RETIREMENT VILLAGES ASSOCIATION SUBMISSION TO THE LOCAL GOVERNMENT AND ENVIRONMENT SELECT COMMITTEE. 1. Introduction. Retirement Villages Association

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1 Retirement Villages Association RETIREMENT VILLAGES ASSOCIATION SUBMISSION TO THE LOCAL GOVERNMENT AND ENVIRONMENT SELECT COMMITTEE RESOURCE MANAGEMENT (SIMPLIFYlNG AND STREAMLINING) AMENDMENT BILL 1. Introduction The RVA wishes to be heard in conjunction with this submission. ] The Retirement Villages Association ("the Association") represents the interests of the owners, developers and managers of retirement villages throughout New Zealand. Our 265 member villages have a (2008) capital value of approximately $6 billion with some 16,350 dwellings which are home to more than 20,000 older New Zealanders. Our members represent approximately 80% of the retirement village industry and consist of not for profit religious and welfare villages (e.g. the Selwyn Foundation, Auckland), independently owned villages (e.g. St Albans Retirement Village, Christchurch) and corporate groups (e.g. Rymans Healthcare, Metlifecare, etc). Retirement village living is about independent living. Our residents are not in residential care (i.e. rest homes and hospitals) but live as part of a village community where a variety of amenities and opportunities are offered. Having said that, 142 member villages (53%) offer a continuum of care which includes a rest home and/or hospital on site. Over the next 25 years or so the number of people over the age of 65 years will double from 510,000 in 2006 to about 1 million people in Of these, nationally approximately 5% live in retirement villages today (1 dwelling unit for every 19 people over the age of 65 years), although the spread is not evenly distributed across the country popular retirement areas such as Kapiti and Tauranga have penetration levels of 11 14%. To maintain the current penetration level of about 5%, retirement village operators will need to build an additional 800 1,200 dwellings annually until This growth should be seen in the context of growth since 1998, when approximately 10,000 retirement village dwellings existed, through 2000 (4 lr800 dwellingsk..ta.2008 (16,350 dwellings) and 2009 (17,100 dwellings). R E C E I V ED ~ i i~j1

2 In short, retirement village operators and developers are committed to an extensive programme of construction for the foreseeable future. 2. The Bill The Association strongly supports the general direction, intent and detail of the Resource Management (Simplifying and Streamlining) BilL We appreciate the importance of balancing public participation and debate into developments which affect them with the wider importance to the community as a whole of the specific developments. The RMA itself is intended to strike a balance between these potentially conflicting interests, but our experience is that self interest and misinformation often leads to unnecessary delay and substantial expense. To give but one recent example : One of our members is in the process of redeveloping an older village in Auckland City. The village has been in existence for many years and is in need of redevelopment and renovation to meet the changing demands of the next generation of retirees. The consent to redevelop the village has taken two years to complete and has cost the developer $800,000. There were 50 objectors to the original consent but the Auckland City Council granted the entire application on the grounds that there was no material effect on the local community. Despite that ruling two objectors took an appeal. One withdrew and the other failed to appear at the appeal hearing, thereby incurring the developer significant legal costs to prepare a defence but to no effect. Other issues our members have encountered are : Slow processing by the relevant Council. Councils, almost without exception, extend timeframes to process an application by making repeated requests for more information in an effort to "buy time". Ryman Healthcare quote an example when a Council considered an application for four months before suggesting that they might have to notify a decision that should have been made within 14 days of being lodged. In our view Councils should have one opportunity to request information from an applicant and should not be able to extend their deadlines. The Committee may consider adding some sanctions to the Bill to stop Councils from wasting time in dealing with resource consent applications. Taking the soft option. Members have often found that it is an easier and safer route for a Council officer to decline a consent application and force the applicant to either apply to the Environment Court or to 2

3 make significant concessions to the objectors. As a result the process is both more costly and delayed as the officers are reluctant to proceed on a non notified basis. As a result we strongly support the creation of an Environmental Protection Authority to provide "efficient and timely administration" of proposals of national significance. However, the definition of "national significance" is lacking in the Bill; in our view this should include significant housing and care accommodation developments which are required to meet the demands of an ageing population. Development contributions The Local Government Act introduced the concept of Long Term Council Community Plans (LTCCP) and development contributions levied on developers to contribute towards the cost of their developments on the wider community. Typically development levies include contributions towards roads, water, community amenities such as libraries and playing fields, street lighting, landscaping and so on. The LTCCP outline a "wish list" of council projects which may (or, more frequently, may not) be related to the development in question. The cost is divided between the number of new household units to arrive at a cost per household for any new development. This cost is added directly onto the cost of development and is borne by the new house owner, or incoming new resident in the case of retirement villages. Councils quickly dropped the use of financial contributions under the RMA as these had to be assessed with reference to the actual impact of the development, and there was a quite straight forward process for appealing an assessment, if necessary. On the other hand, Councils have embraced development levies as a new means of revenue collection where the rights of appeat are limited to the High Court as a judicial review. One such example is Neil Construction and others v North Shore City Council, Auckland High Court, 21 March 2007, in which the Court found : [289] The Council has made an error of law in failing to ensure that its development contributions policy complies with the requirements of the Act to assess development contributions against a "development" (as defined in s 197) that generates a demand for reserves, network infrastructure and community infrastructure. [290] The Council has made an error of law in adopting a narrow concept of economic efficiency in the causative approach it has applied to the assessment of development contributions, and excluding appropriate consideration of the distribution of benefits and equitable and proportionate allocation. [291] It follows that the Council has made an error of law in failing appropriately to explain in its development contributions policy, as required by s 106(2)(c) why in terms of s 101(3) it has determined to use development contributions as a funding source.

4 [292] The Council has not erred in law in the reserves standard and the rate of contribution it has adopted in relation to the reserves contribution under the development contributions policy. Concluding observations [293] The enactment in the Act of Subpart 5 of Part 8, relating to Development Contributions provided councils with a valuable and economically efficient funding tool in addition to the traditional funding sources such as general rates. There is no right of appeal from councils' determinations in relation to development contributions and the review process is limited (refer [95]). Any challenge by developers has to be mounted by way of judicial review. In exercise of their discretions, given the greater flexibility in decision making conferred on councils by the Act, it is therefore necessary and important that councils carefully observe the purpose and principles of the Act and the role of local authorities, that they ensure both openness in their decision making processes, and the ability of sectors of the community affected by their decisions, to participate in those processes. In addition, our members tell us that they have found Councils have been irresponsible in their application of the development contribution policy, and list the following examples : Reserves previously granted discounted in respect of development ignored and attempt to charge again in full for reserve contributions. Charges applied per household unit as per LTCCP and then additional charges made for off site works directly attributable to the development. No allowance for credits where a developer has mitigated the effect of the development on the Council e.g. providing on site amenities. 4. Councils denying any responsibility to consider each application on its merits. Refusing to issue resource consents or building consents while development contributions are in dispute. Including the costs of replacement of existing infrastructure in the LTCCP and the assessment of development contributions. Many councils have shown no conscience when it comes to charging development contributions. It is seen purely as an exercise in funding Council's capex programme, regardless of whether there is any link to the development in question. The outcome of the development contributions policy is a significant increase in the cost of housing in most districts. So far as retirement villages are concerned, this cost is passed directly to incoming residents, many of whom have lived in the same distrīct for many years and who have already contributed to the Council's infrastructure programme through their rates. 4

5 We submit that development contributions should be scrapped and Councils should revert to financial contributions under the RMA and must justify their charges based on an assessment of the development's real impact on Council facilities and amenities. 3. Conclusions The Association supports the objectives of the Bill to introduce mechanisms to speed up and reduce costs in for developers. We ask that the Bill be extended to deal with the issues noted above regarding development contributions so that Councils are encouraged to use the RMA's financial contributions regime with the benefits that process brings. We wish to be heard in conjunction with this submission. John Collyns Executive Director.