Going for Housing Growth: Providing for urban development in the new resource management system

Introduction

As discussed in the previous section, Phase Three of the resource management reforms will replace the RMA with new legislation.

Following a review led by the Resource Management Expert Advisory Group (RM EAG), Cabinet has agreed to replace the RMA with two acts:

• a Planning Act focused on regulating the use, development and enjoyment of land
• a Natural Environment Act focused on the use, protection and enhancement of the natural environment.

Cabinet has agreed to narrow the scope of the resource management system and the effects it controls, with the enjoyment of property rights as the guiding principle, specifically by agreeing to:

• a narrowed approach to effects management based on the economic concept of “externalities”. An externality is a cost or benefit resulting from one party’s activities that falls on an uninvolved third party. This means that effects that are borne solely by the party undertaking the activity will not be controlled by the new system
• raising the threshold for the level of adverse effects on people and the environment that can be considered in setting rules and determining who may be affected by a resource consent.

Other key agreed features of the new resource management system include greater standardisation, including standardised land use zones and overlays, and use of spatial planning.

Spatial planning will be focused on identifying sufficient future urban development areas, development areas that are being prioritised for public investment, and existing and planned infrastructure corridors and strategic sites. Spatial planning will be informed by constraints (such as natural hazards and significant natural areas) and environmental limits.

The Government intends to introduce the new legislation to Parliament before the end of 2025.

Figure 1 sets out key decision-making mechanisms under the proposed Planning Act and Natural Environment Act.

Further information on Phase Three is available on the Ministry for the Environment’s website.

Providing for urban development in the new resource management system

The new resource management system is still being designed. Several of the RM EAG’s recommendations, and the decisions taken by Cabinet to date in response, are expected to make it easier to provide for urban development in the new system. Examples of this are set out below.

The new resource management system will be simpler and provide more certainty that development can go ahead, so long as that development occurs within environmental and human health limits.

There is an opportunity for the legislation to set out the importance of housing and urban development in the new system. For example, the RM EAG recommended that the Planning Act include goals around sufficient development capacity and creating well-functioning urban and rural areas.

A clearer legislative basis for setting environmental limits will provide more certainty around where development can and should be enabled.

Spatial planning will focus on enabling urban development and infrastructure within environmental constraints and can align infrastructure investment with land use change.

The new system will provide greater ability for landowners to use property as they see fit. The new legislation will do this by reducing the scope of effects being regulated. It will:

• more clearly define the types of effects managed and only manage externalities
• raise the threshold for when adverse effects must be managed
• provide a clearer framework for managing effects on the natural environment and for managing effects on communities, property and neighbours.

The new approach to managing effects based on externalities will mean land use effects that are borne solely by the party undertaking the activity will not be controlled.

The new system will set a higher bar for regulatory restrictions on property including requiring councils to complete regulatory justification reports to deviate from national standards.

National standards and nationally standardised zones could reduce the need for consents, be broadly enabling of development, and make plan making easier. More permissive zoning will improve economic efficiency and provide more choice for businesses and consumers. Standardised zones will also provide more consistency and cost savings for developers who have to modify otherwise identical proposals to match local plan requirements in different districts. Nationally standardised zones will be a key part of shifting the focus of policy setting to a national level, while maintaining local decision making over things that require consideration of local context.

Expanding the scope of permitted activities could reduce the need for consents, and standard conditions on activities could reduce complexity.

One set of National Policy Direction under each new act will simplify, streamline, and direct local government plans and decision-making, as well as providing guidance on how to resolve conflicts between competing priorities. The National Policy Direction will declutter the existing set of RMA national direction.

Dispute resolution in the new system will be more efficient, including more limited availability of merits appeals (compared to the RMA) and the creation of a new Planning Tribunal. These initiatives will help resolve disputes more quickly meaning parties can be clear about what development can go ahead.

Use of a mechanism to allow for timely release of land for urban development could support the competitive operation of land markets.

We’re seeking feedback on what else the new resource management system needs to do to provide for good housing and urban development outcomes, noting that there will be further opportunities to submit on the Planning Bill and Natural Environment Bill when these are considered by the relevant select committee, and the instruments made under them later.