Collective nouns are fun. A murder of crows is great. A hoon of kaka and a booming of kakapo are apt and very Kiwi.
But what do we make of the growing set of National Policy Statements affecting land use?
The answer is obvious. New Zealand has a confusion of National Policy Statements.
Kaka hooning around Wellington are great fun. The growing confusion of National Policy Statements is decidedly less so if you worry about the housing shortage.
Cutting through the confusion would require Resource Management legislation, due in Parliament very soon, to prioritise land for housing over other goals.
A month ago, the government released its National Policy Statement on Highly Productive Land. The NPS-HPL fences off some 15% of the country against encroachment from the 1% of land in urban use.
The policy is rather confused all on its own.
While media stories on the policy posit some implausibly critical national security importance of Pukekohe potatoes, NPS-HPL mostly isn’t about that.
According to Harrison, the net return on sheep and beef paddocks that will be banned from turning into housing is, on average, about $250 per hectare. A hectare can carry a lot of houses: about ten quarter-acre sections. Or two and a half one-acre lifestyle sections.
Banning a one-acre section to protect agricultural production with net value of about $100 per year, in a housing shortage, is ludicrous. It is far less than the value of a single window in the house that could be there.
The policy is deeply confused.
The draft policy had intersected badly with another National Policy Statement – this one on Freshwater Management. Tighter nutrient limits under NPS-FM meant some horticulturalists would not be able to continue market gardening. They worried that NPS-HPL would also ban them from turning their farms into housing.
Fortunately, farms will not be stuck in that Catch-22. Improving freshwater quality is now an allowed exemption from NPS-HPL.
But what of the policy’s clash with the housing and competitive urban land supply goals of the National Policy Statement on Urban Development?
Treasury had been sharply critical of the draft policy and of the cost-benefit analysis commissioned by the Ministry for Primary Industries. Treasury had recommended that NPS-HPL be deferred until more rigorous cost-benefit assessment had been undertaken. Treasury had also recommended that MPI be told to provide some options for avoiding clashing with NPS-UD.
The problems Treasury had seen in the draft policy remain.
Treasury warned that including Land Use Category 3 land (the kinds of paddocks that Ian Harrison talked about) trebled the amount of land barred from use in housing. About five percent of the country’s land gets the top two grades. Adding LUC 3 land restricted housing on another ten percent, without really considering effects on the supply of land for housing.
MPI noted that some councils already made it difficult to develop on LUC3 land. But MPI ignored that a National Policy Statement would lock in those kinds of restrictions. Councils that might have considered easing restrictions, in response to the housing crisis, will not be able to do so.
And while it remained possible for the National Policy Statement on Urban Development to include improved implementation to try to get around the worst of the effects of NPS-HPL, Treasury was sceptical that it would happen.
Inflated urban land prices seemed to be the most likely result of restricting land use on cities’ fringes.
Treasury warned that “NPS-HPL could unduly compromise objective 2 [housing affordability] of the National Policy Statement on Urban Development (NPS-UD).”
It noted that the shonky cost-benefit analysis had not been updated and that the reliance on a flawed CBA “may be criticised by third parties”.
And it urged that the policy be deferred until stronger analysis had been undertaken, including thorough assessment of whether the policy should protect Category 3 land.
So while NPS-UD requires councils to open up sufficient land for development, NPS-HPL bans a lot of the options for doing so. And when councils are already looking for reasons to prevent new development, they’re likely to go further than NPS-HPL requires.
The effects will not be limited to suburban expansion. The ability to build new houses at a city’s fringe provides an anchor for land prices across an entire urban gradient – including the land under downtown apartments.
There remains a way to cut through the confusion. Coming Resource Management legislation will set a National Planning Framework. The legislation should prioritise competitive supply of land for urban housing over other goals.
If it does not, and cities continue to have a hard time delivering affordable urban housing, our confusion of National Policy Statements can take some of the credit.