Government responds to ‘Using Land for Housing’ inquiry

The government has released its response to the Productivity Commission’s report, Using Land for Housing.

The Productivity Commission’s Using Land for Housing report reviewed New Zealand’s fastest-growing urban areas’ planning and development systems to identify best practices for meeting residential land demand. The report contains 70 recommendations to both central and local government on a range of issues relating to the urban planning and development system.

The Government has said that it agrees with and will act on almost all recommendations, noting that recommendations are already being addressed through the Resource Legislation Amendment Bill, the Urban Development Capacity National Policy Statement (NPS), the Better Local Services reforms, Crown-led development projects, the Housing Infrastructure Fund, and Urban Development legislation.

Notably, the government registers its agreement with the Commission’s finding that “specific rules and aspects of plans appear to impose unnecessary constraints on development capacity”. The Commission notes that the opportunity cost of foregone development, in terms of higher housing costs, often outweighs the benefit of minimising environmental impacts and existing amenity impacts. Supporting this finding, the government refers to its Urban Development Capacity NPS which, it says, aims to ensure such opportunity costs are reflected in decision making.

The government also notes that it is considering a sunset-clause for restrictive covenants allowing changes by super-majority. It says it is also working with the Overseas Investment Office to identify process improvements to reduce the cost and time associated with approvals for foreign owned developers wanting to build houses in New Zealand.

Key components of the government’s response include:

  • Defining growth expectations and monitoring performance, through the Urban Development Capacity NPS
  • Increased government intervention in order to address development shortfalls identified by the Urban NPS
  • Governance, institutional and regulatory reforms for the water sector to improve infrastructure-related decision-making and responsiveness to growth. The government also suggests the introduction of on-going infrastructure charges.
  • Debt-relief to councils in high-growth areas via a Housing Infrastructure Fund, to help speed infrastructure development
  • Review of Auckland’s Transport System
  • Shared infrastructure data standards to enable integrated decision-making across public-sector infrastructure

Click here to read the Productivity Commission’s Using Land for Housing Report.

Click here to read the Government’s full response to the Using Land for Housing Report.