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The Urban Development Bill would enable New Zealand’s urban areas to be transformed by facilitating the development of land in areas of public transport infrastructure, which are already valuable locations for people to live and work

Expanding Kainga Ora’s toolbox – the Urban Development Bill – By Nicky McIndoe and Liam Bullen

Urban development in New Zealand is set to be transformed thanks to the newly introduced Urban Development Bill. Currently at the select committee stage, submissions closed on 14 February 2020.

The bill stems from the Kainga Ora–Homes and Communities Act, which disestablished Housing New Zealand and strategically combined it with its subsidiary HLC and parts of the KiwiBuild unit to form Kainga Ora–Homes and Communities (Kainga Ora).

The bill aims to enable Kainga Ora to improve the social and economic performance of New Zealand’s urban areas through complex development projects called specified development projects (SDPs). Under the bill, Kainga Ora would have the option to undertake the SDPs by itself or to partner with other entities, such as iwi, local government or the private sector. The bill aims to reduce the risk of complex developments, as well as creating opportunities in the private sector and for councils and Maori developers.

The bill is the second and more interesting piece of legislation designed to enable Kainga Ora to improve urban development outcomes in New Zealand. It is also part of a wider suite of legislative change that includes the Infrastructure Funding and Financing Bill, which aims to provide an alternative funding and financing model for the provision of infrastructure for housing and urban development.

Development powers

SDPs would involve a mix of housing types, transport connections, employment and business opportunities, infrastructure, community facilities, and green spaces. To facilitate this complex mix, the bill would give Kainga Ora access to a ‘toolkit’ of development powers as well as land acquisition powers. These will allow Kainga Ora to carry out comprehensive urban development by giving it more power and reducing reliance on other entities to get the job done.

This toolkit of powers includes:

• The ability to remove obligations owed by the landowner to a third party from the land

• The right to exchange or revoke particular types of reserve and conservation land

• The right to build or change or remove transport infrastructure

• The power to require network utility providers to install utility assets

• The power to set targeted rates, development contributions, collect betterment payments or charge connection payments.

Ability to act as consenting authority

In addition to the toolkit of powers, Kainga Ora would be able to essentially take over a council’s role as a consenting authority. Similar to the normal consenting process, there will be public consultation and submissions on the SDP objectives, location and effects. However, the right to appeal to a court will be very limited.

Projects will continue to be tested against the Resource Management Act (RMA) provisions as well as the bill’s principles of integrated and effective use of land and buildings, quality infrastructure, efficient, effective and safe infrastructure, access to public open space, and low-emission urban environments.

Once an SDP is confirmed, finalising the details necessary to enable development will be much quicker than the standard RMA process. Kainga Ora will also be the consent authority for activities carried out by others within the development plan area, and will be responsible for responding to any plan change requests, as well as for compliance, monitoring and enforcement.

Compulsory acquisition of land

Crucially, Kainga Ora would gain the ability to compulsorily acquire land under the Public Works Act (PWA). While Urban Development Minister Phil Twyford has promised Kainga Ora’s land acquisition powers will only be used “sparingly, if at all”, these powers are still extensive, as outlined below.

Kainga Ora will have the ability to apply to the Minister for Land Information to have land or an interest in land (not including sensitive Maori land) taken by compulsory acquisition under the PWA for one or more ‘specified works’, without the need to demonstrate that the work also meets the definition of ‘public work’ in the PWA. The definition of ‘specified work’ is broad, and includes urban development, urban renewal, housing and related infrastructure purposes.

Kainga Ora will be able to apply at any time, whether or not a development project has been established and whether or not the relevant land is within a project area. It will also be able to transfer the land or interest in land to another person or entity for a ‘specified work’. The land will vest in Kainga Ora, who does not have to hold it for a particular public work.

Compensation for any private acquisition or taking can either follow the PWA processes or, by agreement, take an unspecified different form and amount. This provision is a departure from the universal approach of the well-established PWA compensation framework.

Kainga Ora will be able to transfer land to developers, but with the right for the Crown to ‘resume’ such land if the land is no longer required for a specified work or is required for another specified work. Land held by Kainga Ora for ‘specified works’ which have been completed can be disposed of without the need to offer it back to former owners, as would be the case under the PWA (although this power is subject to specific processes for former Maori land).

Transforming urban development

This bill, if used carefully, would enable New Zealand’s urban areas to be transformed. It would facilitate the development of land in areas of public transport infrastructure, which are already valuable locations for people to live and work.

SDPs will be complex, and the bill would enable them to be efficiently undertaken, creating plenty of opportunity for developers with the potential for up to 15 SDPs throughout New Zealand.

Urban development in areas of transport infrastructure is already seen as a winning combination around the world and it is encouraging that New Zealand looks to be following suit.

Nicky McIndoe is a partner and Liam Bullen a law graduate within the full-service law firm of Kensington Swan; Nicky leads the environment and planning team, and works as an advisor to government agencies and council-controlled organisations carrying out large infrastructure projects

Dentons Kensington Swan


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