A new national direction in the right direction

28 Oct 2021 8:17 AM | Anonymous

The Government and the National Party have come together to jointly announce changes to New Zealand’s planning system to enable more medium density housing and cut red tape that acts as a barrier to development.

The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill (the Bill) amends the Resource Management Act 1991 (RMA) and seeks to rapidly accelerate the supply of housing where the demand for housing is high.

The Bill requires territorial authorities in major cities to set more permissive land-use regulations that will enable greater intensification in urban areas by bringing forward and strengthening the National Policy Statement on Urban Development (NPS-UD).

The NPS-UD requires, among other things, that tier 1 territorial authorities amend their RMA plans to enable intensification in urban areas. The current process for plan making, however, means territorial authorities will take until at least August 2024 to deliver the additional housing development capacity unlocked by the NPS-UD.

The Bill brings forward the implementation of the NPS-UD intensification policies by using the existing streamlined planning process (SPP) with appropriate modifications. The SPP is an alternative process for plan making or changes to provide an expeditious planning process, with opportunities for submissions and a hearing. The modified process introduced in the Bill is the intensification streamlined planning process (ISPP).

The Bill was introduced to Parliament on 19 October and had its first reading this Tuesday (26 October). The Bill has been referred to the Environment Committee. Submissions on the Bill close on 16 November. Details can be viewed here.

The Bill also introduces medium density residential standards (MDRS) in all tier 1 urban environments, which will enable landowners to build up to three homes of up to three storeys on most sites up to 50% maximum coverage of the site as of right, that is, they will be permitted activities and not require a resource consent. The MDRS will also enable:

  • more flexible height in relation to boundary standards to enable 3 storeys on average-sized sites
  • smaller private outlook spaces (space between windows and other buildings) and private outdoor living spaces (for example, balconies)
  • reduced side yard setbacks to allow development closer to side boundaries
  • more resource consents (when needed) to proceed on a non-notified basis.

The tier 1 urban environments of Auckland, Hamilton, Tauranga, Wellington, and Christchurch (serviced by 14 tier 1 territorial authorities) will be required to apply the MDRS in the first instance, with territorial authorities in tier 2 urban environments only being affected if they experience an acute housing need.

The relevant territorial authorities would need to prepare an intensification planning instrument (IPI) – a plan change to implement the intensification policies and incorporate the MDRS. IPIs will generally need to be notified by 20 August 2022, and their MDRS provisions will have immediate legal effect from the notification date, with some exceptions.

Territorial authorities will incorporate the MDRS into their planning documents using the ISPP. The ISPP will establish a set of standardised process steps that relevant territorial authorities will use to develop an IPI. It will also be used to implement the MDRS.

Amongst others, the ISPP will see the establishment of independent hearings panels (IHPs) to conduct hearings on the intensification planning instrument. If the territorial authority does not agree with the IHP’s recommendations, the Minister for the Environment will become the decisionmaker. An IHP’s recommendations would not be limited to the scope of submissions received and may also include recommendations on other matters related to the IPI.

Projections for development contributions (DCs) tend to be based on district plan-enabled capacity. Currently, district plans typically only allow for one home of up to two storeys. This effectively means councils would be able to generate much more DCs revenue than anticipated by most district plans, which may allow them to comfortably fund any additional growth infrastructure (capacity) not already projected to be provided, e.g. increased infrastructure capacity to cater to higher levels of stormwater runoff due to greater impermeable surface areas. The fixed costs of other growth infrastructure items such as streetlights and cycleways to currently service those single dwellings should generally remain unaffected or only be affected at the margin.

It is projected the Bill will bring forward the aims of the NPS-UD and help respond to the housing crisis by enabling at least 48,200 and as many as 105,500 new dwellings to be built in the next five to eight years.

PwC undertook a cost-benefit analysis on the NPS-UD and found that 72,000 additional dwellings could be expected by 2043 as a result of implementing the intensification policies in tier 1 urban areas. PwC now considers this likely to be a conservative estimate.

Further modelling by PwC has found the proposed medium density rules proposed by the Bill are expected to add 48,200-105,500 dwellings on top of these figures, over the next five to eight years.

The Bill will undoubtedly be welcomed by the development community and parallels will likely be drawn between the Bill’s intentions, and the Housing Accords and Special Housing Areas Act and the Auckland Unitary Plan Independent Hearings Panel process, both of which have been considered success stories.

At the same time, the Bill deals a severe blow to two schools of thought:

  1. Not In My Backyard (NIMBY)
  2. Build Absolutely Nothing Anywhere Near Anything (BANANA).

The Bill’s proposals are a move in the right direction and are welcomed by Infrastructure New Zealand, however, we want to ensure that supporting infrastructure is also taken into account. We will be making a submission in support of the Bill and its proposals. If you would like to provide comments and feedback to be considered for inclusion in our submission, feel free to contact Azeem Khan at azeem.khan@infrastructure.org.nz by 14 November.

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