Inclusionary Zoning

Posted November 12, 2021

There has been a lot of coverage in the press about high property prices. Prices are increasing around the country at record levels, and solutions are being sought for slowing growth and making housing more affordable. Here we look at one potential solution, its implications, and next steps.

Queenstown has consistently featured as a location attracting top property prices. In response, the Queenstown Lakes District Council (Council) recently consulted on its draft Queenstown Lakes Home Strategy and Action Plan. This plan sets out its strategic direction and vision for housing in the district over the next ten years. While the strategy itself directs Council rather than individuals, the consultation includes potential planning methods which may achieve the outcomes set out in the Action Plan. The planning method preferred by Council is inclusionary zoning. 

What is inclusionary zoning? 
Inclusionary zoning is a general term for a regulatory method that requires a proportion of new developments to be affordable. There is a range of ways to achieve this, but Council is considering making it mandatory through the inclusion of objectives, policies and rules in the Proposed District Plan. The rules as drafted would currently require: 

  • At the time of subdivision, in the Residential Zones the requirement to either provide a monetary contribution equal to 5-10% of the sales values of serviced lots, or the requirement to transfer 5-10% of serviced lots, depending on the size of the development and in other specified zones that provide for residential activity, a requirement to provide a monetary contribution equal to 1-4% of the sales value of the lots;
  • At the time of development of new or relocated residential units, the requirement to provide a monetary contribution ranging from $75 to $150 per square metre of floorspace increase (dependent on the property zoning) or 2% of the estimated sale value of the additional residential unit/s;
  • Where a contribution has already been made at the time of subdivision, a “top-up” contribution for residential units will still be required. 
    Any contribution would be given to a certified community housing provider, like the Queenstown Lakes Community Housing Trust, to manage for the purposes of affordable housing. 

Failure to comply with the contribution rules would lead to a requirement for resource consent. Council could then impose resource consent conditions to meet the affordable housing objectives and policies. 

How does this impact me? 
While the above provisions are only draft at this stage, and the numbers may change, they do give a good indication of Council’s intentions. 
If you’re planning a residential subdivision or residential development in the future, you may want to consider how the inclusionary zoning contributions could affect your proposal. The inclusionary zoning contributions are in addition to any development contributions that are payable. 

What happens next? 
Council is currently compiling the results of the informal feedback on the draft provisions. Following this, it will likely move forward with final drafting for statutory notification to include the provisions in the Proposed District Plan. While the rules will not have effect at notification, Council has the ability to consider the affordable housing objectives and policies from the date of notification when making decisions on resource consent applications. It could therefore impose conditions (depending on the type of application). 

We’ll be watching out for further action in this space. 

Contact us on 03 409 2258 to discuss the potential impacts of inclusionary zoning on your development. We can also advise you if you’re interested in submitting on any inclusionary zoning proposals in the future.

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