Building rules eased, but developers may remain unconvinced: can New Zealand’s RMA reforms increase housing supply?

Once land is approved for housing, how far is it from someone moving into a new home?

The New Zealand Government hopes reforming the Resource Management Act (RMA) will simplify development approvals and make more land available, leading to more homes being built. But views in the construction sector are mixed: some expect the new rules to break through construction bottlenecks, while others believe financing, infrastructure and policy uncertainty will still leave projects on the drawing board.

The reforms also raise another question. When cities allow more housing to be built, can existing trees and green spaces remain?

Farewell to the old RMA as the Government eases building restrictions

On 22 September, the Planning Bill and Natural Environment Bill, intended to replace the Resource Management Act 1991, passed their third readings in Parliament. The bills address land use and development, and the use and protection of the natural environment, respectively. As at 24 September, Parliament’s website had yet to show that either bill had received Royal assent, and the new planning system had not yet been fully implemented.

Chris Bishop, the minister responsible for the reforms, believes the old RMA has long constrained land development and slowed housing and infrastructure construction. The Government hopes clearer rules will reduce approval barriers, making it easier for developers to determine what can be built on a site and which processes a project must follow.

This is now the second consecutive New Zealand government to attempt to replace the RMA. The previous Labour government passed reform legislation, which was subsequently repealed by the current coalition Government. For development projects that may take more than a decade to complete, how rules are designed matters, but whether they remain stable over the long term also affects investor confidence.

Why are developers still not optimistic?

Peter Cooney, a director of nationwide property developer Classic Group, believes the reforms do not adequately address the key issues holding back housing construction.

In his view, the way local councils handle development projects could still leave developers at a disadvantage. If a council opposes a project and developers lack an effective avenue of appeal when they believe it is viable, the approval process will struggle to become truly predictable.

He also wants spatial planning to adapt to market changes. Large projects may take 15 years from land purchase to delivery. Developers must assess demand, costs and the policy environment years into the future. If planning lacks flexibility and government policy keeps changing, easing development restrictions today may still leave developers unwilling to take on long-term risks. Cooney therefore does not believe the reforms will transform the housing market quickly.

Simplicity Living managing director Shane Brealey takes a more cautious view. He acknowledges that the old RMA accumulated new rules over the years, becoming increasingly complex and difficult to implement, and that reform is needed. But the new system will require an adjustment period: local council staff, planners and developers will all need to learn how to interpret and apply the new rules. He expects the burdens of reform may temporarily outweigh the benefits during the first 12 to 14 months, with results potentially emerging over the medium to long term.

Brealey also cautions that easing building height limits does not mean large numbers of high-rise apartment projects will get under way. Major apartment projects must first secure financing, control construction costs and find construction teams capable of delivering the work. Permission to build taller addresses only part of the question of whether a project can be built; it does not guarantee financial viability.

Once more land is opened up, can infrastructure keep pace?

Some industry figures have greater confidence in the reforms.

Scott Cracknell of architectural design firm Context Architecture believes consolidating numerous local planning documents into fewer regional plans will help reduce inconsistencies in the rules, making resource consent approvals simpler, faster and more predictable. For businesses pursuing projects across different regions, knowing clearly what the rules are can reduce uncertainty at the outset.

Signature Homes chief executive Paul Bull believes making more land available for housing will increase housing supply and buyer choice. He thinks competition arising from increased supply could also put downward pressure on house prices. The reforms both create room for more housing within existing urban areas and allow further development on city fringes, helping meet the needs of different buyers.

Waikato developer John Kenel is also positive about the direction of the reforms. However, he points out that inadequate supporting infrastructure, such as water supply networks, has long been a major barrier to building homes. He hopes fast-track approval processes and the new planning system can accelerate infrastructure projects.

This shows that releasing land is only one step in the housing supply chain. Even with development approval, a project still needs roads, water supply, drainage and other infrastructure. Developers must also secure financing, undertake construction and ultimately find buyers. Approvals can be accelerated, but they cannot accomplish the subsequent work on their own.

Will more housing mean cities lose more trees?

Easing building restrictions has also sparked fresh debate over protecting the urban environment.

RNZ previously reported that tree protection advocates fear the new system could narrow the avenues for protecting some urban trees, resulting in more mature trees being removed during development. Previously, local councils could identify trees as worthy of protection based on their age, form, how representative they were of their species, or historical significance. Advocacy groups worry that if protection shifts towards trees with significant historic heritage value, other trees that are equally valuable to communities will become harder to retain.

In South Auckland, these concerns are particularly tangible. Tree canopy cover in Māngere-Ōtāhuhu is around 9%, below the Auckland average of approximately 20%. Andrew Jenks, who has long been involved in local tree planting, points out that a tree takes decades to mature. Newly planted saplings cannot immediately replace a mature tree that already provides extensive shade.

Arborist and advocate Zane Wedding also worries that communities with relatively few trees will lose even more shade. He believes mature trees improve the neighbourhood environment and help manage stormwater and flooding.

The debate also involves a “regulatory compensation” mechanism. The Government’s policy explanation states that when certain planning protections affect private land, local councils must consider providing relief to landowners. Advocacy groups worry this will increase the cost to councils of protecting trees, making them less willing to impose restrictions. The Government, meanwhile, believes planning should also give fair consideration to the effects on landowners. The actual outcome will depend on subsequent rules and how local plans are implemented.

Observations and reflections:

After homes are approved, the question is whether they can be built

RMA reform responds to a real problem: complex and lengthy planning processes increase costs and can leave housing construction lagging behind demand. If the new legislation makes rules clearer and approvals more predictable, it will indeed help development.

But “allowing more to be built” does not mean “more has been built”. Measuring the reforms’ success requires looking beyond how many days have been shaved off approvals or how much more land is available for development. It also means looking at how many projects actually begin construction, how many homes are ultimately completed, and whether infrastructure can be delivered alongside them.

The urban environment should also be included in this assessment. Once mature trees are gone, planting a few saplings cannot immediately replace them. Housing numbers affect whether people can establish a home; shade, drainage and the neighbourhood environment affect their quality of life once they move in.

The Government has tried to make building homes easier. The real test now is whether developers can turn approved projects into houses, and whether those houses can become affordable homes with the infrastructure and amenities people need for long-term living.