Hot take: it should be affordable to live in Auckland.

You may not be surprised to learn I’m not the only one with this hot take. Indeed, the Minister of Housing recently took the notable step of saying house prices should come down, something common wisdom says should be a politically toxic thing to proclaim out loud.

Many factors contribute to high housing costs. The expert consensus is that the core driver has been insufficient supply to keep up with changing demand as the population grew, some of the population aged, wages rose, and existing housing stock got old; that, plus the fact that housing supply has been primarily constrained by low-density zoning.

The Unitary Plan helped, but it still has holes and generally does not quite go far enough to unlock enough capacity to fill our housing needs. Set-back mandates and restrictive rules around recession planes (i.e. how close to the property line you can build, at what heights and angles) have led to poorly designed sausage flats, and missing opportunities for a perimeter-block housing approach.

The biggest hole in the Unitary Plan — sitting right in the middle of our maps — turns our city into a housing donut, by focusing intensification into lower-demand areas that are poorly served by public transport, like Te Atatū and Flat Bush.

Filling the housing donut is critical for a lot of objectives we care about. For example, building homes not just in bulk but in the right places helps us unlock the productivity benefits of agglomeration, reduce the need for car travel, and develop the kind of mixed-use neighbourhoods – shops, schools, housing, parks and workplaces within walking distance – that people love.

To try and address this centrifugal effect, the previous government launched the National Policy Statement on Urban Development (aka the NPS-UD) and subsequently the Medium Density Residential Standards (MDRS), but these have both been consistently undermined by Auckland Council.

Earlier this year, the Minister of Housing, Chris Bishop, directed Auckland Council and its independent hearings panel to fast-track the NPS-UD reforms, given the uncertainty caused by the MDRS repeal.

However, Auckland Council is pushing out deliberation on more housing until 2025 at the earliest, arguing that because every walkable catchment area might possibly be affected by flooding, it should delay rolling out more housing in all of them. Given the time it takes to consent and build things, it’d be 2028 before Auckland saw a single apartment built according to 2020-era reforms!

Enter: “Going for Housing Growth”

So it was a welcome surprise when last week the Minister announced “Going for Housing Growth”. This is a suite of policy reforms designed to a) direct councils to increase housing capacity, and b) make it easier to build the kind of homes that people actually want to live in.

Let’s take a look at some of the key elements of the proposed policy.

Housing Growth Targets

The crown jewel of the new policy is replacing the MDRS (the hard-won and formerly bipartisan policy to unlock three-story townhouse development in the suburbs) with a broader mandate to unlock 30 years of land for housing supply.

Northcote Kāinga Ora redevelopment. Source: Google Maps

Measuring hectares of bulidable land land with a unit of time is a strange thing to do – what does 30 years of land look like? Essentially, it means we must consider how much more housing we need over the next three decades, and plan for it appropriately.

Most Councils would argue that they have already done this, but I’d argue they’re incorrect. Demand estimations have indeed been done, but are usually done poorly. For example, Councils have:

  • relied on projections that have consistently underestimated population growth
  • not measured what is actually likely to be built by the market
  • not considered how wage growth and demographic change will affect housing demand
  • not considered the need for renewal of the existing housing stock
  • not considered the historic under-supply of housing

The new policy is signalling good things in turning this around: the Minister has talked about requiring Councils to consider what can feasibly be built, and to use generous assumptions around population growth. But to be really committed to housing affordability, the needs to consider all of the above.

There is a deeper problem here: the Resource Management system is deeply deferential to clear national direction, but becomes extremely legalistic and bureaucratic when Councils are given discretion. Replacing something as specific as the MDRS with something as vague as “30 years of land” is likely to result in a few years of lots of legalistic wrangling and not much house building.

Intensification in the right places

Fighting back against the predatory delay by Councils and Independent Hearing Panels, the Minister announced a suite of changes to the NPS-UD. In contrast to the vagueness around the housing targets, the NPS-UD changes are very specific — and very good.

Ockham’s Kōkihi apartment buildings on Great North Road in Waterview. Photo by Patrick Reynolds.

Specifically, the Minister has announced that the NPS-UD changes will include:

  • Closing off what he rightly called the “interminable and frankly boring” debate around what counts as “rapid transit” by having the government simply publish a list of the routes that qualify.
  • Introducing a new class of “strategic routes”: these are high-quality bus routes that are ready to support more intensification. but are not captured by the definition of “rapid transit”
  • Directing Councils to generally plan with regard to demand and access to different services

These are critical changes for filling in the housing donut. The lack of integration with transport infrastructure has been one of the biggest gaps of the Unitary Plan – and is one of the greatest threats to its political sustainability.

This map shows the scale of potential from including “strategic routes”, not just rapid transit. It demonstrates that if you were to upzone 800-metres around every corridor with a ridership of 500k+ trips per annum, you’d capture almost the entirety of the isthmus. (Image by Scott Caldwell, originally shared on Twitter.)

Qualifying Matters & Special Character Protections

The NPS-UD allows for exemptions to the intensification rules if a “qualifying matter” is present. This is fundamentally because there are some parts of the city that we just don’t want to intensify — like places with cultural value, or areas that are at risk of flooding.

But Councils have been abusing the open-ended nature of qualifying matters to delay and avoid intensification – and the Minister has noticed:

However, some councils have misused these exemptions, relying on unlisted exemptions without sufficiently justifying why they actually make intensification inappropriate, and not properly undertaking any site-specific analysis.

Most notably, Auckland Council has been avoiding filling the donut by introducing bizarre “special character” controls over whole neighbourhoods, and applying them in incoherent ways.

A “special character” home in Kingsland. Source: Google Maps

To date, these special treatments have been a major source of delays in the Independent Hearing Panel process. That’s because you’re asking a small, under-resourced group of people to simultaneously assess a) whether a qualifying matter is valid, and b) whether the Council’s application of the qualifying matter is valid.

These are inherently value-laden judgements, not just evidence-driven, and probably should be a political decision. It would create better outcomes and move the process along faster if Councils were required to submit qualifying matters and their methodologies to the Minister for approval, and the IHP simply assessed whether the Council’s application of the qualifying matter was valid.

Balconies and floor area requirements

If we’re on the cusp of an apartment boom, it’s important that apartments cover a range of different sizes, incomes,and lifestyles — not just luxury penthouses for the wealthy few. To support a variety of options, the Minister has announced that the NPS-UD changes will remove the requirement for balconies and minimum floor areas in apartments.

In an ideal world, everyone would have enough money to afford plenty of floor space, some of which would be al fresco – but that’s not the world we live in. The real world consequence of banning small apartments is not that every person gets to live in spacious accommodation, but that people wind up sharing normal-sized houses with a large number of other people.

density v overcrowding picture
Source: Alfred Twu, California YIMBY

This might be fine for student dorms, but when people start to get into their 30s it’s just called overcrowding. This kind of housing situation is a large reason why respiratory diseases like COVID-19 spread so much more readily in the poorest parts of Auckland. It’s not good for any of us.

Mixed Use

Intensification is a massive opportunity to inject vibrancy and life into the places we live – and enabling mixed-use, that is, allowing people to live, work, and play in the same area, is the key to making intensification work really well.

The Minister has signalled that the NPS-UD changes will include the ability for people to open small shops like cafes and dairies anywhere in the city, and to allow for more expansive commercial uses, like metro supermarkets, restaurants and offices in the core NPS-UD catchments.

Vibrant, mixed-use Freyburg Square. Source: Scott Caldwell

This is good, smart, and vital to making intensification a politically-sustainable endeavour. We’re embarking on a 30-year project to redesign our city for the 21st century – and, if the construction of apartments brings with it the construction of vibrant, mixed-use neighbourhoods that provide what people need to live a good life on the local level, then it will be a project that otherwise disinterested or disgruntled neighbours can get behind.

Density and mixed-use are not the same thing, but they are closely related, and form a virtuous circle. Mixed-use is a key part of making density work, and density is a key part of making mixed-use work. The more people in a neighbourhood, the more customers for local businesses and participants in local activity; and more businesses and local activity means more jobs, more things to do, more fun and interesting places to be.

Greenfields growth

Planning policy in the latter half of the 20th century was essentially an experiment of deeply distorting the housing market by broadly prohibiting redevelopment in urban areas, while lavishly subsidising the many costs (transport, utilities, water) of greenfields development — an ideology that Auckland bought heavily into, sprawling out across its green edges and agricultural “food baskets”, and subjecting people to ever longer journeys and more time spent sitting in traffic, just to be able to have a roof over their heads at each end of the day.

We’ve now largely exhausted the places where it’s possible to cheaply build new houses on the city fringe – which in turn means that the best and biggest opportunities lie in filling the housing donut. And, the high costs of infrastructure have increasingly been reflected in our planning policies: Auckland Council’s appetite for endlessly expanding the city has been curtailed thanks to planning instruments like the Rural-Urban Boundary.

In a fervour for developing both “up and out”, the Minister wants to replace the RUB with a new policy that allows greenfields developers to build housing as long as they are willing to pony up the costs for the necessary new infrastructure. Although the Minister sees this as a liberalisation of the rules, and it might look good on paper, it’s hard to imagine that any developers will be interested in this. They’ve already baulked at being asked to pay just 20% of the costs of infrastructure, so they’re unlikely to warm to the Minister’s ask that they cover 100%!

In conclusion (for now)

Greater Auckland, as a member of Coalition for More Homes, has recently been involved in advocating for better outcomes in the Plan Change 78 process. We’ve experienced the blunt end of how the resource management system is working through filling the donut — and it’s not pretty.

So it’s laudable how quickly and how far the Minister plans on going to rectify this situation.

Put together, this is a mostly coherent package of reforms, that will probably go a long way in filling the housing donut. Whether the package will be a success now depends on the playoff between technocratic delays to implementation, and the political will of the Minister to enforce it.

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  1. Thanks for this post
    The Mixed use should go both ways, residential should be permitted in ground floor in retail areas. So suburban centres can expand and contract with demand. e.g. so we do not have empty shop fronts. Here history on were rule on no ground floor residential in retails areas comes from.
    On Micro dwellings here a youtube clip from DW on 18m2 apartment Warsaw

  2. I suspect this particular minister knows exactly how unlikely developers will be do pony up for 100% of infrastructure costs but had to include the “out” part for the benefit of the transport minister and their coalition partners.

    1. Also, it was telling that making the MDRS optional was called out specifically in his speech as being “as per the coalition agreement with ACT.”

      Either ACT wanted that inserted so they could take credit or (possibly more likely) Chris Bishop wanted to distance himself from the move.

    2. Agree, Bishop seems to be the smart one in the National party. If only they made him transport minister.

      1. God help us if he is the “smart one”.
        Honestly, he is really not that smart. Just standing out like a bull in a china shop.

  3. To what extent is the policy package an option? If a council opts into the mdrs, can they opt out of all of the other parts? Or is it just the 30 years of greenfield that they are opting out of?

  4. If Bishop gets this stuff through, that would really show up Labour’s inability to get anything done. Especially as Bishop’s own party, coalition partners, and voters are probably against many of these changes!

    1. The MDRS is more enabling than what National is proposing here! And National have an advantage by getting to see how councils and IHP’s will react to the rules.

      The proposal is good to be clear, but if I were to speculate if Labour got another term, there would have been some similar reforms to fix councils gaming definitions and special character areas, and we would have had more housing enabled, obviously keeping the MDRS. Certainly some great parts of this package wouldn’t have gone through under Labour though.

      Point being that Labour “got more done” and would probably have continued to do so. Bishop is doing as well as he can with the ACT reverse thrusters on full bore and the passive NIMBY wing of National weighing things down.

    2. The outcome will be heaps more dense housing in places a hours drive away from any jobs or infrastructure and absolutely zero PT.

      That will be what we get.

    3. When this goes through and doesn’t fund any housing anywhere we actually need housing, there will still be nothing to celebrate. MDRS standards were better, letting NIMBYs yell them down was and is a huge mistake, if the outcome we want is more housing where we need housing.

  5. I agree completely; let us end this old idea of wooden housing, that was never good in this country. It was a colonialist idea and it is time to go.
    We need apartments, quality apartments; and there are many quality constructors of apartments now in our city, unlike the 1990s.
    We need to start ensuring that people learn about the beauty of the apartment life, of walking to everything, of not even needing a bike because you can walk to the train station or ferry; or keeping a bike as the between train and ferry useful wheels.
    The city centre houses some 80,000 residents, yet days have 300,000 people imported to our CBD.
    It is ridiculous that people travel so far to work. We are not the last generation (our parents and grandparents), we should love our home life, and our work life, and not spend half our lives talking about the traffic, or the weather. These things do not matter in the Apartment Life.
    I have spent most of my adult life in the City Centre, and I will never return to the suburbs, because they are tedious’ yet society cannot understand why we have so many societal issues, based around the isolation of the suburban lifestyle.
    If you don;t like ram raids – build apartments. If you don’t like drug and alcohol in the streets, build apartments. Put a nightclub in every basement of these apartments. Basements in the city have become the best nightclubs imaginable. Excessive noise beneath the earth so only the Taniwhaa might complain.

    I moved to the city when I was 17, left the country when I was 22, and returned to the city when I was 30, having lived in Sao Paulo. Another decade later and little has changed, but that water is finally being taken seriously, and some apartments are actually being built, this is real positive change compared to 25 years ago.

    We can solve all of our problems with quality apartments. OCKHAM knows this, KALMAR knows this. IKON knows this, LEIGHS knows this. But the law must make it easier for these high quality developers.

    The law in this motu is slow, and with reason, but we are in vital times, and we cannot keep getting sick because of poor quality housing stock.

    Vive les apartements!!!

    bah humbug

    1. Apartments are great in theory, but in NZ they can be expensive, risky investments and lack some critical elements, I have found.
      1. Banks require a large deposit for under small apartments, which makes them still unaffordable for first home buyers.
      2. Body corporate fees are usually high can increase unexpectedly making the apartment suddenly unaffordable and owner risking bankruptcy.
      3. They are often lacking in car-free public space and secure bike storage, so it is difficult to own bikes, particularly e-bikes or cargo bikes due to risk of theft and lack of suitable parking.
      There is also a shortage of 3-4 bedroom apartments in the market, so ones that do come about are upwards of $1.5 million a pop plus body corporate.

    2. having loved in apartments across Europe, I could not wait to get a proper house (bungalow) at the first chance I had.

      They are great for those in their 20/30s or retired but unless you live in an up market one, are often really not great at all, especially if their is no outside space or balcony. From my experience, the higher the number of apartments, the higher the chance of landlords/body corporate treating the place like a slum.

      NZ needs high quality, multi storey terraced housing.

      1. “having loved in apartments across Europe, I could not wait to get a proper house (bungalow) at the first chance I had.”

        Having spent 10+ yrs in Asia in condos, with a wife and 2 kids, I loved it.

        Multiple swimming pools, tennis squash badminton basketball and futsal courts. Grass to kick a ball round, a dozen kids at anytime circling on bikes or in the pool any afternoon.

        Most of the residents between the ages of 30 and 60, lots of families. Locals and expats killing to get it in. I have lived in about 3 different places like this.

        It’s disingenuous to say the choice is between suboptimal apartments and high quality terraces.

        1. P.S. don’t disagree on the value of quality terraces (I lived in one on a trendy suburb of Sydney) but high quality apartment complexes are needed too.

  6. The battle continues.
    Cars, sprawl. Intensification, PT, bikeways, busways, apartments, greenfields, brownfields.
    A higher or lower benefit to cost ratio.
    People living in an apartment close to work and PT are much better off

  7. Wow this seems like actual application of evidence to create policy. I’ve not been a supporter of this coalition but this seems like a great example of positive change and should be a great way to get over the partisan politics.

    Now what’s the deal with the massive misalignment on transport policy? Billions on roads with no good business or evidence for their need? And cutting investment in tha alternative modes that this housing policy will make more urgent? How can two ministers from the same party be so at odds? Seems like there might be some partisanship happiness within the ranks.

  8. 30 years’ land supply needs staged release, or else there will be bits and pieces all over the place, like we have at the moment. The ability of MHUD to acquire land to accumulate decent redevelopment parcels is necessary. Kainga Ora have been able to do their best work where property ahs been in their single ownership, with negotiated purchase of a few “missing teeth”, but piecemeal redevelopment leads to sausage flats and sausage McMansions with no public/shared landscape. redrawing LINZ boundaries is the only real way to change land use – this applies in rural greenfield development as well, where many subdivisions are awkwardly fitted into somebody’s paddock while the next owner doesn’t want to develop. This is a big issue to address, with NZ’s attitudes to land ownership rights, but it is fundamental to good redevelopment of land.
    Building design is also important. “Amazing Spaces” can be created in the same Rule-based controls as unliveable “Shoeboxes”. What is needed is a set of design rules, not planning rules. This affects affordability – what it costs to build to a particular price-point of end product.

  9. “30 years’ land supply needs staged release, or else there will be bits and pieces all over the place, like we have at the moment.”

    In theory, this might be balanced by the idea that a developer will have to pay 100% of (at least) the CAPEX cost of servicing these scattershot developments. This would be a rather effective way of discouraging “low-density away from everything”. The risk is that this part is watered down, while the rural-urban divide isn’t re-established to balance the watering down. Once it is gone, and you can (at least in theory) develop everywhere without at least plan change…

    1. Planning hearings would still be likely to conclude, “We can’t possibly put the cost of all the infrastructure needed in this wider precinct on this small development.” Or the next small development, or the next….

  10. The oddest/most disappointing thing about the announcement was that on the hand, the government wants more housing on public transport corridors, but on the other hand, the focus is on building more roads, not public transport.

    It’s also disappointing that similar policies put forward by the previous government were dismissed by the current government. Doesn’t augur well for developing a shared long-term vision which will survive changes in governments, which was what the MDRS was meant to achieve.

    1. “The oddest/most disappointing thing”

      It’s not odd as such – Bishop just isn’t quite like the rest of this crew. Some of his policies are clearly at odds with those of other key figures in his party / coalition, but he has to triangulate as to what he can get across the line, and some things he can’t oppose because it’s not seen as his wheelhouse, event though it affects his subject matter. I guess it’s better than if they were unified on wanting both roads and sprawl-only. I was fully expecting this govt to simply re-establish minimum parking and allow Councils to re-establish height limits galore, so this is still a pleasant surprise, all told.

      1. Very true! Urban development in Auckland is a game of inches, not yards. Thanks for the explanation 🙂

  11. It sounds like on almost all points the minister actually “gets” it and is doing it right! Hard to believe from a Nat minister but here we are!
    The single biggest issue with housing (of any form) in Auckland is the transport infrastructure to support it. Ideally most would be based on using PT and with big increases in PT options.
    Secondly we will require considerable investment in stormwater given greater concentration of high density inevitably decreases green sponge space.

  12. The 2016 unitary plan was fit for purpose – Auckland is NOT going to see the growth it has historically seen. Those days are over for the next 15 – 20
    Years or until its social issues are resolved, if at all. It does not hold the same appeal to immigrants that it used to.

  13. The downside of relaxing the rules and leaving things up to the market, is housing intensification has been concentrated in areas with the cheapest land (for maximum profit), not in areas with the best infrastructure.
    For example, there are three developments occurring at a point exactly halfway between Swanson and Ranui railway stations (i.e. 1.5km away, so not walkup for most people), with three houses replaced by 43 units. However, there are no connected footpaths, only one off-street park per unit, no on-street parking, and the storm water flows into a stream that already floods (lined with red-stickered houses).

    1. According to many trendy urbanists, if you enable density everywhere then higher density development will mainly occur in expensive, central locations. Totally ignoring the finite demand for expensive, centrally located housing!

  14. A disaster without
    – strong urban design (form-based zoning perhaps) to ensure/facilitate communities and public spaces that work
    – still need large public build as private developers will ration housing to maximise profit, and likely preferably work the high value end of the market (this is an evidence trend since early 1990s). The Minister of Housing is deliberately killing off public builds to satisfy those property developers who have made large donations to National, ACT and NZ First
    – real financial support needed to local authorities to ensure the full range of infrastructure is provided (includes such as libraries, public transport, reserves, schools, health facilities, …)

  15. “Set-back mandates and restrictive rules around recession planes…have led to poorly designed sausage flats, and missing opportunities for a perimeter-block housing approach.”

    I agree with this, but it seems to be lost on most people that to acheive perimeter-block housing would require more directive regulation – not less. Both the current Unitary Plan provisions and MDRS are very enabling of residential development, but we are not seeing perimeter block development under these. Even if further standards were relaxed to ‘enable’ perimeter blocks (e.g. front yard setback), I don’t see developers lining up to do permiter blocks.

    Instead, we are seeing the 2020s version of the 1970s sausage flats because it is the easiest and most profitable type of development at the moment.

    A permiter block development could happen if one developer owned the whole block. However, with Auckland’s fragmented land parcels it would require strongly directive planning controls to ensure that each property is developed in such a way that a perimeter block is eventually built.

    It is confusing as to why people assume that more planning deregulation will magically bring about perimeter blocks?

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