Neighbours halt development: Whose interests does medium- and high-density housing threaten?

As New Zealand's government vigorously promotes medium- and high-density development in Auckland, with Labour and National jointly supporting large-scale intensification, a group of Remuera residents has halted work on a nearly completed 13-townhouse development with all its building consent approvals in place.

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The news sent shockwaves through the Chinese construction industry. Many industry professionals said the case clearly conflicted with the MDRS medium- and high-density development policy, which had passed its third reading. Whom should we follow: the High Court's ruling or Auckland Council? Will resource consent become harder to obtain before the new legislation takes effect in August 2022? Will this problem disappear once the MDRS legislation is implemented?

 

Background to the case

 

Before townhouse construction began, the 1600-square-metre site at 44 Ventnor Road in Remuera contained just one home. It was then to become a substantial development of 13 townhouses. Kurt Gibbons, owner of 44 Ventnor Limited, said the project was two months from completion and all 13 units had been presold for between NZ$1,090,000 and NZ$1,330,000.

 

Auckland Council had previously granted resource consent (RC) for the development, but several neighbouring households opposed it. They included resource management lawyer Richard Brabant and his wife Eleanor, commercial developer David Pederson and his wife Tracy, and the Wallaces, who are Bayleys real estate agents. The residents jointly brought proceedings, which were heard by the Auckland High Court.

 

Auckland High Court Justice Gerard Van Bochmann found that council planners had not adequately considered the effects of adding 13 homes, exceeding 4 times the number permitted in the Mixed Housing Suburban Zone. He also raised daylight, outlook, privacy and streetscape concerns. He said the failure to properly assess a development of this scale before construction began may have deprived neighbours of the right to be informed and to have their submissions considered.

 

'I acknowledge that putting this development on hold will affect 44 Ventnor, and Auckland Council will also be disappointed, given urban development and the Auckland Unitary Plan's provision for more intensive development in residential areas,' Justice Gerard Van Bochmann said. Nevertheless, he halted the project because he considered that, when granting resource consent (RC), the council had failed to consider how increased building density would affect neighbourhood character and residential amenity. The resource consent application had to be reconsidered, and construction should stop.

 

The lawyers' perspective

 

The New Zealand Chinese Building Industry Association (NZCBIA) and ChanceryGreen promptly held a video seminar, inviting a party to the proceedings and lawyers to analyse the case. Raymond Huo, a director of ChanceryGreen and former chair of Parliament's Justice Committee, explained that this was a judicial review case. The judge's task was to review whether an administrative decision, such as one made by a council, central government department or minister, was lawful, reasonable and fair, particularly whether the correct process had been followed. Natural justice was the central principle, while the merits of the decision were outside the scope of consideration.

 

Because this was judicial review, the parties were applicants and respondents, rather than plaintiffs and defendants as commonly understood. There were 5 applicants, all neighbours of the development, and 2 respondents: Auckland Council, which granted the consent, was the first respondent, and the developer was the second. Huo said an error in the council's approval was effectively also the developer's error. If the developer's planners, designers and other relevant professionals had prepared complete, error-free project documentation, the council would not have made an incorrect decision on the basis of a correct report.

 

The main legal foundations of the case were the Resource Management Act 1991 (RMA) and the Auckland Unitary Plan. Richard Brabant, a party to the case and one of the few senior lawyers specialising in resource consents and local government law, said the Unitary Plan gave developers different development allowances in different zones. This site was in a mixed housing zone, where three homes could be built on 1684 square metres without resource consent. The developer had instead built 13 townhouses. Such a high-density development was clearly inconsistent with Remuera's character, and there were potential wastewater, roading and stormwater issues. He had therefore asked the council at the initial design stage to notify neighbours so they could express their views, discuss matters with the developer and find a mutually acceptable solution. That did not happen.

 

Auckland Council formally announced on 16 December that it had appealed the High Court ruling in Wallace v Auckland Council [2021]/44 Ventnor (44VL). Even so, from the council consenting department's perspective, this judicial review had already become case law. When assessing resource and building consents, the council now needed to consider building intensity in terms of the environmental context, development effects, neighbourhood amenities and street and neighbourhood character, among other factors. Building intensity was therefore no longer confined to physical form; the other factors raised in this case would also be considered. This meant stricter assessments of applications to build four or more homes on sites in mixed housing zones.

 

Beyond the Resource Consent Act 1991, Huo also analysed sunset clauses, which concern developers and buyers. He said that in the current property development market, developers, builders and consumers alike needed to pay attention to which factors might be used as leverage after contracts were signed.

 

The planners' perspective

 

This was undoubtedly an outcome none of the developer, council, buyers or neighbours wanted. However, it is foreseeable that disputes will increase as more medium- and high-density developments begin.

 

Many people are therefore deeply concerned about the forthcoming Medium Density Residential Standards (MDRS) legislation. How will the MDRS change new-home design? How will height limits, particularly for sea-view homes, recession planes, site coverage and floor area ratios be handled? If homes designed to meet MDRS planning requirements no longer need RC, will neighbours lose their right to be informed and to object? How will neighbourhood disputes caused by removing recession plane requirements be resolved? All of these could trigger disputes between neighbours and developers.

 

Dylan Huang, founder of Archiland's Auckland architectural design practice, said: 'The Auckland Unitary Plan took effect in 2016. As designers, we began designing homes under it in 2017. Some clever designers began pushing density to its limits in pursuit of higher returns, and the market gradually changed our thinking too. There was an inevitability about the case we are discussing today. I therefore think future developments should find a balance with their surrounding environment and ecology as early as possible.'

 

Senior planner John Yan said the most immediate impression was that the council had become more cautious about approving new projects following the case, considering their effects on the surrounding environment. Previously, design details relating to density and the surrounding environment were easily overlooked when medium- and high-density housing was assessed, creating the failings exposed in this case. The council would pay greater attention to these areas in future approvals. Accordingly, three points deserved particular attention when planning projects:

 

First, before construction begins, it is necessary to determine whether neighbours will be adversely affected and whether a hearing is required through a notification assessment. The council needs a more detailed analysis of a neighbourhood's existing development landscape, character, density and building scale. Planners, architects and designers need to understand the appearance, height and visual character of existing nearby homes, the size of surrounding and neighbouring sites, whether nearby land has previously been developed, and whether resource consent has recently been granted for neighbouring developments. These factors determine neighbourhood character and the types of development suitable for the site, such as standalone homes, duplexes or townhouses.

 

Second, the environmental effects of building intensity are directly linked to existing neighbourhood character. Assessing building intensity effects requires considering the number of units, homes and households in a new development, the positioning of outdoor spaces and windows, the number of parking spaces and associated noise, and their potential effects on the existing environment and neighbours. A professional planner can provide analysis and assessment.

 

Third, the effects of neighbourhood character and building intensity must be analysed against existing conditions. Because Auckland Council is now approaching its hearing processes more cautiously, approvals will focus more on assessing development effects on the environment as it currently exists.