6. A Wealth-Creating Local Economy

New Zealand's number one export is milk. It's number 1 import is petroleum and number 3 cars & trucks. Traditionally, it suffered from the tyranny of distance, but with fibre-optic broadband anywhere in the world can be everywhere else. From an economic perspective it changes everything, and most importantly, it means the time of villages and towns has come once again. Businesses no longer need to concentrate in cities to be near their customers, suppliers, professionals and competitors. They can select location based on quality-of-life considerations. It is this new revolution, the technology revolution that makes the MarketTown concept economically feasible.

In Auckland's hot real estate market, higher-quality, lower-priced homes in a socially and culturally enriched community would sell out rapidly. However, it would be a mistake to sell first-come/first-serve. Instead, the MarketTown will focus on attracting head-of-household jobs. In this way, the people who will work locally will be the first eligible to buy or rent a home. This takes commuters off the road. It keeps the villages lively and active during the day. It provides children whose classrooms are on the plaza with working-adult role models. It supports the cafes and restaurants during the work day. It provides more cohesion for families, who may all walk home for lunch or meet at the affordable village cafe.

To make this happen, the MarketTown uses mixed-use micro-zoning. Mixed use means workplaces in the villages, larger office buildings in the town centre and blue collar jobs in the walk-to industrial park. Microzoning means that the plazas have businesses with high foot traffic, whereas secondary pedestrian streets would have home offices with few visitors during the workday.

The other significant point of difference is how the price of homes is structured. As a prototype, an 80/10/10 pricing structure is used. 80% is the total cost - land, building, common investments. Then the purchase price includes a mandatory 20% in lieu of the social enterprise taking profits. Half (10%) goes into a Legacy Fund that is used to provide financing and venture capital for the SME businesses that move into the MarketTown. Estimated as a fund of about $200 million, this enables those SME businesses to be more competitive. In addition to financing, the Legacy Fund employs top talent that assists those SME businesses to grow and become more profitable. In this way, private enterprise of individual businesses find that New Zealand, and in particular, the MarketTown enables them to be more successful. They can provide more jobs, so that the MarketTown achieves a target of zero unemployment and finds that all its citizens can enjoy a living wage or better.

The other 10% of the prototype project is used to start second generation projects elsewhere in NZ and overseas. This money comes back to the first MarketTown later on. We highlight the word "prototype" to make a distinction between a social enterprise and the subsequent projects built by mainstream developers. Once the first MarketTown is built in Auckland, it is hoped that the Council will include it as a permitted model that developers can build. They will set their own pricing and policies, but will find that it becomes a low-risk project that should have strong Council support.

More in this category: « 5. Recreation and Sport