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The Impact of the Simplifying and Streamlining 
Amendments to the RMA
Owen McShane
8 August 2010

However, Councils such as Wellington and Hamilton seem convinced that, while RMA decision makers must ignore trade competition between competing businesses, Councils are still able to write District plans designed to protect their favoured retail centres from outside competition and from new retail centres in particular.

The Hamilton City Council set out to stifle competition from retail development in the Te Rapa commercial strip. But the local Iwi, who were developing a high quality retail centre in the area, were able to protect their property rights because of inadequate consultation with Iwi. Unfortunately the anti-competitive nature of the Plan itself was not tested.

The worst way to maintain an efficient retail sector is to protect it. Cities churn and must be allowed to churn. Protecting one retail centre from competition because some enterprises are failing is as effective as deciding the All Blacks should be protected from any international competition because some players might get injured in the process.

I happen to believe that the Reforms did not emphasise this aspect of anti-competitive plans and decision making sufficiently, and this protection of ‘chosen’ retail centres (such as Wellington’s Golden Mile) by providing monopoly rights to landlords will continue, to the detriment of the economy and to consumers in particular.

General Simplification and Streamlining of Decision Making – or Making bad decisions Faster? (Themes 5 and 7)

Aaron Wildavsky used to remind me and my fellow students at Berkeley that there is little point in catching the fastest train if it is heading in the wrong direction.

A “simplified and streamlined” RMA can simply mean that we reach bad decisions more rapidly.

Over the last couple of months a steady stream of applications for a new town or comprehensive residential developments have been rejected by the Courts. They usually fail because they are not where some “Smart Growth strategy” says they should be, or because the local community does not want any more houses like their own ‘intruding’ into the landscape. These failed applications are always written up as a “triumph for the community”. Presumably building trades-people, young families, and the unemployed are not a part of any community. Every thousand houses represents about 5,000 direct jobs and say 35,000 downstream jobs. So that’s 25,000 direct jobs and about 250,000 indirect jobs lost – and the recovery continues to falter. And think of the 15% GST!

Of course, these jobs don’t all come on stream at once – many plumbers will move from house to house as the houses are built. But the jobs are there and the assets are built.

There is another ‘downstream’ impact on employment. As investors and developers suffer this stream of failures, and have to write off millions of dollars in land and compliance costs and legal fees, they simply give up and withdraw from the market.

They know they will lose such Appeals because the Act says Landscape is a matter of national importance, while employment and affordable housing do not rate a mention in the hierarchy. And the Environment Minister Nick Smith has promised the Environmental Defense Society this will not be changed in the second round of reforms because there will be no changes to Part 2 of the Act.

The unemployed will certainly take no comfort from another new town, including 500 dwellings and 150 room hotel, being turned down – this time at Omaha. The NZ Herald of August 5^th reports that:

The [Omaha] decision was greeted with relief yesterday by Omaha Beach Community president Graham Painter.

“We are pretty chuffed – it’s a clear win.”

He refused to say how much Prime Minister John Key, who is one of the Rodney resort’s 1300 holiday home owners, chipped in for the court battle to stop buildings being constructed to nearly the top of a ridge.

So the PM has helped fund the blocking of a 35,000 job development scheme!

This compares to the 70 jobs created by the National Cycle-way to date, and a promised total of only 4,000 jobs.

These rejections of new housing projects may be written up as ‘a victory for the community’, but they are no victory for the unemployed, or for our building and construction sector.

As the McKinsey Global Institute said back in 1992 – the Construction sector sucks up young unskilled males like a vacuum cleaner. So Maori are doubly impacted. They can now give thanks to the PM.

And all ordinary New Zealand families suffer because these would have been affordable houses near the coast. The Herald on Sunday reported this month that a waterfront bach three doors down from Prime Minister John Key's holiday home has sold for $2.65 million at auction. The Omaha Beach property was purchased by the previous owners in 1990 for $105,000 – thus turning an annual profit of $250,000 for the past two decades.

From the days of the ancient Roman Aristocracy, the fight against “urban sprawl” has always been about keeping the plebs at bay.

Rules that Have Immediate Legal Effect. (Theme 4)

The Amendments changed the time when new rules of a proposed plan become operative.

In the past, new rules in Proposed Plans had immediate legal effect, in that their existence had to be immediately recognized by decision-makers. But they had little weight on day one, and only gained weight as they went through, and survived, the process of submission, further submission, hearing and appeal. This provided a whole realm of bureaucratic discretion, and consequent arguments over what weight should be attributed to which rules of what plan. Officials has little incentive to make plans fully operative.

The original version of sections 86A to 86G of the Amended Act of 2009 recommended that no rules have any effect until the whole proposed plan became operative. This was intended to create an incentive for Councils to get their plans operative rather remaining in legal “limbo” for years.

However, as a result of submissions to the Select Committee, this proposal was amended to allow certain rules, with effects on soil, water, air and natural and cultural heritage, to have immediate legal effect on notification. (Sections 86A – 86G paraphrased)

In other words, such rules retained the status quo – which means they would have no substantive effect at the time of notification, but would gain weight as they moved through the process of submissions, hearings and appeals, as had always been the case.

The Kaipara District Council, identified about twenty such rules in their recently Proposed Plan but it turns out that these rules are backed up by assessment criteria to be referred to in default on a rule. When assembled into a single “Word” document, the document is 88 pages long. Hardly anyone took the trouble to translate this set of rules into such a document, so once again readers of the Proposed Plan had no way of ascertaining what parts of the Plan had immediate legal effect on notification of the Plan.

Moreover, Council’s web page claims that these rules became immediately “operative”. For example this statement appears on the web page at “More info” and reads (with my comments between square brackets):

Rules Which Take Legal Effect [Correct]

Where a rule protects or relates to water, air, soil (or soil conservation purposes); protects areas of significant indigenous vegetation or significant habitats of indigenous fauna; or protects historic heritage these rules are effective from the time the plan change is notified. [Wrong. They are not effective from that time – they have only legal effect from that time.]

In addition to this the objectives, policies and other issues, reasons, or methods in the Plan must be considered from the time the plan change is notified.

Click here to view the rules which will take legal effect from the date of notification. [Correct, but the link is not currently functioning.]

All sections of the Plan received submissions, so there is no change to the list of rules which take effect immediately. [Wrong – NO rules take effect immediately.]

Council has consistently promoted the idea that these rules became operative on the day the plan was notified which is simply not true.

In other words, the Kaipara District Council has seized on the fact that the amended Act did not define the meaning of “immediate legal effect” and has decided these rules become immediately operative.

The Centre for Resource Management Studies warned the select committee that this was likely to happen but the submission was ignored.

Another means of developing Rules that have Immediate Operative Effect

Councils are not satisfied with misinterpreting Section 86 of the Amended Act. They are also resorting to turning RMA rules into Engineering Standards and then adopting them and declaring that, as standards, they can be enforced immediately.

The minute of the introduction of the Engineering Standards 2009 into the Plan at the Kaipara District Council Meeting of 23^rd September, 2009, reads:

4.1 Engineering Standards 2009

Community Infrastructural Assets Manager and Development Manager.   3803.01

A report from the Community Infrastructural Assets Manager and Development Manager regarding the Engineering Standards 2009 was circulated. A copy of the Engineering Standards 2009 was circulated separately. Engineering Standards had been developed that ensured consistency of design and construction for subdivisions, land development and infrastructure that would be vested in Council or managed and maintained by Council. It was proposed to incorporate those Engineering Standards into the Kaipara District Plan by reference.

Note that at this stage, when the resolution was passed by Council, the standards were restricted to infrastructure that would be vested in Council or managed and maintained by Council. This has been the standard practice.

The CEO has taken the view, and expressed this view in public, that the Engineering Standards 2009 were just Standards, and hence required no public consultations (and there were none) and that they were not part of the Plan.

Many applicants have received the following advice when querying the application of the Engineering Standards 2009 to private roads etc, as conditions of consent, even for applications filed prior to notification of the Proposed Plan:

The Standards were adopted by Council by resolution at its September meeting last year. This was not a formal RMA process, but input was obtained from an industry working party in earlier iterations of the document in the year leading up to its adoption. They are not directly subject to submissions or objections.

Section 1.2.6 of the Proposed District Plan says

The Engineering Standards apply to new development and are not intended to be retrospective. Existing accesses and infrastructure do not need to be upgraded to comply with the Engineering Standards unless the use of those assets changes.

Many assumed this meant that the Engineering Standards 2009 are a part of the Proposed Plan and would not be applied to applications filed prior to the notification of the new Plan. Of course, Council is actually imposing these standards on private roads and on private land on all applications, regardless of when they were filed. (My own application for a subdivision included.)

Contrary to the original resolution of Council, on September 23^rd 2009, the reference to the standards in Chapter 1.2.6. of the Proposed District Plan says the document now sets standards for the construction of public services and private infrastructure, associated with subdivision and development. It reads:

Kaipara District Council Engineering Standards 2009

The Kaipara District Council Engineering Standards 2009 is an important document for the District as it sets standards for the construction of public services and private infrastructure, associated with subdivision and development.

The Engineering Standards 2009 have a major impact on people’s property rights, as they exist under the Operative Plan, and also severely reduce the opportunity for landowners and applicants to use their own experts to make decision on technical matters on their own property.

Many of the Engineering Standards 2009 are not Engineering Standards at all but are RMA rules restraining the use of private property, or even forcing the taking of private property into public ownership without compensation.

For example, the Engineering Standard below requires that only four lots can be served by a private road.

5.1.1       Road Vesting

The following requirements shall be met when subdividing land:

(a) Access ways serving 4 or more allotments shall be by public road vested with Council.

This so called Engineering Standard, which is actually a land use rule, has effectively brought to a halt any subdivision on private roads, either directly, or indirectly, because of the consequent imposition of massive street crossings and road upgrades of these private roads that makes the costs of meeting conditions of consent exorbitant.

The broad term “when subdividing land” means that landowners wanting to exercise their right under the Operative Plan to subdivide a lot on a private road serving four lots or more triggers a demand to upgrade the private road to public road standard which must then be vested in Council. This obvious “taking” should require designation and compensation – but the Plan has introduced a new concept of using Engineering Standards to institute “Takings by Stealth”.

Similarly, presumably to avoid the restraints of Section 86, the Whangarei District Council has recently issued a communication advising:

On 9 June 2010 Council adopted the Environmental Engineering Standards 2010 (EES).

Note that these “Engineering Standards” are now called “Environmental Engineering Standards” and include what would normally be treated as RMA rules and thus automatically subject to submissions, hearings and appeals.

For example I recently received this advice by email:

Just advising you on our small changes to the EES 2010. 

2.       Section 4.11.1 Residential. Correct maximum impervious area to read 5% as below:

·The development has individual lot sizes larger than 10,000m² (1 ha) with a proposed created impervious area such as roofs, hardstanding and driveways not exceeding 5% of the total site.

This “corrects” a standard RMA type rule controlling site coverage on private land.

This “Environmental Engineering Standard” should not be so easily rendered immune to section 32 analysis and the process of notification, submission, hearings and appeals. It is clearly a rule that creates a major intrusion into the property rights of landowners in the District.

Such a miserly site coverage means that houses and other farm buildings will have to be built very close to the road because otherwise the driveway would account for the full 5% coverage – only 500 m² on a 10,000 m²  Lot, or a driveway say 30 metres long after accounting for roof areas and hard-standing.

And are all driveways and hard-standing areas deemed to be impermeable?

Consider gobi-blocks or mussel-shell driveways.

Conclusion.

While it is too easy to reach firm conclusions on the impact of some of the Amendments or themes, it is clear that the reforms have generated a backlash from the professionals who implement them that has overturned the intentions of section 86 in particular and meant that rules and standards are being enforced earlier in the Plan change process than was the case before the reforms.

While we are all familiar with the concept of unexpected outcomes and also recognize that it is human nature to “buck the rules” I believe we are seeing a much more intransigent and determined attempt to subvert the will of Parliament than we have grown accustomed to in the past.

This may be because the current generation of plan-writers graduating from our high schools and planning schools are fully imbued with the new philosophy of eco-centric environmentalism, which regards man as the enemy of the Earth Mother, and hence justifies any interventions necessary to protect the Earth Mother from rape and degradation.

If Parliament writes laws that reduce their powers of intervention then these laws must be ignored or “re-interpreted” so that true virtue can prevail.

This sets a new standard for the law-makers. Laws designed to promote anthro-centric environmentalism (in which the environment is managed to enhance human welfare) must leave little “wriggle-room” for the extremists to exercise their visions.

It also means that the regulatory review process must be extended and empowered.

The experience within Kaipara District and Whangarei City – and Hamilton and Wellington – strongly suggests that proposed plans (which are proposed regulations under the RMA) should be subject to specialist regulatory review prior to notification.

The consequences of the new rules, deemed to have immediate effect, in Kaipara District is that, although over 90% of applications for consent have been processed within the legal time-frames over the last twelve months, no new titles have been issued over that same time period.

Wildavsky was right.

The “post-Amendment train” may indeed be much faster, but it is certainly taking us in the wrong direction.

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