Reanimating so-called zombie towns

One zombie town may be due for reanimation. 

Many Kiwi small towns are shrinking, becoming what economist Shamubeel Eaqub calls zombie towns.  He argues that the forces of urbanisation, technology, globalisation and ageing are working against the provinces, leaving them stagnant and declining.

Horowhenua has been one of the hardest hit. Over the past 10 years 80 per cent of territorial local economies (TLOne zombie town may be due for reanimation. 

But Horowhenua’s economy  may be about to receive a multimillion-dollar shot in the arm from the Wellington Northern Corridor (WNC), which is part of the government’s Roads of National Significance project. The New Zealand Transport Agency says that the project will provide a modern state highway network to handle future traffic and many expect the corridor to shift the Horowhenua economy from stagnation to growth.

Horowhenua, like other small areas in the country, faces many economic challenges. It has been left behind while next-door neighbour Kapiti, with its closer proximity to Wellington, has grown rapidly since the 1980s.

Kapiti’s residents earn more than their northern neighbours and their homes are worth more.  Horowhenua has median wages 9% ($28,000 versus $31,000) lower than the Kapiti Coast District. The difference widens to 40% ($77,000 versus $107,000) in the 90th percentile of pay packets. 

Mr Eaqub says Kapiti has increasingly become a retirement and commuting suburb of Wellington. But he argues that, in driving terms, Horowhenua could be what Kapiti was not that long ago and that the district could benefit from the massive WNC project that will improve 110km of road from Wellington north.  

The Wellington Northern Corridor, the State Highway 1 route between Wellington International Airport to north of Levin,  is likely to reduce freight costs and travel times, essentially bringing Horowhenua closer to the capital and making the district more desirable and productive.

NZ Institute of Economic Research (NZIER) research commissioned by Horowhenua District Council says that the new roads are set to be an economic catalyst for the district.

Its analysis indicates the new infrastructure will present long-term gains from employment and population growth.

The new infrastructure will present long-term gains for Horowhenua. These gains will accumulate over time, but will be significant, including:

• 1000 additional jobs over the next 20 years

• 10,000 more people over the next 20 years

• 4000 more households over the next 20 years

NZIER believes the benefits for Horowhenua include:

• Increasing business opportunities further away, as better transport links improve the proximity of customers.

• Attracting new investment into the region, as Horowhenua integrates better with neighbouring regions.

• Attracting people to Horowhenua to live and work, as the area becomes more attractive as a place to work, live and retire.

• Increased productivity following a ‘thickening’ in local markets for labour and goods and services, as better integration with neighbouring regions creates a ‘catch-up’ in incomes and other economic measures.

It is believed that the strong connections between Horowhenua and the surrounding regions and districts are a key reason to be optimistic about an improvement in economic outlook for Horowhenua.  The district is on the border of two larger economic entities of Wellington and Palmerston North.  NZIER contends that Horowhenua stands to gain a great deal from improved connections to the south.   

Wellington ranks top across a range of income measures, and residents of the Horowhenua District, with an easier commute on the Wellington Northern Corridor, stand to gain from both employment and potentially higher wages by working outside the district.

An easier drive means that residents in other districts can work in Horowhenua, and moving there becomes more attractive because improved connections means they don’t have to change jobs.

Mr Equab believes it's all about leveraging opportunities from the Wellington Northern Corridor.

“If you can attract more people to the district, make it easier to live, easier to do business, the potential is big. It's a chance of a lifetime that is not going to happen again. It's like winning Lotto without having to buy a ticket.”

Tune into NBR Radio’s Sunday Business with Andrew Patterson on Sunday morning, for analysis and feature-length interviews.