The Resource Management (Enabling Housing Supply and Other Matters) Amendment Act (Act) gained Royal Assent on 20 December 2021.

The Act was only introduced on 19 October 2021 in a joint announcement by the Government and the National opposition. So, the entire parliamentary process lasted one day short of nine weeks.

It is fair to say that the reaction to the Bill, now Act, has been mixed.

Its intent seems simple and clear – increase the allowable density in residential zones to enable more dwellings. And with that intent there is clearly an opportunity for developers to increase their yields, or landowners generally to in-fill once the medium density provisions are included in District Plans (by August 2022).

The flip side, however, is that there are potential implications from what in some instances will be a marked increase in permitted densities, that may be less positive, particularly from an existing and planned amenity point of view.

Most commentators are agreed that the enacted legislation contains some improvements from the select committee stage and is ‘better’ than the Bill that was first introduced. But many of the concerns raised in submissions have not been addressed, including not only amenity issues but also issues in relation to the need for (unplanned) existing infrastructure upgrades, the potential infrastructure demands from peripheral developments that could potentially shift from ‘traditional’ medium density (i.e. single dwellings per lot) to the new multiple dwelling format. Not to mention the impact on existing trees, which remain important to many.

There is also the issue of how the specific ‘exceptions’, that mean the new densities do not have to be included, will be applied. Especially given the concerns raised by both Councils and community groups, who may look to use the exceptions to limit the extent of medium density development.

How the market might respond to these higher densities has also been the subject of discussion. It has been suggested that, where there is a concern that purchasers might be dubious of the intensity of these ‘medium’ density developments or simply wish to preserve lower densities, new subdivisions may include further covenants that seek to maintain a preferred level of amenity. If that occurs it could introduce further complexities to new titles, as well as undermining the intent of the changes the Act introduces. Those outcomes could lead to further legislative change to pre-empt such practices.

At this stage, these outcomes remain to be seen. The rapid progress of the legislation has meant that higher level debate on the actual need for the changes, given the progress with existing – planned – higher density zones, has simply not taken place. For example, the new enabling provisions in the Auckland Unitary Plan, and the provisions encouraging infill in the Christchurch District Plan. And there is still the process of incorporating the changes in District Plans, and the application of the ‘exceptions’ to occur. It will only be later in 2022 that the full effect of the Act is felt.

What can be said is that the step of Central Government undertaking what is reasonably micro-level planning that has previously been the realm of local (and bespoke) authorities, is a novel one, so judgement as to its success will have to be reserved.

If you have any specific queries on whether and how the new medium density rules might apply to, or affect, land you own, please contact Cavell Leitch’s Resource Management or Property Teams.