Changes planned for the Resource Management Law (RMA) should reduce houses prices and improve offering – as long as they can be promulgated, economists say.
The government announced on Monday that it plans to introduce two new pieces of legislation to replace the law by the end of this year.
It will optimize planning systems between the councils, will raise the number of “permitted activities” and set environmental limits.
He said this should reduce administrative and conformity costs by 45%.
RMA reform minister Chris Bishop and Undersecretary Simon Court said that the replacement of RMA by law based on property rights would increase the economy and raised life standards.
“RMA is broken and everyone knows it. It makes it very difficult to build infrastructure and houses New Zealand desperately, very difficult to use our abundant natural resources and has not resulted in better management of our natural environment,” said Bishop.
Kelvin Davidson, chief economist of Corelogic, said he should mean more supply than the opposite, which would limit home prices growth and improve access and accessibility.
“The survey a few years ago identified the limited supply of land as one of the three main factors up to the prices of houses in New Zealand over several decades, with the other two being a descendant trend for mortgage rates and a favorable tax system for property,” he said.
“Therefore, if we open more land, this should have an important impact specially when you put it along with credit limitations, such as debt / income indices.
“However … it will be difficult to discern, because changes in RMA presumably will occur over several years, and supply changes can be slow. So, yes, I think this is an important change, but don’t expect results overnight.”
Brad Olsen, executive director of Infometrics, agreed that there should be an impact.
“It is a very fundamental change. It seems that with some of the other planning exchangers, not only from the previous government, but more generally, it has been a little fragmented or a little more moving.
“This was understandable, there are some very large and thorny challenges to try to balance yourself in the planning space.
“I feel that the proposal on the table here is quite allowed -do it, unless there is a good reason not to do it.”
He said that although people could argue that the new rules would mean that there was a risk that things would go wrong and that there could be bad results, there was that risk now – and it was a long and expensive process, besides.
“I prefer to move toward we do things.”
He said he would take time to bed, however.
This can be seen with the quick approval law.
“Even with the fast way, nothing is being built in this second because of it and should not, things take time.
“Some of the cost economies that will emerge seem to be material, the cited numbers are quite substantial. It shows that this is not merely moving. This can take time to pass.
“There will be almost so much risk that there are high plans made and high expectations begin to be discussed just so as not to go anywhere … We may not see it in the next 12 months, but when it is hit … it will take a while to get there, but as soon as it reaches the top speed, it will reach the top speed quickly.”
Simplicity economist Shamubeel Eagb said the key would be whether the arrested changes.
The government approached the opposition to find common ground.
But the EAQB pointed to the medium density residential standards (MDRs), which had a bipartisan agreement in the previous government’s mandate, but were later filed.
“It’s great to talk about bipartisanship in the middle of the term electoral, but when the detail becomes apparent political agreement can crumble.”
He said there needed to be an open debate so that there may be a high level agreement, and from there the details could be prepared.
He said the government needed not to be afraid of confrontation through an open consultation process with “winners” and “losers” as a result of the changes.
