The National Party’s proposed housing reforms will be delayed until 2027 while it overhauls the Resource Management Act

Housing Minister Chris Bishop has admitted the National Party’s promised housing reform won’t be fully implemented during this term of government. 

In a speech to the Property Council summit in Auckland on Thursday, Bishop said "Going for Growth” and other reforms would only be bedded in “from 2027 or so onwards”. 

This delay follows the National Party’s decision to abandon a bipartisan housing agreement, called the MDRS (medium density residential standards), negotiated from the National side by Judith Collins and Nicola Willis in 2021. 

At the time, Willis said Labour and National had come together “to say an emphatic ‘yes’ to housing in our backyards”. 

But new party leader Christopher Luxon sided with his NIMBY caucus colleagues in the run-up to the 2023 election and had Bishop announce an alternative policy after Luxon revealed his opposition during a public meeting.

National’s new policy allowed councils to opt out of the denser housing rules, provided they zoned their cities for 30 years of growth "immediately" — but, almost two years later, not a single council has formally adopted the policy.

Bishop said on Thursday the finer details of the policy’s first phase were still being worked through by officials and local councils should be ready to implement them in 2027.

This is partly due to a “sequencing problem” as the Government is also planning to introduce an entirely new resource management regime towards the end of next year. 

“If we implemented [housing policies] straight away in 2026, councils would be forced to conduct expensive and lengthy plan changes — only to start all over again a year or so later once the new Resource Management Act (RMA) comes into effect,” he said. 

“So, we’ve made the pragmatic decision to implement Pillar One of our Housing Growth changes as part of the replacement of the RMA”. 

Housing reform and the new resource management rules will be implemented as part of the 2027 Long Term Plan cycle, or roughly four years after Bishop backtracked on the MDRS.

Slower but broader 

The upside to delayed housing policy is that National’s reforms have the potential to be much more comprehensive than Labour and National had proposed with the MDRS. 

An example of this would be the changes in the RMA reform which will standardise zoning across the country, allowing developers to easily build in different cities. 

“Zoning is so balkanised that even large developers tend to stick to one or a few main centres as branching out requires reconfiguring to different planning rules,” Bishop said, quoting Motu economist Stuart Donovan.

New rules will prevent councils from layering regulations on buildings and may require compensation for anything above the standardised zone rules and environment limits. 

“Councils are even getting involved with things as niche as whether it is possible for someone to see the TV from the likely location of their couch,” Bishop complained. 

Cheap loans for now  

As a stop gap measure, while waiting for local councils to complete their 2027 plans, the Coalition Government will offer cheap loans to developers wanting to build new suburbs on the rural fringes of New Zealand cities. 

Bishop said the government-backed lender would provide low cost loans to a special-purpose funding entity during the development phase, which will later be refinanced by private lenders, with future homeowners repaying the costs through an annual levy.

“The development phase of a project is often the riskiest, and private financiers reflect this by charging higher interest rates,” he said. 

However, these special loans would be offered at the rate the private market would charge for completed developments, with the Crown picking up the extra risk free of charge.

Cheap loans will be complemented by a rule change which will allow housing to be built on land currently classified as “highly productive” and suitable for growing food.

Bishop said a lot of the land in the category was in the lowest quality classification and should be freed up for housing to be built. 

“Across the country, this will open up land for housing roughly equivalent to the size of the Waikato region,” he said. 

However, this also means that rules allowing for urban sprawl will be put in place several years before rules which allow for denser and mixed-use urban development.