It looks like Nick Smith and the National Government may be doing what they should have done from the outset - talking to Auckland Iwi about how they can be the developers of housing on the Crown's land in Auckland.

Otto Von Bismark is widely attributed with the remark "Laws are like sausages — it is best not to see them being made." Turns out he never said it, but that doesn't stop the sentiment being any less true. 

Because with Nick Smith's proposed quick fix for the Auckland housing problem - or, rather, the political optics part of the Auckland housing problem - we're seeing a full policy abbatoir laid out as public spectacle. And it isn't a particularly pretty sight.

As reported by John Armstrong, Andrew Little yesterday summed up where matters are at during question time in the House:

He asked John Key if he could confirm that some of the Crown-owned land deemed suitable for housing developments was occupied by power substations and cemeteries; that it turned out that the Government did not actually have the 500ha of such spare land that it had said it had; that some of that land was not even owned by the Crown; that it had turned out the Government could not sell the land without giving iwi first right of refusal; that it now turned out the Government had already given iwi first dibs on one such piece of land; and, lastly the whole thing was going to wind up in the courts.


But rather than dwell on the omnishambles nature of this particular policy, I'll confine myself to the legal aspects of it; in particular, the constraint imposed by the Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 and the settlement deed underpinning this legislation.

The Government remains adamant, at least in public, that these pose no legal problems for its proposed policy. Even if it represents an element of sharp dealing with respect to Iwi in the Auckland area, the policy of letting private developers build private homes on Crown land that this legislation otherwise gives Iwi a legal right to purchase  is entirely lawful.

John Key said as much in his post-Cabinet news conference on Monday. And he even gave a concrete example to prove his point:

Key said the approach had been used before in developing land for housing in Christchurch, where South Island iwi Ngai Tahu had a right of first refusal for Crown land. However there was an open tender won by Fletcher Building.

"Ngai Tahu recognised, that despite the fact that they would have wanted that, they didn't have the right of first refusal."

Well, that sounds like pretty strong evidence for the Government's position. I mean, if Ngāi Tahu recognised that their legal right of first refusal under legislation doesn't stop the Government's actions in Christchurch, why should Auckland be any different?

Probably because of this fact. Ngāi Tahu's right of first refusal only applies to "relevant land" - that is, land that the Crown owned back in 1997. And the land on which the development Key was talking about sits is owned by the NZTA in order to build the Southern Motorway - a project commenced well after 1997. Meaning that it's highly likely that the land in question simply isn't subject to Ngāi Tahu's right of first refusal at all.

How can we find out for sure? A land title search would do it - but that costs money, which I'm not about to spend satisfying my curiosity. So instead I'll make do with this subsequent tweet from Katie Bradford:

Ok John Key's admission of wrong advice was on comments last night re Ngai Tahu right of refusal - not Ngati Whatua.

Oops. Looks like that this evidence for the lawfulness of the Government's position isn't actually evidence of anything at all.

Of course, spotting yet another screwy bit of advice on the whole right of first refusal issue doesn't prove that the Government's claim that there are no legal issues with its policy is false. But there's another development that is more telling that, in spite of the Government's brave words, it actually is somewhat uncertain of its position.

When the issue of Iwi rights of first refusal first arose a couple of weeks ago, Nick Smith was pretty adamant that this was not an issue and that the Government's plans - to bring in private developers through open tender to build housing on Crown land - would go ahead irrespective. Iwi would get no special rights or consideration in this process, because they had no legal rights to consider.

Now, however, the tune is starting to change a little. Yesterday in Parliament, in response to a patsy question about housing developments in Hobsonville, Smith said this:

Alfred Ngaro : What has been the relationship with local iwi on the Hobsonville project, and how has the Government ensured that Treaty settlements—right of first refusals—have been complied with?

Hon Dr NICK SMITH : This Government completed a Treaty settlement with Ngāti Whātua o Kaipara in July 2013. The Government negotiated in good faith with Ngāti Whātua in regard to the Hobsonville development. A pragmatic and mutually beneficial agreement was reached last year, in which Ngāti Whātua will be a development partner for the village precinct at Hobsonville, which is part of the 1,000 homes we accelerated in the announcement on Saturday. This example shows that the Government and iwi are able to work together to bring more housing on stream while respecting Treaty settlements. I am confident we can do the same in respect of the new programme for using Crown land for housing.

And then today, Smith is reported by Radio NZ as saying:

For that first site, it's not intended that Right of First Refusal would be triggered. We're in a different document, and it's important to understand that there's a protocol, that where we are developing land under Section 136 of the Tamaki Makaurau Collective Act (Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014) for housing purposes, then we need to work with the collective.

That's entirely correct - as I pointed out in this post, the Government included a protocol in its Deed of Settlement with the Tamaki Makaurau Collective promising that it would allow this Collective the first right to be the developer of any housing projects that the Government may initiate on its land in Auckland. While this protocol is not itself legally binding - it's not a part of the subsequent legislation - you can be damn sure it's relevant to deciding if the Crown's actions when developing its social housing in Auckland are consistent with that law. 

And so what we may be seeing happen is what should probably have happened well before the public announcement of the Government's policy. It is talking with the body that represents the Tāmaki Makaurau Collective to see if it can and will act as the developer of housing on the land in question - thus giving the various Iwi's the chance to gain economically from the policy.

So we may in the end get a damn fine tasting sausage. But the making of it? Urgh.

Comments (4)

by Rich on June 17, 2015

How does a right of first refusal actually work?

How long does the iwi have to decide whether they want the land, and what price do they pay? Is this determined by an independent valuation or can the government for instance conduct a tender and allow the iwi to match the highest bid?

by Fentex on June 17, 2015

How long does the iwi have to decide whether they want the land, and what price do they pay?

I seem to recall these questions answered this post.

by Donald Ellis on June 18, 2015
Donald Ellis



Each settlement act is unique and the processes may vary from place to place. In the case of the Collective Redress Act the owner of RFR land must notify the Collective at least 40 working days in advance that they may be disposing of RFR land in the future (that was the Min of Ed letter from last December). There is no commitment ot offer implied in that notice it's just a heads up. Bear in mind that the RFR landwowner may also have to offer the original owner of land acquired for public works or their successor the first first right of refusal. If that offer is not taken up then the RFR landowner makes the formal offer of right of first refusal to the Collective who have 40 working days to accept or reject the offer.


What is not clear is how a price is put on the offer. The Ngai Tahu Settlement Act seems to say that the landowner can publicly tender the land but then has to offer it first to Ngai Tahu at the same or better price. The Collective Redress Act is silent on that process.


Although multiple properties can be included in one offer all properties have to be specifically and clearly identified. The landowner can't throw a blanket over Auckland and ask if the Collective want all the spare stuff.

by Donald Ellis on June 18, 2015
Donald Ellis

A correction (I think) to both Andrew and me. The Act seems to say that the expiry date of the offer must be at least 40 days after the date of the offer. The RFR landowner can dispose of the land twelve months after the expiry date if they hear nothing. Adding the pre-disposal notice period of 40 working days, effectively the Collective can stall the disposal of land for 15 months from go to whoa.

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