New rules for New Zealand’s largest cities will require city councils to relax urban limits and make huge swathes of land available for immediate development - if councils want to opt out of medium density residential standards (MDRS).
Housing Minister Chris Bishop will detail his "Going for Growth" policy in a speech to the Real Estate Institute of New Zealand on Thursday morning, as part of efforts to tackle the housing crisis.
While the policy risks slowing progress on new housing, by allowing councils to opt out of the density housing rules, it will require them to zone for 30 years of housing growth first.
All this land will have to be ‘live zoned’, meaning it can be built on now and isn’t just set aside for future growth. For a fast-growing city like Auckland, that may mean making enough land available to almost double the current housing stock.
Bishop said this will “flood the market” with development opportunities and allow economics, rather than planning rules, to decide which ones are taken up.
The reality of the policy is that cities will have to allow higher density housing in existing suburbs to meet these housing growth targets, but councils will have more flexibility to protect certain areas and allow further sprawl to do some of the work.
A key part of Bishop’s plan will be to remove city limits and allow more rural land to be converted into housing. This will help to limit land value growth by creating a sort of valve that will release some price pressure from urban land markets.
But converting farmland into housing is expensive, both for developers to build and for councils to service, and so urban development is often more attractive and cost-effective.
Existing rules requiring density around key transport corridors will be strengthened and expanded. A list of specific rail and bus lines considered to be ‘rapid transport’ will be published to prevent “boring debates” about what meets the technical criteria.
Finally, the new rules will require more mixed-use zones that combine commercial and residential buildings, plus abolish minimum floor sizes and balcony requirements.
Mixed-use zoning may mean allowing dairies and cafes in most suburban areas and larger businesses such as restaurants, shops, and offices in higher density areas.
Bishop said getting rid of the balcony size requirements could knock up to $70,000 off the cost of a new apartment in Auckland.
These are the six elements of the plan: set 30-year growth targets, relax city limits, define transport corridors, require mixed-use zoning, get rid of size and balcony rules, and make the MDRS optional.
While losing the density standard will disappoint housing advocates, who saw it as the easiest way to deliver more homes, the rest of Bishop’s plan will work to deliver similar outcomes.
The Ministry of Housing and Urban Development has assembled an expert advisory group, made up of many pro-housing economists, who have been helping to craft the policy.
77 Comments
Interested to see how councils can make 30 years of growth immediately available for housing, without first providing any road or three waters infrastructure. Immediately building out all the infrastructure that won't be needed for another 30 years seems a sure way to bankrupt councils.
New thinking is coming to NZ as evidenced by this Housing Minister-what a different world we would be in if this came in 2004 and not 2024. Next--so as not to Bankrupt Councils apply the American way of extending Residential Housing that leaves Council budgets in strong shape. All that necessary expansion infrastructure is eaten by the "gain" properties. First the land bankers get hit and then are forced to sell if they don't have deep pockets as the Road, foot paths, 3 waters costs, and power, are accessed to the adjacent property owners on a cost per linear metre of road frontage. (payable over 25 years due to Municipal Bonds). Then as the land is developed into smaller lots each new title picks up its percentage of the infrastructure cost and that too is directly accessed to that property and payable over 25 years plus the bond interest rate (Municipal Bonds always carry the lowest interest rate). In total adds a special assessment of about $2000 on average per title. Bottom line-rate payers elsewhere do not pay -only the new titles that gain. This blows open somewhere like Dairy Flats. Then bring on the Light Rail from Helensville to Orewa to cover this new region and connect it to Rapid Transport corridors. Grow Auckland responsibly.
Nothing Magic needed. Just new thinking combined with new policy. Why policies like what is used in America is not already in force is the question to ask. Why charge rate payers at large for Infrastructure to develop bare land when most of it can be pasted on to the beneficial owners of those new titles.
the rules ensure development contributions are small compared to the actual cost, especially in green field sites. A previous national government limited what costs could be ascribed to development contributions.
I have spoken to a lot of developers lately and they are arguing for taking the costs from the value of the upzoning. They are claiming farmers are making the money not them (their claim not mine). The alternative is if you zone enough land the price falls to a point where the developer can afford to pay for infrastructure. But land banking and mind set has restricted the falls in land values that should have happened in last two years
Overdue maintenance of existing infrastructure that has been funded by rates including depreciation tax credits & then delayed for decades isn't an upgrade. And this is the more typical scenario.
As I said, I have personal experience of paying development contributions for zero incremental council costs & benefits.
It's not 1:1, they don't spend your 50K contribution on half a swing at the local park, and a micro rockborehole drain in the road gutter outside your house. But development contribution get pooled up and do fund improvements in the local area. In my area for instance they bought a large bit of land to expand a local park.
See schedule 8 for the individual projects the cash has been spent on, it doesn't just disappear. Nothing in your local board area?
https://www.aucklandcouncil.govt.nz/plans-projects-policies-reports-byl…
In the case of New Plymouth the council had a sum of development money which during the proposed 3-waters setup was to be handed over to govt. NP council promptly spent that on some projects. Don't think the spend was for the intended purpose of 3-waters leaving a hole in allocations. This was done so as not to hand these accumulated funds to govt. Not sure if other councils did the same. I've always been a little suspect on development funds and where they've been spent. This is where outside auditing is required and not be council auditors or or any local to the council area.
I would love to see a nationwide audit of all councils for how much 3 waters money they took and where it actually went. Another good way to bring some accountability back into local council, have some heads roll and soon people would be making more prudent decisions with public money.
So projections based on nothing ....and whos projections?
"National population projections give an indication of the future population usually living in New Zealand. They indicate possible outcomes based on different combinations of fertility, mortality, and migration assumptions. The projections assume current policy settings and do not try to anticipate future major policy changes that may affect population change.
These projections are not predictions. The projections are designed to meet both short-term and long-term planning needs but are not designed to be exact forecasts or to project specific annual variation. They should be used as an indication of the overall trend, rather than as exact forecasts. The projections are updated every 2–3 years to maintain their relevance and usefulness by incorporating new information about demographic trends and developments in methods."
"Which projection should I use?
Users can make their own judgement as to which projections are most suitable for their purposes. At the time of release, the median projection (50th percentile) indicates an estimated 50 percent chance that the actual value will be lower and a 50 percent chance that the actual value will be higher than this percentile. Other percentiles indicate the distribution of values (such as projection results or assumptions). For example, the 25th percentile indicates an estimated 25 percent chance that the actual value will be lower and a 75 percent chance that the actual value will be higher than this percentile. Shading in graphs indicates the chance that actual values will fall within a certain range. Different shading is used to distinguish different ranges."
https://www.stats.govt.nz/information-releases/national-population-proj…
Fair enough...but id suggest your post demonstrates that Bishops announcement is just that...an announcement...the councils can choose whatever growth number they wish (and change it regularly) to 'meet' a 30 year housing growth projection.
It is a guarantee of nothing at all.
Verbatim from the announcement:
"Councils are required to prepare Housing and Business Development Capacity
Assessments, known as HBAs, at least every three years. These set out projected
demand for housing and business land and calculate the development capacity
enabled in their plans to meet this. Right now, Councils have a lot of discretion
about the inputs into these assessments.
Central government needs to have confidence that demand for housing is not
being understated, or that the amount of available and feasible development
capacity is not being overstated.
We will therefore be requiring councils to use the “high” demand projections in
their assessments, and also strengthening the requirements and guidance for how
councils’ model how much capacity is live-zoned and feasible."
It is not just local councils failing to keep up with mass migration.
RNZ reported this morning that school classrooms are running so beyond their physical capacity that "more than a hundred schools are being forced to teach students in staff rooms and libraries".
New schools and classrooms are urgently needed in high-growth areas and parts of Auckland and Canterbury have critical unmet demand. A roll bulge is moving through secondary schools and last year migration brought an extra 20-thousand school children, half of them in Auckland
Thank you.
Looking at the CCC HBA there is a medium term (10 years out) surplus of 78,000 in the greater Christchurch area under the current regime with a high demand projection of 56,600.
The available already well exceeds the high demand projection....yet the building rate is the building rate.
https://www.greaterchristchurch.org.nz/assets/Documents/greaterchristch…
You could easily drop those 500,000 homes into the "Greenfieldl" between Helensville and Orewa. All those Lifestyle Blocks have been bought up by immigrants knowing it would be coming. That saves the fertile soil in the South of Auckland for Vege growing. Plus -no more being savaged in the city when your neighbour cashes in and suddenly you have a 3 story skyscraper you never in 50 years thought was possible on your adjacent boundary.
There are a lot of flood planes in that corridor, better to concentrate around Wainui, the closer you get to Waitoki the wetter and more vulnerable to flooding. Transport links are better as well from Orewa, and the new Milldale mall thing is about to rise, with the new overbridge not far off.... logical to keep extending Milldale.
Perhaps this is getting us ready for the next 'Christchurch'. (the inevitable Wellington, say)
If immediately available, future-zoned land had been available for those who had been unexpectedly displaced (what is now fallow Red Zone land; previously developed housing estates) when the earthquake hit, then they could have just gone down, say, Tram Road; bought part of one of the thousands of acres of suitable sites and started to rebuild. But because it was all 'locked up' by past District Plans, and the vested interest of those who wanted to keep property price high; everywhere, not just Christchurch, that opportunity was not an option.
With this announcement, along with the Granny Flat one of a few days back, anyone who loses their home can buy a readily available block; plonk a Tiny Home on it (from $49,500 I believe) and set about rebuilding their lives from there.
Excepting there was plenty of subdivisions available at the time, there was however issues with what the new building standards were going to be, and that created the delay (not to mention insurance settlements and EQC) , not the shortage of available locations to build.
The District Plan was an impediment to all those 4 hectare block down Tram Road (20 minutes from the city centre) - they couldn't be chopped up until after 2011 at the earliest, from memory. And judging by what it looked like when I was down there a few weeks back, not much, if anything, has changed.
All of Tram road is in the flood zone, some parts in medium & high risk.
Waimakariri District Natural Hazards Interactive Viewer (arcgis.com)
Won't solve much as plenty of land available within current limits.
Red tape and poor infrastructure are biggest issue.
Auckland Council needs to be looked at. Holding far too much up.
Utility providers block developments due to gouging.
Best move will be to put GST on new houses back into local infrastructure.
Then go one stop further Chris Bishop and introduce "Municipal Bonds". Here is a defination:
Tax-exempt
The advantage of municipal bonds for investors is the fact that they are tax-exempt, meaning that the returns from such bonds are not subject to taxes. It makes it a highly attractive investment for individuals who are in a high tax bracket.
So with Municipal Bonds "munis" for short it means that the funds are raised from Mom & Pops-not just the usual suspects--Foreign Banks!
Can we at least get rid of the rules that mandate low density on the city edge, try to build in some attempt at getting decent design done at all scales, and some fiscal rules around whatever funding councils get to develop infrastructure (like strict allocation so there's no diverting of funds collected in to pet projects).
And thank god that they want mixed use zones. I recently spent time touring in Australia, and a neighbourhood in the Adelaide or Brisbane 'burbs where you can walk to a local cafe, there's still a local pub, and I don't have to drive bloody miles to buy a loaf of bread were pretty pleasant - but a lot of Australian cities never went quite so overboard on strict zoning.
Why is it NZ always wants to take theory to the illogical conclusion?
From the horse's mouth: https://www.beehive.govt.nz/speech/going-housing-growth-speech
The government will also work towards embedding an effective “right to build” on
city fringes, on the condition that the infrastructure costs of new development are
covered. In other words, where “growth pays for growth”. Councils would not be
able to turn down a development on the grounds that perceived demand isn’t
there, or that the infrastructure costs are too high.In addition, councils will no longer be able to impose rural urban boundaries in
their planning documents. This doesn’t mean they can’t have land zoned for rural
use, but it does mean they can’t set hard regulatory boundaries that constrain
growth.Many political parties and many governments over many years have said they
would do this: our government will be the one to finally deliver it.
Yes, this is the epiphany moment all need to have, ie a presumptive right to build.
If the developer can show that 'growth pays for growth, then subject to the usual qualifying matters, then they can do it.
Council are only there to monitor compliance.
This is how it is done in other jurisdictions and as an example The Woodlands: Master Planned Luxury Homes for Sale in Houston, TX
But it can be done at any scale from brownfields to greenfields.
Good on him for actually trying to get stuff done. He will run up against the brick wall of vested interests and the civil service, but it's a step in the right direction because more houses will make them cheaper, along with other moves like opening up building product approvals to items certified in Australia.
Current ACC rules say you have to plant 5H in bush to break off a single 2H max site for rural ..... the greenies are going to go nuts.
Those sitting on future urban are going to see price DROPs, if future urban is 4.2-4.4 more $$ then rural next door, can see where dev will occur
I said last week to watch the nuance in Bishop’s call for ‘average’ prices to fall. Was anyone listening?
Removing minimum floor areas and balcony requirements will really help stimulate apartment development (especially once interest rates start falling), we will likely see a lot more one bedroom apartments built and sold in Auckland, for circa 450-500k rather than circa 600k. Much more accessible price point. And maybe 2 beddies for circa 650k rather than 750-800k
A flood of these sorts of properties will help bring average sales prices down, without necessarily affecting existing house values much.
Hats off to Bishop in this aspect, at least
Minister Bishop almost has it right, when he says:
“flood the market with opportunities for development” that would be driven by economics rather than planning rules,’
For all those who say existing ratepayers will have to foot the bill for any new infrastructure., this is not true and I know as someone involved in new and existing city developments.
The best the critics can claim is YES under the present status quo, it might if they do it, but it needn’t be so.
And that is the whole point of these changes, which should also include not using people that can only delivery bad outcomes of unaffordable housing.
Also, new soil use classification will help protect elite soils, but councils could have already sorted it voluntarily not rating the rural to future residential, and the farmers themselves covenanting soil protection.
But the weakness in Bishop’s plan is his term ’30 years supply available now.’
This a made-up term by ‘zonists’ to try and describe what presumptive zoning looks like in jurisdictions that have less and restrictions and more affordable housing.’
There is no report anywhere as to how this figure was rationally derived.
The best it can be used as an analogy to describe that, ‘if a developer can show an economic opportunity to develop that does not require ratepayer inputs, or that is already covered by present levies etc., then there is a presumptive right to develop subject to a few qualify matters.
This vague term and others will allow the ideologies to thwart affordability by still putting bureaucratic roadblocks in front of people to 1) make it time-consuming and 2) create another revenue stream to protect any old ones they might lose.
But as it further exposes the bad-faith actors, it can be tweaked as we go.
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