The RMA ‘Enabling Housing Supply’ Bill – red tape removed for housing intensification

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In a rare show of unity, Labour and National have teamed up to bring a radical new housing policy to life. The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill (the ‘Bill’) proposes amendments to the Resource Management Act 1991 (‘RMA’) in order to bring forward and strengthen the National Policy Statement on Urban Development 2020 (‘NPS-UD’).

The NPS-UD already went some way to unlocking additional housing development capacity in urban areas. The Bill is intended to speed that up through a new bespoke planning process, as well as significantly reducing constraints on housing development in major centres. In particular, it will mean that resource consent is no longer needed to build ‘up to three homes of three storeys’ on most sites within Auckland, Hamilton, Tauranga, Wellington Region, and Christchurch.

It is projected that the Bill (available here) will bring forward the aims of the NPS-UD and help respond to the housing crisis by enabling at least 48,200 and as many as 105,500 new houses to be built in the next five to eight years.

In a nutshell, the key proposals in the Bill are:

  • Medium Density Residential Standards (‘MDRS’) that will sit within a new Schedule 3A to the RMA, and in essence set permitted activity standards to be applied within ‘relevant residential zones’ (being almost all of them, within the urban centres to which the MDRS apply).
  • A requirement for ‘relevant territorial authorities’ to prepare an ‘intensification planning instrument’ (‘IPI’), being a plan change designed to incorporate the MDRS (but which can also give effect to certain NPS-UD policies and/or contain provisions for financial contributions). IPIs generally need to be notified by 20 August 2022, and their MDRS provisions will have immediate legal effect.
  • A new ‘intensification streamlined planning process’ (‘ISPP’), contained in new Part 6 of Schedule 1 RMA, for considering IPIs. This will involve an independent hearing panel making recommendations to councils, and the final decision being made by the Minister if those recommendations are not accepted. There will be no right of appeal (to either the Environment Court or High Court).

These components are explored in more detail below.

Application of the changes – ‘relevant territorial authorities’

The obligations in the Bill apply to ‘relevant territorial authorities’, which are defined as:

  • The 14 ‘Tier 1’ territorial authorities (i.e. district councils) identified in the NPS-UD (i.e. within the Auckland, Hamilton, Tauranga, Wellington Region, and Christchurch); and
  • Any Tier 2 councils that have the requirements applied to them by regulations.

In other words, the new requirements will apply to the five main centres as a starting point, but may also be applied to other areas in the future if the Minister identifies an ‘acute housing need’.

Medium density residential standards (MDRS)

The MDRS are intended to apply to all ‘relevant residential zones’ in an ‘urban environment’ (with limited exceptions). In essence, the effect of this approach is to make ‘medium density’ the default residential zoning for urban centres to which the MDRS applies.

The flagship standard of the MDRS is to allow up to three dwellings on a site, of up to 11m high (intended to allow three storeys), as a permitted activity (i.e. with no resource consent required). This is still subject to standards with regard to familiar matters like height to boundary (recession planes), boundary setbacks, site coverage (≤60%), impervious area, and window ‘outlook space’. However, these standards in new Schedule 3A are likely to be much more permissive than what currently applies in many residential areas. In addition:

  • Where a housing proposal would not fully comply with the MDRS, the most stringent activity status that can apply for a resource consent application is restricted discretionary (with limits on notification).
  • Councils will not be allowed to include any other ‘building standards’ in their district plan in relation to a permitted activity to which the MDRS apply.
  • The MDRS will also make subdivision easier in many cases, by generally providing that councils cannot set a minimum lot size (with some conditions, e.g. as long as it is practicable to construct a residential unit on each proposed lot that complies with the MDRS building standards).

In preparing their IPIs to ‘incorporate’ the MDRS into district plans, Councils are able to be more permissive than the MDRS in providing for housing (including to give effect to the NPS-UD), but can only set rules that are ‘less permissive’ than the MDRS in very limited circumstances. These circumstances are referred to as ‘qualifying matters’ (adopted from the NPS-UD) and relate to things like open space, natural hazards, section 6 RMA matters, designations or heritage orders, the safe or efficient operation of nationally significant infrastructure, and other matters required to give effect to another national policy statement. Even where those circumstances apply, any departure from the MDRS needs to be carefully justified on a site-specific basis.

Intensification Streamlined Planning Process (ISPP)

The ISPP will be yet another bespoke planning process under the RMA, modelled on the existing ‘streamlined planning process’. In summary, the key steps are:

  1. Pre-notification consultation and engagement with iwi on the IPI;
  2. Notification of the IPI, with the MDRS provisions having immediate legal effect (meaning that in most cases they immediately override the existing plan provisions – exceptions apply where a ‘qualifying matter’ is invoked, the IPI provisions are more permissive than the MDRS, and for new residential zones);
  3. Submissions and further submissions on the notified IPI;
  4. Hearings held by an independent hearings panel (‘IHP’);
  5. IHP recommendations to council on the IPI, and council decisions;
  6. If the council does not accept any IHP recommendations, the Minister for the Environment becomes the final decision maker in respect of those matters; and
  7. The IPI changes to the district plan become operative (with no appeal rights, but the potential for judicial review).

Of note, an IPI is only allowed to address the matters prescribed in the Bill, and each council can only notify an IPI once.

Navigating the way forward

While many councils have been on the journey to enabling greater intensification (i.e. brownfields development), the changes proposed in the Bill represent a significant leap forward – and will render obsolete much debate around the council table in terms of ‘how much density is too much’. The announcement has been celebrated by lobby groups seeking more affordable housing, and also decried by some residents’ groups in equal measure. When asked whether the Bill was “the death of NIMBYism”, Minister Woods’ response was: “we certainly hope so”.

It has been observed that these changes alone will not address existing supply chain issues, construction costs, land prices, or boost capacity of the construction sector. That is undoubtedly true, and the RMA was only ever one lever available to Government. However, what the Bill does do is forcibly remove barriers to urban intensification, by making medium density housing the ‘new normal’ in the country’s main centres.

As has been seen in the implementation of the Auckland Unitary Plan, increased density provisions do not necessarily lead to new housing development of any scale, given the highly fragmented land ownership in existing urban areas. In practice the effects of these changes are likely to vary for different suburbs and areas, including in terms of the existing land use patterns or level of density. For example, experience has been that the new provisions will not necessarily incentivise multi-unit developments in the inner suburbs where sites are already smaller (unless multiple land parcels are bought up by developers). They will however, allow for much larger single dwellings in those areas. On the larger less central sites, ad hoc smaller developments are much more likely to occur of 3 units on a single site.

Naturally there will be concerns around the urban design or amenity implications of the changes, but for better or worse the clear policy approach here is to dispense with those concerns as long as the (relatively permissive) building standards in the MDRS are met.

Other RMA considerations that the Bill does not address include the need for a corresponding increase in infrastructure provision and capacity, including in terms of green space. In terms of the funding for new or improved infrastructure, the Bill also amends the RMA to enable financial contributions to be collected in respect of permitted activities (they can presently only be imposed as a resource consent condition, but the MDRS would see significantly fewer resource consents being required). Even if funding is available for much needed infrastructure upgrades, pepper potted intensification across entire districts is likely to make planning for construction of that infrastructure more difficult.

There may also be some details to work through in terms of the extent to which district plans can still regulate other effects of housing (despite the prohibition on ‘other building standards’), for example requiring developments to be hydraulically neutral with regard to stormwater. In addition, it is not clear whether a certificate of compliance could be sought in reliance on an IPI as soon as it is notified (given that MDRS provisions have immediate legal effect and are deemed to be operative).

The Bill is expected have its first reading on Tuesday 26 October, and will then be referred to the Environment Select Committee for a three week submission period followed by oral hearings, with the intention of passing it this year.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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