does stand out on the northern edge of Hamilton City, in the medium-long term it will lie well within urban Hamilton. The UEPA provides for substantial residential growth to the east of the PPC2 site. The Hamilton-FPP area has substantial capacity for residential growth, and the PPC2 area would add to this, and its availability would affect the rate of residential development in other locations. The provisions in the proposed change for affordable dwellings and 2 medium density development would specifically contribute to the availability of lower priced housing. The PPC2 site lies within the H2A Corridor, and the recently announced joint initiative for development along the Corridor is expected to result in faster economic and population growth for the Hamilton area. As part of this, the Metro Plan, while in its early stages, indicates more urban expansion north of Hamilton, towards Taupiri. On that basis, the PPC2 land may be expected to lie within urban Hamilton in the short-medium term, rather than the medium-long term. Taking account of these matters, I consider that PPC2 is generally consistent with the growth direction envisaged for the Hamilton-FPP area (and Metro Plan area), from an urban economic perspective. 3 2. QUALIFICATIONS AND EXPERIENCE My full name is James Douglas Marshall Fairgray have a PhD in geography from the University of Auckland, and I am a principal of Market Economics Limited (M.E.), an independent research consultancy. I have 40 years' of professional consulting and project experience, working for public sector and commercial clients. I specialise in policy and strategy analysis, evaluation of outcomes and effects in relation to statutory objectives and purposes, assessment of demand and markets, urban and rural spatial economies, land use and core economic processes. This research has been within my core disciplines of economic geography / spatial economics, and spatial planning. I have applied these specialties in more than 900 studies throughout New Zealand. I have qualified as a commissioner, through the Making Good Decisions programme (2017). I am an Associate Member of the New Zealand Planning Institute (since 2013). I have wide-ranging research experience in policy evaluation and impact assessment from an economic perspective, from a range of economic assessments in the Resource Management Act 1991 (RMA) context, including evaluation of the benefits and costs of policy options, and economic processes and decision-making. During 2014, I was engaged to prepare the core material for the section 32 guide released by the Ministry for the Environment, and I was the presenter on economic matters for the nationwide series of workshops on the section 32 guidance. I have studied regional and district economies throughout New Zealand, and roles of key sectors in the economy. I have undertaken a wide range of studies into business and residential land demand, across many cities and districts throughout New Zealand. My research and evidence has covered regional and urban economies, business sector studies, business location preferences, residential demand and dwelling and location preferences, and urban development matters generally, within the context of the RMA and regional and district plans. 4 Code of Conduct I confirm that I have read the Code of Conduct for Expert Witnesses contained in the Environment Court Practice Note 2014 and to the extent that I am giving expert evidence, I have complied with it in preparing this evidence. I confirm that the issues addressed in this evidence are within my area of expertise and I have not omitted to consider material facts known to me that might alter or detract from the opinions expressed in my evidence. Involvement in the proposed Plan Change In July 2019, I was engaged by Perry Group Ltd (PGL) to undertake an economic assessment of Proposed Plan Change 2 to the Hamilton City District Plan (ODP): Te Awa Lakes (PPC2) which would alter the zoning on land in Te Rapa North from Industrial to a mix of residential and commercial, along with an Adventure Park and visitor accommodation. For my assessment I examined previous work including the National Policy Statement on Urban Development Capacity (NPSUDC) study undertaken by M.E. for the FutureProof Partners (FPP) in 2017. This was a detailed assessment of future long-term demand for vacant industrial land and parcel level vacant land supply across the FPP area. I undertook analysis of the geographic context of the PPC2 land, including the latest growth outlook for business and population, and future land needs for industrial activity and residential activity. I prepared a stage 1 report , titled Te Awa Lakes PPC2 Economic Assessment Stage 1 Report (ME Stage 1 Report) in August 2019. I undertook further evaluation in September- October 2019, including assessment of the recent development patterns on Industrial land in the FPP sub-region. I prepared a second report, titledTe Awa Lakes PPC2 Economic Assessment Stage 2 Report (ME Stage 2 Report) in September 2019. I have drawn from both Reports in preparing this statement. On the 2nd and 3rd of October 2019, I engaged in expert conferencing on this matter with various parties. I refer to the Joint Witness Statement on Economic/Strategic Issues (JWS), which I signed and which captured the outcome of that caucusing. 5 Research relating to the Hamilton-Waikato (Futureproof) area Over the past 30+ years, I have undertaken a range of studies into economic and social matters in the sub-region, for both private and public sector clients. My work has covered Hamilton City, Waikato District Waipa District and the Waikato Region, as well as studies in other districts and centres in other parts of the Region. My research has typically involved analysis of the growth outlook for business and population, tourism, forestry, farming, housing, retail and service demand, and the implications for business and residential land needs, within cities and towns and generally across the economy. During 2018 and 2019, I was involved in the study which M.E. undertook for the FPP in order to comply with the requirements of the NPSUDC. I was not one of the lead authors on the NPSUDC reporting. However, as part of my role as a director of M.E., I maintained overall contact with the projects. I was directly involved with workshops on behalf of FPP with MBIE and MfE. In 2018, I prepared a Discussion Paper for FPP and other council clients in which I evaluated the NPSUDC and identified key areas where it needed to be modified. Some of those recommendations are apparent in the proposed National Policy Statement on Urban Development (NPSUD) which will replace the NPSUDC. 3. SCOPE OF EVIDENCE I have been asked to provide evidence in relation to the likely effects of PPC2 from an economic perspective. This covers the implications of PPC2 for industrial growth in the Hamilton-FPP area, as the proposed change would potentially reduce the land area available for future industrial growth, and implications for residential growth and urban form since the change would increase the area available for residential and commercial activity. I have covered: a) The two Reports which I prepared in relation to PPC2 (above); b) The expert caucusing; c) Comments on the Section 42A Report as they relate to my evidence; d) Comments on submissions; and e) Conclusions. 6 In this statement of evidence I do not repeat the description of the plan change and refer to the summary of the application in the evidence of John Olliver for the Applicant. 4. SUMMARY OF REPORTS Key Issues PPC2 raises several important economic issues, because it would mean changes in land use and growth capacity from what is envisaged in the Hamilton City District Plan, and therefore affecting the overall development path for northern Hamilton, and the wider FPP urban growth context.
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