Productivity Commission urban planning report blunt, measured & perceptive

The bluntest finding in the Productivity Commission’s draft report out last Friday, Better urban planning, is this: The planning system shows considerable evidence of unnecessary, excessive & poorly targeted land use regulations.

The commission issued its draft report, Better urban planning, for comment, closing Monday 3 October. Its final report to the Government is due on Wednesday 30 November.

2 more commission findings get to the heart of the planning quandary:

  • Many local authorities in New Zealand discourage or prevent the development of commercial activity outside designated centres. Local & international experience with such policies suggests that they often fail to achieve their objectives and can act as barriers to competition & productivity growth, and
  • In trying to protect existing city & town centres, some New Zealand urban local authorities have sought to reduce retail & commercial competition from other locations.

In a car-dominated world, centres built up with features such as a town hall, library & close-knit retail can be destroyed by powerful retailers buying cheaper land outside the centre – and eventually becoming more of a focal point.

Foodstuffs’ 17-year battle to get permission for a supermarket outside the recognised centres in Takapuna is one example of that conflict. In Morningside, the Warehouse used an old warehouse just outside the recognised “centre” for a new shop – and on Dominion Rd through Mt Eden there is no centre, just an extremely long retail strip. At Silverdale, the Warehouse held its development site for so long before building that it became part of a new retail village – one of about 5 scattered “centres” between the motorway ramps & Orewa.

The Productivity Commission’s conclusion: “The planning system has an inherent status quo bias & risk aversion.”

The commission cites the original intent of the 1991 Resource Management Act – enabling, not preventative, saying this status quo bias is reflected in “an overemphasis in the implementation of the Resource Management Act on managing or avoiding adverse effects, which does not sit well with the dynamic nature of urban environments”.

Call for a cultural shift

Down the list to the final chapter, the commission recommended: “A future planning system should place greater emphasis on rigorous analysis of policy options & planning proposals. This will require councils to build their technical capability in areas such as environmental science & economics. It would also require strengthening soft skills – particularly those needed to engage effectively with iwi/Maori.”

On the surface, that recommendation makes sense. Against history, however, it’s a hard change, because the commission is asking bureaucrats (highly skilled) to make subjective calls on developers’ proposals, instead of making those calls based on black & white rules – not the (historic) New Zealand way.

A recent example (still before the Environment Court) concerns Queen Elizabeth Square in downtown Auckland. The council proposed selling the square to adjoining landowner Precinct Properties NZ Ltd for inclusion in its new Commercial Bay development. Among opponents (because you can only oppose or support), Institute of Architects urban issues group chair Graeme Scott suggested changes which he believed would provide a better outcome. Our system doesn’t allow for that, but the commission’s proposal would engage people to take a wider view.

And its final recommendation is telling: “Central government should improve its understanding of urban planning & knowledge of the local government sector more generally. An improved understanding will help promote more productive interactions between central & local government.”

Our government got stuck in a party political rut in point-blank opposing the city rail link in Auckland, and also in opposing the council’s alternative funding methods to transform travel. In the last year, government & council have stopped talking past each other, so progress can be made.

Sharing windfalls

Among other recommendations, the commission said council should be able to participate in windfall profits arising from its own upgrades, and they should also be able to use a range of infrastructure delivery models: “A future planning system should enable councils to levy targeted rates on the basis of changes in land value, where this occurs as the result of public action (eg, installation of new infrastructure, upzoning).

“A future urban planning system should give councils the capability to use a wide range of innovative infrastructure delivery models, including public-private partnerships. Councils, either alone or through joint agencies, will need to develop the capabilities to operate such models successfully. Future arrangements could build on current regional shared-services initiatives that increase project scale and develop project commissioning expertise.”

Call was for blue-skies approach

Commission chair Murray Sherwin said in his release on the draft report: “The commission was asked to take a blue-skies approach to what a future urban planning system could look like. Well functioning successful cities matter a great deal to the wellbeing of New Zealanders. This is about giving people the opportunity to live in well designed, well supported cities that respond to growth & diversity.”

The commission said its report reflected the challenges of the current system and where changes are most needed. Mr Sherwin said the commission had no intention of adding another layer of complexity to what was already a very complex & often conflicted system: “There is no simple fix – it’s not just a case of changing legislation. Effective urban planning is about the right mix of legislation, people with the right skills and strong relationships.

“Urban planning helps to maximise the benefits of cities, by providing essential infrastructure services & community facilities and by managing conflicts between property owners. Yet too often, the connection between planning rules & the wellbeing of communities is weak or difficult to justify, and the supply of infrastructure & zoned land fails to keep pace with demand in our fast-growing cities.”

Some conclusions

The commission concluded that a planning system should allow urban land to be used for different purposes over time, provide enough land & infrastructure to meet demand, ensure that residents can move easily through cities, and protect the natural environment.

“Planning is where individual interests bump up against their neighbours’ interests, and where community & private objectives meet. It is inherently contested and difficult trade-offs sometimes have to be made. These decisions are best made through the political process, not the courts. Our current planning system tends to be adversarial & reactive to the views of well resourced & mobilised groups rather than the majority. We believe that any future planning system would have less regimented, but more targeted consultation requirements.”

“Central government needs to set stronger boundaries around planning, and councils need to allow people greater scope to decide how to best use their land, subject to clearly articulated requirements for protecting the natural environment, and include processes for addressing conflicts between neighbours. The commission has recommended the establishment of a permanent independent hearings panel to help councils ensure their plans meet legislative requirements.

“What we need is a responsive system that aims to deal with competing demands for resources, competing citizen interests & values. The commission’s draft report suggests how to achieve this.”


The commission recommends a future planning system should:

  • make a distinction between the built & natural environment, with clear objectives for each (chapter 13)
  • favour development in urban areas, subject to clear limits (chapter 7)
  • develop a Government policy statement on environmental sustainability to provide the boundaries within which urban development can occur (chapter 8)
  • provide narrower access to appeals and tighter notification requirements (chapter 7)
  • make spatial plans a mandatory component of the planning hierarchy (chapter 9)
  • establish a permanent independent hearings panel to consider & review new plans, plan variations & private plan changes across the country (chapter 7)
  • include more responsive rezoning through the use of predetermined price triggers to signal when land markets are out of balance and rezoning is needed (chapter 7); and
  • make greater use of targeted rates & volumetric charges to fund infrastructure investment & maintenance (chapter 10).

Productivity Commission, 19 August 2016:
What would a high-performing planning system look like?
Urban planning: What’s broken and how to fix it
Better urban planning, draft report

Related stories today:
Productivity Commission urban planning report blunt, measured & perceptive
Commission sees government change as essential for urban planning
Commission says everything English wanted on planning

Earlier story:
11 December 2015: Planning system is next Productivity Commission target

Attribution: Commission report & release.

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