NICK COWDY / Residential Sales Consultant, Principal Agent

The government has announced significant plans to reform zoning and land use policies, aiming to increase housing supply and address the housing crisis. Housing Minister Chris Bishop emphasised that these reforms would reduce restrictions on developers and streamline the building process, with the goal of increasing housing availability and affordability.

Key Components of the Reforms

  1. Removing Fixed Urban-Rural Boundaries: Councils will no longer have the authority to set fixed boundaries that restrict urban expansion. This change is expected to allow for more flexible and extensive development, providing additional space for new housing projects.
  2. Promoting Density Around Transport Corridors: The government will allow more dense housing developments around strategic transport corridors. Bishop said the previous government’s requirements to zone for at least six storeys around rapid train and bus lines would continue, and said they would be beefed up. “We need thousands upon thousands of new homes around New Zealand,” said Bishop. “Cities must grow.”
  3. Eliminating Minimum Size Requirements: Minimum size requirements for apartments and balconies will be abolished. These regulations have previously added significant costs to apartment construction, limiting the availability of affordable housing. By removing these restrictions, the government aims to lower construction costs and increase the supply of affordable apartments.

Long-term Housing Supply and Affordability

The government has outlined six major reforms intended to free up land for development and address the housing crisis:

  1. Ensuring Long-term Land Availability: New Zealand’s 24 largest councils will be required to maintain a 30-year supply of developable land. “This will ensure abundant development opportunities in our key urban areas,” Bishop stated.
  2. Strengthening Zoning Requirements: Councils will need to adhere to stricter guidelines for zoning and planning, ensuring that the capacity for new housing remains viable over time without causing price spikes.
  3. Mixed-use Developments: The government is advocating for more mixed-use developments, where residential areas will also accommodate small-scale commercial activities like cafes, retail stores, and offices. This approach aims to create vibrant, self-sufficient communities.
  4. Optional Medium-Density Standards: Medium-Density Residential Standards (MDRS) will become optional for councils, allowing for flexibility in how different regions adopt these rules. “Different councils are at different stages, and eight of the relevant 15 councils have already completed plan changes,” said Bishop.
  5. Simplifying Rapid Transit Definitions: To avoid delays and confusion, the government will simplify the definition of “rapid transit” and clarify the rules around walkable catchments in urban zones.
  6. Smaller Apartments on the Horizon: By abolishing minimum apartment sizes, the government expects an increase in the construction of smaller, more affordable apartments. Bishop noted that evidence from 2015 shows in the Auckland market, balcony size requirements had previously increased the costs of an apartment by $40,000 to $70,000 per unit.

A Long-term Vision for Affordable Housing

Minister Bishop emphasised that while the reforms would not lead to an immediate drop in house prices, they are expected to make housing more affordable in the medium to long term. “My aim is that we make housing more affordable. We don’t see an immediate plunge in house prices, but houses are too expensive in New Zealand and we want housing to be more affordable,” he said.

By addressing both the supply and affordability of housing, these reforms represent a significant step towards resolving the housing crisis. The government’s approach is designed to foster sustainable urban growth and ensure that New Zealand’s housing market can meet the needs of its residents in the future.

Information in this post was sourced from 1 News.

Housing