RMA adds $30b to housing costs and stopped 40,000 new houses: Smith

The Resource Management Act has added as much as $30 billion to the cost of new homes and stopped as many as 40,000 being built in the last decade, says Environment Minister Nick Smith in a speech outlining a wide-ranging 10 point plan for what he calls "considered but substantial" reform of the country's primary environmental and planning law.

"The Act is not working for New Zealand or New Zealanders," said Smith in a speech delivered in Nelson, where he used a pile of local government plans and RMA-related documents as both lectern and backdrop to the address. "It is making housing too expensive. It is hampering job and export growth. It is stymying much-needed infrastructure. And it is not doing a particularly good job of managing vital natural resources like fresh water and the coastal environment."

His housing costs claims are based on analysis by a team from the Wellington economic consultancy, Motu, led by the immediate past chair of the Reserve Bank of New Zealand, Arthur Grimes, which was also released this evening.

"It estimates that for projects that proceeded, the RMA added $30,000 extra cost to each apartment and at least $15,000 per section," said Smith. "It also says that RMA rules reduced development capacity of homes by 22 percent. If you extrapolate this study over the past decade, the RMA has reduced housing supply by 40,000 homes and added $30 billion in cost."

Smith's speech comes after the widely reported publication of the 11th annual report by Demographia, a US-based advocate for small government and relaxed urban boundaries, which found New Zealand housing, particularly in Auckland, is "severely unaffordable" compared to eight other developed countries.

While the speech concentrated on the RMA's impact on housing affordability, Smith also confirmed he would try again to advance controversial changes to two of the three purposes clauses of the Act, Sections 6 and 7, which stalled in the last Parliament under his predecessor Amy Adams, because the Maori and United Future parties would not support them.

However, he pledged to seek a "broad constituency for considered but substantial change" to the Act, despite the National-led government now being able to pass such changes with the support of the single vote of the Act party.

"National and Act have the numbers," he said. "My preference is to build a broader base of support."

But "economic growth, jobs and exports need recognition."

"The idea that the only consideration in resource consenting is protection of nature is naive. This is not the National Parks Act. Tinkering with the RMA won't do. The purposes and principles are outdated and ill matched with the reality of the issues it manages, like housing development. The plan making process is too cumbersome and slow."

Its processes needed to encourage collaboration rather than adversarial processes and "property owners need stronger protection from unnecessary bureaucratic meddling," Smith said.

The executive director of the Environmental Defence Society, Gary Taylor, said: "Most of these changes have been anticipated and are broadly acceptable in principle. The devil will be in the detail and we look forward to seeing actual drafting."

EDS did not support Smith's proposal to tip the balance of the Act in favour of private property rights, saying the current balance was already contributing to bio-diversity being lost "at an alarming rate", but welcomed the fact the Section 6 and 7 reform proposals no longer included an attempt to merge the clauses into an "unprioritised list", as Adams had wished to do.

Among changes that would strengthen environmental protection, Smith said he wanted a faster process for implementing major new rules at a national level, which under current systems could conceivably take 30 years to filter from policy through local government plans and finally to land owners for implementation.

"This is ridiculous," said Smith. "We are proposing a law change that will enable national regulation of these sorts of issues after one round of national consultation and the power to implement immediately, backed up an instant fine regime. Our plan is to have such a rule in place for dairy cows to be banned from streams and rivers by July 2017."

Key changes would see the RMA refer specifically to housing affordability and urban development, neither of which are present in the Act at present.

"It is as though the Act was designed for a Garden of Eden prior to the development of cities," said Smith. While it put "huge weight on protecting landscape, amenity, natural character and heritage without any balancing consideration over the cost implications."

This played into the hands of "blatant self-interest" by neighbours objecting to development proposals, "dressed up in the language of ensuring only quality developments are allowed."

"It is not that there are not legitimate neighbourhood interests, but rather that the process does not have anyone actively advocating for the young family wanting access to affordable house or apartment."

As expected, the reforms would also add reference to natural hazards, such as earthquake risk, and acknowledge the importance of infrastructure.

Local government plan-making processes would be simplified.

"It does not make sense for a small country of four and half million people to have each of the councils reinventing the wheel," Smith said, citing as an example "over 50 different definitions of how to measure the height of a building."

(BusinessDesk)