The five local boards with the highest GDP in Auckland are roughly equivalent to Christchurch, Wellington City, Hamilton, and Dunedin combined
In Auckland, there are places and sectors growing faster than most can manage. Then, there are those standing still, disconnected from the progress roaring down the road. In part two of a three-part report, Carmen Parahi and Simon Shepherd check on the view from the top of the Auckland tree.
Ivan and Alena Rivera have it made.
They have the right qualifications and live in the best area in Auckland, placing them high on the Auckland Council’s Prosperity Index.
The young couple have embarked on a work adventure in Berlin. She’s an accountant and he’s a data scientist. It’s his career in the hi-tech industry determining how and where they live.
“There is a lot of demand and I don't think the supply is matching the demand just yet,” says Ivan.
“A lot of companies recruiting data scientists are still finding their way, still trying to find the best way to use data science to optimise their business. Now is a good time to be in that industry.”
Ivan is 29 and Alena is 33. They have no children and recently bought a townhouse in St Heliers, a small community nestled along Auckland’s inner harbour. In April, Core Logic reported the median house price in St Heliers was $1.7m; for Auckland it was $893,000.
The suburb the young professionals call home is located in the Ōrākei Local Board, which has the highest prosperity per household of all 21 of Auckland Council’s local authorities.
The Auckland Prosperity index - developed by Auckland Tourism, Events and Economic Development (ATEED) and Infometrics - measures prosperity using 24 indicators grouped in six domains: skills and labour force, demography, connectedness, business activity, economic quality and household prosperity.
Ōrākei was ranked the highest, at 9.8 from a possible 10. The Auckland average is 4.7.
Household prosperity indicators are determined by annual household income, home ownership, beneficiaries, rental affordability and unemployment.
Ōrākei also has the highest average household income at $107,800 - more than $30,000 higher than the Auckland average.
The report has identified central and northern local boards perform well across the measures because they have easy access to the CBD, and skilled employment and educational opportunities.
The results show there is a correlation between higher education and top dollar earning power.
Good news for the 429,500 people, or 28 per cent of Aucklanders, who live in those five areas.
While Ōrākei tops the household measures, Albert-Eden is the highest ranking community board for prosperity in Auckland. Over 100,000 residents live in the area stretching from Greenlane to Point Chevalier to Sandringham. It boasts more than 105 local parks and is home to Eden Park. Prime Minister Jacinda Ardern lives in the area and is the Mt Albert MP.
Peter Haynes of the centre-left City Vision group has been the local board chairman since November 2010. He says residents in his board don’t need the same level of public facilities as other boards because they’re close to the CBD. Many homes in his area have their own swimming pools.
“Nobody in Epsom has suggested to me there is a need for a public swimming pool and I’d be surprised if they ever did.”
So what makes Albert-Eden so prosperous?
“It was one of the earliest settled areas in Auckland so it’s long established. It’s close to the inner city. Property values have increased the most in the fringe areas of the inner city,” he says.
“We have a population that is better remunerated or have higher income and higher education. We have more top decile schools and school pupils in our area than anywhere else in the country with St Cuthberts, Auckland Diocesan, Epsom Girls Grammar, Mount Albert Grammar. So the schools certainly attract a higher property premium.”
Young entrepreneur Aliesha Staples lives in Point Chevalier in the Albert-Eden board and operates her impressive tech company in the city. She set up in the CBD to access public transport and to meet with clients easily.
Five years ago, Staples was in the film industry when she spotted an opportunity in the emerging world of Virtual and Augmented Reality.
Her company won the Young Achiever Award at the 2017 Hi-tech awards. She’s about to jet off to the Cannes Film Festival for a New Zealand showcase alongside Weta Digital. Staples is also working on major motion pictures she’s not allowed to talk about.
“It's just getting bigger and better all the time. I can't even do a business plan any more. We just throw it away every two weeks.”
Staples said Virtual Reality has taken a while to live up to promises, but now she considers it a business tool, not a game.
“So they (VR programmes) will be a tool that will save businesses money, they will increase productivity and be used as a tool in a workflow that saves time and money.”
Digital Media was identified in the 2017 Technology Industry Report as one of the growth areas, recording revenue growth in the sector of 32.5 per cent.
But a challenge Staples VR shares with other companies in the sector is a drastic skills shortage. The company tries to partner with tertiary institutions so it can pick its interns, but even when they have just qualified, graduates’ skills are quickly out of date.
“This industry is ridiculously fast moving, I wouldn't know another industry that is moving this quickly. The only way to stay up to date is to be immersed in it every day.”
Staples not only employs tech graduates, she also has self-taught workers. “Even the graduates take some upskilling though as the industry is so fast, hardware and tech advances quickly.”
She says people who want to get into the industry need a tech mindset and the right attitude but admits it’s difficult without the right help.
“Anyone can get into this - even poorer communities - but you do need to get yourself in the door. You need to go to networking events and meet with the companies who are open to internships and upskilling.”
But it’s access to high skilled, high paying jobs that’s keeping impoverished communities shut out from making the most of what industries like the technology sector has to offer.
Most tech companies are based in the CBD. Reaping the benefits of being connected or immersed in the industry is more difficult for those living outside the area, especially if they don’t live near reliable transport or can't afford to travel into the city every day.
In the Auckland prosperity index, 'skills and labour force' is an important measure. It determines people’s ability to meet their basic needs, gain meaningful employment and more options in every sphere in life. It includes qualification levels.
All five southern local boards are below the Auckland average on the skills and labour force measure. But the inner and northern harbour boards are significantly higher.
ATEED general manager economic growth Patrick McVeigh says indicators of prosperity for local boards and their residents include whether they have access to public transport, education, and work opportunities, plus work skills, qualifications and better connectivity to technology.
So it’s not a surprise when you look at Central Auckland and Northern Auckland to those areas that are connected to the economy in the city centre, it’s the strongest economy.
“They have access to those opportunities more so than areas in the South and parts of West Auckland where it takes longer to get to work, there is less educational opportunities and you start to see that play through. So less jobs, less high quality jobs, less connectivity makes a difference.”
While some are enjoying prosperity many are missing out, particularly Māori and Pasifika peoples living in communities mainly in West and South Auckland.
Ōtara-Papatoetoe is the only one of five South Auckland boards where locals enjoy highly skilled jobs. But it has the lowest household prosperity ranking.
McVeigh says the city has been experiencing strong GDP growth.
“We have been creating jobs. We have a number of sectors that have been booming. All of that's really positive in terms of Auckland’s overall economic story but what we are seeing is the benefits of that are not trickling down, so the benefits of growth are not reaching all communities in all places.”
The ATEED report is expected to help local boards and the Auckland Council find ways to increase prosperity for their constituents and deal with any challenges particular to their areas.
Ōtara-Papatoetoe board chair Lotu Fuli says the index proves what has been known for a long time in South Auckland, they are not benefiting from the economic growth happening elsewhere in the city.
I could see the rest of Auckland taking off but my board area I could see a lot of homelessness and a lot of increased unemployment.
“We were living in this world where we had the record number of luxury cars bought but also the record number of homelessness in the same city. We were on the other end, that bottom end.”
Ōtara-Papatoetoe has the lowest prosperity rating of all 21 boards. Out of a score of zero to ten, it scored 0.7. The average household income for its 87,800 locals is $60,800; $15,700 less than the Auckland median.
Fuli plans to use the index results to push for more investment from the Auckland Council and central government. She’s focused on how the board can help their young people find meaningful employment.
“We know that it has to be the right kind of education to take our young people and generation into those future jobs.”
Haynes says despite the high prosperity rating for his Albert-Eden board there are pockets of deprivation in the area.
“We inherited Owairaka and Waterview, they have almost no public facilities whatsoever. It’s criminal. We have lobbied for more amenities.
“So in one of our relatively deprived areas the people received LED light bulbs so they could save on electricity and reduce their power bills. And they last longer. It ticked two boxes for sustainability and helped the less well off people. We’re not going to do it in Epsom.”
Albert-Eden is the only board to have accommodation grants for community organisations. It’s one of few boards to provide direct funding help assistance to groups ranging from autistic children to refugees.
He believes the only way to narrow Auckland’s inequality is to give people real employment and educational opportunities.
You want to have a high wage, high skill economy and provide for the less well off to gain the higher skills. It’s the only long term solution.
Haynes gets bothered by assumptions local boards in the poorer parts of Auckland aren’t getting support.
The local board funding policy includes deprivation as one of the criteria for determining the amounts of discretionary spending local boards get. So local boards with greater deprivation get more per capita than boards without deprivation.
Ōtara-Papatoetoe gets $17.5m in operating expenditure but Albert-Eden - with a bigger area and larger population - gets $12.2m.
He says it proves no one has lost sight of the growing inequality in Auckland. The issue is discussed in every council workshop he attends.
“Addressing the growing inequality in our city is important, it’s always at the forefront of our minds when making decisions.
But he believes the Auckland Council and local boards lack the budget to fix the disparity between the rich and poor - especially the housing crisis.
“Auckland Council is debt strapped, we can’t borrow anymore so we can’t build a lot of social housing. We can facilitate it through the consenting process. We can build night shelters but that’s really just tackling the worst of the problem in a small way.”
The Government will make the greatest impact, he says.
“It’s about our economic policy, labour market policy, education policy, social welfare policy.
We’re yet to see whether this Government is really going to address it. We’re certainly hopeful.
Auckland news camera team
Dan Woodfield and Jake Ji
Design & Layout: