The Government’s big plans for zoning and land use reform will “flood” the property market with more homes and push house prices down, in a bid to “fix the housing crisis”, the Housing Minister says.
As part of the reforms, councils will be stripped of their ability to set fixed urban-rural boundaries, minimum sizes for apartments and balconies are to be abolished, and more dense housing development around “strategic transport corridors” will be allowed.
The Government’s final policy direction, largely matching National’s pre-election commitments, was unveiled by Chris Bishop this morning.
“We need thousands upon thousands of new homes around New Zealand, because whichever way you look at it, we have a housing shortage,” he said.
He said the Government was “unshackling the developers and unshackling the house builders from the red tape and the planning rules that stymie development”.
Bishop said the previous government’s requirements to zone for at least six storeys around rapid train and bus lines would continue, and said they would be beefed up.
He said councils would now also be expected to deliver intensification along “key bus routes”. Last year, National pulled out of a bipartisan agreement with the previous Labour government to allow more medium-density throughout major centres.
Bishop responded to existing criticism over intensification, saying that “cities must grow”.
“We can’t let urban planning rules be a barrier to housing affordability. They are at the moment. That’s got to change. Houses need to be more affordable. Rents need to be more affordable,” the minister said.
The Housing Minister added the changes would push average property prices down.
“My aim is that we make housing more affordable. We don’t see an immediate plunge in house prices, but as I’ve said publicly many times, houses are too expensive in New Zealand and we want housing to be more affordable,” he said.
“That’s not something that’s going to happen next year or the year after, but it is something that we want to happen in the medium to long term.”
In recent weeks, Bishop has drawn attention for his declaration that average house prices in New Zealand needed to fall.
Bishop outlines Govt’s big plans for housing
This morning, the minister confirmed six reforms he hopes would “free up land for development” and help deal with the country’s housing crisis.
The first major change announced was that New Zealand’s 24 biggest councils would have to make sure there is enough developable land available for at least 30 years of housing at one time.
“This will ensure abundant development opportunities in our key urban areas,” Bishop said.
He said the Government would “strengthen” the requirements and guidance for how councils model how much capacity is live-zoned and feasible, also requiring price indicators not to deteriorate over time.
One reform would mean councils couldn’t set fixed rural-urban boundaries “that constrain growth”.
“The Government rejects the view that cities can only grow outwards, as well as the view that density is the answer to everything,” Bishop said.
“The Government will make it easier to build new houses in existing urban areas, as well as work towards establishing an effective ‘right to build’ new houses on city fringes, provided the infrastructure costs of new development are covered and growth pays for growth.”
The Government has also promised to “significantly strengthen” density requirements by asking councils to zone density around “transport corridors”.
Bishop said: “We will require greater density around strategic transport corridors, not just rapid transit, simplify the definition of ‘rapid transit’ to avoid further boring and interminable debates about what counts as ‘rapid transit’, clarify the definition of ‘walkable catchments’ in the context of centre zones and rapid transit, and clarify the rules around unlisted ‘qualifying matters’ which allow councils to avoid enabling intensification.”
Bishop said he was “keen” to see more mixed developments and will require tier one councils to enable a baseline level of mixed-use across their urban areas.
He said this might include “allowing small-scale activities such as dairies and cafes to operate anywhere within urban areas”.
The Government also require tier one councils to enable small-to-mid-scale activities “like cafes and restaurants, retail, metro-style supermarkets and offices” in areas subject to the National Policy Statement on Urban Development’s six-storey or greater intensification requirements.
Smaller apartments are also on the way, with minimum sizes for apartments and balconies to be abolished.
“These requirements, imposed by some councils, can significantly increase the cost of new apartments and limit the supply of lower-cost apartments,” Bishop said.
“Evidence from 2015 shows that in the Auckland market, balcony size requirements increased the costs of an apartment by $40,000 to $70,000 per unit.”
Finally, Bishop announced that councils would be able to choose if they would meet medium-density requirements.
This means medium-density residential standards (MDRS) would be optional for councils, which Bishop admits is “legally tricky as the MDRS was passed into law in 2021.”
But he said: “Different councils are at different stages, and eight of the relevant 15 councils have already completed plan changes.”
“Solving our housing crisis will mean a more productive, wealthier and better New Zealand and today’s announcements are a step on the journey.”
‘Councils limited in what they can offer’ – Labour
Labour’s housing spokesperson Kieran McAnulty said his party was “open” to any measure that would lead to more housing, “but not at the expense of building standards or loss of elite productive soil”.
“There is an opportunity here, but the short-term thinking means it runs the risk of ending as a shambles.
“This shouldn’t be used as a way for the government to avoid difficult discussions about density or fronting up with funding.
“It may look good on paper, but this announcement hasn’t been thought through, and the Government has again opened themselves up to being all talk,” he said.
McAnulty said it was “all well and good” to ensure development opportunities, “but unless the Government fronts with infrastructure money, councils are limited in what they can offer by ways of expansion”.
‘Not enough to turn the tide’ – Greens
Green Party spokesperson for urban development Julie Anne Genter said today’s announcement shows some support for bolstering urban density, but “it will not be enough to turn the tide on a status quo of urban sprawl”.
“While today’s announcement includes some good initiatives that support density, the direction of this Government, especially in regards to its transport policies, will see our cities sprawl and their efficiency decline,” she said.
“If we want smart and efficient cities, we need to prioritise building homes where the infrastructure already is. Compact cities allow people to easily and affordably get to the places their lives revolve around.”
She said mixed-used zoning was a good step towards building density but “disjointed greenfield development and a transport policy that prioritises cars will see a status quo of sprawl continue”.
“We literally can’t afford more car-dependent sprawl — especially with the urgent need to reduce emissions. Sprawling suburbs will see the efficiency of our cities decline and their pollution rise.”
“The solutions to the housing and climate crises are the same: denser, greener cities that are less reliant on cars and enable more nature both in and out of the city.”