Minter Ellison Rudd Watts: New National Policy Statement on Urban Development

By Bianca Tree and Rachel Devine This year, housing demand has been central to a number of policy announcements including the creation of a new Housing and Urban Development Authority, a Construction Sector Accord, and the review of the Resource Management Act 1991 (RMA).

The Government has now initiated consultation on a new National Policy Statement on Urban Development (NPS-UD) to replace and expand on the existing National Policy Statement on Urban Development Capacity 2016 (NPS:UDC 2016). The new NPS-UD is intended to provide national direction under the RMA in an effort to create well-functioning, inclusive and better connected cities.

The NPS-UD will be a high level policy document. Once finalised, councils will have to give effect to the objectives and policies of the document in regional policy statements and regional and district plans. Landowners, developers and the community need to understand how the proposals for the NPS-UD will impact property portfolios in the coming years. In particular, consideration should be given to how the proposals may:

enable growth in new areas,
create new reverse sensitivity effects for industries previously unaffected by urban expansion,
place pressure on infrastructure and services and impact on development contributions and rates to finance necessary infrastructure for growth; and
create tension with the priorities of other National Policy Statements including on indigenous biodiversity, freshwater, air quality and the recent discussion paper for a National Policy Statement for Highly Productive Land.

We expand on some of the key proposals for the NPS-UD below.

The focus of the proposed NPS:UD is on growth without unnecessary restriction

At this stage, the clear focus for the NPS-UD is on enabling growth and intensification, particularly in major urban centres.

It is intended to enable growth by requiring councils to provide development capacity to meet the demands of communities (including providing for greenfield development with good infrastructure), address unnecessary regulatory constraints such as minimum car parking requirements, and encourage quality urban environments. The idea is to ensure growth is strategically planned and leads to well-functioning cities.

Provisions are also proposed to be included in the NPS-UD that will direct local authorities to enable high-density residential development in specified areas. The most directive policies would apply in major urban centres, with lesser requirements for all urban environments.

Auckland, Hamilton, Tauranga, Wellington, Christchurch and Queenstown will be targeted

These cities have been identified as ‘major urban cities’ having growing populations where pressure on housing is creating national impacts. Like the existing NPS-UDC 2016, the NPS-UD will apply some policies nationally while others will specifically target these major urban centres. For example, only these major urban centres will be required to produce a Future Development Strategy (FDS), to show how and where they will provide for future development.

The NPS:UD is proposed to strengthen and clarify existing requirements for FDS’ to:

push the current FDS system towards better spatial planning,
to identify locations for future intensification and supporting strategies,
identify where urban development should be avoided,
strengthen the role of the FDS to inform plans and strategies prepared under other legislation,
better align land use and infrastructure planning, and identify funding gaps between capacity and infrastructure,
improve ongoing implementation, and
ensure FDS’ contribute to urban development that takes into account issues of concern to iwi and hapū and identifies how hapū and whanau aspirations for urban development on whenua Māori will be taken into account.

Good decision-making will be encouraged

To ensure good decision making by councils, objectives and policies are proposed to be included in the NPS:UD that:

require local authorities to use market information to make good decisions and in preparing Housing and Business Development Capacity Assessment’s, and
improve engagement by coordinating planning and taking into account issues of concern to iwi and hapū.

Requirements to implement the NPS-UD

The NPS-UD will come into effect when it is gazetted. Councils will then need to give effect to the new objectives and policies through their regional policy statements, regional plans and district plans as soon as practicable.

Certain policies in the NPS-UD will have more specific timeframes. For example, all objectives in the NPS-UD will apply immediately from the date of gazettal as will two proposed policies that provide for residential intensification. Policies providing for intensive development and removing car parking minimums must be notified as changes to district plans within 18 months from the date of gazettal.

Futureproof your portfolio – we can assist

The Government is seeking submissions on a range of questions set out in a consultation document on its proposals for the NPS:UD. The only opportunity for the public to comment is through the current consultation process which is open until 10 October.

As noted above, the Government has also recently released a consultation document on proposals for a National Policy Statement for Highly Productive Land (NPS: HPL). The NPS:HPL will require local councils to ensure there is enough highly productive land available for primary production now and in the future, and to protect it from inappropriate subdivision, use and development. It will also limit growth and expansion in areas categorised as highly productive (which includes approximately 14 percent of New Zealand’s land). The proposals on the NPS:HPL are also open for consultation until 10 October.

Please get in touch with one of our experts if you would like to discuss the implications of these proposals or if you would like assistance in drafting a submission.

We are hosting seminars in our Auckland and Wellington offices to discuss the NPS-UD and its potential impact on urban development, the Resource Management review and the status of the Government’s proposed amendments to environmental legislation.

The Auckland seminar will be held on Thursday, 19 September from 7:30–9:00am, with the Wellington seminar held on Wednesday, 25 September from 12:30–2:00pm.

If you wish to attend, please RSVP for the Auckland seminar or the Wellington seminar.