Attachment 2

UDA Submission

URBAN DEVELOPMENT AUTHORITIES (UDA)

Thank you for opportunity to make a submission on Urban Development Authorities Discussion Document February 2017.

We have the following comments.

Overview section

Hutt City is squarely focused on urban redevelopment and the provision of a greater choice for housing for its community. Hutt City has growth aspirations coupled with significant areas of greenfield land and urban regeneration needs particularly in our CBD and has set itself the targets of 6000 new homes and 10,000 new residents by 2032. Having a UDA has great potential to assist in making this happen.

Hutt City’s Councils key difficulties when trying to coordinate development projects are:

·    being able to get a number of private landowners to work with Council to deliver infrastructure and intensification projects that will provide significant numbers of new dwellings and increase the amenity of the city and

·    Aligning timeframes and intentions with other public agencies such as NZTA

Hutt City is very close to Wellington City so, as it becomes more difficult to intensify in Wellington City (cost, issues with earthquake/disaster resilience and having 50,000 more people living in the city) then more developers will look to Hutt City or Porirua for development opportunities. This is the driver of the growth Hutt City is currently experiencing.  Also, medium growth local authorities are required to provide development capacity through the NPS UDC.     

An example of difficulties in assembling land is our largest development - River Link. Hutt City is working with GWRC and NZTA to deliver significant improvements to flood protection, transport linkages and urban regeneration of the CBD.  However, private land owners in the area are unsupportive of Council’s focus on quality intensive redevelopment in CBD which in turn reduces Councils ability to influence the amenity of any development.

Proposal in general

Hutt City Council is generally supportive of proposal and the overall concept of encouraging integration of land use and infrastructure planning. We can see the potential for an active Urban Development Authority (UDA) in our city.

However, we do have some concerns relating to the independence of Council decision making and Council’s ability to meet its responsibilities under the LGA in terms of section 10 “Purpose of Local Government” and section 11A “Core services to be considered”. Further, it is unclear how individual rate payers and residents interests are protected as their rights to be consulted and ability provide feedback on proposals appear to be considerably diminished.

Framework and processes

More clarity is needed when defining the relationship between central and local government and the process related to the identification of opportunities.  For example, while the Discussion Document talks about central and local Government working together to identify opportunities, it then goes on to say on page 19 that “with the prior agreement of the relevant local authority the Government will determine the key elements of each development project, in particular the objectives for which the project is being established”. Then on page 23, the Discussion Document states “central government and local authorities will together select the particular development projects and areas in which more enabling development powers can apply”.  It is not clear whether the development powers are established in consultation with the local authority.  Where central government initiates the proposal the independent panel formed to make recommendations should have local representation on it. 

Our view is that legislation needs to specify the process or approach taken towards consultation with and gaining the agreement of local authorities on any government proposal.  Similarly, the process that local authorities must follow when seeking approval for a proposal from central government needs to be very clear.

Infrastructure providers such as Wellington Water Limited (WWL) should be consulted in the establishment phase stage so capacity issues, design standards, hazard areas and investment requirements are factored in upfront.  For example, WWL may need to provide information relating to infrastructure capacity and feasibility. As producing this information can take time, factoring it in at the feasibility stage will be essential to the ultimate success of the project.

It is also unclear how any rules around development contributions will interact with existing local authority policies on this and also with changes made to the Local Government Act 2002 (LGA) to introduce the catchment approach to setting development contributions.

We are concerned that final decision making sits with the Minister and the intention to manage this within the context of setting the strategic objectives for each proposal particularly as it is unclear what role local authorities will have in setting these objectives when it is a government proposal.  This places a great deal of importance on ensuring that the strategic objectives are the right ones for both the proposal and the city concerned.  This is one example of the proposal directly affecting a local authority’s ability to represent the rate payer interest and be accountable to ratepayers. While Council is democratically accountable to its residents and ratepayers, central government is not.

We also have some concerns about the level of control the Minister has over the appointment of independent commissioners should there be objections to the proposal from those who do have the ability to make a submission.  Does the assumed wider public interest in development justify overcoming third party resistance by excluding those not immediately affected by the development?  We’re not sure it does.

The extent to which each relevant central Government department is involved should be agreed at time strategic objectives are agreed. Involvement should be mandatory. One way of doing this could be to form a cross-department project team that would physically locate where the development is taking place so that the team can form a direct relationship with the UDA and the Council.

Urban Development Authority

We agree with:

·    the definition of “urban development” in relation to UDAs

·    with the range of organisational forms identified for UDAs and that it is important to have a range of options

·    with the proposals with regards to a UDA having an accountable Board of Directors with the correct skills.

The proposal is that there will be a new type of statutory entity that can represent and be accountable to both arms of Government for reporting purposes.  Successful implementation demands a process that doesn’t entail too much “red tape” otherwise this has the potential to slow the development project down and result in staff being employed only to meet compliance requirements. We are not sure that it is a good idea to have non-expert public servants trying to control the delivery of a major development and infrastructure project unless of course it is government’s intention to establish an organisation with the level of expertise required to fully understand and provide advice on these types of major projects and their complexities.

There seems to be a possibility that a UDA delivering a project may “go bust” and a commissioner appointed. Could a commissioner finish the project? This is a further risk to the level of influence and control a local authority might have over a project and also whether a project is actually completed.

Land assembly

We agree with the proposal to enable the UDA to offer landowners part or full payment for their land in the form of an equity stake in the development project to give them the opportunity to receive the value uplift from the project’s activities as long as this is made an option for the UDA rather than an expectation that it will be done.  Profit sharing or value uplift maybe the best way to achieve active engagement in a development project by previously reluctant landowners.

Compulsory acquisition

We are concerned that, for central Government initiated projects, the Crown has ability to require local authorities to transfer or re-purpose land that they own within the development project area without any public consultation.  Again, rate payers have an expectation that their Council will comply with the LGA, RMA, Reserves Act and other binding legislation and to enable this expectation to be overridden has the potential to undermine the democratic principle of “no taxation without representation”.  Ratepayers are being taxed yet they have no input into decisions that affect the land in which their rates are invested.

Bylaws

UDAs will have the ability to revoke bylaws.  These bylaws have been developed in consultation with the community and their development follows a prescriptive process.  It is unclear what this means with regard to activities on reserves – for example, would it apply to an Alcohol Free Zone Bylaw? 

Planning, land use and consenting powers

The proposal shifts the balance from existing District Plan rules to the development projects’ strategic objectives which are the only aspects that can be considered and commented on. Also, the UDA can be the consenting authority with central Government making the decision about who holds planning powers to the UDA.

Alternatively, the local authority could develop a master plan for the development area and make this part of its District Plan with a simpler regime in terms of who can object and what those objections can be about and in so doing retain control of the planning, land use and consenting process.

Local authorities should be required to integrate the development plan within its planning context when reviewing their District Plans. Having said this it is important for local authorities to have a say on the extent to which its District Plan should or could be changed to accommodate the development plans and how those plans fit with existing development aspirations and rules. 

It isn’t clear how Councils will be able to ensure that any Development Plan will identify and incorporate provisions in existing RPS, Regional Plan and District Plans that will continue to apply. It isn’t clear how this this will work with existing documents.

It is difficult to see how the approach suggested for the new Development Plan is substantially different or better than the current plan change process.  It still involves two rounds of public consultation and consideration and recommendation to be provided by an independent commissioner.  We are concerned about the ability to override the District Plan particularly where there are apparent inconsistencies with wider aspects of the plan for example vegetation, and ecological and heritage.

The UDA can delegate consenting functions to independent commissioners where the UDA is applicant for the resource consent/s otherwise the UDA can decide on applications from other entities (i.e. the entity it has charged with delivering the strategic objectives of the development plan) perhaps should be compulsory?  The UDA could perhaps use the same processes as the local authority uses when it is applying to itself for resource consent.

Cumulative and downstream effects of storm water (from the development) may have impacts on water quality outside the project area (limits set by Whaitua/PNRP). WWL must comply with consenting conditions for storm water discharge which is regulated by GWRC. Having GWRC sitting outside the process may create unnecessary complications in this regard.  Is it intended that the UDA will have to consider cumulative and downstream effects when considering whether or not to grant resource consent to the developing entity?

Our view is that iwi and the relevant regional council should be involved in each stage of the establishment phase along with the relevant CCOs such as WWL.

If a UDA is set up and the local authority has no control of or input into the process then the local authority should sit outside the planning/consent process. If UDA consults on development plan then ignores the response form public consultation then Council should not be held accountable to any community concerns because it does not control the process itself – the UDA has full control.

We are not sure if there is any gain in making the timeframe for non-notification and notification decisions within 15 working days – will 5 days make a great difference in the overall scheme of things given the size and scale of potential proposals?

Where objections are made the UDA is required to submit the recommended development plan and all objections to an independent commissioner. It would seem to make sense for the commissioner to receive all submissions (both positive and negative) so they can get a more rounded understanding of existing views on the proposed development.

Need a process where existing local authority plans are checked and compared with development plans to achieve the highest level of integration possible before beginning a new project.

Compliance

The UDA shouldn’t be “gamekeeper and poacher” i.e. set the rules then check itself (or its appointed delivery entity) to see if it is sticking to them. A standard compliance approach that is consistent with existing local authority processes should be used.  There could be some exclusions developed to give the UDA power to get consents. The decision making hierarchy should provide criteria with weighting that will be applied to decide what powers should be given to the UDA and what should remain with the local authority.  Environmental effects should be included in the criteria. There does not seem to be any rationale in the document for this.  The end result is two compliance and enforcement bodies operating in the same area introducing unnecessary complications and confusion for residents and ratepayers who will no doubt continue to call the Council about compliance and enforcement matters.

Efficiency gains

It would be more efficient, in our view, to have a master plan/development plan zone in the existing District Plan with rules to streamline the consent process for the master plan area then have Councils do what they do best in terms of resource consents – ensure compliance.

Our assessment is that a UDA will take around two years to establish a development project despite some of the processes being removed e.g. no formal hearing of submissions. This is approximately the same amount of time similar development projects take to be established currently.

Public Works Act

We generally support the UDA having the ability to compulsorily acquire land for development projects and understand the PWA does allow this currently.  A key issue not addressed is the ability for people to slow down the process of compulsory acquisition and our view is that fair compensation would go some way towards enabling the UDA to engage with land owners.  The amendment to the Resource Legislation Amendment Act providing up to $50,000 compensation on top of market value may go some way to addressing this.  Any compulsory acquisition must be able to stand the “public benefit” test.

Knock on effects for infrastructure

We repeat our concerns regarding knock on effects of the development projects outside the consented area. There is the “tipping point” issue where if a development tips the balance for requiring more infrastructure in the area then the developer has to pay for all of it i.e. the whole upgrade.   There is potential for landuse activities and inadequate design standards (within specified development areas) to create downstream and cumulative impacts on water quality – storm water and wastewater overflows. It is important discharge effects are managed in an integrated way and reflects community aspirations and regulatory conditions.  

Legacy issues

There needs to be a process for ensuring quality of development to avoid and/or reduce potential legacy issues. Local authorities being are able to give advice on what powers the UDA should have is a way of doing this.

Rate payers and residents shouldn’t be expected to invest significantly more than planned to fund debt and assets that require significant further infrastructure investment that Council hasn’t had an opportunity to consult its community about prioritising.

Funding administrative responsibilities

If the local authority is responsible for administering the collection of development contributions and other fees charged by the UDA then it should be financially compensated for doing so.

The local authority is required to collect infrastructure fees on behalf of UDA again without any compensation to the local authority. If the UDA were to collect these charges itself then it would incur a cost. This should be recognised in the agreement upfront with costs associated with the collection of any fees and charges identified and a fee agreed between the TA and the UDA.

Spatial Plan

We support this being required of larger urban Councils to provide more certainty for both developers and community.

Infrastructure

An independent method for providing infrastructure where the necessary infrastructure is not in local authority plans or needs to be brought forward to accommodate urban growth has implications for ratepayers and the current investment in infrastructure.

The UDA will be able to require the provision of infrastructure within the development project area and coordinate local authorities and CCOs like Wellington Water and network utility operators as necessary to ensure integration with wider networks and infrastructure planning. We assume that the UDA will be required to have regard to local authority’s long term investment plans for infrastructure and have a good understanding of the financial impact on ratepayers of bringing some investment forward and delaying other investment to ensure that rate payers do not become the fall back investors in infrastructure that will have limited community wide benefit. 

Local authorities of course are required to ensure that investment meets the current and future needs of communities for good quality infrastructure, local public services and performance of regulatory functions in a way that is most cost effective for households and businesses. How will this be achieved given that the local authority will not be making investment decisions and long term plans which have been agreed to by the community can be ignored or replaced by a UDA?

The vesting of new infrastructure in local authorities means that it is important that performance and design standards are developed with the local authority and adhered to. The funding of on-going maintenance and renewals needs to be explicitly considered when setting up the project. Ratepayers could otherwise end up picking up the tab for infrastructure that doesn’t meet acceptable design and performance standards.

It is not clear who will pay for all of this but ultimately the local authority will have ownership of infrastructure assets vested in it (where there is no debt or where they get both the debt and the income stream to pay that debt).

Trunk infrastructure upgrades and/or new trunk infrastructure outside the project may be required to support a new development. The provision of trunk infrastructure (e.g. reservoir or waste water plan upgrade) may have significant funding implications and require mainstream consenting processes or notice of requirement.

We assume that the local authority will be one of the agencies with whom the UDA will be required to consult regarding any proposed infrastructure location, design, construction standards, levels of service, operating implications and connections to existing systems.

It isn’t apparent from the proposal whether there is anything to mitigate the risk that the UDA plans are flawed (where a local authority has not been involved in the development of the project and strategic objectives of that project) and the local authority will be left holding the loss resulting from redundant or unnecessary infrastructure i.e. the anticipated growth does not occur.  We concede however that it would be unlikely that a development project would be approved where projected growth is low or non-existent.

What if no organisation wants the debt ladened assets? Who will be the public entity who owns the assets then? There needs to be agreement up front with the local authority on how assets will be distributed and how they will be paid for if there is debt remaining but no income stream associated with the asset. 

Giving UDAs the power to suspend roading bylaws and recommend and require councils to cancel, create or amend local roading bylaws as they apply to the development project in agreement with Council has the potential to result in uncertainty for public as to what the rules are and again disenfranchises ratepayers and residents as they have not ability to input into the process. 

Strategic and Long Term Planning

A UDA can be given the power to require changes to the Long Term Plan and Annual Plan to ensure consistency with the strategic objectives of the development project.  We are concerned that rate payers and residents will not be consulted on significant changes. No consultation is in direct conflict with existing local authority Significance and Engagement Policies. 

Anyway, why shouldn’t UDAs have to have regard to existing LTPs where there is symmetry between the strategic objectives of both the development plan and Councils long term plans?

Funding and financing

The approach to development contributions seems to fit with Hutt City Council’s existing catchments approach to charging Development Contributions. Perhaps local authorities should be able to spread the cost across city in a graduated lessening amount as everyone will benefit from improvements to a lesser or greater degree. The community as a whole will benefit theoretically in the long term.

Resolving disputes regarding the collection and dissemination of rates or contributions between and UDA and local authority through the use of an independent commissioner appointed by central Government seems to add complexity/red tape.

Maori interests in urban development and land use

Council thinks it is vital that iwi be given every opportunity to be involved in the establishment of an UDA. To this end the opportunity to engage with their local authority or central government about the possibility of a development project should be given to them through the legislation. Also, the local authority should work with the UDA to engage owners of land held under the Te Ture Whenua Maori Act, including through their trusts and incorporations and with post-settlement governance entities. This is because local authorities often have existing memorandum of understanding and other agreements with local iwi that should be taken into consideration as part of establishing the strategic objectives of a development project.

Criteria or thresholds for selecting urban development projects

There should definitely be criteria developed for selecting urban development projects. If there was to be a preference then Council would recommend a preference being given to urban redevelopment. The criteria should be principles-based focused on the purpose of urban redevelopment and defining what that is. 

Projects that are aligned with the LTP and existing planning documents should be given preference as this reduces administrative and other costs for UDA and Councils. Perhaps cost effectiveness could be the key principle? Preference could also be given to projects that align with existing ratepayer and resident preferences as expressed through the LTP and/or a (future) spatial plan. 

The legislation shouldn’t prescribe circumstances in which a local authority can exercise its veto power but could outline principles on which agreement is based and reached. There should be precisely defined circumstances in which central Government can establish a project despite the local authority not agreeing. For example, the local authority refuses to agree despite clear evidence that project is in best interests of residents and ratepayers as well as the community generally.

Role of local authorities

Development projects should not be able to proceed without local authority involvement in fact there should be more involvement particularly at planning and development stage.

Market provision of infrastructure

It seems that the biggest barrier to private provision of infrastructure is who funds, maintains and operates the infrastructure over the long term and the cost and lack of expertise in the development sector.

Private market arrangements to pay for infrastructure providing to particular markets might also put price pressure on local authority provision of infrastructure to those who can’t afford private arrangements i.e. the local authority left to provide for the high deprivation areas/population despite their limited ability to fund this. Also, standards need to be the same as those set by the local authority or regional council. Some standards just have to be set centrally e.g. water quality as they are nationally important.