• Urban resources to be targeted
• High land prices a problem
• More work to be done

Environment Minister Nick Smith is signaling the Govt’s next round of environmental law reform will challenge the distorting impact of strict city boundaries on land and house prices. Smith says metropolitan and urban limits have “contributed to high increases in section prices over the last decade.” The Minister has appointed two technical advisory groups on urban and infrastructure issues. A 2007 project led by economist Arthur Grimes - an appointee to the urban TAG - suggested land just inside Auckland city boundaries was worth 12 times more than adjacent land outside the urban limit. Don Brash’s 2025 Taskforce also identified high land prices as the biggest obstacle to more affordable urban housing.

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The taskforce said council zoning restrictions and arbitrary urban limits are preventing enough land being released to lower the overall price of housing. There are “few more striking examples” of the cost of poor regulation than the difference in value between land at the margins of city boundaries. In a presentation for the Taskforce, Grimes showed increases in land prices between 1998 and 2005 averaged 243.6% - the highest being Auckland city with a 335% increase - compared with an increase in the cost of building a house averaging 112.6% across the isthmus. Despite this, urban intensification goals of urban limits had not been achieved, except in the Auckland central business district. Intensifying urban land use through infill developments was difficult for regulatory reasons and because locals often opposed it, while greenfields land inside city limits was limited and expensive. Grimes says current policies represent a deliberate choice “to make houses more expensive.”

Smith insists he is looking for balanced change, “not urban sprawl at any economic cost”, and is anxious to ensure changes do not allow councils to hit developers with development levies that are then used to fund other council projects. Development levies were removed from the Resource Management Act and inserted into the Local Govt Act in 2002, and appeal rights were removed at the same time.

Heading the urban TAG is barrister Alan Dormer, who is joined by planning consultant Adrienne Young Cooper, Grimes, architect and urban designer Graeme McIndoe, Chief Executive of the Property Council of NZ Connal Townsend and Ernst Zollner of the NZ Transport Agency. It has a report date of 31 March 2010. The Infrastructure TAG will be chaired by Mike Foster, Director of Zomac Planning Solutions Ltd, and includes Cooper, Dormer, solicitor Kelvin Reid, civil engineer Lindsay Crossen, Sacha McMeeking from Ngai Tahu and the Chief Executive of the NZ Council for Infrastructure Development Stephen Selwood. It has a report date of 30 June 2010.

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