Urban Development Bill Gives Significant Powers to Kãinga Ora

Introduction 

The Urban Development Bill was introduced as part of a number of initiatives undertaken by the Government to remove what it saw as impediments to progress urban development within New Zealand.

One of those initiatives was the enactment of the Kãinga Ora – Homes and Communities Act 2019. This legislation established Kãinga Ora, as a new Crown Entity, amalgamating a number of previous entities: Housing NZ Corporation, HLC (2017) Limited and the Kiwi Build Unit.

Under this legislation, Kãinga Ora has been afforded two key roles:

  • To become a public landlord; and
  • To partner with a number of entities on a range of urban development projects.

This second role and the powers afforded to Kāinga Ora to undertake this role, are now proposed to be provided for in the Urban Development Bill (the Bill). This Bill has recently been through the select committee process, where the Environment Committee considered 134 submissions and has recommended the Bill is passed with its suggested amendments.

This article briefly describes the powers afforded to Kãinga Ora under the Bill and focuses on providing a high level summary of the Special Development Projects process and the impact this will have on the role of territorial authorities, if passed.

Powers of Kãinga Ora

The Bill provides Kãinga Ora with the ability to:

  1. acquire land for specified works. Specified works include a variety of works such as housing, urban renewal, a facility for emergency services, to name just a few;
  2.  enable, lead or facilitate a special type of complex urban development – called a specified development project; and
  3. access a toolkit of existing development and funding powers when undertaking specified development projects.

Specified Development Projects

Under the Bill, in order to become a specified development project (SDP) a “custom-made” process, outside of the standard RMA planning and consenting process, is to be followed by Kãinga Ora.

A SDP begins with the selection of an urban development project by either Kãinga Ora, Ministers or jointly with other parties, such as iwi, local authorities or private developers. Kãinga Ora are then tasked with undertaking a due diligence type of assessment and providing advice to the Joint Ministers about whether the project should proceed.

If the Joint Ministers approve the project, an Order in Council is used to establish a SDP. Kãinga Ora then prepares a draft development plan that must meet a number of criteria which then requires approval from the Minister before public consultation can occur.

Kãinga Ora then calls for submissions, which it considers and provides its recommendations on the SDP to an Independent Hearings Panel (IHP). The IHP then considers all the material and provides its own recommendations to the Minister within 9 months. If accepted, the Minister makes the SDP operative by giving notice in the Gazette.

Impact on Territorial Authorities’ Role

The impact of the establishment of an SDP on the role of a territorial authority is rather significant, and begins before a SDP becomes operative. We discuss a selection of the ways in which the Bill will change the role of a territorial authority in respect of an SDP.

Generally, the Bill provides a duty for a number of entities to co-operate including relevant local authorities, including providing reasonable assistance to each other to enable each entity to perform their roles.

Even before an SDP becomes operative there are additional requirements that a territorial authority must comply with. For example, during the due diligence phase undertaken by Kāinga Ora it must provide a copy of its project assessment report to the relevant territorial authorities’ and invite them to indicate their support in writing. It is mandatory for territorial authorities to respond with the timeframe provided, which must be at least 20 working days.

In its response, a territorial authority is asked to indicate its support in writing. It is able to provide any conditions associated with its support and can provide reasons if it does not support Kãinga Ora’s recommendations, along with any changes that would be required for the territorial authorities support. There is no requirement for a territorial authority to consult with anyone else before providing its response to Kãinga Ora.

The period between the Order in Council establishing an SDP and an SDP becoming operative by notice in the Gazette is called the transitional period. Kãinga Ora becomes consent authority once the SDP and is operative, but in the transitional period the territorial authority continues to process resource consents and Kãinga Ora has the power to decline or impose conditions on the consent if it considers such action is reasonably necessary to achieve the SDP’s objectives.

Practical Implications for Territorial Authorities

There are also number of practical considerations that are likely to arise regarding how Kãinga Ora is going to resource a number of elements of its role that it will take over from a territorial authority. In our opinion perhaps the more likely scenario, is that it will reply heavily upon the expertise already within territorial authorities to assist with this. These circumstances include but are not limited to:  

 

  1. Once an SDP is operative Kãinga Ora step into the role of consent authority for the development area. This means it also takes on the role of monitoring and enforcement in the project area in respect of consents and all other activities, permitted or otherwise;
  2. The Bill provides for Kãinga Ora to obtain funding for an SDP through targeted rates, and for the territorial authority to collect those for Kãinga Ora; and
  3. Both Kāinga Ora and territorial authorities have an obligation to assist any person to determine who does what in respect of an SPD area.

There is certainly a lot of change occurring in the urban development space, and more to come with the consultation on the National Policy Statement for Urban Development Capacity completed. It remains to be seen if these changes will have the impact sought by the Government particularly in this Covid-19 era.

If you have any questions about the issues and documents considered in this article please get in touch with one of the Adderley Head team.

Disclaimer: This is a brief summary for information purposes only and is not legal advice.

Posted on Thursday 2nd July, 2020 at 11:55 am