Land Covenants in Auckland and
Their Effect on Urban Development
Craig Fredrickson
July 2018
Technical Report 2018/013
Land covenants in Auckland and their effect on
urban development
Technical Report 2018/013 July 2018
Craig Fredrickson
Research and Evaluation
Auckland Council
Technical Report 2018/013
ISSN 2230-4525 (Print)
ISSN 2230-4533 (Online)
ISBN 978-1-98-856458-6 (Print)
ISBN 978-1-98-856459-3 (PDF)
This report has been peer reviewed by the Peer Review Panel.
Review completed on 11 July 2018
Reviewed by two reviewers
Approved for Auckland Council publication by:
Name: Eva McLaren
Position: Acting Manager, Research and Evaluation (RIMU)
Name: Regan Solomon
Position: Manager, Land Use, Infrastructure Research and Evaluation
Date: 11 July 2018
Recommended citation
Fredrickson, Craig (2018). Land covenants in Auckland and their effect on
urban development. Auckland Council technical report, TR2018/013
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© 2018 Building Better Homes, Towns and Cities National Science Challenge
Acknowledgements
This research was conceived of by
Dr K. Saville-Smith as part of the Architecture of
Decision-making Building Better Homes, Towns and Cities programme, funded by the
Building Better Homes, Towns and Cities National Science Challenge and developed
and executed by Craig Fredrickson, RIMU, Auckland Council.
Executive summary
A covenant is a contract or promise between parties that binds them to obligations in a
contract for a fixed period of time, or in perpetuity. Covenants ‘run with the land’, meaning
they bind owners of the land to a covenant’s condition. In recent decades they have
become a common method for developers to control how future owners of land develop
and maintain land in New Zealand (Quality Planning, 2013; New Zealand Productivity
Commission, 2015). As such, covenants create a private planning regime that is
enforceable in the civil courts (Mead & Ryan, 2012; Toomey, 2017).
Strong population growth in Auckland is expected to remain high in coming years, putting
pressure on housing supply in the region. Council’s high-level strategy, The Auckland
Plan, and the Auckland Unitary Plan seek to use both urban intensification and expansion
to supply new dwellings to accommodate the increasing population. But will property level
constraints such as land covenants affect the city’s ability to grow as and where is
needed?
Land covenants in New Zealand are commonly used in modern residential subdivisions,
which are the focus of this research. They are used as a mechanism to control land use
and development, and to create and maintain neighbourhood amenity. There has been
little research on land covenants on residential land in New Zealand, and this report seeks
to understand their numbers, location, and nature in Auckland. The effects of land
covenants include acting as a barrier to development and redevelopment, increasing
house prices and decreasing affordability, and being used to stifle competition, as a
method of social exclusion, and as a form of land control. While covenants present a
number of disbenefits to some parties, they create benefits to others, including increased
property value, and maintained or increased amenity. Land covenants are also used to
protect heritage, and for conservation purposes.
Land covenants are spread across the Auckland region, where there are 151,170 land
covenants on 96,261 titles. The land area of titles with a covenant covers 60,757 hectares
or 12 per cent of Auckland’s land area. Residential zones contain 83,068 titles that are
affected by land covenants, or 19 per cent of the total number of titles in residential zones;
these titles cover an area of 8685 hectares, 23 per cent of the total area of residential
zones. Residential zoned titles with land covenants are concentrated in greenfield suburbs
that have been developed over the last few decades. Analysis shows the proportion of
titles with land covenants in residential zones has been increasing over time. Less than 10
per cent of titles issued in the early 1980s in current residential zones had a land covenant
on them; for titles issued in 2017 it is over 50 per cent. Furthermore, over three-quarters
(86 per cent) of the covenants in residential zones are on titles that have been created in
the last 30 years. Properties in residential zones with a land covenant have commercially
Land covenants in Auckland and their effect on urban development i
feasible capacity for 13,243 additional dwellings, or 12 per cent of the total commercially
feasible capacity for all residential zones.
Centre zones contain 2529 titles affected by covenants; they cover a land area of 336
hectares, or 23 per cent of the total combined area of centre zones. In the Future Urban
zone, 897 titles have covenants or 26 per cent of the total titles in the zone. The land area
of the titles with covenants in this zone is 10,674 hectares, or 26 per cent of the total land
area of the zone. Over 5800 titles in rural zones have a land covenant or 19 per cent of the
total tiles in these zones. The Countryside Living zone has the highest number (2507) and
the highest proportion (34 per cent) of titles with land covenants of any of the rural zones.
Analysis of the data by local board area shows that Howick Local Board has the largest
number of titles with land covenants (18,261). Other local boards with high numbers are
Hibiscus and Bays (11,746) and Upper Harbour (11,414). Upper Harbour Local Board has
the highest proportion of titles with covenants with 46 per cent. Auckland’s two rural local
boards, Rodney and Franklin, each have just under 9000 titles with covenants, accounting
for 29 per cent and 28 per cent of the total number of titles in each respectively.
Covenants present a number of barriers to development and redevelopment in an urban
context. In Auckland the presence of covenants in residential areas earmarked for
intensification, or future urban expansion, will have an effect on the ability of these areas to
change. While land covenants will have an effect on urban development in the future, they
can also have a number of benefits such as providing assurance to prospective buyers on
the quality of development and neighbourhood amenity. Covenants may be a barrier to
urban development, but there are also a number of solutions that could be employed to
overcome them. These include the use of time limits or sunset clauses on new covenants,
the introduction of an easy process for those with benefits from covenants to agree to have
them modified or removed, and legislative change to allow for public planning documents
to override covenants – as is done in New South Wales.
The contents and effects of land covenants are difficult to understand, given the way
information about them is stored by Land Information New Zealand, and further research
on the topic may be required to fully comprehend their present and future impacts.
Land covenants in Auckland and their effect on urban development ii
Figure: Titles with land covenants in Auckland
Land covenants in Auckland and their effect on urban development iii
Table of contents
Executive summary .............................................................................................................. i
Table of contents ................................................................................................................ iv
1.0 Introduction .................................................................................................................. 1
1.1 Scope of this report ............................................................................................ 2
2.0 Background ................................................................................................................. 3
2.1 What is a land covenant? ................................................................................... 3
2.2 Use of land covenants in New Zealand .............................................................. 5
2.3 Land covenants in overseas jurisdictions ......................................................... 10
2.4 The effects of land covenants .......................................................................... 12
3.0 Method to identify titles with land covenants in Auckland .......................................... 18
3.1 Caveats, limitations, and notes on outputs ...................................................... 19
4.0 Analysis ..................................................................................................................... 21
4.1 Land covenants by local board ........................................................................ 22
4.2 Land covenants by zoning ............................................................................... 24
4.3 Plan enabled and feasible capacity of parcels with land covenants in residential
zones ......................................................................................................................... 30
5.0 Discussion ................................................................................................................. 34
6.0 Conclusion ................................................................................................................. 40
7.0 References ................................................................................................................ 42
8.0 Appendices ................................................................................................................ 48
Example of schedule of covenants for a residential subdivision .................. 49 Appendix A:
Number of titles, land covenants, and titles with land covenants in Auckland Appendix B:
2018, by Auckland Unitary Plan (operative in part) zone ................................................... 58
Area zoned and area covered by land covenants in Auckland 2018, by Appendix C:
Auckland Unitary Plan (operative in part) zone .................................................................. 60
National Policy Statement on Urban Development Capacity 2016: Housing Appendix D:
and business development capacity assessment for Auckland. Executive summary.
(Auckland Council, 2017) ................................................................................................... 62
Land covenants in Auckland and their effect on urban development iv
1.0 Introduction
Land covenants are a legal mechanism that can be used to control land, what it can
be used for, and can stipulate the types of development that can occur on it.
Covenants placed on land either restrict or require a land owner to do or not do
something, depending on the terms of the covenant deed. In New Zealand over the
last few decades, land covenants have become a popular way for developers to
control land use, building style, and other aspects of neighbourhoods, as a way to
increase or maintain perceived value (Mead & Ryan, 2012; Rikihana Smallman,
2017; Land Information New Zealand, n.d.). Land covenants have also been a
popular mechanism in New Zealand to protect for conservation land which is
privately owned, through the Queen Elizabeth the Second National Trust (QEII Trust)
(Saunders, 1996), through the Reserves Act 1977, or by consent notice under the
Resource Management Act 1991 (RMA).
Land covenants play an important but often hidden role in our planning system, with
their abundance and impacts little understood. In New Zealand there is little evidence
to understand how land covenants, and other barriers, slow down the delivery of
housing to the market (Johnson, Howden-Chapman, & Eaqub, 2018). Land
covenants in effect are private planning rules that are enforceable through civil courts
(Mead & Ryan, 2012), and at times do not match, or are counter to, both strategic
plans and the district planning rules.
Auckland has had strong population growth in the last decade, with it increasing by
180,700 people to a total of 1,657,200, between 2008 and 2017 (Statistics New
Zealand, 2017). The city’s population growth is also expected to remain strong into
the future, with the region projected to accommodate 60 per cent of the country’s
population growth to 2043 (Ross, 2015). Rather than keeping pace with population
growth, dwelling growth in the city has not been as strong, creating what is being
widely called a “dwelling shortfall” (New Zealand Government & Auckland Council,
2013; Alexander, 2015). In order to overcome the shortfall, and increase dwelling
growth, Auckland Council’s spatial plan (known as The Auckland Plan), set out a
development strategy that built on legacy regional planning approaches that were
based on the compact city model. The plan sought to accommodate 400,000 new
residential dwellings, or between 60-70 per cent of projected dwelling growth to 2040
in the existing urban area (as at 2012) (Auckland Council, 2012). A new updated
version of the spatial plan (still in draft form, and known as Auckland Plan 2050)
continues the strategy of both urban intensification and expansion (Auckland Council,
2018). Given the importance of both the intensification and the expansion of
Auckland’s urban area to increase dwelling numbers, will constraints at the individual
Land covenants in Auckland and their effect on urban development 1
property level, such as land covenants, affect the city’s ability to grow as and where
is needed?
New planning rules enabled by the Auckland Unitary Plan came into effect over most
of the city in November 2016. The plan indicated that many areas that are currently
rural or semi-rural on the urban fringe, often typified by large lot residential and
countryside living will be the site of future urban development. In addition, more
permissive rules increasing dwelling densities across most of the suburban area
were also introduced; this will likely see dwelling intensification through infill
development, redevelopment, addition of minor household units (granny flats), and
internal subdivision of dwellings. But will the presence of land covenants that restrict
owners on what they can do with their properties affect the ability of the city to
develop as planned?
1.1 Scope of this report
The analysis undertaken and reported in this study explores the location and quantity
of property affected by land covenants across the entire Auckland region. The focus
of comment and discussion in this report is on how covenants may affect urban
development, redevelopment, expansion, and change, and understanding how the
possible future effects of covenants may impact on the city’s long-term growth
strategy and the planning rules.
Land covenants in Auckland and their effect on urban development 2
2.0 Background
2.1 What is a land covenant?
A covenant is a contract or promise between parties that bind them to obligations in a
contract for a fixed period of time, or in perpetuity. Covenants, or private deed
restrictions, have featured in England and Wales land and property law since the 16
th
century (Taylor & Rowley, 2017), but their modern origins began in England in 1848
with the case of Tulk v Moxhay (1848). Many of New Zealand’s laws are derived or
have evolved from statues enacted in the United Kingdom, including laws around
covenants. Covenants ‘run with the land’, meaning they bind owners of the land to a
covenant’s conditions, often in perpetuity. In recent decades they have become a
common method for developers to control how future owners of land develop and
maintain land in New Zealand (Quality Planning, 2013; New Zealand Productivity
Commission, 2015). As such, covenants create a private planning regime that is
enforceable in the civil courts (Mead & Ryan, 2012; Toomey, 2017).
In the context of this research, land covenants refer to those which affect freehold
land. Covenants relating to leases and leasehold land form a distinct area of land law
and as such are not addressed in this research.
Land covenants that require a land owner to do something are positive covenants,
and those that prohibit or prevent an owner from doing something are known as
restrictive covenants. In New Zealand, land covenants may be private agreements
between parties, or imposed by councils as conditions of the land use and
subdivision consenting process (Mead & Ryan, 2012; Quality Planning, 2013).
Official records of covenants and their details are documented against a title in Land
Information New Zealand’s (LINZ) computer register.
Land covenants between two or more parties have a grantor and a grantee (also
known as a covenanter). The grantor of the covenant (also called the covenanter)
agrees to have a burden on their land, to the benefit of another piece of land. The
grantee (also known as a covenantee) agrees that their land will have the benefit
associated with the covenant. Land that has the burden of a covenant is known as
the servient land, while land that has the benefit of the covenant is known as the
dominant land. Under the provisions of the Property Law Act 2007, land covenants
give the grantee a legal interest in the land (Property Law Act 2007, 2007).
Mutual land covenant schemes impose restrictions or control land use or building
styles, with the scheme allowing each lot to be both dominant and servient land for
the covenants in relation to all the other lots in the scheme (Land Information New
Zealand, n.d.). Mead and Ryan (2012) note that in New Zealand it is common for
Land covenants in Auckland and their effect on urban development 3
large residential subdivisions to have a building scheme, which LINZ refers to as
‘mutual land covenant scheme’. Schemes place restrictions on the use of the land,
and aim to maintain the quality of the neighbourhood; any owner of land within the
scheme may enforce against another any of the covenants made under the scheme
(McMorland et al., 2017).
Covenants can also be applied on a property as a condition of resource consent
under the Resource Management Act 1991.
Covenants on land can be created through three mechanisms enabled by the Land
Transfer Act 1952
1
. Covenants are added to a piece of land’s Certificate of Title
through the creation of an easement instrument. Section 90 of the Act outlines that
this can be done in one of three ways (Land Transfer Act 1952, 1952). The first is
through a transfer instrument. This is when a covenant is created when the
ownership of land is transferred from one party to another. The second is through an
easement instrument. This is when a covenant is created and is registered on the
title using an easement instrument. Thirdly, covenants can be created through a
deposited plan. This is when a new property is created through a subdivision and the
plans are registered, with any covenants, and new Certificates of Title are issued.
Cross lease titles, the terms of their leases, and related covenants, are registered in
an easement instrument just like any other other covenant. While covenants relating
to cross leases are land covenants, due to their unique nature and complex issues
(Fredrickson, 2017) they have been excluded from analysis with other land
covenants in this research,
While land covenants can prevent land owners from undertaking certain activities,
they are not permitted, or can be voided, if they breach the provisions of legislation,
specifically the Human Rights Act 1993, the Residential Tenancies Act 1986, the
Property Law Act 2007, or the Commerce Act 1986 (Hinde, McMorland, & Sim,
2018).
Land covenants can be revoked or modified under Section 307 of the Property Law
Act 2007, and must be executed by the registered proprietors of the affected
dominant and servient titles (Land Information New Zealand, n.d.). The High Court
also has jurisdiction to modify or extinguish land covenants under Section 3017 of the
Act, when an application is made to the Court by someone bound or burdened by a
positive or restrictive covenant (Property Law Act 2007).
1
Aspects of the Act relating to the creation of easement instruments was amended by the Land
Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002
Land covenants in Auckland and their effect on urban development 4
2.2 Use of land covenants in New Zealand
The most common uses for land covenants in New Zealand are those associated
with residential subdivisions, the focus of this research. Covenants are also used
protect heritage, and for conservation purposes. Covenants can also be used for
water and soil, forest research areas, and wahi tapu, all in respect of Crown forestry
licences, and for purposes under the Resource Management Act 1991 in connection
with resource consents and subdivisions (Hinde et al., 2018).
2.2.1 Residential subdivision
There is little academic literature on the use of the land covenants on residential land
in New Zealand, but there has been much coverage in local media on the subject in
recent years, and comment by the New Zealand Productivity Commission in their
report on using land for housing published in 2015. For Auckland there has been no
research on land covenants to date. Hattam and Raven (2011) undertook research
on the extent of the use of land use covenants in the Rolleston area in Canterbury,
and found that 75 per cent of new residential properties had a restrictive covenant
requiring a minimum dwelling size of at least 160 square metres, with 180 square
metres being a typical requirement. Also observed was that only three per cent of the
properties in the area created in Rolleston since 1990 had no covenants specifying
the minimum size of dwellings that could be built (Hattam & Raven, 2011).
Examples of the restrictions used in covenants in new residential subdivisions
include subdivision controls, stipulations on the size of dwellings, their form, and their
construction material, and directions on landscaping and fencing. The following part
of this report presents a synthesis of restrictions observed, from a variety of sources,
including (New Zealand Productivity Commission, 2015), reports in online media (for
example, Dally, 2013; Simpson, 2016; Rikihana Smallman, 2017), analysis supplied
by the Ministry of Business, Innovation and Employment (S. Jacobs, personal
communication, March 1, 2018), developer/ development websites (for example,
Addison, 2010; Beach Grove, 2013; Silverwood Corporation, 2014), and from
personal inspection of covenant schedules on Certificates of Title. While this
summary is not extensive, it provides some insight into the types of restriction that
have been used.
Land covenants in Auckland and their effect on urban development 5
Subdivision and land use
• No further subdivision allowed, or no further subdivision without the consent of
the developer.
• Developer approval of house plans required before construction (although one
case cited noted that this clause expired a few years after the subdivision went
on sale).
• No commercial activity in residential properties.
• No state housing is allowed.
Dwellings and construction
• Minimum floor area of the dwelling; some include the floor area of a required
garage, others do not.
• Time limits on the length of the construction period, for example the exterior
completed within six months from the start of work, and the interior completed
within 12 months.
• Conditions that the dwelling may only be occupied as a residence, once a
Code Compliance Certificate has been issued.
• Requirement for the completed dwelling to be of at least a minimum value.
• Restrictions on look, shape, and form. This includes no dwelling should have
the same plan, building shape or use the same materials as any other within
250 metres of the land, only single level dwellings permitted, or in another
case have a minimum of two levels. No bright or vibrant colours can be used
on dwellings. Many covenants have a requirement for a garage, and for it to
be attached to the dwelling.
• Controls on the types of construction materials that can be used, including the
prohibition of recycled or reused materials. Some include rules on the types of
cladding and roofing to be used e.g. roofing can only be slate, tile or a pre-
coloured steel.
• The requirement to ensure regular maintenance to dwellings and to ensure
they look neat and tidy.
• No accessory dwellings (also called minor household units or granny flats) are
permitted.
• No prefabricated houses, or relocatable houses; in some cases they were
permitted, but only with developer approval.
Land covenants in Auckland and their effect on urban development 6
• No structures other than dwellings are to be built on the land; this includes
shed, huts, or carports. Storing of caravans is also prohibited.
• If a dwelling is damaged or destroyed, any rebuilt dwelling must be to
substantially the same specifications, be materially the same in look, and use
materials not unlike the original.
Amenity
• Rules on landscaping and fencing, including landscaping plan must be
approved by the developer, minimum and maximum number of trees allowed
in the front yard, along with minimum and maximum heights of the trees. Also,
for fencing, restrictions on the location (some ban fences in front yards),
heights, and types of materials (for example, no corrugated iron or fibrolite)
that can be used. In some cases no garden sheds permitted, or restrictions,
such as they cannot be seen from the road, or from a neighbouring property.
• Clotheslines are only permitted if they cannot be seen from the road.
• Restrictions on the size and location of aerials/antennae and satellite dishes,
including rules stating that they cannot be visible from the street.
• Limitation on the size of letterboxes, including the types of material that can be
used.
• Signs and advertising are banned, except for signs used to market the
property for sale (size limits may apply). ‘For rent’ signs are forbidden.
• Occupants of houses are not allowed to park caravans, boats, trailers, trucks,
commercial vehicles or vans. One stated that owners are not permitted to park
on the street, ever. Also vehicles that are in a poor state of repair, damaged,
used for agriculture, or heavy, are prohibited.
• Requirement to remove graffiti within 48 hours of it being carried out.
• No outdoor furniture of any kind in the front yard.
Other
• Owners won’t permit noise which might be found to be offensive or a nuisance
to others.
• Owners are not permitted to object or impede to any future plans of the
subdivision’s developer.
• Restrictions on animals, including a ban on cats, and animal that may cause
nuisance or annoyance, and a ban on certain dog breeds.
Land covenants in Auckland and their effect on urban development 7
• Restriction on utility operators that can be used, one covenant viewed only
permitted the use of Telecom New Zealand as the telephone provider.
Enforcement
2
• Often covenants include fines for non-compliance, such as $500 per day of
breach, a one off penalty of at least $20,000, or a penalty of 25 per cent of the
dwelling’s value.
• Permission for the developer to enter the land with 48 hours’ notice to monitor
compliance with the covenant.
An example of a schedule of covenants for a residential subdivision in Auckland can
be found in Appendix A.
The passing of the Property Law Act in 2007 meant that both positive and negative
covenants could apply to land (Hinde et al., 2018). Prior to this, all covenants needed
to be expressed in negative terms, even if they required the owner of the land to do
something (Norris Ward McKinnon, 2011). In most other jurisdictions only restrictive
(negative) covenants are permitted.
2.2.2 Heritage
Covenants can also be used to protect heritage, under the Reserves Act 1977. The
Act allows for private land owners to protect private land that “possesses such
qualities of natural, scientific, scenic, historic, cultural, archaeological, geological, or
other interest that its protection is desirable” (Reserves Act 1977, p. 121). Such
covenants are included in the Christchurch City Council’s Heritage Conservation
Policy, which states that the council will use them as a mechanism to “protect
buildings, places and objects of heritage value” (Christchurch City Council, 2007).
The Heritage New Zealand Pouhere Taonga Act 2014 also includes specific
provisions for heritage covenants as a mechanism to protect historic places, such as
private homes and other buildings, archaeological sites, and sites of significance to
Maori (Heritage New Zealand Pouhere Taonga, n.d.).
2
A number of the covenants around enforcement are designed to be applied during the construction
period and would be enforced by the subdivision developers, but others would require enforcement by
owners of dominant land under a covenant, or other land owners in a mutual covenant scheme. All of
these would need to be done through an application to the Court.
Land covenants in Auckland and their effect on urban development 8
2.2.3 Conservation
Given their widespread use in New Zealand, land covenants for conservation should
also be mentioned. Land covenants for conservation include those for open
space, conservation purposes, to preserve the natural environment, for heritage,
sustainable management, and in relation to Crown forestry licences for protection of
sites that have archaeological, historical, spiritual, emotional, or cultural significance,
water and soil, forest research areas and wahi tapu (Hinde et al., 2018). Areas of
private land, deemed to “preserve the natural environment, or landscape amenity, or
wildlife or freshwater-life or marine-life habitat, or historical value” can be covenanted
for conservation purposes under section 77 of the Reserves Act (Reserves Act 1977,
p. 122).
The most widely known covenants for conservation in New Zealand are those related
to Queen Elizabeth II National Trust, known colloquially as QEII covenants. The QEII
Open Space Covenant scheme, sees QEII partner with land owners to voluntarily
protect land and water bodies that are of “aesthetic, cultural, recreational, scenic,
scientific or social interest or value” (Queen Elizabeth II National Trust, 2011). QEII
covenants are put in place by land owners who want to help protect areas of their
property that they and the QEII trust consider of ‘value’. While owners often covenant
the land for selfless reasons to protect areas, there are also a number of benefits.
These include the QEII Trust advising property owners on the management of the
land, providing monitoring of the land, and support for fencing, weed and control,
restoration planting, and even rates relief (Queen Elizabeth II National Trust, 2018).
Other benefits to the land owner can include covenanted areas providing shade and
wind protection (Johnston, 2003), bush can help prevent slips and erosion and bring
back native birds, and wetlands can act as water filters and act as run-off retainers
(Orr, n.d.). The QEII trust has protected around 180,000ha (at 30 June 2014) of land
with covenants, protecting features including native forest, wetlands, high country,
coastlines, and cultural and archaeological sites (Queen Elizabeth II National Trust,
2011).
2.2.4 Condition of resource consent
Another use for covenants is under Section 108 of the RMA. While most land
covenants are between two private parties, covenants can also be required as a
condition of a resource consent issued by a consenting authority (local or regional
council). This is done through a consent notice, which is registered against a property
title, and includes the conditions required to be complied with under the consent
(Quality Planning, n.d.). Under section 221 of the RMA, a consent notice is deemed
Land covenants in Auckland and their effect on urban development 9
to be “a covenant running with the land when registered under the Land Transfer Act
1952, and shall, notwithstanding anything to the contrary in section 105 of the Land
Transfer Act 1952, bind all subsequent owners of the land” (Resource Management
Act 1991, p. 457). Examples of covenants being used as part of the resource
consenting process in Auckland include the rural subdivision rules in the former
Rodney District. Aspects of the rules required the protection of vegetation and other
areas by covenant (Auckland Council, 2011). Similar provisions requiring covenants
to protect areas are also proposed in the rural subdivision rules of the Auckland
Unitary Plan
3
(Auckland Council, 2016).
2.2.5 Non-complaint
Covenants can also be used to address reverse sensitivity issues, though the use of
a 'restrictive non-complaint covenant'. Central Auckland’s Britomart Precinct has
restrictive non-complaint covenants preventing complaints about noise effects
generated by Ports of Auckland, with the covenant required under council’s planning
documents (Auckland Council, 2016). A second example of a restrictive non-
complaint covenant is in Albany, where North Shore City Council required land
owners looking to develop apartments next to North Harbour (QBE) Stadium to future
proof against noise complaints (Thompson, 2007).
2.3 Land covenants in overseas jurisdictions
Land covenants are a popular mechanism of private land use control in the United
Kingdom. While covenants are widely used, unlike New Zealand, there are
processes in place to cancel or modify covenants where they are deemed to be out
of date. In Scotland a tribunal system is used, to assess the modification of
cancellation of covenants. (Adams, Disberry, Hutchison, & Munjoma, 2001) note that
there are cases where covenants that prevented redevelopment in the centre of
towns being cancelled to facilitate higher-density developments. In England
applications can be made to a tribunal for restrictive covenants to be discharged or
modified if it can be shown that that the restriction is obsolete on the basis of
changes in the neighbourhood or the property (Brading & Styles, 2017).Covenants
can also be discharged or modified by the tribunal where covenants are shown to
limit or impede some reasonable use of the land for public or private purposes, with
decisions on applications taking into account any relevant planning documents (Lee,
2017).
3
The rural subdivision rules of the Auckland Unitary plan are not yet operative, and at the time of
writing this report were still under appeal in the Environment Court.
Land covenants in Auckland and their effect on urban development 10
Edmonton, in Alberta, Canada has been struggling with the redevelopment of parts of
the city where restrictive covenants only allow single stand-alone houses, or have
been used to exclude grocery stores (Ziff & Jiang, 2012). Currently, like New
Zealand, there are few options available to discharge covenants that prevent
redevelopment, except through expropriation schemes
4
(Ziff & Jiang, 2012).
Suggestions for law reform to allow judicial power to discharge out of date covenants
has been mooted, along with proposals that would allow municipal authorities to
impose time limits for new covenants, or allow them the ability to respond to
covenants that affect their power (Ziff & Jiang, 2012).
Restrictive covenants have a long history in the United States, and were used before
the development of public zoning by local governments as a method of land use
control, often by land developers (Deng, 2003). The covenants were used as a way
to prevent incompatible land use conflicts and their potential effects of property
devaluation (Fischel, 2004). In Houston, Texas, there are still large swathes of the
city that have no zoning, instead privately established covenants are used to control
land use (Buitelaar, 2004) and also to control aesthetics (Korngold, 2001). Covenants
have also been used to bar commercial activities in residential areas, to shape
physical characteristics of suburbs, as well as their historical use to influence the
social sphere – particularly through the now illegal use as a method to prevent sales
to non-white buyers (Dehring & Lind, 2007). The near-universal use of land use
planning in towns and cities across the country has led to complex conflicts between
covenants and planning rules, but with covenants often outweighing planning rules
when tested in the courts (Berger, 1964). Most states have no statutory mechanism
to remove covenants or for their modification, but common law doctrine of ‘changed
conditions’ has led to their modification or termination (Walsh, 2017). Many states
currently use covenants ‘not to sue’ on contaminated brownfield sites
5
. The
covenants are used to encourage redevelopment by the State waiving the right to
sue for clean-up costs from innocent purchasers of polluted sites (those not
responsible for causing the contamination) (Andrew, 1996). Restrictive covenants,
like in New Zealand, are being used in modern subdivisions, with covenants used to
empower homeowner associations to administer and enforce covenants (Korngold,
2001). In 1975 estimated that 2.85 per cent of housing units in United States were in
homeowner association developments, in 1998 that estimate has risen to 14.67 per
4
An expropriation scheme is similar to New Zealand’s compulsory acquisition powers under the Public
Works Act 1981.
5
In the United States the term brownfield is defined by the United States Environmental Protection
Agency (n.d.) as “property, the expansion, redevelopment, or reuse of which may be complicated by
the presence or potential presence of a hazardous substance, pollutant, or contaminant”.
Land covenants in Auckland and their effect on urban development 11
cent (Korngold, 2001). Covenants have also been used for conservation purposes,
as in here in New Zealand (Mahoney, 2002), and as a method to protect solar and
wind resources (Newman, 2000)
Covenants are also used in Australia, particularly for private residential estates
(Kenna, Goodman, & Stevenson, 2017), and both New South Wales and Victoria,
unlike New Zealand, have mechanisms to remove covenants (with varying levels of
effectiveness). In New South Wales, the Environmental Planning and Assessment
Act 1979 specifically enables planning instruments to override restrictive covenants
(Environmental Planning and Assessment Act 1979). Research by Taylor and
Rowley (2017) notes that in Victoria, prior to 2000, covenants were treated external
to planning and were dealt with through property law. Legislative changes made in
2000 included provisions allowing planning instruments and processes to be used to
remove or vary covenants, but poorly devised legislation meant that a number of
issues still remained. Further changes have meant that the outcome is that
covenants now have a privileged status in the planning process, and they are hard to
remove and continue to trump public interest arguments (Taylor & Rowley, 2017).
2.4 The effects of land covenants
2.4.1 Form of land use control
Covenants act as a form of land control. In Houston, Texas, private restrictive
covenants are widely used to control land uses and urban development in the place
of a formal planning and zoning system (Buitelaar, 2009). In many parts of the world,
including New Zealand, land covenants are used to encourage conformity such as
how a house should look (Ziff & Jiang, 2012) or restrict further development (Kenna
et al., 2017). In New Zealand covenants sit outside the planning system but often
impose more restrictive rules than set out in statutory planning documents. In some
cases covenants prevent more intensive use of land than plans allow and there is
little councils can do to prevent or alter them (New Zealand Productivity Commission,
2015). While similar examples are also seen overseas (Kenna et al., 2017), some
jurisdictions have introduced processes that prevent rules of public planning
documents being undermined by private covenants (Mead & Ryan, 2012; Taylor &
Rowley, 2017). Covenants can also be used in New Zealand to control land use,
which can also act as a barrier to development and intensification. This includes
when the inclusion of a covenant is required as a condition of a resource consent,
particularly in rural or peri-urban areas. Covenants in these cases can include
requirements to protect vegetation or other natural features, or prevent development
through prohibiting further subdivision. While covenants in these cases may prevent
Land covenants in Auckland and their effect on urban development 12
intensification, they could be considered justified as they are used a mechanism to
generate other benefits, such as environmental protection.
2.4.2 Barrier to development and redevelopment
The New Zealand Productivity Commission (2015) have identified land covenants
and their restrictive nature as a barrier to both development and redevelopment, by
restricting the current and future capacity for additional dwellings of land. The
Commission also noted that when covenants specify the requirements for types of
materials to be used in a development they can prohibit efficient building techniques,
including the use of building materials that may be developed in the future. A
submission to the Commission in their investigation revealed how land covenants
have been used as a barrier to development on neighbouring land, with a covenant in
Tauranga used to prevent the provision of road access or services to adjoining land
zoned for residential development (New Zealand Productivity Commission, 2015).
Mead and Ryan (2012) indicate that they believe that covenants operating in
perpetuity could thwart strategic planning objectives for intensification. Mead and
Ryan further note that the absence of covenants in older areas but their presence in
modern subdivisions “will mean that intensification pressures may be concentrated in
areas less suitable for urban change, such as areas with earlier period or character
housing” (2012, p. 4). Existing land covenants were also noted as contributing to the
challenge of the Christchurch rebuild following the earthquakes that affected the city
by MBIE’s chief architect (Joiner, 2012).
Land covenants were also indicated as a barrier to development in overseas
jurisdictions. Research in Australia has highlighted that the use of land covenants on
residential properties in the City of Darebin, in greater Melbourne, will be a constraint
on future housing growth (City of Darebin, 2011). In Sydney the proliferation of
private residential estates with covenants are seen as an inhibitor to infill
redevelopment and increased densities (Kenna et al., 2017). In England and
Scotland, covenants can impact the development process, but can be overcome with
relative ease (Adams & Hutchison, 2000; Walsh, 2017). In the United States
covenants are noted as a constraint, particularly to ‘brownfield’ redevelopment
6
(Adams et al., 2001), and in the Netherlands heritage covenants were identified as a
barrier to redevelopment, with an example noted where they had a “large impact on
the estimated for land development costs, causing a delay in the planning process”
(Baarveld, Smit, & Dewulf, 2018, p. 109).
6
Refer to footnote 4.
Land covenants in Auckland and their effect on urban development 13
2.4.3 Effects on house prices and affordability
In residential areas, land covenants can affect house prices and affordability. Given
covenants are put in place to either restrict what can happen or require an action, it is
unsurprising. The NZPC in their report on housing affordability noted that in New
Zealand, land covenants increased the cost of housing by often having direct
requirements that minimum costs or size be met. and also by requiring the use of
certain building techniques and materials (New Zealand Productivity Commission,
2012). Covenant restrictions mean that it is often impossible for affordable housing
options to be constructed, either through requirements for a minimum floor space
size or restrictions on housing typology (Easton, Austin, & Hattam, 2012). Covenants
can also add to transaction costs in the development process, adding expense and
time (Buitelaar, 2004; Dally, 2013), and so increasing the cost of housing. Over the
last decade there have been numerous comments in New Zealand media about how
covenants prevent affordable housing. Some of the commentary includes:
• Developers using covenants, in conjunction with development staging, as a
mechanism to stop the construction of smaller or affordable houses, and thus
increasing the value of land and sale price of homes for later stages
(Stevenson, 2018).
• The use of covenants that restrict smaller houses, increasing build costs and
therefore increasing unaffordability (McDonald, 2017). One example is of a
retiring couple wanting a smaller home but finding that new subdivision
covenants prevent them from building a home to fit their needs (Rikihana
Smallman, 2017).
• The exclusion of pre-made, pre-fabricated, or relocatable houses, all of which
are often cheaper methods of building, from new subdivisions (Dally, 2013;
Heyward, 2018).
• Neighbouring residents of a proposed co-housing development in Flaxmere
want it to be subject to the same covenants as their properties, which include
minimum dwelling size requirements, integrated garages and internal
boundary fencing (Harper, 2018).
While there has been no economic assessment of the effects of covenants in New
Zealand, there has been in the United States. Research by Speyrer (1989) showed
that in Houston, Texas, houses that were in neighbourhoods which had private
covenants had significant premiums compared to identical houses without covenants.
Speyrer also found that the use of covenants to protect from externalities were more
valuable than any forgone development opportunities – this means that the benefits
Land covenants in Auckland and their effect on urban development 14
of being in a covenant scheme were greater than the disbenefits of having to comply
with covenant rules. In Louisiana, analysis by Hughes and Turnbull (1996) revealed a
number of relevant points, including:
• That restricting utilities (such as power and phone) to being underground
increased house prices
• The requirement to mow lots, decreased prices
• Restrictions on prefabricated houses and on drilling had no effects
• Constraints such as no signs, and parking and dumping restrictions also
increased house prices.
Hughes and Turnbull also observed that stricter restrictions have a diminishing price
effect as neighbourhoods mature, and perhaps most importantly covenants
increased house price by about six per cent in 10-year-old neighbourhoods and by
two per cent in 20- year-old neighbourhoods. A note here that covenants in Louisiana
can only have a 20-year lifespan, after which they can be renewed, perhaps
accounting for the low margin on their benefits after that length of time. Analysis by
Rogers (2006, 2010) showed that properties with covenants governed by residential
community associations had a premium of about two to three per cent, and that the
marginal price of covenants falls to zero after 25 years if a covenant is not renewed.
2.4.4 Covenants used to stifle competition
Covenants are sometimes used as a mechanism to control or restrict business
activity, and can be used to stifle or reduce competition in a market (OECD, 2010) .
In Edmonton, Canada, research by Ziff and Jiang (2012) notes an example where
supermarket firms relocate their stores to a new location and sell the existing site,
placing a covenant on the land that prevents any future owner from operating a
supermarket on the site. Other examples of covenants used for these purposes
include a fast food chain selling a restaurant site and inserting a covenant that
prevents beef-based fast food being sold, or a former private hospital site having a
covenant preventing another hospital operating on the land in the future (OECD,
2010). Ziff and Jiang (2012) further note that such uses of covenants have
contributed to reduced competition and customer choice, and the creation of what
are referred to as ‘food deserts’
7
.
7
A food desert is defined in United States of America legislation as being an area “with limited access
to affordable and nutritious food, particularly such an area composed of predominantly lower-income
neighbourhoods and communities” (Food, Conservation, and Energy Act of 2008).
Land covenants in Auckland and their effect on urban development 15
As noted in earlier, in New Zealand covenants can be ruled invalid if they violate the
Commerce Act 1986. The Act states that covenants shall not have the effect of
“substantially lessening competition in a market” (Commerce Act 1986). Although
covenants cannot be used to substantially lessen competition, they can be used to
lessen it none the less. An Auckland example of the use of a covenant to prevent
competition is the former Village 8 cinema site on Crown Lynn Place in New Lynn
(Figure 1). The owner closed the cinema complex in June 2001, when it opened a
new cinema complex in Henderson’s WestCity Waitākere mall (then known as
Westfield WestCity). When the site was sold, including the cinema complex building,
a covenant was placed on it preventing any future land owner operating a cinema
complex on the site (and interestingly any single retail shop with a floor area less
than 400 square metres) (Figure 2).
Figure 1: Former Village 8 cinema complex site in New Lynn
Land covenants in Auckland and their effect on urban development 16
Figure 2: Covenant text for former Village 8 cinema site, New Lynn (CT# NZ960/262)
2.4.5 Covenants as a mechanism of exclusion
Covenants can be used as a method of exclusion, either explicitly or surreptitiously.
An historic example, and perhaps the most well-known, use of land covenants to
exclude was their application across the United States to exclude non-whites from
some suburbs (Jones-Correa, 2000). By 1940, 80 per cent of property in Chicago
and Los Angeles had restrictive covenants excluding black families (United States
Commission on Civil Rights, 1973). Despite racial restrictive covenants being ruled
unenforceable in 1948, Berry (2001) poses that other types of private covenants may
play a part in racial and economic segregation in residential areas of Houston and
Dallas. Covenants mandating that homeowners pay for amenities in a development,
have been raised as a method of exclusion – deterring undesired residents, that is
lower-income households, from purchasing homes (Strahilevitz, 2006). Restrictive
covenants only allowing single-family homes have been used to prevent the
establishment of group homes or shelters for people with mental disabilities in the
US, although a few states have enacted laws to counter such covenants (Salsich,
1986).
Land covenants in Auckland and their effect on urban development 17
3.0 Method to identify titles with land covenants in
Auckland
The datasets used to identify titles that had land covenants, as at February 2018, are
listed below (Table 1).
Table 1: List of data sources and descriptions used in modelling
Data Description Format Organisation; source
NZ title
memorials list
List information relating to a transaction,
interest or restriction over a piece of
land, including mortgages, discharge of
mortgages, transfer of ownership, and
leases. Data in table is for both current
and historic memorials, and also
provides a high-level memorial
description. (Land Information New
Zealand, 2017)
Table
Land Information New
Zealand; LINZ Data
Service
NZ property
titles
Spatial extent of property titles, including
a record of all estates, encumbrances
and easements that affect a piece of
land. (Land Information New Zealand,
2017)
Spatial/GIS
Land Information New
Zealand; LINZ Data
Service
Auckland
Council local
board
boundaries
Polygons indicating the extents of the
local board areas for Auckland.
Spatial/GIS
Statistics New
Zealand; 2013
census-based
geographic boundary
files
Zoning
(Auckland
Unitary Plan,
operative in
part)
Extents of zoning defined by polygons
for the Auckland Unitary Plan, operative
in part (as at November 2016)
Spatial/GIS
Auckland Council;
SDE
8
8
SDE refers to Auckland Council’s ArcGIS geospatial repository
Land covenants in Auckland and their effect on urban development 18
The creation of a dataset of titles with land covenants in Auckland is a multi-step and
multi-output process (Table 2). Each dataset output is an intermediate dataset used
for further processing, or an output dataset in its own right, that is used for analysis.
Table 2: Method for creating land covenant dataset for Auckland
Step
No.
Name Description
One
Create core
dataset
Joining current
9
memorial text to titles (spatial file), and extracting only
those that have a ‘land covenant’ recorded (Output 1). This output creates
one polygon per land covenant.
Two
Tag core
dataset with
additional data
Take land covenant dataset (Output 1) and tag the titles (spatial file) with
the Auckland Unitary Plan (operative in part) zone and local board (Output
2).This dataset is used as the input for steps three, four and five.
Three
Number of
covenants
Take tagged land covenant dataset (Output 2) and filter out those not on
land (in the General Marine Zone), and those that are cross leases (Output
3). This dataset is used to calculate the number of land covenants.
Four
Number of
titles
Take tagged land covenant dataset (Output 2) and remove duplicate titles,
i.e. those that have more than one covenant on them (Output 4). This
dataset is used to calculate the number of titles with land covenants.
Five Land area
Take tagged land covenant dataset (Output 2) and remove duplicate titles
that have more than one covenant on them, and then “flatten” the title
dataset (remove duplicate title shapes, where there is more than one title
per shape, such as with unit titles) (Output 5). This dataset is used to
calculate the land area covered by land covenants.
Each of the datasets outputted is saved as a geodatabase file (a spatial or GIS file
that can be used in mapping software), and then if required exported and saved as
an MS Excel file for creating tables for analysis.
3.1 Caveats, limitations, and notes on outputs
As with many datasets and analysis, there are a number of important things to note
about the data. For the data and analysis created for this report, the following should
be noted:
• The title data downloaded from the LINZ data portal was dated 27 January
2018.
• Auckland Unitary Plan (operative in part) zoning data was as at 8 November
2016.
9
The NZ title memorials list dataset from LINZ contains all current and historic memorials. Current
memorials are those that are currently in effect and/or are for titles that presently exist. Historic
memorials are those that are no longer in effect and/or for titles that no longer exist. As part of this
process all historic memorials were filtered out.
Land covenants in Auckland and their effect on urban development 19
• All titles that are registered as a cross lease have been filtered out of analysis,
as all cross lease titles have a land covenant registered in their memorial.
Cross leases have been excluded from this analysis as they have been
addressed in Fredrickson (2017); that analysis showed that there were 99,829
cross lease titles in Auckland on 39,636 properties.
• For analysis, the results exclude those titles that were identified as being in
the ‘General Coastal Marine’ zone; this was because these titles are not on
land.
Land covenants in Auckland and their effect on urban development 20
4.0 Analysis
Land covenants, excluding those on cross lease titles, are spread across the entire
region, in areas of both rural and urban character (Figure 3Figure 2). In Auckland
there are 151,170 land covenants on 96,261 titles. Seventeen per cent of titles in the
region have a land covenant on them. The land area of titles with a covenant on
covers an area of 60,757 hectares, or 12 per cent of Auckland’s land area.
Figure 3: Titles with land covenants in Auckland
Land covenants in Auckland and their effect on urban development 21
4.1 Land covenants by local board
All 21 of Auckland’s local boards have titles that are affected by land covenants, but
two-thirds of the titles with covenants are in just six local board areas. Howick Local
Board has the largest number of titles affected by land covenants, 18,261, which is
38 per cent of the total titles in that area and 19 per cent of the regional total of titles
affected by land covenants. Two other local board areas have more than 30 per cent
of titles in their area with covenants; Upper Harbour Local Board area has 46 per
cent (11,414), or 12 per cent of the region total, and Papakura with 34 per cent
(6618, or seven per cent of the region total). All of these areas have large residential
areas that have been developed in the last 20 years. Other local boards with high
numbers of titles with land covenants are Hibiscus and Bays (11,741, or 12 per cent
of the regional total), and the two rural local boards, Rodney (8981) and Franklin
(8893, or nine per cent of the regional total). Conservation covenants and covenants
preventing further subdivision, both often used as conditions in the resource
consenting process, may be the cause for this.
Table 3: Number of titles, land covenants, and titles with land covenants in Auckland,
by local board area
Local board name
Total
number
titles in
local
board
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion of
total titles
with a land
covenant
Proportion of
regional total
of titles with a
land
covenant
Albert - Eden
34,663
960
817
2%
1%
Devonport - Takapuna
22,545
1,076
907
4%
1%
Franklin
31,127
11,096
8,893
29%
9%
Great Barrier
1,538
109
83
5%
0%
Henderson - Massey
38,048
8,841
6,673
18%
7%
Hibiscus and Bays
41,644
17,990
11,746
28%
12%
Howick
47,507
23,180
18,261
38%
19%
Kaipātiki
30,866
1,838
1,564
5%
2%
Mangere - Otahuhu
19,416
21,580
1,694
9%
2%
Manurewa
24,360
7,045
6,225
26%
6%
Maungakiekie -
Tamaki
28,644 1,393 914 3% 1%
Ōrākei
32,856
4,416
3,409
10%
4%
Otara - Papatoetoe
21,770
2,909
885
4%
1%
Papakura
19,556
10,601
6,618
34%
7%
Puketāpapa
17,615
822
756
4%
1%
Rodney
32,061
14,337
8,981
28%
9%
Land covenants in Auckland and their effect on urban development 22
Local board name
Total
number
titles in
local
board
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion of
total titles
with a land
covenant
Proportion of
regional total
of titles with a
land
covenant
Upper Harbour
24,573
14,871
11,414
46%
12%
Waiheke
6,902
490
392
6%
0%
Waitakere Ranges
19,165
1,908
1,678
9%
2%
Waitematā
54,402
4,284
3,102
6%
3%
Whau
25,676
1,424
1,249
5%
1%
Total
574,934
151,170
96,261
17%
-
The local board areas where the land area of titles with a land covenant add up to the
most hectares are Rodney and Franklin which together comprise three-quarters of
the region’s total land area affected by land covenants. Titles with land covenants in
Rodney add up to 28,703 hectares, which is 13 per cent of the total area of the board
and half the regional total of affected land area, while Franklin’s titles with land
covenants cover 14,955 hectares, 12 per cent of the board’s land area – a quarter of
the regional total. The land area of titles with land covenants in the Howick Local
Board cover close to half (48 per cent) of the board’s land area, but only five per cent
of the regional total. The only other local board with more than 30 per cent of land
area affected by covenants is Mangere-Otahuhu (39 per cent), but its affected area
(2031 hectares) is only three per cent of the regional total. Hibiscus and Bays has 29
per cent of its land affected, or 3147 hectares (five per cent of the regional total).
Table 4: Total land area of titles with a land covenant, by local board area, in Auckland
Local board name
Total land area
in local board
(ha)
Land area of
titles with
covenant (ha) in
local board
Proportion of
total land area of
titles with
covenant in
local board
Proportion of
total area of
titles with
covenant in
region
Albert - Eden
2,834
138
5%
0%
Devonport - Takapuna
2,113
72
3%
0%
Franklin
119,752
14,955
12%
25%
Great Barrier
32,066
518
2%
1%
Henderson - Massey
5,321
566
11%
1%
Hibiscus and Bays
11,006
3,147
29%
5%
Howick
6,969
3,376
48%
6%
Kaipātiki
3,384
226
7%
0%
Mangere - Otahuhu
5,247
2,031
39%
3%
Manurewa
3,712
735
20%
1%
Maungakiekie -
Tamaki
3,642 137 4% 0%
Land covenants in Auckland and their effect on urban development 23
Local board name
Total land area
in local board
(ha)
Land area of
titles with
covenant (ha) in
local board
Proportion of
total land area of
titles with
covenant in
local board
Proportion of
total area of
titles with
covenant in
region
Ōrākei
3,225
299
9%
0%
Otara - Papatoetoe
3,706
562
15%
1%
Papakura
4,072
858
21%
1%
Puketāpapa
1,872
110
6%
0%
Rodney
227,495
28,703
13%
47%
Upper Harbour
6,973
1,861
27%
3%
Waiheke
15,476
702
5%
1%
Waitakere Ranges
30,403
1,345
4%
2%
Waitematā
1,939
163
8%
0%
Whau
2,685
255
9%
0%
Total
493,891
60,757
12%
-
4.2 Land covenants by zoning
Assessing titles and land covenants by their zoning allows some insight into how
areas of the city are affected, either now or in the future. This section breaks down a
number of zoning groups and analyses the number of titles in each zone, the
numbers with a land covenants, and the area that they cove. A full table of all
Auckland Unitary Plan (operative in part) zones and statistics can be found in
Appendix B (numbers of titles) and Appendix C (land area of titles).
4.2.1 Residential zones
Residential zones contain 83,068 titles that are affected by land covenants, or 19 per
cent of the total number of titles in those zones; 86 per cent of all titles affected by
covenants in Auckland are in residential zones (Table 5). These titles cover an area
of 8685 hectares, 23 per cent of the area of the zones; 14 per cent of total land area
affected by covenants in Auckland is in residential zones (Table 6). Residential
zoned titles with land covenants are concentrated in greenfield suburbs that have
been developed over the last few decades, such as Long Bay, Greenhithe, West
Harbour, Flat Bush, and Karaka. Close to half (42,450, or 44 per cent) of all titles with
land covenants are located in the Mixed Housing Suburban zone, another quarter
(23,567, or 24 per cent) being in the Single House zone, and a tenth (9,992) being in
the Mixed Housing Urban zone.
Land covenants in Auckland and their effect on urban development 24
Table 5: Number of titles, land covenants, and titles with land covenants in Auckland,
2018, by residential zones of the Auckland Unitary Plan (operative in part)
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
Large Lot
6,879
1,622
24%
<1%
2%
Mixed Housing Suburban
199,468
42,450
21%
10%
44%
Mixed Housing Urban
100,687
9,992
10%
2%
10%
Rural and Coastal
settlement
5,841 727 12% <1% 1%
Single House
86,191
23,567
27%
5%
24%
Terrace Housing and
Apartment Buildings
42,415 4,710 11% 1% 5%
Total
441,481
83,068
19%
19%
86%
Table 6: Area zoned and area covered by land covenants in Auckland, 2018, by
residential zones of the Auckland Unitary Plan (operative in part)
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
Large Lot
2,912
887
30%
1%
Mixed Housing Suburban
14,970
3,608
24%
6%
Mixed Housing Urban
7,531
851
11%
1%
Rural and Coastal settlement
1,856
399
21%
1%
Single House
8,539
2,604
30%
4%
Terrace Housing and
Apartment Buildings
2,485 337 14% 1%
Total
38,293
8,685
23%
14%
Land covenants in Auckland and their effect on urban development 25
Figure 4: Titles with land covenants in residential zones (in Auckland’s urban core),
2018
Land covenants in Auckland and their effect on urban development 26
Title issue date can be used to analyse the proportion of titles in residential zones
with and without land covenants over time. The analysis shows residential titles the
proportion of titles with land covenants has been increasing over time. Less than 10
per cent of residential titles issued in the early 1980s had a land covenant on them.
In 2017, over 50 per cent of residential titles issued had a land covenant on them.
The proportion of titles issued pre-1980 (not shown on graph) show only small
proportions of titles with covenants – two per cent or less prior to 1964, with the
proportion increasing through the 1970s. The early 1980s saw a slight dip, but has
been increasing steadily since.
Figure 5: Proportion of current titles in residential zones with land covenants, by year
of title issue, Auckland, 1980-2017
4.2.2 Centre zone
Centre zones, including the city centre (CBD), metropolitan centres, and other
centres are areas of the city that are expected to accommodate large amount of floor
space and high numbers of apartments as the city intensifies. These zones contain
2529, or three per cent of the regional total, of the of titles affected by covenants
(Table 7); Titles in the centre zones affected by covenants cover a land area of 336
hectares, or 23 per cent of the total combined area of the zones (Table 8). The City
Land covenants in Auckland and their effect on urban development 27
Centre zone has the highest number of titles affected by land covenants, with 1616,
with the area of titles with covenants in in the Metropolitan Centre zone covering 108
hectares.
Table 7: Number of titles, land covenants, and titles with land covenants in Auckland,
2018, by centre zones of the Auckland Unitary Plan (operative in part)
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
City Centre
28,824
2,573
1,616
6%
2%
Local Centre
2,404
343
150
6%
<1%
Metropolitan Centre
5,436
903
426
8%
<1%
Neighbourhood Centre
1,994
57
43
2%
<1%
Town Centre
6,382
407
294
5%
<1%
Total
45,040
4,283
2,529
6%
3%
Table 8: Area zoned and area covered by land covenants in Auckland, 2018, by centre
zones of the Auckland Unitary Plan (operative in part)
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
City Centre
261
104
40%
<1%
Local Centre
246
59
24%
<1%
Metropolitan Centre
382
108
28%
<1%
Neighbourhood Centre
132
12
9%
<1%
Town Centre
442
52
12%
<1%
Total
1,463
336
23%
1%
4.2.3 Rural zones
In rural zones over 5800 titles have a land covenant or 19 per cent of the total titles in
these zones (Table 9); they cover a land area of 41,000 hectares or two-thirds of
Auckland’s total covenanted land area (Table 10). Of all the rural zones, the
Countryside Living zone has the highest number (2507) and the highest proportion
(34 per cent) of its titles with land covenants. Titles with land covenants in the Rural
Production zone cover the largest area of any of the rural zones, covering 19,104
Land covenants in Auckland and their effect on urban development 28
hectares or half of rural zone covenanted land and fully a third of total covenanted
land by area.
Table 9: Number of titles, land covenants, and titles with land covenants in Auckland,
2018, by rutal zones of the Auckland Unitary Plan (operative in part)
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
Countryside Living
7,299
3,862
2,507
34%
3%
Rural Production
12,579
2,574
1,694
13%
2%
Mixed Rural
4,500
1,240
767
17%
1%
Rural Coastal
3,437
960
593
17%
1%
Waitakere Ranges
Foothills
1,200 185 141 12% <1%
Waitakere Ranges
2,169
134
122
6%
<1%
Rural Conservation
215
44
39
18%
<1%
Total
31,399
8,999
5,863
18%
6%
Table 10: Area zoned and area covered by land covenants in Auckland, 2018, by rural
zones of the Auckland Unitary Plan (operative in part)
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
Countryside Living
22,592
6,953
31%
11%
Rural Production
165,169
19,104
12%
31%
Mixed Rural
39,077
6,185
16%
10%
Rural Coastal
77,770
7,397
10%
12%
Waitakere Ranges Foothills
3,141
317
10%
1%
Waitakere Ranges
2,870
314
11%
1%
Rural Conservation
3,093
992
32%
2%
Total
313,714
41,262
32%
68%
Land covenants in Auckland and their effect on urban development 29
4.2.4 Future Urban zone
In the Future Urban zone 897 titles have covenants or 26 per cent of the total titles in
that zone. The land area of the titles with covenants in this zone is 10,674 hectares,
or 26 per cent of the total land area of the zone; Four per cent of total land area
affected by covenants in Auckland is in the Future Urban zone.
Table 11: Number of titles, land covenants, and titles with land covenants in Auckland,
in the future urban zone of the Auckland Unitary Plan (operative in part)
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
Future urban
3,464
1,417
897
26%
1%
Table 12: Area zoned and area covered by land covenants in Auckland, 2018, in the
future urban zone of the Auckland Unitary Plan (operative in part)
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
Future urban
10,674
2,732
26%
4%
4.2.5 Other notable zones
The airport zone has the highest proportion of titles with land covenants (67 per
cent), with the titles with covenants accounting for 84 per cent of the total area of the
zone. In this zone there are 85 titles with a total of 16,904 covenants, averaging 199
covenants per title, which is vastly more than any other zone. The Quarry zone also
has a high proportion, with 66 per cent of titles in the zone having a land covenant.
4.3 Plan enabled and feasible capacity of parcels with land
covenants in residential zones
This section includes analysis on the number of dwellings enabled by planning, and
those that are commercially feasible, that could be affected by land covenants in
residential zones.
As part of the requirements of the National Policy Statement on Urban Development
Capacity (NPS-UDC), Auckland Council undertook several sets of calculations,
relating to the capacity for residential properties to accommodate addition dwellings
Land covenants in Auckland and their effect on urban development 30
under the planning rules. The two that have been analysed against land covenants
for this study include:
1. Plan enabled capacity: The capacity for additional dwellings that a parcels
could accommodate under the rules of the Auckland Unitary Plan (operative in
part), and
2. Commercially feasible capacity: The capacity for additional dwellings that a
parcel could accommodate under the rules of the Auckland Unitary Plan
(operative in part), that are also commercially feasible
10
.
Plan enabled capacity and commercially feasible capacity is for additional dwellings,
and has been calculated based on the zoning of the Auckland Unitary Plan (operative
in part), as at November 2016. A copy of the executive summary of the report can be
found in Appendix D, and full results and overview of the methods used in reporting
of the NPS-UDC requirements can be found in Auckland Council (2017), National
Policy Statement on Urban Development Capacity 2016: Housing and business
development capacity assessment for Auckland. Further details of the modelling
methodology for plan enabled capacity can be found in Balderston and Fredrickson
(2014), Capacity for Growth Study 2013 (Proposed Auckland Unitary Plan):
Methodology and Assumptions.
4.3.1 Plan enabled capacity in residential zones and land covenants
Analysis of plan enabled capacity (PEC) in residential zones shows that 16 per cent
of residential zoned parcels assessed for capacity are covered by a land covenant;
plan enabled capacity for these parcels is for 119,891 additional dwellings. This
capacity
11
accounts for 13 per cent of all plan enabled capacity for residential zones.
Break down of the capacity results by zone are shown in Table 13.
When the assessed capacity affected by covenants is assessed by each residential
zone the Mixed Housing Suburban zone has the most with 65,188 dwellings
potentially affected by land covenants, or 54 per cent of total residential zones’ PEC
with land covenants. A further 26,219 in the Mixed Housing Urban zone affected, 22
per cent of the total residential zones’ PEC with land covenants A further PEC for
10
Commercially feasible capacity is an assessment of the ability of an ‘average developer’ acting
within normal commercial parameters to deliver developments. The approach is a variation on the
‘residual value’ method, which is a widely used standard commercial methodology to determine the
maximum price a developer should pay for a potential development site (the ‘residual’) given expected
development costs, sale prices and minimum return requirements (Auckland Council, 2017).
11
Number of dwellings
Land covenants in Auckland and their effect on urban development 31
23,864 dwellings are affected in the Terrace Housing and Apartment Buildings zone,
or 20 per cent of total residential zones’ PEC with land covenants.
Table 13: Plan enabled capacity (PEC) in residential zones and land covenants
Residential
zone
Number of
parcels
assessed
in zone
Number of
parcels
with land
covenants
Proportion
of parcels
with land
covenants
Total PEC
(dwellings)
PEC
(dwellings)
on parcels
with land
covenants
Proportion
of PEC
with land
covenant
in zone
Proportion
of total
PEC
Large Lot
623
238
38%
5,808
2,257
39%
<1%
Mixed Housing
Suburban
117,920 23,620 20% 333,302 65,188 20% 7%
Mixed Housing
Urban
58,801 4,984 8% 258,992 26,219 10% 3%
Single House
1,896
509
27%
11,432
2,363
21%
<1%
Terrace
Housing and
Apartment
Buildings
19,202 1,656 9% 296,730 23,864 8% 3%
Total
residential
zones
198,442 31,007 16% 906,264 119,891 13% 13%
4.3.2 Plan enabled commercially feasible capacity in residential zones with
land covenants
As well as assessing the proportion of plan enabled capacity affected by land
covenants, commercially feasible capacity was also analysed. Of the PEC for an
additional 906,264 dwellings for on parcels in residential zones across Auckland,
111,510 dwellings were commercially feasible. Twelve per cent of these
commercially feasible dwellings are on a title with a land covenant; the properties
have commercially feasible capacity (CFC) for an additional 13,243 dwellings. Break
down of the capacity results by zone are shown in Table 14.
The Mixed Housing Suburban zone has the largest amount of commercially feasible
capacity affected by land covenants, 6838 dwellings, or 52 per cent of the total
residential zones’ CFC with land covenants. The Mixed Housing Suburban zone
having a further 4226 affected or 32 per cent of the total residential zones’ CFC with
land covenants.
Land covenants in Auckland and their effect on urban development 32
Table 14: Commercially feasible capacity (CFC) in residential zones with land
covenants
Residential
zone
Number of
parcels
with CFC
in zone
Number of
parcels
with land
covenants
Proportion
of parcels
with land
covenants
Total CFC
(dwellings)
CFC
(dwellings)
on parcels
with land
covenants
Proportion
of EFC
with land
covenant
in zone
Proportion
of total
EFC
Large Lot
108
48
44%
1,672
389
23%
<1%
Mixed Housing
Suburban
19,245 1,836 10% 55,770 6,838 12%
6%
Mixed Housing
Urban
11,498 590 5% 41,313 4,226 10%
4%
Single House
216
52
24%
3,250
535
16%
<1%
Terrace
Housing and
Apartment
Buildings
1,086 56 5% 9,505 1,255 13%
1%
Total
residential
zones
32,153 2,582 8% 111,510 13,243 12%
12%
Land covenants in Auckland and their effect on urban development 33
5.0 Discussion
Covenants present a number of barriers to development and redevelopment in an
urban context, including the limited ability to amend or discharge those covenants. In
some cases existing covenants that prevent or limit redevelopment or intensification
in residential areas may be viewed as no longer suitable, and may cause future
issues especially where they have been created in perpetuity. In Auckland the
presence of covenants in residential areas earmarked for intensification, or future
urban expansion areas, will have an effect on the ability of these areas to change.
Large areas of the city are covered by titles that have a land covenant, just over 8600
hectares in residential zones, around 330 hectares in centre zones, and over 10,600
hectares in the Future Urban zone.
Over four-fifths (86 per cent) of the covenants in residential zones are on titles that
have been created in the last 30 years, meaning that the buildings on them are also
likely to be of a similar age. The redevelopment of these areas is not likely to happen
in the very near future, as the houses on these titles are still too new to be
economical to redevelop. When they do come to the end of their economic or
physical life, the covenants on the land will prohibit redevelopment at densities higher
than are currently there, even if it is permitted under planning rules, due to the
restrictive nature of the development controls contained in their covenants. This is
likely to affect the ability of the city to reach its intensification goals for the existing
urban area. This problem is not limited to residential areas. Places like the city,
metropolitan, and town centres that have been indicated as suitable for high density
living are also potentially impacted by land covenants. The impacts of land covenants
will also be felt in the areas in which the city is expanding; the Future Urban zone. In
these areas 26 per cent of current titles have a land covenant, with those titles
covering 26 per cent of the land area of the zone. As these areas are planned to be
developed into urban uses from their current rural state, the presence and effects of
current covenants preventing subdivision and additional dwellings may mean that
these areas are planned and developed less efficiently than an area without such
covenants, potentially leading to poor urban form outcomes.
Whether a covenant is viewed as good or bad depends on who is looking at it – and
time. Land covenants on residential land are viewed as beneficial by the developers
who use them to increase the value of their product by ensuring a standard of houses
in a development. This benefit is also seen by the buyer, as the covenant will ensure
they are buying a product that meets a certain standard, but also the knowledge that
the look and feel of the neighbourhood will be maintained into the future. This in turn
increases the value of their property. Those who don’t benefit from the covenants
Land covenants in Auckland and their effect on urban development 34
though are those who are looking for affordable housing. Covenants may also prove
to be a disbenefit to owners who may struggle to comply with covenant rules. While
covenants may be seen as a benefit when a house is new, as time passes and
houses age they may no longer be of benefit to owners when they are required to
spend money and time ensuring they comply with the covenant rules. While this
creates a disbenefit to the individual owner, it may provide benefit to other properties
in the neighbourhood by ensuring standards are kept. If a house needs to be
replaced, as most covenants are in perpetuity, any new houses built will need to
comply with the original rules set out in the covenant, even if the suburb has changed
and new building techniques or densities are desirable. From the view of the
planners trying to ensure changing cities are fit for future generations, and property
developers looking to realise that vision, covenants that restrict this happening are
bad.
While land covenants will affect urban development in the future, they currently have
or will offer a number of benefits. The NZPC noted that covenants can encourage
development by placing time limits on construction, provide assurance to prospective
buyers on the quality of development and also provide buyers with reduced risk (New
Zealand Productivity Commission, 2015). Other benefits from covenants on
properties in residential neighbourhoods include higher sales prices over time
(Speyrer, 1989; Hughes & Turnbull, 1996; Rogers, 2006, 2010). Coverage in local
media has also shown that residential properties with covenants also improve
amenity and the perception of the neighbourhood (Dally, 2013; Simpson, 2016;
Rikihana Smallman, 2017), again increasing the value of the property. This increase
in value, both initial and over the longer-term is perhaps why land covenants have
become increasingly popular on residential properties in the last few decades. Often
higher house prices are elicited and maintained through popular covenant clauses
such as minimum floor space area, shape and form of the house, minimum house
value, and specifications on types of construction materials, all of which prevent
lower-cost and affordable houses (McDonald, 2017; Rikihana Smallman, 2017;
Stevenson, 2018). In addition, some covenants explicitly prohibit state houses, thus
excluding other parts of society from living in the suburb.
Covenants may be a barrier to urban development, but are there some solutions to
the problems they present? The NZPC’s report on using land for housing (2015)
outlined a number of shortcomings with covenants, but suggested that no need for
reform was required on the matter, or for local authorities to have the ability to
overturn covenants. The report did make two recommendations relating to
covenants. The first, that time limits be placed on covenants of a period of 25 to 30
years, and secondly, that reforms be introduced to make it easier for land owners to
Land covenants in Auckland and their effect on urban development 35
modify or remove them. The first suggestion, to place time limits on covenants is one
that is used overseas in the likes of Louisiana. While this might be useful for
covenants in residential areas that may inhibit or prevent development and
redevelopment (which was the scope of NZPC’s inquiry) no mention is given to
whether such a suggestion would also apply to other types of covenants such as
those for heritage or conservation. No mention is also given on whether such a
measure should apply to existing covenants, or only those created after changes to
relevant legislation. If the changes only applied to covenants created after changes,
the effects of covenants already in place would still be in effect and be a large
problem.
The NZPC also suggest there is merit in making it simpler for land owners to
extinguish covenants, noting the current requirement for covenants to be modified or
discharged is for all landowners with benefit to agree, or by court order. Lowering the
agreement from unanimous to a super-majority (75 per cent), as suggested, would
make it easier to discharge covenants restricting redevelopment, especially where
mutual covenant schemes have been used for residential areas. Such a rule change
may also have unintended consequences, by allowing impact on other types of
covenants such as those for conservation.
The interaction between planning documents and covenants is complex, and differs
depending on the jurisdiction. In New Zealand covenants take precedence over
public planning documents like regional policy statements and district plans, often
creating a conflict that limits redevelopment and intensification goals of such
documents. In Australia, New South Wales has had legislation that allows covenants
to be superseded by planning documents since 1979, and Victoria has tried to
incorporate covenants into the planning system (Taylor & Rowley, 2017). In England
the Law of Property Act 1925 allows for the discharge of covenants through a
tribunal, if the covenant is deemed to impede reasonable use of land for public or
private purposes, taking into account any plans that may affect planning permissions
(Lee, 2017). In the aftermath of the Christchurch earthquakes, it was suggested by
MBIEs chief architect that a way to overcome redevelopment constraints such as
covenants was to enable special powers allowing the district plan to override
residential covenants, and that this might be needed as part of the rebuild (Joiner,
2012), but no such powers were enacted. Easton et al. (2012) suggested that
allowing planning documents to override covenants in New Zealand was a good idea,
citing NSW as an example of where such a system was in place, but this idea was
rejected by the NZPC, stating that such a move would “limit the opportunity for
private individuals to make welfare-enhancing arrangements” (New Zealand
Productivity Commission, 2015, p. 117).
Land covenants in Auckland and their effect on urban development 36
The precedence of private property rights and the private planning system (in the
form of covenants) over public planning documents may cause a barrier to
redevelopment and intensification in some locations. In order to facilitate future
development in areas where it has been determined appropriate though planning
documents, some changes may be required to ensure that this can occur despite the
presence of barriers related to covenants. To what degree public planning
documents can influence the effects of covenants would need to be determined – it
need not be an all or nothing situation. The opposite case to New Zealand is New
South Wales, where public planning documents override covenants, but in Victoria
they have tried to find a balance between public planning and private covenants by
trying to incorporate the modification and discharge of covenants into the planning
process, arguably relatively unsuccessfully (Taylor & Rowley, 2017). In Alberta,
Canada, Ziff & Jiang, (2012) propose that local governments be given the ability to
respond to restrictive covenants that interfere with municipal powers.
Another option proposed by submitters to the NZPC was giving councils the ability to
void covenants, but the NZPC also rejected this option, as it would increase
workloads for councils and undermine the overall effects of covenants (New Zealand
Productivity Commission, 2015). Rather than just voiding covenants, the ability to
modify them may also be an option. While the ability to void or modify covenants
would allow councils to ensure that covenants did not contravene their plans, an
equitable framework to assess the merits of a covenants rules would need to be put
in place to enable this to happen. It might be beneficial if such decisions didn’t sit with
a council, but instead with another body, such as in England and Scotland where a
legal tribunal system is used. Another option is for the decision to sit with the court,
as is currently the case for some covenant changes or discharges.
The ability for councils to create conditions on residential subdivision consents that
would prevent the use of covenants, which in theory is a covenant that there will be
no other covenants, was mooted by Easton et al. (2012). While this would prevent
situations where development or redevelopment is prevented, and that is admirable,
it would put in place the same issue that they are trying to alleviate – a future
constraint on the land, and one that may have unintended consequences. It is also
unclear how councils would impose such conditions under the current legislation.
It has been suggested that ‘developer agreements’ be used as a method to control
development as an alternative to covenants (Easton et al., 2012; New Zealand
Productivity Commission, 2015). Developer agreements are a contract between the
subdivision developer and house builders, which require builders to construct
dwellings to a certain standard similar to those seen in covenants, such as materials
to be used, dwelling floor area minimums, and construction time limits. While
Land covenants in Auckland and their effect on urban development 37
agreements could keep the type of houses in a suburb of a certain type and quality, it
is hard to see subdivision developers using them in place of covenants. The terms of
the contract would only apply to the dwelling construction, and would not be effective
after the builder sells the property, and some of the increased value that a developer
could sell a section for is from the perceived value that purchasers have for some of
the amenity and land use controls that covenants provide. If perceived future value is
less, then the amount that a subdivision developer could command for a section
would be less.
Housing affordability in Auckland has decreased (Eaqub & Eaqub, 2015), as well as
the provision of state housing (Housing New Zealand, 2015, 2018). Covenants can
add to the cost of housing where they include requirements for minimum floor area
and the use of certain materials, which can impede the provision of affordable
housing. Some covenants even explicitly prohibit social or state housing. Given these
issues, a mechanism to overcome such constraints to limit the effects of covenants
on these housing types may need to be investigated. The Affordable Housing:
Enabling Territorial Authorities Act 2008 was a piece of legislation that tried to do just
this. Section 30 of the Act stated that “a covenant over land is void if one of its
purposes is to stop the provision of affordable housing or social housing on the land”
(Affordable Housing: Enabling Territorial Authorities Act 2008). Unfortunately after a
change of government the Act was repealed in 2010. As covenants in areas that are
developing or redeveloping affect the delivery of housing, perhaps a similar piece of
legislation will be required again to ensure the provision of affordable and social
housing.
Many of the solutions discussed in this section would require some sort of legislative
change. Changes to laws, including the Property Law Act, and potentially others,
would not be a simple process and would require both political and public buy-in. The
NZPC recommended that the Ministry of Justice and the Ministry of Business,
Innovation and Employment review the legislation relating to covenants, but changes
to important components of New Zealand law and changes to the Act would not be
done lightly. The Property Law Act was last updated in 2007, following a review of
the 1952 version of the Act by the Law Commission in the early 1990s (New Zealand
Law Commission, n.d.).
Understanding the effects of land covenants is hard to quantify. While it was
relatively easy to identify those titles that have a land covenant, it is not possible to
easily understand what the contents of the covenants are, or what their effects may
be. Covenant information is stored in LINZ’s LandOnline, which provides access to
title and property information. If you have direct access to the LandOnline system you
can view the content of a covenant by searching for the title you are interested in,
Land covenants in Auckland and their effect on urban development 38
and then open any relevant documentation attached to the title. Using LandOnline
also comes at a cost, with a charge being made for every title that is viewed.
Covenant information is stored as an image file, often a TIFF or PDF, which means
that it is not searchable for keywords using standard software; this analysis must be
done by manually reading the covenant text, or perhaps though the use of character
recognition software. For these reasons, only a small number of titles had their
covenant text reviewed as part of this research. A more thorough review of
covenants, to understand their wording and their direct effects, would perhaps
provide a better understanding of the impacts of their clauses, but would require a
well-defined study scope and sufficient resourcing, but is an area of research that
should be explored further.
Land covenants in Auckland and their effect on urban development 39
6.0 Conclusion
Land covenants are a well-established and effective mechanism to control land and
land use, forming a set of private planning controls that are often hidden, and sitting
outside of New Zealand’s public resource planning system.
Land covenants in New Zealand take a range of forms, but are widely used in
residential subdivisions. In these cases they are used as subdivision controls, to
stipulate the minimum size of dwellings, what form they can take, and their
construction material, as well as providing directions on landscaping and fencing.
Covenants are also widely used for heritage and conservation purposes.
The effects of covenants in urban areas include: acting as a barrier to development
and redevelopment, increasing house prices and decreasing affordability, being used
to stifle business competition, as a method of social exclusion, and as a form of land
control. While covenants present a number of disbenefits to some parties, they
create benefits to others, including increased property value, and maintained or
increased amenity.
Land covenants are spread across the Auckland region, where there are 151,170
land covenants on 96,261 titles. The land area of titles with a covenant covers an
area of 60,757 hectares or 12 per cent of Auckland’s land area. Residential zones
contain 83,068 titles that are affected by land covenants (19 per cent of the total).
Residential zoned titles with land covenants are concentrated in suburbs that have
been developed over the last few decades. Analysis shows the proportion of titles
with land covenants in residential zones has been increasing over time. Less than 10
per cent of residential titles issued in the early 1980s had a land covenant on them.
In 2017 over 50 per cent of residential titles issued had a land covenant on them, and
over three-quarters (86 per cent) of the covenants in residential zones are on titles
that have been created in the last 30 years. Properties in residential zones with a
land covenant have commercially feasible capacity for 13,243 additional dwellings, or
12 per cent of the total commercially feasible capacity for all residential zones.
Centre zones have 2529 titles affected by covenants, and over 5800 titles in rural
zones have a land covenant. The Countryside Living zone has the highest number
(2507) and the highest proportion (34 per cent) of titles with land covenants of any of
the rural zones.
While the impacts of land covenants in residential and commercial areas of the
region may not be felt currently, they are likely to have a future impact on the city’s
ability to develop and redevelop efficiently or in line with strategic planning goals. A
number of solutions to the problems they present include recommendations from the
Land covenants in Auckland and their effect on urban development 40
NZPC for legislative change. The NZPC in its findings on an investigation into using
land for housing noted that overall they did not see any need to substantially change
how land use covenants operate in New Zealand, but did recommend statutory
sunset clauses or time limits for covenants (though they did not specify if that should
apply to only new covenants or also existing ones), and reducing the proportion of
covenant beneficiaries’ permission required to modify and discharge them. Both of
these suggestions have merit, but in the longer term will have little impact on the
effects of covenants already in place in residential areas that will affect
redevelopment. Another option would be adopting a regime similar to that of New
South Wales, where planning documents override covenants, or adopting a tribunal
system as used in Scotland or England to assess covenants through a formal
process. Other solutions, which could be viewed as less favourable include providing
councils with the ability to discharge covenants.
Land covenants, particularly in existing residential suburbs and in areas earmarked
for future urban expansion, will limit the ability for these areas to grow and change as
the population of Auckland increases.
Land covenants in Auckland and their effect on urban development 41
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Land covenants in Auckland and their effect on urban development 47
8.0 Appendices
Land covenants in Auckland and their effect on urban development 48
– Example of schedule of covenants for a Appendix A
residential subdivision
Land covenants in Auckland and their effect on urban development 49
Land covenants in Auckland and their effect on urban development 50
Land covenants in Auckland and their effect on urban development 51
Land covenants in Auckland and their effect on urban development 52
Land covenants in Auckland and their effect on urban development 53
Land covenants in Auckland and their effect on urban development 54
Land covenants in Auckland and their effect on urban development 55
Land covenants in Auckland and their effect on urban development 56
Land covenants in Auckland and their effect on urban development 57
– Number of titles, land covenants, and titles Appendix B
with land covenants in Auckland 2018, by Auckland Unitary
Plan (operative in part) zone
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
Airport
127
16,904
85
67%
<1%
Business Park
161
76
37
23%
<1%
City Centre
28,824
2,573
1,616
6%
2%
Coastal Transition
24
0
0
0%
0%
Countryside Living
7,299
3,862
2,507
34%
3%
Defence
1
0
0
0%
0%
Ferry Terminal
5
0
0
0%
0%
Future Urban
3,464
1,417
897
26%
1%
General Business
1,675
243
203
12%
<1%
Green Infrastructure
Corridor
0 0 0 0% 0%
Hauraki Gulf Islands
8,438
599
475
7%
<1%
Healthcare Facility
220
0
0
0%
0%
Heavy Industry
2,983
264
219
8%
<1%
Large Lot
6,879
2,200
1,622
24%
21%
Light Industry
13,476
5,885
1,350
12%
1%
Local Centre
2,404
343
150
9%
<1%
Major Recreation Facility
147
17
13
9%
<1%
Maori Purpose
144
3
2
11%
<1%
Marina
103
14
2
2%
<1%
Metropolitan Centre
5,436
903
426
8%
<1%
Minor Port
7
0
0
0%
0%
Mixed Housing Suburban
199,468
52,366
42,450
37%
44%
Mixed Housing Urban
100,687
12,536
9,992
27%
10%
Mixed Rural
4,500
1,240
767
17%
1%
Mixed Use
17,111
1,522
1,146
10%
1%
Mooring
1
0
0
0%
0%
Neighbourhood Centre
1,994
57
43
5%
<1%
Public Open Space -
Civic Spaces
21 3 3 14% <1%
Public Open Space -
Community
204 2 2 1% <1%
Land covenants in Auckland and their effect on urban development 58
Zone name
Number
titles
Number of
land
covenants
Number of
titles with a
land
covenant
Proportion
of total titles
in zone with
a land
covenant
Proportion
of total titles
with a land
covenant in
region
Public Open Space -
Conservation
2,659 50 38 2% <1%
Public Open Space -
Informal Recreation
3,712 151 104 3% <1%
Public Open Space -
Sport and Active
Recreation
895 40 26 3% <1%
Quarry
114
137
75
66%
<1%
Road
553
111
74
15%
<1%
Rural and Coastal
settlement
5,841 872 727 13% 1%
Rural Coastal
3,437
960
593
17%
1%
Rural Conservation
215
44
39
19%
<1%
Rural Production
12,579
2,574
1,694
13%
2%
School
293
27
22
9%
<1%
Single House
86,191
34,770
23,567
36%
24%
Strategic Transport
Corridor
446 33 26 7% <1%
Terrace Housing and
Apartment Buildings
42,415 7,643 4,710 25% 5%
Tertiary Education
13
0
0
0%
<1%
Town Centre
6,382
407
294
7%
<1%
Waitakere Ranges
2,169
134
122
6%
<1%
Waitakere Ranges
Foothills
1,200 185 141 12% <1%
Water
17
3
2
12%
<1%
Total
574,934
151,170
96,261
17%
-
Land covenants in Auckland and their effect on urban development 59
– Area zoned and area covered by land Appendix C
covenants in Auckland 2018, by Auckland Unitary Plan
(operative in part) zone
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
Airport
1,542
1,292
84%
2%
Business Park
61
18
29%
<1%
City Centre
261
104
40%
<1%
Coastal Transition
1,493
0
0%
0%
Countryside Living
22,592
6,953
31%
11%
Defence
17
0
0%
0%
Ferry Terminal
8
0
0%
0%
Future Urban
10,674
2,732
26%
4%
General Business
357
88
25%
<1%
Green Infrastructure Corridor
6
0
0%
0%
Hauraki Gulf Islands
47,153
1,220
3%
2%
Healthcare Facility
164
0
0%
0%
Heavy Industry
1,869
610
33%
1%
Large Lot
2,912
887
30%
1%
Light Industry
4,586
1,064
23%
2%
Local Centre
246
59
24%
<1%
Major Recreation Facility
454
126
28%
<1%
Maori Purpose
87
0
1%
0%
Marina
265
8
3%
<1%
Metropolitan Centre
382
108
28%
<1%
Minor Port
17
0
0%
0%
Mixed Housing Suburban
14,970
3,608
24%
6%
Mixed Housing Urban
7,531
851
11%
1%
Mixed Rural
39,077
6,185
16%
10%
Mixed Use
984
132
13%
0%
Mooring
1,247
0
0%
0%
Neighbourhood Centre
132
12
9%
<1%
Public Open Space - Civic
Spaces
3 2 52% <1%
Public Open Space -
Community
91 1 1% <1%
Land covenants in Auckland and their effect on urban development 60
Zone name
Total zoned
area (ha)
Zoned area
that has land
covenant (ha)
Proportion of
total zoned
area with land
covenant
Proportion of
total area of
titles with
covenant in
region
Public Open Space -
Conservation
34,660 101 <1% <1%
Public Open Space - Informal
Recreation
8,411 1,411 17% 2%
Public Open Space - Sport
and Active Recreation
3,084 340 11% 1%
Quarry
1,682
1,223
73%
2%
Road
17,377
21
<1%
<1%
Rural and Coastal settlement
1,856
399
21%
1%
Rural Coastal
77,770
7,397
10%
12%
Rural Conservation
3,093
992
32%
2%
Rural Production
165,169
19,104
12%
31%
School
668
80
12%
<1%
Single House
8,539
2,604
30%
4%
Strategic Transport Corridor
2,564
4
<1%
<1%
Terrace Housing and
Apartment Buildings
2,485 337 14% 1%
Tertiary Education
40
0
0%
0%
Town Centre
442
52
12%
<1%
Waitakere Ranges
3,141
317
10%
1%
Waitakere Ranges Foothills
2,870
314
11%
1%
Water
1,836
1
<1%
<1%
Total
494,869
60,757
12%
-
Land covenants in Auckland and their effect on urban development 61
– National Policy Statement on Urban Appendix D
Development Capacity 2016: Housing and business
development capacity assessment for Auckland. Executive
summary. (Auckland Council, 2017)
Executive summary
The National Policy Statement on Urban Development Capacity 2016 requires the
completion of a housing and business development capacity assessment. The first of
these is due by 31
st
December 2017. This report contains the methods and results of
the assessment. The key conclusions of the assessment are specified below.
Housing assessment
Overall forecast population growth and demographic change related housing demand
is assessed to be between 239,000 (low) and 397,000 (high) over the period 2016 to
2046. Under a medium growth scenario, additional demand is projected to be
319,000 dwellings. In addition to population driven demand a shortfall of 35,000
dwellings has been added.
Plan-enabled capacity in residential zones in the urban area ranges between
120,000 (infill – where no existing structure is removed) and 1.07 million
(redevelopment, where sites are cleared and redeveloped to the maximum).
Plan enabled potential for dwellings in centres and mixed-use business areas is at
least as much as the residential zone redevelopment figure, depending on the split of
enabled floor space between business activities and assumed apartment size.
Estimated feasible dwelling development capacity in the urban areas (business and
residential zones) is 140,000 residential dwellings.
Additional feasible capacity of 15,000 dwellings in the rural areas is assumed. This
number will be revised pending the completion of Rural Subdivision appeals on the
Auckland Unitary Plan.
Feasible capacity for 25,000 dwellings from Housing New Zealand has been
assumed.
Feasible dwelling development capacity in the future urban areas is 146,000
residential dwellings, assuming a Mixed Housing Suburban zoning on all non-
business areas.
Overall, currently feasible supply is expected to be sufficient to meet forecast
demand for the short and medium terms. Longer term currently feasible supply is less
than demand.
Land covenants in Auckland and their effect on urban development 62
Given the changes in feasibility identified in the last 12 months due to factors other
than ‘planning regulations’, the significant amount of plan enabled capacity that
exists, significant alternation to planning policy and strategy to address this is not
recommended.
Business assessment
The plan enabled business space capacity ranges from approximately 4500 hectares
(business land capacity) to over 30,000 hectares (floor space capacity).
There is no shortfall of feasible business land/ space in the short or medium term.
However, there is a shortfall in some locations in the long term.
Business land or floor space that is feasible for residential development in mixed use
zones is not included in the final feasibility assessment
Land covenants in Auckland and their effect on urban development 63
Find out more: phone 09 301 0101, email
[email protected] or visit
aucklandcouncil.govt.nz and knowledgeauckland.org.nz
