One of Urban Development Minister Phil Twyford’s most important pieces of legislation is due to have its first reading in Parliament this week.
The Urban Development Bill is designed to give the new housing agency, Kāinga Ora - Homes and Communities, the power to speed up the development of large urban development projects.
It establishes a process the agency can use to cut the red tape from government-approved public or private projects.
The idea is for it to be a one-stop-shop that can consent projects so that developers don’t have to go through separate consenting processes with different authorities.
There is no rule around how large a project would need to be to qualify, but Twyford's view is that a housing development would have to include “several thousand” dwellings, for example.
He said the sorts of projects that could benefit from the streamlined process include development around the proposed light rail corridor in Wellington or the Unitec site at Mount Albert.
The Bill is the sequel to a piece of legislation that enabled Kāinga Ora to be established on October 1 to bring together the KiwiBuild Unit, Housing New Zealand and its development subsidiary HLC.
Twyford hoped the “powerful” entity would see projects that would otherwise take a decade to get off the ground, come into fruition in a year or two.
What exactly would the legislation enable?
Let’s say a private developer wanted to build 4000 houses, a block of shops and supporting infrastructure. This is the process they would follow under the Bill:
- Kāinga Ora evaluates the feasibility of the project. It gets views of local councils.
- The Finance Minister and Minister responsible for the administration of the Act (currently Housing Minister Megan Woods) endorse the project.
- A “special development project” (SDP) is set up under law. This defines the project’s boundaries, objectives and governance. Its governing body should include a local council representative.
- Kāinga Ora prepares a draft development plan, including the development’s design, information on what development powers will be accessed, whether any changes to normal Resource Management Act (RMA) planning instruments will be required, funding arrangements, and considerations given to Maori, environmental and heritage interests. Kāinga Ora engages with Ministers with interests in different parts of the project (IE the Minister for the Environment if reserve land is to be included in the development).
- Kāinga Ora publicly notifies the draft development plan for consultation. Submissions are heard and considered by an independent hearings panel.
- The independent hearings panel reports back to the Minister responsible for the legislation, possibly recommending amendments be made to the development plan.
- The Minister responsible for the legislation approves or declines the plan.
What powers will Kāinga Ora have?
Kāinga Ora and its partners will be able to:
- acquire land - either through agreement or compulsorily
- override, add to, or suspend provisions in RMA plans or policy statements
- act as a consent authority (city/district level) under the RMA
- veto or amend resource consent applications
- delegate, with Ministerial approval, some development powers to crown entities (powers to acquire land and levy targeted rates can’t be delegated)
- use funding tools for infrastructure and development activities
- levy targeted rates and development contributions
- build and change infrastructure
- reconfigure reserves
What protections will be in place?
Twyford said he spent time ensuring there would be enough environmental/Maori/heritage protections in place without reducing Kāinga Ora’s effectiveness to truly speed up the process.
In terms of land acquisition, safeguards are broadly the same as the Public Works Act, but Kāinga Ora can dispose of the land without being required to offer it back to the former owner if certain development work has been completed. The exception is where the land is former Maori land.
An SDP’s objectives have to be consistent with national policy statements, national environmental standards, and other national directions under the RMA.
Reserve land, land subject to conservation interests and coastal marine areas can only be included in the project with the Conservation Minister’s approval. The Minister also needs to approve any changes to existing reserves.
Kāinga Ora has to seek recommendations from Heritage New Zealand on the protection of heritage values for a proposed project area. The development plan cannot override planning rules and other provisions protecting historic heritage in a way that would make them more permissive to development.
Nationally significant infrastructure providers must be engaged during the initial assessment stage of the SDP process.
And the Bill can’t be used in respect of Maori customary land, Maori reserves, common marine and coastal areas protected by customary rights. Some other categories of land can’t be compulsorily acquired but may be developed with the owners’ consent.
National's view
National’s housing spokesperson Judith Collins’ initial take on the Bill is that “it looks similar to some of the things we were doing”.
She said she would be able to comment further once her party’s caucus had discussed it.
National will release a discussion document on its housing policy next Monday.
49 Comments
1) Just shows how badly screwed up the implementation of the RMA is, that the government has to resort to overriding it. The RMA is theoretically good legislation (effects based) but has been applied like the town & country planning act (zone based).
2) The government wouldn't have to resort to such measures if it ran a sustainable immigration rate focused on maximising gdp/capita growth, rather than one of the highest immigration rates in the world per per capita producing the resultant negative externalities (deficits in schools, roading, hospitals etc)
$1 billion? That's 0.3% of NZ's GDP.
Latvia, a country with an economy that's 1/6th of ours, raked in $1.75b in hi-tech manufactured exports (5% of GDP). Estonia $2b (6.7% of GDP).
We are quickly being surpassed by most ex-Soviet nations in metrics such as R&D spend, hi-tech manufacturing, startup funding, % of STEM graduates, GDP per hour worked, and the list goes on.
I recall the recent US trade agreement has "protection and enforcement of copyright" front and foremost in the new trade agreement with a certain country. We tend not to abuse copyright and/or steal technology from other nations, as some other country's some nations do, so perhaps our volume/export stats are behind others. AKA #genuineinnovation
Exactly.
If they just put as much effort into repealing the RMA and allowed ALL developers large and small the same benefits that they are going to bestow on a few.
All they are doing is centralising power into the hands of the few, the benefits of which will stay with them and not passed onto the end consumer any more than is needed to undermine the business if those landowners who can't access these benefits.
The only push back that I can see that might be of benefit to actual home buyers is councils will be forced for their own survival to become a competitor to this power grab and compete by making it easier for the small landowner to develop.
Yep. Lucky developers.
If we thought the large scale developers have too much market power now, it's gunna be fun to see what happens when they are afforded yet another benefit for simply being 'large'.
"A private developer wanted to build 4000 houses.."
That's the problem. We should not be relying on "A" developer to establish an entire community. It's no worse than restricting the land supply in the first case for overall consumer welfare, as you allude.
The Kumeu Kauri Grove model - One developer, one builder, lots of buyers, high prices.
What people are forgetting here are the challenges to providing services to these new suburbs to be created.
What can't be removed from this process is Councils have to deliver water; unless purchasers are happy with tank water. Potentially a developer can deliver a sewer system, but whether they want to is another question. In addition, Drainage solutions can be incorporated into the subdivision design.
As Christchurch has found out, when supply meets demand price comes back to what people can afford. Establishing enough competition should be part of the approval process.
I don't know that it's just the fact that implementation of the RMA as zone-based rules is the primary problem - rather it is all the rules upon rules and various character, tree canopy, height to boundary, urban design and on and on other 'residential' overlays that have been applied to the residential zones.
One common set of residential rules for all residential zones would make life a whole lot easier. It is exemption from all those disparate local body rules that I think they are trying to over-ride with this legislation.
Anybody with a positive and productive mind will be in full support of anything, any measure, that streamlines, simplifies and speeds up the existing process(es) of consents. But from bitter experience you do have to question if the bureaucracy of The Brown Cardigan Brigade that infests local government, could ever be that willing, let alone get on board. The motto of the BCB after all is “Omnes Auctoritate Nihil Responsabilitas.”
show stopper or revert to the 5-10 year scenario by kicking the problem upstairs
"Let’s say a private developer wanted to build 4000 houses, a block of shops and supporting infrastructure. This is the process they would follow under the Bill:
- Kāinga Ora evaluates the feasibility of the project. It gets views of local councils."
I was starting planning to help one of our families young couple to build their first house. It struck me that the councils, banks and government have created so many bureaucratic rules and barriers to achieving this, it is no wonder so few new houses are built. If I had my way
1 Building permits would be free. They can recover these costs in the rates. At the moment councils are just using it as a huge excuse to click the ticket at every turn without any restraint or accountability for the costs.
2 It should be possible for a young couple to live in a house without it having to be absolutely and completely finished. When you look at half the hovels that they are paying stupid money for, they would be far better off in their own brand new home even without carpet, paint, curtains and paths.
3 There needs to be far more scope for sweat equity, Installing their own insulation, paths, even wall board, bathroom and kitchen joinery are pretty easy. In the good old days you could run the wires for the electrician who would check and terminate them. These day it is all sewed up and very hard for a young person to get past the system that captures all the work for the building companies.
Theres nothing like a bit of first hand experience to change ones perspective. Although I would leave out banks and say rbnz.
"It struck me that the councils, banks and government have created so many bureaucratic rules and barriers to achieving this, it is no wonder so few new houses are built."
I was recently informed by a chap of his son, who is a registered electrician, young, newly married, trying to get into his first home. He was trying to contract a building company (with current high demand) and wanted to do his own wiring. The building company would not touch it. Despite being a registered electrician, he had to accept the standard contract or not at all. Totally sewn up! No way to cut costs or save at all. No performance clauses other than the company offered ones.
Regardless of any new measures NZ will always have unaffordable poorly built houses as long as a considerable number of builders, and that includes the so called LBPs and the august master builders, that can take short cuts and rip their customers off. It is extraordinary what they can get away with. Latest gambit appears to be “see you in court then” with the knowledge that say 20 - 30K is not worth the legal bills of chasing. There are far far too many undisciplined and unaccountable builders in NZ only because they can operate quite freely, as such.
This all sounds ridiculous and not feasible. There will be very few situations this will apply on such a large scale. The SHA legislation this dumb government binned was more widespread for a range of landowners and developers. Instead these numpties play politics by tossing it out. Situation normal
Average cost to build per m² of house has gone up 3x in last 20 years vs just 1.5x inflation, but houses are not significantly better as a result. Most of that extra is money being wasted on regulatory compliance. Roll back regulatory regime by 20 years (keep updated building codes) and you can cut $100k+ off cost of most homes. Then do land - stop the vast cost of subdividing that adds 100's k to sections (recently talked to a rural Auckland land owner who said council was charging $250k per section for him to subdivide a lifestyle block with no water services or rubbish collection provided). Councils can and should recoup costs in rates - after all they are gaining a new revenue stream in form of a long term rate payer.
The most important thing to do is to remove liability for house problems from anyone but the owner. Caveat Emptor should be the start and end of it to avoid all the inefficiencies of apportioning blame. The cost of fixing a few defective houses is tiny compared to the massive cost of compliance and over-speccing everything imposed by industry wide arse-covering. The owner can buy insurance against house construction issues it if they want - that removes the need for just about everyone in the council consenting industry (including the armies of professionals employed to deal with them). Also need to reappraise all building related regulation for economic sanity - is the cost higher than the benefit? Eg $200/year electricity for a heat pump is way cheaper than $50k of insulation requirements for a house in a warm part of the country. $5000 to repair a leak in 20 years is cheaper than $50k upfront in over-specced cladding requirements. Spending $15k+ per house on scaffolding to avoid extra injuries that cost maybe $100 per house is dumb economics too.
Exactly. Regulatory imposts add cost but little value, and the critical test of a dwelling is what's in the current Building Act re Council powers to condone existing but unpermitted construction (Schedule 1 Part 1 Section 2):
2 Territorial and regional authority discretionary exemptions
Any building work in respect of which the territorial authority or regional authority considers that a building consent is not necessary for the purposes of this Act because the authority considers that:
(a) the completed building work is likely to comply with the building code; or
(b) if the completed building work does not comply with the building code, it is unlikely to endanger people or any building, whether on the same land or on other property.
And it's worth considering the ultimate test - the Christchurch earthquake series, which did not cause any private wooden dwellings to kill their occupants, despite up to 60% of said dwellings being of sufficient age to have avoided the permitting mania of late......
Fundamentally wrong for the Government to be making different rules for different groups. Everyone should eat from the same plate. If the regulatory regime is hopelessly expensive and inefficient in any (every) regard then FIX IT. Government is the only organisation with that power.
Good luck with that Phil. Replacing one set of bureaucracy with another wont solve anything. Reality is house supply wont keep up with demand and prices will continue to rise because:
1. Rapidly growing immigration (whether residency based or work permit - which often leads to residency) puts pressure on supply and prices (upwards)
2. Attacking Ma and Pa landlords by removing depreciation deductions (National), ring fencing rental losses (National in the 70's did it briefly and now Labour trying it again this year) - both policies will reduce supply of houses (and increase prices)
3. Poverty level of NZ superannuation - about $400/week for an individual - and lack of incentive for taxpayers to maximise private super savings forces and motivates middle aged people to look elsewhere for retirement planning/savings so they buy rental houses for income (and capital growth, whether taxed or not). Kiwisaver contributions of 3 + 3 % are nowhere near enough and Kiwisaver is taxed to hell as well from you receiving no deduction for contributions and the fund itself is also taxed heavily (thanks Labour/Lange/Brash as consultant) - unlike overseas jurisdictions like USA, Canada, Australia whose retirees are significantly better off in retirement without resorting to investing in rental properties)
4. Relentless tax grab by govt though GST on new homes (10% introduced by Labour/Lange/Douglas then increased to 12.5% by Labour (Palmer/Moore/Caygill) then again to 15% by National (Key/English) - both parties are as bad as each other - adding $75,000 of tax to a modest $500,000 purchase (and you can probably double that tax amount after interest is paid on the mortgage for 25 years!).
Look you lot, you've got it all wrong. Think of the jobs the RMA has created. The system should be extended to WOF inspections for vehicles (you can't just leave it to grubby mechanics, you know) and obviously, council staff should be consulted on all car purchases. There should be a section in the 5 year Plan setting out how many vehicles in each category can be purchased each year, with detailed specifications for insurance category, safety rating, fuel economy, etc. The applicant must provide proof of parking availability at home and at work, and a maximum mileage per annum agreed.
This sort of transformative thinking is what New Zealand needs if we are to transition rapidly to a high tech, knowledge economy. Council staff should be consulted on each area of society and asked to incorporate their guidelines into future Five Year Plans progressively.
Honest...
Roger that!.
Can I be on the 5 year Planning Committee to plan for this new exercise. I can do squat all, a total jerk and become a pain in the neck, if I try hard enuff. However, it all depends on remuneration and travel expenses, being offered. I was a real estate agent for a while, but in reality, I have been a weight lifter for many a year, a burden on society and have lived off the fat of the land. Please put me on the top of the list, I can become your right hand man and will give the job all the support it needs. We need more Public Servants such as I, I just need a little promotion to get a head of the pack. Is there transport provided per chance?, I live in Aussie at present. But willing to trade for the benefits I trust are the same as here. Oh and a roof over my head..Yours Truly ..AE.
It is sad, really sad that the message remains largely unperceived. The mantra and the thrust of The Brown Cardigan Brigade rides resolutely onwards. We know, we say, you do. And in so doing you, the people, pay increasingly for the benefit of our great disservice.Forget the details. Just remember as rate payers and taxpayers you are unworthy recipients of whatever we deem to do or not do, whatever is to your disadvantage.
Vive Brown Cardigan Brigade. “ Omnes Authoritatis Nihil Responsibilitas.”
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