New housing regulations that could change the shape of our cities

Housing Minister Chris Bishop new rules The way urban development is planned will limit councils’ ability to block new housing construction and change the character of New Zealand’s cities.

More and more terraced houses will appear in the suburbs – replacing single-family homes and lawns – and around them will be built cafes, dairies and other small shops.

The streets surrounding train lines and high-frequency bus routes will be higher as they will be given over to six-story or higher residential buildings with shops, bars and restaurants on the ground floor.

Agricultural land on the outskirts of cities will be divided into smaller plots and subdivided into suburban villages, suitable for people who want to commute longer to work.

New Zealand’s cities will grow taller, denser and deeper into the countryside, although the exact layout will be decided by elected councils and the market.

Whatever the outcome, Bishop’s radical deregulation of urban real estate markets will fundamentally change the shape of our cities and, let’s hope, leave a dent in our housing crisis.

On Thursday, the Minister outlined six requirements that city councils will have to accept if they want to abandon the (controversial) Medium Density Housing Standards (MDRS).

They will have to: immediately introduce 30-year residential zoning, abolish city boundaries, rezone transport corridors, allow mixed-use zoning, and abolish minimum apartment sizes.

Councils that choose this option could have to zone up to 10 times more dwellings than were required under pre-MDRS policy. The aim is to create a flood of housing potential that will wash away the land shortage and make building, buying or renting a home much more affordable.

Housing Minister Chris Bishop wants to slash house prices

Ghettos, Farms and Shoeboxes

But critics say the policy will deliver less housing than MDRS, result in urban sprawl that will eat up productive farmland, and allow cities to create high-density zones with just a few “ghettos.”

Housing experts say these risks, while legitimate, are mitigated by other regulations and economic incentives. For example, other regulations already control how highly productive land should be managed, and more new policies will require rural development to pay for its own infrastructure.

The zoning change regulations will force new houses to be built in attractive locations, for example along the best transport routes and close to the city centre, which should limit the creation of new houses in ghettos.

Shoebox apartments, another possible outcome of this policy, will only be built if New Zealanders want to buy or rent them — and if banks be willing to lend on them.

Stuart Donovan, a senior researcher at Motu who has advised the government on housing issues, said there was no consensus on whether the policy was better or worse than MDRS.

While there was the potential to deliver more housing than the status quo, much depended on the details, such as how growth forecasts were set and which transit routes were prioritised.

Eight of the 15 councils covered by the MDRS scheme have already implemented the policy and may choose to maintain it rather than restart the entire zoning process, he added.

Labour and Green Party spokesmen welcomed the further densification but warned that removing the city boundary would lead to the city becoming too large.

Auckland Mayor Wayne Brown expressed similar concerns and also criticised the government for imposing housing policy without earmarking funding for infrastructure.

brown I told Stuff “there was no trace of any money, just a whole bunch of instructions,” while also enjoying the opportunity to use MDRS.

Auckland Mayor Wayne Brown attends the 2022 event.

Green suburbs full of madness

The medium-density standards have been met with strong opposition by voters in some inner-city suburbs who enjoy living in a single-family home with a lawn while still being close to the city center.

Many residents of these “leafy suburbs” hated the idea of ​​building three-story terraced houses right next to their villas and did not have to bear any of the costs associated with the housing shortage.

Bishop’s new policy aims to allow councils to protect these suburbs, but only if they can do so without restricting housing development.

Action Party leader David Seymour, who he is a senior minister in the cabinettook credit for blocking “a mad Labour-National plan” to allow terraced houses to be built in almost every suburb of the city.

“It is only after encouragement from the ACT that sanity has returned to housing policy. For many, this will come as a huge relief,” he said in a press release.

Seymour said new homes can now be built built out of sight “existing residents who may not want a three-story building located one meter from their boundary.”

He argued the new plan would free up undeveloped land for new housing, although many housing experts believe most new homes will have to be built in existing suburbs.

However, the bishop knows that building all the new houses in the distant suburbs will not the increase in productivity that is counted on will be the result of this reform.

He told reporters on Thursday that the same people who complain about congestion in their neighborhoods often complain about children can’t afford an apartment.

It was suggested that some would have to accept a compromise. The terraced houses on their street could ultimately translate into a safer and more prosperous community.

Many studies have shown that densely populated cities are much more efficient economic engines than areas where people live more widely dispersed.

However, large, sprawling cities with poor transport connections and public services often have lower productivity because workers waste time commuting and overcoming other barriers.

This is yet another reason to ensure that cities do not try to push all new development to the suburbs, where there are fewer jobs and opportunities.

There are some specific rules in place to ensure councils don’t block housing in prime locations. For example, central government will dictate the definitions of catchment areas accessible to walkers and rapid transport.

Both of these issues sparked debate when Wellington City was working on a neighbourhood plan earlier this year, with a panel of experts wanting to limit what was considered “walkable” and refusing to consider the Johnsonville rail line as rapid transit.

In 2018, following the adoption of the Unitary Plan, Mt Roskill began to replace medium density housing (left) with 1950s state houses.

Will this work?

Ryan Greenaway-McGrevy, influential housing researcherconcluded that such a policy would not be as effective in encouraging the building of new homes in existing suburbs as the alternative.

“Based on these metrics, it’s a step back from MDRS, but it was always intended to be that way,” he said.

Ultimately, the goal of both MDRS and the Bishop alternative was to ensure that cities built enough housing to make up for decades of shortfalls and lower housing costs.

The bishop even said he would like to see it house prices are falling. But Donovan doesn’t expect that to happen — at least not nominally.

“Housing costs as a share of income should fall. That’s a key indicator, and that means that productivity gains are staying with workers and not being passed on to landlords,” he said.

However, the average house price could nominally fall if more affordable housing were built, e.g. smaller apartments without a parking space or balcony.

Bishop agreed that there would be no “immediate drop” in market prices because the reforms would take several years to begin to have an impact on prices.

Eric Crampton, an economist at the NZ Initiative who also helped develop the policy, said he saw the new policy as a continuation of Labour’s record in government.

“Labor has enabled much higher density development and has made some progress on the infrastructure funding tools needed to enable growth. National will enable more fringe subdivisions, make it easier to build affordable housing and require councils to more quickly rezone more housing,” he said.

“To restore housing affordability, we need to make up for the very long period in which housing supply failed to keep up with demand.”

Once New Zealand cities stop catching up on housing demand, they will likely look very different to how they do today.