Attachment 1

UDA Submission Outline of Proposals

THE PROPOSED URBAN DEVELOPMENT AUTHORITY DISCUSSION DOCUMENT ^[1]

EXECUTIVE SUMMARY

The Urban Development Authority Discussion Document (hereafter referred to as UDA) proposes the formation of publicly owned/controlled UDAs that can drive spatially defined projects of national or local significance that are complex or strategically important, and access special powers to speed the delivery and reduce the cost of development. 

These powers include;

·    Compulsory acquisition (through application to the Minister of Land Information);

·    A “Development Plan” process that replaces the existing resource consent and rezoning processes under the RMA;

·    Powers to levy landowners to offset infrastructure costs;

·    Ability to change and revoke reserve status over certain types of public reserves; exchange reserves; and

·    Powers to override Regional Plans, Regional Policy Statements, and District Plans. 

The powers will be conferred on UDAs on a project-by-project basis (not generally) and will expire upon completion of each project. The scope of statutorily based monitoring, measuring “success”, and enforcement is based on the delivery of “strategic objectives” not the completion of the project. However, those objectives can include things like provision of social outcomes, quality of infrastructure, and affordable housing.

Although there is a carefully designed framework for public input on balance public participation and rights of appeal are reduced. 

The Development Plan in effect is a Private Plan Change for the Development Area, with the matters the development plan must incorporate, consider and deliver being similar to that required under the RMA.  

The Ministry of Business, Innovation and Employment will be presenting on the UDA proposal at the Council briefing on Thursday 27 April 2017.

BACKGROUND

In February 2017, the Ministry of Business, Innovation and Employment released a 125 page paper titled “Urban Development Authorities Discussion Document”. The purpose of the discussion document is to explore potential legislation that may provide an alternative regime for urban development and redevelopment to occur. 

This document builds on previous papers canvassing topics on Urban Development, Land Use Planning, and Housing Affordability that Council has previously submitted on. It is also intended to dovetail into current legislation, directives, or proposed amendments to legislation such as the NPS Urban Development Capacity and Resource Legislation Amendment Bill for example.

This UDA Discussion Document has far reaching consequences across multiple departments within Council. They include Reserves, RMA Policy, Resource Consenting, LGA Consultation, Partnerships, Infrastructure, and Long-term Planning. It will take time to canvas the full extent of the impacts to ensure a more comprehensive understanding is identified and assessed.   

THE PROPOSAL

The proposal will enable development projects to run outside of ‘business as usual’ local and regional government processes; although the Building Act requirement will still be in force. 

The legislative framework is intended to enable local and central government to:

·    Empower national or locally significant urban development projects to access more enabling development powers and land use rules; and

·    Establish new urban development authorities to support those projects where required. 

Central government in partnership with local government would have the power to:

·    Identify a development project;

·    Set the strategic objectives for the project;

·    Select which of the development powers the project can access;

·    Determine who can exercise the development powers for that project; and

·    Determine who is accountable for delivering that development project’s strategic objectives. 

Central government would be required to work with local authorities to identify the development project and set the strategic objectives of the project. 

The toolkit of powers that may be allocated include:

·    Land assembly powers that cover both public and private land, including existing powers of compulsory acquisition, together with powers over reserves and lesser interests in land;

·    Planning, land-use and consenting powers that shift the balance of matters that must be considered in decision-making towards the strategic objectives of the development project;

·    Independent power for providing infrastructure where the necessary infrastructure has not been included in local government plans or needs to be brought forward to accommodate urban growth; and

·    Powers that enable an Urban Development Authority to levy development contributions and a targeted infrastructure charge on properties within a development project area; and

·    If consent authority roles are not delegated to UDA or independent commissioners, then local authorities or regional councils must be the consent authority of the Development Plan. 

The full suite of powers will not be available as a default position. Only the powers required to “unlock” each site will be made available and these will be conferred only with Ministerial approval. 

The UDA will have the ability to use the powers directly, including the ability to approve its own “development plans”. Private developers can be contracted to deliver development but will not have access to any of the special powers. 

Local authorities would have responsibilities to:

·    Work with central government on potential project areas;

·    Undertake public consultation on proposals;

·    Undertake a regulatory role for applications under a Development Plan;

·    Collect and disseminate revenue through targeted rates, Development Contributions or infrastructure fees; and

·    Amend statutory documents at the end of the process to integrate the matters into the Development Plan. 

Local authorities and central government sit at the centre of the proposal with an emphasis on collaborative decision making and potential partnerships. Regional councils are a peripheral player by comparison. For example, there is provision for local authorities to veto projects within their jurisdiction but regional councils would not have this power. 

The process for creating UDAs is not fully fleshed out in the discussion document but both “Councils” and “CCOs” are eligible to become UDAs. This appears to leave the door ajar for both in-house development functions and arm’s length UDAs/CCOs. There is emphasis on skill-based boards and Ministerial approval of board makeup. This does not sit neatly with an in-house development function overseen by a traditional Council committee. 

Beyond the immediate local authority considerations a full range of Crown entities are eligible to become UDAs (e.g. Housing NZ) and there is explicit provision for new Local authority/ Crown partnership entities akin to the recently formed “Regenerate Christchurch”.

Establishing a UDA only applies to areas zoned Urban. It does not apply to un-zoned Greenfield sites.  For Hutt City, key development areas are the CBD with River Link and Wainuiomata for greenfield.

The legislation would cover the consenting and delivery of infrastructure (both bulk and local – ranging from 3 waters, roads, lighting, signage, cycle-ways and public transport); and may amend or remove local authority By-Laws (in consultation with local authority) inside the Development Area. 

A UDA can require Council’s to amend LTPs to cover funds required for the Development Project. There may be the ability for a UDA to require LTP, infrastructure and transport plans to “not be inconsistent” with the strategic objectives of the development project. 

Where there is demonstrable benefit UDAs could levy property owners to recover the costs of providing or upgrading infrastructure. It appears that UDA can require targeted rates and Development Contributions on land within the development, which would be collected by local authority and transferred back to the UDA.  The local authority cannot levy in the Development Area, so would have to have an agreement with the UDA if any of the targeted rates needed to go back to the local authority. 

The collection and dissemination of rates or contributions would be subject to an agreement between the local authority and the UDA. If no agreement can be reached, an “independent decision-maker” would make a decision that would have to be implemented by the local authority or UDA. 

UDA’s can become an approved public organisation and access the National Land Transport Fund for local major roads and highway connections. There will be additional controls on state highways and railways.  

Treaty settlement legislation and agreements takes precedence, and UDA’s would be bound by relevant agreements. There would be no change to land under Te Ture Whenua Maori Act 1993 processes. Maori reservation under the Maori Reserves Land Act 1955 is excluded from powers over reserves. 

Maori Freehold Land will still be subject to potential compulsory acquisition powers. If a UDA is also a Requiring Authority it may seek compulsory acquisition of land outside of the Development Project area for network utility infrastructure. 

The UDA proposal enables decisions to be made that could affect Council, ranging from:

·    Overriding and/or requiring amendments to the District Plan;

·    Overriding, amending or replacing Bylaws; 

·    Requiring main/bulk infrastructure investment by Council;

·    Overriding, amending or replacing LTP programmes; 

·    Collection and dissemination of targeted rates;

·    Overriding, amending or replacing Reserve Management Plans;

·    Potentially require regulatory roles to monitor and consent developments within the Project area, unless transferred to another body which could include the UDA;

·    Acquisition or “transfer” of some types of reserves or other land for urban development purposes; and

·    Potentially be inconsistent with LGA requirements on public consultation.

Although the powers that are proposed for the UDA seem extreme and potentially impact on how Council engages with its community, there are some balances built in that Council can utilise to create opportunities for the city it may otherwise find difficult. They are;

a.   Special powers are available for approved sites/projects (the majority of the district will continue to be governed by existing legislation in the usual way);

b.   Council and Council CCOs are eligible to become a UDA and access special powers (which include compulsory acquisition and streamlined planning approvals). Note: there are barriers to Council-proper becoming a UDA relating to a preference for skill-based boards;

c.   Council could partner with the Crown to create a joint UDA; and

d.   Council can propose a UDA establishment and can join in partnerships.

Local authorities have the power to veto individual projects.^[2]

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. 

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 however they are unknown at present.

Overall this legislative change has potential opportunities that could benefit Council more than the risks. That said, the devil can be in the detail, hence being clear on our position and matters that are relevant to TLAs are important to clarify.

Proposed matters of relevance to include in a submission could include but are not exclusive too:  

·    Incorporating tools that capture “value uplift”;

·    Adopting a “principles approach” to consultation rather than duplication with the LGA; 

·    Central Government providing seed funding and/or knowledge expertise;

·    Ensuring alignment with the LGA;

·    Supporting the partnership approach;

·    Check what legislative power local government has to support its community where local and national aspirations clash;

·    UDA’s could become inconsistent with land use planning precedents in the wider district;

·    Community could feel they don’t have a voice in influencing outcomes in their place.

·    Could be required to upgrade remote trunk infrastructure systems 

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[1] This summary is based on the comprehensive summary completed for Porirua City Council by Nic Etheridge

[2] Note: There is an independent “appeal process” to that decision, and a question whether government has the power to override local authority opposition of the development is seen to be in the National Interest.