07 April 2017
Report no: PRC2017/2/117
Urban Development Authorities
Purpose of Report
1. The purpose of this paper is to:
a. advise the Committee about the main aspects of the Government’s proposal to introduce legislation to create Urban Development Authorities (UDAs) to support and fast track urban development projects across New Zealand and the implications of this proposal for Hutt City and Council;
b. ask the Committee’s to approve the draft submission (attached as Appendix I) on the proposal.
That the Committee approves the draft submission on the Government’s proposal to introduce legislation to create Urban Development Authorities (UDAs) to support and fast track urban development projects.
2. Recently, the Government announced it will introduce legislation to create Urban Development Authorities (UDAs) that will support and fast-track urban development projects across New Zealand. UDAs are intended to widen Government powers (both central and local) to play a more active role in identifying, planning and delivering strategic urban redevelopment projects.
3. UDAs have existed worldwide for some time. The Australian Federal Government established and resourced a Major Cities Unit within the Department of Infrastructure, Transport, Regional Development and Local Government in 2008 to provide a more coordinated and integrated approach to urban development.
4. In recent years, some state governments in Australia (New South Wales, Victoria) have established growth management agencies that work closely with their Departments of Planning to manage the planning and infrastructure co-ordination for the release of land areas for development around major cities. Growth boundaries are used by those state governments to manage urban growth through infill and intensification, and at the city boundary.
5. In the UK, English Partnerships is the national regeneration agency, helping the Government to support high-quality sustainable growth in England. It is responsible for land acquisition and assembly, and major development projects, alone or in joint partnership with other agencies and with private sector developers. The Housing Corporation is the national government agency that funds new affordable housing and regulates housing associations in England.
6. In England, Urban Regeneration Companies are independent companies established by the relevant Local Authority and Regional Development Agency (which has an economic development focus on a regional level), with the aim of uniting public and private-sector partners. They work alongside English Partnerships and other local stakeholders including employers, amenity groups and community representatives. These Urban Regeneration Companies have proved successful in attracting private investment into targeted areas and in coordinating economic development delivery and funding.
7. An outline of the key aspects of the proposal is attached as Appendix I and the draft submission is attached as Appendix II.
8. Council’s Urban Growth Strategy has a target of 6000 new homes by 2032. Establishment of a UDA within Hutt City would be one tool to assist in achieving this target.
9. The Government is calling for submissions which are due on the 19th May 2017. No hearings will be held. Submissions will be analysed and reported back to the Minister and new legislation will be drafted.
10. The key focus of the document is widening Government powers – both central and local – to play a more active role in identifying, planning and delivering strategic urban redevelopment projects. The desired outcome is making cities more connected and sustainable with a wider range of housing – including more affordable options – while supporting quality living environments across the housing continuum.
11. It is generally accepted that UDAs, if implemented appropriately, can make a big difference to New Zealand’s future. The proposal offers a “toolbox” of powers that could be vested in an UDA for the purposes of progressing urban development that can accelerate the building of new communities and support the revitalization of existing urban areas to deliver “vibrant places to live and work”. The range of these powers is broad - from streamlined planning to compulsory acquisition of private and public land.
12. Not every development will require all the powers to be vested in a UDA – it will only involve those powers needed to successfully complete the development. Once completed, ownership of infrastructure assets are vested back to the local authority in which the development took place or another agency as appropriate. Provision is made for ensuring that the receiving organisation does not inherit debt or have to purchase the assets vested in it. This makes adherence to performance and design standards imperative. There is no provision for the funding of renewals and on-going maintenance.
13. Proposed matters of relevance included in the draft include:
Level of central government control
a. Central government will have a very high level of control of decisions affecting development in local environments - the Minister has final decision making powers vis a vis an urban development proposal.
b. The impact on Council decision making independence or on Council’s ability to influence if government decides to introduce legislation that does not require local authority agreement particularly at the planning and development stage.
c. Council’s ability to meet its responsibilities under the Local Government Act in terms of section 10 “Purpose of Local Government” and section 11A “Core services to be considered.”
d. The rate payers and residents interests and ability to provide feedback on proposals.
e. The proposal includes a local government ability to veto any proposal should it believe that it isn’t in its constituent’s interests to approve. However, this can be overridden where the government is of the view that the development is in the national or regional interest. This is an attempt to circumvent national or regional “nimbyism”.
Council’s current ability to influence/guide development in the city – will a UDA make a difference?
a. Difficulties, if any, in ensuring that the market delivers infrastructure and intensification projects that will provide significant numbers and types of new dwellings to a level of quality that ensures the creation of a vibrant a sustainable city.
b. Whether our growth aspirations are likely to occur and if they are what that means for urban intensification in Lower Hutt.
c. Council’s focus on urban redevelopment and providing a greater choice for housing.
d. The lack of a spatial plan and the impact this might have on our ability to develop proposals for Government to consider granting development powers to a Council-established UDA. Officers recommend Council give serious consideration to developing a spatial plan for the city.
a. Compensation and powers of compulsory acquisition. Good compensation packages are critical to the success of the proposal and people need to understand what is available to them. It is far more productive if people come willingly to the negotiation table because they can see the advantage to them of doing so. Officers view is that providing the UDA with sufficient flexibility to design compensation packages that will benefit both the building/land owner, the UDA and ultimately ratepayers is essential.
b. Taking of public land for UDA purpose. This goes to the inability of rate payers and residents to have involvement in the process of deciding whether or not to use public land such as a reserve for development purposes. The process for doing this needs more rigour around it.
c. Shifting planning and land use controls outside District Plans. While the streamlining of processes is an important aspect of ensuring that developments can be easily progressed, officers are not convinced that the argument made for this is persuasive. Officers see no reason why the master plan (and associated rules for stream lining the consent and decision making process) for a development could not be included in an existing District Plan. Shifting the planning outside the District Plan could result in parallel processes and inefficiencies for both the UDA and the “host” Council.
The ability to override one or more of the existing District Plan, regional plan and applicable regional policy statements “risks the creation of yet another fast track or streamline pathway with its own administration and rules and further fragment what is already at risk of becoming an extremely fractured and inefficient planning system” (NZPI, Preliminary Analysis of NZ Government’s Urban Development Authorities Discussion Document 9/3/2017). It also removes the ability of rate payers and residents to participate in planning processes. There seems to be no cogent reason for bypassing or replacing existing RMA processes.
d. Value uplift or betterment fee/levy system. The proposal does not support the use of value uplift or betterment fee/levy systems in New Zealand although overseas these tools have proved effective for specific, local projects that can be completed in the short term (NZPI).
These approaches have been used in New Zealand (Wellington) before. The rationale for limiting the UDA funding proposals does not engage with the function of value uplift potential revenues in buying the agreement and participation of stakeholders in the kind of land acquisition processes suggested in the Discussion Document.
Our view is they can be useful but should be included as an option for UDAs not as being compulsory.
14. Central government can develop a proposal separate from the TA however it must have the TA’s prior approval of the projects strategic objectives before granting development powers to a UDA. This is where the local authority power of veto comes in. It should be noted however, that the proposal does suggest that local authorities should not be involved and should not have a power of veto. This suggestion should be strongly resisted
15. The proposal to introduce UDAs to New Zealand has potential to assist local authorities to develop urban renewal projects that can improve the city’s urban fabric and catalyse further private development.
16. Council could stand to gain large development outcomes it couldn’t hope to achieve on its own by working alongside and utilising central governments resources and powers under the UDA provided Council was in agreement that it could be beneficial.
17. Overall this legislative change has potential opportunities that could benefit Council.
18. Wellington City Council considered establishing a UDA in 2016. Councillors were generally supportive of the proposal however their preference was for the UDA to be in-house rather than at arm’s length as a CCO or CCTO. Officials on the other hand recommended that the UDA be a CCO or CCTO.
19. WCC has recently decided (21 April 2017 Dominion Post) that the council can do a better job on its own, and has brought the work back in-house.
20. The Committee has the options of:
a. Approving the draft submission without changes; OR
b. Approving the draft submission subject to changes required by the Committee being made; OR
c. Not approving the submission and asking officers to undertake further work and come back to a subcommittee for approval. The subcommittee being the Chair and Deputy Chair of the Policy and Regulatory Committee; OR
d. Not approving the submission because the Committee does not believe it is appropriate for Council to make such a submission.
21. Officers from relevant areas of Council were consulted in the development of this submission.
22. Councillors had a workshop with officials from MBIE on 27th April to provide Councillors with information on the UDA proposal and enable questions for clarification.
23. There are no legal considerations at this stage. However, the consequential legislation could create relatively significant legal considerations for Council in the long term although these are unknown at present.
24. At the moment, there are no significant financial implications in making a submission. However, the consequential legislation could create relatively significant financial considerations for Council in the long term although these are unknown at present.
25. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of the local government in that it provides Council with advice on an important development in the legislation affecting the operation of Local Government. It does this in a way that is cost-effective because it there is limited cost associated with making a submission to Government and it is in the city’s best interests that Council is involved in decision making concerning legislation to introduce Urban Development Authorities.
UDA Submission Outline of Proposals
Author: Wendy Moore
Divisional Manager, Strategy and Planning
Approved By: Kim Kelly
General Manager, Strategic Services