New proposed National Policy Statement on Urban Development Capacity

Tuesday 1 November 2016

Authors: Marija Batistich and Laura Lincoln

​​​​First published in NZ Winegrower, August-September 2016 edition.​​​

​​The Government recently released its consultation document on the proposed National Policy Statement on Urban Development Capacity (the proposed NPS) in June and submissions closed in July. The proposed NPS is one response to New Zealand’s current 'housing crises' and aims to ensure that regional and district plans provide sufficient capacity for business and housing development in rapidly growing areas. It is also intended to complement and support the reforms proposed in the Resource Legislation Amendment Bill 2015, which if passed will require local authorities to establish, implement, and review objectives, policies, and methods to ensure there is sufficient development capacity in respect of residential and business land to meet the expected long-term demands of the district.

What is an NPS?

The RMA provides for the creation of a number of legislative instruments used to provide national direction on topics of national significance. National policy statements are one of these instruments. They are issued under section 52(2) of the RMA and state objectives and policies for matters of national significance. 

There are currently four national policy statements already in place under the RMA. These include the National Policy Statement for Freshwater Management, the National Policy Statement for Renewable Electricity Generation, the National Policy Statement on Electricity Transmission and the New Zealand Coastal Policy Statement.

Once operative, local authorities are required to amend their regional policy statements and regional and district plans to give effect to an NPS. Decision-makers on plans, policy statements, resource consents and other matters will also be required to consider the objectives and policies in the NPS as part of their decision-making processes under the RMA.

How will the proposed NPS encourage urban development?

Under the proposed NPS, all local authorities will be required to provide sufficient development capacity for the short, medium and long-term. Decision makers will also be required to pursue an urban form that seeks to maximise the potential for social and economic exchange, provide for efficient use of resources including urban land and infrastructure, and seek to enable land and development markets to operate competitively.

However, local authorities with high-growth urban areas will have additional, more intensive, obligations under the proposed NPS. It requires those authorities to provide a future land release and intensification strategy alongside their plan to provide certainty that there will be sufficient development capacity in the medium and long term, and that minimum targets will be met. This strategy must identify broad location, timing and sequencing of development over the long term, include processes for flexible implementation, and be informed by housing and business land assessments and the views of infrastructure providers, land owners, property development sector and other stakeholders. The proposed NPS also requires regional councils with high growth areas to set minimum targets for the medium and long term for sufficient residential development capacity in accordance with their housing assessment, and incorporate them into regional policy statements.

The objectives and policies in the proposed NPS are based on some key terminology, and in particular introduce new meanings of "Development Capacity", "sufficient" and "long term", "medium term" and "short term". 

"Development Capacity" is defined to mean the capacity of land for urban development to meet demand, taking into account the following factors:

  • the zoning, objectives, policies, rules and overlays that apply to the land,
  • the provision of adequate infrastructure, existing or likely to exist, to support the development of the land, having regard to:
    • ​the relevant proposed and operative RPS, regional plans and district plans,
    • any relevant management plans and strategies prepared under other Acts.

​​"Sufficient" is defined to mean the provision of enough development capacity to meet demand, plus to take account of the likelihood that not all capacity will be developed, an addition​al margin of at least:

  • 20% over and above projected short and medium term demand
  • 15% over and above projected long term demand

The proposed NPS states that total capacity should reflect demands for different types of property in different locations.

Finally, "long, medium and short term" is defined to mean within 30 years, 10 years and 3 years.

Who will be most affected?

The tiered structure of the proposed NPS means that local authorities with areas experiencing the most growth (i.e. "high growth urban areas") will be most affected. In these areas, the analysis and directions required by the NPS become much greater. High growth areas include Auckland, Tauranga, Hamilton, Queenstown and Christchurch. There are also additional policies that apply to medium and high growth urban areas. Medium growth areas include New Plymouth, Nelson, Kapiti, Palmerston North and Wellington.

When will it be operative?

Submissions on the proposed NPS closed in July. The Government’s intention is to finalise the policy and for it to take effect in October this year, in conjunction with the Resource Management Act reforms and Auckland’s new Unitary Plan. We will keep you updated on progress over the coming months. As for whether or not the proposed NPS will prove an effective response to the 'housing crisis', we will probably need to wait a little longer!​​​


This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Andrew Beatson

    Partner Wellington
Related areas of expertise
  • Environment and resource management