Going for Housing Growth stage one unveiled

The Government will establish ambitious new housing growth targets for New Zealand’s cities, while taking steps to make it easier to expand both up and out, says Housing and Resource Management Act (RMA) Reform Minister Chris Bishop.  

“Our Going for Housing Growth policy focuses on the fundamentals that have led to unaffordable housing for New Zealanders. Our programme of reform involves freeing up land for development and removing unnecessary planning barriers, improving infrastructure funding and financing, and providing incentives for communities and councils to support growth.

“Housing in New Zealand is too expensive, because we have made it very difficult for our cities to grow. Fixing our housing crisis will improve our economy, increase productivity, help get the government’s books back in order by reducing the enormous fiscal cost to the government, improve intergenerational equity, and decrease material hardship.” 

“This morning I’ve laid out six changes the government will progress to free up land for development, which is pillar one of the Going for Housing Growth Plan. A Housing Expert Advisory Group of urban experts and economists have helped put the package together. 

“These changes give effect to the Government’s Quarter Two Action Plan commitment as well as the National/ACT Coalition commitment to make the medium density residential standards (MDRS) optional for councils whilst requiring ratification of their use.

The changes are:

  1. The establishment of Housing Growth Targets for Tier 1 and 2 councils
  2. New rules requiring cities to be allowed to expand outwards at the urban fringe
  3. A strengthening of the intensification provisions in the National Policy Statement on Urban Development (NPS-UD)
  4. New rules requiring councils to enable mixed-use developments in our cities.
  5. The abolition of minimum floor area and balcony requirements
  6. New provisions making the MDRS optional for councils 

“New Housing Growth Targets will be set for all existing Tier 1 and 2 councils. The councils will be required to “live-zone” feasible development capacity to provide for at least 30 years of housing demand at any one time, a big step forward from the current requirement to ‘live-zone’ feasible development capacity to meet just three years of demand at any one time. This will ensure abundant development opportunities in our key urban areas. The government will also strengthen the requirements and guidance for how councils model how much capacity is live-zoned and feasible, and require that price indicators (such as urban fringe land price differentials) do not deteriorate over time. 

“The Government rejects the view that cities can only grow outwards, as well as the view that density is the answer to everything. 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.  Strengthened long-term spatial planning and other changes will support this, and result in the abolition of the Rural-Urban Boundary as a planning instrument in Auckland, and similar approaches elsewhere.

“We will also significantly strengthen the existing NPS-UD to ensure that housing capacity is enabled is in locations where there is demand and that are well-connected to businesses, services, and transportation. 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.

“As I’ve said for some time, I’m keen to see more mixed-use development in our cities, which will make them more liveable and connected. We will require Tier 1 and 2 councils to enable a baseline level of mixed-use across their urban areas, which might include, for example, allowing small-scale activities such as dairies and cafes to operate anywhere within urban areas. We will also require Tier 1 councils to enable small-to-mid-scale activities like cafes and restaurants, retail, metro-style supermarkets and offices in areas subject to the NPS-UD’s six storey (or greater) intensification requirements.

“The government will also be abolishing minimum floor areas and balcony requirements. These requirements, imposed by some councils, can significantly increase the cost of new apartments, and limit the supply of lower cost apartments. 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, we will also be making the MDRS optional. This is legally tricky as the MDRS were passed into law in 2021 and councils are implementing them at the same time as NPS-UD requirements. Different councils are at different stages and eight of the relevant 15 councils have already completed plan changes.

“The Government will legislate to require that all councils currently required to implement the MDRS must carry out a ratification vote to determine whether they plan to retain, alter, or remove the MDRS from their urban areas. Decisions to alter or remove the MDRS will trigger a plan change to give effect to this. However, all councils will be required to give effect to relevant Housing Growth Targets as well as the other changes outlined above. The precise legal mechanisms for each council may well vary and we will work that through in the coming months.

“The changes I’ve outlined today are just the start. There’s a lot to do on our infrastructure funding and financing system as well as incentives for growth and I’ll have more to say in the coming months.“Solving our housing crisis will mean a more productive, wealthier and better New Zealand and today’s announcements are a step on the journey.” 

Note to Editors:

Three fact sheets are attached.