Housing development had previously been signalled as an area of focus for the Government’s resource management reform programme [1], and yesterday, the Honourable Chris Bishop unveiled the Government’s Going for Housing Growth programme (GHG Programme).

The GHG Programme has three ‘pillars’ intended to address the ‘root cause’ of the housing shortage. These include:

• Freeing up land for urban development, including removing unnecessary planning barriers.
• Improving infrastructure funding and financing to support urban growth.
• Providing incentives for communities and councils to support growth.

The Government announced its decisions in relation to Pillar 1 which builds on the National Policy Statement for Urban Development 2020 (NPS-UD) introduced by the previous government. These Pillar 1 changes will be implemented through amendments to the Resource Management Act 1991 (RMA) and the NPS-UD and are intended to apply by mid next year.

We have identified below nine of the key decisions in Pillar 1 which will have the greatest impact on housing development in New Zealand’s major urban centres.

1. Housing Growth Targets will require all large urban centres to ensure that there is enough land available for development for at least 30 years of housing at one time

• The Housing Growth Targets will be introduced as a requirement for Tier 1 and Tier 2 city, district and unitary councils (being Auckland, Hamilton, Tauranga, Wellington, Christchurch, Whangarei, Rotorua, New Plymouth, Napier/Hastings, Palmerston North, Nelson/Tasman, Queenstown and Dunedin).
• The NPS-UD currently requires these councils to plan for 30 years of housing demand, and “live-zone” for housing that is commercially viable for a period of three years.
• The GHG will enhance this obligation and require “live-zoning” for 30 years of commercially viable housing i.e. it will require councils to provide land for housing in their district and unitary plans. This land must provide housing capacity that is commercially viable for a developer to build at a profit – what that looks like or how this will be measured remains to be seen.

2. Housing development will be encouraged both up and ‘out’

• The NPS-UD requires Tier 1 and 2 local authorities to prepare long-term strategic plans called Future Development Strategies.
• The Government has indicated that it intends to amend the Future Development Strategy requirements to ensure the strategies enable more housing in both greenfield and brownfield areas.

3. Councils will no longer be able to impose rural urban boundaries in planning documents

• This means there will be no hard regulatory boundary that defines urban areas or contains urban growth.
• The Government has also indicated that it will work towards a ‘growth pays for growth’ system that ensures that development cannot be turned down on the basis that there is a lack of demand or high infrastructure costs.

4. Building heights and density in urban areas will need to reflect the level of commercial activity and community services

• Policy 3(d) of the NPS-UD currently requires in Tier 1 urban environments, building heights and density of urban form commensurate with the level of commercial activity and community services within and adjacent to neighbourhood centres, local centres and town centre zones.
• Policy 3(d) will be amended so that it applies beyond neighbourhood, local and town centres. This means that Tier 1 councils will be required to enable intensification (subject to qualifying matters) in all other locations not already considered in policy 3.

5. Density requirements around transit corridors will be strengthened and the walkable catchment will be defined

• Currently Policy 3(c) of the NPS-UD requires in Tier 1 urban environment, building heights at least six storey development within at least a walkable catchment of rapid transit stops, and from the edge of city centre and metropolitan centre zones.
• The definition of rapid transit will be clarified and simplified so that it applies to a wider range of transit corridors, and the density requirements are to be specified by criteria.
• The Government will also define walkable catchments by setting minimum catchment sizes that councils must use to define walkable catchments, based on the level of service provided by the type of centre.

6. “Qualifying matters” that apply under the NPS-UD will need to be better justified and offsetting may be required

• Qualifying matters can limit intensification or make intensification required under Policy 3 inappropriate in certain areas. The procedural and evidential requirements that apply to qualifying matters will be amended to ensure that they are only used when they are well-justified (i.e there is an intention to ensure that decision-makers engage with economic evidence and consider trade-offs and the evidence is robustly tested).
• In addition, the loss of development capacity through the use of “other” qualifying matters (which are not specifically listed in clause 3.32(1) of the NPS-UD) will need to be offset by a direct and corresponding increase in development capacity elsewhere.

7. A baseline level of mixed-use development will be required in Tier 1 and 2 urban environments

• The Government has indicated that it will require a baseline level of mixed-use development within urban areas to encourage mixed-use development alongside housing development.
• This national direction will specifically require Tier 1 councils to enable small-to-mid-scale mixed-use activities (such as café, restaurants, retail, metro-style supermarkets and offices) in areas that are subject to six storey intensification requirements.

8. The ability for councils to require minimum floor areas or balconies in district plans will be removed due to a concern over the cost and desire to create greater choice in the housing market

9. The Medium Density Residential Standards (MDRS) will become optional

• Currently, under the RMA, Tier 1 (and specified Tier 2) councils are required to incorporate the MDRS into every relevant residential zone in their district or unitary plan, which include provisions that enable up to three residential units of up to three storeys per site without a resource consent.
• As previously signalled, the MDRS will become optional meaning that councils can opt out of implementing these standards, or alter or remove them (if already implemented). The MDRS will be replaced by the general intensification requirement in Policy 3(d).

The Government has clearly indicated that it will take a range of actions to try and stimulate the housing market. Consultation in relation to the detailed design of the changes needed to give effect to Pillar 1 will take place in early 2025. We expect further decisions in relation to Pillar 2 before then as well.

Please reach out to one of our experts if you would like more information in relation to these changes and what impacts they may have.

Footnote

[1] For further detail see our Article dated 25 March 2024.

This article was co-authored by Holly-Marie Rearic, Senior Solicitor, and Aimee Harris, Law Clerk, in our Environment team.