DR ERIC CRAMPTON: Better urban planning

Oliver [Hartwich] asked me to make the case for the government’s resource management legislation. It should be read in conjunction with Nick Clark’s critique below. I share his concerns, and I expect he’d share some of my hopes.

Under a supportive Minister like Hon Bishop or Hon Twyford, the legislation would enable a more liberal approach to housing and development.

For ages, urban planning has treated competition as though it is a swear word. Competitive urban land markets with abundant development opportunities are now one of the planning system’s many goals.

Many of the rules that stop new apartment towers, subdivisions and supermarkets will disappear.

Currently, proposed supermarkets often must prove they will not hurt the vitality of other neighbourhoods by stealing customers from existing supermarkets. Some councils block new subdivisions by pointing to carbon dioxide emissions in transport that are already regulated by the Emissions Trading Scheme. Those days will be over.

Having the same zoning definitions across different cities will make building easier. A building allowed in one city will generally be allowed in a part of another city that has the same zoning. Under a supportive Minister, the system could be built on foundations of liberal mixed-use zoning, with more kinds of activities allowed in more places.

And more activities will be permitted, without the need for resource consents.

When planning imposes costly restrictions on one person’s property for the benefit of the neighbours or the broader community, councils will be required to proactively consider the cost of those controls on the affected landowner. However, compensation machinery is patchy. And when central government requires council to impose a restriction, council should be allowed to ease the restriction rather than compensate owners for imposing it. But both improvements can yet be made.

Private plan changes, a pressure-release valve when plans do not keep up with community needs, are somewhat strengthened in the new regime. Councils will more often have to evaluate those change proposals on their merits, instead of rejecting them without evaluation.

The improvements described above are written into the Bills themselves. Some important details, like zoning definitions and how hard the government will push for more housing, depends on the national direction that will be set by future Ministers.

But it is an improvement. And one that can be built on, if future Ministers share Hon Bishop’s and Hon Twyford’s vision of better urban planning.

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Nick Clark: Better than the RMA is not good enough

Eric shows that, under the right ministers, the government’s replacement legislation should be an improvement on the existing RMA.

But being better than the RMA is a very low bar. That alone is not a good enough reason to pass these bills. And legislation that only works under the right minister is risky. My case is that Parliament should pause them and allow the government to fix them properly.

The bills provide a framework, but ministers would still decide too many important details later. Those details include which activities need consents, zoning, housing density, environmental limit setting, public notification rules and the meaning of the bills’ main goals. A pro-housing, pro-development minister could make this system faster and more enabling. A different minister could make it even slower and more expensive than the RMA. The more a minister can decide, the more vested interests will lobby the minister.

That risk might be tolerable if the design were sound. It is not. The National-ACT coalition agreement and Cabinet's 2024 principles put property rights at the centre of reform. By the time the bills were introduced, that promise had been weakened. The select committee could not fix it because it had to work within a philosophical approach favouring top-down regulation and planning over one based on property rights and the use of market-based tools to deal with environmental impacts.

The bills’ regulatory relief provisions apply only to a few factors and do not have to match the landowner's loss. The committee removed the alternatives to first-in first-served water allocation. The bills still have no property rights presumption, no cost-benefit discipline on national direction, too little legislative support for competitive urban land markets. The bills’ plethora of unranked objectives and vague wording will provoke the litigation that plagued the RMA. There will almost certainly be detail buried deep in the bills’ clauses which cause nasty surprises come implementation.

All three opposition parties oppose the bills, and the system would not take effect until the end of the decade. Legislation rushed through prior to election is unlikely to last. The last RMA replacement was repealed within weeks of the 2023 election. Substantial amendments will likely be needed next year even if there is no change in government.

Eric makes the case for pass and repair. My case is repair, then pass.

Eric Crampton is Chief Economist and Nick Clark is a Senior Fellow at the New Zealand Initiative