Real Life

Have the good times gone?

Population drift and decline are hollowing out many of our small towns, but some heartland hamlets are thriving. Greg Bruce takes the pulse of Smallville, New Zealand.
Child enjoying small town life.

Neither my wife nor I have lived anywhere in New Zealand other than Auckland, but in January this year, sitting in our tiny, rented two-bedroom flat in Mt Eden, I began forwarding her Trade Me ads for houses in Oamaru and she began forwarding them to her mum.

I remember the scene so clearly. I was sitting behind my computer at the dining-room table and she was sitting behind her computer on the couch in the lounge. There were barely three paces between us. We were drowning in the Auckland housing market and it just struck me that we had to get out.

We had ached with our inability to get on the property ladder for nearly two years, renting while we watched real estate prices in the city become increasingly silly. It didn’t appear possible to own a house in the city we called home. I felt trapped in a system that felt fundamentally wrecked.

Looking outside the city was not something we were much interested in. We were expecting our second child and both our families lived in Auckland. We didn’t want to leave that support behind and, generally speaking, we liked our families. But it felt like we had no choice and that made me angry.

In common with many lovely coastal towns, Oamaru has had a slight population rise.

Still, like most city people, particularly those with children, I have sometimes dreamed of the pastoral life, without traffic, career striving or endless social hierarchies. We could get a decent house in Oamaru for not much more than the deposit on a decent house in Auckland. We could live a life of cosy winter Sundays, reading by the fireplace, untroubled by worries about how we’re going to earn enough money on Monday to pay the mortgage on Thursday.

But places aren’t just randomly interchanged locations in which to live and work: they are also imbued with meaning, memories, important people. To leave a place you’ve called home for so long is not just an economic calculation, but a spiritual and existential one.

I looked at those numbers next to the homes in Oamaru and compared them with the numbers next to the homes on my watch-list from Glen Eden and New Lynn and I felt sick with the opposing pulls of financial necessity and the desire for a fulfilling life.

New Zealanders – urban, rural and in-between – have been pulled in opposing directions forever. This is, to some extent, the nature of life.

But with Auckland booming as never before, gathering more and more of the country’s population, and with much terrifying talk of town closures and economic change, how is today’s situation different? What are the forces that will decide the places we’ll live in the future? And how different will our country look as a consequence?

In relation to the rest of the country, our biggest city is an almost unfathomable giant. Auckland contains a greater proportion of its host country’s population than any other city in the world, except Dublin.

The size of Auckland and its contribution to our economy means its growth has a momentum that would be difficult to stop, and which nobody particularly wants to stop anyway. The economy gets bigger as more people come to the city and so more people come to the city for the bigger economy.

The inland North Island has seen some of the steepest declines in population, Taumarunui among them.

On the other hand, a large number of people who leave our towns aren’t leaving for Auckland, or any other New Zealand city for that matter. It’s conservatively estimated that more than 800,000 New Zealand citizens live outside New Zealand, and that figure is based on research that doesn’t include children under 15, who could take the figure beyond one million.

The Auckland/small town dichotomy is therefore, in some ways, unhelpful. If we’re going to be worried about people leaving our small towns, we need to be at least as worried about them leaving for Australia or Europe as we are about them leaving for Auckland.

Our conversations and attitudes are shaped by strange forces that are often beyond our control or ability to predict.

At the moment, one of those forces is a single person with a vast and seemingly ever-expanding presence in the media: New Zealand Institute of Economic Research principal economist Shamubeel Eaqub.

His use of the term “zombie towns”, in his 2014 book Growing Apart, to describe a phenomenon that academic demographers have been talking and writing about for years, generated such a furore that it has become an almost self-perpetuating news story. The book, and more specifically the term, generated such a relentless cascade of media coverage that even Eaqub seemed surprised by it, especially given that the Royal Society of New Zealand last year also published a report discussing the issue, authored by a small battalion of the country’s leading academics and researchers, and it left barely a mark on the pages of the country’s newspapers.

The population count for Tokoroa shown in this photograph, taken four years ago, was already long out of date. Home to nearly 20,000 in the 1970s, the town’s population was down to 14,950 in 2001. The 2013 census recorded only 12,714 residents.

“While the Royal Society described them as ghost towns,” Eaqub wrote in an opinion piece on, “I described them as zombie towns. This caused much outrage.”

Zombie towns, ghost towns, troubled towns. No matter how sensational or dull the term, the phenomenon is real: towns with low economic growth, declining populations, few skilled workers and few real opportunities for career advancement are facing a death spiral, where the ways out seem limited and an increasingly popular solution seems to be to let them die.

A big part of the issue is age. In the 2013 census, there were about 600,000 people aged 65-plus – 14.3 per cent of the total population. By 2043, it’s projected that almost one in five New Zealanders will fall into this age group. That trends presents a growing problem, particularly in the regions.

In 2013, sociologist Paul Spoonley, a distinguished professor at Massey University, wrote of his concerns – shared by his colleague, demographer Natalie Jackson – about the stagnation and “premature ageing” in many New Zealand regions. Population numbers were flat-lining and some regions were on the verge of decline, with fewer young people staying on and eventually having children of their own.

“This is in contrast to Auckland,” he said. “Yes, there will be ageing, but 60 per cent of the growth for Auckland will come from natural increase. Births will continue to outnumber deaths by some margin. This becomes something of a cycle. Auckland will grow, while most regions will not. The size of Auckland, plus the fact it has growing population numbers, makes it attractive for those firms that require a steady labour supply and skills. So regions will struggle to keep job-seekers, firms and families in competition with Auckland.”

Of course, the decline is not unique to New Zealand. Since the industrial revolution, young people throughout the world have quit small towns and rural settings for job opportunities in big cities – leaving behind the ageing and old.

St Patrick’s Basilica – its expansive pews are rarely filled today, in this town of 13,050 souls.

Demographers use the term “dependency ratio” to refer to the number of people in the working age population versus the number outside. In the mid-20th century, New Zealand’s dependency ratio was roughly four to one. Now, we’re fast heading toward two to one and, in some places, one to one.

A worsening dependency ratio means problems not just in the funding of super-annuation, but in all sorts of other areas: necessary infrastructure projects, for instance, or funding and training for skills shortages.

When populations age or the number of residents starts to decline, things can get bleak quickly: schools and post offices shut down, shops and services move away. As Spoonley likes to put it: who’s going to be left to wipe our chins?

Some countries are trying innovative ways to reverse the trend. In the United Kingdom, for instance, some government services have been shifted to vulnerable parts of the country to try to stimulate growth. But in some places, it’s too late for such measures. In Japan, hundreds of towns are being abandoned. Although that’s what Eaqub and others are suggesting might happen here, nobody really wants to say where or when.

One of the names they’re not saying is Taumarunui, which had 6540 permanent residents in 1981 and now has 4503, with Statistics New Zealand predicting that by 2031 it could drop by another third.

As the population of Taumarunui has declined, so has the town’s economy, or maybe vice versa. The freezing works and a milk processing plant have been closed and most of the local railways jobs lost. The steady population decline keeps property values and rates payments down, limiting what can be spent on infrastructure. That too means fewer job opportunities and therefore fewer reasons for people to stay.

Afternoon tea in Oamaru. Although Oamaru is growing, it will be hard-pressed to match the heady days of the 1880s, when it was the “best built and most mortgaged town in Australasia”.

Some places have become bywords for decline: Tokoroa, home to nearly 20,000 people in the 1970s, had 12,714 residents in 2013. Whanganui has lost 3000 people since its peak in the 1990s. Kawerau has lost a quarter of its population in the years since 1981.

It’s no accident that all the places mentioned so far are in the North Island. For demographer Natalie Jackson, the biggest surprise from the most recent census was the lack of growth in the North Island. “It shocked us how it had expanded across so many territorial authorities,” she said. Most of those towns will never grow again.

Last year’s Royal Society report asked: “Should the central government plan ‘red zones’ for local authorities unable to meet their responsibilities?”

It didn’t offer an answer. Because, while it’s fine to ask questions at a high level of abstraction about best economic practice, who wants to tell somebody who has brought up children, been married, and buried parents in a place that it will soon cease to exist?

What do we know about anything? Our projections about the future are so often so badly wrong, it’s better to call them guesses.

In 2003, the Ministry of Economic Development, the Ministry of Social Development and the Department of Labour together published a report titled “Population and Sustainable Development”. Among its projections were that New Zealand’s population would likely grow to 4.4 million by 2021, then to a peak of 4.6 million by 2051, before declining to 4.2 million by 2101.

In mid-June this year, our population was 4,595,000 and increasing by about 200 every day, with no sign of slowing. By the time you read this, it will be over 4.6 million. In other words, a 12-year-old projection by the country’s leading economic policymakers has proven to be off target by about 36 years.

Will we have 4.2 million people by 2101? It looks increasingly unlikely but the point is, who can tell?

A “traffic jam” on a rural road near Opotiki.

Nobody should be embarrassed, or much surprised, by such wrongness. According to lore, demographers in the 1940s didn’t see the baby boom coming. In the 1970s, it was widely believed that cities were dying as people moved to the suburbs and the coasts. As late as the 1990s, according to a recent report in the Guardian newspaper, global consulting giants Arthur Andersen predicted by 2015 “the inner parts of cities like London would be populated only by the poor and unemployable”.

Major change can sometimes come about through good planning, but it can also come about through complete accident. Who can say what as-yet unseen global economic and political forces will determine how many people will live in New Zealand and where?

In its concluding remarks to last year’s landmark report, the Royal Society tossed this question uncertainly from hand to hand: “The principal implication of these reflections is that we should not too readily project the current situation into the future. On the other hand demographic trends suggest that ‘no growth’ will become more rather than less common.

“On the other hand, districts currently experiencing slow population growth should reflect that a few years ago Tauranga was expected to become essentially a retirement location, not a major port and service centre. Havelock North and Ashburton were regarded similarly, but the wine industry and dairying respectively have changed their current circumstances dramatically. Dairying has similarly changed South-land’s prospects.”

Other places are growing, too. The population of the Queenstown-Lakes District, for instance, grew by 23 per cent between the 2006 and 2013 censuses and has almost doubled from its 1996 population of 14,000. It’s the country’s second-fastest growing region behind Selwyn, west of Christchurch, which grew by 33 per cent between 2006 and 2013 – largely driven by dairy conversions, as well as a few refugees from the Canterbury earthquakes.

Places such as these might not offer residents the same economic benefits or career opportunities of the big city, but what they demonstrate is that those opportunities aren’t the only ways to attract people to the regions.

In 1986, a quarter of the country’s population lived in Auckland. Today, that proportion is a third. Between 2006 and 2013, 11 cities shared 75 per cent of New Zealand’s growth. Auckland made up just over half that growth.

Auckland is expected to eventually be home to about 40 per cent of the country’s population. What will this mean for the city’s infrastructure, and for the quality of life of the people that live there?

Is Auckland a place that young people really want to live in? Or, if the answer to that seems obvious, is it a city in which they can afford to live the life they want? Sure, there are more jobs and they are better paid, but housing is an order of magnitude beyond severely unaffordable, and unless something changes radically, there’s little prospect for most young people of ever owning a home in the city.

Eaqub, whose most recent book Generation Rent points out the flaws and problems inherent in the Auckland property market, nevertheless says Auckland is special, that it creates jobs for the rest of the country and we need to protect that.

Auckland is expected to eventually be home to about 40 per cent of the country’s population. What will this mean for the city’s infrastructure, and for the quality of life of the people who live there?

“We need to think about some places that people don’t want to live in anymore and for those places, what’s the plan to shut them down?” he told TVNZ’s Sunday last year. “Should you be investing other people’s money into saving those places? If the choice is between, say, funding opportunities [to alleviate] child poverty versus saving a town that has been in terminal decline for 20 years, I know where I’d put my money.”

The population of Oamaru grew from 12,681 in 2006 to 13,050 in 2013, an increase of 2.9 per cent and part of a wider increase across the Waitaki region of which it is part. Waitaki Mayor Gary Kircher lauded the result as a big improvement on predictions, which were of decline. He attributed much of the increase to improved irrigation schemes bringing a boost to the agricultural sector.

Over the same period, Auckland’s population increased by 8.5 per cent, or 110,589 people, to 1,415,550, pretty much as expected.

In April this year, I stood in the living room of a modest three-bedroom house on the outskirts of Auckland, with my baby daughter and pregnant wife, and I wrote a very large number on a pre -printed sheet of paper that would both buy us that house and commit us to an extraordinary amount of debt. It would also allow us to remain in the area we thought of as home, or at least reasonably close to it, and to the people, memories and attachments that went along with that.

So, by the time of the next census, in 2018, we will have added two more to the population of Auckland – and none to the population of Oamaru, although it could so easily have been the other way round.

We stayed in Auckland primarily because we could afford to, which was almost entirely due to our family’s financial contribution to the house purchase. We wanted to stay because we have built lives and careers here and the city is home, but those were really secondary issues. Without the money to do that, who knows what our decision would have been?

In many ways, our story is the precise inverse of the situation so many young people face growing up in some provincial towns. They have plenty of reasonably priced housing options, but may be forced to move away because there are fewer good opportunities to build a decent life.

Our story is also a bit of an outlier (and not many people move from Auckland to Oamaru). Others our age or younger, without the now-requisite family support – or, alternatively, incandescent career trajectories – to finance their way into a house in Auckland, are often looking overseas to build their wealth and lives.

As Eaqub says, “If we stifle growth in Auckland, it won’t turn up in Northland – it will turn up in Sydney or Singapore.” Although house prices in those places aren’t necessarily any better than Auckland, earning opportunities are.

The concept of agglomeration is much talked about by economists: by concentrating a large amount of economic activity in one place, that place becomes more efficient and the growing economy attracts more investment and people, who undertake more economic activity, and so on.

But that agglomeration can also work against a place. A city could find, for example, its roads gridlocked, its homes completely unaffordable, large groups of people left off the tail of its relentless upward growth curve.

People are free to move. Where do they want to go? Where do we want them to go? How do we help make sure that – wherever they go – they’re able to live decent lives? These are questions we have already started to ask. We need to keep asking them until we start to come up with some good answers.

Words by: Greg Bruce

Photos: Bonita Cooke and Getty Images

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