Housing Affordability Bill - RMA Processes to be Circumvented

                  The Housing Accords and Special Housing Areas Bill (the “HA Bill”) was introduced into Parliament on 16 May 2013. A very short period of consultation was allowed, with submissions to the Select Committee only open until 30 May 2013.
  • By Margo Perpick, Partner at Wynn Williams, Christchurch, and member of ADLS’s Environment and Resource Management Committee.

The purpose of the HA Bill is to enhance housing affordability by facilitating an increase in land and housing supply in regions or districts with significant housing affordability or supply issues. This is to be achieved through the implementation of the following concepts:

1.   Scheduled regions and districts;

2.   Housing accords;

3.   Special housing areas (SHAs);

4.   Qualifying developments;

5.   More permissive resource consent powers; and

6.   Faster plan change processes.

In summary, the Bill gives significant powers to the Minister for the Environment, who is able to schedule a region or district, and declare SHAs

without any requirement for consultation with local government or other affected parties. If a housing accord is unable to be reached with a relevant territorial authority, then Central Government can step in and grant consent to qualifying developments directly.

The Bill has significant implications for local authorities, for reasons of both infrastructure funding and plan integrity.

1. Scheduled regions and districts

A district or region may be identified as having significant housing affordability or supply issues if:

–    the weekly mortgage payment on a median-priced house exceeds 50% of the median weekly take-home pay for an individual, based on a 20% deposit; or

–    the median house price divided by the gross annual median household income equals or exceeds 5.1.

The Bill identifies “Auckland” in Schedule 1 as a region with significant housing supply and affordability issues. Other districts or regions may be identified at a later time and added to Schedule 1 by way of Order in Council.

There is no requirement for the Minister to consult with the local authority of the affected region or district prior to recommending its inclusion as a scheduled region or district.

2. Housing accords

In scheduled regions and districts, Government may enter an agreement with a territorial authority to work collaboratively to address housing supply and affordability.

The agreement would be known as a housing accord, and the territorial authority would then be an “accord territorial authority” and thereby able to operate under the new regulatory powers provided in the Bill.

A housing accord must set out the parties’ agreement about how they will work together to enhance housing affordability by facilitating an increase in land and housing supply, including setting agreed targets for residential development in the district.

3. Special housing areas

Special housing areas (SHAs) which have the potential to deliver increased land and housing supply may be established by Order in Council within scheduled regions and districts. Resource consent and plan change powers will be more permissive within special housing areas.

Before an area may be identified as a special housing area, the Minister must be satisfied that, with the appropriate infrastructure, the area could be used for “qualifying developments” (described below), and that there is demand for such qualifying developments.

If a proposed SHA is in a district where a housing accord is in effect, then the Minister must not recommend that the SHA be created unless the accord territorial authority has also recommended that.

However, if there is no housing accord in the area, the Minister may recommend that an SHA be created, even if the territorial authority does not recommend it, if:

– a housing accord was in place but has been terminated; or

– the Minister has endeavoured to negotiate in good faith with the territorial authority but has been unable to conclude a housing accord.

The latter provision is concerning for local authorities, as there is no requirement for the Minister to consult with them prior to recommending an SHA.

The Minister does not need to be satisfied that it will be possible or feasible to provide appropriate infrastructure for the SHA; only that, if appropriate infrastructure is provided, the area could be used for qualifying developments.

As the legislation currently stands, SHAs could be created in areas which cannot be adequately or feasibly provided with infrastructure, which would be an undesirable situation.

4. Qualifying developments

The more permissive resource consent and planning powers will apply in relation to qualifying developments, which must be:

– predominantly residential; and

– meet prescribed height limits of up to 6 storeys; and

– meet prescribed minimum density requirements.

5. More permissive resource consent powers

The HA Bill provides an alternative to the RMA resource consent process, for qualifying developments within special housing areas. Such developments will have the option of applying for resource consents under the Act (if passed), instead of under the RMA.

An application for consent under the proposed Act will be decided by the “authorised agency”, which is:

– the territorial authority, if the special housing area is within a district where a housing accord exists; or

– the Chief Executive of the Ministry for the Environment (MfE) which administers the Act, if the special housing area is within a district where no housing accord exists.

In relation to applications for qualifying developments in SHAs, there will be special activity status rules:

– if a proposed plan describes the activity as prohibited, then the activity will be treated as a discretionary activity;

– if a plan states that an activity is prohibited, but a proposed plan classifies it as controlled, restricted discretionary, discretionary, or non-complying, the proposed plan will apply.

There will also be special notification rules. The authorised agency must not notify the application, or hold a hearing, unless it identifies that the activity’s adverse effects on the owners of the adjoining land are more than minor.

Even in that case, notification is still within the authorised agency’s discretion, rather than mandatory.

If a hearing is held, it must be commenced within 20 working days, and completed within 30 working days, after the closing date for submissions. The decision on the application must be notified no later than 60 working days after the application was first lodged.

The authorised agency must make its decision on the application on a basis which is consistent with, and gives effect to, the purposes of the HA Bill, that is to enhance housing affordability by facilitating an increase in land and housing supply in regions or districts with significant housing affordability or supply issues, while:

–  taking into account and giving weight to the matters that would arise for consideration under Part 2 and sections 104 to 104E of the RMA; and

–  taking into account the key urban design qualities expressed in the MfE’s New Zealand Urban Design Protocol (2005).

In order to grant the application, the authorised agency must be satisfied that sufficient and appropriate infrastructure will be provided to support the qualifying development.

However, the Bill does not clarify who is responsible for the provision of infrastructure necessary to enable a qualifying development, including the attribution of the cost of wider network upgrades required as a result of qualifying developments.

This is an issue which could have significant implications for local authorities. Land developers generally proceed on the basis that the infrastructure for the development will be provided by the developer, but then transferred to the local authority when the development is complete.

This leaves the local authority with the burden of the depreciation and maintenance of the infrastructure.

Often, too, development infrastructure on the periphery of an urban area can have upgrade implications for established infrastructure further inside the urban area. These types of issues should be taken into account prior to the identification of land as an SHA, not at the later stage of making a decision on a qualifying development.

6. Faster plan change processes

The Bill also provides for speedier plan change processes in relation to qualifying developments in SHAs, in districts where a housing accords exists.

If the activity is prohibited in the relevant operative plan, and the proposed plan anticipates that the land will be available in the future for a qualifying development, but is silent as to the rules that will apply, an applicant may request a variation to the proposed plan.

An applicant may also request a plan change if the activity the applicant is seeking to undertake is prohibited in the relevant plan and a proposed plan continues to describe the activity as prohibited, or there is no provision for the qualifying development in a proposed plan.

Where an applicant requests a plan change or variation, a faster process than is currently the situation under the RMA will apply. If the adjoining owners give their approval to the application, the authorised agency must make its decision within 40 working days after the request for plan change is received (or after all required information has been provided).

Even where a limited notification process is necessary, because adjoining landowners have not given written approval, the entire process is to be completed within 130 working days of the request being received.

The authorised agency must make its decision on the basis of giving effect to the purpose of the HA Bill, while having regard to Part 2 and section 74 of the RMA.

However, the agency must only give effect to those parts of a Regional Policy Statement that are consistent with the purpose of the Bill.

7. Limited rights of appeal and objection

The Bill provides that there is no right of appeal against a decision made by an authorised agency, except in relation to a qualifying development that is four or more storeys high.

It also prohibits applications for judicial review of decisions of authorised agencies, where a right of appeal exists, and unless that right of appeal has been exercised and a decision has been made on the appeal.

There is also a limited right of objection, similar to that available under sections 357-358 of the RMA. However, unlike the RMA, the HA Bill does not allow a right of appeal against decisions made on objections. 

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