A University of Waikato report on population growth in the region commissioned by the Waikato Regional Council in 2015 highlighted how much stronger than expected Waikato’s population growth had been in recent years.
The report found Hamilton City had experienced a surge in population of 3000 people in 2014-15, 2.2% ahead of predictions, Waikato District an extra 1600 people putting it 2.5% ahead of expectations and Waipa was up 4.9%.
All three areas were experiencing the growth through increased net migrations.
Overall, the report found regional growth could amount to as much as another 175,000 people or a 40% increase on today’s 425,000 by 2060.
Hamilton City’s population alone was now expected to be 41,000 people more than initial estimates had it at and Waikato District 20,000 more.
Waikato region’s average population growth in recent years had been 2.5% compared to the national average of 1.9%, already the country’s fastest rate in a decade.
That unexpected population boost was hitting home now and the need for more housing space was raising concerns among the region’s mayors about the conflict the growth would bring to high-value farm and horticultural land.
Waipa mayor Jim Mylchreest said his two main urban centres of Te Awamutu and Cambridge were struggling to keep up with demand for land for housing.
Such demand inevitably signalled greater pressure on the high-quality farmland bordering the growth areas.
Resource Management Act consent processes, however, were making it more difficult to develop land that was not zoned rural.
“Around Cambridge we have sufficient land within the expressway to develop but the problem is, given the cost to develop it and the time, do the people who own it want to develop it?”
He believed councils would face a finer balancing act in years to come with growth demands and planning tools would have to adjust to cope and continue to protect farmland.
“You only need to cast your mind back to the days of the 10-acre block to see how it can go wrong. We will have to increase the density of houses to allow people in and to ensure it is controlled growth rather than completely limit growth.”
He believed Waikato District Council (WDC) had a tougher job on its hands than his own, being squeezed by Auckland growth from the north and Hamilton from the south.
WDC Mayor Allan Sanson said his council’s planning encouraged development around “nodes” in existing small Waikato towns of Pokeno, Te Kauwhata, Huntly and Ngaruawahia rather than having strip-type development down the length of State Highway 1 between Auckland and Hamilton.
The 8500 extra dwellings in the node areas available by 2046 would provide housing for about 22,000 people but fell well-short of the estimated 35,000 extra people the district would have by then.
Translated to land area based on current subdivision sizes the district could be 600-800ha short for residential land alone.
“Three years ago we started to see how conservative growth estimates were. Our building consents in the district for the past year are running at twice what was estimated.”
He acknowledged it would be only a matter of time before farmland around the nodes was required to be rezoned for housing.
“Even at Te Kauwhata, while we allowed for 1800 new dwellings, it is actually now going to be 2700.
“In my heart, I know these nodes will require more land.
“The Pokeno development is already requiring more, developers have moved from turning out 220 sections a year to 400. That land around there, however, is fragmented and not all is high value.”
However, some of the better land at Te Kauwhata had been lost.
“And Huntly is under huge pressure to rezone land. It is short.”
The council identified a “sizable” section near the town for industrial and residential development in coming years that included farmland.
But Sanson was confident good Waikato farmland would be protected from the creep of lifestyle blocks that usually accompanied residential growth.
Landowners had been manipulating planning rules to effectively create rural “villages” of subdivisions by chopping up old 10-acre blocks.
“However, Plan Change 2 that came out eight years ago has now stopped that.”
The rule disallowed subdivision of a block under 20ha.
“You can still do it but only one title can be cut off from it now.”
Hamilton City Councillor and infrastructure-growth committee deputy chairman Geoff Taylor predicted Hamilton's growing appetite for housing space and rural land use were likely to go head-to-head over coming years.
While the city was well provided with subdivisions to the south with the 8000 section Peacocke development, and the smaller Rotokauri subdivision to the west there was impending pressure on land around the WDC boundary to the north.
“Hamilton City Council has an agreement to claim some of that land as zoned for housing in 2039 but I think it may need to come sooner than that.
“It's always a hard decision to take land that is productive and use it for housing. Similarly, there could be rural areas to the west and south which may need to come into the city. But like any fast-growing city, we are hungry for more land."
Sanson said much of the land in the 2039 agreement had already been included, with the remainder being around Gordonton and inside the new K road expressway.
Like Sanson, Taylor attributed part of the need for more land to the Government's policy statement on housing that required cities to have 20% more housing allocation over their estimated demand.
“So everyone is trying to comply with that policy and that will require high-quality farmland to the north at some stage.”
He described the target as a tall order for councils to meet and one that loaded considerable infrastructure costs onto them. Hamilton City Council was applying for a $240 million loan to develop infrastructure around housing.
Sanson said pressure for industrial land was also unlikely to ease.
“We have all sorts of companies crawling all over us seeking industrial land and we are saying we just do not have it. At current rates we will not have any of that land for expansion in three years.”
DairyNZ eyes impact of Waikato growth
As DairyNZ economist Matt Newman considers the future for dairying in Waikato, one thing he is confident about is that future will not mimic the past.
“We have been in a position in Waikato where we have had strong urban expansion and growth and that does seem more accelerated at the moment with Auckland’s southern push.
“But we have also had growth in land in dairying too over the past six years, now with 390,000ha of land in dairy, so it has not been such a big issue.
“But going forward, I think it will be different.
“The Healthy Rivers plan essentially makes conversions harder, requiring a resource consent, but we will still have urban encroachment happening so we do expect a level of net loss of dairy land in the next decade.”
His view on the impact on cow numbers was echoed by KPMG agribusiness head Ian Proudfoot who said he thought New Zealand might have reached and probably passed peak milk production.
Stricter environmental controls and community expectations would make it more difficult to pursue dairy farm conversions in the future.
Newman said fewer cows in the district might be an outcome of environmental constraints.
“But loss of milk production is what would cause us more concern. That makes it a real issue for processors and should concern the wider community in terms of economic loss.
“In the old model, dairying would have pushed out further to more marginal country as pressure came on the land closer to town. I am not so sure that will continue now.”
Newman said the effect on milk volumes as a percentage nationally might be relatively small as farmers adjusted to a new regime.
“Other sectors are being squeezed too, including market gardening and I wonder if those smaller operators serving the local population are the ones who will be squeezed the most.”
Market signals for land use had determined dairy’s success in past decades in Waikato but shifts in returns and other industries might also drive changes to other land uses in the district.
That included more use of Waikato dairy land for market gardening crops traditionally grown south of Auckland.
But that land use might also come under pressure with environmental constraints limiting options in coming years.
