NZ takes aim at environment law in war on housing crisis

The New Zealand government Wednesday outlined controversial plans to reform planning and environment legislation that it blames for the country's worsening housing crisis.

Environment Minister Nick Smith said the 25-year-old Resource Management Act (RMA) had added 30 billion NZ dollars (22.96 billion U.S. dollars) to the cost of building new homes over the last decade and reduced the number of new homes by 40,000.

Overhauling the RMA was critical to addressing housing supply and affordability and maintaining the momentum of economic and job growth, Smith said in a published speech in the South Island town of Nelson.

The government planned to make the RMA more practical and relevant, standardize local authority plans and simplify the process for gaining building consents.

"The Resource Management Act has produced over 80,000 pages of plans and rules across New Zealand's 78 councils. This 10-meter mountain of red tape is holding back the development of new houses and jobs, and it is not performing well enough in managing key resources like freshwater," Smith said.

He cited an "independent" report commissioned by the Treasury and the Ministry of Business, Innovation and Employment that said the RMA was adding an extra 30,000 NZ dollars (22,962 U.S. dollars) to the cost of an apartment, an extra 15,000 NZ dollars (11,481 U. S. dollars) to the cost of a home, and reducing the capacity of housing development by 22 percent.

Smith outlined 10 major changes to the RMA to go through this year, including recognizing urban planning, prioritizing housing affordability, acknowledging the importance of infrastructure, and giving greater weight to property rights.

Environment groups and opposition parties said that while many of the reforms were broadly acceptable in principle, the devil would be in the detail, and many voiced concerns that the government was undermining environmental protections in favor of developers.

The main opposition Labour Party said it would work constructively on sensible proposals for reform, but the changes would not make housing cheaper.

"Changes to benefit housing should not be used as a smokescreen to undermine the environmental protection standards," Labour leader Andrew Little said in a statement.

The opposition Green Party said the government was demonizing the RMA to justify a pro-development agenda and its own failure to build affordable housing in the six years it had been in power.

"It's nonsense to say that housing development is being prevented because the RMA adds an extra 15,000 NZ dollars to the cost of a new home when the average median house price in Auckland has increased by a whopping 228,400 NZ dollars (174,698 U.S. dollars) under (the center-right National Party-led government)," Green Party RMA spokesperson Julie Anne Genter said in a statement.

The Reserve Bank of New Zealand has been warning for months that soaring house prices are a threat to the country's financial stability and introduced tighter lending rules in 2013 to curb demand.

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