Property development company Winton Land alleges Kāinga Ora is engaging in anticompetitive behaviour by refusing private developers fair access to fast-track powers and paying well above market rate for land.
Winton Land Limited, and its subsidiary Sunfield, filed a case at the Auckland High Court on Wednesday alleging Kāinga Ora engaged in anticompetitive behaviour by refusing to fast-track their $4b Sunfield development in Papakura.
Winton Land chief executive Chris Meehan declined to state the amount of money being sought, but said it was significant.
Meehan said the company wanted a declaration from the court that Kāinga Ora’s conduct was unlawful and in breach of the Commerce Act, and for the agency to reconsider using fast track consenting powers for Winton’s Sunfield development.
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The Sunfield development was envisioned as a privately-funded car-free master planned development in Papakura with 4400 homes, three retirement villages, and 250,000 m2 of commercial and education space, a renewable solar energy network, 22.8 hectares of open spaces and an autonomous electric shuttle fleet.
However, Kāinga Ora refused a request to make the project a specified development project (SDP) in November 2021 and Housing Minister Megan Woods said she would not ask Kāinga Ora to look at the proposal again.
The Urban Development Act (UDA) introduced the ability for Kāinga Ora to authorise SDPs and fast-track consenting processes for projects involving private developers and iwi.
SDPs effectively create a partnership between Kāinga Ora and the developer or iwi where they worked through a different consenting process to the one in the Resource Management Act (RMA).
However, Kāinga Ora also had the ability to fast-track consents for its own developments, which is where Meehan said the organisation was being anticompetitive.
Katja Lietz, general manager urban planning and design for Kāinga Ora said the organisation was limited in what it could say about Sunfield now that it was before the courts.
However, Lietz said establishing an SDP under the UDA should not be seen as a "fast-track" process.
“The SDP process is designed to overcome barriers to development in areas where there are complexities, such as multiple landowners and a need to coordinate development across numerous parties in collaboration with local authorities and other project partners."
Meehan said Kāinga Ora’s developments included large numbers of units that would be put up for sale on the private market, making it an active competitor with private developers – and allowing it an unfair competitive advantage because it had better access to fast-track consenting processes.
“Even on the parcels of land [Kāinga Ora] are in the market buying, they’re for a mix of on-market, affordable and social housing – they’re not just for social housing.
“They’re a big competitor now to the development industry because they’re the biggest provider of on-market housing in New Zealand.”
A Kāinga Ora protocol prevented the Crown agency from bidding more than 5% above market value for land, however the Urban Development Act gave it the power to re-zone land and increase the value of that land significantly.
Meehan said this meant Kāinga Ora was able to pay a premium for rural land based on valuations factoring in that a rezoning would occur.
Rezoning land from rural to residential could double its value.
Meehan said private developers had no such certainty they would be able to get such a zone change through so were unable to match this level of bidding.
Leitz said Kainga Ora rejected the claim that they “repeatedly overpaid for land purchases”.
“Winton should provide evidence to substantiate these claims."
The evidence Meehan cited was Ferncliffe Farm, near Tauranga, where he said Kāinga Ora outbid 11 developers with a bid based on a land valuation that took into account a re-zoning which had not occurred yet.
Meehan said overpayments on this scale simply enriched landowners at the expense of taxpayers and drove up land prices for everyone.
In rejecting Winton’s application, Kāinga Ora highlighted issues around flood risk and questions about whether the development’s aims aligned with its own.
The agency also said there was a “misalignment in expected timeframes” between Winton and Kāinga Ora which Meehan interpreted as meaning Kāinga Ora did not have time to process their application.
“I was surprised at that, and I guess we were more surprised to see five minutes later they were in the market outbidding the private sector for land parcels,” Meehan said.
“They’re not too busy to process their own applications under the UDA for the parcels of land that they’re involved in.”
Lietz said Kāinga Ora did not reject the Sunfield proposal because the agency was “too busy” and highlighted publicly available reports on the issue which highlighted issues like flood risk.
Meehan said Winton had already done work around the flood risk, but had never been given the opportunity to present the work because its application had never been considered through the fast track consent process.
“They’ve never seen our engineering reports. They’ve never seen our infrastructure reports. They’ve never seen our iwi consultation reports.
”They’ve never seen anything because they’ve never agreed to process our application.
”For them to speculate that flooding might be an issue is simply erroneous because they’ve never looked into it.”
Lietz said just because Kāinga Ora did not select the Sunfield development for assessment as a potential SDP did not mean the project could not go ahead.
Meehan said a development of the scale of Sunfield was impossible under the Resource Management Act and would have taken more than 10 years to make its way through Auckland Council’s usual consenting processes.
“First off, there’s not enough processing capacity at Auckland Council to deal with a project of this scale.
“Problem number two is we have designed an entire suburb that is very light on cars. Nine out of 10 houses don’t have cars.
“The RMA is only equipped to deal with the good old normal subdivisions and roads and garages.”
National’s housing spokesman Chris Bishop said the UDA was passed to enable developments like Sunfield.
“Ministers need to explain why they have said no to fast-tracking over 4000 new homes that would have created thousands of jobs.
“The excuse that Kāinga Ora is ‘too busy’ isn’t good enough. What exactly are the almost-2000 extra bureaucrats at the agency doing?”
Meehan said Winton would have fully-funded the cost of infrastructure at Sunfield and paid developer contributions as well.
Winton Land Limited is listed on the New Zealand Stock Exchange and has a market capitalisation of $700m.
“We’re not asking either the Council, or Kāinga Ora, or the Government, for one red cent, we’re not asking for a penny,” Meehan said.
“We’re saying we have the balance sheet, we have the money available, so we’re not asking for a drain on the public purse.
“All you have to do is process the application, that should not be too much to ask.”
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