Going for Housing Growth – Addressing our Housing Crisis

On 4 July 2024, the Coalition Government introduced its plan to fix our housing crisis consisting of five interlocking actions.  This article considers the first being the Going for Housing Growth policy.

The six changes cabinet has agreed to under the policy are:

1. The establishment of Housing Growth Targets for Tier 1 and 2 councils;

2. New rules to make it easier for expansion outwards at the urban fringe;

3. Strengthening intensification provisions in the National Policy Statement – Urban Development (NPS-UD);

4. New rules requiring councils to enable mixed use development in cities;

5. Abolition of minimum floor areas and balcony requirements;

6. New provisions making medium density residential standards optional for councils.

Below is a summary of the first three key changes under the policy.

Housing Growth Targets for Tier 1 and 2 Councils

Tier 1 and 2 councils will be required to meet housing growth targets. These targets will apply to 24 councils across New Zealand, including the Queenstown Lakes District. The targets will require councils to “live zone” feasible development capacity to provide for at least 30 years of housing demand at any one time. “Live-zoning” means to provide for housing to be enabled in a plan that is legally operative and in effect. This means it must have passed through all of the RMA first schedule process steps including environment court appeals. This is to be compared with the status quo which only requires councils to “live-zone” feasible development capacity to meet three years demand at any one time.

Comment - infrastructure funding and financing will be key to achieving the outcomes sought under this part of the strategy if the aim of ‘flooding the market’ and driving down land prices and cost of housing is to be achieved.

New Rules for Urban Expansion

The aim here is to ensure growth strategies are more responsive to development opportunities and to enable more housing both in greenfields (new) and brownfield’s (existing) urban areas. With the greenfield opportunities, there is to be a condition that infrastructure costs of new development are covered, in other words, where “growth pays for growth.”  Councils should not be able to turn down a development on the grounds that perceived demand is not 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, which means they cannot set hard regulatory boundaries that constrain growth.

Comment – The Queenstown Lakes District Plan, like many other RMA plans, contains strategic planning provisions which seek to avoid urban development outside identified urban growth boundaries. This suggests that councils who have avoidance policies associated with urban growth boundaries will need to revisit the same.  Minister Bishop has signalled that there is further work to be done on urban expansion given the connection to the government work also being undertaken on infrastructure funding and financing.

Strengthening Intensification Provisions in the NPS-UD

This change relates to requirements around where councils must enable intensification so that capacity is enabled where there is demand and there are connections to business, services, and transportation.  The intention is to strengthen density requirements around transport corridors not just the current “rapid transit” networks, clarify terms such as what “walkable catchments” mean and to clarify the rules around “qualifying matters” - noting that councils are not required to implement the intensification provisions in particular areas a ‘qualifying matter’ makes intensification inappropriate in these areas. These are ‘permitted exemptions’ to intensification and include matters such flood risk, heritage values etc.

Comment - these changes are intended to provide for more efficiency and certainty in the implementation of the NPS-UD. They also signal that care will be required to justify on a solid evidential basis any ‘permitted exemptions’.

The government has signalled that these changes will be implemented through amendments to the Resource Management Act and the National Policy Statement on Urban Development, with the requirements expected to be in place by mid-2025. Formal consultation on the detailed design of changes will occur in early 2025.

This article was prepared by our Resource Management and Environmental Law team who are happy to assist with more information about the Going for Housing Growth programme and how it might affect you. You can contact Jayne Macdonald at jmacdonald@mactodd.co.nz or 03 441 0127.