Yesterday, the government announced an ambitious new plan, a grabbag of housing policies ranging from okay to highly laudable designed to lower the price of housing. However, this package is a donut: a tasty outer with a great big hole in the center…

The Problem

For decades, New Zealand has faced two major shifts in the general population: significant growth, and significant aging. During the same period of time, the number of houses consented each year has been both internationally and historically low. Meanwhile, congestion has grown exponentially, meaning the cost of provisioning new transport infrastructure at the edge of the city precludes opening up more land for development. These have all produced a perfect storm which has made land extremely scarce.

Consequently, the price of land has skyrocketed.

It is stated often, but perhaps not enough, that the primary driver of housing cost increases has been the cost of land. Houses have significant intrinsic value, but that value shouldn’t passively increase: given time, houses rot and fall apart. Empty plots of urban land sell for sums similar to their developed counterparts. The missing centre of the government’s donut is a package of policies which deal with this reality.

The Solution

To see a decrease in the average cost of land, we would have to see population growth weaker than the growth of urban land stock. This would either require massively slashing population growth, or an unprecedented amount of taxpayer money spent on sprawl infrastructure. Each of these things would have severe unintended consequences on the economy and environment, so should not be depended on. This leaves us with a single path forwards: economising on our land use. In other words, we need to intensify.

This not an unsolvable problem, or even an unsolved problem. Auckland has already started doing it. Since the introduction of Special Housing Areas, and then the Unitary Plan, we’ve had an explosion in the number of dense housing typologies being built here. The result? Stagnant rents while the rest of the country surges!

StatsNZ’s quality-adjusted rent index used for calculating CPI Inflation.

However, flattening out is not sufficient. There are more than 180,000 households in New Zealand who are under financial stress due to the cost of renting. At the other end of the income spectrum, our housing costs are pushing young talent to other countries and stopping other talent moving here. To have house prices fall, there has to be an expectation of rental price decline in the short, medium and long term. To do that, we need to understand what Auckland’s Unitary Plan hasn’t accomplished, fix that, and then export to the rest of the country.

Intensifying by land value

The first and foremost issue with the Unitary Plan is that high land value areas, exactly where it makes sense to intensify, were all but excluded.

The most important signal that the government can send is that high value areas are earmarked for intensification. As part of it’s long-term RMA reform, the Randerson review of existing urban planning has advised that

We see three further ways in which New Zealand’s approach to urban land use regulation
might be designed to achieve more competitive urban land markets:
• more use of land price data and analysis to inform regulatory decision-making
• ensuring new capacity is targeted to high-demand areas
• ensuring a flexible approach to the design of land use regulation.

One implementation of this may be to produce suburb-by-suburb housing targets proportionate to aggregate land value, which local governments would then have to provide for in their urban planning. Such a system would keep housing affordable, not just across the nation, or the city, but at a hyperlocal level, while still allowing for local input into designing their neighbourhoods.

Transit-oriented development

While building tall with wide site coverage are important ways of intensifying, one of the most effective ways of intensifying is by removing space for cars. While NPS-UD has gotten rid of car parking minima, many PT-starved areas will likely still demand land for cars. Kāinga Ora should be directed to provide Transit Oriented Developments on top of, and around, as many mass transit stations in the city, as possible, where people can confidently live car-free, or at least, car-lite.

Manukau Station put a university on top of it, and it’s a massive success. Aotea Station will soon be providing apartments, offices, and shops above it with the Aotea Central development. Similar developments could be achieved along many other rail stations in Auckland. The government could use it’s fast tracked consenting process to make sure these are an early part of its building programme.

Taking this a step further, we need to be capturing the land value increases driven by mass transit investment. This could be accomplished by a strategy of acquiring land around stations before they’re announced and/or built, or with a capital gains tax/land value tax including primary residences. This would provide a revenue stream for local and central transport agencies making much needed investments into our transport infrastructure.

We also need to be making sure that private development around transit can happen at sufficient scale. With NPS UD, the government is directing local councils to upzone for 6 story developments within walking distance of rapid transit. But in many places in Auckland, our frequent bus services are producing better public transport outcomes than rapid transit trains. Frequent bus routes along each of the isthmus arterials (Manukau Road, Mt Eden Road, Dominion Road, Sandringham Road, New North Road, Great North Road) must be included in this upzoning.

The government must also consider forcing councils to bring forward their NPS UD implementations. Although in theory, councils are presenting their updated plans next year, they will then spend years in front of independent panels. It could still choose to do what it did with it’s abolition of parking minima, sending it through a shorter process, meaning it’ll be affecting change on the ground next year, not in 2025.

Enabling Apartments in THAB zoning

Another major issue is that the Terrace Housing and Apartment Building Zone does not allow certain outcomes that would typically be described as terraced housing or apartments on most sites. In particular, THAB Zone has requirements to provide side and frontal setbacks.

Side setbacks are only set at 1 meter, which may seem inconsequential, however on a 10 meter wide site that amounts to 20% of the land eaten away. Likewise, above 8 meters, recession planes (also known as height-in-relation-to-boundary rules) in THAB are so steep that they impose effective 3 or 4 story height limits on narrow sites. These effects put together mean that apartments are only possible on large sites, precluding the vast majority of THAB zoned land from development.

As the government is forcing councils to zone for 6 stories near rapid transit stations, it needs to be clear that this means allowing 6 stories in practice, not just by explicit height limit. Consequently it needs to force council waive or reduce setbacks and recession planes when THAB zoned sites are adjacent to other THAB zoned sites.

New development in Paris with no frontal or side setbacks, which would not be compliant in THAB zone.

One particularly notable gap in our intensification is 4-5 story buildings. This is because the building code mandates that at 4 stories, residential buildings must provide elevators for reasons of accessibility. This is important as it greatly increases the number of potential homes that mobility impaired people can live in and visit. However, the crudeness of mandates mean that if a building of that height isn’t economic, and it’s not viable to go higher, then that doesn’t get built at all. A better approach, that would likely also produce better outcomes for disabled folk, would be a lump sum payment for builds that comply with Universal Design principles. For many people, elevators are core transport infrastructure and should be funded as such.

Allowing ground floor retail in apartments can also counterintuitively enable more intensity. Without setbacks, living on the ground floor can be undesirable as pedestrians can peer into your living space. Developers will generally try to find another use for that bottom floor, and when shops are not possible, it will be dedicated to parking instead.

Abolish single family zoning

Under the unitary plan, single family zoning (and it’s cousin, “multi housing suburban”) remain the the popular zones. Allowing gentle intensification by-right by enabling typologies like below would mean most existing landowners would be able to cheaply redevelop their properties.

Conclusion

The government has finally stepped up by sending a signal that their goal is affordability, but while tax rules and subsidies may make things more affordable for some sitting on the margin of renting and ownership, building houses needs to be at the centre of their housing programme. There are many pathways there, but it must embark on at least one.

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65 comments

  1. I think Kiwis have a hard time visualising different urban forms to the ones we have here. We fear townhouses even though we could pre-fab them up to five stories, but there isn’t the zoned land for us to build them en masse at five stories, so we don’t start.

    We have to move away from the idea that apartments need to be 70sqm and cost the same amount as a 100sqm house with land under it. Where are the affordable 3/4 bedroom apartment options for families? Until people see it, they won’t know it can be done, or be able to think about whether they might want it.

    1. I think you can make the case though that anything inside the ‘Outer Link’ ring or within walking distance of it should automatically be stripped of single level status where it exists.

  2. Interesting post, just like to comment on use of ground floor.
    My understanding of history is that it was market forces that changed ground floor living in city centres to retail about the 1850s. In Hamilton district plan (like in many cities) they no longer allow market forces to bring back residential ground floor living in parts of the city & suburban centres.
    Thinking about line ‘Developers will generally try to find another use for that bottom floor, and when shops are not possible, it will be dedicated to parking instead’ what does this feel like to the pedestrian?
    I have written about this a number of times on ‘Hamilton Urban Blog’ and giving examples of effect at a street level. Search ‘ground floor living’ on Hamilton Urban Blog, here is link to post on Delft. http://hamiltonurbanblog.co.nz/2019/01/ground-floor-living-%e2%80%93-delft-example/

    1. Thanks, that’s interesting. I was mulling on a comment Roeland made recently, and realised how useful a form we don’t see here would be: The (roughly) five storey townhouse as part of the “perimeter block housing” form.

      This ticks so many boxes. It could be individually owned by a family who rent out the ground floor as mixed use and one or two other floors as residential.

      The family gets to live in the main residence, of two or three storeys. They keep control of the whole property in a way that New Zealanders seem to value – instead of being part of a body corporate. And they are more likely to be better landlords, since the state of the rental property reflects immediately on them rather than being hidden in another suburb somewhere.

      1. A big part of it is earthquakes. The building code makes it much easier to build 3 story or less (which is fair enough I guess). If you are going to pay for engineers to go higher you may as well go much higher.

      2. That’s a great idea. But now you can’t claim the mortgage on rentals as an expense the only people who can do anything are those with $2million in cash to park. Same goes for Built to Rent projects if the developer is cashed up they will do it but if they need a loan they will probably rethink.

        1. One day it might all settle out and people will be willing to invest in businesses, technology, pieces of local infrastructure, services. And just those who have a particular interest in property would invest in property; not looking for a way to milk capital gain.

          (Right at this minute this all seems pie in the sky because all sorts of urgent problems are being exacerbated but hey, nice to dream.)

          The built form could still be useful for three co-owners or for families living above their business, with extended family renting another part.

        2. – People will still be able to borrow on such properties, they just won’t receive a subsidy to do so (in the same way that owner occupiers and cash buyers don’t receive subsidies).
          – The new rules only apply to residential property, so commercial space should still be eligible for the mortgage interest subsidy.

        3. I think they will have to carve out interest on new builds if they want new houses. To be clear I support a full capital gains tax on all assets. I just can’t believe they will limit investment to people who can pay cash. No one who needs to borrow will invest if that means you get taxed on revenues rather than profits. Long term it will work out that pension funds and insurance companies will become landlords. But in the short term I wouldn’t want to be a tenant.

        4. Bollocks. Did renters get lower rents when interest rates plummeted?Why would rent change in one direction, not in the other?

        5. “No one who needs to borrow will invest if that means you get taxed on revenues rather than profits”: depends on what you consider a profit. Why should a business become unprofitable just because it was purchased with debt instead of cash?

        6. Anyone else getting conflicting stories? First roads, then brownfields, now roads again, from that article Conor’s linked:

          “One of the things we’re often told is that a lack of the roads and pipe needed to service new housing is one of the main infrastructure blockages that are holding up the building of new homes. To deal with this we’re launching a $3.8 billion Housing Acceleration Fund, which will speed up the pace and scale of house building.”

        7. Looks like they are not completely stupid after all. The carve out for new builds will encourage people who can’t pay cash for a rental property to build a new one. Removing deductions for interest will mean anyone highly geared will sell particularly if they have loans over several rentals. First home buyers might win but those who can’t afford to buy yet will get stung. Yes of course increasing costs will lead to increased rents. If you increase the marginal cost of any good then fewer items are sold and the sale price is higher. That is how markets work. At least Build to Rent isn’t getting screwed but it is still a dumb policy as it will have the greatest impact on those with the least ability to do something else, renters.

        8. “Why should a business become unprofitable just because it was purchased with debt instead of cash?” That’s not the relevant issue as supply is greater than one unit. The issue is that the landlord at the margin, who is completely geared, will see their cost of capital rise by 50% (assuming 33% tax). So they probably won’t provide a house for let or if they already own they will sell. If they are on more than 180k per year the cost of capital rises by 64%. Supply must decrease, we just don’t know how much it decreases. Those landlords will do something else and be fine. The potential tenants miss out. It is a dumb policy, but you will be able to read about that when the Treasury advice they ignored is released.

        9. Whilst the number of houses available to let may fall, the number of houses, and therefore the number of people housed will remain the badically the same, just a bigger proportion will be owner occupied, surely a good thing.
          Independent of this equation, is how to increase the building of more houses? What efficiencies can be gained by increasing the supply of skilled builders etc by more training. What efficiencies can be gained by increasing standardisation, more houses being built from standard designs and modules?

        10. “It is a dumb policy, but you will be able to read about that when the Treasury advice they ignored is released.”

          Treasury’s advice was that more analysis was required before implementing.

          Interestingly, they preferred a 20yr brightline test.

        11. This policy will either be the thing that sinks Labour and the country returns back to the Nats (despite their current total ineptness) – or else it could just be that it is the Game Changer masterstroke that sorts out the runaway housing bubble for once and for all. Only time will tell.

  3. The problem is :

    1. Demand from overseas buyers not fixed. You don’t see it?? Many were buy onbehalf of those Chinese overseas black market.
    2. The builder push up the price ! There’s plenty of houses subdived in three or more houses, making the price sky high. For example, few house in Bucklands Beach Road with GV 1.2M were sold over 2.7M!!! Reason why? Each land with around 700m to be build for three to four houses, each will sell around 1.7M. You can calculate how much profit the builder can make. Government take no eye on these!

    1. But isn’t the purchase by overseas buyers who are non-resident now stopped? Illegal? Or are you saying it is still going on?

  4. Multi-use developments are great, I totally agree, but are more difficult for the developer and architect. A multi-use building will trigger other requirements under section C of the Building Code – ie Fire. Not that much more difficult when building a new building, but a lot more onerous when redeveloping an older block into apartments, as any change of use will trigger additional fire and access requirements.

    I must say, it is great to see the removal of single-storey stand alone state housing in Mt Roskill etc – but I find it perverse that they are only replacing it with 2 storey housing on smaller sections. They really need to be replacing it with 4 storey terrace housing at a minimum – or even 6 storey blocks along the primary routes. Good to see that some of these are happening down Dominion Road – but they should be lining each side of every major transport route.

    1. That is one of the many issues with state owned housing. They can’t build apartments or high density because it will cause issues. Maybe they will make some of the freehold stuff higher density who knows.

      1. there are plenty of Kāinga Ora apartment developments? they could certainly do more, but the idea that they don’t because of ‘issues’ is false?

    2. Other than construction headaches, there’s also the ongoing economics to think about. It looks like mixed use doesn’t scale to every development until you have a really dense urban form. That is, if every section is developed to 5 or 6 storey apartments with ground floor commercial space then there will be an oversupply of commercial space (or an undersupply of local customers) and much of the commercial space will end up vacant.

      Take Sugartree, a modern apartment development in Central Auckland. It has several 12-14 storey apartment blocks that were designed from the outset to have ground floor commercial space. They were unable to tenant all the commercial space, most of the businesses that did get established haven’t survived Covid-19 and now they’re converting most of the ground floor space to more apartments.

      If a 12 storey apartment block can’t sustain retail/hospitality/offices on its ground floor then a 6 storey apartment block doesn’t have a hope, unless it is relying on a surrounding residential area that doesn’t have competing commercial space. This implies that only some apartment developments can sustain ground floor commercial space.

      On the Auckland isthmus maybe a sustainable model would be mixed-use developments fronting the main transit corridors, with perimeter block style / townhouse residential development down all the side streets.

      1. This is a good outcome ‘now they’re converting most of the ground floor space to more apartments’. We need to push back on the idea that ground floor has a fixed use, If there is demand for retail or office all good, if not ground floor living adds to the character neighbourhood.

      2. I would have been surprised if those shops would survive even in good times.

        Pictures here → https://wrongsideofmycar.blogspot.com/2019/07/sugartree-lane.html

        The problem is that (1) it looks like a private lane, (2) it is completely isolated from its surroundings by the street grid, and (3) viable shops on your lane, or completely quiet lane. Pick one. Whoever is in charge picked the latter anyway.

        An underrated thing about buildings is how adaptable they are. Can you convert that ground floor to residential? Or back to shops? Can you convert that parking on your ground floor to shops?

        Or can you convert the garage of your townhouse to a shop? Maybe you want to convert your townhouse to walk-up apartments?

        A long time ago, you could add storeys to your house long after it was built. So as your family grows or as your financial situation improves the house can grow along with it.

      3. Yes, I think the issue is that the ground floor shopping area and “laneway” is incompetently designed. I’d fully expect it to go bust – it is simply not inviting. Most developers and architects really don’t understand how to produce a really good retail experience. It is an art, rather than a science. Clearly, and sadly, this lot never had it.

  5. I think the tax changes will have a massive effect. Something like 30% of all house sales have been to investors and speculators. Without favourable tax treatment that could completely dry up and house prices could drop significantly. We will see I guess.
    We obviously do have an under supply issue as well, but I am not sure that is the main driver of high prices.

  6. Property located within easy walking distance of stations in central Auckland areas shouldn’t just be zoned to allow 6 stories. It should be zoned for a MINIMUM of 6 stories as standard with their needing to be a good reason to be exempt (ie shading of a public park). In some places that minimum should be even higher.

  7. Great post. Intensification and co-ordination with PT within the inner city is essential. We are building a massive and expensive train-set around the central city and the fact that we aren’t building massive residential developments (3 / 4 bdrm apartments) on top of it is crazy talk. Hong Kong funded their entire Airport high-speed train through the sale of land and buildings along the route.

  8. As a Auckland baby boomer, in my younger years the city was a place of excitement, movies, a visit during the weekend to play video games, walk in the parks, etc. Times have changed, the interest to visit town has diminished. And so it should. We age, we have the desire for more quiet. The demographic for urbanites are the students, backpackers, tourists, homeless, etc. They don’t necessarily have the money to purchase the quality goods offered on Queen St. Hence more 24 hour dairies. I see a sad future for the CBD in 2030. People are not meant to live high rise apartments. New housing in new areas should have infrastructure based on green technologies, on 1 acre land plots on long term 70 year leases to encourage self sufficiency. Home ownership is the biggest fallacy of all. Why would anybody encourage others into a life of debt to purchase property they can’t afford? Eat healthy, exercise daily, die anyway.

    1. Sadly misinformed. As a person of similar age I live in a high rise apartment and my building has a large number of retired people.
      People not meant to live in high rise? You have no basis on which to make such a statement. Your prejudices are why we have this issue.
      The CBD is still wonderfully vibrant and a desirable place to visit. Or indeed live there, as I do.

    2. One acre land plots might come into their own when climate change has brought severe geopolitical strife, but currently they are the least green type of development because the residents drive so much and tend to build huge energy-wasting and resource-wasting homes.

      Recommending one acre land plots for Auckland is a form of climate denial.

      If people want to live semi-rurally, there are many small towns in New Zealand which would benefit from their moving there. But they need to do this embracing the lower number of contacts and services there, and not keep driving back to Auckland to visit specialists and friends – which would be more climate destruction.

      1. “Recommending one acre land plots for Auckland is a form of climate denial.”

        Probably not a coincidence that someone in their 70s whose motto is “eat healthy, die anyway” has a nihilist approach to housing, to climate change, to young people who are too poor to worry about, and to civilisation in general.

    3. You’re mistaken, queen streets low point was in the 80s or 90s. It’s been on a boom for the last couple decades.

      1. I disagree. Let’s face it: Queen St was more of a destination back then 80s than it is now. Let’s see: we had movie cinemas (Regent, St James, Civic, Mid-City (which admittedly was shit and deserved to die) and more), Her Majesty’s Theatre, Main Street cabaret, DKD, Asylum, John’s Diner, Zanzibar, Club Roma, etc. Almost all your cinemas are shut in Queen St, but instead they are all out in the suburbs. It used to be a place to go to on a Friday or Saturday night – now it is a ghost town of the dead and dying businesses, filled with lonely Asian students living in substandard apartments and eating noodles on Lorne St. At the other end of the extreme it is a shopping place for the rich and filthy rich, buying new Gucci handbags and Prada (whatever they make). It is really no longer a place of interest or a choice of destination for anyone these days. Instead, everyone goes to the Viaduct, or to Ponsonby, or to Parnell, or to Grey Lynn, or whatever new destination is fashionable this week. Queen St does not even finish amongst the top ten destinations of Auckland these days.

      2. I disagree. Let’s face it: Queen St was more of a destination back then 80s than it is now. Let’s see: we had movie cinemas (Regent, St James, Civic, Mid-City (which admittedly was rubbish and deserved to die) and more), Her Majesty’s Theatre, Main Street cabaret, DKD, Asylum, John’s Diner, Zanzibar, Club Roma, etc. Almost all your cinemas are shut in Queen St, but instead they are all out in the suburbs. It used to be a place to go to on a Friday or Saturday night – now it is a ghost town of the dead and dying businesses, filled with lonely Asian students living in substandard apartments and eating noodles on Lorne St. At the other end of the extreme it is a shopping place for the rich and filthy rich, buying new Gucci handbags and Prada (whatever they make). It is really no longer a place of interest or a choice of destination for anyone these days. Instead, everyone goes to the Viaduct, or to Ponsonby, or to Parnell, or to Grey Lynn, or whatever new destination is fashionable this week. Queen St does not even finish amongst the top ten destinations of Auckland these days.

    4. “…the city was a place of excitement, movies, a visit during the weekend to play video games, walk in the parks,..:

      I almost fell asleep dreaming of such “excitement”, especially the walk in the park.

  9. “With NPS UD, the government is directing local councils to upzone for 6 story developments within walking distance of rapid transit. But in many places in Auckland, our frequent bus services are producing better public transport outcomes than rapid transit trains.”

    Firstly, it’s a bit sad that busses in congestion are still better for most trips, even competing along the same corridor, than our trains.
    Secondly this is extremely important, it opens up way more of the city. These bus services are very usable and with some more green paint would become genuinely great services. I will have zero faith in the council if they pull “trains and busway only qualify” that would be extremely dirty and agains the spirit of what central government is trying to implement.

  10. One way of encouraging 4-5 storey buildings might be a rates rebate for the first few years on a sliding scale but only for those two levels. That would encourage investors or potential owners.

  11. Good piece. It’s critical that when council undertakes the plan change to give effect to the NPS-UD, they abolish height in relation to boundary (HIRB) rules in the THAB zone.
    One area I disagree with you on is side yards. I think if HIRB rules go, a small side yard requirement is important to mitigate daylighting impacts, also simply practically speaking it’s good to have at least a metre to allow for building maintenance etc.

  12. Related to this, I’d like to see council get a bit more innovative, for example holding a ‘micro apartment’ design competition. The winning designs could then form an ‘acceptable design’ template in terms of resource consent processes. Such designs are likely to need to be predicated on flexible floor plans, smart storage solutions, communal facilities etc.

  13. Lots of good arguments in here and fortunately some already in place in Auckland at least. The AUP allows up to ten stories in many places already including near the centre on arterials, so Great North Road can have lots of high apartment buildings on there but development only goes as fast as developers can build and they will probably not want to flood the market at once and thereby lose their profit margins. Building density on top of and around stations is a great idea. Apartment living close to the city centre seems to most suit young people, childless professionals and empty nesters. I would argue that it is also really important to have some child-friendly mid-density housing also not far from urban centres too otherwise parents end up having to drive their kids around a lot, setting up a new generation to normalise private car use rather than public and active transport. This might mean inclusionary zoning for family housing in each suburb, as well as targeting for population numbers. I think it is a great idea to give local areas who are near transport links a target but to give them some say on how to achieve that.

  14. Great article Scott! Probably the most important thing central government can do is bring forward the implementation of the NPS-UP. Get new district plans done in the unitary plan style – quickly and signed off by central government so councils can’t wriggle out of upzoning with restrictive landscaping, setback or recession plane rules.

    The secret sauce is to couple this process with funding so councils and residents see the benefits of upzoning through better infrastructure (parks, transport, pipes, schools). Maybe a lump sum to councils for hitting a zoning target and then they get the GST revenue on every new dwelling they enable. That would consents seriously moving – only construction labour and materials bottlenecks to solve from there!

  15. The missed opportunity, for me, is the lack of terraces. I spent 5-6yrs in Sydney and some of the nicest neighborhoods were centered around terraced housing, with the local pubs, restaurants etc and a train station/major bus route around the corner. All in walking distance.

    Sure, the best ones were heritage and you can’t just rustle those up quickly, but we could be doing these more to provide density and activity.

  16. Affluent inner suburb owner’s wouldn’t want intensification because they want to ensure the new supply is low to keep their house value high.

    The local politicians who want to be re-elected will try not to anger those people so the will continue to restrict supply.

    That’s why we got a donut

  17. I was about to invest in a new build home. It was a long term investment and I would be happy to rent to good tenants at a fair price.
    Now I’m going to invest my money offshore instead as a result of the government announcement.
    Not sure how this helps the housing crisis as it is one less home available to rent.

    1. Daneil, you realise that you already could only offset interest costs against rental revenue right? They removed the ability to offset income tax two years ago.

      So unless you were expecting to make a net profit on your investment property, with rent more than covering all mortgate payments and expenses, then you situation has not changed.

  18. You know I love it when a Govt makes a gutsy call and non tax deductibility of interest rates on rental property is one. Know ones no what will happen but they have done it and they could only do it because there is a housing price crisis. Economists will look at their spreadsheets but only a year ago they were predicting a price fall because of covid 19. As they say the only reason for having economists is to make weather forecasters look good. Another gutsy call was the ban on new oil and gas exploration permits. We haven’t seen the end of that one yet. I am not making any predictions because I don’t know what will happen but good on them sometimes we need bold action to force change even if the outcome of the change is very uncertain. With any luck and good management any negatives can be minimised.

    1. Have to agree. Over the last 11+yrs we have been ruled by popular politicians whose main goal was to remain popular (to paraphrase Bill English). So they fiddled around the edges and daren’t anger middle NZ.

      So credit where credit is due.

  19. The RMA was meant to be effects based legislation but was implemented as zoning and density restrictions along the lines of the Town & Country Planning Act. Successive governments then failed to put in place the required national standards leaving us an inelastic land supply.

    The proposed NBA & SPA must redirect us back to effects based planning. It is critical that the new national standards are rolled out at the first opportunity.

    We cannot afford to continue to be held hostage to arbitrary zoning and density rules written by planners who dont bear their costs.

  20. They’ve said that the aim of the NBA is to move away from effects to outcomes based planning.

    As far as promoting housing, I am not sure a strong focus on effects would help. You could end up having to do a time consuming and expensive in-depth analysis for every house rather than just checking if it ticks the boxes for the relevant zone.

    I think the problem rather is that the plans and zones etc are too restrictive.

    I am concerned about how well the RMA reform will address the housing crisis. They don’t seem to have a clear idea of what is currently going wrong or how they will fix it. I’ve got higher expectations for the NPS-UD, but I am concerned that Councils will water that down on implementation.

  21. Upzoning *increases* the price of (upzoned) land. That does not preclude upzoning from enhancing affordability, because upzoning allows less land-intensive dwellings to be built.

    It is really important that when we evaluate whether upzoning delivered housing affordability in Auckland that we do not look at land prices. Just track the prices of the kinds of capital-intensive dwellings the policy was designed to enable.

  22. What evidence do you have for the statement that “land is extremely scarce”? To suggest it must be scarce because the price is high borders on the tautological. Simple visual inspection contradicts the premise of this piece.

    Rather than a deregulatory orgy of destruction, how about simply putting in place incentives for intensifying on vacant land, car parking land and low-quality post 1960 1-3 storey commercial buildings. You get more housing faster and rapidly fill in gaps, supporting 15 minute communities.

    But there’s no need to destroy community input in this model so I guess it’s not very interesting 😉

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