Increased housing density has been given the green light through changes to the Resource Management Act 1991 (RMA) jointly proposed by both Labour and National. The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill (Bill) was introduced to the House on 19 October 2021. The Bill seeks to make changes to accelerate the implementation of the National Policy Statement on Urban Development 2020 (NPS-UD). It also seeks to increase housing supply in large urban areas by allowing for increased density through Medium Density Residential Standards, which apply to almost all existing and new residential zones and allow for medium density housing (up to three dwellings of up to three storeys high) to be built as a permitted activity without requiring resource consent.
The Government's modelling indicates that the proposed changes will result in at least 48,200, and as many as 105,500, new homes built in the next five to eight years, over and above what would occur by councils implementing the NPS-UD as it stands.
Medium Density Residential Standards
To increase housing density in larger urban areas, the Bill proposes the Medium Density Residential Standards (MDRS), which would allow medium density housing (at least three dwellings of up to three storeys per site) to be built as a permitted activity across the Tier 1 urban environments (being Auckland, Hamilton, Tauranga, Wellington and Christchurch). These dwellings would be permitted activities, not requiring a resource consent. The Bill directs these Tier 1 territorial authorities to notify plan changes or variations to implement the intensification provisions of the NPS-UD by 20 August 2022, at which point the MDRS will also have legal effect (and according to clause 77J of the Bill, consent applications lodged after this notification, will only consider the MDRS to the extent that these are inconsistent with existing provisions in the District Plan).
Territorial authorities will be required to apply the MDRS to all existing residential areas, except for those:
- Zoned as large lot residential (as described in the National Planning Standards)
- Where there is a qualifying matter as defined in the NPS-UD, including:
- A matter of national importance that decision-makers are required to recognise and provide for under the RMA
- A matter required in order to give effect to any other national policy statement
- Open space provided for public use (but only in relation to the land that is open space)
- An area subject to a designation or heritage order.
In these areas, the relevant territorial authority can amend the densities and heights as required by the MDRS but must provide evidence to support this in its evaluation report of the provisions, identifying the particular qualifying matter that makes higher density inappropriate, and including a site-specific analysis to satisfy the requirements of clause 77I.
An amendment is also proposed to allow a local authority to amend its plan to require financial contributions be charged for permitted activities. This is intended to support territorial authorities with the cost of development infrastructure that may be required to incorporate the MDRS.
New Schedules (3A and 3B) to be introduced to the RMA will deal with a number of aspects traditionally addressed by district plans - such as height of buildings (including in relation to boundaries), setbacks, building coverage, impervious areas, and outdoor living space. These are similar to the conditions on a permitted activity and appear to provide a more standardised approach across the country's urban areas. These standards ensure that the proposed increase in density is not uncontrolled and that building standards are met, but if passed it will provide for more intensive development than traditionally seen across the country.
While the Bill itself does not directly deal with any associated subdivision requirements, it does note that any subdivision provisions in district plans must be consistent with the level of development permitted under the clauses of Schedule 3A. We expect changes to subdivision rules and minimum lot sizes will also be progressed as part of the plan changes councils are required to notify by August 2022.
Bill amendments to speed up implementation of NPS-UD
When it was originally introduced, the effects of the NPS-UD were not expected to fully take effect until August 2024 once those plan changes required to implement the policies had made their way through the usual RMA planning process. However, the Government has recognised that while Tier 1 councils are making progress towards implementing these requirements, more needs to be done - and faster.
The Bill seeks to bring forward when the effects of the NPS-UD will be felt by introducing a specific planning process called the intensification streamlined planning process (ISPP). This process is to be used for introducing the MDRS and can also be used for implementing policies 3 and 4 of the NPS-UD (and policy 5 for Tier 2 councils). Tier 1 councils (and Tier 2 councils directed to do so by regulations where the area is experiencing an acute housing need) are required to notify an intensification planning instrument by 20 August 2022.
The ISPP is based on the existing streamlined planning process, although it appears to involve the Minister for the Environment less than the existing streamlined process. This involves pre-notification consultation, submissions, and an independent hearings panel to conduct hearings and make recommendations to the territorial authority (not limited to the scope of submissions). If the territorial authority does not agree with the panel's recommendations, the Minister for the Environment steps in and becomes the decision-maker (and can accept the recommendations or make alternative recommendations). As proposed, the ISPP removes appeal rights entirely, similar to the streamlined planning process. This is different to what we have seen in other bespoke planning processes (where errors of law can be appealed to the High Court).
The introduction of a further bespoke planning process to the RMA (similar to that introduced for implementing the National Policy Statement for Freshwater Management 2020) appears to signal the way in which the Government anticipates planning processes will work efficiently. This could be further reflected in the ongoing reform of the RMA and introduction of the Natural and Built Environments Act and Spatial Planning Act. While this will speed up the implementation of the NPS-UD we will still likely be waiting until at least mid-2023 to see the true impacts on the ground.
Some existing plan changes may need to be withdrawn
Under the transitional provisions included in the Bill, Tier 1 councils that are currently preparing plan changes or variations to proposed plans to implement the NPS-UD policies may find that these need to be withdrawn. As the Bill currently stands, it provides that territorial authorities must withdraw a proposed plan or plan change if it intends to give effect to intensification policies of the NPS-UD, proposes changes to a residential zone that will be subject to the MDRS, or creates a new relevant residential zone that does not incorporate the MDRS; and the planning instrument has been notified on or before the commencement of the Bill but a hearing under clause 8B of Schedule 1 is not completed on or before 20 February 2022. This is designed to ensure that neither council nor submitter resources are unnecessarily wasted participating in a planning process which will ultimately require further changes to implement the MDRS.
The Bill is yet to have its first reading in Parliament, following which there will be an opportunity for public submissions. If you are interested in knowing more about the Bill, or making a submission to the select committee, please contact our Resource Management team to discuss.
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