Land and Property Development - Legislative changes on the way

The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill (“the Bill”) was introduced in October of this year to speed up implementation of the National Policy Statement on Urban Development 2020 (NPS-UD). The NPS-UD aims to remove restrictive planning rules and will require councils to plan better for growth. The introduction of the Bill, alongside the NPS-UD, will change the way that New Zealanders develop land, making it easier and faster to create higher-density housing.

The Bill was read for the third and final time on 14 December 2021 and we expect to see it take effect from August 2022 (the deadline for councils to incorporate changes into their district plans). It will amend the Resource Management Act 1991 to require specified territorial authorities (including those located in Auckland, Hamilton, Tauranga, Wellington and Christchurch) to set more permissive land use regulations to enable greater housing intensification.

The main way that the Bill does this is by requiring those specified territorial authorities to incorporate medium density residential standards (MDRS) into their district plans. These MDRS will designate high-density building as a “permitted activity” and will remove some of the barriers to getting resource consent for these kinds of developments. The new rules will allow developers to construct three-storey buildings with up to three residential units on a single site, and will also remove minimum size restrictions on lots created by subdivision, making it much easier to create freehold parcels for new high-density units.

The new Bill does, however, set some minimum building requirements to enable and control development (shown below).

The MDRS will only take legal effect from the time that council notifies that it has made the relevant plan changes. In the process of doing so, councils can modify the MDRS rules to make them less enabling of development where certain exceptions apply. One such exception being that a “qualifying matter” applies and an area has certain features such as significant infrastructure, natural hazards, open space for public use, heritage and consistency with iwi participation legislation. An example that applies to the Waikato specifically is where strict application of the MDRS would contravene the objectives of Te Ture Whaimana o Te Awa o Waikato — the Vision and Strategy for the Waikato River.

Watch this space

Overall, the new process proposed by the Bill (shortly to be the Act), is expected to result in fewer resource consents being required and a simpler development process. While this sounds positive, it is still unclear exactly how each council will adopt and manage this change and there are still a number of unanswered questions about how the Bill will interact with the current development environment - i.e. the current subdivision process and the number of private land covenants that exist preventing further development.

In particular, McCaw Lewis will be paying close attention to Hamilton City Council’s response to the Bill and how that will affect property development within the city. We will post updates as we receive them.

In the meantime, please get in touch with our property lawyers if you have any questions.

Amy and Emma are Solicitors in our Property Team. Amy can be contacted on 07 958 7459, and Emma's contact number is 07 958 7439.