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NPS-UD: Further Detail on Auckland Council's Response

By Iain McManus

Auckland Council has provided further detail on its likely response to the National Policy Statement on Urban Development (“NPS-UD”).

In my last blog, I outlined how the Council would respond to the NPS-UD requirement to enable more intensive development within a walkable catchment of the City Centre zone, Metropolitan Centre zones and rapid transit stops.

Now, Council officers have set out the Council’s proposed response to the NPS-UD requirement to review zone provisions in “all other locations”, specifically how Council proposes to respond to the NPS-UD requirement to provide for intensity of development in all other locations commensurate with the greater of:

  1. The level of accessibility by existing or planned active or public transport to a range of commercial activities and community services; or
  2. Relative demand for housing and business use.

Determining level of accessibility

The Council proposes to measure “accessibility … to a range of commercial activities and community services” through a GIS network analysis model.

The Council will use the following activities as the destinations for the analysis: jobs; centres; mixed use zones; education facilities; supermarkets; convenience stores/dairies; medical facilities; and open space.

It proposes to vary the accessible distance according to the destination (as people are generally prepared to travel further to some destinations (e.g. work) than they are to others (e.g. a dairy)) and give every property a score based on the number and type of destinations they are within range of. 

Those properties with the highest scores will be those with the highest level of accessibility in the region and, in the absence of “qualifying matters” (see my earlier blog), will generally be up-zoned.

Determining relative demand for housing and business use

The Council proposes to use land price as its proxy for “relative demand for housing and business use”.

The rationale is that higher land prices reflect a higher level of demand for that land relative to land in other locations.

However, as we all know, zoning affects land value (the same property will have a higher price if zoned for intensive development than if zoned for limited development).  Hence, Council proposes to “strip out” the value of the zoning (although it doesn’t say how).

Intensity commensurate with accessibility and demand

The NPS-UD requires the degree of enabled height and density to be commensurate with “the greater of” the level of accessibility or relative demand.

However, accessibility and demand are two entirely different things (‘apples and oranges’) so it’s hard to say which is “the greater of” the two.

In light of this, where an area has either high accessibility or high demand, the Council proposes to provide a residential zone that enables unlimited density and a minimum of two storeys in height.  In zoning terms this means the Mixed Housing Suburban, Mixed Housing Urban or Terrace Housing and Apartment Buildings zone – not the Single House zone.

Where an area has both high accessibility and high demand the Council proposes to provide a residential zone that enables unlimited density and a minimum of three storeys in height.  In zoning terms this means the Mixed Housing Urban or the Terraced Housing and Apartment Buildings zone – not the Single House or Mixed Housing Suburban zone.

Note that the “qualifying matters” identified in my earlier blog may mean that existing zonings are retained in some locations that would otherwise be up-zoned based on their accessibility and/or relative demand.

Unintended consequences?

The Council’s implementation of the NPS-UD in “all other areas” is likely to lead to a significant reshaping of the zoning pattern across Auckland, with more widespread use of the Mixed Housing and Terrace Housing and Apartment Buildings zones.

However, one of the interesting consequences of the NPS-UD is that, all other things being equal, property in an expensive area is more likely to be up-zoned (and up-zoned more) than property in a lower priced area. 

Given that intensive zoning tends to increase the value of land, this is likely to put more money in the pockets of people who are already relatively wealthy – an interesting outcome for a Government that has been so determined to close the wealth gap through its other policies. 

Could anticipation of this outcome have been part of the Government’s motivation for extending the bright line test to tax the capital gains on more property?  Or would that be ascribing too much prescience to the Government?

Feel free to contact us if you would like to discuss the potential implications of the NPS-UD on your property.

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