Chris Bishop’s ambitious housing policies have run into inevitable roadblocks in Cabinet, which includes a number of NIMBY ministers

As expected, Housing Minister Chris Bishop’s mission to fix the housing crisis has run into opposition in his own Cabinet and with city councils wanting more control over housing. 

The NZ Herald reported on Friday that Cabinet had overruled a proposal put forward by Bishop which would have required Auckland City to zone for an estimated 540,000 dwellings, if it wanted to opt out of the Medium Density Residential Standards (MDRS).

The National Party campaigned on allowing councils to opt out of the MDRS if they instead zoned for at least 30 years of housing demand immediately. But in a Cabinet paper, Bishop suggested adding an extra rule that required the same amount of housing to be enabled as under the existing MDRS policy. 

A Ministry of Housing and Urban Development document, seen by the Herald, estimated this extra rule would mean Auckland Council had to zone for 540,000 developable homes; almost double the existing housing stock. 

However, Cabinet wouldn’t support the proposal and approved the policy with just the 30 year supply rule, which is expected to result in about 200,000 buildable dwellings. 

Bishop has been working hard to create a housing policy which provides the same amount of housing capacity as the MDRS, but still gives local councils flexibility to choose which suburbs are intensified. 

This is partly in response to voter backlash in wealthy suburbs where National Party voters often live in single family homes. The MDRS would have allowed developers to build three units, three stories high in almost any residential lot in NZ’s largest cities. 

It was formed as a bipartisan policy because the blunt approach was highly unpopular with the existing residents of many suburbs, while mostly benefitting developers and hypothetical future renters or homeowners. 

But it was also an easy way to radically increase the supply of housing, as it allowed at least three homes to be built on every residential lot. In many cases, tripling the total number of housing units that could be put on a street or in a suburb.

The challenge for Bishop has been to create a policy which allows councils to carve out some suburbs—particularly those which are flood prone—but still forces them to rezone a similar amount of development opportunities as under the MDRS.

Most councils already claim to have zoning plans which provide for 30 years of housing growth, although usually the majority of this land does not yet have infrastructure and is not ready for development. 

Some cities have also used unrealistically low population growth forecasts in order to limit the amount of land they have to zone, or chosen undesirable areas where building is less likely to actually occur.

Opposition to density in wealthy Auckland suburbs has created a ‘doughnut city’ where lots of the most development-friendly areas are far from the city center and often have limited transport infrastructure.

Trouble at home 

While Bishop is deeply committed to getting more housing built, many of his colleagues in caucus and Cabinet do not share his enthusiasm. 

The Act Party campaigned against urban density, even suggesting allowing just 30% of a suburb’s existing residents to veto any multi-unit development, and at least one National Party MP celebrated the demise of the MDRS in a social media video.

Prime Minister Christopher Luxon has said his home suburb in Botany should always stay as a single family home zone and campaigned against a large development that was planned on an abandoned petrol station site.

New Zealand First’s manifesto also promised to “address and correct” legislation for the intensification of housing that had happened “without consultation”.

It should not be a surprise Cabinet rejected Bishop’s more radical proposals. In fact, we foreshadowed it might happen in a column this time last year. 

Asked if his bold policies could face a second backlash, Bishop said the National Party and the Coalition Government were both pro-housing and would support his urbanist agenda.

While his policy work has received support so far, this pushback in Cabinet reveals resistance to his more radical ideas, which could limit his ambition to flood the housing market with supply and drive down prices.

It is vital that Bishop finishes his reforms. Allowing councils to opt out of the MDRS has delayed upzoning in many cities by multiple years. If the final policy, now expected to be enacted in 2027, is significantly weaker than the MDRS, it will all have been for nothing.