Proposed RMA Reform: Uncivil dispute resolution

Dr Bryce Wilkinson
Insights Newsletter
1 April, 2021

Currently, every house auction is a contest between competing bidders. The auction confronts each bidder with the last price bid. Beat that price or watch someone else win the auction.

Nor is the seller immune from this contest of valuations. The price might not meet the seller’s reservation price, but it is the best offer on the table. Hesitation is natural.

This is a civil system for resolving disputes over the future ownership and use of property. There are (usually) no fisticuffs, no machine guns and no police presence. No one is forced to do anything against their will. No one gets something for nothing.

Arrangements under the Resource Management Act 1991 are fundamentally different. Take the case of someone who wants to build, say, 20 houses on a property they own. Others oppose this. Some might want it kept as farmland, converted to a local park or planted in native trees. Some habitual objectors are strident and well resourced.

The RMA gives objectors an open slather chance to stop the development. It does not confront objectors with the lost value in the form of housing. Why offer to buy the property at market value when the RMA might give them what they want at no charge? Why be civil?

The RMA’s invidious system opened the floodgates to “not-in-my-backyard” objectors. It invites a dishonest contest of exaggerated valuations. It encourages opportunism, narrow self-interest, spite, and greed. It imposes no meaningful discipline on non-owners.

The Randerson Review Panel’s proposed changes to the RMA were presented at a Law and Economics Association seminar in Wellington this week. The Panel’s report largely overlooked the importance of property rights.

The Panel was, of course, aware of the glaring housing shortage. But it failed to diagnose it from a law and economics perspective. The community could pay a very high price for that deficiency.

Stay in the loop: Subscribe to updates