Comment: Imagine Auckland Council wants to keep protecting notable pōhutukawa, native bush, landscapes, and other places that safeguard nature and make Auckland a beautiful place to live. Doing so under the Government’s proposed planning system could require it to compensate thousands of private landowners under a new “regulatory relief” framework.
The proposed regulatory relief framework in the Planning Bill and the Natural Environment Bill risks creating the most bureaucratic, expensive and legally contested part of the new system, even though there’s a better way.
It will delay the creation of new plans for years, create enormous uncertainty for everyone, and generate a wave of litigation unlike anything we’ve seen under the Resource Management Act.
In simple terms, councils would have to consider providing ‘relief’ to private landowners where planning rules significantly impact their land. Those rules include protection for areas of terrestrial indigenous biodiversity, sites of significance to Māori, outstanding landscapes and features, heritage sites, and areas of high natural character.
The intention may be to better recognise property rights. But the practical consequences could be severe. What would this actually look like on the ground?
Let’s imagine it is 2029. Auckland Council is preparing its first Natural Environment Plan and Land Use Plan under the new legislation. It wants to retain many of the protections that Aucklanders agreed to in the former Auckland Unitary Plan. They include significant ecological areas across approximately 17,300 private properties, and about 6,000 notable trees.
Under the legislation, however, the council cannot simply roll across those protections.
First, it has to determine whether each planning rule is likely to have a significant impact on the reasonable use of private land. If it does, the council has to prepare a regulatory relief framework setting out how affected landowners may be compensated.
That sounds straightforward.
It isn’t.
Based on existing protections, 24,000 private properties across the region are subject to a planning rule to which regulatory relief might apply.
Before the council can even notify its plans, it needs to estimate the potential impact of planning rules across all these properties. It must determine which landowners are eligible for relief, estimate the cost of providing it, obtain legal advice on numerous uncertain statutory terms, and decide what forms of relief should be offered.
All of this happens before a single submission on the new plans has been heard.
The council eventually concludes that many rules are likely to have a significant impact on reasonable use. It drafts a relief framework. It notifies its plans.
At this point, the council doesn’t have a clue what kinds of relief would be considered acceptable by landowners. But to minimise ratepayer exposure, and avoid setting a precedent, it offers relief at the lower end of what landowners might desire (focusing on bonus development rights and assistance with fencing and pest control, rather than cash compensation or rates relief).
The battle begins.
Thousands of landowners submit on the relief framework. Some argue they deserve greater compensation. Others challenge whether they are being treated fairly compared with neighbouring properties. Developers, community groups and environmental organisations all get involved. Lawyers are engaged.
An Independent Hearings Panel considers the competing claims. Appeals follow to the Environment Court. Meanwhile, the rest of the plans are held up. Uncertainty reigns. Planning grinds to a crawl.
Years pass before the framework is finally settled.
Only then can the council begin a second process: working out what relief individual landowners are actually entitled to receive.
That requires another round of property assessments, valuations and legal decisions. Thousands of individual decisions are issued. Many are challenged.
Within just 15 days, the council has to consider the merits of all these complaints.
Objections go to the new Planning Tribunal, with further appeals to the Environment Court. In some cases, there is judicial review in the High Court. The tribunal and court systems are overwhelmed as they manage similar contests from all around the country. The many new and uncertain terms in the legislation provide fertile ground for side-bar litigation.
Throughout this process, the council still does not know what its ultimate financial liability will be. Ratepayers do not know what the framework will cost. Councillors cannot budget with confidence. Developers do not know which planning rules will survive. Environmental protections remain tied up in years of legal uncertainty.
That’s just Auckland. Scenarios like this will play out across the country. Consultant Martin Jenkins has estimated that, nationally, councils may face a cost of between $7 million and $2 billion. That is an astonishing range of uncertainty, dependent on councils’ willingness to create rules that would be captured by the regulatory relief regime in the first place. It is a nightmare for the environment and for a well-functioning system.
None of this means property rights should be ignored. They shouldn’t. Landowners should have access to relief where planning rules impose genuinely unfair burdens.
But New Zealand does not need to create an entirely new compensation bureaucracy to achieve that. There’s a simpler and better way forward.
A strengthened version of section 85 of the Resource Management Act, coupled with the bills’ existing requirement that regulation be proportionate, would protect property rights without creating this hot mess.
The Government says it wants a planning system that is faster, simpler and less litigious.
Regulatory relief achieves the opposite. It risks creating years of uncertainty, higher costs for councils and ratepayers, and a powerful incentive for councils to avoid environmental protections altogether.
If ministers are serious about building a planning system that works and has longevity, this is the number one provision they should rethink.
