The Coalition Government says it plans to push ahead with significant housing policy reforms before the end of June.
Prime Minister Christopher Luxon has been stamping his chief executive style on the Beehive’s operations and has started making quarterly ‘action plans’ for his government to deliver.
While many of the targets are easily achievable, publicizing each step puts pressure on ministers to keep the wheels moving in their portfolios.
Four items on the 36-point plan relate to the property market with changes planned in zoning rules, public housing, rental regulations, and construction materials.
Zoning regulations
At number five, Cabinet will agree to make the Medium Density Residential Standards (MDRS) optional for councils and “take decisions” related to the ‘Going for Housing Growth’ plan.
The Act Party took credit for this policy—and 17 other action plan items—in a newsletter to its supporters which described it as “the three-three-storey-house law”.
“ACT stood against the whole Parliament on this. We said mandatory zoning from Parliament would not build more homes, but it would further bugger up council infrastructure and annoy a lot of people. MDRS is going optional,” it said.
The coalition agreement between the two parties goes one step further and requires any council that wants to continue using the MDRS to ratify it with a vote.
Housing Minister Chris Bishop said, in a Cabinet paper, that he intended to report back on how to make the rules optional during the “first quarter of 2024” alongside other details.
This would be step one in a three year plan to promote housing growth which will force councils to zone “30-years-worth” of land for development.
What that means in practice is still being worked out. Some experts have said many councils have already nominally zoned 30-years of growth but housing costs continue to climb.
Bishop has said the definition was critical and would be announced before the budget in May.
Other initiatives to improve housing growth include the fast-track consenting regime—which could greenlight big developments—and new funding tools for local governments.
Public housing
Next on the action plan list is a formal response to the independent review of Kāinga Ora which is currently being carried out by former Prime Minister Bill English.
It was expected to report back in March, having looked at the financial viability of the Crown agency and its costs relative to the private sector.
Bishop said he was “deeply concerned” about the $520 million operating deficit which was weighing on the Crown’s total operating balance and blocking the path to surplus.
The report is likely to endorse opening up public housing to community and private providers.
Labour’s housing spokesperson Kieran McAnulty said community providers were currently pausing developments as the Government wouldn’t commit to funding rent subsidies.
“The Salvation Army, for example, has had 70 desperately needed homes kiboshed by the Ministry of Housing and Urban Development,” he said.
National didn’t wait for the budget to announce their $2.9 billion tax cut for landlords and didn’t need to wait to confirm funding for community housing providers either, McAnulty said.
Rental rules
Number seven on the coalition’s action plan is another set of Act Party policies related to rental housing.
It has been written as “introduce legislation to improve the rental market” but could also be described as a relaxation of regulations intended to give tenants more rights.
The Act Party newsletter said it would mean restoring no-cause evictions, shorter notice periods when ending fixed-term tenancies, and allowing landlords to charge pet-owners a larger bond.
Renters arguably benefit from these softer rules as they may encourage more property owners to offer their houses as rentals and take more risks on imperfect tenants.
Green Party co-leader Chloe Swarbrick questioned “for who precisely” the legislation would improve the rental market, implying it would not be tenants.
Building materials
Finally, number eight on the list is a promise to release a draft plan for relaxing restrictions on what building materials can be used in New Zealand.
Chris Penk, the Minister for Building and Construction, said in a recent speech that it was too expensive for new products to be introduced in the local market.
“We will cut through barriers stopping high-quality overseas building products from being used in New Zealand while ensuring we do not compromise on quality”.
National campaigned on easing these restrictions after pandemic supply disruptions caused prices for certain products to skyrocket, even though equivalents were available elsewhere.
The party proposed allowing any material or system approved for use in the American, European, British, and Australian markets to be automatically approved in New Zealand.
Act’s newsletter said the Ministry of Regulation, led by David Seymour, would be involved in the reform as the party had long campaigned for this change.
In 2021, the Labour Government asked the Commerce Commission to do a market study of the building sector.
The competition watchdog reported back in December 2022 and recommended overhauling the regulatory system to make it easier to access competitor products.
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