11 February 2021, Veros , 1 comment

Urban Development in 2021: What’s Lies Ahead

Talk to anyone trying to invest or develop and they will have war stories of the frustrations and challenges they have faced. Without a doubt, undertaking development over the last 5 years – whether for new housing or commercial development, has become more difficult, with more risk, and with more layers of complexity.

Throughout 2020 we saw an enormous amount of policy activity in respect to planning and urban development. But what does it mean at the land development coalface? Does this mean we will see more housing, faster? Will it speed up investment and give us better and faster outcomes?

The government has acknowledged that we have a housing crisis on our hands, and in the face of it are making noises about the RMA and planning reform gathering speed. Recently David Parker, Minister for the Environment said that “Instead of allowing cities to respond to population growth sustainably, poor quality and restrictive planning has contributed to a lack of certainty and unaffordable housing,”.

With 35,000 to 40,000 resource consent applications processed by local authorities each year, the planning processes, the burden of cost, risk profile and time lag have a huge impact on investment and development.

If you’re expecting significant and immediate changes to the status quo, don’t hold your breath. Yes, there are big changes coming but these will take time, to translate into action and it is unlikely that some of the broad powers to get things done and cut through red tape will be utilised in a hurry.

2020 saw the introduction of the Urban Development Act, the Covid-19 Recovery Act, a substantial review of the RMA, and implementation of a number of National Policy Statements. This once in a generation planning reform agenda is a seismic shift in powers towards a partnership model involving central government and mana whenua. It’s an acknowledgement that the systems and processes we currently have in place aren’t working. So, we need to crack a few eggs to make an omelette.

What does all this mean for you?

We briefly outline some of the changes taking place further below, but the short story is that there is a lot going on, most of which will take time. While we won’t see changes from the proposed RMA reform package until 2022, we have summarised the big changes that will likely occur in 2021 as the sector comes to grips with the new norm and begin to implement and explore the opportunities that have been created recently.

The big changes for 2021

  • Car parking. Car parking is no longer the domain of a District Plan, but is now being left up the market. This is a change that we strongly support and is well overdue. The market will dictate how many car parks are provided with development. It will drive innovation into car share and alternative modes of transport. It will increase demand for end of trip facilities. It will reduce and costs of housing and commercial and will improve land efficiency.
  • Highly productive soils, freshwater and climate change. Along with existing rules, this will have an impact on urban greenfield growth. It’s another factor that will shift urban growth in rather than out. Highly productive soils will not likely affect existing or future growth or urban areas but will shape how out towns and cities grow over a longer timeframe. It will apply pressure to growth and the next phase of greenfield development.
  • For local government – there is a lot of thinking, and adjustment needed in the face of both the planning and urban development reform, and the current urban growth challenges. There is an urgent need to revisit and retest growth areas – viability, yield, infrastructure servicing, transport and movement, housing typologies.
  • Land developers – greenfield development is becoming harder and harder in NZ. Relatively, the infill development residential market is maturing and becoming easier with greater political support and fewer regulatory hoops. Terraced housing and apartments are making up an increasing part of the homes that New Zealanders are willing and interested to live in.
  • Landowners – over the next 10 years there will be opportunity to value add and look at urban growth opportunities through the integrated spatial planning processes, and as we look for new growth areas that are suitable amongst the quagmire of rules.
  • Central Government Agencies – are holding new powerful regulatory tools, have political mandate to move fast, and have funding to act. There are opportunities for the private sector to benefit from the Urban Development Act that could support large scale development and investment. To achieve greater leverage, government agencies are seeking out opportunities co-invest for the private sector and with mana whenua.

RMA Amendment Act 2020

  • Came into effect in June 2020 and comprises mainly minor administrative amendments that represents further tinkering of the RMA.
  • Yet, it removes the non-notification provisions relating to residential activities that were intended to de-risk and speed up the supply of new housing.
  • Status: In place and making development and the new supply of houses harder.

Urban Development Act 2020

  • A piece of legislation that has huge potential, with significant powers provided to Kainga Ora (KO) and the Ministry of Housing and Urban Development (MHUD) to pursue large scale housing plans.
  • This includes such powers as compulsory acquisition powers, the ability to write your own planning rules, and the ability to assess your own consents. The act allows the government to bypass district plans and slow Council consenting process.
  • While it is an exciting piece of legislation, it is unlikely that the broad powers it provides will be utilised at scale, avoiding the potential community and political backlash that it inevitably entails.
  • Status: Huge potential, but still unused after 6 months.

Three Waters Reform

  • A three-year programme to reform Three Waters across New Zealand.
  • Aggregating water, wastewater and stormwater infrastructure that is held and controlled predominantly by the country’s 67 local authorities.
  • Transfer of assets and operation into amalgamated water services entities, that sit outside of local government by 2023.

COVID-19 Recovery (Fast-track Consenting) Act 2020

  • A short term consenting process to bypass the RMA, boosting projects and delivering the associated benefits from the fast-tracked investment.
  • Much like the Urban Development Act, this legislation also has the potential to cut through red tape and bring projects online quickly. However, since its inception, it has proven to be slow-moving, inconsistent in its application and providing very little certainty of success.
  • Of particular note is an adverseness to any project that has a hint of contentiousness or minimal stakeholder engagement, of which there are many.
  • There are certainly no cost savings to be had in the pursuit of this consenting pathway, with the costs associated with its pursual being equal to, if not more, than a standard consenting process.
  • With little comfort in your success, similar costs and the only benefit being the potential for time savings (which have largely failed to materialise), you are essentially rolling the dice in the hope of success.
  • Status: 8 months in, slow-moving and costly.

Figure 1: The Covid Fast Track Process – Something that sounds good in a short sound bite, but appears to be far more complex and slow-moving in reality.

New RMA

While the headline of “throw out the RMA” may be universally popular, for anyone who has read the 500+ review document, the reality of what will replace it is equally complex to what we currently have.

The RMA Review report does outline a seismic shift in planning resourcing, influence and decision making from local government to central government and mana whenua. In particular, an attempt to shift focus and effort towards spatial planning and plan-making in contrast to implementation and consents.

However, across the board and without exception, the review highlighted that local government and government agencies will require significantly more capacity, resourcing and funding to match their changed roles under a reformed resource management system.

The review states that “we anticipate the greatest draw on local authority resourcing will occur during the initial decade after the proposed legislation is enacted.

The recent announcement that the 30-year-old RMA will be replaced by three new Acts as outlined in the review document has been heralded by the government as gamechanger, simplifying the planning process and reducing costs and time as a result.

The three new Acts will be:

  • Natural and Built Environments Act (NBA) to provide for land use and environmental regulation.
  • Strategic Planning Act (SPA) (sometimes also referred to as the Spatial Planning Act) to integrate with other legislation relevant to development, and require long-term regional spatial strategies,
  • Climate Change Adaptation Act (CAA) to address complex issues associated with managed retreat and funding and financing adaptation.

The core piece of legislation to replace the RMA is the NBA, that still seeks to:

  • promote positive outcomes for both the natural and built environments
  • ensure that use, development and protection of resources only occur within prescribed environmental limits
  • ensure adverse effects of activities on the environment are avoided, remedied or mitigated; and
  • provide a set of mandatory national policies and standards on specified aspects of the new system. These will include environmental natural limits, outcomes and targets.

The core objectives of the proposed reform package remain well aligned to that of the RMA, with any hope of a streamlined process that will not frustrate development projects and positive urban growth resting in the detail.

Further detail will not likely emerge for a few months, with the NBA planned to pass through the house in December 2021. For now, don’t hold your breath for a silver bullet.

National Policy Statements and Environmental Standards

National Policy Statement on Indigenous Biodiversity

  • Work in progress with it expected to come into effect in April 2021
  • sets out the objectives and policies to identify, protect, manage and restore indigenous biodiversity

National Policy Statement on High Productive Soils

  • Work in progress with it expected to come into effect in Mid 2021.
  • To improve the way highly productive land is managed under the RMA and protect it from inappropriate subdivision, use and development.

National Policy Statement on Urban Development

  • Took effect on 20 August 2020
  • Replaced the National Policy Statement on Urban Development Capacity 2016.
  • Requires councils to plan well for growth and ensure a well-functioning urban environment for all people, communities and future generations

National Policy Statement for Freshwater Management

  • Came into force on 3 September 2020
  • Provides local authorities with direction on how to manage freshwater.

National Environmental Standards for Freshwater

  • Came into force on 3 September 2020
  • Regulates activities that pose risks to the health of freshwater and freshwater ecosystems.

National environmental standards for marine aquaculture

  • Came into force 1 December 2020
  • Provide consistent regulations to manage existing marine farms around New Zealand.

Pictures: Cover page of several documents. Images from some of the NPS documents. Flow diagram from COVID-19 legislation.

Authors:

 

 

 

 

 

One comment so far

  1. Ian Pike,

    Hello guys
    Great summary of what’s happening in the urban development space – I was working on producing something similar but you have beaten me to it!
    Would you be happy if we include this on our website – with appropriate acknowledgement back to Veros?

    Cheers

    Ian

Leave a Reply

Your email address will not be published. Required fields are marked *

By leaving a comment you agree with the storage and handling of your data by this website. You can learn more about how we handle you comment information in our Privacy Policy. We are using Akismet to reduce comment spam. Learn how they process your comment data.