Smith proposes 10 part re-write of RMA to boost housing supply; says RMA responsible for extra $30 bln of housing cost and 40,000 fewer homes

Smith proposes 10 part re-write of RMA to boost housing supply; says RMA responsible for extra $30 bln of housing cost and 40,000 fewer homes

By Bernard Hickey

Environment, Housing and Building Minister Nick Smith has detailed a 10-point plan to rewrite the Resource Management Act (RMA) this year to boost housing supply and improve housing affordability.

Smith delivered his overview of plans to overhaul the RMA in his 20th annual speech to the Nelson Rotary Club and released a 65 page paper from Motu on the RMA's impact on housing supply to back up his call for major reform.

The report estimated the RMA added NZ$30,000 to the cost of an apartment, NZ$15,000 to the cost of a home and had reduced the capacity for housing development by 22%. It indicated the RMA had added NZ$30 billion to the cost of building over the last 25 years and reduced new housing stock by 40,000 homes.

“The Government is planning the most significant overhaul of the Act since its inception 25 years ago. We want to modernise the purpose to make it more practical and relevant, standardise council plans and simplify the process for gaining consents," Smith said in the speech.

Smith said he wanted to make 10 major changes to the RMA and wanted to build a broad base of support, even though National and ACT's David Seymour could pass the changes on their own. He described the reforms as pragmatic and moderate. National abandoned an attempt to reform the RMA last year before the election because it could not garner the support of ACT's Peter Dunne and the Maori Party's three MPs. The election result meant National only needed ACT's support after the election.

"We want to reduce the mountain of plans and rules that make the RMA a barrier to new housing and jobs, but retain the core environmental controls that ensure we keep New Zealand special and such a great place to live," he said.

Smith outlined 10 changes, including:

1. Adding the management of natural hazards such as quakes, floods, landslides and volcanoes.

2. Properly recognising the urban environment, given 80% of consents are in cities but there is no direct mention of cities in the current RMA,

3. Specifically recognising the importance of affordable housing in the RMA.

Smith said the current act put huge weight on protecting landscapes, natural character and heritage without any balancing of the cost implications.

"When deciding whether a sub-division will be allowed, whether an apartment building can be built higher, what section size or apartment size will be allowed, side yard requirements, set-backs for viewing shafts, there is no legal requirement to consider the impacts these will have on the supply and affordability of housing," Smith said.

4. Including the provision for appropriate infrastructure into the RMA. Smith also said he viewed economic growth, jobs and exports as needing recognition in the Act. "The idea that the only consideration in resource consenting is protection of nature is naive. This is not the National Parks Act."

5. Give more explicit recognition to property rights. "We are looking at amendments that limit the degree to which council officials can meddle in people's lives," he said.

6. Consolidation of rules across councils. There are currently 80,000 plans and rules across 78 Councils that would reach 10 metres high if stacked up. Smith pointed out there were 50 different definitions of how to measure the height of a building.

7. Speeding up the plan-making process, which currently takes 6 years to complete a plan.

8. Building a new collaborative way or resolving resource management issues, rather than use litigious and adversarial approach. He pointed the Land and Water forum as one example of a new approach.

9. Strengthening the powers for national regulation to allow for a law change for national regulation after one round of national consultation, backed up by an immediate fine system. Smith said the Government wanted to have such a rule in place to ban dairy cows from streams and rivers from July 2017.

10. Use the Internet for notification of new plans, rather than using paper for notifications to all submitters.

Smith said he planned to draft and introduce the bill in the first half of the year, before advancing to a full select committee process and passage before the end of 2015.

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If you find yourself in a hole keep digging seems to be Smith's strategy.
 
Auckland has one of the most severe mismatches in the world between prices for housing and ability of its residents to pay . 
 
Auckland needs 40,000 - 50,000 houses today priced at or below $225,000 to turn it back into the city it was 30 years ago.
 
And this is the best National can come up with.

What more could you expect from a Nick Smith/Motu team?

Worthy but oh so long-term.
 
The plethora of plans, definitions etc is a consultant's dream (borrow watch, advise time, collect fee).  So cutting through Byzantium is of itself useful.
 
But as Plans etc mean Zones in planners' minds, there's still no strengthening of the original, effects-based notion inherent in the RMA.  Smaller plans still mean the Town and Country Planning Act 1947 with all its glories.
 
Whereas the Land and water forum (risk-based, practitioner-driven) is a much better overall model for assessing Effects.
 
Affordability is, alas, a function of land price (bubbular), build cost (duopoly), regulatory cost (all cost, little benefit), and labour (in short supply).
 
Hey ho.

Shame they rejected Aucklands proposal to "7. Speeding up the plan-making process, which currently takes 6 years to complete a plan."

Nick Smith: " "The idea that the only consideration in resource consenting is protection of nature is naive..."
 
Resource Management Act paragraph 5:
"The purpose of this Act is to promote the sustainable management of natural and physical resources... managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety..."
 
Enabling "people and communities to provide for their social, economic, and cultural well-being" is more than just protecting nature so it's already there.
 
What makes the RMA process for housing hard and expensive is the quality of council staff who make the subjective assesments that are required by the process. There are balances between getting unneccessary reports and getting enough information to make informed decisions (I don't mid paying for say geotech reports if it's going to avoid building on crap ground for example). There are subjective balances to be made between affordability and quality of housing.
 
As plans are written and plan changes added more and more sites are moved into more subjective activity statuses (Discretionary +). To help affordability there just needs to be more activities moved back into Permitted or Controlled Statuses where Council discretion is limited to specific items.
 
 
 

I fully agree Bob it is very clear in the "Purposes of the Act"..........
 
And the Interpretation Act 1999   - States how to read any piece of legislation.

Part 2
Principles of interpretation

5 Ascertaining meaning of legislation

(1) The meaning of an enactment must be ascertained from its text and in the light of its purpose.

(2) The matters that may be considered in ascertaining the meaning of an enactment include the indications provided in the enactment.

(3) Examples of those indications are preambles, the analysis, a table of contents, headings to Parts and sections, marginal notes, diagrams, graphics, examples and explanatory material, and the organisation and format of the enactment.

 

More changes. That can only slow down development in the short term. Onwards and upwards in Auckland for the foreseeable future.
If they implement these changes we might see an impact in 10 years time.

A simple equation.
Smith spends a year and a few taxpayer dollars amending the RMA to save $15,000 on the price of a new build.
Meanwhile the land price rises by 10% , say $50,000.
Wonderful maths here.
Who wins?

Very good point.
 
And I'd add to the cost of amendments - the need for all existing practicing planners to be re-trained in the amendments, the need for all planning guidance documents (MfE, NZPI etc.) to be amended, the need for internal council documents to be updated, the need for new case law to be developed, the need for tertiary planning institutions to update course materials.
 
They might sound petty but these true costs in respect of time/resources are indeed  significant.  That's not to say we shouldn't amend, but the RMA has been amended already SOOOO many times, to what seems to be little effect in respect of the problem of housing unaffordability.
 
I'd have preferred a clean slate approach - a reform/review exercise not unlike that Sir Geoffrey Palmer undertook back in the late 80s. And in the meantime the Govt just needs to get on with its own state housing build/re-development proposals in those markets/regions with the most urgent need. 

I don't know why BBIII's point isn't blindingly obvious to everyone. If you take a fringe home in Auckland where the land is 300K and the house is 200K then there are lots of ways to make that more affordable. The target by the way is $225K (3 * $75K, the median household income in AKL).
 
In descending order:
 

  • make it possible for developers to buy land at rural prices: save $150K
  • make the building supplies industry as price competitive as Australia: save $30K
  • speed up the process for getting RC and removing some of the urban design rules: save maybe $10K
  • Make development contributions pay later instead of pay now: save maybe $10K

 
So if you concentrate on all the stuff that is hard to implement and is complicated etc you may take the price of the new home from $500K down to $450K.
 
Or you could take one step that it isn't hard procedurally - i.e remove restrictions on where you can build new residences and you could take that package down to $350K.
 
Strangely enough this used to be routine in NZ. The country's most successful property developer routinely ignored local town plans, was prepared to beef up infrastructure itself, and drove efficiencies into purchasing of building materials. The name of that developer was the government of NZ when it was building state houses.

And add to that bullet list, to include all individuals and entities registered or resident overseas to require OIO approval for the purchase of any NZ property - no matter what the price and/or significance. Time to shut the doors (at least temporarily) on both hot money and the extreme volatility of other central bank actions around the world.   

Canada shut the doors outright on 86000 applications as at 14 February 2014.
It may only be my simple mind but I am certain there has been a big surge in overseas mrket participation here in the recent year.

I am yet to be convinced that that would have a noticable effect in our case but I wouldn't object if the government just did it anyway.

Exactly. If it is the small number/insignificant factor that the Govt claims it to be .. then very few purchases/purchasors will be affected anyway.

Smith.

The billion dollar auckland upper harbour infrastructure upgrade and the pt chev billon dollar southern connection is all reflected in house prices. You wonder why house prices are going up? Just look at the billion dollars that was spent down the road from your auckland house. Plenty of upside remaining. But weary of USA, their currency can drag NZ down into the dark ages. Along with the rest of world.

Meanwhile, Queenstown which has a housing shortage/affordability problem similar to Auckland's, just gets on with it.........
 
A price list has not been released yet but it might cost about $450,000 to buy land and build a three-bedroom house.
That compares with Queenstown's median property price for the past 12 months of $595,000.
 
http://www.odt.co.nz/news/queenstown-lakes/330742/resort-subdivision-mee...

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