Wāhanga Tuarima – Te tono mō te mana whakaae kia hangaia he whare

5.1
In this Part, we examine:

• how local authorities plan for housing on Māori land and the regulatory costs to owners of Māori land;
• how rates and development contributions are charged;
• how owners of Māori land have been involved in district planning;
• the advice and support owners of Māori land can access from local authorities to help them build on Māori land;
• our conclusion on how local authorities respond to housing proposals on multiply-owned Māori land;
• the effect of local authority regulation on those who want to use Māori land for housing; and
• critical success factors for effective advice and guidance.

5.2
Local authorities have important roles in the development of Māori land for housing. Local authorities are responsible for planning land use in their districts in ways that ensure that the land is used in a sustainable and appropriate way. They have oversight and responsibility for major infrastructure and community facilities, which they collect rates to fund. Local authorities also charge development and financial contributions to pay for the extra infrastructure needs that new developments will place on the district. Owners of Māori land can also get help and advice from local authorities about what they need to do to build housing on Māori land.

5.3
Overall, we found that:

• local authorities take different approaches to planning for housing on multiply-owned Māori land and the planning costs for Māori seeking to build on their land vary considerably depending on the approach, which can be a barrier;⁸
• local authorities are increasingly taking a more proactive approach to enabling housing on multiply-owned Māori land, and some have specific consultation processes and planning regulations that are intended to make it easier for Māori to build housing on their land;
• local authorities can do more to explain the planning costs associated with building on multiply-owned Māori land, including the exemptions and remission polices that apply to them, to reduce barriers created by confusion about the costs; and
• some local authorities are taking on a leadership role, calling the different agencies together to provide a more co-ordinated approach to supporting Māori who want to build houses on their land.

How local authorities plan for housing on Māori land and the regulatory costs to Māori land owners

5.4
Figure 27 sets out the different approaches that local authorities take towards housing on Māori land. Several of these local authorities were reviewing their district plans at the time of our audit and intended to include provisions that would make it easier to build housing on Māori land. Many have specific policies and objectives for housing on multiply-owned Māori land, some of which are set out in their long-term plans (formerly known as long-term council community plans, or LTCCPs).

Figure 27
Approaches taken by local authorities to regulating housing development on Māori land

We are not real estate developers, this is a brand new language, we are not conditioned to work with councils, Māori need a process, we followed all the steps, were knocked over because we were alternative, we have different issues regarding finance/loans, we have a different understanding – alternative thinking, we want a home not for investment we want a home for our kids and grandparents to be warm!

For our whānau the consent process with the Council has been hugely detrimental, we started our project anyway – the extra costs would have broken the project.

5.5
The costs and processes involved in getting resource consent and building consent for a housing proposal are often described as barriers to using Māori land for housing. Local authorities "zone" land areas in district plans for particular purposes. The rules that go with those zones can affect the number of houses and the housing density allowed on any given piece of land.

5.6
The different levels of restriction will affect how much regulatory costs owners of Māori land will have to pay. Where Māori land is very strictly regulated – for example, if no further houses are allowed to be built without resource consent – landowners will incur extra costs to get the necessary consent or permission to build. Because of its location and historical uses, Māori land is more likely to be zoned for purposes other than housing, which can make it difficult to gain consent.

5.7
We commissioned a planning firm to examine the degree to which these costs vary and to test what proportion of the overall costs of developing houses on Māori land these costs are. We also analysed records of actual developments.

5.8
Our planning consultants developed three development scenarios in nine selected local authorities. They then assessed what the costs would be for each. The scenarios identified that the average contribution to total development costs from resource consent, building consent processes, and development and/or financial contributions (what we refer to as the total planning costs) are on average around 4.5% of a total development. Most of this cost tends to be the cost of development and/or financial contribution charges (on average, 3.5% of the total development cost).

5.9
Although a smaller proportion of total development costs, the total planning costs can be considerable and significant, potentially $25,000 for each house. These are costs that owners of Māori land need to be able to pay at the early stage of a development – normally before any funding or finance has been secured, which can result in owners of Māori land deciding not to progress with their building plans.

5.10
Some local authorities have specific planning regulations for Māori land that are intended to help make it easier for Māori to build housing on their land. A 2009 review by TPK found that about 60% of local authorities have provisions in their district plans to support housing development on Māori land. Having provisions in district plans makes the planning costs and processes much more certain for owners of Māori land. Some regional policy statements and development plans also have objectives to increase the use of Māori land for housing. For example, in the Bay of Plenty, the Smart Growth Strategy has a goal to house 16,000 people through housing on Māori land. Including specific objectives in local authority plans helps to foster a more proactive and supportive approach to building proposals.

5.11
The planning costs that owners of Māori land must pay will depend on the particular approach to planning of Māori land. We identified three approaches that local authorities were taking or intending to take. These were:

• no zoning or separate recognition for housing on Māori land;
• zoning particular areas of Māori land for housing on Māori land; and
• not zoning for papakāinga housing, but general provisions included in current zones and/or approval on the basis of land management plans.

5.12
Figure 28 sets out the advantages and disadvantages of the different approaches.

Figure 28
Advantages and disadvantages of different approaches to planning for housing on Māori land

5.13
Recognising housing developments on Māori land in district plans (by including zones) makes developing houses on Māori land cheaper than if there had been no recognition in the district plan. Our planning consultants concluded that developments in local authorities that included zones for housing on Māori land were on average about $10,000 cheaper for each house than those in local authorities that had made no specific provision for housing on Māori land in their district plan.

5.14
Because a "papakāinga zone" is for housing on Māori land, it is likely to have more permissive rules (such as the number of houses allowed on a particular area of land) than zones with no specific provisions for housing on Māori land. However, a planned development that would exceed the permitted number of houses would also require a more-expensive resource consent process (or even an entire plan change).

5.15
For zoning to be effective, it requires that all Māori freehold land be appropriately zoned. Zoning can also be problematic when Māori groups receive land under treaty settlements, which can require further re-zoning. This lack of flexibility in the zoning approach can increase rather than decrease costs for owners wishing to build housing on their Māori land.

5.16
In two local authority areas (the former Manukau City Council⁹ and Waimakariri District Council), a change to the district plan would sometimes be needed to develop housing on Māori land. In the former Manukau City Council, there is a "papakāinga zone" but there are also pockets of Māori land outside that zone that are zoned as rural and subject to more restrictions. A landowner wanting to build housing there would have to apply to change the zone to a "papakāinga zone", which would cost $30,000–$50,000 if the change were simple and there were no objections. It could cost considerably more if the change required hearings and public consultation or if it escalated to the Environment Court.

5.17
The drawbacks to providing for housing on Māori land through zoning have led several local authorities to try a more flexible approach, which may ultimately prove cheaper (especially for large-scale developments). The main features of a more flexible approach involve moving away from using papakāinga zones and instead either including rules in all relevant zones (such as the rural zone) or allowing more intensive development where there is a management plan for the land block, or both. Figure 29 sets out the specific approaches three local authorities take in the regions where we audited.

Figure 29
More flexible approaches taken by some local authorities

5.18
Land management plans could result in increased costs for those who apply for consent to build housing on Māori land. In the one instance we saw, the plan cost about $30,000. We note, though, that larger-scale intensive developments require a certain level of planning anyway, that the plan would include other resource consent requirements (such as an assessment of environmental effects), and that a comprehensive plan can save cost and problems later in the development process.

How rates and development contributions are charged

5.19
The charging of rates on Māori land is controversial. There is a high level of rates arrears on Māori land blocks. The wider issues around the rating of Māori land are beyond the scope of this audit. However, rates arrears are often perceived as a barrier to building housing on Māori land.

5.20
Māori groups have expressed concern that, once a house is built on the land, the family owning that house will be subject to a large rates arrears bill. They are concerned that the relevant local authority would charge the individual household for the rates owed on the whole block.

5.21
All of the local authorities we visited had rates remission policies for Māori land that they were prepared to use to encourage development. Typically, this meant that, if an individual or whānau built a house on Māori land, the local authority would, if requested, remit the rates owing on the part of the block that the house was on. The local authority would charge that household in the future for only the rates owed for the part of the block their house was on.

5.22
The local authorities in the regions where we audited have information on their websites about rates remission policies, as well as publicly available leaflets. However, we consider that they could do more to communicate to owners of Māori land how these policies work and how the owners can apply for a remission to allow housing developments to go ahead.

5.23
Local authorities charge people who build houses a fee called either a "development contribution" or a "financial contribution". These contributions are intended to help pay for the cost of increased demand on infrastructure (including sewerage, water, stormwater, roads, and public amenities like reserves and libraries) that will happen as a result of more houses being built.

5.24
In our interviews with owners of Māori land, development and financial contributions were cited as an extra cost that can be a reason for some developments not going ahead. Some landowners expressed concern at being charged when their land is poorly connected to infrastructure. One organisation saw development contributions as a "tax" on developers who will make a profit from their developments – a category that most Māori housing developments do not fall into.

5.25
We examined how local authorities charged development and financial contributions on housing developments on Māori land. The Local Government Act 2002 makes no distinction between commercial or other developments for setting development and financial contributions. Instead, these contributions are supposed to be determined by:

• who will benefit from the services they fund;
• when the benefits will occur; and
• whether the actions or inactions of anyone has contributed to the need for the services to be funded by the development or financial contributions.

5.26
In addition, development and financial contributions must be tied to specific local authority activities – they cannot act as a general "tax".

5.27
The development and financial contributions policies of all local authorities in the regions where we audited had tied specific development contribution charges to specific infrastructure needs. The policies included exemptions from development and financial contributions if a development will not be connected to that infrastructure.

5.28
The two local authorities with the most Māori land in them were also two of the three local authorities in our sample with the highest development and financial contributions. This may in part explain the level of concern Māori expressed to us. Development and financial contributions were not higher in these local authorities because of the amount of Māori land. Instead, the contributions were driven by the location and state of present infrastructure, anticipated growth, and the difficulties arising from relatively low population densities.

5.29
We consider that local authorities could reduce the confusion around rating, development, and financial contributions, and possibly encourage the development of Māori land, by:

• raising awareness of their rates remission policies;
• providing information about how they set development and financial contributions; and
• providing information about what the money is used for.

5.30
The local authorities in the regions where we audited had done this to greater and lesser extents. For example, Tauranga City Council has explained to Māori trusts in the city how development fees are charged and why they are charged.

How Māori landowners have been involved in district planning

Locally we formed a papakāinga group at a time when city councils were reviewing council rules. Our tangata whenua group was able to review these rules. Local council included and accepted tangata whenua recommendations. The outcome was we were able to change [regulations] …

It is vital to nurture meaningful relationships with Māori communities as they are aware of their own housing issues and have the capacity to respond to their needs if supported appropriately.

Councils will go to Papatipu for consultation yet the actual land owners may not be included in that dialogue ... This may be due to convenience rather than a lack of resources.

5.31
Both the Resource Management Act 1991 and the Local Government Act 2002 require local authorities to consult with tāngata whenua so that they have the opportunity to contribute to the local government decision-making process. In our discussions with local authorities and Māori landowning groups, we found that there is a tendency to focus consultation on engaging with iwi and larger hap groups. Doing so risks missing out on the views and the aspirations of most owners of Māori land, whose land is not normally vested in iwi or hāpu organisations.

5.32
If they consult effectively, local authorities can acquire valuable knowledge about the plans and aspirations of local owners of Māori land. In doing so, they can begin to form relationships that can lead to more co-ordinated approaches to developing Māori land. We found examples of this in the Western Bay of Plenty and Northland.

5.33
Close engagement with trusts and whānau from the earliest possible stages can lead to better understanding by local authorities of the intentions, aspirations, and plans owners have for developing housing on Māori land. Early discussions and negotiations about these plans can avoid costs later on. Figure 30 sets out some examples of good practice in this area.

Figure 30
Examples of good practice in local authority support for housing on Māori land

The advice and support owners of Māori land can access from local authorities to help them build on Māori land

5.34
The resource consent and building consent processes can appear daunting and jargon laden. If local authorities can help Māori through these processes, Māori land developments are more likely to be completed. Some local authorities provided specific guidance to Māori interested in building on their land through basic brochures or toolkits. Figure 31 includes other examples of good practice in supporting Māori through the planning stage of their housing development.

Figure 31
Examples of good practice in supporting Māori through the planning stage of their housing development

Our conclusion on how local authorities respond to housing proposals on multiply-owned Māori land

5.35
In our view, the local authorities in the regions where we audited are taking steps to improve the way they approach their planning for Māori land. Some provide free advice to landowners, show flexibility in how they charge development fees, and provide rates remission so that rates arrears do not become a barrier to development.

5.36
Local authorities that include objectives and measures to help Māori to realise their aspirations for their land and link these to wider community outcomes provide more proactive and positive support to owners of Māori land.

5.37
Because of their key role in land use planning, and the relations that they are obliged to build with tāngata whenua, local authorities are well placed to foster better joint agency approaches to supporting owners of Māori land who want to use their land for housing.

The effect of local authority regulation on those who want to use Māori land for housing

5.38
Figure 32 describes how local authority regulation can affect three different types of Māori organisation.

Figure 32
The effect of local authority regulation on Māori housing proposals

Critical success factors for effective local authority regulation

Critical success factors for local authorities to effectively support and regulate housing on Māori land

5.39
Local authorities are more likely to effectively support and regulate housing on Māori land when:

• they know who oversees the Māori land in the area and discuss the plans that the owners have for their land – if the owners plan to build houses, the local authority explains what they will need to do and how to go about it;
• their planning staff know about the Te Ture Whenua Māori Act 1993 and Māori Land Court processes;
• they effectively communicate their rates remission and development fees policies to Māori landowners and explain how those policies work;
• they call the different agencies together so that there is a coherent and joint response to the plans of owners of Māori land; and
• they build appropriate flexibility into their district plan to consider more intensive development of Māori land that might previously have been used for agricultural purposes.

Critical success factors for owners of Māori land

5.40
Owners of Māori land are more likely to get the information and support they need from their local authority when they visit the local authority early and arrange to meet with the planning team to discuss ideas about using the land for housing. Landowners can also ask staff about:

• rates remission policies;
• likely development contributions and what they will be used for;
• likely resource consent costs; and
• what type of support and access to expertise the local authority might be able to provide.

8: Planning costs may also be problematic for development on general land. However, Māori land is more likely to be zoned in a restrictive way because of its historical uses and locations.

9: Although Auckland's local authorities had been amalgamated at the time of our audit, the district plans for each of the amalgamated authorities were still current, and will remain so until reviewed by Auckland Council.