Battling for Building Consents

For every hotel project we see developed in New Zealand, there are more attention-grabbing projects that don’t make it passed the building consent stage.

A Taupo hotel was declined building consent earlier this week because it was “out of character” with the rest of the city centre.

Nationally, almost 99 percent of all resource consents are granted, 95-98 percent of which are issued without public or third-party notification. And while a far greater majority are granted consents rather than refused, it’s often the declined projects we hear about. A lot of the time, these projects seem to be hotel projects who can’t get passed the consent stage.

What’s holding projects back?

“The challenge is the length of the consulting process and the costs involved without certainty of an outcome,” said Mark Weingarth, director and planning consultant of town planning and resource management company Plan Co.

“Whilst there is a high chance of obtaining the consent in the long run, the risk, the costs of doing so, the length of the process and the differences in the scheme from first submitted to what is consented can be difficult to determine without undertaking appropriate due diligence and pre-resource consent work.”

According to Weingarth, what’s happening is projects are often caught in a difficult state of pending approvals, and making changes to meet various technical requirements. This slows down the whole process and makes everything cost more to get off the ground.

What can be done about it?

Often the best and only way to prevent being stuck waiting for resource and building consent is to make sure the building is perfectly suited for its environment. For example, there is no point proposing a hotel in a residential area that is zoned for standalone housing with a two-storey height limit. Weingarth explained there are cases where the development won’t fit in any particular zone.

“In these cases it is important to get in front of the Councils early to discuss their thoughts on a proposal and whether such a development could be supported. Engagement with key decisionmakers and staff within Councils is important for proposals where an applicant is looking to push the boundaries.”

According to a BRANZ study on the barriers to resource and building consents, there are three main issues that builders and developers have are with the legal framework, how the legal requirements are implemented and interpreted by the industry, and perceptions about the local government and industry’s competency to understand and comply.

What makes the process different in NZ and how can that be resolved?

In New Zealand, resource consents are granted through the Resource Management Act (RMA), giving people and companies permission to develop and use natural or physical resources.

However, the RMA has become a complex process, confusing many, being interpreted differently by different parties.

“In my opinion, the principle of what the RMA is seeking to achieve and means in which it does are generally robust. However, over time a lack of Government direction has resulted in the courts and legal professions dictating how the RMA is administered,” said Weingarth.

The result of this is that more weight is given to legal accuracy and following the due process rather than meeting the outcomes that the RMA aims for. A lot of the focus is given to notification, deciding whether or not to involve or exclude third parties from the conversation during the application process. The idea behind this is that if anything or anyone is deemed to be ‘adversely affected’ by the project, or if the project would have a ‘more than minor’ impact on the environment than the application should be opened up to comment.

“In principle, this is a good concept, however, the exercising of the process following years of litigation is cumbersome.”

Similar systems in other countries have automatic notification of applications and limited hearing processes to speed up the planning and decision process. If that were instituted in New Zealand, perhaps, the slowdown would be reduced but for now, projects will remain waiting for years with pending resource and building consents.