Government housing agency Kāinga Ora has shut down claims of anti-competitive behaviour over its decision not to fast-track Winton’s 4400 home Sunfield development in Papakura.
Kāinga Ora opted not to fast-track the development under the Urban Development Act (UDA) in November 2021, then Housing Minister Megan Woods declined to have it assessed in April 2022.
Fast-tracking through the Specified Development Project approval process can help speed up developments that might have otherwise struggled because of funding constraints or needing collaboration between multiple parties.
To date, these powers have only been applied to its own projects.
NZX-listed Winton launched legal action in the Auckland High Court in October alleging Kāinga Ora refused to use its powers to facilitate private sector-led property developments, reserving those powers for its own benefit, putting it in breach of the Commerce Act.
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Winton said Kāinga Ora had said it was too busy to consider new applications while actively processing its own, some in a similar area to Sunfield.
The company was seeking substantial damages as well as consideration under the UDA, though it acknowledged the court case could go on for years.
Filing its defence, Kāinga Ora said it didn’t have confidence that fast-tracking was suitable for the development.
General manager for urban planning and design Katja Lietz said the agency had done many large developments, amounting to hundreds of millions of dollars, with Winton and gave the Sunfield proposal serious consideration.
“There always has to be a good reason to depart from usual planning and consenting requirements, and we couldn’t see that with the information Winton provided us.”
It said Winton had not briefed Auckland Council, Waka Kotahi or nextdoor neighbour Ardmore Airport on its proposed development.
The council had publicly expressed concerns about flood risk at the site and Ardmore Airport users were concerned about aircraft noise sensitivity.
Kāinga Ora said Winton refused an offer for a joint meeting with the council to discuss the project.
The agency also took the opportunity to discredit other claims made in the media relating to its relationship with Winton.
One such claim centred on Ferncliffe Farm, a 95-hectare parcel of land on the outskirts of Tauranga the agency purchased for $70.4m late last year.
It said it was not the highest bidder for Ferncliffe Farm, which Winton had also wanted to buy, and said it understood its bid was accepted because it had guaranteed payment in advance of development.
In August, The New Zealand Herald reported Kāinga Ora had received two valuations for the property, both of which were likely to result in an artificially high price.
In that same article Winton executive director Chris Meehan claimed the agency “significantly” outbid 11 other developers with practices aimed at driving other developers out of the market.
“Ferncliffe was purchased to address a need for affordable housing in Tauranga, over and above what the market has been providing,” said Lietz.
She said while the agency was buying land to increase housing supply, over the previous five years its land acquisitions accounted for less than 0.3 percent of all residential/lifestyle land purchases.
In response to the agency’s statements, Meehan said, “This is a government that says it wants to increase the supply of housing, but it spends an estimated $10,000 a day to hire a legal team that includes two Kings Counsel to fight against a private developer having access to the UDA legislation that would enable it to increase the supply of housing at no cost to the taxpayer.
“And then they wonder why we have exploding government debt, a cost of living crisis and a housing crisis.”
Litigation
Meehan and his property development company aren’t shy when it comes to the courtroom.
In its product disclosure document issued before its December 2021 IPO, the business forecasted for administrative costs of $10.9m in its 2022 financial year, but it ballooned to $13m because of higher legal fees.
In October, Meehan told Newsroom that being in and out of the courtroom was the reality of being a property developer in New Zealand when dealing with the Resource Management Act, with large projects often contested and facing costly environment court hearings and subsequent appeals.
“We wish it wasn’t the case but it’s just the way it is. It’s not specific to Winton, I don’t think it’s ever changed, it just happens that now we’re a public company people seem to be more interested in it.
“It’s a bit like if you’re an earthmoving company you need to use a digger to move the earth as part of your fundamental toolkit, if you’re a property development company you need lawyers and the courts.”
In a similar vein to its Ferncliffe Farm comments, in September last year, Winton filed for a judicial review of an Overseas Investment Office Decision allowing a rival property developer to purchase land in Havelock North it also wanted to buy.
The review was shut down on all six grounds claimed.
The 42-hectare parcel of land was sold to CDL, also listed on the NZX, for $58m. The second highest bidder had offered $49m, while Winton had offered $32m conditional or $25m unconditional for the land.
