14 February 2008

Affordable Housing and the RMA

> Parliament: "Affordable Housing: Enabling Territorial Authorities Bill" A conversation at a function last night took me back to an issue that I was reflecting on last year: whether territorial authorities presently have the jurisdiction to provide for "affordable housing" rules in their plans. That is, can, for example, requiring developers who construct large multi-unit developments to ensure that a certain number of units are maintained for "affordable housing" – be that social housing or "cheaper" housing? I tried to access the government's legal advice on this issue but it was withheld. You'll see from the Bill introduced late last year that the government has taken the view that such regulation is not possible under the Resource Management Act and so they have proposed a new regulatory framework. I'm not convinced I agree with their position that this type of regulation is not possible under the RMA. The fundamental premises in the government's analysis must be that the RMA is about "environmental" matters, not "socio-economic" matters. But I think this is misconceived. I think that – as a matter of jurisdiction – these socio-economic matters are within the purpose of the RMA and district plans rules can address them. That said, the RMA would require a careful assessment of whether, as a matter of a cost-benefit analysis, such rules are justifiable; but in my view that's a matter of evidence and justification – not jurisdiction. I'll explain further. The starting point or "lodestar" of the RMA is set out in its purpose clause, section 5:
section 5 Purpose (1) The purpose of this Act is to promote the sustainable management of natural and physical resources. (2) In this Act, sustainable management means managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural wellbeing and for their health and safety while— (a) Sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and (b) Safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and (c) Avoiding, remedying, or mitigating any adverse effects of activities on the environment.

Basically, everything in the Act comes back to this provision, along with the other principles set out in Part 2 of the Act. It effectively defines the functions of territorial authorities and therefore their jurisdiction to include objectives, policies, and rules in district plans (ss31, 74, and 79). Now, section 5 has a number of important components. First, section 5(1), has 3 main parts: - “promote” - “sustainable management” - “natural and physical resources”. For present purposes, the interesting part is "sustainable management". The other two are obvious: - "natural and physical resources" are defined broadly as including "land, water, air, soil, minerals and energy, all forms of plants and animals (whether native to New Zealand or introduced), and all structures". - "promote" sets out the aspirational nature of the purpose. In terms of the section 5(2) definition of "sustainable management", it is often divided into two functions:- the management function (the bit before the "while"); and - the ecological function (the bit after the "while"). In rudimentary terms, the provision directs that the "use and development" (and, oddly "protection") of natural and physical resources be managed to allow for people and communities to provide for their (various) "well-beings" while ensuring that certain ecological matters addressed. There's some academic dispute about the meaning of the term "while", particularly whether it's a co-ordinating conjunction or a sub-ordinating conjunction. As one person put it "[Whether] developmental or environmental interests should be balanced, or whether the satisfaction of what are environmental bottom lines … is a pre-requisite to any development being permitted" (Harris, 1995). The prevailing view at the moment seems to be the former; an "overall broad judgement" is applied and positive outcomes in terms of people's wellbeing etc may be used to justify non-compliance with so-called environmental bottom lines. I suspect, though, we haven't seen the end of this debate. But the main point is that the purpose provision clearly contemplates the achievement of many "anthropocentric" – human-centred – elements; it's just not about protecting "environment" or "ecological" matters. The management function identifies the importance of ensuring social, economic, and cultural wellbeing (although, the language suggests a neo-liberal, laissez-faire conception, where people themselves – not the management or regulation – are empowered to achieve well-beings). The so-called ecological function or environmental bottom lines are surprisingly anthropocentric too: - Paragraph (a) – or the intergenerational element – frames the desire for sustainability in terms of the needs of future generations, ie it's principally about people. - Paragraph (b) is about the intrinsic ecological value; people are irrelevant here. - Paragraph (c) refers to avoiding, remedying, or mitigating adverse effects on the environment. That may look like an ecological focus, but the definitions make it clear that the environment and this provision also incorporates anthropocentric concerns. Section 2 defines "environment" as follows:

"Environment includes— (a) Ecosystems and their constituent parts, including people and communities; and (b) All natural and physical resources; and (c) Amenity values; and (d) The social, economic, aesthetic, and cultural conditions which affect the matters stated in paragraphs (a) to (c) of this definition or which are affected by those matters."

Again, people and communities figure prominently, along with social, economic, and cultural conditions or wellbeings. That's no surprise, though; when you think about it, much of our present RMA regulation is nakedly about (often, solely) people's wellbeing, particularly where it relates to "aesthetics" etc.

Similar points are made by the leading text in this area, including recognition that the RMA does address socio-economic matters (Nolan, 2005):

"Although the RMA may be regarded as first and foremost an environmental statute not designed to comprehend social purposes, this view is not without its critics. [T]he RMA does address social and economic matters in certain respect including, for example, the issue of inter-generational equity which is acknowledged in s 5(2)(a)."

Further:

"There can be no doubt that the Act is concerned with economic effects but the manner in which such effects are to be taken into account is complex and depends in part on the nature of the economic effects which are at issue. [Referring to the provisions I have just mentioned] Plainly, economic effects will be important and relevant in the preparation of policy statements and plans which are guided by Part II."

In simplistic terms, therefore I think it is relatively easy to construct an argument that regulation of developments for the purpose of ensuring affordable housing is within the purview of the RMA.

The development of housing involves the use of "natural and physical resources", namely land and structures. Therefore the RMA instructs that the sustainable management of those natural and physical resources should be promoted, through the control of the use of those natural and physical resources.

Is requiring the construction of affordable housing as part of those development promoting the sustainable management of the use of those resources?

Well, in terms of the management function, the construction of large developments may affect some people's socio-economic well-being; people from in lower social-economic backgrounds will not be able to afford to live in those areas. Of course, the development is likely to also affect the socio-economic well-being of others positively. But the point is that, under the management function, we have both positive and negative effects relevant to the overall broad judgement under s5(2).

Moving to the ecological function, this same disenfranchisement of some people from affordable housing is relevant to the inter-generational equity element (s5(2)(a)) because the profile of housing may not meet the housing needs of future generations. Under the environmental effect element (s5(2)(c)), the creation of this particular types of housing has an effect on the environment because it affects people and communities and their socio-economic conditions in the same way.

Of course, this simply identifies the relevance of socio-economic outcomes to the equation. It does not suggest they dominate. A judgement needs to be made. But that's my point. As a matter of jurisdiction, there effects are relevant to RMA regulation and the RMA is designed to provide mechanisms for these judgements to be made.

The RMA does not give local authorities carte blanche to make such rules though. The RMA requires they be justified through the consultative and deliberative processes. Most relevantly, any proposed regulation must survive the section 32 evaluation of alternatives, benefits, and costs:

s32 Consideration of alternatives, benefits, and costs (1) In achieving the purpose of this Act, before a proposed plan, proposed policy statement, change, or variation is publicly notified, a national policy statement or New Zealand coastal policy statement is notified under section 48, or a regulation is made, an evaluation must be carried out by [certain decision-makers]. (2)A further evaluation must also be made by [at certain times].(3) An evaluation must examine— (a) the extent to which each objective is the most appropriate way to achieve the purpose of this Act; and (b) whether, having regard to their efficiency and effectiveness, the policies, rules, or other methods are the most appropriate for achieving the objectives. (3A)… (4) For the purposes of the examinations referred to in subsections (3) and (3A), an evaluation must take into account— (a) the benefits and costs of policies, rules, or other methods; and (b) the risk of acting or not acting if there is uncertain or insufficient information about the subject matter of the policies, rules, or other methods. (5) The person required to carry out an evaluation under subsection (1) must prepare a report summarising the evaluation and giving reasons for that evaluation.(6) The report must be available for public inspection at the same time as the document to which the report relates is publicly notified or the regulation is made."

(Note particularly how section 32(3)(a) refers back to the section 5 purpose.)

This is where, in my view, the real action is. Is direct regulation of this effect, ie requiring developers to provide affordable housing as part of a development, the most appropriate means of addressing this problem? It might be. It might not be. But the RMA sets up a process and standard for that deliberation. Importantly, that requires an assessment of the evidence on the issue.

In my view therefore the present legislation allows these issues to be progressed and justified, without any need for further legislation or amendment.

As an aside, there's also nothing to stop the government making affordable housing a national issue, rather than waiting for local authorities to move on the issue. The RMA contemplates the expression of national priorities through National Policy Statements. This has a flow-on effect into local authority plans and decision-making. I won't go into the mechanics of that but in my view the government could have driven this issue by simply promulgating a national policy statement on the issue.

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Course Outline

Lord Justice Lawton in Maxwell v Department of Trade and Industry [1974] 2 All ER 122 said:

"From time to time ... lawyers and judges have tried to define what constitutes fairness. Like defining an elephant, it is not easy to do, although fairness in practice has the elephantine quality of being easy to recognise. As a result of these efforts a word in common usage has acquired the trappings of legalism: 'acting fairly' has become 'acting in accordance with the rules of natural justice', and on occasion has been dressed up with Latin tags. This phrase in my opinion serves no useful purpose and in recent years it has encouraged lawyers to try to put those who hold inquiries into legal straitjackets.... For the purposes of my judgment I intend to ask myself this simple question: did the [decision-maker] act fairly towards the plaintiff?"


This course examines the elephantine concept of fairness in the law, along with other contemporary legal issues.

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