Local Government: Stop using consents as cash cows

Resource Management Act 1991

18A Procedural principles: Every person exercising powers and performing functions under this Act must take all practicable steps to(a) use timely, efficient, consistent, and cost-effective processes that are proportionate to the functions or powers being performed or exercised;

Section 36AAA Criteria for fixing administrative charges

The RMA has become an important part of funding

In 2022, Herald senior reporter Bernard Orsman wrote a story entitled: $270m budget hole: Aucklanders set for steep rates rises unless big savings found. In it he wrote: Falling revenue from things like resource consents as the economy heads south next year is also adding to the deficit.

If one reads RMA Section 36AAA(2), this is a breach of the law. If the sole purpose of RMA charges is to recover reasonable costs incurred by the local authority in respect of the activity to which the charge relates then falling resource consents should have a neutral impact on the budget. 

The only way for an ordinary citizen to learn how actual charges are calculated and charged is to submit an actual consent application and see what happens. The director of a charitable trust focused on affordable housing did this, and the findings were disturbing.

Case Study One: Affordable Elder Housing

On Waiheke Island, the Waiheke Community Housing Trust raised funds to purchase a section to build three affordable elder homes they would lease. The budget saw a 100% budget blowout, due to charges, delays and required consultant reports by the Council. The final straw was a demand for a development contribution. Six months after the project finally opened  the trust was forced to sell the property and evict the elderly tenants. Far from enabling the people and communities, Auckland Council disabled them, crushed them, destroyed them.

When Auckland Council was asked to explain how they reconciled their charges to a charitable trust in the context of S36AAA (3) the senior manager for Resource Consenting replied in writing that Auckland Council considers every application to benefit the applicant, even a charitable trust that is intentionally building affordable housing to benefit the community.  This raises two questions:

1. Why would the Parliament in its wisdom include S36AAA(2) if the Council’s position is right?
2. How does benefit fall to trustees who will not live in the housing? 

When the council was asked these questions, they stonewalled.

Case Study Two: Local food and turning waste materials into surplus resources

Having witnessed the Waiheke Housing Charitable Trust debacle, and finding council officers refused to meet with or answer questions in writing as to how the social and environmental challenges could be addressed, the council advised another charitable trust director the only way to engage is to file a resource consent application. Having done so, the outcome was disturbing:

• No way to apply for a consent without paying a 4-figure deposit
• No controls over how the planners charge against that deposit
• The planner charged 333 minutes to reject the application and take it from the deposit
• The applicant asked to appeal the charges and was denied in violation of the law
• The required appeal report was not written by the council despite numerous requests
• It is believed the rejection was in error, but the Council simply stonewalls
• It is clear the culture within Council is to “run the meter” in breach of s18(a)

Need for Reform

The proposed Labour reforms of the RMA are not reforms at all, but instead are ways to increase parasitical costs in property development. Real changes would include:

• S36AAA(2) enforced. Councils must show charges are fiscally neutral, not funding overhead
• S36AAA(3) enforced. No charges to community-benefit initiatives such as housing trusts
• S36AAA(3) enforced. No charges for a rejected application (does not benefit the applicant)
• S18A(a) enforced. Council must demonstrate efficient and cost-effective charges

Overhaul: A major overhaul of the culture of council planning is necessary. Central government should make it clear consents are not to be a new source of revenue. Further, if the laws need to be untangled to make applications user-friendly (not needing a private planner), enact them. For example, ban negative components where the applicant is required to cite every rule. overlay and national policy and then state it either does not apply or the effects are de minimis. Simple applications should be able to be written by a reasonably literate, non-professional applicant, and the planners instructed to not reject for lack of jargon. If the application misses a point, the planner should have the latitude to add the point and make the approval conditional on the amendment.

Rebalance: The purpose of the RMA is to enable people and communities to provide for their social, economic and cultural well being, health and safety while protecting and preserving the environment. Rebalance the Act by drafting clear instructions to council that:

• Enable people and communities, not officers and private planning consultants and experts
• Make economic well-being equal to environment in assessment
• Same for social and cultural well-being
• Define environment in a way that includes human habit
• Do not use applicant fees to fund studies (such as required applicant-paid surveys on lizards
• For every net immigrant family require (using UDA) one new house to be constructed
• Boost the role of the Urban Development Act in doing major development using skunkworks*

Beauty: Finally, add beauty and love-of-place to the purpose of the RMA. NZ is a young country with a transient outlook. As countries mature, people build towns and villages, workplaces and homes not only to keep them warm and dry, but to enable them, and their future generations to enjoy a good life. This is why old Europe is so beautiful and American-style suburbs are so banal.

* Skunkworks is where a large and unwieldy institution like Kainga Ora sets up a small, highly focused team – in this case, using company-law – assigned to accomplish a single outcome – in this case to build new towns. Do not use private developers because their pecuniary interest is not, and will never be, aligned with the public interest. Do not use the civil service because public servants are risk aversive, wasting time, money and burning out good ideas.