Hon Chris Bishop, Minister of Housing, has recently announced the Government's "Going for Housing Growth" policy, which seeks to free up land for development and remove what the Minister has called unnecessary planning barriers, improve infrastructure funding and financing, and provide incentives for communities and councils to support growth.
While it's widely agreed that more (and affordable) housing is needed in New Zealand, those working in the development and planning space know the "devil is in the detail". We expect the proposals will be contentious and put further pressure on already stretched councils and infrastructure providers.
Many councils are still in the thick of grappling with the clunky intensification planning processes – the result of the previous Government's attempt to "fix" the housing supply crisis. These intensification planning processes are yet to deliver what was intended and have arguably caused more problems, inconsistency and ambiguity than solutions for councils, developers, communities and infrastructure providers (and at not insignificant cost).
Now, with further changes to what Minister Bishop called the "fundamentals", it is not surprising there is some scepticism. Time will tell as to whether the changes do indeed "flood the market" with opportunities for development and reduce the cost of housing, without coming at a major cost (such as increased litigation, lack of infrastructure, poor building practices, environmental degradation, etc).
Key changes
The key changes proposed include:
- Requiring the councils of our largest cities to meet Housing Growth Targets.
- Allowing for outward expansion of cities at the urban fringe – not allowing councils to rely on 'rural-urban boundaries' to limit greenfields development.
- Strengthening the intensification provisions in the National Policy Statement on Urban Development (NPS-UD).
- Requiring councils to enable a baseline level of mixed-use development in cities.
- Abolishing minimum floor areas and balcony requirements.
- Making the Medium Density Residential Standards (MDRS) optional for councils.
We set out how this ambitious programme will be rolled out below.
Housing Growth Targets
The Government will amend the NPS-UD to require councils in our largest cities (Auckland, Hamilton, Tauranga, Wellington, Dunedin and Christchurch) to live-zone rather than plan for 30 years of development capacity and make it available right now to “flood the market” with opportunities for development.
Changes will also be proposed to the way councils prepare their Housing and Business Development Capacity Assessments under the NPS-UD. The Government wants to make sure demand for housing is not being understated in these assessments, and the amount of available and feasible development capacity is not being overstated. Councils will also be required to use the “high” demand projections.
Expansion at the rural-urban boundary
The Government is proposing changes that enable cities to expand at the urban fringe – essentially removing rural urban boundaries in planning documents. There are also plans to embed a “right to build” on city fringes, on the condition that infrastructure costs of new development are covered – in other words, “growth pays for growth”. How this is implemented is still to be determined and will be the subject of a further announcement later in the year.
The Government has also said Future Development Strategies (FDS) have not delivered what was promised – noting a perception they stifle development on the edge of cities, rather than enable it. We can expect changes later this year to make FDS more responsive to development opportunities and enable housing in both greenfields and brownfields areas.
NPS-UD intensification provisions
The Minister also announced sweeping changes to the NPS-UD requirements around where councils must enable intensification, including:
- Reinstating baseline intensification requirements to require large urban councils to enable heights and densities commensurate with demand and/or accessibility to businesses and services across all urban areas.
- Specifying density requirements around strategic transport corridors. Councils will be responsible for determining these corridors, subject to criteria set out by Government.
- Simplifying the definition of rapid transit – likely by listing metropolitan train lines and busways that trigger upzoning.
- Clarifying the definition of “walkable catchments” (triggering upzoning) by setting minimum catchment sizes councils must use with catchment sizes based on the level of service provided by the type of centre or node.
- Requiring councils to explicitly justify the use of "qualifying matters" (like flooding and special character) where they want to reduce density.
New rules for mixed used development
The Government proposes to introduce new national direction requiring Tier 1 and 2 councils to enable a baseline level of mixed-use across urban areas. Tier 1 councils will also be required to enable small-to-mid-scale activities like cafes and restaurants, retail, metro-style supermarkets and offices within areas subject to the NPS-UD’s six storey intensification requirements.
Abolition of minimum floor area and balcony requirements
Minimum floor area and balcony requirements are seen to significantly increase the cost of new apartments and limit the supply of lower cost housing options.
MDRS to be optional for councils
As expected, legislation will be passed to make implementation of the MDRS optional.
For councils who vote to retain the MDRS, nothing will change. For councils who vote to remove or alter the MDRS, there will be a process for the relevant provisions to be removed quickly from planning documents. Councils must still give effect to the relevant Housing Growth Targets, intensification changes, and direction on mixed-use through the same plan change.
Further RMA reform
This announcement is just one component of the Government’s broader RMA reform work. Further announcements later this year are expected in relation to:
- restrictions on development through the National Policy Statement on Highly Productive Land and the National Policy Statement on Freshwater Management;
- timeframes for obtaining a permit through the Wildlife Act;
- heritage rules; and
- barriers to building on Māori land.
Please get in touch with one of our experts if you would like to discuss the above.