Smith puts out National Policy Statement that requires high growth Councils to open up 15% more land than is forecast to be required; NPS to be in place by Oct and back up Unitary Plan; Smith sees Commissioner for Auckland not needed

Houses being built in Weymouth in South Auckland. Photo by Bernard Hickey for Hive News.

By Bernard Hickey

Building and Housing Minister Nick Smith has announced a proposal for a National Policy Statement (NPS) on Urban Development Capacity that would require high growth Councils such as the Auckland Council to release 15% more developable land than it is forecast to need over the long term in an attempt to prevent a repeat of the quadrupling of land prices seen there in the last 25 years.

The much-trumpeted NPS is a tool the central Government can use under the existing Resource Management Act (RMA) to direct Councils to take certain factors into account when designing their regional and district plans. Smith said the NPS would ‘buttress’ the current process to complete a Unitary Plan for Auckland and avoid the need for Commissioners to be appointed if the Council failed to agree a plan to release enough land.

Smith said the NPS and the RMA gave the Government the power to direct changes to Auckland’s plans if the Council did not agree a Unitary Plan in August that met its long term development capacity requirements. The Independent Hearings Panel (IHP) is due to release its proposed Unitary Plan for the approval of the Council by August 19.

Asked if the Government would appoint commissioners to run Auckland if the Council rejected the IHP’s proposal, Smith said the NPS and the RMA gave the Government the power to centrally direct changes to Auckland’s plans if a Unitary Plan was not agreed.

“There is no need for that action (appointing commissioners) given the very strong set of directive powers,” Smith told a news conference where the NPS was released.

The NPS will be open for submissions until July 15 and Smith said the Government aimed to gazette the NPS to make it legally binding from October, which would line with the timing of the introduction of the Auckland Unitary Plan and changes to the Resource Management Act.

“This new policy is about tackling the long-term root cause of New Zealand’s housing affordability problems. Insufficient land supply in Auckland has seen median section prices rise from $100,000 in 1990 to $450,000 now – an increase of 350 per cent. In the same time, building costs rose 78 per cent and the Consumer Price Index 71 per cent,” Smith said.

Here’s the detail

The NPS requires that Councils have enough land in their city and district plans to match projected growth and that they monitor and respond to housing affordability data, building and resource consent data, and value of land on the urban boundaries.

“Councils would have to take into account the difference between planned and commercially feasible development capacity, and provide for over-supply to ensure competition (20 per cent short to medium-term, 15 per cent long-term),” Smith said.

The NPS would also require Councils co-ordinate their infrastructure and ensure their consenting processes were “customer focused” and recognise the national significance of ensuring sufficient land is available over local interests.

“This policy is about a culture change to support development that connects planning decisions to economics, ensures plans are regularly updated and recognises the national importance of housing,” Smith said.

The NPS was graduated so high growth cities (more than 10% population growth per decade) had tougher requirements than medium growth cities (5-10% population growth per decade).

The NPS made no mention of or changes to the infrastructure funding problem faced by high growth Councils that were unable or unwilling to raise more debt. It also did not abolish the Rural Urban Boundary.

Political reaction

Labour Housing Spokesman Phil Twyford said the NPS was a damp squib that was unlikely to make much difference in Auckland.

“The Government has been talking tough for the past few weeks. You’d think this was going to be the big gun, but its only Nick Smith firing blanks. The land-bankers and speculators will read the NPS and rub their hands with glee,” Twyfor said.

“It fails the two crucial tests. It has nothing to say about how infrastructure will be financed, leaving Auckland ratepayers to wonder whether they will be left to pay the $17 billion cost of new infrastructure needed to support Auckland’s growth. “nd for all National’s huffing and puffing about getting rid of the urban growth boundary, it says nothing about abolishing the boundary and replacing it with a smarter way of managing urban growth,” he said.

“The NPS sets up a bureaucratic system for assessing the projected demand for housing and business land, and measuring that against the estimated capacity of land and dwellings. If the development capacity falls short then the Council is expected to amend its plans to free up more land. “Where’s the promised game-changer? I’ll be interested to hear Auckland Council’s response, but I am pretty sure they will look at the NPS and say ‘no problem, we are already doing this’,” he said.

“National has been blaming the RMA and Councils for expensive housing for the past 10 years. It has been a very long reveal, but this National Policy Statement is final proof that when it comes to the Government’s housing policy, the emperor has no clothes.”

(Updated with detail, reaction)