As foreshadowed in the 2016 Budget announcement, the Government
has released the proposed National Policy Statement on Urban
Development Capacity (NPS UDC) for consultation.
The NPS UDC has been described as the Government's response
to New Zealand's current housing crisis. What might surprise
many is that it is not just set to address the problem in the
Auckland region, but Tauranga, Hamilton, Queenstown and
Christchurch are also grouped in the "High Growth Urban
Area" category where minimum targets will need to be set by
regional councils for the supply of sufficient residential
development capacity for the medium and long term.
The need for regional and district councils to ensure sufficient
development capacity is also referenced in the Resource Legislation
Amendment Bill 2015 (read more about the proposed changes here.)
The initial consultation phase began with selected stakeholders
and iwi authorities in early December 2015 after the Minister for
the Environment advised of his intention to develop this Policy
Statement in conjunction with the Ministry for Business, Innovation
and Employment. The proposed NPS UDC is now available for public
consultation with submissions closing on 15 July 2016.
Government's response to the housing
Environment, Building and Housing Minister and Environment
Minister Nick Smith has been clear that the NPS UDC will not be a
quick fix for Auckland's housing shortage (or housing shortages
in other regions), but is simply a tool in the toolbox for
addressing this issue.
The Government has clearly identified that land supply is the
key issue for unaffordable housing, and an increase in the supply
of land will be part of the resolution to that issue.
The suggestion of a "price to income ratio" as the
trigger for freeing up more land for housing received heavy
criticism by commentators following the 2016 Budget announcement
and leading up to the release of the NPS UDC. However, local
authorities will be required to monitor the relative affordability
of housing, including the ratio of house price to income and the
relative cost to rent, among other indicators, to inform an
area's development capacity. If that monitoring indicates that
development capacity is not sufficient in any of the short, medium
or long terms, local authorities must respond by providing
development capacity as soon as possible, in accordance with
policies in the NPS UDC.
The NPS UDC also goes some way to addressing the criticism
directed at the Government by some commentators who suggest that it
is the lack of infrastructure that is hindering the building of
houses on that land, by including a definition of "development
capacity". That definition includes a requirement to take into
account the provision of adequate infrastructure when assessing
whether land for urban development meets demand.
What does this mean for the resource management
We expect that more land will be identified and rezoned for
residential development based on assessments of estimated demand
for dwellings, including for different types of dwellings,
locations and price points. Other assessments will also be required
to assess the demand for business land, which includes industrial,
commercial, retail, business parks and mixed use land.
Local authorities in High Growth Urban Areas will also be
amending their regional policy statements to give effect to the
policies in the NPS UDC by the end of 2018, or earlier if a housing
assessment shows development capacity is insufficient to meet
How to make a submission
Details of how to make a submission are on the Ministry for the
Environment's web page.
Submissions close at 5.00pm on Friday 15 July 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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