Planning review crucial for housing

Finance Minister Bill English

Finance Minister Bill English has announced the Productivity Commission is to review urban planning rules and processes and identify the best system for land use allocation.

Urban planning in New Zealand not only underpins housing affordability but also the productivity of the wider economy, English said.

“Many parts of the regime are out-dated and unwieldy, having been developed over the years in a piecemeal fashion. International best practice has moved on and so must New Zealand.”

The Commission will be looking at the urban planning rules that fall under legislation like the Local Government Act, the Resource Management Act and the Land Transport Management Act, to ensure they support a responsive housing market.

Property Council chief executive Connal Townsend said the Council unconditionally supports the review as it is timely to look at how the growth of New Zealand’s cities is planned and funded.

“Our country’s three most powerful planning laws have created a mosh pit of bureaucratic complexities, driving costs at both the supplier and buyer ends, sky high.

“The Resource Management Act, the Local Government Act and the Land Transport Management Act suffer from a lack of cohesion, seamless integration and logical connection. Instead of complementing each other, they compete with each other.”

New Zealand desperately needs to limit the financial and economic risks currently emanating from the urban planning system, he said.

“Unresponsive planning rules are causing delays and reducing certainty, which add costs. An OECD report found that regulations add between $32,500 and $60,000 per dwelling in subdivisions and $65,000 and $110,000 per apartment. Too often, these costs bring projects to a grinding halt.”

Townsend said that, until issues with current planning rules are addressed, Auckland and other growth areas will suffer from constraints on growth and expensive house prices, which decreases their desirability as cities.

However, he added planning rules should not be examined in isolation as they are interconnected with land, transport, infrastructure, and urban design rules.

Productivity Commission chair Murray Sherwin said fast growing cities like Auckland are struggling to provide enough capacity to house their rising populations.

At the same time, other cities face the problem of maintaining essential services and infrastructure with flat or declining populations.

New Zealand’s urban areas need a planning system that can respond effectively and efficiently to these pressures, Sherwin said.

“We will explore the development of New Zealand’s current planning system, assess its performance compared to other countries, and identify where change is needed. The aim is not to draft new laws ourselves, but set out what a high-performing planning system would look like.”

The Commission, which recently presented its Using Land for Housing report to Government, will release an issues paper by mid-December and this will be followed by a consultation period.

It is due to report back to Government by the end of November 2016.