The Act Party hopes to tackle the housing crisis by requiring residential property developers to seek permission from 70% of the neighbourhood before building medium-density units.
It would also incentivise local councils to approve new dwellings by sharing the revenue earned from GST, and create an alternative consenting process based on private insurance.
In a policy document released on Sunday, Act leader David Seymour said New Zealanders needed to “build like boomers” to make up for a significant shortage in housing.
Successive governments had focused on demand-side measures—such as tax changes, first home grants, and the foreign buyer bans—but the real problem was the supply of houses.
Research from Auckland University, a joint-agency housing research group, and Treasury’s chief economic advisor have all reached this same conclusion.
Act used estimates from the New Zealand Initiative when forming its policy. The free-market think-tank has forecast that between 20,000 and 40,000 homes will need to be built every year to meet demand.
A paper written by the Initiative’s Leonard Hong said the only way to fix unaffordable and overcrowded housing was to free up supply.
“Politicians should stop blaming the housing crisis on migration, land banking investment, and speculation, and instead find policy solutions to free up urban development and housing supply.”
Not in my backyard
The paper name-checked “NIMBY-ism” and “cultural heritage activists” as being among a range of factors that had discouraged urban development.
But local and central governments had helped to ease some of the restrictions through Auckland’s Unitary plan and the National Policy Statement on Urban Development.
“Up-zoning brownfields for apartments, townhouses and greater density is critical for improving affordability,” Hong wrote in the paper.
Rather than giving developers the greenlight to build medium-density housing, Act’s policy would empower local residents to approve or permit bigger buildings.
The party would replace Medium-Density Residential Standards (MDRS), which allows for three-story multi-unit dwellings, with the much more restrictive Mixed Housing Suburban Zone.
Auckland Council says buildings in this zone were usually one or two story, stand-alone homes, that were set back from the site boundaries and had landscaped gardens.
The Act Party would amend the Resource Management Act to default to giving property developers permission to build bigger buildings, but allow neighbours to object.
Developers would have three pathways to build outside of zoning laws: getting 70% of a street or block to approve a change in zoning rules, negotiating approval directly with neighbours, and finally through a Planning Tribunal.
The Tribunal would be able to exempt the developer from planning restrictions, provided they pay compensation to anyone affected by the new building.
A problem shared is a problem halved
To counteract these more restrictive rules (relative to the MDRS) the Act Party would incentivise councils to consent more homes by sharing the tax revenue earned from property developments.
The GST revenue earned from new builds currently goes to the Government, despite local councils footing the bill for the infrastructure required by the homes.
Hong suggested a similar policy in his paper, saying it made “little sense” that councils should bear the cost of new development while the central government gets the revenue.
“Burdened by infrastructure financing costs, councils have little incentive to build,” he wrote.
“Localising decision and veto rights without offering corresponding benefits of growth incites anti development sentiments as locals bear the costs without generating the revenue”.
Act’s policy hopes that local councils would be more willing to consent homes and relax zoning laws, if doing so earned them money to use on upgrading roads and water connections.
Half of the GST revenue earned from a new build would be redirected to local councils, which Act estimated would be worth about $1.2 billion each year.
“That provides a very good environment for approving more homes, allowing for more consents and enabling builders to build without more delay,” the policy document said.
The final plank in Act’s housing plan would be to create an alternative to local council consenting process that would rely on private insurers instead.
“The scheme would require builders to purchase insurance for all new dwellings from an insurance company regulated by the Reserve Bank. Insurance companies could choose not to cover a given builder if they used risky materials or was otherwise too risky of a client for them to take on.”
This would give homeowners certainty, as the insurer would be on the hook if their home turned out to have been poorly-built with shoddy materials.
Act said because insurance companies would be earning money from each consent, they would be incentivised to approve development and accept innovation.
“This avoids the overly skittish approach of present council inspections. Insurance companies could, for instance, have ‘trusted builder’ programmes, where builders using certain standard materials and with good track records and certifications could be subject to fewer inspections than other builders”.
97 Comments
I thought these guys were all about property rights, now we have to ask everyone nearby (or pay them off) to have the right to develop.
Also will be some great fun calculating the GST splits, builder pops to Mitre10, grabs an extra box of nails, uses half for the new build, does the council get a 1/4 of the gst?
I'll never be an act voter, but I've always appreciated that their policies usually simplify things, between this complexity, the new government run health insurance company they want to start to support immigration, and others, they are losing their way when you look into the details.
I'm so looking forward to where ACT points at other places where their changes have been implemented and actually worked.
I expect to be waiting a long, long time.
(In case I haven't been clear - Far too much of this 'policy' is untried pie-in-the-sky spit-balling.)
just when i was ready to vote ACT they come up with the most absurd policy statements like this one.
70% approval.? You would be hard pressed to locate 50% of the owners and half of them will just ignore you.
This will never reduce red tape, just exasperate all concerned and reduce the number of new builds to near zero.
As for an Insurance company taking this on, thats an oxymoron, Insurance companies dont intentionally step into risk, they avoid it like the plague. They will charge arms and legs for the process and again reduce the builds, not expand them.
And GST.? WTF.? This is even worse than the stupidest ever change to GST on fruit and veges, that will fail and this will fail also.
It seems pretty transparent, for homeowners who can't think beyond themselves the most advantageous thing for property values is zero new housing getting developed as they will hold a monopoly on housing.
Now that does come with massive social costs and will destroy our productivity even further, but hey who cares about that?
The Act Party hopes to tackle the housing crisis by requiring residential property developers to seek permission from 70% of the neighbourhood before building medium-density units.
Can someone explain to me how this is reducing red tape? Seems more like adding even more red tape over the existing red tape.
That's just one of three pathways.
They state:
ACT’s policy would enable property owners to increase the development potential of their property, without having to rely on what is allowed within council plans. There would be three pathways to increasing the development potential of a property beyond the plan:
1. Mutilateral pathway: development is allowed if 70% of the titles along a street/block approve the change in zoning rules.
2. Bilateral pathway: allows a property owner to negotiate with neighbours who are directly affected by the development.
3. Unilateral pathway: allows property owners to ask a Planning Tribunal (which will be a planning equivalent to the Disputes Tribunal) to exempt them from certain planning restrictions, in exchange for Tribunal-determined compensation to be paid to their neighbours.
These pathways largely already exist.
I can already approach the neighbors and get their signoff. (I tried this once and never again because it's a friggin' nightmare and most neighbors think I'll be making millions and want a slice.) Council can identify 'affected neighbors' and will listen to their views as part of a restricted discretionary process. You'd be surprised who else think they are neighbours and want to stick their oars in.
The 3rd pathway look to me - in much the same way the current hearing process does - like it will result in many totally unfathomable and arbitrary decisions.
Correct me if I am wrong here, but basically, all the red tape that actually causes issues is the exact stuff they are doubling down on.
Are they basically proposing to keep all that but get rid of leaky home standards and what not instead under the guise of "cutting red tape".
That said the current process is painful. I had to secure three neighbours sign-off to have one corner of a proposed garage 5cm over the 3m setback rule. The Chinese investor over the road took 6 months to track down. After they realized I was not building on their property they just laughed and signed.
I disagree, it will get built, just in all the wrong places. Its probably pretty easy to get 70% in the poor areas, especially with a bit of a kick back.
Why can't we have a right wing party that want to improve the wealth of the country instead of just lining their own pockets.
And the last time ACT touched the building industry cost NZ multi billions in leaky homes with the cost still going on. They may say it will it will lower costs there but in the end its created costs else where. Just like arranging deck chairs on the titanic. All well and good someone sitting in an office and creating a report and then a political party that has never worked in or near the construction industry to have all these brilliant ideas just like I have brilliant ideas on having less MP and political parties should be held accountable for the laws they pass 10 20 yrs ago but they would say that's stupid.
Clearly everyone who joined the ACT party was a builder. I just love builders, they blame everyone else. When I was much younger I bought a house thinking the builders must know what they were doing, boy was I wrong. Clueless builders teamed up with equally clueless architects who used building materials made by clowns to be used in the Med where it never rains.
Leaking buildings changes were nothing to do with ACT.
https://en.m.wikipedia.org/wiki/Leaky_homes_crisis
"The Building Act 1991, which became law in 1993, changed building controls from a prescriptive system to a more self-regulated regime. In addition, the Government dropped the apprentice training system for builders and the related building trades."
"The 43rd New Zealand Parliament 1990-1993. Government was The National Party, led by Jim Bolger. National controlled nearly seventy percent of the seats in Parliament."
We are and have been "building like the boomers" for the last few years. The 20 - 40k numbers quoted to meet demand if anything appear to be on the low side. While I agree the the biggest problem is supply I can see nimbyism being a major roadblock around getting approval under zoning rules.
Fantastic policy. Protecting property rights is a cornerstone of this country. Why should a developer be able to plonk a massive building next to anyone’s property blocking their sunlight and reducing their enjoyment of their property I.e. state housing, close to boundaries etc. I would love to get solar but with the ability of developer to shade the house why would I?
Imagine applying this logic to the rest of the economy.
Why would I start a business when a competitor could start up and make it harder? Why start a business if I had to get approval from 70 percent of my competitors? Why start a business when the regulatory framework is completely arbitrary and up to the whims of a small group of people who are incentivised to stifle any change at all?
ACT loves to apply free market principles to everything, apart from housing for some reason which apparently plays by different rules. This garbage policy would utterly stifle construction and keep everything completely static. Can you give me an example of a city/country that has been completely static and experienced positive growth for its inhabitants?
It's gone well beyond that though, can't even paint your house what colour you would like without getting council approval. That is the stupid red tape that's crippling us not straightforward stuff like preventing leaky homes and improving insulation, at least that red tape has a purpose and clear definitions.
Not to forget the LBP supervision hurdles put in front of DIYers after leaking buildings which they had nothing to do with (a professionals stuffup all the way). It would be good to revert back to the old system which permitted people to repair/build their own homes subject to the councils signing off the usual inspections. Especially useful for tiny offgrid homes.
Personally I think a true libertarian model would fix most of the problems. Build what you want where you want (with a few limited rules to protect sunlight, fire spread, etc), and buyer beware. The only role for the council would be to ensure the home is safe (maybe a couple of inspections of foundation and framing for a simple residential home).
Totally agree.
There should be some simple standards providing some basic amenity and nuisance protection, and that’s all. Apart from a select number of heritage areas.
All the discretionary ‘urban design’ considerations are hugely inefficient and usually add limited benefit.
I love high quality architecture but it’s a nonsense to regulate for it.
Yes I think you are right. There has to be balance in that builders can’t block sun etc but can still build without too many hurdles. The other issue is social housing, if tenants who cause trouble are evicted then fine, otherwise no thanks to social housing in my area. On the housing shortage, is there a shortage or is it a shortage of affordable housing. If it’s an affordability issue then building up is not going to solve the problem, it’s an interest rate issue.
I don't like this policy myself but I think the Interest.co.nz "hivemind" - with its singular focus on reducing housing costs to the ignorance of any other consideration or perspective - has got it arse-about-face with respect to whom ACT intends to appeal with this policy.
Not everybody wants to have a Williams Corp townhouse development spring up next door to them, where half the units are Air BnBs or short term rentals (or even worse to most, finding that KO has bought up the neighbouring property).
I live in Chch, the land of the Williams Corp-style shoebox and I'm the only one out of my friends & family who has actually put their money where their mouth is and purchased a townhouse to live centrally (for my sins it is actually a nice, big townhouse in a small development, but I think it counts!) - everybody else says they love intensification but then wants to move out to Rolleston or the new subdivisions in Halswell or Marshlands to have precisely the opposite experience ... a big house, with a garden, and parking on and off the street, and greater certainty that you wont be built out.
I have a couple of friends house-hunting right now, for whom a primary consideration is ensuring that whatever they buy is as unlikely as possible to have either the insufferable Boys-High-Old-Boy-Turned-Developer crowd, or Kainga Ora, having a go at doing a development next door ... they will love this kind of policy and guess what? Their vote counts as much as yours or mine.
I'm not saying it's right, but when have you ever had to be right to win votes?
The more grating aspect in some respects is that ACT is still trading on its reputation as being the more libertarian party when it clearly isn't such a thing anymore, and this clearly isn't a libertarian policy (depending on your perspective on whether somebody else's right to build a house should infringe on your right to enjoy your existing house).
To some extent, can you blame Seymour? When they were a libertarian party, they'd have to deal with the ignominy of having weirdos like Colin Craig get more party votes than them, and kissing the ring of the National party to get a seat. Now they are probably going to be the third biggest party (maybe fourth if they keep losing candidates!) and potentially wield a lot of power with their voters happy to see such a situation.
Among many of my peers (30-40, typically privately-employed or business owning, homeowners) ACT is easily the most popular choice based on pub and dinner table chit-chat polling. No way would this be the case if ACT had stayed true to its libertarian origins. Go back to pre-Seymour days and ACT to them would have been a part of Australia, not an NZ political party. This kind of policy proposal is aimed at those ACT 2.0 supporters, not the libertarian OGs. Once again not saying it's right!
I think it is the hypocrisy that annoys me the most with ACT. On the one hand, they'll be going on about how the government is inefficient and has to be run more like a business and implement free market principles, same story with their education policy where they want to implement performance pay and incentives.
Which is fine, I can understand that but then when it comes to housing they do shit like this, basically making it impossible to build and completely stifling any chance of actually building accommodation in the places where people actually want to live so they don't have a soul-crushing commute which actively destroys our collective productivity.
Basically rugged unfettered capitalism for everyone else and cosy protected monopolies for small segments of the population with zero consideration for the wider economy and what the effects of that actually are beyond their own immediate gratification.
Yeah you've summarised my last point fairly well - it's the hypocrisy of ACT (with respect at least to housing) that is grating when they continue to trade on the 'goodwill' of their previous libertarian positioning.
I mean all parties are guilty of this to some extent (Green Party has long since ceased being a purely green/environmental party, when did Labour last do anything positive for the working class, can't even be bothered picking apart National as it's been done to death and we all know how crap they are) but ACT is perhaps the most egregious example in this context.
Maybe it's time for them to drop the libertarian mask and simply say "we are a party that represents the interests of the privately employed or business owning, better-off-than-average voter". Every group in society is entitled to seek representation and further their interests, so there's no real need to pretend you're something you're not from a political perspective.
"Not everybody wants to have a Williams Corp townhouse development spring up next door to them....."
Noone does, which is why the current MDRS system (it can happen to anyone) is the fairest. It needs to happen, so let the market work out where it happens. Sounds almost like a policy ACT should come up with!
But agree, true libertarianism just wouldn't be popular, needs some populism in there to attract and keep a core of voters.
Correction: Not anybody wants to have a Williams Corp townhouse development spring up next door to them.
As the ACT party are well aware, if there was no regulation then the market would build what people want, where they want it. The problem is that those that want a Williams Corp townhouse want it in an area with decent amenities, like Seymour's Epsom or Van Velden's Tamaki.
Successive governments had focused on demand-side measures—such as tax changes, first home grants, and the foreign buyer bans—but the real problem was the supply of houses.
The real problem is that successive governments have ignored, like ACT does above, focusing on the root cause of demand which is of course population growth.
Those measures mentioned are more likely to alter the price paid for an existing house rather than the number of houses required. Stop immigration like we did during covid and rents started falling, house prices would have followed them down too if the RBNZ hadn't stepped in.
make up for a significant shortage in housing
Housing shortage? What shortage David? We've got so much surplus accommodation that we're importing people to fill motels paid for by the good taxpayers of NZ. Oh well, I guess that's just the price kiwi's will have to pay in order to keep their wages down.
The Government has also announced a temporary support package that includes accommodation in a motel, or about $220 (per person, per week) of living cost support payments in the form of a payment card.
Work visa scam victims offered job lifeline at Sudima hotels (msn.com)
so a builder gets insurance to build the house then sells it to a homeowner that cannot get insurance for the same house because it does not have council compliance? so what happens then,
the owner lives in an uninsured house? what happens when you try to onsell that house surely you would have to disclose it was uninsurable so the price would be lower?
Sorry, but I don't understand the intro. Is this some attempt at a laconic subversive ironical Spinoff framing of the piece? Need to signal this in the layout, if so. eg writer pic of brooding dude.
'The Act Party hopes to tackle the housing crisis by requiring residential property developers to seek permission from 70% of the neighbourhood before building medium-density units.'
Also, the writer isn't nzdan are they?
I work as a civil engineer in subdivision work. I am leaving the industry next month. Partly because the consenting process is so painful I have literally been brought to tears several times in the last couple of years. The RMA is so broken I just can't take dealing with it anymore.
Sadly though, I don't see anything in Acts announcement that gives me hope it will get better.
That’s really sad and I totally get it. It’s soul destroying
however…. It’s not the RMA per se, but the plans that councils prepare under the RMA that are the issue
I guess if you had very prescriptive ( in a good way) legislation then that would prevent councils’ ability to prepare bad plans
Officebound. I assume if you had more context you wouldn't have said that. So here's a couple of scenarios.
- A woman generously gifted her family home and lifestyle block to daughter and and son in law who would be trapped in rent otherwise. She would build a 65m2 minor dwelling for herself on the property. There was a boggy patch in a field that turned out to be a wetland that needed protection under the NES framework. She has now spent 180k on consultant and council fees for assessments of environmental effects etc. This started 18 months ago and she still hasn't begun construction. She broke down in my office last month whimpering 'I wish I just got a caravan '. I cried with her.
A couple build their dream home in Leigh in 1980. The lot is undersized and the on-site effluent field is too small. It requires a resource consent which the Rodney Council grant them on the same day for a nominal fee. The consent is for perpetuity. In 2022 the widowed wife gets a letter in the mail. Because her property in under the jurisdiction of Auckland Council now and they have expiry dates on resource consents she needs to apply for a new one. Because the lot is undersized there in no way she can build a complaint wastewater system. She would spend the next 8 months having costly assessments by consultants and responding to Council RFIs. Total bill to date is 20k. This week she finally got the draft consent. The condition requires her to install a UV filter system. Costs 15k. She cried in my office when I told her and I cried with her. She is a pensioner and can't afford bills like this. She is seriously considering removing the plumbing from her house and using a camping toilet from here on. She might lose her house otherwise.
Thank you very much for sharing a snapshot of your work & the dysfunctional RMA regime that understandably causes you & your clients such distress. I wish you well.
Its obvious that Labours version of RMA replacement will be even worse & National have already had 3 terms to address it & didn't (another broken promise). Only hope for commonsense on this & much other nonsense is a high ACT vote.
Those two incidents seem more like a 'bureaucracy out of control' with a complete lack of pragmatism by the authorities and a complete loss of empathy for the people involved.
Blindly 'following the rules' without regard for eventual outcomes. Council's modus operandi to a tee.
We can blame the RMA all we want. The problem is a process made extremely rigid to the point of farce by people who must never think outside the square.
What does 70% of the neighbourhood mean? How big is "the neighbourhood"? If the development is next to the couple down the street that nobody likes then we can vote it in?
If the development is between two recent migrants who don't feel empowered to stand up for themselves than it will go ahead, but if its between two rich ACT voters it wont. So typical ACT policy I guess.
Might be a good idea to think about protecting all these so called assets with some sort of reality based defence force instead of relying on the goodwill of past alliances....? lol
I note many commentators here criticizing ACT as being counter to their more liberal aims in this new policy.
The commentators are confusing their anarchy, or maybe their lack of critical thinking, with liberalism.
What ACT are saying is that if a majority group of like-minded owners are happy with the status quo, then they are not forced out by the dictate of an outside source like a council or itinerant developer.
And yet with the 70% rule (just like a Body Corporate), there is the opportunity for organic change over time, as people move on and new owners with different aims purchase.
This also means that the councils and central Government keep their social contract with owners in existing non-covenanted, but zoned, subdivisions.
This is far closer to a true democratic process ie liberalism, than the land restrictions/grabs of present policies.
Good points, at least in the abstract, philosophical sense. However the major issue with it, as pointed out several times in comments, is that in reality you will seldom achieve the 70% threshold. That would have major implications for housing supply, don’t you think?
And Act say they would allow neighbourhoods the rights to exempt themselves from certain planning rules. I am sure this would happen a lot more than neighbourhoods voting in more intensive housing.
You have to remember that because we have such dysfunctional land use policies in NZ that YES it is difficult to retrospectively apply this to many existing areas, but is democratically fairer to local communities, and in some areas will speed things up, as to what the local community majority wants.
The present solution is to, within one political cycle, completely override the social contract Govt, and in particular council has with local communities.
Body Corporates already have new legislation that allows changes made with 75% agreement. Naturally one would not expect any changes voted on to reach this threshold when first developed, but over time, as owners and trends change, then it will be easy to make any change. But also allow for any necessary major change to be voted on and passed immediately. It used to be that some BC couldn't process the likes of leaky home claims because the ONE BC owner was holding everyone else to ransom.
Also, there are true historical areas like Franklin Road in Auckland etc. that the neighbours should be able to secure from development.
There are also many areas in Auckland where developers and landlords already own enough property that if they got together would be over the 70% margin, and could more readily develop.
ACT's solution allows for organic change to happen over time, as the majority of the local owners themselves change in age and in ownership etc, and agree to the change, and because it will be a rolling generational change, there will be less negativity affected neighbours and a more stable guaranteed supply of land.
I know you still don't get it, because it is a bit counterintuitive, but just think it through.
The present policy is saying that you could buy in any existing subdivision in NZ that does not have covenants, and the next day a developer could build you out of privacy etc.
How would that make you feel, and what could it do for the value of your asset?
Ironically, owners in non-covenanted subdivisions could individually, on their own property or collectively get together and put worse restrictive covenants on their property.
If ACT also enables easier building out, then there will be plenty of land available, plus as mentioned, many landlords own the majority of property in many neighbourhoods, so if it has development potential they will agree.
This way more people on both sides will get what they want, including affordability.
This is how it happens in jurisdictions that have the most affordable housing.
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