Subdividing your property?

by: Alice Balme, Partner + Imogen Edwards, Associate. Originally published in NZ Property Investor June 2022

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Disclaimer
The information in these articles is general information only, is provided free of charge and does not constitute legal or other professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article - including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.

In recent years, there has been a real shift in the policy framework around residential development. Recent changes in this space were intended to make the process for subdividing and building residential dwellings consistent across the country.

The National Policy Statement on Urban Development Capacity 2016 was the first 'national direction' around urban development and shone a spotlight on those urban centres where growth was at its highest - think Auckland, Tauranga, Wellington, and Christchurch. This policy statement was swiftly replaced by the National Policy Statement on Urban Development 2020 following a change of Government.

Councils in these high growth areas were required to respond quickly; identifying land for residential (and business) development that could be supported with the necessary infrastructure - not just in the short to medium term but, importantly, in the long term.

As if this wasn't enough, the Government then introduced the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 - an amendment to the Resource Management Act 1991 (RMA). The intention was to remove perceived development barriers from the RMA (and from local planning frameworks) to accelerate the intensification of residential development.

So, what does this mean on a practical level? Well, quite a lot, actually. And if you are considering subdividing your property in the future, take note.

A key driver behind the changes is a desire to standardise the approach to residential development in New Zealand as much as possible. Standardisation is a common theme that can be seen in a number of the changes in the RMA landscape recently, but perhaps none so obvious as in the urban development space.

The days of having a multitude of planning documents regulating urban development that differ from district to district are numbered. We will soon see standardised objectives, policies and standards (collectively referred to as the Medium Density Residential Standards) applying to certain residential zones across the country. Large-lot residential areas, areas subject to natural hazards and areas with heritage features will be the only exceptions where the Standards will not apply. You may have already seen a number of Councils consulting on plan changes that will see the Medium Density Residential Standards introduced in residential zones; at the same time identifying those areas subject to natural hazards and heritage features exempt from the Standards. Councils are required to notify plan changes that give effect to the RMA changes in this respect by 20 August 2022.

Once incorporated into planning frameworks throughout New Zealand, the new Standards will create a consistent, nationwide approach to residential development, doing away with the need to obtain resource consent for the physical development itself (provided the development complies with the Medium Density Residential Standards).

Subdivision must now be provided for as a controlled activity - meaning that while consent is still required for the activity of subdividing a property, the relevant local authority is required to grant the application if it complies with the relevant requirements or conditions. In certain circumstances, restrictions relating to minimum lot size, shape size, or other size-related subdivision requirements will be removed.

New density standards mean that there can be up to three residential units per site, with buildings up to three storeys in height also permitted. Recession plane restrictions are far more permissive under the Standards. Buildings must not project beyond a 60° recession plane measured from a point four metres vertically above ground level along all boundaries. Setbacks and building coverage are also standardised, along with outdoor space requirements and landscaped area requirements.

The restrictions on notification introduced with this legislation significantly limit public voice in the built environment. An application must not be publicly notified if it is for a development of one, two or three residential units and does not comply with one or more of the density standards. Moreover, an application for four or more residential units that complies in all other respects with the density standards must not be publicly or limited notified.

The Standards are designed to facilitate rapid intensification, in a uniform manner, and negate the need to obtain resource consents as much as possible. Where resource consent is required, the ability of nearby neighbours to participate through either public or limited notification is curtailed.

For developers, a more uniform, standardised approach to development across the country will likely be welcome news. Perhaps not so much for those next door lucky enough to still be living the quarter acre kiwi dream!

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Disclaimer
The information in these articles is general information only, is provided free of charge and does not constitute legal or other professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article - including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.