The Minister for the Environment has recently released for public consultation a Proposed National Policy Statement (“NPS”) on Urban Development Capacity.

The Proposed NPS aims to ensure that local authority plans enable development by providing sufficient capacity for business and housing growth in the short, medium and long terms (three, ten and thirty years respectively). It comprises seven broad objectives, and 20 more focussed policies. The objectives, and some high level policies, apply to all local authorities. Some policies apply only to local authorities containing high growth urban areas (Auckland, Tauranga, Hamilton, Queenstown and Christchurch), while other policies apply to high and medium growth urban areas.

The Minister for the Environment, Nick Smith, states that the proposed NPS addresses three key issues:

  • Connecting planning decisions with economics: for example, price signals, commercial feasibility, and ensuring sufficient competition in supply are proposed to become required considerations in planning decisions.
  • Requiring more responsive planning: for example, the NPS will require short, medium and long-term policies to manage growth, and regular reviews aimed at ensuring plans remain up to date.
  • “Re-balancing” national and local interests: for example, the Policy will require councils to place greater weight on the national importance of sufficient land supply for housing and business growth.

In terms of the Proposed NPS’s obligations, it requires local authorities containing medium or high growth urban areas to carry out housing and business assessments at three yearly intervals. These assessments must estimate demand; and the supply of development capacity required in the short, medium and long-terms. A range of regular monitoring requirements - for example the number of resource and building consents granted, and the relative affordability of housing - is also proposed. Where the evidence indicates insufficient supply, the Proposed NPS requires local authorities to respond by providing further development capacity; for example, by changing plans and policy statements and/or addressing consenting processes.

For high growth urban areas, regional councils are also required to set (and review every three years) minimum targets for the supply of residential development capacity, and incorporate these targets into their regional policy statements. A buffer of 20% over and above projected short and medium-term demand, and 15% above long-term demand, is proposed to be required to take into account that not all capacity will be developed. In high growth urban areas, local authorities will also be required to produce future land release and intensification strategies to demonstrate that there will be sufficient development capacity and that minimum targets will be met.

The Proposed NPS forms part of the Government’s wider reforms, including those aimed at strengthening national direction under the RMA. The Proposed NPS is also intended to compliment the Resource Legislation Amendment Bill 2015 (see our previous article on that Bill here) which, as presently drafted, will impose under the RMA new requirements on councils to provide sufficient development capacity.


It is difficult to take issue with the stated aims of the Proposed NPS, as expressed through the proposed broad-brush objectives. However, while the Governments’ discussion document extols the Proposed NPS as a “powerful tool to make our urban environments work better”, we will have to wait and see whether the Policy, if approved, generates real traction on the ground (i.e. whether the words on paper will translate into concrete residential/business development). A recent example of Government intervention in the land supply/housing markets, the Housing Accords and Special Housing Areas Act 2013, has so far achieved lukewarm success - in terms of actual development - and has highlighted the complexities inherent in such markets.

In the case of Auckland, despite the almost universally accepted need for residential growth, the ability to stimulate actual development through central/local government initiatives (as opposed to simply enabling conditions in which such development may occur) has proved somewhat elusive in the context of the scale of the supply deficit. It is also unclear to what extent the processes required under the Proposed NPS, which are reasonably onerous on local authorities in terms of assessments/monitoring required (for example), will duplicate or cut across similar processes that may already be undertaken or planned in some jurisdictions.

Another key factor in the NPS’s success (or otherwise) will be the provision of infrastructure. Although the Proposed NPS expressly promotes coordination between local authorities and infrastructure providers and requires councils to consult/work with infrastructure providers, it does not (nor can it) direct infrastructure providers or meaningfully address the crucial issue of infrastructure funding.

What next?

The Government is seeking feedback on the Proposed NPS. Submissions close at 5pm on 15 July 2016. Once submissions have been considered, the Ministry will prepare a summary of submissions report, including recommendations to the Minister. The Minister will then decide whether to approve the Proposed NPS. If approved, the Government has stated that the NPS will likely take effect by the end of 2016, broadly in line with the Resource Legislation Amendment Act and the Auckland Unitary Plan.

Please contact us if you would like to discuss how the NPS may impact you or your business, or if you would like assistance drafting a submission.

A copy of the Proposed NPS, and a discussion of its key themes, is available in the Government’s consultation document.    

Posted on June 8, 2016 .