Land aggregation and the role of government

While there will always be a place for both green and brownfield development, for years the ledger has been in favour of greenfield due to the risks and costs associated with brownfield. But with escalating costs, aging infrastructure and affordability concerns, we’ve seen a desire to move towards more intensification within our cities. Our national land development manager, Campbell McGregor looks at one of the key roles central and local government play in urban intensification and how the proposed changes to the Public Works Act can aid land aggregation.

With escalating costs, aging infrastructure and affordability concerns now more than ever there is a desire to move towards more intensification within our cities. However, in order to achieve sufficient brownfield development, supply needs to more closely align with demand.

One of the key challenges we face here in Aotearoa is sufficient availability of brownfield land as well as adequate aggregation of the land to allow development to occur.

While pockets of redevelopment are occurring, it’s often at the expense of valuable existing greenspace. We see numerous privately-owned community facilities like golf clubs and racecourses experiencing rising costs and some are electing to leverage their land for redevelopment as a means to fund their ongoing existence.

Another challenge is ensuring that following intensification, there is adequate amenity to provide for more people living closer together. There is generally a greater opportunity to provide for both intensification and good urban amenity ie. to achieve good urban development outcomes, when dealing with larger land parcels, as opposed to fragmented, smaller parcels.

This is where both central and local government has a role to play. Either through broader planning instruments like planning for public transport corridors, or through its own larger-scale projects. 

While there is ample opportunity to work with the private sector, private developers on their own will typically find it a timing, affordability and coordination challenge to aggregate multiple small land parcels into larger parcels with the necessary scale to create better master planned urban development outcomes that we desire. 

This is where government plays a key role and is an important function of government.

While public sector government agencies have traditionally been able to fall back on the Public Works Act (PWA), which provides a pathway for the compulsory acquisition of land for public works, this is a last resort measure for many government agencies due to the cost, perceptions and adversarial nature of the process. The complexity of the PWA process, and the “high bar” that must be met to justify the need to acquire the land in the first place, makes acquisition difficult and also limits an agency or council’s ability to forward plan for future needs.

One example of the limitations of the PWA is the Waka Kotahi Western Ring Route and upgrades to SH16. Land was acquired in relation to the Waterview tunnel project and related upgrades to SH16. In many cases, boundary adjustments cut existing properties in half to allow the widening to occur with significant costs expended to “protect” the property from noise and other such effects resulting from the project. Even before the construction of additional lanes on SH16 was completed for this project, planning was commenced to widen the corridor again to allow for the Northwest Rapid Transit corridor which requires further land taken to accommodate the corridor.

This type of short-term approach happens time and time again resulting in significant costs to key infrastructure projects but also poor outcomes for homeowners along such corridors.

While there is no large-scale application of the PWA for urban development regeneration, the Kāinga Ora LEAD Alliance in Auckland’s Northcote and Mangere (where Harrison Grierson is a participant) is one example where the benefits of large-scale land aggregation can be seen. Admittedly, while the majority of the aggregation was already Crown land, this does showcase what intensification benefits can be achieved with large land parcels and public sector involvement. 

There is also an argument this aggregation could have gone even further to include what can be termed in the industry as ‘’missing teeth’’ or the purchase of additional privately held properties. Some of the benefits even with this large aggregation still resulted in significant cost uplifts simply to maintain access through construction periods to one or two houses.

The most recent Government Policy Statement on Land Transport (2024) identifies taking a strategic approach to land acquisition and specifically route protection. This, in combination with the pending update to the National Policy Statement on Urban Development (expected to be released later this year) which will require councils to provide land for 30 years of future housing supply, offers the opportunity to look at the bigger picture and to provide for different land acquisition options either through the Public Works Act or another mechanism. It could include a combination of compulsory acquisition, buy and lease back, or agreed future purchase options on property to better enable the aggregation of property for both urban regeneration (and intensification) and core infrastructure outcomes.

It may then also enable urban amenity improvements to provide better overall urban development outcomes.

I note also in recent media announcements the government proposes to establish a list of nationally and regionally significant projects that will be compiled with bipartisan political input with a view to then, hopefully, being implemented over time with enduring bipartisan support. This may be somewhat wishful thinking but is a laudable goal. In combination with the current review of the Public Works Act, this would allow for longer-term decision-making for better overall social and economic outcomes.

This article is part of a series where we look at brown and greenfield development, the role of government and the infrastructure that supports it all.