‘Development Ready’ Land: What the NPS-UDC means for you

The recently-introduced National Policy Statement on Urban Development Capacity (NPS-UDC) requires local authorities to provide sufficient development capacity in their district and regional plans and policy statements for housing and business growth to meet demand.

National Policy Statements are ‘high order’ documents, which means that local authorities must give effect to them. In other words, it is no longer sufficient for local authorities to simply zone enough land to meet population and business growth projections. Instead, land must be serviced, be commercially viable and meet demand for different types of development, different locations and different ‘price points’.

In some areas, not all currently zoned land meets these new requirements.  This can be due to complications arising from fragmented land ownership, high land values and high numbers of ‘lifestyle’ properties, with some owners unwilling to aggregate or sell their land. In response to these challenges in Rolleston, Greater Christchurch, for example, rural zoned land adjoining the township urban boundary has been given Special Housing Area status under the the Housing Accords and Special Housing Areas Act 2013. This allows the land to be subdivided for urban development under a streamlined consent process despite still being zoned Rural.

In other areas, development may not be feasible due to natural hazard constraints significantly increasing development costs potentially in combination with fragmented land ownership and difficulties in acquiring land required for key infrastructure. There are also understood to be land supply shortages in some areas.

Nevertheless, timeframes for meeting requirements under the NPS-UDC are tight.

Key dates and figures

In High Growth Areas (those with 10% + growth per year and population of at least 30 000), Councils must:

• Carry out housing and business development capacity assessments at least every three years, including for different locations and price points. The first assessments are to be completed by the end of 2017.

• Set minimum targets for sufficient, feasible development capacity for housing in the short (3 years) and medium (3-10 years) term which are to be included in regional and district plans by the end of 2018. These changes to plans do not need to go through the normal RMA plan change consultation processes (Schedule 1).

• Complete future development strategies for the long term (10-30 years) by end of 2018.

• Provide an additional margin of feasible development capacity over and above the projected demand of at least 20% in the short and medium term and 15% in the long term (which factors in the proportion of feasible development capacity that may not be developed).

• Undertake quarterly monitoring of market indicators of sufficient development capacity including prices and rents for housing, residential and business land, resource and building consents relative to population growth and housing affordability.

Councils that share jurisdiction over an Urban Area are being strongly encouraged to work together to implement the NPS-UDC.

No longer ‘business as usual’

The Greater Christchurch Urban Development Strategy is to be reviewed in 2017, followed by a review of Chapter 6 of the Canterbury Regional Policy Statement (Recovery and Rebuilding of Greater Christchurch). Waimakairi and Selwyn District Councils are in the early stages of District Plan Reviews, whilst the Christchurch Replacement Plan is now largely (but only just) operative. Auckland's Unitary Plan is partly operative and Queenstown Lakes is a further high growth area midway through its District Plan Review. Other high growth areas include Tauranga, Hamilton and Nelson.

All Councils will need to respond to the NPS-UDC within their plans.  The focus on ‘minimum targets’ and ‘development ready’ land in the right places in relation to market sector demand, presents a very different scenario to ‘business as usual’.  MBIE and MfE are providing some guidance to local authorities, including on ‘market indicators’ and ‘housing and development capacity’.

Urban growth boundaries may need to revised, with extensions and potentially reductions in some locations where land is unlikely to be ‘development ready’ within the NPS’ required timeframes.  Other approaches to urban growth management may need to be developed which, for example, add more flexibility and scope for responding to market demand and achieving ‘minimum targets’.

About the author:

Fiona Aston has over 30 years resource planning experience in both local government and the private sector. She is Director of Aston Consultants, a consulting firm specialising in planning expertise, land development and resource management skills for projects ranging from small-scale resource consents to complex multi-disciplinary subdivisions, plan changes and plan reviews, across the South Island.