RMA announcement is welcomed news

Media Release

21 January 2015

RMA announcement is welcomed news

The Housing and Building Minister’s announcement on overhauling the Resource Management Act, supply, affordability and quality of housing echo the same messages Property Council has been spearheading for years.

Some of the major changes Dr Nick Smith has announced include:

• Recognise urban planning

• Prioritise housing affordability

• Acknowledge importance of infrastructure

• Greater weight to property rights

• National planning templates

• Speed up plan-making

• Encouraging collaborative resolution

The Minister also released the Motu study, Impacts of Planning Rules, Regulations, Uncertainty and Delay on Residential Property Developments report, which was prepared for Treasury and MBIE. According to the study, dwelling prices are determined in the long run by the total costs of a development including regulatory costs and costs for delays and uncertainty.

The study found that almost 90% of surveyed developers have been affected by delays or uncertainties related to regulation; something Property Council has been raising as a major concern for considerable time.

In its 2015 Manifesto released this week, Property Council asserts that local body politicians are largely ignoring or misunderstanding the overall effect of how their many planning requirements and consenting processes culminate to deter development or push up house prices.

Property Council has been calling for the Government to insist that local authorities consider how their District Plans affect the viability of new housing developments for this very reason. If councils make it too strenuous and costly to build, not only will the massive delays in addressing the housing crisis continue, but developers are forced to pass costs to the customer – making houses even more expensive for Kiwi families.

The Motu study goes further to say that in the case of certainty, a project will proceed if and only if expected market prices for a development exceed the expected costs. Therefore council-related costs can transform a viable project into one where nothing actually happens.

Property Council chief executive Connal Townsend says without fail, councils and CCOs need to overhaul their attitudes to enable and facilitate development to help increase housing supply and reign in outrageous house prices.

“In our manifesto we set out three key challenges for central and local governments and industry: real collaboration, holistic policies that consider all relevant factors, and balanced decisions.

“What does it mean? It means we want, through the RMA reforms, for councils to know, understand and willingly consider the implications of consenting decisions on building. Otherwise, we’re going to have the same problem we’ve had for ages: houses being too hard and too expensive to build and customers being asked to cough up the costs.”

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