The Government’s Granny Flat Policy and Reverse Sensitivity Overlays

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Environmental / Resource Management

Exploring the Fine Print: The Government’s Granny Flat Policy and Reverse Sensitivity Overlays

Initial reactions suggest that there is widespread acceptance of the Government’s proposed changes to the Resource Management Act 1991 and the Building Act 2004 to make it easier to build granny flats. The Government’s Discussion Document, titled Making it easier to build granny flats, outlines the proposed changes.  In this article, we examine the detail in the Discussion Document and identify that in certain situations, reverse sensitivity overlays will impose unnecessary restrictions and undermine the objective of the granny flat policy.

But what exactly is a granny flat, and will granny flats be a useful tool to help address the issues associated with soaring housing costs? 

The term “granny flat” is defined in the Collins English Dictionary to mean “self-contained accommodation within or built onto a house, suitable for an elderly parent”.  The history of the concept goes back to the common law right of jus mariti.  In an article published in the Otago Law Review, the Hon John Priestley explained that the common law right of jus mariti was developed during the 13th century.  It gave the husband on marriage the right to control the wife’s property and enjoy its fruits. “If a husband predeceased the wife, the wife, during her widowhood, enjoyed the dower (shades of the dower house in “Downtown Abbey”)…”. The term “dower house” is defined in the Collins English Dictionary to mean “a house set apart for the use of a widow, often on her deceased husband’s estate”.  In 1884, the New Zealand Government passed the Married Women’s Property Act to give married women the right to own and manage property.  As society continues to change – the terms “dower house” and “granny flat” are becoming increasingly outdated.  However, the concept of a small self-contained house as a secondary or ancillary residence to the principal residence does have the potential to be used as a tool to help address the issues associated with soaring housing costs for the vulnerable members of our communities.  The Discussion Document notes that high housing costs have a greater impact on retirees on fixed incomes, Māori, Pacific people, and people with disabilities.

The Discussion Document has used the term “granny flat” because it is a commonly used term. A closer examination of the detail shows that the policy’s focus is on the term “minor residential unit” or “MRU”. The intent of the policy is to “enable small, detached, self-contained, single storey houses for residential use.” The term “minor residential unit” is defined in the National Planning Standards as “a self-contained residential unit that is ancillary to the principal residential unit and is held in common ownership with the principal residential unit on the same site”.

 The proposed changes to the Building Act to make it easier to build MRUs include:

  • A new schedule in the Building Act to provide a building consent exemption for MRUs.
  • The use of licensed practitioners and specific Building Code solutions.
  • A notification system to inform councils of new dwellings.

The changes to the Resource Management Act will be implemented through a national environmental standard (NES) to permit MRUs in rural and residential zones without a resource consent.  Many district plans around the country already allow MRUs.  However, there are different permitted activity standards across the different district plans.  The proposed NES will create nationally consistent permitted activity standards for MRUs.  The permitted activity standards identified in the Discussion Document include:

  • A maximum internal floor area of 60 square metres.
  • One MRU per principal residential home on the same site.
  • The MRU is to be held in common ownership with the principal residential unit on the same site.
  • A restriction on the area of a site that can be covered by buildings through a maximum building coverage percentage in residential zones and a requirement for permeable surface areas to enable water to filter naturally into the ground.
  • Setback requirements in residential and rural zones.

The Discussion Document specifically states that the policy proposal is to not override the matters of national importance set out in section 6 of the Resource Management Act.  The section 6 matters of national importance include matters relating to the protection of the natural environment, the relationship of Māori and their culture and traditions with their ancestral lands, water, sites, waahi tapu, and other taonga, historic heritage, and significant risks from natural hazards.  District plans use overlay provisions to manage the protection, maintenance or enhancement of these matters of national importance. Overlays trump zone provisions and they generally apply more restrictive rules than zone provisions. Therefore, if a site is caught by an overlay, it may still be necessary to obtain a resource consent for a MRU, even if the permitted activity standards have been met. This is appropriate in the context of the section 6 matters of national importance.  However, overlay rules can also come into play for other resource management matters such as reverse sensitivity.

The concept of reverse sensitivity was discussed in an article entitled “Reverse Sensitivity – The Common Law Giveth, and the RMA Taketh Away by Pardy and Kerr, which was published in 1999 in the New Zealand Journal of Environmental Law.  Under the Resource Management Act, “new uses may be prohibited or limited on the ground of reverse sensitivity in order to protect established uses from having to modify their operations.” Reverse sensitivity is “the legal vulnerability of an established activity to complaint from a new land use.” The practice of restricting new activities on the basis of reverse sensitivity has been criticised for compromising private land rights. The legitimate scope of reverse sensitivity provisions is a question of fact.

An example of an overlay being used for reverse sensitivity is the Aircraft Noise Overlay in the Auckland Unitary Plan. In Independent News Auckland Ltd & Anor v Manukau City Council (2003) 10 ELRNZ the Environment Court said:

While evidence seems to indicate that public pressure is more volatile and vociferous if there is a marked or proposed change in airport operations, nevertheless we find there to be a clear relationship to the number of people exposed to high aircraft noise and the introduction or increase in restraints on airport operations.

The finding by the Environment Court was on “high aircraft noise” and the facts related to a development of 349 household units on a Business 5 zoned site. The Aircraft Noise Overlay in the Auckland Unitary Plan has “High Aircraft Noise Areas” and “Moderate Aircraft Noise Areas” within residential zones.  The overlay rules for new dwellings in a residential zone in the Moderate Aircraft Noise Areas for Auckland International Airport require a resource consent where: (a) the average density exceeds one dwelling per 400m2; or (b) the maximum density controls and/or minimum site size within the area included within 1412 Flat Bush Precinct in the moderate aircraft noise area are exceeded. Therefore, in certain situations, the permitted activity standards for MRUs in residential zones will be trumped by the reverse sensitivity overlay in the Moderate Aircraft Noise Areas within the residential zones around Auckland International Airport. There is no evidence to indicate that MRUs in residential zones in Moderate Aircraft Noise Areas will result in changes to airport operations. Importantly, aircraft noise in these areas of the residential zone is “moderate” not “high” and any MRU in these areas will require there to be an existing residential house on the same site.

In 2016, California adopted several laws to facilitate the development of accessory dwelling units as secondary units on residential parcels to help with California’s housing affordability problem. The reforms in California have been touted as a success and a study of the California reforms identified that accessory dwelling units “are typically permitted on parcels with relatively good access to jobs”. Research has also suggested that since 2018 “27% of completed ADUs have qualified as low-or moderate-income units.”

Given the housing pressures in South Auckland, it would be an appropriate option for the granny flat policy to include a specific exemption to the Aircraft Noise Overlay in the Auckland Unitary Plan to enable MRUs to be a permitted activity in residential zones that are within the Moderate Aircraft Noise Area.  Such an exemption would remove unnecessary restrictions and it would help to ensure that the objective of the granny flat policy is not undermined.

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