Government announces housing growth targets and new rules

The New Zealand Government will set ambitious targets for urban housing development and take steps to facilitate vertical and horizontal expansion, according to the Minister for Housing and Resource Management Act (RMA) Reform, Chris Bishop.

“Our Going for Housing Growth policy addresses the root causes of housing affordability in New Zealand. The reform programme focuses on freeing up land for development, removing unnecessary planning barriers, improving infrastructure funding and providing incentives for communities and councils to support growth,” Mr Bishop said.

“Housing in New Zealand is too expensive because we have made it so difficult for our cities to grow. Solving the housing crisis will stimulate the economy, increase productivity, help balance the government budget, improve intergenerational equity and reduce hardship.”

Bishop outlined six key changes as part of the government’s Going for Housing Growth Plan, developed with input from the Housing Expert Advisory Group, made up of city experts and economists. They include:

1. **Setting housing growth targets for Tier 1 and Tier 2 councils

2. **New rules to allow suburban expansion

3. **Strengthening provisions on intensification in the National Policy Statement on Urban Development (NPS-UD)

4. **New rules require councils to allow mixed-use developments

5. **Abolition of requirements for minimum floor area and balconies

6. **Make Medium Density Housing Standards (MDRS) optional for councils

The new housing growth targets will require Tier 1 and 2 councils to “live in the zone” with a feasible development capacity of at least 30 years of housing demand, a significant increase from the current three-year requirement. This change aims to ensure there is ample development opportunity in key urban areas.

“The government rejects the notion that cities can only grow outwards, or that density alone is the solution. We will make it easier to build new homes in existing urban areas and support the introduction of ‘right to build’ on the outskirts of cities, provided that infrastructure costs are met by growth,” Bishop explained.

The government will also eliminate the rural-urban boundary in Auckland and adopt similar approaches elsewhere. Improved long-term spatial planning will support these changes.

To ensure housing is available in high-demand, well-connected areas, the NPS-UD will be strengthened. This will include requiring higher density around strategic transport corridors, simplifying the definitions of ‘rapid transit’ and ‘walkable catchments’, and clarifying the ‘qualifying matters’ rules that allow councils to avoid enabling intensification.

Mixed-use development will also be a priority, in line with new requirements for Tier 1 and 2 councils, which will need to allow for small-scale businesses such as dairies and cafes in urban areas, as well as medium-scale businesses such as cafes, restaurants and offices in areas subject to the six-storey density requirement under the NPS-UD.

The government will remove minimum floor and balcony requirements that have significantly increased housing costs. Evidence from 2015 showed that balcony requirements in Auckland increased housing costs by $40,000 to $70,000 per unit.

Finally, the government will make MDRS optional for councils. Councils currently required to implement MDRS must hold a ratification vote to determine whether to retain, amend or remove the standards from their council areas. Regardless of the outcome, all councils must meet new housing growth targets and other specified changes.

“These changes are just the beginning. There will be further work to be done on how we fund our infrastructure and the funding system and how we incentivise growth. Solving our housing crisis will lead to a more productive, more prosperous and better New Zealand,” Bishop concluded.