Thousands of fast-tracked houses to test struggling Queenstown

David Wightman speaks plainly when asked about the changing development plans in Queenstown by his company, RCL Group.
“We anticipated a faster approvals process,” Wightman, RCL’s chief executive, says from Melbourne. Engagement with the Queenstown Lakes council proved “fruitless”, he says.
RCL’s Homestead Bay development has made the Government’s controversial fast-track priority list, for consideration by an expert panel. The recently released list said the development would feature 2800 residential units. But when the developer got Overseas Investment Office approval to spend $70 million buying 163 hectares next to Jack’s Point, in the shadow of the Remarkables mountain range, the development’s scale was put at between 1700 and 2300 units.
“That was at a fairly early stage in our master planning exercise,” Wightman says of the figures in the OIO approval, granted in April last year. “We refined that master plan through some discussion with council and government bodies who had a preference for different densities and some higher densities.”
He expects the ball-park development figure of $223m to increase, and says given RCL’s experience developing nearby Hanley’s Farm, Homestead Bay could be fully developed within 10 years.
“It will be, I suspect, somewhere between 2500 and 3000 lots.”
What was the problem with the council? As Wightman tells it, the council was enthusiastic when told RCL would pay more than $50m for essential infrastructure like sewerage pipes. “And then it all stopped.”
The council wanted to embark on a structure planning exercise, kicking the work out to a consultant. “We had a workshop where they presented their findings, which were pretty much identical to the findings we gave them six months earlier.”
The past two years have been disappointing, Wightman says. “It’s been a study in creative inertia.”
Queenstown Lakes District Council’s planning and development general manager David Wallace says Te Tapuae southern corridor – spanning south of the Kawarau River, around RCL-developed Hanley’s Farm, to Jack’s Point and Homestead Bay – is a priority development area.
“We are currently in the process of structure planning this area with a view to maximising social, environmental, cultural and economic outcomes for the community. The structure plan is far more comprehensive in scale than a limited masterplan representing the interests of a single developer.”
There’s a massive demand for affordable housing in the district. The Queenstown Lakes Community Housing Trust has 1300 households on its waiting list. (RCL’s client database boasts 6000 names.)
Average rentals in the district are $750 a week, while the average home sells for $1.6m, about $700,000 more than the national average.
RCL told the OIO its Homestead Bay development was expected to hand over between 85 and 125 units to the housing trust for affordable housing. “Those discussions haven’t progressed at all,” Wightman says. “In my experience, and I’ve got a reasonable amount of experience here [in Australia], supply helps with affordability.”
Homestead Bay will have apartments, townhouses, small and large sections, and some high-end lots, with higher density housing clustered around the retail and commercial areas. “There will be a complete range.”
There’ll also be parks, playgrounds, sports grounds, land earmarked for a school and indoor facilities.
RCL isn’t the only beneficiary of the fast-track process.
More than 5000 new apartments or homes could be approved in the Queenstown Lakes district – 1050 units at Silver Creek (beneath Queenstown Hill, overlooking the Frankton Arm), 501 residential dwellings at Flint’s Park (along Ladies Mile), and another 900 units in Gibbston Valley’s Gibbston Village.
Are these developments in the right place, to ensure they don’t blight the soaring mountains and twinkling lakes?
The Upper Clutha Environmental Society’s submission on the Government’s fast-track bill said it should be abandoned. “It’s not needed,” says society president Julian Haworth, of Wānaka, who might be best-known for opposing tech billionaire Peter Thiel’s luxury lodge.
While Haworth doesn’t think a development the size of Homestead Bay is needed now, he’s not particularly worried about it. As soon as the adjacent Jack’s Point subdivision was approved that whole corridor of former farmland was destined for urban-density development, he says.
His view is: If not there, then where? “If you don’t put the 3000 (units) there and look after the next 25-30 years, the houses will spread all over the landscape.”
What Haworth’s “really pissed off about” is proposed gondolas at Coronet Peak and in the Cardrona Valley – which he says are fig leafs for new housing. The Coronet Village, featuring a gondola to the ski field, could feature up to 780 units, while the Cardrona Valley plans include on-mountain visitor accommodation, and housing for workers.
District plan rules to protect landscapes have been hard-fought. The Wakatipu Environmental Society took the council to the Environment Court in the 1990s – and won – because the rules didn’t provide adequate protection.
The rules stop developers from “building whole clumps of houses in appropriate places out in the rural zone”, Haworth says. But the fast-track process “drives the coach and horses through” the district plan.
“You may as well throw the district plan in the lake.”
(Earlier this month, Regional Development Minister Shane Jones, of New Zealand First, said: “The Fast Track Approvals Bill is a key part of the Government’s plan to rebuild our economy and cut through the red and green tape that has made it more and more difficult to build the projects New Zealand needs.”)
Another problem in Queenstown is clogged roads.
“All of that [new] housing is going to have that many more cars feeding into a network that already doesn’t cope,” says Alexa Forbes, a Queenstown-based Otago Regional Councillor who co-chairs the public and active transport committee.
She notes most of the new housing developments are located either south of the Kawarau River bridge, east of the Shotover River bridge, or east of the single-lane Edith Cavell bridge at Arthur’s Point.
“Your huge constraint is you’ve got people trying to get from places outside the bridges into the very small area inside the bridges.”
The state highway at Frankton, near the airport, is a particular pinch-point. Forbes says more traffic flows through there, on generally single-lane roads, than along many highways in other parts of New Zealand.
Data from Waka Kotahi/NZ Transport Agency put “annual average daily traffic” (AADT) along State Highway 6, just east of what’s known as the BP roundabout, at 25,706 vehicles in 2022, measuring vehicles travelling in both directions.
That’s about the same as traffic travelling in one direction of Christchurch’s two-lane southern motorway, State Highway 76. The east-bound lanes within sight of Addington Raceway have an AADT of 24,475. It’s also not far shy of State Highway 1’s north-bound lanes, north of Wellington, near Grenada Village, which have an AADT of 30,770. (For context, Auckland Harbour Bridge’s north-bound lanes have an AADT of 77,700.)
Peak-hour traffic in Queenstown ebbs and flows. You’ve got work peaks, school peaks and tourist peaks. “It can take a very, very long time to get just a few kilometres,” Forbes says.
There just isn’t a viable alternative to the car. A ferry service on the Frankton Arm, from the Hilton Hotel into the central business district, is embryonic and relatively expensive, while buses sit in the same traffic cars do.
A $250m, four-year project of traffic improvements along State Highways 6 and 6A, between Lake Hayes and Queenstown, originally included bus lanes and bus priority measures, but they were cut after a budget blowout.
In June, Transport Minister Simeon Brown told Newsroom there wasn’t a break between the Government and local councils over public transport. “The Government is investing $250m into Queenstown to improve roads and public transport, and to unlock land for housing.”
Yet, at the same time as the Government is scaling back a public transport infrastructure project along Queenstown’s clogged state highways, it’s fast-tracking potentially thousands of new houses that will inevitably lead to even more cars crawling their way towards the over-capacity bridges Forbes has already mentioned.
“It’s terribly irresponsible,” she says.
Queenstown’s sewer system, situated a stone’s throw from the airport, along the banks of the Shotover River, is also struggling to cope with population growth. In January, there was an overflow into a nearby swamp from the wastewater treatment plant, which was having stench-inducing problems with de-watering and sludge processing.
Wightman says RCL Group originally planned to spend a significant amount on pipes to connect Homestead Bay to the Shotover plant, but the council suggested there wasn’t capacity. “We’ve come up with alternative solutions.”
The Hanley’s Farm subdivision is winding down. There are fewer than 100 lots left to sell out of 1670. “They’ll all be sold by the end of this year.”
At one point, RCL had 500 lots under construction in Queenstown. “I doubt that’s ever been done before,” Wightman says. “It’s going to be even bigger at Homestead Bay.”
The single-biggest challenge for Homestead Bay will be workers – or “getting the resources in here”, as he puts it. Asked about whether it might build a temporary workers’ village, he says: “We’ll absolutely look at that.”
Ideally, civil and building contractors would move from Hanley’s Farm to Homestead Bay. But Wightman’s worried there’ll be a time-lag between finishing one and starting the other, meaning many people will have to leave Queenstown to find work.
“That’s the tragedy in all of this.”
Wightman’s not sure how long the fast-track process might take. All 149 applicants who made the initial priority list will be jostling to be at the head of the queue, he says. “We’d like to think that ours will be more shovel-ready than others, so we’d like to think we’ll be early in the queue.”
As for Queenstown’s council, Wightman says: “They really, I think, have to follow or get out of the way.”