‘Nice pointers, but show us the money,’ say councils

The Government's new National Policy Statement on urban development could make a big difference, but only if city councils have the funds to implement it. Marc Daalder reports.

"Our housing market is stuffed," Minister for Urban Development Phil Twyford said on Wednesday, as he unveiled a new proposed National Policy Statement on urban development.

The announcement was met with cautious optimism from city councils and property developers across the country. Sir Paul Adams, who heads up the Tauranga-based developer Carrus, said the document was a "game-changer".

"I'm on the record with Minister Twyford as stating that if we can remove the impediment to creating an adequate supply of residential sections, we can match the supply-demand curve and bring in really affordable housing," Adams said at Carrus' Kenepuru Landing development site in Porirua, where the NPS was announced.

The NPS institutes new rules for how councils should plan for urban growth and development and could make a major difference going forward. The largest problem with the guidelines, however, is that councils may not have the money to follow them.

Funding woes

It isn't breaking news that councils - particularly in fast-growing cities - are struggling for money. The NPS identified six high-growth cities and the mayors of four of them agree that more funding is needed. But Twyford said that isn't on the way.

"We're not proposing to provide extra funding to them," he said.

Auckland Mayor Phil Goff hit back in a press release. "High growth cities cannot be expected to shoulder the burden of growth by themselves," he said in a statement.

"At the moment, about 93 percent of public revenue goes to Government, yet cities shoulder most of the cost for accommodating growing populations. We need some degree of revenue sharing if Government wants Auckland to take more of a role in urban development."

"All local governments agree that changes need to be made to how local government income is raised," said Wellington Mayor Justin Lester. "If we're just putting the cost onto ratepayers through rates, that's not an appropriate mechanism to ensure the long-term growth of our city."

Lack of funding "will definitely make it harder" to implement the NPS, Lester said.

'Show us the money'

Jim Boult, Mayor of Queenstown Lakes, agreed. "This is a new approach to planning and one that needs significant investment to ensure that we have got it right and delivering the right outcomes for the communities in our district," he said.

"I do believe there is investment needed to achieve this, especially given that we are already under pressure to keep up with rapid growth that needs investment in infrastructure and services. If new funding isn’t forthcoming it jeopardises a council’s ability to do other essential things."

Tauranga Mayor Greg Brownless said he was "very strongly of the view that, either before or at the same time as we enable more housing, there must be that investment by Government in transport infrastructure."

"I think it would be really good to help out our ratepayers who currently have to shoulder the burden of [transport and pipeline] infrastructure. You can't just say, 'Do this, this and this' without assistance,'" he said.

Stuart Crosby, Vice President of Local Government New Zealand, backed Goff. "He is correct. Our take is it's a package arrangement between central government, local government and property developers. They all need to work together to make this work."

He pointed out that the Productivity Commission said new funding tools would be required to help councils deal with rapid urban growth. "There needs to be a share of public revenues," he said.

Christchurch Mayor Lianne Dalziel was unable to comment on the funding question. Hamilton Mayor Andrew King was the only one of the six to say that additional funding wasn't needed.

"No I don't agree with Mayor Goff. Hamilton is in a really good place to go ahead and do this ourselves with our existing funding," he said.

Twyford and Minister for the Environment David Parker both said that planning and land use regulation are part of councils' basic mandates.

"We're not going to pay for them to exercise their planning function, which is their core duty," Parker said.

The proposal

If funding is forthcoming, the NPS could radically reshape urban development in New Zealand. The document places a new focus on growing "up and out." That means mixing medium and high-density housing with steady expansion along pre-planned transport corridors.

In order to do this and make space for more growth, the NPS will force councils to abandon restrictions on building height and housing density in city centres. The document also takes aim at minimum car-park requirements, which councils use to keep space open for parking in urban areas.

While the previous NPS, released under National in 2016, required councils to supply 15 percent more land than forecasts said would be needed, the new proposal does away with this. 

Mayors of high-growth cities were broadly supportive of the NPS initiatives.

"We welcome the fact that this new proposed approach aligns with work that we are already undertaking with a range of partners on developing our own spatial plan for the Queenstown Lakes District," Boult said.

But the sense remains that without funding, nothing much will happen.

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