End of the line for ‘laxative’ SHAs

Wellington City Council voted last week not to extend its Special Housing Areas for another year, marking the end of the initiative in the city. Thomas Coughlan reports on the policy’s troubled history. 

It’s been a busy month for housing in Wellington. Unfortunately for those shut out of the capital's housing market, most of the chatter has been about stopping development rather than starting it. 

Last week, councillors narrowly voted to drop 11 Special Housing Areas, effectively drawing to a close, in Wellington, one of the previous Government’s flagship housing affordability policies. 

Wellington had 34 SHAs. The majority have been delivered on, but the council decided to axe the remaining 11 instead of extending them and enabling developers to deliver housing in those areas. 

And on Wednesday the Court of Appeal heard a case brought by a community group appealing a High Court decision that effectively green-lit development at one of Wellington’s most contentious SHAs, the former air force base at Shelly Bay. 

Should the Court find in the group’s favour, it will be yet another win for the 27 year-old planning regime ushered in by the Resource Management Act (RMA), which is deemed by its critics to be both broken and impossible to fix.

SHAs a “laxative to get new houses flowing” 

The RMA is New Zealand’s primary piece of planning legislation. It sets out everything from council’s district plans to building consent regulations and the use of natural resources. The Act, and the plans and case law built around it, offer the NIMBY('not in my backyard') brigade an arsenal of grounds on which to object to new development. 

In 2013, then-Housing Minister Nick Smith introduced legislation allowing central Government and councils to sign accords creating “Special Housing Areas,” where development could proceed in a more streamlined way. 

Some local councillors argue SHAs have worsened the housing crisis, rather than improved it. 

At the bill’s third reading, Smith blamed the “convoluted RMA” for holding up development and colourfully described how the new regime would help.

“We’ve got a constipated planning system blocking new residential construction and this bill is a laxative to get new houses flowing,” he said.

The fix was only meant to be temporary. In the case of Auckland, it was meant to get developments underway ahead of the Unitary Plan which would follow. For the rest of the country the powers were meant to be in force until 2016, although this was later extended to 2019. The Labour-led Government is reviewing whether to extend the Act beyond 2019.

SHAs “an absolute miserable failure”

But some local councillors argue SHAs have worsened the housing crisis, rather than improved it. 

Wellington city councillor Simon Woolf told Newsroom he believed SHAs were a “total failure”.

“We were sold it on the basis that it would provide affordable housing and developers avoid a little bit of red tape but it wouldn’t impinge greatly on district plan or RMA.”

But Woolf said what was eventually enacted was not at all like what was promised, leading councillors to feel “betrayed”. 

He said councillors had been promised that issues such as character, height and density would be taken into account when SHA developments were consented.

Auckland Councillor Chris Darby told Newsroom that SHAs, prior to their being replaced by the Unitary Plan had failed to increase supply. 

Darby said some developers seen the SHAs as an “early run” on the Unitary Plan. They managed to get land rezoned, making it more valuable and then either sold the land on or held it for further gains. 

“On the affordability front, SHAs were an absolute miserable failure,” he said.

Under the SHA housing accord, ten percent of new developments consented had to be sold as affordable housing. That requirement vanished under the Unitary Plan, allowing developers in SHAs to walk away from their commitment to both increasing supply and delivering a certain number of affordable houses.

A report from to the Council’s Planning Committee in December last year found just 100 “affordable” homes had been delivered under the housing accord over three and a half years. It also built 482 “retained affordable” homes largely intended to be kept as social housing.

Of the 154 SHAs in Auckland, 86 had been disestablished, Darby said.

A good “interim step”

SHAs have few defenders, but some argue they are a good temporary measure to increase housing supply while other solutions to the housing crisis like KiwiBuild or RMA reform gather pace.

Wellington City Council has delivered on many parts of its housing accord, even if key developments like Shelly Bay still hang in the balance. 

The housing accord committed Wellington to delivering 1000 sections and dwelling consents in 2015 and another 1500 in the four years after that. Consent data from Statistics NZ shows residential consents exceeding 1500 in each year since the accord. 

In 2015, 1715 residential developments were consented, in 2016 that number rose to 1792 and in 2017 it rose again to 2300. 

Mayor Justin Lester voted in favour of extending the SHAs. He said they were a good “interim step” while other solutions to the housing crisis were developed. 

He said the SHAs had delivered land that might have been land banked and had helped Wellington to deliver the biggest year for building consents in its history. 

But Lester said community feedback had shown communities objected to the inability to see and therefore consult on developments before they went ahead. 

Heritage or housing? 

Councillor Andy Foster agreed this was a major problem. He voted against the initial accord in 2014, but voted in favour of some of the individual SHAs.

Foster said if given the opportunity he would now vote against all of them. He said case law, which is currently before Court of Appeal showed the council had very little oversight over SHA developments, allowing developers to overrule the district plan.

The High Court approved buildings at the Shelly Bay development of up to 27 metres, when the District Plan had only permitted building of up to 11 metres. Other considerations like heritage or open space were also overridden. 

“In process terms its wrong and completely undemocratic and the outcomes are also wrong because it tips the District Plan on its head and says its all about housing,” Foster said. 

He said when the council entered into the accord, it was promised key principles including the District Plan and RMA would still apply, a promise that turned out to be misleading. 

Back to the drawing board 

RMA reform remains a distant possibility. 

Housing Minister Phil Twyford aims to deliver 12,975 KiwiBuild homes to Wellington over the next ten years, but has not promised any radical overhaul of the RMA.

Opposition housing spokesperson Judith Collins has promised radical reform of the RMA, but also said she aimed to reassert private property rights, which could end up making development even more difficult.

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