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Doing a subdivision within a Future Urban Zone

Dec. 2019

We review a case below in which the Environment Court allowed an appeal for a 2 lot subdivision in a Future Urban Zone (FUZ). In essence the appellant developer's case to complete the subdivision was successful against the Council because the subdivision was not inconsistent with the Proposed Auckland Unitary Plan (PAUP) related objectives and policies of which the most important being that the subdivision did not prevent structured future urbanization.

Case: Albert Road Investments Limited v. Auckland Council [2018] NZ ENVC102

The appellant was a large scale developer buying significant land, North of Warkworth, much of which was in the future urban zone. The appellant had acquired private rights to manage the structure plan process for all land acquired.

The particular subdivision consent application before the court was for a subdivision of 1.6 hectare Section in FUZ, with Lot 1 being the existing dwelling, accessory building and then Lot 2 being the balance. The intention was to sell the house lot and invest the capital to undertake the planning and process required to prepare the developer's large landholding for future development. Once live zoned (i.e. no longer future urban zoned) the site would be developed in accordance with the final outcome identified through the council's structure plan. The appellant sought to control the risk of fragmentation in advance of live zoning via a consent notice condition on the title to the subdivided properties prohibiting any construction of dwellings, buildings or access ways or services until live zoned.

The subdivision was a non-complying activity, so the Courts role was (via Section 104 RMA) to closely scrutinize for any inconsistencies with the objectives and policies of PAUP. The Court found the subdivision was not inconsistent with the relevant objectives and policies. In particular, the subdivision did not compromise future urban development by premature subdivision because it did not materially impact on development capacity/land supply to accommodate residential, commercial, industrial growth and social facilities to support growth nor have any impact on infrastructure including transport network.

The proposal was not contrary to the objectives and policies seeking to avoid urbanization as a dwelling (or a replacement dwelling) was a permitted activity within that zone and urbanization is inherently a matter of degree.

The fact the developer had purchased large landholdings within the area was not at issue, but it was relevant to the consideration of related objectives and policies. The Court found this two lot subdivision did not cause fragmentation that would compromise future urban development, and relevant to this, the Court recognised the developer buying large areas of land made future urban development more efficient.

Further the subdivision was not contrary to the objectives of the rural-rural production zone because the land was already severely constrained in its ability to accommodate rural production (too small, steep, heavily fragmented area close to residential dwellings) so the subdivision did not hinder rural uses.

Although the main focus of the case was whether the subdivision was contrary to the objectives and policies of PAUP, the case went further to say that the developer's proposal was properly compatible with the approach to urbanization of Future Urban Zoned land as set out in PAUP. From the judgement,

"Successful urbanization can never be delivered simply by the instrument of a plan change. Auckland Council has a leadership role in structured planning and plan change for urbanization of FU zoned land. Even where a plan change is privately initiated, it would generally need to be adopted by Council to get anywhere. However, as with a horse that is led to water, a developer must make the decision to take the investment risk involved in urbanization. Further, Auckland Council will not be capable of delivering urbanization without developer investment."

This case shows a willingness of the Court to consider developers interests although given it was a non-complying activity, it is an exception based on particular facts.

The council and the appellant were able to reach an agreement on the final wording of the consent notice condition for the Court's final approval. This mechanism may be of assistance where developers are motivated to advance the structure planning process in advance of councils allocated budget.

Written by Blair Franklin, Partner.

Email: b.franklin@holmdenhorrocks.co.nz