Government officials warn plans to allow for more housing intensification in the country’s main centres could be hampered by property owners using legal instruments to prevent development on their land.
The Government has committed to changing the Resource Management Act to enable landowners to build up to three homes of up to three storeys on most sites in Auckland, Hamilton, Tauranga, Wellington and Christchurch without resource consent. Conditions apply.
The Ministry of Housing and Urban Development and the Ministry for the Environment largely support the decision, which is also backed by National.
But, in a regulatory impact assessment on the proposed law change, they warned, “Development covenants and cross leases can act as a barrier to intensification by restricting future land use and making delivery of affordable housing difficult or costly to comply.
“These agreements can limit housing height, subdivision, density, rentability and choice of building materials, and lock in low density housing, often for perpetuity.
“They can be relatively easy to establish and can be difficult to revoke without agreement of all interested parties…
“[I]t is plausible well-resourced property owners, resident associations and developers may use covenants to limit housing intensification. This could limit the expected benefits of enabling intensification.”
The officials said they only have limited evidence on the extent to which the use of covenants is currently a barrier to development. Accordingly, they couldn’t comment on the extent to which they may be used more when the new density rules take effect in August 2022.
But they said, “The Government plans on undertaking work in this area to get a clearer estimation of the scale of the problem and the need for any further intervention.”
Bell Gully law firm partner, Andrew Beatson, was wary of the implications “further intervention” could have on property rights. He maintained this could significantly erode the “well-understood principle of freedom of contract”.
Beatson said the scale of the problem would need to be large enough that the Government could “fully” justify changing the way covenants are applied to property titles.
CoreLogic NZ head of research Nick Goodall didn’t believe the use of covenants would materially affect the intent of the law change - to allow for more intensification.
He noted capacity constraints, preventing home building, is a much greater impediment in the short to medium-term.
See this story for more on the proposed law change, this story for more on concerns raised around infrastructure needed to support intensification, and this story for more on the impact the policy will have on land prices, written on the back of the interview below with Minister for the Environment David Parker.
46 Comments
But it's not interfering with owners property rights is it? My understanding of these covenants is that the subdivider puts one on, something like properties built in x subdivision need to be larger than y square metres.
The later buyer needs to comply with the covenants, if anything it limits the owners property rights.
Not my area of expertise though, would be interested in opposing points.
Dangerous territory.Hard to see how any law can be equitable to the myriad of features and conditions of residential land. For example on hill properties going to three stories could completely block the view of a neighbouring residence, completely devaluing it. There have been some pretty high profile & expensive court cases recently just over fencing doing the same.
True that the covenants are generally restricting property owners' rights. However - once the bulk of the subdivision already has standalone houses built according to the covenants then no-one wants the few vacant sections to pop up 3 x 3 story townhouses on them. It's not like owners are going to knock down their new $1M houses and convert them into townhouses. If there were no covenants in the first place then that would fine.
Yes, they are called restrictive covenants, because they can't exceed what the zoning already allows, ie fencing by law can say fences cannot be higher than 1.8m, so a covenant can restrict that to say cannot be higher than 1.5m but cannot extend that by saying fences can be higher than 1.8m.
Also in the context of how it is used the word, 'restrict' means to protect something that people value, which increases the price a developer can charge. Most things of value have restricted availability.
Sure they may not want them but the vacant section isn't theirs, why should they choose what may be built. This attitude that new development is all well and good until someone has theirs and after that enough is enough is the reason it's so difficult to get anything built.
"New development was all well and good right up until I bought, after that density was about right. Any more would clog up the roads and brown up the schools."
But the developer of the subdivision will have put covenants on all the land they develop - hence even the empty sections, or a section sold 10 years ago, still has that covenant against its title - virtually forever and a day.
Hence, this density idea won't work in any subdivisions done within the past 20-30 years is my guess - empty section or already owned and built on.
Maybe the government needs to address the real issues and open up sufficient land to allow people to build the sorts of houses that they want instead of trying to jam us together like battery hens. Either that or stop allowing in far more immigrants into the country than they are able to provide adequate infrastructure for. The solution of diminishing the lifestyle of Kiwis to accommodate an out of control immigration policy is not acceptable.
There is more than enough land in NZ to feed all of NZ many many times over. Should we give a toss about countries who cannot regulate their population to match their resources. Besides which; drive around Auckland and look at the vast areas of land that is barely productive,some of which could never be very productive. It is just sitting idle in some super wealthy persons land bank, holding Auckland to ransom with complicity of the city councilors. And as I said why should we diminish our lifestyle to accommodate a very damaging immigration policy that is also enabling other countries to avoid dealing with their over population issues.
Much land is not actually being used for their purpose at all. Also some of our prime productive land gets converted to things like new gun clubs with pollute the land with lead, and then becomes a HAIL site. I know of a new one setup just a few years ago, all permitted.
The market is saying the sort of house people want is "anything close to the CBD". There's not enough sufficient land for that, because aside from public spaces, most of its already built on. An increase in height allowance is one of the only ways to increase the amount of available building space, without being miles away and all the additional issues that urban sprawl brings with it.
Most half decent cities around the world are a lot more densely populated than the quarter acre dream NZ sold itself on.
If people don't want to live on top of one another, a city probably isn't for them.
The answer to that one is simple. They need to decentralise the city. Start shifting the jobs to the edge of the city instead of the people so that commuting is in both directions or more sensibly, people can buy houses close to their work. Look at all the land on the left driving from Manakau to Botany. It looks like it is set up for new industrial development. Fill it with houses and shift the industrial out. I am sure that there are other examples.
Designate old industrial and commercial areas as residential.
Better still start shifting employment out of Auckland. It is a dysfunctional and grossly inefficient city that is a drag on the rest of the country. For example Sleepyhead have realized this and are shifting their factory away.
What a shitty piece of legislation.
Buy a house, do due diligence to understand what might be happening in the future-roading, new developments etc. Then hey, presto! Bob the builder can put up a 3-storey apartment next door, blocking your sun and view. And to cap it off they may not provide off-street parking.
It's nothing about privilege and NIMBYism (which seems to be directed at dwellers in central cities with character homes). It's screwing people as a weak approach to addres an issue successive Governments have contributed to.
Go rot Judith. Go rot Ardern.
You need to now be super careful about what you buy and to checkout all the neighbours. If you have a old place next door on a huge section on the Northern side your potentially in trouble. Nothing has really changed, I used to look outside when I was looking at apartments, it was a favourite trick to build the first block, sell it then build a second block that killed your view. This new law is going to totally wreck some areas of Auckland and seriously devalue your house if your unlucky.
'If you have a (sic) old place next door on a huge section on the Northern side your (sic) potentially in trouble.'
Yes indeed, but not even necessarily a huge section - could be 500 or 600 square metres and someone might build three x three storey, 11m townhouses 2 metres off your northern boundary. Bye bye sunshine, other than in summer (when you don't really need or want it)
It's the price we pay for having successive neo-liberal governments that think the way of solving the housing crisis is incrementally de-regulating planning regulation, in a race to the bottom.
Absolute bollocks.
It's easy, and lazy, and doesn't address more important factors like population growth, and monetary policy.
Most of the residential land council controls do not have covenants.
But historical, all covenants were you and your neighbour agreeing to how you would live next to each other. Once neighbourhoods got too large then the owners employed managers and then voted in members of the neighbourhood to oversee their collective interests hence councils and councillors were born. Once these 'professionals were handed control over larger neighbourhood groups, these covenants were formalised as zoning.
The council is supposed to manage on behalf of their ratepayers but the larger the council, the less likely it represents any majority in that neighbourhood.
To change the zoning without consent from the majority of the owners is breaking the social contact with their ratepayers.
It's not that covenants should not be changed, but they should not be changed without the majority of that neighbourhoods consent. Likewise, property owners should not complain about what might happen to their neighbourhood. If they think it is worth preserving then they need to get off the arse and collectively put agreed covenants on their neighborhood. That's when they would find what their neighbours really think.
OMG. That's shockingly elitist advice but I don't think it legally possible anyway. That is exactly what the article is talking about; i.e., whether or not such a move could be taken by people wanting to retain the low density amenity that was developed by a city council decades and decades ago.
I mean what would you think could legally constitute a neighbourhood?
You have completely misunderstood the article. You as an individual can set conditions on the use of your property, as long as they are restrictive(subservient) to general law, and collectively as a group of neighbours they can do this, it's called democracy. And anyone group can do it, what is so elitist about that?
This is not about achieving density just for the sake of density, it's about creating affordable housing. If density was a proxy for affordability then Hong Kong would have the most affordable housing in the world, not the most expensive.
So the same applies on the edge of urban areas? Ie. urban boundaries should only be removed if a majority of rural land owners in the hinterland agree?
If not, why not?
Many people living in those areas enjoy the areas for their rural ambience.
Or they might be farmers who's livelihoods might be affected by the encroachment of housing.
Rural zoned land is a blank canvas except for that deemed residential around the farm dwelling.
That is how it works in jurisdictions with affordable housing. Those that want to sell can do so and those that don't want to are not forced to. A farmer's livelihood is not affected by the encroachment of housing. How can it be? Unless in dysfunctional jurisdictions like ours we allow these new city neighbours to have reverse sensitivity powers.
Attempting to tap some crowd sourced knowledge: How do I calculate the financial pros and cons of staying in my modernish 4bd 799msq central suburb home v knocking down and building/subdividing to max profit under the ‘new rules’. There are soft benefits like location, school and space for family but if it came down to a purely financial calculation..how much will a developer pay or can I eventually come away with after selling the maximum that I will be able to build(assuming I could arrange this). (Residential ‘nice’ sort after area’). S facing. If I wanted to be a ruthless vulture that is.
Well, I'm not going to give you free advice, done that too much in life with the 'promise of rewards' from tyre kickers (other than my uncle who rewarded me handsomely on some advice in Wellington ahead of government laws coming in).
All that I will say is I would think very very carefully about doing development at this stage in the cycle, hard times lie ahead.
These days property development is the only game in town.
At times like these my gut feeling would be to get out of it, now. Or at least be very very careful.
Do things other people do not do. Do not read media too much. That way your mind becomes brain washed to think like everyone else.
All Labour and National have proved is that they don't represent people as individuals, but as some sort of groupthink where we are compromised to represent a common good, where nobodies needs are met, and we are all equally miserable, except a select small group of people who are more equal than the rest of us.
To those that want to protect their neighbourhoods, I would say, don't expect the council or Govt. to represent you anymore, clearly, they have an agenda where your best interests are not in their best interest, so get out there, mobilise your neighbours and secure your neighbourhood character with your own covenants.
There are more rational individuals than groups, and if there are no rational humans, what is the basis of your own arguments?
In not protecting amenity values like sunlight, the Govt. have not only broken its social contract to look after your basic needs, but it's a slippery slope to losing self-determination over food, water, and air quality security.
It's not that an increase in density cannot happen in some areas, but it's the way they do it. Not only do they create the problem, but then they implement the wrong solution.
In short, you cannot trust them to do the right thing. They are not malevolent, they are incompetent.
I am sure to those that will never afford a home, looking at successive governments whose policies have enriched existing homeowners time and time again - some certainly are more equal than others.
And i say this as a recent homeowner - the idea that people in this country can no longer afford what should be a basic right is totally shameful.
The whole "protecting Neighbourhoods" arguments is total nonsense. Some of the loudest voices in Christchurch against this move are from suburbs with some of the most awful run down properties in them today, with quiet streets and no life in them - despite being a stones thrown away from the CBD. The idea of the fact that I was here first so i get to prevent others from enjoying this area is totally outdated thinking. NZ is way behind the world and its time we caught up.
The first part of your argument is correct but is completely undone in the second half by not understanding first principal rationale.
If two like-minded people et al, who have agreed how they want to live beside each other, can have that agreement overridden due to the incompetence of the people whose work was to look after your interests, then nothing is off the table.
For example, you say 'The idea of the fact that I was here first so I get to prevent others from enjoying this area is totally outdated thinking.' Based on that rationale, then they can come onto your property and into your home and take anything of yours they want. At best you have just described communism/facism, and at worst anarchy.
This type is misunderstanding feeds the very reasons we have unaffordable housing and why the wrong reaction is to think increasing density will solve it.
There is no jurisdiction in the world where density makes housing more affordable on a like-for-like basis, in fact, the research shows it makes housing less affordable on a like-for-like basis.
Interesting article about some of the headwinds facing residential construction, which I have been talking about for a while. Has Tony Alexander been reading what I've been saying?
https://www.oneroof.co.nz/news/40399
A quick question…so 2 additional dwellings can be added & can be up to 3 stories high. On a smallish section how do the new builds fit within recession planes (building envelope) or have these rules changed too? To the best of my knowledge the proposed rules on this topic haven’t been overly clear..
Yes agreed. If current recession planes are still used, then it may negate any other rule, so the final density may be a lot less.
The fact that this issue has not been made clear, and their historic record to date, would lead me to think they haven't thought this through.
Recession plane rules are proposed to be changed too. They are going to be 6m up on the boundary then a 60 degree angle. Yes you read that right, they are proposing a building 6m high being allowed on your boundary. So much for sunlight for neighbours. Where is the national outrage.
It's a good question. I suspect that the general public have been so conditioned through media/opinion/comment/legal challenge etc. from the development community to think that planning/planners/plans prevent/stymie development - such that the public think anything the government does to relax planning rules (i.e., take the power out of the hands of planners) must be a good thing.
Remember ACT's 'Freedom to Build' election manifesto of a couple of elections ago?
That's what this policy initiative attempts to provide.
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