Development Sector Indices Welcomed

The Ministry of Business, Innovation and Employment (MBIE) and Ministry for the Environment (MfE) with significant input from the sector, including council professionals and Property Council members, have put together guidance information on development market indicators. The input from sector experts will ensure the guidance information is steeped in real-world experience and ensures the data being used by central and local government is transparent and up-to-date. In practice, developers will find high growth councils looking at how development markets are working and how plans will provide sufficient development opportunities.
The information and guidance is to help councils implement the National Policy Statement on Urban Development Capacity (NPS-UDC) to better facilitate and enable urban growth.

The latest guidance information covers:

  1. Price efficiency indicators - a suite of new measures that together show how well land and development markets are functioning and the impact planning can have on them. The indicators highlight areas where planning decisions can affect land prices, and therefore the  affordability of homes and business space. There are four price efficiency indicators:
  • Price-cost ratio (for homes)
  • Rural-urban differential (residential) 
  • Industrial zone differential
  • Land ownership concentration indicators (for residential land).
  1. Minimum targets for housing in regional policy statements and district plans. Fast growing urban areas change the form and function of communities and there is often resistance from existing communities to the change. The NPS-UDC helps move the discussion with communities away from ‘how much’ growth should be provided for, to focus on ‘how’ it should be accommodated.  Developing regional and district minimum targets for housing development capacity is a key mechanism to achieve this. 
  2. Future development strategies - will outline how development capacity will be incorporated into district plans, Long Term Plans and infrastructure strategies, and how minimum targets for development capacity will be met. 

A future development strategy is informed by evidence and should identify future urban environments, intensification opportunities, and the associated infrastructure required. It will act as a guide for planners, decision-makers, infrastructure providers, businesses, and the community, about future urban growth, potential constraints to urban growth, and opportunities and solutions to respond to growth over the next 30 years. 
Councils are now working towards meeting the requirements of the NPS-UDC. Councils for the high growth urban areas of Auckland, Hamilton, Tauranga, Christchurch and Queenstown will produce their first housing and business development capacity assessments by the end of 2017. During 2018 councils for Whangarei, New Plymouth and those with medium growth urban areas will prepare their housing and business development capacity assessments. 
The price efficiency indicators are available on the MBIE Urban Development Capacity dashboard and the guidance describing how to use them is available on the implementation guidance page of the MfE website. Guidance for setting minimum targets for housing development capacity and developing a future development strategy is also available on the implementation guidance web page.