Non-residential activities in residential areas

Abstract

Non-residential activities in residential areas provide for home-based employment and economic diversification. They can also provide valued services for the local community. However, they may also be regarded by a community as a symptom of residential decline and causing a loss of amenity values.

Best practice in managing non-residential activities in residential environments requires decision makers to reconcile these conflicting factors. This guidance note is intended to assist with the formulation of district plan provisions for non-residential activities in residential areas. Brief mention is made of new mixed use developments, but the primary emphasis is on existing residential areas.

Practitioners must have sound information on the changes taking place in the community and the nature and resilience of the host residential environment, accompanied by ongoing monitoring of community feedback, consent applications and case law.

This guidance note does not address non-residential activities outside residential environments.

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Guidance note

• What are non-residential activities?
• Why are non-residential activities in residential areas a planning issue?
• Adverse and positive effects of non-residential activities
• Formulating strategies for managing non-residential activities
• Establishing an information base
• Regulatory approaches taken in district plans
• Non-regulatory approaches
• The concept of mixed use
• Section 32 and other methods
• Monitoring

What are non-residential activities?

Virtually all district plans in New Zealand have a zoning model that identifies areas for residential (or living) purposes, within which residential activities are dominant and an associated high level of amenity values is expected. These amenity values include visual quality, open space, gardens, trees, low noise levels, limited traffic generation and other characteristics people usually associate with domestic life.

Non-residential activities can range from those associated with self-employment in the home, to a wide range of employment, community support and commercial activities that may entirely displace residential occupation. These categorisations have often resulted in three classes of non-residential activities in plans.

Why are non-residential activities in residential areas a planning issue?

Traditionally New Zealand residential communities have segregated residences and workplaces. As a result, there has been ongoing community concern about non-residential activities establishing within, or encroaching into, residential areas, as evidenced by the number of notified resource consents, and a steady (albeit small) volume of evolving case law. The degree to which non-residential activities are tolerated is influenced by the character and status of the host community.

However, in recent years there has been a trend to encourage mixed use in some modern suburban developments (the 'new urbanist' model), and within existing residential areas close to public transport, which allows for redevelopment at higher densities. In New Zealand this approach has largely been confined to the major urban centres. Given these changes and ongoing development pressures, non-residential activities need to be appropriately managed by plan provisions and through the resource consent process.

1. Home occupations, where the activity is carried out on site by the occupant of the dwelling
2. Community facilities, which are favoured as meeting local needs but usually have little or no residential component (e.g. preschools, churches and medical practices)
3. Other non-residential activities, which typically include motels, café bars, larger medical facilities, specialised recreation facilities, offices and service stations.

Non-residential activities may seek to establish in residential environments under the following scenarios:

• establishment of a new activity within a residential area
• expansion from a business zone into a residential area
• intensification of an existing non-residential activity within a residential area
• a change in use from one non-residential activity to another within a residential area.

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Adverse and positive effects of non-residential activities

Adverse effects can be tangible or intangible. Tangible effects include:

• the potential for increased noise and traffic generation
• visual detraction associated with building scale and appearance
• signage
• expanses of car parking
• overshadowing and loss of privacy.

Intangible adverse effects may include:

• loss of residential coherence through lack of on-site occupation and isolation from residential neighbours; and
• a perception that the character of the neighbourhood is changing and in decline.

Positive effects of non-residential activities may include:

• cheaper entry costs for new businesses, particularly where these are initially small scale; and
• providing access to a wider range of local services;
• clustering of businesses providing mutual support and self sufficiency.

As part of a planned mixed-use community, such activities may help facilitate less dependency on car travel and enhance urban sustainability. For some people, a mixed-use urban environment will be a more diverse and interesting place to live.

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Formulating strategies for managing non-residential activities

A wide range of approaches can be taken to this issue, and the best one will depend on local circumstances. The actions listed below will assist in formulating a strategy for managing non-residential activities.

• Undertake an analysis, in consultation with the affected parties, of the nature and character of neighbourhoods and areas within an urban area as a whole.
• Consider whether any residential areas have special amenity characteristics that require enhanced protection.
• Assess whether development pressures are likely to endanger the long-term survival of small residential enclaves or transition zones, and determine whether their long-term retention for residential purposes would be realistic.
• Consider whether retaining particular areas in residential use is an anomaly in terms of adjoining land-use patterns.
• Assess the extent and nature of existing non-residential activities in the area, and whether particular types of development should be of a similar character and scale.
• Explore opportunities to facilitate environmental compensation, such as providing viable uses for heritage buildings in the area, or measures to discourage the loss of such buildings.
• Assess the capacity and safety of the local road network.

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Establishing an information base

It is necessary to have a good understanding or 'reading' of the urban environment in order to justify any differentiation by zoning. This may include undertaking the following.

• Identify any unique or localised aspects of the residential environment that may justify different treatment of non-residential activities. Examples include age of housing stock, or any special heritage, visual, landscape or natural values. Another example is proximity to public transport, community facilities or business areas.
• Analyse the results of consultation with residents groups, tangata whenua, or sector groups (refer to the Consultation Process for Plan Development and Consultation with Tangata Whenua guidance notes for good practice tips on effective consultation).
• Acknowledge that, in many cases, operators of non-residential activities may not be part of any organised groups, and therefore may be overlooked. In these cases inviting broad-based consultation, such as through regular council newsletters, may be necessary.
• Review resource consent applications, case law and complaints.
• Acknowledge that a desk-top exercise will be inadequate, and that field visits to areas subject to successful or unsuccessful non-residential activity applications, or controversial sites, will be necessary.
• Look at areas which have declined and the factors which have contributed to this outcome.

This information can both help identify both what standards are appropriate, and issues that cannot be addressed through regulatory means.

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Regulatory approaches taken in district plans

Regulatory control is likely to be the primary management tool for controlling non-residential activities in residential areas. This is reflected in district plans generally. Plans can adopt an effects-based approach (with little or no identification of particular activities), an activity-based approach, or a combination of both. The approach adopted will have significant ramifications for rule drafting.

Plan strategy

• Plan strategies should adopt a top-down approach, beginning with objectives and policies, zone statements (if applicable), rules and assessment matters. Some plans have quite specific rules which are supported by only limited and very general objectives and policies (refer to the Policy Framework note for good practice tips on effective plan preparation).
• First decide whether to differentiate between residential and non-residential activities, and then whether to differentiate between different types of non-residential activities. For example, should church activities and preschools have more generous provision on the basis that they are argued to serve local needs?
• The Council may wish to provide more liberal standards for different categories of non-residential activities (e.g. for preschools but not for offices). If so, such an approach needs to be justified at a policy level, and the rules carefully drafted, because if activities have similar effects the Council's intentions may succumb to the 'baseline test'.

Objectives and policies

• Objectives should specify desired environmental outcomes (i.e. 'what' is desired) and policies the means (i.e. 'how') to achieve them.
• Avoid circularity in policy wording, whereby you attempt to please everyone by supporting non-residential activities, while pointing out that their potential adverse effects must be avoided. It is more helpful to specify the circumstances in which consent might be favoured.
• Similarly, wording such as 'avoid, remedy and mitigate' in policies only paraphrases one component of Section 5 of the Act, and provides little assistance to decision makers. It should be clear to readers of the plan and to interested residents the extent to which non-residential activities are likely to be acceptable in their neighbourhood, and under what circumstances.

Rules - activity-based approach

• Rules need to provide reasonable certainty for both communities and developers. Rules that result in large numbers of existing non-residential activities becoming non-complying and reliant on existing-use rights are likely to be resisted by affected landowners and the business community.
• Special provisions such as scheduling or a site-specific permitted activity status could be considered for significant existing facilities in these circumstances. Both techniques involve identifying existing activities on their sites and having special rules for their operation or expansion.
• Give careful consideration to allowing some reasonable ongoing use and expansion of these activities while ensuring they do not detract from the character and amenities of the residential locality. Specific rules could be applied to ensure minimum setbacks, limiting large scale buildings, signage, etc.
• Failure to provide for larger scale non-residential activities elsewhere in appropriate zones is likely to result in successful applications to establish in residential areas on the edge of existing business zones. In this respect a council needs to be realistic about retaining residential zonings in locations where this might be an anomaly, and where amenity values are already seriously compromised.
• In an activity based plan other rules (e.g. traffic and parking) will apply. These need to be adequately cross referenced.
• If particular categories of non-residential activities are to be discouraged (and this can be justified), give consideration to the consent category applied. If the Council decides a certain activity is unsuitable in a residential area, and is contrary to well focused policies, its categorisation as a non-complying, rather than as a discretionary activity, should be considered. New service stations may be a potential example of this type of activity.
• Controlled activity status will be inappropriate if the council anticipates there may be situations where consent will be declined.

Rules - effects-based approach

In the case of effects-based plans, similar principles apply but are linked to the threshold level set in the rules, which for non-residential activities may include floor-space limits, traffic generation levels, requirements for continued on-site residential occupation, and noise levels. This approach requires a judgement as to the relative significance of non-compliance and the consequent activity status.

• If an effects-based approach is adopted, rule provisions are more demanding to draft and have a particular need for policy clarity. Policies should use phrases such as 'the council will discourage non-residential activities generating traffic levels greater than that anticipated for residential use' rather than 'to avoid, remedy and mitigate the effects of traffic'.
• Refer to the Writing provisions for regional and district plans guidance note for good practice tips on preparing effective rules.

Effects checklist

Thresholds in effects-based plans are quantifiable standards that trigger consent. In activity-based plans they can form the basis of assessment criteria, without necessarily being in the form of a rule. A possible effects checklist is as follows.

• Floor-space threshold
• Noise threshold:<
  • day
  • night
  • on zone boundaries
• Traffic generation:
  • by category of vehicle (total)
  • day
  • night
  • hourly (peaks)
  • heavy traffic
• On-site residential occupation
• Number of people employed (from off site)
• Total site area for a non-residential activity (scale)
• Heritage and protected trees
• Size, number and design of signage
• Hazardous substances threshold
• Glare threshold
• Parking:
  • numbers required
  • maximum number threshold (scale)
• Location and safety of access point - standards
• Differentiation in rule thresholds by zone - according to sensitivity of the particular residential environment
• Adequacy of controls relating to certain existing non-residential activities in the residential area
• Specific provisions for any expansion of existing non-residential activities
• Earthworks
• Setbacks from waterways

A plan need not contain all of these standards, and may include any combination of them. 'Hybrids' between these two models may well prove to be the most practicable approach.

With effects based plans in particular, it is important that standards are not subjective to the point that the status of the activity is unclear.

Enforcement

Non-residential activities in residential areas are one of the main sources of complaints to councils. This reinforces the need for a clear policy framework so that the public's expectations as to what the plan can deliver are realistic. Where standards are set these must be legally certain, so that the plan can be enforced.

Assessment matters

Assessment matters can be added to the plan to assist decision making, and are in addition to and not a substitute for the matters in Section 104 of the Act. Assessment matters are not required under Section 75 of the Act, but will assist the decision-making process for controlled and discretionary activities, and may be taken into account under Section 104(1)(c) of the Act. They are not policies, but provide more detailed guidance, particularly to an applicant as to the factors a Council considers is relevant when consent is required under a particular rule.

Assessment matters can enable the council to address factors it considers important, but which are too subjective to qualify as rules. For example, assessment matters could take into account factors such as external appearance (e.g. will the non-residential activity take place in a building that looks residential in appearance and is of a similar scale?).

Definitions

If an activity-based approach is adopted, identified activities will be given particular status within zones (e.g. preschools, discretionary activity). In this case, although rule drafting is easier, accurate definitions assume critical importance.

• Some plans use generic categories (e.g. 'places of assembly') without defining them, or by describing them as comprising education facilities, preschools, spiritual facilities, etc. without defining them. This may lead to difficulties in administering the plan.
• 'Home occupations' are almost universally provided for as permitted activities, although the threshold levels for the establishment as of right (e.g. floor space) can vary.

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Non-regulatory approaches

• While regulatory intervention is likely to be the primary management tool, other options may assist in managing the effects of non-regulatory activities. These include:
  • private covenants on developments that may restrict certain non-residential activities
  • environmental compensation, such as policy incentives for non-residential activities where this might facilitate the retention of a heritage building, protected trees, etc.
  • rates relief or the use of a non-complying activities fund to acquire land to enable the removal or modification of unattractive long-established non-residential activities
  • design guides
  • urban enhancement works, such as street works, street furniture and other neighbourhood improvements, which signal a commitment by the local authority to rejuvenating the local community.
  • Regulatory provisions can be supported by information of an advisory nature made available by councils.
  • Rather than adhering to the 'how to apply for a resource consent' genre, such advice should relate specifically to non-residential activities, such as homestays, preschools, etc.
  • The content of these will be largely determined by the nature of the host community (e.g. is it affected by the presence of tourist facilities, a major hospital, a university, etc?).

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The concept of mixed use

For some larger urban areas, increasing emphasis has been given to proactively encouraging a mix of residential and non-residential activities. This is usually associated with new greenfield developments (with associated structure plans), or around major transport nodes in the existing urban area where public transport is a viable alternative.

Note that this means 'mixed use' as part of a comprehensively designed development, not the establishment of stand-alone business activities among existing houses in declining residential areas. Contemporary mixed-use developments mean residential activities are usually established above street level, with compatible low-impact non-residential activities at street level, similar to the land-use pattern found in many European cities (e.g. cafés, small shops, offices).

Councils as landowners, and roading and regulatory authorities, can proactively provide for mixed-use development, but at a rate the host community feels it can accept. Preferred locations are:

• large greenfield sites as a part of a comprehensive structure planning exercise
• areas where housing stock is due for replacement; and
• areas readily accessible by frequent public transport.

There also needs to be a commitment by the council to enhance public spaces in higher-density developments involving mixed uses, particularly in respect to roads, footpaths, street furniture, traffic management, stormwater and sewer upgrading, parking and landscaping.

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Section 32 and other methods

The nature of non-residential activities is such that regulatory intervention at a policy and rule level is the only viable method for dealing with the issue. (Refer to the Section 32 - Methods of Implementation guidance note. This note provides for good practice tips and techniques for Section 32 analysis and implementation.)

• Note that efficiency and effectiveness (of plan provisions) and the link to S7(b) - 'the efficient use and development of natural and physical resources' still remain.
• It will be important to demonstrate that any restrictions on non-residential activities still enable people to provide for their social and economic welfare (S5 - Purpose of the Act) and not prevent efficient use of resources (S7 (b)).
• There will inevitably be a balancing exercise with amenity effects in terms of S5(2)(c) and Section 7(c).
• Administration and compliance costs are no longer explicitly mentioned under S32, but are an inherent component of the effectiveness and efficiency of rules. Councils will need to be cautious in reconciling these issues with the enabling aspects of S5 and S9.

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Monitoring

Change within residential areas will usually only take place slowly. However, it will be appropriate to undertake monitoring at the time of plan reviews or when major variations or plan changes are undertaken. An exception to this approach may be required if the council is unsuccessful on appeal, or a major controversy arises over a particular land use. In these circumstances an investigation of what went wrong should be initiated (refer to the Policy and Plan Effectiveness Monitoring guidance note for good practice tips on monitoring and evaluating the suitability and effectiveness of plans).

The establishment of non-residential activities inevitably involves a balance between economic diversification and enabling community support services on the one hand, and protection of residential integrity and amenity on the other.

• A review of complaints and feedback (whether from residents or sector groups) will be one indication of whether this balance is right.
• A review of resource consent applications may also provide information on this issue. Consents granted by the council that appear inconsistent with the plan (or by the Environment Court on appeal) may indicate that provision for non-residential activities is inadequate.
• It may also indicate problems with effects thresholds being too liberal or too restrictive (e.g. noise/traffic generation rules), poor definitions (particularly in activity-based plans), or poorly focused policies on which to base decisions.
• Where particular residential environments are fragile, a review of consents and field checks should be undertaken on a geographically targeted basis to see whether the residential integrity of the area is being maintained. Inner-city housing enclaves and areas adjacent to major centres and on arterial routes are particularly relevant in this context.
• Finally, where applications for non-residential activities have been granted, information from monitoring consents and longer-term reviews will provide some indication as to the adequacy of rules. Any rules in the plan need to be sufficiently clear to enable enforcement. Without this, the community may have their expectations of the residential integrity of their neighbourhood undermined.

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Best practice examples

The following examples illustrate best practice in particular aspects of plan preparation, as described in the guidance note.

Planning for non-residential activities in residential area: Objectives, policies and rules: Auckland City Plan

Auckland City Plan, Part 7, Section 7.7 of the Isthmus Section, pp. A18-A22 (PDF 312KB)
The Auckland City Council provides a comprehensive residential activity table, which establishes the status of various non-residential activities, taking into account the impact of location, scale, and generated effects on neighbouring sites and the local environment when administering development control in relation to non-residential activities in residential zones.
Contact: Isthmus and Islands Resource Management Group: (09) 379 2020.

Planning for non-residential activities in residential areas: Objectives and policies - Wellington City District Plan

Volume 1 of the Wellington City District Plan, Objective 4.2 and associated policies (PDF 78KB)
The Wellington City Council actively encourages mixed use within the residential areas through their effects-based objectives and policies. The Wellington City District Plan uses zones, activities and definitions to address the issues associated with non-residential activities in residential areas.
Contact: District Plan Team: (04) 499 4444.

Planning for non-residential activities in residential areas: Objectives and policies - Dunedin District Plan

'Residential' section of the Dunedin District Plan, Objective 8.2.1 and associated policies (PDF 57KB)
The Dunedin City Council has established provisions within the district plan which regulate non-residential activities by controlling the scale and design of buildings and the scale of proposed activities.
Contact: Dunedin City Council: (03) 477 4000.

Planning for non-residential activities in residential areas: Objectives, policies and rules: Christchurch City Plan

Proposed Christchurch City Plan Volume 2, Objectives 9.1 and 11.3 and associated policies (PDF 101KB)
The Proposed Christchurch City Plan provides a useful example of an effects-based plan, whereby activity status is dependent on compliance with various rules. The objectives and policies relating to non-residential activities in residential areas provide guidance on the environmental results anticipated in each zone.
Contact: Civic Planning: (03) 379 1660.

Planning for non-residential activities in residential areas: Policies - Hastings District Plan

Section 8 of the Hastings District Plan, Objective 8, Policies RZP5, 10 and 11 (PDF 71KB)
The Hastings District Council uses a mix of activity-based and effects-based rules to address issues relating to non-residential activities in residential areas. The policies address various effects often generated from non-residential activities in residential areas, providing useful guidance for planners. Contact: Environmental Planning: (06) 878 0500.

Planning for non-residential activities in residential areas: Rules - New Plymouth District Plan

Volume 1 of the New Plymouth District Plan, pp. 183-216 (PDF 599KB)
The New Plymouth Proposed District Plan relies on effects-based rules, rather than identification of activities (and their definition), as the basis for regulatory control. The objectives and policies in living zones are focused on effects in those zones (e.g. noise) rather than the generic issue of non-residential activities per se.
Contact: New Plymouth District Council: (06) 759 6060.

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RMA provisions

The current relevant RMA provisions are:

• s5 non-residential activities as a physical resource (S5(2) (a) and (c) are particularly relevant here)
• s6(f) in specific circumstances involving heritage
• s7 (b) the efficient use and development of natural and physical resources
• s7 (c) maintenance and enhancement of amenity values
• s7(g) any finite characteristics of natural and physical resources
• s10 existing uses
• s31 functions of territorial authorities under this Act
• s32 consideration of alternatives, benefits and costs
• s35 the duty to gather, monitor and keep records
• s75 contents of district plans
• s77A the power to include rules in plans
• s77B types of activities.

Also relevant is the First Schedule of the RMA - Preparation and change of policy statements and plans by local authorities.

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Case law

• Seabreeze Investments v Christchurch City Council (CO98/02) and Avonmore Tertiary Academy v Christchurch City Council (c107/02) called for recognition of long-established and previously complying non-residential activities.
• In Taupo Plan Services v Taupo District Council (A108/97) the Court ruled that where there is insufficient zoned provision for business activities, they could be established in an adjacent residential area.
• In Hopper Nominees v Rodney District Council (HC 105/95) it was held that effects being minor does not remove the need to consider objectives and policies.
• In Wouldes v North Shore City Council (A058/98) the Court held that discretionary activities can be declined on the basis that a plan cannot be an 'infallible blueprint' anticipating all potential adverse effects.
• In Harte v Christchurch City Council (C069/02) the Court held that absence of a resident on site (residential coherence) is only a moderate effect.
• In Swindley v Waipa District Council (A075/94) the Court held that a discretionary activity can be inferred to be an efficient use of resources.
• See Clulee v Kapiti Coast District Council (W015/99), where the Court held there are no cumulative effects where an activity is not contrary to objectives and policies or zone strategies, and has no significant adverse effects on amenities.
• In Caltex NZ Ltd v Auckland City Council (A095/97) the Court held that where an activity would potentially have significant adverse effects on the environment, it should be a non-complying activity. It was also held that integrity of a plan only arises on consideration of non-complying activities.
• See Mair v Rotorua District Council (A059/02) for a discussion on 'incremental creep' of non-residential activities. This was a case where the Court declined consent to the further expansion of an activity, albeit a rest home in this case.
• See PJ Woodward and Ors V Marlborough District Council (W096/2000) and Giles v Christchurch City Council (A092/2000), where the Court held that although assessment matters are not required under Section 75, the Court applied them as being helpful in these cases.
• In Taylor v Auckland City Council (A114/2000) and LRG Investments v Christchurch City Council (C064/98) the Court commented on the potential adverse effects of mitigation measures, and their significance.
• In Kapiti Environmental Action v Kapiti Coast District Council (A060/02) the Court indicated that discrimination in favour of activities having community value (but having similar effects to other activities) could be justified.
• In Quinn v Lower Hutt City Council (W013/93) and Mullalys Auto Centre v Christchurch City Council (C014/97) the Court addressed situations where the prospect of reversion to residential use was unrealistic, despite zoning for that purpose.

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Related guidance notes

The following guidance notes are related:

• Consultation process
• Policy framework
• Section 32 - methods of implementation
• Writing provisions for regional and district plans
• Structure plans

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Current challenges in practice

Justification for controlling non-residential activities

The enabling provisions of Sections 5 and 9 of the Act require councils and practitioners to take into account any positive economic benefits of non-residential activities. The challenge is to clearly justify plan provisions restricting non-residential activities in residential environments. Generalised policy statements about protecting amenity will not be enough. Failure to provide for non-residential activities in other ways or locations, and reliance on generalised policies, will not augur well for success if challenged in the Environment Court.

Management of non-residential activities can be achieved under either effects- or activity-based plans. However, it is important to start with clear objectives and specific policies which provide clear guidance rather than paraphrasing sections of the Act. Policy guidance and assessment matters that specify circumstances in which activities will or will not be favoured are to be preferred.

Degree of regulatory intervention

Rules need to ensure that the activity status reflects what the council anticipates to be the degree of regulatory intervention required and the level of involvement by third parties (i.e. controlled, restricted discretionary, discretionary or non-complying). A mismatch between levels of effects and consent categories can negate policy provisions, and either result in unnecessary consents on the one hand, or erode the integrity of residential areas on the other. For example, making a preschool a controlled activity may be inappropriate if noise problems cannot be mitigated on a particular site.

Acknowledgements and editorial comments 

This guidance was prepared by Bob Nixon and Tim Joll, Planit (R.W. Batty and Associates). Best efforts have been made to make correct references to legislation and the work of others, but in all instances refer to the original source.

Thanks and acknowledgement to John McSweeney of the Ministry for the Environment for peer reviewing the notes.

The guidance note was updated in March 2006 by Vicki Barker and Matthew McCallum-Clark of Incite.

This guidance note was prepared in February 2004 and updated in March 2006.