13 July 2016
Chair
LocalGovernment and Environment Select Committee
Parliament Buildings
Wellington
Dear Sir/Madam,
SUBMISSION FOR WATER NEW ZEALAND
ON THE PROPOSED NATIONAL POLICY STATEMENT URBAN DEVELOPMENT CAPACITY
Introduction and overview
- 1.Water New Zealand (“Water NZ”) appreciates the
opportunity to provide a submission on the proposed national policy statement
for urban development capacity (“NPS UDC”).
- 2.Water New Zealand is a not-for-profit
organisation that promotes and represents water professionals and
organisations. It is the country's largest water industry body, providing
leadership and support in the water sector through advocacy, collaboration and
professional development. Members are drawn from all areas of the water
management industry including regional councils and territorial authorities,
consultants, suppliers, government agencies and scientists.
- 3.In terms of overall comments, Water NZ questions
whether a national policy statement is the most appropriate mechanism to
address development capacity issues, given growth and housing affordability
issues are not issues for every district or region, given housing affordability
is not just an issue of land supply; and given the other measures being
implemented to address these issues – such as loan and overseas borrowing
restrictions, special housing areas legislation, and the measures proposed in
the Resource Legislation Amendment Bill.
- 4.Water NZ also considers that the NPS UDC misses
an opportunity to provide guidance as to the form the development capacity
should take – i.e. whether it should be provided through intensification of
existing urban areas or further urban expansion (or both).The greater adoption of active demand
management by councils and the showcasing of different housing options (rather
than the traditional quarter acre plot) is likely to be helpful in this
regard.
- 5.There are also a number of issues which the NPS
UDC does not address but which will ultimately impact on the availability
and/or take up of development capacity.These include the ability of the construction industry to respond
quickly to additional capacity; the reluctance of some areas/councils to
accommodate growth (given the costs associated with such growth); the
fragmented consenting system which requires multiple consents from different
local authorities for developments; and how consenting processes can be made
more “customer focused” given the existing resource management system.While it may be beyond the scope of the NPS
UDC to address such matters, Water NZ considers it is important that reforms in
the resource management sphere recognise these impacts and progressed in a
co-ordinated manner.
- 6.Assuming the NPS UDC is proceeded with, there are
seven specific aspects of the NPS UDC aspects that Water NZ wishes to comment
on:
(a)The provision of infrastructure;
(b)Efficiency;
(c)The lack of consideration of the productive rural
use of land;
(d)Estimating sufficient development capacity;
(e)The process for changing plans and policies;
(f)The process for considering the NPS UDC with
other NPSs and legislative instruments; and
(g)Statistic New Zealand references.
- 7.These issues are discussed in turn and the
specific changes sought by Water NZ to address its concerns are outlined at the
end of this submission.
Infrastructure
- 8.Water NZ is pleased to see that the NPS UDC
acknowledges (in policies PC1 to PC3) that infrastructure providers need to be
part of the decision making process for determining growth areas.There are however four issues around
infrastructure that Water NZ wishes to comment on.These relate to: the requirement for
infrastructure, the adequacy of infrastructure, the timing of infrastructure
and the funding for infrastructure.
- 9.In terms of the requirement for infrastructure,
it is noted that while there is a specific requirement to provide sufficient “residential
and business development capacity”, there is not a similar requirement to
provide or ensure that there is sufficient infrastructure available.Instead the requirement is to take into
account the existence/likely existence of adequate infrastructure[1]
and to have particular regard to the actual and likely availability of
infrastructure.[2]Water NZ is concerned that this could lead to
the situation where local authorities feel forced to provide additional land
for business and housing even where appropriate infrastructure is not
available.This could include for
example pressure to allow on-site wastewater systems and roof tank water
supplies in high density urban areas as an interim measure until public
infrastructure catches up.Where
infrastructure doesn’t catch up, this creates a legacy problem for the future.To avoid this issue occurring, Water NZ
considers that the NPS UDC should be amended to clarify that the requirement to
provide sufficient residential and business development capacity is subject to
adequate infrastructure being available or likely to be available to support
the proposed urban use.
- 10.In terms of adequacy, there is reference in the
definition of development capacity to the need to take into account the
provision of “adequate infrastructure existing or likely to exist to support
the development of land”.However,
unlike the term “sufficient” which is defined in relation to development
capacity, no definition or guidance is provided as to what is adequate
infrastructure.Water NZ suggests that a
definition for “adequate infrastructure” be provided in the NPS UDC.
- 11.For consistency, Water NZ also considers that
Policy PB3 should be amended to refer to the adequacy of infrastructure.
- 12.In relation to timing, while recognising that
infrastructure will be required, the proposed NPS UDC does not expressly
recognise the potential timing delays in the provision of infrastructure and
the effect that this will have on development capacity.This is important as if land is activated for
urban development prior to the infrastructure being available this can cause
issues downstream in terms of consenting (such as how stormwater is dealt with
and provided) and also result in unnecessary and inappropriate removal of production
land from productive use.The timing of
infrastructure can be affected by a number of factors, some of which are
matters outside the control of local authorities.These include: the availability ofskilled engineers, project managers and
trades people in the infrastructure (and also housing) sector – of which there
is currently a shortage; national immigration and macro-economic policies;
funding; and the need to involve other parties such as the New Zealand
Transport Agency where the development necessitates changes or access to State
Highways. Water NZ therefore considers
that the proposed NPS UDC should be amended to specifically require
consideration be given to the timing of infrastructure availability.
- 13.With respect to funding, the discussion document
indicates that costs associated with the provision of infrastructure will be
met using a combination of development contributions and rates due to the new
ratepayer base that the urban growth will provide.Water NZ has a number of concerns in this
regard:
(a)Given the existing under-provision of
infrastructure in some areas, and the limitations on development contributions
(in terms of only being responsible for a proportionate share of the growth
related costs directly related to a particular development), Water NZ considers
that there is likely to be a significant funding shortfall, which could
compromise the achievement of the urban growth capacity;
(b)Given the requirements in policy PD1 to provide
development capacity (which includes infrastructure), in the short, medium and
long-term, ratepayers could end up footing the bill for infrastructure which is
not required for another 20 or 30 years; and
(c)An over-reliance on development contributions
may effectively undermine the policy intent of increasing housing affordability
by passing the infrastructure capital costs onto the end consumer (through
increased section prices).
- 14.To ensure that the NPS UDC meets its aims, Water
NZ considers that alternative funding arrangements for infrastructure, such as
a contribution from central government to regionally significant infrastructure
should be investigated. Consideration
could also be given as to what existing mechanisms are available under the
Local Government Act 2002 (“LGA”) and Land Transport Management Act 2003
(“LTMA”) to assist with funding of infrastructure and any (legislative)
linkages required to enable such funding to be used in this context.
Efficiency
- 15.In the preamble to the NPS UDC it states that it
is important that cities “use resource efficiently and minimise their
environmental footprint.”However, no
specific direction to this effect is contained in the body of the NPS UDC.Water NZ considers that it would be useful to
include a policy regarding efficient use, not just of land, but of water and
infrastructure associated with urban development.This would also provide a linkage to the NPS
freshwater and the need to manage water wisely.
- 16.Such a policy would also support the requirement
to ensure that sufficient work is done to ensure that land in the right areas
is set aside, increasing the likelihood that the land will actually be
developed for urban purposes.
Lack of consideration of productive rural use of
land
- 17.At present the proposed NPS UDC does not require
that consideration be given to value of any existing or potential productive uses
of rural land proposed to be urbanised.The
particular rural uses, the ability of those uses to transfer elsewhere, the
characteristics of the land (such as soil classifications), and the efficiency
of the rural productive use versus an urban use are all matters that should be
considered.
Estimating sufficient development capacity
- 18.The proposed NPS UDC requires each Council to
undertake assessments and monitoring of development capacity. The focus of such
assessments and indeed the NPS UDC itself is on ensuring there is a sufficient
quantity of such land available without any consideration being given to the
quality of the resulting developments.Water NZ considers that quality aspects of urban development ought to
also be considered as this will lead to better outcomes and (as mentioned
below) may assist in achieving the goals in other national policy statements
such as through the adoption of water sensitive design.
- 19.Water NZ considers that requiring each
individual Council to monitor such matters may not be an efficient use of
resources and that there may not be a one size fits all approach.For a very large unitary council like
Auckland, (which Water NZ understands is already undertaking such monitoring) the
monitoring may best sit with that council, but for other smaller councils, it
may be a matter which could more easily and effectively be undertaken by
central government – e.g. the Ministry for the Environment or the relevant
regional council.Imposing such a
requirement on every individual council creates extra work (without any extra
funding) in an area which councils have traditionally had limited
involvement.This is particularly given
the changes to the Local Government Act in 2012 to refocus the purpose of local
government back on the provision of good quality local infrastructure, local
public services and the performance of regulatory functions.[3] Water NZ considers that the estimation of
sufficient development capacity is a task better left with central government
or the relevant regional council.
Changes to plans and regional policy statements
- 20.The NPS UDC states that regional councils
are required to change objectives and policies in their policy statements to
give effect to the proposed NPS UDC without going through the Schedule 1
process.No express mention is made of
regional plans or of district documents.However, the requirement in section 55(2A) of the Resource Management
Act 1991 (“RMA”) applies to all regional and district documents and is not
limited to the regional policy statement. In other words, changes may also be
made to objectives and policies in regional and district plans to give effect
to the NPS UDC without going through the Schedule 1 process.
- 21.Further, and while the section 55(2A) requirement
only applies to objectives and policies and not rules, given the
interdependence of the two, and the ability of some policies to be directive,
the public’s opportunity to influence the outcome of the resultant plan change
processes may be quite limited.In other
words, the die may already be cast by the time the plan change is notified for
submissions. This is particularly concerning given the issues with the proposed
NPC UDC’s as set out in this submission.
- 22.While understanding the proposed NPS UDC is
directed at ensuring sufficient urban residential and urban capacity is
available, Water NZ considers that the NPS UDC cannot and should not do this in
a vacuum.The NPS UDC also needs to
consider and balance the needs of the wider community and provide them with a
proper opportunity to participate in and make submissions on changes that may
affect them.
- 23.Water NZ is also concerned that without a public
process being required there may be a potential disconnect between the way in
which regional and district councils interpret and therefore give effect to the
NPS UDC.While ultimately district
councils would be required to amend their plans to give effect to the regional
documents, a more collaborative or joint approach at the outset would assist in
ensuring a consistent approach is taken and an efficient process is followed.
Consideration of NPS UDC with other national
policy statements and legislative instruments
- 24.The proposed NPS UDC does not currently provide
any guidance as to how it relates to other national policy statements (“NPS”) –
such as the NPS for Freshwater Management (“NPS FM”) and the New Zealand
Coastal Policy Statement (“NZCPS”).Water NZ considers that this is very important particularly where, as
here, the NPS UDC is likely to be pulling in a different direction to these
other NPSs – at least in some respects (increased urban activity versus
protection and enhancement of water bodies/coastal environment). Water NZ
considers that this tension between the NPS UDC and NPS FM/NZCPS is likely to
lead to uncertainty and confusion for regulators and applicants in consenting
and planning processes.Further
clarification as to how these NPSs can be reconciled is required.There are also potentially opportunities to
link up capacity with meeting freshwater and marine objectives for example by
applying water sensitive design in any urbanised areas.
- 25.While the consultation document notes that the
Government is intending to issue non-statutory guidance as to how to balance the
NPS UDC with other NPSs, there are issues with such an approach.Non statutory guidance is by its nature not
mandatory, meaning decision makers can choose whether or not to follow it.Indeed, as the guidance matters are not
stated in the RMA or other planning documents, decision-makers may not even be
aware of them.
- 26.Water NZ considers that it would be more
appropriate to provide guidance in the NPS UDC or the RMA as to how it fits
with other NPSs and which prevails in the event of any conflict. Guidance in the NPS UDC could include a
specific objective indicating how the NPS UDC could be read consistently with
the other NPSs and also a policy which indicates which NPS trumps in the event
of any conflict.
- 27.Further, and related to this, is the issue of
how the NPS UDC gives effect to the sustainable management purpose of the
RMA.While it appears, through policies
such as PA3, to provide for peoples wellbeing by providing for urban
development, very little guidance is given as to how that is balanced with
environmental considerations.
- 28.There is also a need to align the NPS UDC with
the changes proposed in the Resource Legislation Amendment Bill (“RLA Bill”) in
relation to development capacity.Water
NZ suggests that changes could be made to that Bill to clarify how the NPS UDC
fits with other NPSs and the existing Part 2 matters.This would ensure that there was a proper
legislative framework to support the NPS UDC.Accordingly, and to provide the most assistance to decision-makers,
Water NZ suggests that the NPS UDC should follow or at least be contemporaneous
with the RLA Bill.
Statistics New Zealand references
- 29.Finally, there is reference throughout the NPS
UDC to the “most recent” Statistics New Zealand growth projections and to these
projections being attached in an Appendix.It is not clear whether the intention is that this data will be continually
updated – and if so the process for that update - or whether the data is
intended to be a snapshot at this point in time.Water NZ considers that further clarification
of these matters is required.
Changes sought
- 30.Water NZ requests that the following changes or
changes to similar effect or which are appropriate to address the concerns
expressed above be made to the NPS UDC:
(a)Provide further guidance about the form that
development capacity should take in terms of intensification or expansion (or
both) of urban areas;
(b)A definition for “adequate infrastructure” be
included;
(c)Add a new objective and policy to clarify how
the NPS UDC relates to other NPSs;
(d)Amend policy PA2 to clarify that the requirement
to provide sufficient residential and business development capacity is subject
to adequate infrastructure being available or likely to be available to support
the proposed urban use;
(e)Add an additional policy PA4 to require
decision-makers to have regard to:
•the efficient use of land;
•the quality of the development outcomes
achievable on that land;
when
determining what land to use for urban development;
(f)Add an additional policy PA5 to require local
authorities within a region to consult with each other before implementing any
steps to give effect to the NPS UDC to ensure that a consistent region-wide
approach is taken;
(g)Delete or amend policies PB1 to PB5 to make it
clear that (with the exception of Auckland Council and any other large unitary
councils):
•the Ministry for the Environment (“Ministry”) or
the relevant regional council is responsible for undertaking the housing and
business land assessments under PB1 and the monitoring under PB5;
•the Ministry or the relevant regional council is
required to consult with local authorities when undertaking the assessments;
•local authorities are required to assist the
Ministry or the relevant regional council by providing information reasonably
required by the Ministry for the assessments under PB2, PB3 and PB4;
(h)Amend the matters the Ministry must have
particular regard to under PB3 as follows:
…
The actual and likely availability of adequate infrastructure.
Whether the land
is currently production land and any particular characteristic(s) of the land
which make proposed urban use more or less appropriate
(i)That in terms of the process to give effect to
the NPS UDC:
•only those objective and policies in the
regional policy statement and regional and district plans which are necessary
to give effect to the NPS UDC will be changed without using the Schedule 1
process;
•any other complementary objectives and policies
and all rules will be changed using the applicable plan change process;[4]
(j)The RLA Bill be amended to include specific
reference as to how the NPS UDC fits with the other NPSs and Part 2
considerations;
(k)That the timing of the NPS UDC follow or be
aligned closely with the RLA Bill;
(l)That alternative funding arrangements for
infrastructure, such as a contribution from central government to regionally
significant infrastructure, and funding mechanisms under other Acts (such as
the LGA and LTMA be investigated); and
(m)That reference to the “most recent” Statistics
New Zealand growth projections throughout the NPS UDC be amended to refer to
the May 2016 projections or that further detail be provided as to how updated
projections are intended to be incorporated in the NPS UDC going forward.
- 31.Water NZ also requests that consideration be
given to other issues which bear on the ability to provide sufficient
development capacity and mechanisms to address these issues.
Conclusion
- 32.Water NZ thanks the Ministry for the opportunity
to make comments on this document and is happy to elaborate if required.
John Pfahlert
Chief Executive
[1]
NPS UDC, section 3, definition of
“development capacity”.
[2]
[3]
Refer section 10(1)(b) of the Local
Government Act 2002.
[4]
“Applicable” is used here to refer to
the plan change process given the proposals in the Resource Legislation
Amendment Bill to expand the options for plan change processes.