NPS-UDC 2016 released

Litigation Update

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The National Policy Statement on Urban Development Capacity 2016 (NPS-UDC) has been released.

The NPS-UDC provides direction to decision makers under the Resource Management Act 1991 on planning for urban environments. It takes effect on 1 December 2016.

Tiered regulatory approach

The objectives in the NPS-UDC apply to all decision makers when making decisions that affect an urban environment. However, the NPS-UDC targets different policies to different local authorities, based on Statistics New Zealand urban areas classification and population projections. It establishes a tiered regulatory approach.

Local authorities with medium-growth urban areas and high-growth urban areas, as defined in the NPS-UDC, have more obligations than other local authorities and those with high-growth urban areas have more obligations than those with medium-growth urban areas.

The current high-growth urban areas are:

  • Auckland
  • Christchurch
  • Hamilton
  • Queenstown
  • Tauranga

The current medium-growth urban areas are:

  • Kapiti
  • Nelson
  • New Plymouth
  • Palmerston North
  • Wellington

We set out a brief overview of the key obligations arising from the policies below.

Obligations for all local authorities expected to experience growth

The first group of policies in the NPS-UDC relate to 'outcomes for planning decisions'. They set out obligations for all local authorities with an urban environment that is expected to experience growth.

There is a requirement for local authorities to ensure that there is sufficient housing and business land development capacity in their resource management plans to meet demand.

'Development capacity' is the capacity of land intended for urban development based on the provisions that apply to the land in the relevant resource management plans and the provision of adequate development infrastructure to support the development of the land.

The NPS-UDC divides the infrastructure needed to service urban development into two categories. 'Development infrastructure' is network infrastructure for water supply, wastewater, stormwater, and land transport to the extent that it is controlled by local authorities. This can be contrasted with 'other infrastructure' that is generally not controlled by local authorities. Other infrastructure includes social infrastructure such as schools and healthcare, community infrastructure, open space, and energy and telecommunications infrastructure.

In providing development capacity, local authorities have differing obligations over the short-term (within the next three years), the medium-term (between three and 10 years) and the long-term (between 10 and 30 years).

In the short-term, development capacity must be feasible, zoned and serviced with development infrastructure.

In the medium-term, the development capacity must be feasible, zoned and either serviced with development infrastructure or funding for the development infrastructure must be identified in a Long Term Plan required under the Local Government Act 2002 (LGA).

In the long-term, development capacity must be feasible, identified in relevant plans and strategies, and the development infrastructure required to service it must be identified in the relevant Infrastructure Strategy required under the LGA.

For the development capacity to be 'feasible', the development must be commercially viable, taking into account the current likely costs, revenue and yield.

In addition to providing sufficient development capacity, local authorities are required to satisfy themselves that other infrastructure required to support urban development is likely to be available.

When making planning decisions, there are a range of matters that decision makers must have particular regard to, including providing for choices that will meet needs for a range of dwelling types and locations, working environments and places to locate businesses. There are also matters that must be taken into account when considering the effects of urban development.

Additional obligations on local authorities with medium-growth and high-growth urban areas

The NPS-UDC policies impose additional obligations on local authorities that have part, or all, of either a medium-growth or high-growth urban area within their district or region.

The additional obligations include evidence and monitoring requirements to support planning decisions. Local authorities are required to carry out a housing and business development capacity assessment on at least a three-yearly basis. The housing and business development capacity assessment must use information about demand, including information obtained from the mandatory quarterly monitoring of a range of indicators.

The development capacity assessment is required to estimate the sufficiency of development capacity provided by the relevant resource management plans, Long Term Plan and Infrastructure Strategy. It must estimate the additional development capacity needed if relevant factors indicate the supply of development capacity is not likely to meet demand in the short, medium or long-term.

There are also 'responsive planning' obligations for local authorities with medium-growth or high-growth urban areas. These include the obligation to provide an additional margin of feasible development capacity over and above the projected demand of at least 20% in the short and medium terms and 15% in the long-term. Where the evidence base or monitoring indicates that development capacity is not sufficient in any of the short, medium or long terms, local authorities are required to respond by providing further development capacity and enabling development (with a response initiated within 12 months).

In addition, there is an expectation that there will be 'coordinated planning evidence and decision making' for medium-growth and high-growth urban areas. As a result, the policies strongly encourage local authorities that share jurisdiction over an urban area to work together to implement the NPS-UDC.

Further obligations on local authorities with high-growth urban areas

The NPS-UDC policies impose further obligations on local authorities that have part, or all, of a high-growth urban area within their district or region. Local authorities that have part, or all, of a medium-growth urban area within their district or region are encouraged, but not required, to comply with these further obligations.

The further obligations involve the requirement for regional councils to set minimum targets for sufficient, feasible development capacity for housing and to incorporate these targets into their regional policy statements. Where the assessments required by the NPS-UDC show that the minimum targets are not sufficient, they must be revised and the revised targets incorporated into the regional policy statement.

Similarly, territorial authorities with high-growth urban areas are required to set minimum targets for sufficient, feasible development capacity for housing as a portion of the regional minimum target. These minimum targets must be incorporated as an objective in the relevant district plan and revised where a minimum target in a regional policy statement is revised.

In addition, the NPC-UDC policies impose the obligation where there is a high-growth urban area for local authorities to produce a future development strategy which demonstrates that there will be sufficient, feasible development capacity in the medium and long terms. The future development strategy must also set out how the minimum housing development capacity targets will be met.

The requirements applying to the future development strategy include the obligation to identify the broad location, timing and sequencing of future development capacity over the long-term in future urban environments and intensification opportunities within existing urban environments.

The NPC-UDC provides the option for the future development strategy to be a non-statutory document developed using the consultation process under Part 6 of the LGA.

Implementation timeframes

The NPC-UDC sets out the timeframes for giving effect to it. Notably, the objectives and policies that apply to all local authorities – the responsive planning policies and the policies relating to coordinated planning evidence and decision making – must be given effect to immediately (1 December 2016).

Local authorities with medium-growth or high-growth urban areas must begin monitoring using a range of indicators on a quarterly basis within six months of the UPS-UDC coming into effect.

Local authorities with high-growth urban areas are required to have completed their housing and business development capacity assessment by 31 December 2017. By 31 December 2018, these local authorities must have produced their future development strategies and have set their minimum targets for sufficient, feasible development capacity for housing in their regional policy statements and plans.

Local authorities with medium-growth urban areas are required to complete their housing and business development capacity assessment by 31 December 2018.

If you have any questions, or require further information regarding any aspect of this update, please contact us.

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