Kōtuitui

New Zealand Journal of Social Sciences Online

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A rising tide lifts all boats? A preliminary investigation into the impact of rising New Zealand coastal property prices on small communities

Christine Cheyne

Social Policy and Social Work
Massey University
Private Bag 11222
Palmerston North 4442, New Zealand

Claire Freeman

Planning
University of Otago
PO Box 56
Dunedin 9054, New Zealand

Abstract Since the early 2000s, property values have escalated in many coastal areas in New Zealand. While the mainstream media see the increasing property values as a positive economic development, Australian research suggests that migration to coastal settlements and increasing property values in those settlements is a more complex phenomenon and warrants close attention. The Australian research reveals significant social and cultural shifts occurring as well as the more widely discussed ecological impacts. In order to find out more about the social impacts of recent rapid property price increases on previously slow growing and comparatively inexpensive settlements, exploratory research involving interviews with key informants in six small coastal settlements was carried out in 2004. The study demonstrates the importance of micro-level research to complement macro-level analysis of development patterns and contributes to the emergent international literature on nonmetropolitan development trends since the 1990s. It highlights the need for more co-ordinated and integrated development of the small settlements based on a comprehensive assessment of current and future social, economic, and environmental impacts of development.

Keywords amenity communities; social impact; coastal development management; counter-urbanisation; nonmetropolitan migration

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INTRODUCTION

Conspicuous consumption of the coast is not a new phenomenon. However, the heightened intensity of development and its creep into hitherto largely overlooked parts of the coastline in New Zealand has generated a range of new tensions and issues. Unprecedented and extremely rapid change in the New Zealand property market, which continued throughout 2003 and 2004, has had particular consequences for a number of nonmetropolitan settlements in New Zealand that sustained a dramatic increase in property values. Although high prices for coastal properties have characterised certain coastal areas of New Zealand (such as the coast north of Auckland, Nelson, and the Marlborough Sounds) because of climate and high natural amenity, this had not been the case in all coastal communities. In many places, property prices had not increased markedly over recent decades because these places were not widely perceived as being of high amenity. Factors such as climate, lack of conventional aesthetic features (such as native bush, heritage, or beautiful landscape), and isolation had meant that several small settlements along the lower east coast of New Zealand’s South Island and the lower west coast of the North Island had traditionally experienced only small scale and slow-paced development. These areas also typically have had significant Maori populations and also a higher proportion of low-income households.

Since 2002, development in these locations, and in many similar small coastal settlements, has expanded considerably and property values have increased in tandem as a result of a buoyant economy and relatively low interest rates. Together with changing employment patterns (as a result of improved communication technologies and transportation), which are leading to increased numbers of “footloose” (i.e., mobile) employees, these trends in the residential property market have profound implications for nonmetropolitan settlements that are not in traditional high amenity settings.

The rapid increase in values and activity in the coastal property market has generally been treated in the mainstream media as a positive economic development for these areas and in particular for those who own property. However, Australian research by Burnley & Murphy (2004) suggests that migration to coastal settlements and increasing property values in those settlements—what they refer to as the “sea-change” phenomenon—is more complex (see also Murphy 2002; Salt 2003).

The pressures being experienced in smaller coastal settlements since 2000 have some parallels with the pressures experienced in rural areas that led the Ministry for the Environment to carry out a project on managing rural amenity conflicts (Ministry for the Environment 2001). However, there are issues that are unique to coastal settlements, especially those outside of, but within reasonably close proximity to, larger urban areas.

As well as interrogating the widely held assumption that property value increases are uniformly desirable and beneficial, we argue that policy and research must address the particular impacts on smaller communities. While there is recognition of the need to manage development in the fastest growing metropolitan areas, there is very little acknowledgment of potential deleterious consequences of growth in coastal areas of other less populated districts. Instead, local authorities that oversee development at the district level are typically enthusiastic about development. Pressures on the environment and social cohesion from population growth, traffic growth, urban sprawl, and related processes are generally overlooked or underestimated. In order to gain insights into the recent changes in small coastal settlements, we first briefly review the literature on nonmetropolitan migration and counterurbanisation and related literature on second homes.

NONMETROPOLITAN MIGRATION: EXISTING RESEARCH

Theoretical and empirical work on nonmetropolitan migration and counterurbanisation, and more recent body of literature of second home ownership and recreational housing, can offer insights into the emergent changes in and pressures on small coastal settlements. Whereas the nonmetropolitan migration/counterurbanisation literature is generally based on the experience of other developed countries, and in particular the United States, where urban agglomerations are much larger than in New Zealand, the second-home literature encompasses something that is a long-standing New Zealand phenomenon (Keen & Hall 2004).

Writing in the early 1950s, Ullman (1954: 119) noted that:

... [f]or the first time in the world’s history pleasant living conditions—amenities—instead of more narrowly defined economic advantages are becoming the sparks that generate significant population increase, particularly in the United States.

Climate, landscapes, and recreational opportunities were particular amenities that generated nonmetropolitan migration. Ullman acknowledged, however, that demographic, technological, and economic changes such as the growth of early, paid retirement, increased mobility, and a shift away from primary and secondary industries towards service sector employment made this possible. A wave of studies dating from the 1970s was prompted by a turnaround in the population decline of nonmetropolitan areas in the United States (Svart 1976; Williams & Sofranko 1979; Long & DeAre 1988). A similar turnaround occurred in other countries (Smailes & Hugo 1985; Hugo 1989; Boyle et al. 1998; Dahms & McComb 1999; Curry et al. 2001; National Sea Change Taskforce 2005). In the 1990s, nonmetropolitan migration regained momentum (Frey & Speare 1992; Beale & Johnson 1994; Fuguitt & Beale 1996; Long & Nucci 1998; Beyers & Nelson 2000) following an economic downturn in the 1980s.

Frey (1989) identified three sets of explanations for counterurbanisation: period explanations, the regional restructuring perspective, and the deconcentration perspective. Period explanations attribute 1970s counterurbanisation to economic factors in that decade arising, in particular, from the oil price shocks. The regional restructuring perspective highlights the changes in the international economy since the 1970s leading to a decline in labour-intensive manufacturing production and growth in the service industries. The deconcentration perspective similarly emphasises changes in the industrial structures of developed economies and the impacts of new technology on removing constraints for people to pursue their preferences for lower density living environments. This is resulting in the emergence in the United Kingdom of what Halfacree (1997) describes as the “postproductivist countryside”. Research on counterurbanisation thus highlights that it is not just job led but is stimulated by a widespread preference for living in rural environments. As transportation infrastructure has improved, many more people have been able to realise this preference, although income and security of employment are also critical factors (Champion 1989; Mitchell 2004).

Burnley & Murphy’s (2004) research on population movement to coastal (and some rural) areas in Australia—described as the “sea-change” phenomenon—note that there has been a city-to-country movement for at least the last 30 years by what is traditionally referred to “Alternative lifestylers”. However, contemporary sea-changers are a different kind of alternative lifestyler (alternative with a little “a”). They are not seeking self-sufficiency as, they argue, do Alternative lifestylers (who may nevertheless also have been dependent on income support). Many are likely to be in self-employment based on teleworking but they may also continue in employment in the metropolitan areas (albeit with some teleworking).

In many countries, growth in nonmetropolitan areas since the 1990s has outstripped metropolitan growth and/or is greater than average growth (Beale & Johnson 1994; Beyers & Nelson 2000). Where coastal locations are the focus of nonmetropolitan growth, there are particular pressures and particular impacts that extend beyond the physical/environmental/ecological effects that can often be more readily measured and addressed.¹ Burnley & Murphy (2004) described the population migration to coastal and other small communities in Australia as a human tidal wave for which those small communities were largely unprepared. They estimate that over one million people have migrated from metropolitan to nonmetropolitan Australia during the past 35 years. These movements have occurred in all states and most have been to smaller coastal communities. Their research highlights the need to integrate demographic, economic, and sociological perspectives to address the scale of this movement, its variation over time and place, and the types of people involved.

The jury is still out on whether there is a long-term trend towards counterurbanisation. Recent and potentially continuing increases in transport costs as a result of oil price increases may offset the benefits of technological improvements but at the same time economic growth and increased incomes for some sectors of the population (albeit not per capita income growth) may not diminish the “lure of the countryside/coast”. Overseas research on nonmetropolitan migration reveals that it is highly selective in terms of socio-economic status, ethnicity, and, historically (though this may be changing), age (Boyle et al. 1998). The literature on second homes highlights their contribution to what Hall & Müller (2004) refer to as “elite landscapes”. Second homes are associated with new patterns of production and consumption associated with quality of life/amenity-led nonmetropolitan migration.

To identify the social implications of recent changes in the property market on six coastal settlements, exploratory research was undertaken in 2004. The literature on nonmetropolitan migration suggests that changes taking place in small coastal settlements are being driven in large part by amenity-led migration from larger urban areas. Transport and telecommunications linkages increasingly make it possible and desirable for high-income city dwellers to realise their aspirations for additional or alternative residence in coastal and other high amenity locations (Beyers & Nelson 2000; Winstanley et al. 2003; Burnley & Murphy 2004). Research in other countries where there has been significant growth of nonmetropolitan regions, whether as a result of quality of life migration or labour market changes (e.g., expansion of service industries and displacement of agriculture and horticulture), highlight the social and planning challenges (see, e.g., Beyers & Nelson 2000).

The research presented here is an exploratory study focusing on a small number of settlements with a view to extending the research to a larger number of settlements at a later stage. The paper begins with an outline of the scope of the research. The six settlements that were the focus of the fieldwork are then described. Data showing changes in property values are presented. Drawing on interview data, we then discuss the impacts on the communities of these changes in property values. Finally, we consider the evidence from the case study research in light of the literature on nonmetropolitan migration and consider the effectiveness of the current policy and planning framework for ensuring that changes in property values enhance rather than diminish social, economic, environmental, and cultural wellbeing. In particular, we highlight the need for urban policy and planning frameworks to recognise the interconnectedness of urban and non-urban settlements.

SCOPE OF THE EXPLORATORY RESEARCH

To investigate the impact of increasing property prices on the people living in small coastal settlements, research was designed with the following objectives:

1. to establish the current social and economic character of the case study settlements;
2. to establish the extent of rising property prices in the case study settlements;
3. to explore the current and potential social impacts of rising property values and the planning implications;
4. to incorporate the views of Maori;
5. to identify strategies and actions that may be needed to mitigate negative social impacts.

Information was gathered through exploratory case study research encompassing six settlements. The settlements were selected with reference to the following criteria:

1. recent experience of rapid property price rises;
2. availability of social, economic, and property data for the settlement;²
3. geographically discrete communities with their own social and economic identity;³
4. two different study areas (the lower North Island west coast and lower South Island east coast) that have not historically been renowned as high amenity coastal settlements.

The following settlements were selected as case studies (Fig. 1):

North Island	South Island
Waitarere Beach	Moeraki
Foxton Beach	Karitane
Himatangi Beach	Kaka Point

Fig. 1 A map showing the location of the case study settlements.

Interviews (primarily face-to-face but occasionally by telephone) were conducted during 2004 for each case study to obtain the perspectives of community members and professionals who had relevant knowledge about property market developments and/or impacts in each settlement. The interview schedule is attached as Appendix 1. Those interviewed included:

• residents who undertook a community role that gave them some additional awareness of the changing nature of the community;
• local councillors;
• Maori;
• realtors whose sales areas incorporated the settlements;
• local authority staff (primarily planners and community development advisors).

The spread of interview respondents was similar across the settlements. Section IV of the full report of the research contains details of the interview data (Freeman et al. 2005). The logic underpinning the selection of six settlements was to have a reasonable sample size that encompassed similar types of both North Island and South Island coastline (in terms of proximity to larger urban areas and amenity values). We did not seek to undertake systematic comparisons of the different settlements.

Official data sources deployed included New Zealand’s official index of house prices (maintained by Quotable Value New Zealand) and 2001 Census statistics on population and households. Information about property market developments gathered from key informants was triangulated by reference to media reports and other website material (in particular, the district plans, long-term council community plans, and other relevant policy/strategy documents of relevant territorial authorities and regional councils).

Since 2004, the impacts of escalating values of property in high amenity areas have increasingly been the focus of magazine and newspaper articles (see, e.g., Smith 2004; Ansley 2005; Watkin 2005). Typically, media comment is enthusiastic about the financial gains for long-time property owners, lifestyle enhancements for city dwellers, and opportunities for investors. There is some concern about the demise of the “traditional” bach/crib⁴ but this tends to be viewed as an inevitable consequence of “progress”. Land and housing are viewed primarily in economic terms and the social consequences of the changes remain largely unexplored.⁵ The research attempted to provide qualitative data on social impacts at a more micro level to accompany existing data on property values and sales, population, and households.

THE COASTAL SETTLEMENTS

As indicated at the beginning of the previous section, the six settlements were chosen because they are all discrete geographical communities. All are located adjacent to the coast with beaches used by locals and visitors. Fishing, either commercial and/or recreational, is important in the settlements. Residents observed that until recently population numbers had been static or in some cases declining. They also noted that many residents have had long associations with the communities either though residence or through family connections relating to the family bach/crib. The coastal areas in both the North and South Island have a long history of Maori settlement and include land and places of particular significance to Maori.

Socio-economic status

Household incomes are low in all six settlements, being below the New Zealand median of $18,500 per annum. Median household income is particularly low in Foxton Beach ($12,300).⁶ Table 1 provides a summary of data about median incomes. Interviewees indicated that the newcomers to the settlements include a number of professionals buying second homes or commuting. All respondents perceived that since 2002 there had been growth in the number of high-income property owners, both permanent residents and those who were holiday homeowners. It is possible that the communities are becoming more polarised in economic terms. Many respondents expressed a concern that a number of low-income households are now unable to afford to purchase or rent housing in the community because of the increased prices. For example, a South Island District Council inspector made the following remark about the increased property values at Kaka Point south of Dunedin:

There are people now who are saying that they can’t afford to live there. It was an area of cheap housing. A different sort of person is living there, definitely.

A local elected representative noted the impact on rents at Karitane:

Low-income folk would be struggling, not only to buy a property out there, but also to pay the rent. The rents now are pretty similar to town. You’d have to pay for a three-bedroom house, probably $180–190 a week. Four or five bedroom place, a bigger house, not many of them around out there, but if they were available for rent, I would imagine you’d be paying $220–230. So, there’s really not a great deal of difference and for someone on a low income, they may feel that, ‘hell, I’m better off in town’. Once again, you’ve got services and other support networks in town that aren’t available out there. So, that’s probably the downside.

A Horowhenua District Council officer commented about changes at Waitarere Beach:

I think it changes choice of who lives where. Some of our beach settlements [are] places where a lot of our community have gone to live because the rental is very, very cheap. There’s a huge price on beachfront houses. Kent Ave., which works into that new part, those houses that have built out there are just way over the average income of that district. So, what has been happening in terms of the local is a lot of beachfront has been sold in the last couple of years … for almost 100% markup.

All settlements are characterised by small household sizes with smaller numbers of households with children compared to the New Zealand average. Several of the settlements have a high proportion of children being in single parent families, notably Foxton Beach, Himatangi Beach, and Karitane where nearly half of households with children are single-parent households. Some residents, especially those in the North Island, reported that the property price rise was enabling elderly residents to sell up and move out and that houses in the new subdivisions were attracting more families. All the communities are below the national average in terms of families with children. Whilst there are new subdivisions in the north, interviewees considered that families with children would find it very difficult to afford to purchase housing in the coastal settlements.

Property market trends in the case study coastal settlements

A comparison of house price movements with the Consumer Price Index over 20 years before the year when the research was carried out (Fig. 2) shows that while house price movements closely followed inflation in the 1980s, the recent periods of sustained house price increases have occurred while inflation has been controlled at less than 3% per annum.

 Fig. 2 Median house prices and the CPI (annual percent change). Source: Reserve Bank of New Zealand

  The major factors affecting the New Zealand residential property market between 1994 and 2004 include population growth (driven by migration), lower interest rates, and greater investment in real estate by foreigners and expatriate New Zealanders. There have also been two general economic recoveries from 1994 to 1996 and 2000 to 2004. Unlike the residential upturn in the mid 1990s, which affected mainly the upper North Island, the recent upswing has been nationwide but has not occurred uniformly across the whole country.

Factors that have reinforced demand for new dwellings in recent years include internal migration of New Zealanders into lifestyle regions (especially those with warmer/sunnier climates and/or attractive landscapes) and immigration, which was strong in the early 2000s. The relatively low New Zealand dollar up until 2002 made property prices in New Zealand attractive to overseas purchasers and fuelled the demand for lakeside and coastal properties.

Alan Bollard, Governor of the Reserve Bank of New Zealand, has suggested that the investment motive also seems to be a factor driving demand, with housing seen as a preferred alternative to other forms of investment following losses that some investors incurred in shares and managed funds earlier in the decade (Bollard 2003). An increasing number or purchases appear to have been made by those wishing to let the house on the rental market with the expectation of a capital gain.

North Island coastal settlements (Foxton Beach, Himatangi Beach, and Waitarere Beach)

Data on sale prices of all houses sold at Foxton Beach, Himatangi Beach, and Waitarere Beach through agencies that are members of the Real Estate Institute of New Zealand (REINZ) were obtained from the institute for the period of January 1999 to December 2003. The median sales price for each year and the percentage change in median price from year to year as well the change in price over the 5-year period were calculated from the data supplied.

Prices in each of the North Island coastal settlements rose considerably more over the 5-year period, in percentage terms, than in Levin township or New Zealand as a whole. Property in close proximity to the beachfront has experienced the highest increase in property price rises, although all properties have experienced price rises. Table 2 demonstrates the difference in the scale of increase in property price rises between Levin township and the nearby beach settlements.

South Island coastal settlements (Karitane, Kaka Point, and Moeraki)

Data were also obtained from the REINZ on residential property sales at Karitane, Kaka Point, and Moeraki for the period of January 1999 to December 2003. The median sales price for each year and the percentage change in median price from year to year as well the change in price over the 5-year period were calculated from the data supplied. The information is summarised in Table 3, together with figures for the East Otago and South Otago areas and New Zealand as a whole obtained from the REINZ website.

Prices in Kaka Point rose considerably more, in percentage terms, than in South Otago or New Zealand as a whole and prices in Karitane also rose considerably more than both East Otago and New Zealand.

Social impacts of property market changes on case study settlements

There is a range of impacts on small communities from changes in the property market. Those interviewed recognised the environmental and economic impacts that are often more easily observed or measured than social impacts. However, social impacts were also acknowledged including:

• decreasing housing affordability;
• changing social character of community (including such things as shifts in the type of households, and income and ethnicity of residents);
• changing ratio of permanent and temporary/holiday home residents;
• loss and/or growth of services (such as schools, shops, garage, community hall);
• growing or declining population and changes to the age distribution;
• loss of community history as long-term residents leave;
• changing and often conflicting expectations of long-term and new residents.

All the settlements were experiencing change after long periods of relative stability. The biggest change over time had been the change from a self-contained community reliant on local employment, to communities where employment was often in a nearby urban centre, such as Dunedin or Palmerston North. The settlements in the past had been characterised as cheap places to live with low rents and property prices.

The property price rise appears to have surprised long-term residents. Whilst most were pleased that their properties had risen in value, there was concern that this was reducing affordability for many, and that large rate rises may occur in the near future as happened in other places (see, e.g., Thompson 2005). A particular issue for North Island settlements, especially Foxton Beach, was the effect of rises on leasehold land, which made it difficult for many on leasehold land to freehold their property. Real estate agents interviewed reported they were finding properties of all types easy to market and some expressed concern that there were not enough properties for sale to meet market demand. During the course of our research, a large subdivision was proposed (and subsequently approved) for Himatangi Beach and also a further one for Foxton Beach (Dykes 2005; Lougher 2005; Matthews 2005).⁷

Other changes include replacing baches/cribs with larger homes, sometimes involving the removal of the original and/or the building of substantial extensions. A difference is emerging in the style of homes, with smaller, traditional type baches/cribs being replaced by new large and often architecturally designed homes. Some respondents reported that there are now more permanent homes while others reported that there are more holiday homes.⁸ The extent to which dwellings are permanently occupied has implications for local services and other aspects such as safety.

Observation and interviews reveal home extensions and improvements to be very prevalent. For example, a resident commented about Karitane:

I also think there’s a pride of place thing happening. ... You just see people sort of putting an extension on the garage and maybe thinking about doing something else. ... Maybe, it’s two things—pride of place and that money they do put into a place may actually be worthwhile doing if they are thinking about selling or something. So we’ve had more electrical trucks around, more plumbing trucks around ... more than ever.

At Foxton Beach and Waitarere Beach, major subdivisions characterised by large houses with urban style surroundings (i.e., fences, pavements, and driveways), not so common previously in the beach settlements, are being developed.

Vendors included residents (mainly retirees, whose properties had, in the past, been too low in value to sell), who decided to sell and move to town, as well as some long-term bach/crib owners who took the opportunity to capitalise on the newly enhanced value of their property. The rise in property prices has thus been positive for a number of sellers as it has enabled people formerly “trapped” in low value homes to sell and move to town where they may have access to better services, especially health services and schools. Increased choice for homeowners was seen as beneficial for sellers in many respects but also had wider consequences for the community, as noted by a Waitarere Beach Ratepayers Association member:

Anyone that’s renting is obviously working. As far as the elderly people go, there’s a retirement village out here; it’s always been a retirement village out here and there’s still a big number of retirees out here. But, a lot of them now are being offered such good money for their houses that they’re selling and then moving possibly closer to their families around the country. So, that’s a shame to see that happening.

A Dunedin City Council policy planner noted in relation to Karitane:

Generally, for coastal communities like these, the effect is for those people—particularly those who have been there a long time, the elderly maybe have settled there and want the sea out there and spend their days in those communities—it’s a struggle for them because the rates have increased. So, if actually the value of the property is not a significant issue for them, it might be for people who might be inheriting it. For them, the rates are the big issue.

A Palmerston North real estate agent said of Himatangi Beach:

I’m finding that a lot of ours [local home owners] are now leaving and the reason is that a lot of them are getting to an age where they need to be closer to medical services. The market has finally moved. Three years ago, if they sold a bach for $35,000, they couldn’t afford to buy one in Palmerston or Levin or wherever they wanted to move to. So, now that the market has lifted, those older people are saying, well hey here’s our chance to get out and we can go to another town and buy something without losing any money.

Respondents indicated that the buyers tend to be professionals from nearby cities (Dunedin in the South Island, Wellington and Palmerston North in the North Island), and sometimes further afield. A local elected member said of Karitane:

Interestingly enough, some of the folk that are paying top money and investing in these properties are not living there permanently. They’re only still using them as baches or cribs. ... Some people who are coming are retired folk who see the Waikouaiti/Karitane area as a nice place to retire to and they’re coming from all over—from Auckland, from Southland. There’s no fixed pattern or fixed area that they’re coming from, if you like, and those folk, I think, see the area as being in close proximity to Dunedin, where basically Dunedin has all the services in terms of health and all the various other services you need in your twilight years.

There is no evidence that the property value increase here is directly due to foreign investment although repatriating New Zealanders and new immigrants are implicated in the nation-wide property boom.

The provision of sewerage (wastewater) and water services was one of the biggest concerns. Periods of significant change and future development were often tied directly to the introduction or potential expansion of water and wastewater services. Costs associated with the provision of these services are a major burden for ratepayers, especially when connection fees can be in excess of $10,000 per household. Such costs can act as a source of tension in communities, with support for expansion often being driven by higher income residents and newcomers.

Services such as shops, garages, and the local school can be affected by the changes in property values. Generally, it was recognised that development might lead to new facilities such as a cafe, golf course, or other facilities. Somewhat paradoxically, perhaps, development was also associated with the loss of some of these services as new property owners who bought property for a weekend/holiday home may replace or displace families with children. A Kaka Point resident observed:

There’s a lot of cribs and holiday homes. I don’t know what there would be—not for a family. Especially there’s no school there now either. [You have to take the] school bus to either Owaka, Catlins, or up to Clutha.

As noted earlier, where property is bought for the purposes of a second home by those who live and work elsewhere, this can put schools and local services at risk of closure. On the other hand, if property is bought by those who are involved in teleworking and who can afford telecommunications infrastructure (e.g., broadband internet access) this may generate demand for local services.

Positive impacts mentioned by those interviewed included development of facilities in the settlements, skateboard ramps, play areas, cafes, and general landscaping. However, negative impacts were also highlighted such as lack of affordable housing and different sets of values. Many respondents expressed concern that locals would no longer “know” their community and the people living there, and there was major concern that newcomers would change what they considered to be the relaxed, friendly way of life characteristic of the community, bringing new expectations and new lifestyles. As a Horowhenua District Council officer said:

The town people who have come in have quite different expectations. They come in with a different set of values. They come in with a different expectation and they come in with city ideals or city expectations, but also a complete disregard for what is the status quo for an area. So, one of the very relevant issues out at Waitarere Beach is city people seem to forget that there is a road code and people who live in the city, who would never put their 10 year old on a 4-wheel quad or let their 10 year old ride around Waitarere roads on a quad without a helmet ... there’s almost a mindset that happens once they hit the beach that they’re in another land. The holiday mode takes over. So, you have a lot of issues of control on the roads, aspects of expectation, aspects of response, concern about the wellbeing of young people ...

Tensions between newer and longer term residents were also highlighted by a Dunedin City Council officer in relation to Karitane:

… what they’re also seeing is a change in environment. They’re used to living in a quiet environment. They knew the families that came there every year. There was a sort of continuity there, a sort of certainty for them and now, you’ve got people coming in building new houses, improving the ones that are there, including new people who might be trying to supplement their income by renting it out. So every week they could see new people living next door to them, so with that comes extra noise and a bit of uncertainty. Those sorts of issues come into it. There is a change there for people who live there for a long time and it may actually push some of them away from those sorts of communities.

MAORI CONCERNS

Maori have historical connections to the land that may be jeopardised by escalating property values and growth in these previously small settlements. Interviewees noted that some sites important to Maori are being lost to development. In addition, natural features are being affected, which reduces the ability to gather food. For example, kaimoana is affected by pollution. As well as the environmental impacts of development, there are significant social impacts. In particular, interviewees acknowledged that for many Maori, being disproportionately represented in low-income households, it is increasingly difficult to live in the settlements and to own property in areas where they have traditionally resided and exercised kaitiakitanga⁹ .

The data that we gathered do not allow us to fully explore the ethnicity of new property owners or changes in the ethnic make-up. However, to the extent that ethnicity and low income are closely linked variables, it is likely that Maori are displaced if low-income households are displaced. Rising prices put Maori under particular pressure. Sales of adjoining properties to more affluent non-Maori owners create difficulties for low-income Maori residents who may not be in a position to afford the rising rates that inevitably follow increased property values. Similarly, Maori who wish to return to their rohe may not be able or to afford to buy property. If Maori are displaced or prevented from owning property, Maori customary practices are likely to be weakened (e.g., there may be a smaller pool of people to provide regular support at, and carry out maintenance of, local marae and cemeteries). The smaller numbers can be problematic given the high level of demands on the Maori community as a result of Treaty claims and/or local government consultation requirements.

ANALYSIS

The property and interview data collated in this exploratory study reveal substantial changes being experienced in the small coastal settlements. Property prices have risen substantially in all the case study settlements and at a rate that is considerably more than for property elsewhere in the district. The rise appears to be greatest for properties along the beachfront or with sea views, though all properties of all types have experienced significant price increases. In Himatangi Beach, for example, official data released in late 2004 showed an increase in land values of over 330% over the preceding 3 years, compared with a 64% increase for the Manawatu District as a whole (Nicholls 2004). In early 2006, approval was given for two new subdivisions, one with 400 sections and the other with 190 sections (Matthews 2006).

While research is generally lacking, anecdotal evidence suggests that the situation elsewhere in New Zealand is similar, with many small coastal communities undergoing profound transformation and with some palpable tensions emerging between traditional coast dwellers, new residents, environmentalists, the public at large, and developers. A moratorium on coastal subdivision has been sought from environmental groups (see, e.g., Environmental Defence Society 2004) as a result of concerns about the ecological impacts of development. Yet concerns about the social impacts have been largely unaddressed.

As indicated in the discussion of the literature on nonmetropolitan migration and counterurbanisation earlier, the growth in nonmetropolitan settlements since the 1950s is influenced by quality-of-life factors and the growing role of service sector employment, supported by improved transportation and communication linkages. The literature also highlighted the impact of buoyant economic conditions on growth in nonmetropolitan areas. The situation in New Zealand since the early 2000s confirms this. Furthermore, the undesirable features of metropolitan life (urban sprawl in a country typically characterised by low-density housing, increased traffic congestion and noise as a result of traffic growth that far outstrips economic and population growth, pollution, and increasing socio-economic inequalities) are likely to be intensifying pressures for quality of life migration. In addition, the particular effect of recent increased immigration needs to be added to the set of drivers of nonmetropolitan growth. A further factor influencing nonmetropolitan growth is Maori social and economic development; if not unique to New Zealand, this factor is specific to countries with similarly developing indigenous populations and may need to be added to the literature on nonmetropolitan migration.

POLICY AND PLANNING RESPONSES

The question then arises as to how policy and planning frameworks can assist coastal and other nonmetropolitan communities experiencing pressure from development. In the final section of this paper we look at the policy response and the role currently played by central and local government.

Just as large metropolitan areas face unique social policy challenges, so, too, do small communities. Central government responses to issues faced by small communities have typically been concerned with specific policies such as housing, employment, availability of community services (especially for vulnerable groups such as children, those with mental health problems, and the elderly), water quality, other environmental issues (such as wastewater), and transport and other infrastructure. In a few areas there has been a more joined-up approach through the development of Heartland Services Centres and with regional development assistance. Typically, this assistance is focused on communities experiencing decline and/or very isolated areas.

A range of central government agencies has statutory responsibilities. The Minister of Conservation is responsible for developing and monitoring a National Coastal Policy Statement under the Resource Management Act 1991. The Department of Conservation has some responsibilities for protecting the coastal and marine environment and frequently makes submissions to local authorities about the impacts of proposed resource consents. The Department of Internal Affairs has responsibilities for building the capacity of communities. In recent years, the Department has examined the issue of what is needed to build sustainable communities and has proposed that a sustainable community is one that:

• maintains carrying capacities (natural resources, cultural values, human and social capital, economy, and built capital);
• considers future generations;
• retains diversity (creativity, skills);
• has balanced development—recognises interconnections of everything;
• considers wider interdependencies;
• is community-owned, participatory (Loomis 2002).

In the past, social impact assessments of changes experienced by small communities have been predominantly concerned with the changes associated with a major industrial development or closure. Social impact assessment was largely unknown in New Zealand before the late 1970s and became incorporated into economic restructuring in the 1980s but has largely disappeared from central government monitoring.

Aside from these central government agencies, the main vehicle for sustainable community planning is local government. Historically, the planning processes and instruments have included regional plans and policy statements and district plans and annual plans. To these, the Local Government Act 2002 has added the Long Term Council Community Plan that local authorities are required to adopt following a community outcomes process, which must be undertaken once every 6 years. The Long Term Council Community Plan is intended to be a mechanism for guiding sustainable development. It remains to be seen how adequate and effective this planning process will be for managing coastal development. Some districts that have significant coastlines undergoing pressure for development are preparing or have recently prepared non-statutory coastal strategies but again the effectiveness of these remains to be seen.

A challenge for local government is to recognise the breadth and complexity of issues resulting from property market changes rather than adopting a selective or short-term focus on what appear to be benefits for the district/region. Increasingly, there is likely to be concern about “creeping development”, apparently uncontrolled, coming from nearby metropolitan or larger urban areas. The increase in property values, and the new development, means increased rates revenue and the short-term gains appear to outweigh long-term considerations such as the cost of maintaining physical infrastructure and burden on the natural environment. As Norton (2005: 200) has observed in the context of research on local government’s management of coastal development in North Carolina, “ ... when institutional structures compel local government to rely on property taxes for revenues, ongoing land development becomes a necessity for local survival.”

CONCLUSION

Rudzitis (1993: 397) argues that migration patterns “vividly demonstrate the interconnectivity between metropolitan and nonmetropolitan areas”. However, whereas metropolitan expansion usually occurs as a result of areas being designated as growth areas for which infrastructure and services are planned and progressively developed, the sea-change phenomenon has occurred in places where there has been no forward planning for development and growth. The research presented here shows that significant new areas of coastline are coming under pressure, and not just those traditionally sought after as beach resorts (such as Northland, Coromandel Peninsula, and Bay of Plenty).

Recent efforts to stimulate a more holistic approach to dealing with policy issues as a result of the Review of the Centre (State Services Commission 2001) and the introduction of the new power in the Local Government Act 2002 to promote social, economic, environmental, and cultural wellbeing), suggest a recognition by government of the need for integrated and sustainable policies and planning for small coastal communities. However, at this stage, such planning and policy is tentative, uneven, and, in the absence of adequate guidance for local government, unlikely to be undertaken in all the areas where it is most vital. While central government’s policy may have achieved a more joined-up approach to delivery of government services, an integrated approach to planning and monitoring and managing development in nonmetropolitan areas remains exhortative and far from effective.

There is at best some ambiguity regarding policy frameworks for sustainable coastal development and at worst some significant disincentives to managing development. Despite recognition of the need for communities to have balanced development that maintains the carrying capacity of the social, built, and natural environment there are no mechanisms for guiding the sustainable development of coastal and other communities experiencing significantly increased property values. The experiences of the six small coastal settlements in this study highlight the need for policy and research to support managed development and to address the full social, economic, environmental, and cultural ramifications of development.

ACKNOWLEDGMENTS

Assistance with the coastal communities research was provided by Jim Williams, Norah Ellery, and Paula Ding. Funding for the research came from a University of Otago Research Grant. The authors also acknowledge the assistance given by all those who gave their time and shared their expertise during the phone and face-to-face interviews. Thanks to two anonymous referees for helpful comments and additional insights.

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¹ Where there have been initiatives to address challenges facing coastal settlements, the environmental and physical effects of development have arguably received more attention. For example, the recent report by the Parliamentary Commissioner for the Environment (2005) focuses on these issues to the neglect of social impacts.

² Some settlements were not included as they were too small or too close to other settlements for statistical data to be available. The data available for the settlements were nonetheless quite variable.

³ Thus, settlements such as Brighton (near Dunedin) and Waikanae (near Wellington) that are seen as extensions of nearby metropolitan areas, and from which a significant proportion of the population commutes on a daily basis to the nearby metropolitan area, are excluded.

⁴ These are both terms for referring to a low-key holiday home. The “bach” (or crib as it is known in the South Island) is an iconic feature of New Zealand beach settlements (see, e.g., Thompson 1985). In other countries, the term “cabin” or “weekender” may be used. 

⁵ Where there has been attention to social impacts, the focus has been primarily on loss of traditional camping holiday destinations, as seaside camping grounds have been sold to property developers for subdivision for high-cost housing (see Hodge 2005).

⁶ The 2001 Census is used for incomes data.

⁷ As yet no large subdivisions have been proposed for the South Island communities.

⁸ Further research that is planned to follow this exploratory study will attempt to collect data on the prevalence of second homes.

⁹ Kaitiakitanga refers to stewardship.   

 

 

Table 1 Summary statistics for the case study settlements.*

2001 Census	Population†	NZ European‡ (%)	Maori (%)	Under 15 (%)	65 and over (%)	Median income ($)	Unemployed (%)	Average household size	Households with children (%)	Households with couples (%)	Sole parent households (%)
Waitarere Beach	582 [270 households]	93.9	15	15	15	14,200	15	2	40	28	12
Foxton Beach	1893 [834 households]	89.9	17.2	19	25	12,300	16	2.1	44	22	22
Himatangi Beach	528 [228 households]	92.7	15.9	21	16	13,100	15	2.2	48	26	22
Karitane	399 [183 households]	95.2	12.9	18	22	13,300	11	2.1	45	24	21
Kaka Point	219 [108 households]	95.7	4.3	10	22	14,600	8	1.9	30	25	5
Moeraki	150 [36 households]	68	12.0	4	18	11,318	5.1	1.9	25	75	8
New Zealand	3,737,277	80	14.7	23	12	18,500	7.5	2.7	61	42	19

 

*Source: www.stats.govt.nz, Community Profiles. There is no community profile for Moeraki; instead, Statistics New Zealand supplied information separately based on meshblock data from which the statistics in the table above were calculated. All data are from 2001 Census of Population and Dwellings.

†Defined as “usually resident population count”.

‡Statistics New Zealand allows up to three responses for “Ethnic group”, which means that total percentages can be over 100.

Table 2 Median house prices 1999–2003 North Island.

	1999	2000	2001	2002	2003	2004	5 year change
Himatangi Beach	$52,500	$45,000 (–14.29%)	$45,000 (0%)	$69,000 (+53.33%)	$92,500 (+34.06%)	$113,500 (+22.70%)	+116%
Waitarere	$57,750	$75,500 (+30.74%)	$92,000 (+21.85%)	$110,000 (+19.57%)	$136,000 (+23.64%)	$182,500 (+34.19%)	+216%
Foxton Beach	$62,760	$60,000 (–4.40%)	$65,000 (+8.33%)	$83,000 (+27.69%)	$107,000 (+28.92%)	$154,000 (+43.93%)	+145%
Levin	$85,700	$99,000 (+15.52%)	$83,000 (-16.16%)	$89,000 (+7.23%)	$99,000 (+11.24%)	$123,500 (+24.75%)	+44%
New Zealand	$169,000	$172,000 (+1.78%)	$175,000 (+1.74%)	$186,500 (+6.57%)	$212,000 (+13.67%)	$247,500 (+16.75%)	+46%

 

Source: REINZ website

Table 3 Median house prices 1999–2003 South Island.

	1999	2000	2001	2002	2003	2004	5 year change
Kaka Point	$50,000	$70,000 (+40%)	$73,900 (+5.57%)	$89,000 (+20.43%)	$130,000 (+46.07%)	$140,000 (+7.69%)	+180%
South Otago	$58,000	$54,000 (–6.90%)	$60,500 (+12.04%)	$56,300 (–6.94%)	$65,850 (+16.96%)	$92,350 (+62.45%)	+59%
Karitane	$47,000	$61,000 (+29.78%)	$59,000 (–3.27%)	$68,000 (+15.25%)	$86,000 (+26.47%)	$160,000 (+86.05%)	+240%
Moeraki	$125,500	$97,000 (–22.71%)	$70,000 (–27.84%)	$175,000 (+150%)	$162,000 (–7.43%)	$282,500 (+74.38%)	+125%
East Otago	$74,200	$85,000 (+14.56%)	$64,750 (–23.82%)	$68,700 (+6.10%)	$85,000 (+23.73%)	$147,187 (+73.16%)	+98%
New Zealand	$169,000	$172,000 (+1.78%)	$175,000 (+1.74%)	$186,500 (+6.57%)	$212,000 (+13.67%)	$247,500 (+16.75%)	+46%

 

APPENDIX 1 Interview schedule.

The impacts of rising property prices on coastal communities

Name:

Contact details:

Organisation:

Role in organisation:

Length of time in role/place:

Coastal community(ies) responsible for or have knowledge of:

Relationship between your role and coastal communities:

Communities

How would you describe ______________ (the coastal community(ies) that you are affiliated with)?

Who lives there?

Why?

What do they do?

What are the positive features of the community?

What are some of the problems of the community?

Has the community experienced any significant change in character in the last 2–3 years that you have noticed?

The last 5 years?

What is the nature of this change, do you think it will continue and how?

Are there particular groups in the community that have been more affected by this change and, if so, how have they been affected?

Housing

What is the cost of property in these communities? Is it affordable?

Have you noticed any changes in the last 2-3 years? The last 5 years?

Can you describe these changes?

Do you think there is a demand for housing in the community?

Who is buying?

What types of properties are they interested in?

Who is selling/moving out and why?

What impact is this having on the community (general)?

Is this benefiting the community?

Take at look at these figures which show huge rise in property price, doubling prices in many cases [real estate data]

What is your reaction to these? Are you surprised?

What effects could this be having?

Future

What do you see as the probable future for these communities?

What do you think the community sees as its ideal future?

What do you/your organisation see as the key issues for these communities?

What are you doing to respond to them?

Any other comments

THANK YOU FOR YOUR TIME.

 

 

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K06001; Online publication date 24 November 2006

Received 6 January 2006; accepted 21 August 2006

Kōtuitui: New Zealand Journal of Social Sciences Online, 2006, Vol. 1: 105–124

1177–083X/06/0102–0105   © The Royal Society of New Zealand 2006