22, Jan, 2015

Resource Management changes will not cure rising house prices

Category: ECO Inc

Resource Management changes will not cure rising house prices but will undermine environmental protection and community input

Major changes to Resource Management Act (RMA) proposed by the Minister for the Environment will weaken environmental safeguards and will not solve housing affordability issues, says the Environment and Conservation Organisations of NZ, ECO.

ECO Spokesperson and resource economist, Cath Wallace, said the changes proposed will elevate economic interests over a wider scope of social well being and will apply to all resource activity including mining and dairying intensification.   “Housing affordability is a bit of a red herring while environmental protections will be weakened in the proposals.”

“These changes will lead to policy instability and a loss of quality and democratic engagement if the government pushes ahead with its proposals for Ministers making national level policy with little community input.” 

Cath Wallace said reducing house prices is a laudable objective, but there is little evidence that the RMA and planning controls are the main drivers of house price increases.  “The rocketing prices in Auckland may have a small planning influence, but these are not the main explanation.”

“That price escalation is much more likely to relate to demand issues, particularly given that the RMA applies nationally and the price escalations are in two regions.  Increases are most evident in Auckland and Christchurch, the latter of course reflecting the peculiar influence of the earthquakes.”

Cath Wallace said demand is influenced by interest rates, tax policies, net migration and population, and the incomes of buyers of dwellings.  “There is nothing about these considerations in the Motu report for Treasury.”

“On the supply side, the Motu report notes that changes in the Auckland Plan will already make it easier to build more houses, so it is questionable whether we need to sacrifice urban quality to developer interests.  The Building Act is also involved.  We concede though, that some of the planning controls cited by Nick Smith are too micro managing.”

“Overall though, ECO does not find the basis for these changes convincing.  Arthur Grimes of Motu is a respected economist, but the Motu report is clear that regulations may well be beneficial overall.”

Making policy for the whole country on the basis of interviews with 20 Auckland developers, and no consideration of the interests and perspectives of others affected, or the councils, is really unsound policy analysis and decision making.  These changes will apply to all resource activities including mining and dairying intensification.”

Cath Wallace said Minister Nick Smith is right that the urban environment and the natural environment both need more protection.  “We also agree that there is a need for natural hazards to be carefully considered.  But changes to elevate economic interests over community and affected citizens’ interests will not enhance overall well-being.”

“We agree we need good infrastructure, but that does not mean that infrastructure such as roads should be obsessively pursued at the expense of the enjoyment and functionality of urban space and the environment.

Cath Wallace said the government could have done much more to protect the environment.  “It has failed to progress the National Policy Statement on Biodiversity for four years since submissions closed.”

“More National Environmental Standards are also a good idea. But provisions Nick Smith has referred to for ad hoc decisions on policies and standards by Ministers, will lead to policy instability, extra costs, and a loss of suitability of planning rules for districts and regions.

ECO questions the need to strengthen private property rights under the RMA. This could mean loss of ecosystems and species, loss of air and water quality, views and sunlight and of community values.

“Any changes to the RMA will also add costs and uncertainty for all interests as changes to the law will require interpretations by the Courts to create new case law.”

The Motu review showed that the cost of consents process is small for big subdivisions with costs increasing around 0.4-0.5%.”

Cath Wallace said the latest Ministry for the Environment survey of council performance under the RMA showed they processed 97% of consents on time.  “Only 0.27 percent of resource consents were declined.”

“What people have forgotten is the RMA replaced a multitude of different statutes with one planning regime.”

Cath Wallace said the real benefits could be gained not by elevating economic and private interests over other interests amending the Act but helping councils with their application of the RMA.

The recent appeal to the High Court by a local community group on the non-notification of the Karangahake Gorge mine showed that councils could err too far in favour of developers.  “This mine is on conservation land and in an important recreation area.”


Background information: 

The Treasury Report:  "Impacts of Planning Rules, Regulations, Uncertainty and Delay on Residential Property Development" by Arthur Grimes and Ian Mitchell, Motu Working Paper 15-02, Motu Economic and Public Policy Research. January 2015.

"We stress at the outset that our analysis only covers costs of regulations, not their benefits. Thus our study should not be interpreted as a cost:benefit analysis of any of the regulatory policies or practices discussed. Regulations are adopted because the relevant authorities consider that they have benefits that outweigh their costs."

The report is available on the Motu website at

Percentage of resource consent applications processed on time, by consent type,


From table 2.7 - Ministry for the Environment. 2014. Resource Management Act Survey of Local Authorities 2012/2013. Wellington: Ministry for the Environment.

Further “that 0.27 percent of resource consents were declined during [2012/13]. In the five previous surveys, conducted from 2001/02 to 2011/12, the proportion of consents that were declined fluctuated between 0.56 per cent and 0.74 per cent. The 2012/13 results is less than half of that reported in previous years, and the lowest since the 2001/02 survey.  [From Ministry for the Environment 2014].

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