Friday, 15 Oct 2021

Rotorua housing crisis: Subdivision unlikely to go ahead after 2-year wait for resource consent

Half of the 101 subdivision lots consented in Rotorua in the past 17 months are unlikely to progress further as a major development looks likely to end after consenting delays.

The real estate agent involved in the Ashworth Villas development says it took two years to get consent and delays in the Rotorua Lakes Council consenting process are “frustrating”, especially given the city’s “critical” housing situation.

The council, however, says it is committed to supporting housing developments to address the district’s chronic housing shortage and is investing in infrastructure.

And the approval of a District Plan Change to facilitate housing at Pukehangi could see subdivisions like the 37-lot Sunny Downs development, which has been fighting for the green light since 2014, fast-tracked.

Rotorua Lakes Council data obtained by the Rotorua Daily Post showed there were 693 lots across the major subdivisions that have been through or are going through the consent process between October 2019 and March 2021.

In that time, three new subdivisions were granted consent – Ashworth Villas (50 lots), Ian St (26 lots) and 40 Pukehangi Rd (16 lots). One subdivision, Collie Drive, was granted consent for nine lots on top of the 33 already approved.

The 37 lots at Sunny Downs, off Pukehangi Rd, had not progressed through the consent process any further since September 2019when the Rotorua Daily Post first requested these figures.

But there is hope a just-approved district plan change for Pukehangi would allow the developer to finally get that subdivision across the line.

The developer said the main issue was stormwater.

Meanwhile, 76 lots, making up two subdivisions at Tarawera Rd (40 lots) and Vaughan Rd (36 lots) have had titles issued.

Another 226 lots, from Fryer Rd (17 lots), Wharenui Rd (179 lots) and Baxendale Stage 2 (30 lots) have civil works under construction.

Applications for six subdivisions, comprising 220 lots, are being processed.

In addition to the 693 lots undergoing the consent process, 322 lots are in confidential pre-lodgement discussions.

The data does not include minor subdivisions with just a few lots or people subdividing a section.

Bayleys Rotorua branch manager Beth Millard, a real estate agent who worked with Ashworth Villas and other subdivisions, described the consenting situation as “frustrating” and said developers were struggling to get past the council’s red tape.

“We are more than 12 months post-auction at Baxendale and we still don’t have titles.

“It’s not just hard for developers trying to get these subdivisions over the line, there are buyers who have put their lives on hold and are not able to build.”

Millard said the situation made her “really sad” as Rotorua faced a “critical situation” with its low housing stock.

“When it takes two years to get consent, like it did for Ashworth Villas, developers lose confidence. We don’t know what the market’s going to do in that time so it becomes too risky for developers.

“In the case of Ashworth Villas, it’s not likely to go ahead any more, it just took too long to get consent.”

Millard said Rotorua’s housing market was “really hot” but supply and demand was the driver and the city was running out of supply.

“We are losing potential developers because they look to Rotorua as an option then see that we have no land and they find out how long it takes with the council and they just walk away.”

Ashworth Villas developer Ryan Holmes said he was looking to sell the land once pegged for the upmarket development, and there were a couple of offers on the table.

He said Ashworth Villas would not likely go ahead, despite gaining resource consent, because it took two years and “a heck of a lot of money” to reach that stage in the process.

“Three times we had to extend contracts and eventually we had to let buyers out of it.

“What it boils down to is a lack of council infrastructure and forward planning. There are deficiencies in the council network and that’s a big reason why we’re seeing hold-ups at several chunks of land around town.

“It is disappointing. Stormwater has been cited by a lot of developers [as an obstacle] so if that was fixed, I think we would see more progress.

“The problem is that isn’t a quick fix and it’s not a cheap fix.”

Holmes said the situation with Ashworth Villas had not deterred him from developing subdivisions in the future but “it was hard to make developments stack up” in Rotorua.

Meanwhile, the 26 lots on Ian St, part of the Mountview Green development which also includes 60 properties on Frank St, was granted resource consent at the beginning of this month.

Developer and director of Rotowhare Limited Marcus Jacobson said he had been working with Rotorua’s council for a relatively short amount of time and had so far found the planning stage “fantastic”.

“Every council has its own way of operating and the thing we’ve found working with this council is that they are excited we’re coming in and picking this project up.

“This is a project of scale and we are working with the council to make sure they know we are a credible developer. It can take time to build that relationship so they know we’ve been doing everything properly.”

Jacobson said he was keen to look for more Rotorua land to develop.

“We are here for the long term so we want to make sure we do everything right so when it comes to the next consent the council knows we’re credible and will be here for the duration.”

He had not had any issues with stormwater infrastructure in his project.

The Rotorua Lakes Council’s operations group manager, Jocelyn Mikaere, said the council had to balance a desire to get more housing quickly, with legislative requirements.

“We accept that can be frustrating for developers who just want to be able to get on with it.”

The requirements related to a responsibility to protect the environment and to the effects of developments on existing neighbourhoods and potential new residents.

“Requirements around on-site stormwater, for instance, are about mitigating possible risks such as flooding and developers are required by law to identify and mitigate the effects of their proposals and safeguard existing ratepayers.”

Mikaere said the consenting team worked extremely hard to ensure as smooth and speedy a process as possible and was open to feedback on its performance.

“[We] endeavour to work closely with developers and their representatives to minimise any delays and ensure we are getting all the information we need to process consent applications efficiently.”

The council’s infrastructure group manager, Stavros Michael, said investment in the districts’ infrastructure was ongoing and more was included in the 2021-31 draft Long-Term Plan.

“During the past year alone we have upgraded stormwater systems, including increasing capacity, in Vaughan Rd – where development is planned,stormwater on Clayton Rd, and new drinking water capacity for eastern suburbs, and we have started stormwater improvements on central (King St).

“We currently have major roading investment under way, which will also enable and support housing development, with more to come.”

He said the King St stormwater upgrade would service the Ashworth development and planning and detailed design for stormwater upgrades in the western and eastern suburbs was also well under way.

“Our stormwater master plan anticipates some $80m of improvements to help future growth. In 2020 the Government granted council $20m for infrastructure improvements to support residential growth. This included $5m for local road upgrades.”

He said there was always an issue of equity about who carried the costs of infrastructure upgrades to enable land development and developers also had to identify and address the effects of their development proposals on the community.

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