AIDE MEMOIRE Discussion document on urban development legislation Date: 2 December 2016 Priority: High Security Classificatio n: Information for Minister(s) Hon Dr Nick Smith Minister for Building & Housing In Confidence Tracker number: 1765 16-17 Contact for telephone discussion (if required) Name Position Telephone 1st contact Andre Anderson Principal Advisor The following departments/agencies have been consulted [double click box & click checked ] Treasury MoJ NZTE MSD TEC MoE MFAT MPI MfE DIA TPK MoH Other: Minister s office to complete: Approved Declined Comments: Noted Seen See Minister s Notes s 9(2)(a) Needs change Overtaken by Events Withdrawn
AIDE MEMOIRE Discussion document on urban development legislation Date: 2 December 2016 Priority: High Security Classification: Purpose In Confidence Tracker number: 1765 16-17 At EGI on Wednesday 7 December, you are seeking approval to publish a discussion document on urban development legislation. Below, we offer talking points to support your discussion. The draft discussion document is attached to the Cabinet paper as Appendix 3. In addition, you may wish to refer your colleagues to the A3 diagram provided as Appendix 2 of the Cabinet paper, which sets out the process for establishing a development project and preparing its new development plan. As the key issues that other Ministers are likely to raise are found in the departmental comments of the Cabinet paper, Annex 1 provides talking points in response to those comments. Sub-headings identify the particular concerns that departments have raised. Finally, you also asked for the following supporting information: Annex 2 describes the plans that Wellington City Council has for the Adelaide Road area, showing its potential to become a development project managed by the city s proposed new urban development agency. Annex 3 provides pictures from overseas development projects. Andre Anderson Principal Advisor, Construction & Housing Markets T: s 9(2)(a) Ministry of Business, Innovation and Employment 2 / 12 / 16 In Confidence 2
Key messages 1. In July, the Prime Minister announced that we were considering new legislation to support urban development authorities to help unblock development pipelines in high-growth areas. 2. To progress this work, I recommend we publish a discussion document proposing new legislation that would enable local and central government: a. to empower nationally or locally significant urban development projects to access more enabling development powers and land use rules; and b. to establish new urban development authorities to support those projects. Case for change 3. Like many developed countries, we are entering a new phase of city development involving substantial re-development of existing urban areas. 4. Urban re-development projects can require a reconfiguration of infrastructure like roads, services and open space and a different layout of property titles. 5. This is very difficult to achieve with the complex array of existing statutes that are not tailored or designed for these sorts of projects. 6. Countries like Australia, the UK, Canada and the US have recognised this by providing special purpose urban development authorities with a unique range of powers so as to support development and renewal of urban areas. 7. Successful examples like the London Docklands, Barangaroo in Sydney, Roosevelt Island in New York, and Marina Bay, Singapore highlight how these sorts of powers can play a powerful role in the success of modern cities. Overview of the proposals 8. The proposals in the discussion document offer a framework for urban development authorities that will provide more effective mechanisms for undertaking large scale developments. 9. They will support more dynamic and successful cities that better meet the needs for housing, employment and amenity. 10. The proposal is for a range of development powers that cover land assembly, reserves, planning and consenting, infrastructure provision and funding. Consultation 11. I recommend that we consult the public until late April next year, which will provide 3 to 4 months of consultation, depending on whether we want to launch the document before or after Christmas. 12. Rather than present various options for feedback, I am recommending that we present the detailed proposals described in the Cabinet paper so that we can prompt more informed submissions. In Confidence 3
Crown relationship with Māori 13. The proposals have significant implications for Crown-Māori relations. Accordingly, one key purpose for public consultation is to properly engage with Māori. 14. The proposals make no change to the law as it applies to Māori interests in land and the Crown would continue to be bound by all of its Treaty settlement obligations. 15. The process for establishing a development project and preparing its development plan would include consultation with relevant iwi, including the opportunity for those with interests in land inside the project area to partner with government to develop that land. 16. In addition, the proposal is that owners of land held under the Te Ture Whenua Māori Act and land previously returned under Treaty settlements will have the option to exclude that land from any development project. In Confidence 4
Annex 1: Departmental comments Legislation Design and Advisory Committee comments Purpose / criteria to guide decision making 17. The Cabinet paper acknowledges the need for the legislation to include criteria that guide the availability of the development powers. 18. Stakeholders are being invited to offer their views as part of public consultation and officials will report back with recommended criteria at the end of the consultation process. Private property rights 19. The proposals would not create any new public works, nor create any new powers of compulsory land acquisition. 20. The proposal is simply to enable urban development authorities to ask the Crown to exercise powers of compulsory acquisition for existing public works. 21. Checks include: a. The final decision will continue to be made by the Minister for Land Information. b. The standard process of the Public Works Act continues to apply. c. The objectives for which the land needs to be taken must be clear, alternative sites or methods of achieving those objectives must be considered and it must be fair, sound and reasonably necessary to invoke the powers in order to achieve those objectives. Removal of appeal rights 22. It is important to note that the proposal does not make any changes to appeal rights in relation to the compulsory acquisition of land. 23. With respect to planning and consenting, the proposal to include independent commissioners and a disputes resolution process should ensure rigour in the decision making process. 24. Under the proposals, affected parties will have the opportunity to submit on the draft development plan. They will also have the opportunity to seek judicial review of both planning and consenting decisions Te Puni Kōkiri s comments 25. Te Puni Kōkiri has noted a number of concerns with the proposals. While responses to those concerns have not been incorporated in the initial proposals that I am recommending for inclusion in the discussion document, the purpose of the consultation process is to test whether Māori in general share the same concerns, and to remain open to ways of addressing those concerns. Right of first refusal 26. Under the proposals, an urban development authority will not be able to sell RFR land without first offering it to the relevant iwi. In Confidence 5
27. Nevertheless, Te Puni Kōkiri is concerned that the authority may choose not to sell RFR land and instead develop that land itself, thereby reducing the amount of RFR land available. 28. TPK is recommending that the Crown must offer to sell its land at the point that it vests that land in a development project. 29. As this would require the Crown to sell before it has decided it no longer needs the land, I have chosen not to include it as part of our initial proposals. Proposed power for UDAs to act as a requiring authority 30. The proposal is that UDAs can act as requiring authorities over land outside their project area, in order to acquire any necessary infrastructure corridors that are needed to support the project. 31. Te Puni Kōkiri considers that it would be inappropriate for UDAs to acquire Māori land that has been excluded from the development for the provision of infrastructure, unless there is prior agreement with land owners. 32. TPK recommends that, when such agreement cannot be reached, compulsory acquisition for infrastructure provision cannot be used by the UDA. 33. Currently, the Crown, territorial authorities and requiring authorities can all acquire land by compulsory acquisition in these circumstances. As these authorities could substitute for the UDA, preventing UDAs from exercising the same powers is unlikely to protect the land. Need for 4 months of public consultation 34. If we publish the discussion document before Christmas, then public consultation will be open for at least four months. Process for determining which land is excluded 35. Officials have not yet addressed the process that would be required when attempting to ask the 100 different people who on average collectively own a single parcel of Māori freehold land whether or not they want their land to be part of a development project. 36. I acknowledge the likely complexities and the need for further work to be done. Treasury s comments Proposed power to override regional plans 37. The proposal would enable UDAs to override regional policy statements and regional plans and take on the planning and consenting functions of regional councils within development project areas. 38. The intention is that the legislation provide government with the flexibility to choose when particular powers are available. 39. Accordingly, Cabinet will have the authority to decide the cases in which it is appropriate for a UDA to have this power in order to deliver the objectives of a specific project. In Confidence 6
Suggestion for central government to have a more limited role 40. The proposal is for the relevant Minister to approve the final development plan for an area. 41. Given that the plan will exercise significant development powers that have been conferred by statute, I consider it appropriate to retain Ministerial oversight. 42. A similar approach is taken overseas. NZ Defence Force comment Proposed power to override designations 43. The proposal is that UDAs must consult with requiring authorities and designation holders as part of preparing the development plan; and that they cannot remove designations without Ministerial approval. 44. Under the proposals, UDAs cannot unilaterally remove or relocate existing central government services (such as schools and defence facilities). 45. The proposal enables Ministers to balance the needs and objectives of central government requiring authorities with the benefits gained by the development of a project area. In Confidence 7
Wellington case study 46. In March 2016, the Wellington City Council agreed to establish a council-controlled urban development agency (UDA). The Council envisages that the UDA will enable it: a. to take a more active role in the property market by facilitating urban development; and b. to help achieve the Council's urban development goals set out in the Wellington Urban Growth Plan. 47. As part of the Council's 2015-2025 Long Term Plan, Council officials have previously expressed an interest in gaining government support for stronger compulsory acquisition powers and faster consenting processes. Potential Adelaide Road development project 48. The Council has identified Adelaide Road between the Basin Reserve and Newtown as a transformational growth area in its Urban Growth Plan, whose redevelopment would benefit from being managed by the Council s new UDA: Area Land parcels >100 Land value Development period 5 hectares >$100 million 10-20 years 49. Currently, the area is dominated by peripheral service and semi-industrial activities underlain by large property parcels. 50. The vision for the area aims to revitalise the Adelaide Road corridor by providing high density and mixed used development: a. an additional 870 residential dwellings by 2026; b. up to 24 metres in height; with businesses on the lower two floors; c. include affordable accommodation for key workers (e.g. the Wellington Hospital). 51. A Property Group report prepared for Council in March 2016 indicates that compulsory acquisition powers would be essential to assemble all of this land. 52. The next page shows the proposed long-term vision for Adelaide Road and its key components: In Confidence 8
Current/potential greenspace Key vegetation Social / community activities New street trees Pedestrian linkages/crossings Medium-high density housing Heritage/character buildings Adaptive re-use opportunities New mixed use opportunities In Confidence 9
Annex 2: Pictures of overseas development projects King s Cross, London In Confidence 10
Melbourne Docklands Artist s impression of how the project area will look when complete Progress so far: In Confidence 11
Barangaroo, Sydney CBD Before: Currently: Envisaged: In Confidence 12
London Docklands (Canary Wharf) Before: After: In Confidence 13
Marina Bay, Singapore Before: After: Reverse angle: In Confidence 14