New RMA reforms expected this week

Housing Minister Nick Smith in Welcome Bay. The Minister is expected to announce new RMA reforms this week. BOP/pic

Environment Minister Nick Smith will this week outline the approach and timing for a further attempt to reform the Resource Management Act after minor parties blocked a bill from progressing in the last Parliament because of its proposals to strengthen economic development priorities.

Smith, who is also Minister of Building and Construction, told Radio New Zealand's 'Morning Report' programme that some of the reforms would seek to ease the cost of house construction. His comments followed the release overnight of the 11th Demographia report on housing affordability in nine developed countries: Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the US, showing Auckland to be less affordable than cities like New York and Los Angeles.

"There is no question that the Resource Management Act is not working in delivering New Zealanders affordable housing, particularly in places like Auckland," Smith told RNZ. "It's an issue I've given a great deal of thought over the summer break and in reading and I will be giving a speech on Wednesday setting out government thinking on direction in that area."

He indicated the RMA reforms would be couched in terms of the need to replace Special Housing Area legislation, which was introduced as a stop-gap measure to allow faster designation of land for housing in urban areas facing pressure, such as Auckland and Christchurch.

"That legislation expires in 2016," said Smith. "The government has always made plain that the Special Housing Areas legislation is short term intervention in dealing with RMA problems. We've always made plain that there would be a second phase of RMA reform. It is absolutely critical if we are to change the track of house prices that is having such an impact."

A bill promoted by his predecessor in the environment portfolio, Amy Adams, stalled in the last Parliament. Its attempt to amalgamate two key clauses in the RMA and place more weight than in the past on economic development imperatives alongside environmental protections fell foul of the government's minor supporters, the United Future and Maori parties.

The Demographia report, a project backed by a US advocate of small government and free markets, the Wendell Cox Consultancy and which counts long-time Christchurch-based RMA critic Hugh Pavelitch as a lead author, found New Zealand to be "severely unaffordable", with a median multiple price for housing sitting at 8.2 times median household income.

Demographia defines affordable housing as being between two and three times median income. The measure excludes the impact of falling interest rates. Demographia is a consistent critic of restrictions to urban boundaries, which it argues push up residential land prices.

Australia gets a rating of 6.4, the UK 4.7, and the US 3.6. Hong Kong has the worst rating at 17 times median income, but New Zealand is placed second in the survey. Japan and Canada rank 4.4 and 4.3 respectively.

Smith contested the New Zealand findings' contention that median incomes had fallen in Auckland, and said a Treasury paper on the issue will also be published on Wednesday.

Smith had hoped to have papers on RMA reform to Cabinet before the Christmas break, but Beehive sources have told BusinessDesk the process will take longer than anticipated as the government grapples with the conflicting politics of overly expensive housing and opposition to environmental law reform that could compromise the RMA's environmental protection regime.

In his only major statement since the Sept. 20 election on RMA reform to date, Smith said last October that "the RMA needs to explicitly recognise the importance of New Zealanders' access to more affordable housing if the downward trend in home ownership over the past 20 years is to be reversed."

Housing issues "barely rate a mention" in the RMA as it stands, he said at the time.

Indications at the time were also that the government may also seek to reduce restrictions on industrial land use.