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Will new housing density rules result in greater financial contributions for developers?

Will new housing density rules result in greater financial contributions for developers?

Will new housing density rules result in greater financial contributions for developers?

Thursday 28 October, 2021

On 19 October 2021, the Government introduced the Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill, a bipartisan Bill aimed at increasing residential housing density in Auckland, Hamilton, Tauranga, Wellington, and Christchurch. Although the councils concerned have generally welcomed the new intensification rules, several have raised concerns that the Government has not made any provision for infrastructure to accommodate the anticipated 48,200 to 105,500 new homes being built in the next five to eight years.

For new developments, councils charge development contributions pursuant to their Development Contribution Policies to contribute to the costs of building new infrastructure to support the development. A development can range from building a single residential house to a large subdivision or commercial development. The circumstances and extent of development contributions can vary from council to council, but generally councils charge development contributions for developments needing a subdivision consent, land use consent, or building consent.

Local authorities also impose financial contributions (in the form of land or money) through their District Plans on developments in order to:

  • deal with potential adverse effects on the environment that cannot be directly avoided, remedied, or mitigated; and
  • ensure the adequate provision of reserves to meet community needs generated by the project.

Currently, section 108 of the Resource Management Act 1991 only allows councils to impose financial contributions through a resource consent process. However, the Bill widens the circumstances under which councils can charge financial contributions. Once the Bill is enacted, local authorities will be able to amend their district plans through a new intensification streamlined planning process and charge financial contributions for permitted activities (for which no resource consent is required), instead of being limited to those activities requiring resource consent.

This provision in the Bill is intended to help councils fund the cost of development infrastructure required to accommodate the new housing density rules. It represents a significant shift in policy for the imposition of financial contributions and will enable councils to charge financial contributions for all new developments, not just those requiring resource consent. The Government intends to pass the Bill by the end of this year, with councils starting to implement it by 2022.

 


If you have any questions about how the new rules might affect you, or you would like help to make a submission, our experts (listed below) can help.