If the housing shortage isn't about the RMA, what needs fixing?

by Pattrick Smellie / 08 May, 2017
RelatedArticlesModule - Housing

Murray Sherwin. Photo/Newspix

It was standing room only at the session of the New Zealand Planning Institute conference featuring Productivity Commission chairman Murray Sherwin in Wellington last month.

The commission’s latest monster report, modestly titled “Better Urban Planning”, is now the bible for reform of the much-maligned 1991 Resource Management Act, although its reach is far further than legislative reform.

Elsewhere at the same conference, a sparse crowd listened as academics equated the slow-moving Tamaki Regeneration Project with a triumph of neo-liberalism and offered a Marxist interpretation to explain the Auckland housing bubble. In essence, the Marxist view is that a central fantasy drives behaviour, and in the case of Auckland, that is that the market will deliver appropriate outcomes – eventually.

Although no doubt containing a grain of truth, the analysis was neither helpful nor necessarily fair. Interventions such as the Special Housing Areas initiative to try to speed up supply and put a lid on prices have been a hallmark of Government actions for the past eight years. It’s just that they haven’t worked.

Over the same period, the Productivity Commission has become a de facto primary source of new urban and environmental planning policy, with its latest report landing at the same time as a political consensus has emerged that the RMA is past its use-by date.

As a result, Sherwin’s dry, rationalist analysis was essential listening for an urban planning profession still inclined to rear up at the mention of a blocked view-shaft and to assume growth is a cost rather than an opportunity to a city.

Indicative of that mindset was a question to Sherwin asking whether, if central government mandated a larger city, it should also pay for the costs of enlargement.

Sherwin’s answer? Allow councils to pay for new infrastructure by charging its users.

“Make sure the beneficiary pays,” he said. “Either the purchaser or the developer. It’s important that growth is paying for itself.”

Other tools, such as congestion charging, to discourage road use at peak times, should also be allowed as both a source of new funding for better public transport, for example, and as a way to influence city-dwellers’ behaviour in ways that keep new infrastructure costs down.

To concerns expressed about compromising natural landscapes in favour of more houses, Sherwin says only communities can decide. “It’s a community process to weigh up how valuable that view is versus what are we doing to the house prices of poorer New Zealanders who are struggling to be housed.”

However, even if it’s not the whole problem, the RMA is in for a complete overhaul, whoever wins the next general election, in part because after 26 years and 19 rounds of amendments, the 800-page Act is becoming unusable.

The 19th round of reforms ended at 6pm on Thursday, April 6, when the Government sprang a parliamentary vote to end an Opposition filibuster to delay passage of the Resource Legislation Amendment Bill – the final act in an increasingly desperate reform process.

Political parties across the board, as well as lawyers, environmentalists, property developers and business lobby groups, all agree the latest reforms will make a difficult law even harder to use, and iwi participation rights inserted to gain crucial Maori Party votes for the legislation may yet become a bellwether election issue. Both New Zealand First’s Winston Peters and Don Brash’s “Hobson’s Pledge” initiative are trying their best to make it so.

Alleging “brownmail” and urging National MPs to step back from the “separatist abyss”, Peters has been focusing for months on the undemocratic elements of these reforms, although supporters of the measures say they do no more than codify the sorts of relationships that are springing up everywhere between iwi and local government.

Labour’s Meka Whaitiri even told the House that iwi with such agreements in place were among the most worried people about the Mana Whakahono a Rohe provisions, fearing they may not be compliant with the new legal framework.

However, reform of the RMA’s detail doesn’t necessarily mean throwing out the underlying purpose of the Act. Environment Court judge David Kirkpatrick points out that part 2 of the RMA – the bit containing detailed commitments to environmental sustainability – is “untouched”, despite all the other changes. “The basis for the RMA remains reasonably sound.”

Far more important is the reform of local government financing – an issue that Local Government New Zealand has been campaigning on and which the Productivity Commission report addresses at length.

Among its recommendations: allowing councils to levy “value capture” rates on property where values rise very fast – say, over 20% a year. They might be near investments in rail or other public transport, allowing councils to share some of the uplift in property values enjoyed by homeowners because of the city’s investment.

The New Zealand Initiative would go further, proposing that councils should be allowed to keep the GST generated from property developments in their city, so that revenue generated by investments creating new growth would fund the necessary new infrastructure and services.

“RMA reform won’t change anything if you don’t accompany it with incentives,” says the think tank’s director, Oliver Hartwich. “Change the incentives for councils and you might not even need reform.”

Consensus is building for a commission of inquiry to consider such reform in as non-political an environment as possible.

A word of warning: if this approach is to succeed, there will be times when it appears contradictory.

At the same time as loosening the apron and purse strings on local government, central government will also be taking far greater control of local decision-making with national consequences.

“I’m not convinced the RMA needs to be thrown out,” says Labour housing spokesman Phil Twyford. Weaknesses in planning processes, poor decision-making and too little central government direction have been root causes of the current problems.

“Radical reforms of the planning system”, including a more competitive market for urban land and modern spatial planning – a big gap in current tools for urban development – may have just as much impact as spending years changing the law.

This article was first published in the April 22, 2017 issue of the New Zealand Listener.

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