Act aims to improve housing supply and simplify consent process

On 20 December 2021 the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 (Act) was passed into law. This was introduced as a rare piece of bipartisan legislation with the aim to rapidly accelerate the supply of housing in New Zealand in areas with high housing demand.

What does the Act introduce?

The key changes resulting from the Act are to:

• require Tier 1 councils in Auckland, Waikato, Bay of Plenty, Wellington and Christchurch to amend their planning rules to adopt Medium Density Residential Standards (MDRS) in all residential zones; and

• introduce an Intensification Streamlined Planning Process (ISPP) to incorporate the MDRS into plans and implement the intensification policies from the National Policy Statement on Urban Development (NPSUD).

What are Medium Density Residential Standards?

The MDRS enable a wider variety of housing types within all residential zones. These standards permit landowners to develop up to three dwellings on a site and up to three storeys in height without needing to apply for resource consent (provided all other rules and standards are met). Specifically, the MDRS prescribes residential development as a permitted activity so long as it complies with the below standards:

• a maximum of three residential units per site;
• maximum building height of 11m (plus 1m for qualifying pitched roofs);
• a 60 degree recession plane measured from 4m vertically above ground level along all boundaries;
• setbacks as close as 1.5m in the front yard and 1m at the side and rear boundaries;
• building coverage no greater than 50% of the site area;
• outdoor living space of at least 20m² for houses at ground floor, and 8m² for units above ground level;
• outlook space per unit of at least 4m x 4m from a principal living room and of 1m x 1m from all other habitable rooms;
• a minimum 20% of the street-facing façade in glazing; and
• minimum landscaped area of 20% of a developed site for residential units at ground level.

Enabling these development densities without resource consent is a controversial step, especially for neighbours who will be impacted by the scale of such developments. This is particularly the case in suburbs accustomed to single house dwelling types, where neighbours would traditionally have had the opportunity to oppose development through lodging submissions.

A recent high-profile example is the judicial review of the development at 44 Ventor Road in Remuera. In that case, a decision to grant a resource consent on a non-notified basis was successfully challenged in the High Court causing the development, a substantial portion of which had already been completed, to be placed on hold until the consent application could be reconsidered by Council. This consent has since been re-issued, again on a non-notified basis, and we understand is now the subject of a further judicial review.

We are currently acting for a number of clients who are also providing high density housing projects which are testing the interface between higher density housing and existing amenity.

The changes brought about by the Act seek to prevent much of this neighbourhood opposition in cases of compliant intensification. The NIMBY mentality (whereby individuals largely agree that intensification of housing needs to occur, but do not want it in their own neighbourhoods) will no longer be able to be sustained.

The Intensification Streamlined Planning Process

The Act requires councils to use the ISPP to incorporate the MDRS and associated objectives and policies into their plans. The ISPP modifies the usual process for making or changing plans set out in Schedule 1 of the RMA. The ISPP involves:

• notification of plan changes to incorporate the new requirements. This needs to be completed by Tier 1 councils by 20 August 2022;
• a submission period during which submissions are received;
• establishing an Independent Hearing Panel (IHP) to hear submissions;
• the IHP making recommendations to the Council;
• the Council deciding whether to accept or reject each recommendation and, in relation to rejected recommendations, making an alternative recommendation;
• where Council accepts a recommendation, notification of that decision;
• where Council has rejected a recommendation, the Minister for the Environment makes a final decision whether to accept the recommendation or the alternative recommendation; and
• public notification of the final decisions.

There is no right of appeal on any decision made in accordance with this process.

The full process is expected to be completed by August 2023 in most cases. However, we anticipate that there may be some areas in which the time period extends beyond this, for example where the MDRS are included as part of a proposed plan process. This is currently the case in the Selwyn District where a variation is being prepared to the Proposed District Plan to incorporate these matters. As a result, hearings on submissions to the as notified proposed plan will now be heard alongside submissions on the variation which will result in a complex mix of appeal rights following those decisions.

The Infrastructure Squeeze

While the changes should assist in increasing housing densities within existing brownfields, a key concern for Councils, infrastructure providers and developers is how to provide the requisite infrastructure upgrades to accommodate the new intensification, and where costs for this should fall.

While nationally significant infrastructure is carved out within the Act as a qualifying matter for which Councils may modify the requirements (to the extent necessary to accommodate that infrastructure), this does not apply to local infrastructure. Funding alternatives include the use of targeted rates or development contributions. However, where the development is a permitted activity, development contributions would now need to be collected at the building consent stage. The Act has also been promulgated at the same time as the Three Waters Reform, which adds further uncertainty in the infrastructure space.

We are available to assist clients to navigate any of these or other issues arising out of the Act. If you have any questions or would like to discuss, please contact our resource management team.