This is a guest post from Marko Garlick. Marko is a lawyer from New Zealand. He was a director on a pro-housing campaign which led to the widespread upzoning of Wellington in May 2024. Note that Marko sits on an expert advisory group that advises the New Zealand Government on its housing reforms. All views expressed are his own.
New Zealand’s largest city, Auckland, caught international attention after its wildly successful 2016 upzoning. The city is in the process of rewriting its rules again to upzone even further. Here is what’s been happening down under.
Auckland’s 2016 upzoning
Auckland increased the allowed density on roughly three quarters of its residential land to enable townhouses and apartments. The effects were stark. Permits for new housing approximately doubled within five years. The plan significantly shifted where new housing was being built too: proportionately more in existing suburbs, less at the fringe. House prices and rents grew more slowly than the rest of the country, and rents for 3-bed dwellings found to be about 33% lower than they would have been without the Unitary Plan.
No other major Anglophone country had implemented such a comprehensive and widespread upzoning. It’s no surprise that Auckland has inspired similar reforms across the world.
New Zealand’s central government takes upzoning nationwide
Buoyed by the success of Auckland’s 2016 upzoning, the New Zealand central government in 2020 and 2021 sought to take it nationwide and go further. This involved two policies:
- National Policy Statement on Urban Development (NPS-UD). This required councils to allow at least six storeys in areas within walking distance of rapid transit stops, commercial hubs, and city centres in all major cities. It also abolished minimum car parking requirements.
- Medium Density Residential Standards (MDRS). This directed that councils must allow up to three, three story dwellings on each plot, with some associated rules such as boundary setbacks to protect neighbours’ sunlight. Essentially, townhouses and small apartments were allowed everywhere.
Both policies gained bipartisan support upon their introduction. However, after a political backlash against its widespread application, the centre-right National Party withdrew its support for the MDRS, and now leads the newly elected government. It instead will allow councils to opt out of the MDRS and get more control of the location of new housing, if they can prove they have enabled “30 years of growth”. Other changes are in the works, such as enabling more greenfield growth, mixed-use development, and strengthening the NPS-UD. All of these proposed changes are currently under policy development.
The full story of the country’s zoning journey can be found here.
So what’s happened in Auckland?
Auckland’s 2016 zoning changes were contentious, and this second round is proving even more politically fraught. Auckland Council has been extremely resistant to central government direction, believing it has enabled sufficient new capacity for the future. A fear of an “oversupply” is an entrenched view within council, with the council complaining that allowing more supply would be akin to “over-fertilising” a field of crops. While the 2016 upzoning did significantly increase the zoned capacity of the city, Auckland still has a decades-long backlog of underbuilding to catch up on, extremely high rents and prices, and is experiencing strong demand that is outstripping supply.
Auckland Council has sought to take a creatively narrow interpretation of the nationwide upzoning policies, frustrating central government’s intent. Councils could restrict both MDRS and NPSUD with exemptions called ‘qualifying matters’, such as for flooding risk. For example, the council has widely applied historic character areas as an exemption across many of its affluent inner suburbs close to the city centre and railway stations with a dubious methodology. Character protections cover 41% of the residential land within five kilometres. It has also taken a conservative view on the distance of a “walkable catchment”.
Most baffling is the council’s refusal to engage in any rezoning near a proposed light rail line until planning had progressed on the project (which has now been cancelled). This is a sizeable area, roughly 2.5km wide, 24km long, that defers rezoning of some of the highest priced and best connected land in the city.
The process of rezoning has been mired in delays. Auckland Council publicly notified their new plan on time for consideration by an independent hearings panel which tests the legal validity of their qualifying matters. However, it has been granted two one-year extensions. The first was following a significant flooding event. The second was because the council opposed the MDRS and it didn’t want the new plan to come into effect before it was able to opt out, as the new central government had promised it could. The deadline now sits at March 2026. Despite being told to progress unaffected parts of its new plan, Auckland Council has chosen to effectively halt all hearings except for the city centre until it is allowed to opt out of the MDRS. Political negotiations are ongoing. It’s all a bit of a mess.
Where does this leave Auckland, and some thoughts
Auckland will never properly implement the world-renowned MDRS. The policy has actually been in force in Auckland since it notified its new plan in August 2022, but only in areas not subject to a proposed exemption. The sharp construction downturn since COVID means uptake has been low. The council will likely opt out of MDRS when given the chance.
Once implemented, this second round of upzoning will be another huge leap in housing capacity in Auckland. Even with the proposed exemptions, Auckland Council’s proposed new plan has 2.8 times more zoned capacity than its lauded 2016 upzoning (not accounting for construction feasibility). The proposed exemptions will likely be pared back by the independent hearings process, and even more zoning reforms are in the pipeline from the new central government.
With Australian states and the UK looking at copying New Zealand, here are some thoughts.
- The devil is in the detail. Zoning pre-emption – where national or state governments override local councils – can seem simple. Just tell councils to allow apartments near transit stops. But opposed councils can be very creative in their interpretations to stymie new housing. Governments can find themselves in a game of whack-a-mole, constantly trying to close loopholes exploited by councils. Tight definitions are key.
- Incentives matter. Like the UK, New Zealand is fiscally a highly centralised country. Councils see a lot of the costs of new housing but very little of the new tax revenue generated. If their underlying incentives are against growth, don’t be surprised when they are opposed.
- Process matters. Setting clear deadlines with punishment for non-compliance and ensuring hearing panels have sufficient economic expertise is crucial.
Header image from Team Architects
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