Government seeks views on addressing housing growth in new Resource Management system

Hot off the heels of National Direction consultation, the Government is now also consulting on reforms to the planning system aimed at enabling councils and communities to achieve growth in housing where it is needed

Why is change needed?

With New Zealand among the least affordable housing markets in the developed world, the Government is focused on reforming planning systems to make it easier to build more homes.

What’s coming?

At the heart of the reforms is a plan to replace the Resource Management Act by 2027.

The Government’s ‘Going for Housing Growth’ (GfHG) programme is intended to tackle the country’s housing shortage based on three key pillars:

1. Pillar 1 – Freeing up land for urban development, including removing planning barriers;
2. Pillar 2 – Improving infrastructure funding and financing to support urban growth;
3. Pillar 3 – Providing incentives for communities and councils to support growth.

The Government has recently released a GfHG discussion document, which is a high-level non-statutory document that explores Pillar 1 and tests how it could be implemented. Submissions are sought to help inform the Government’s next steps. Public consultation on this consultation package is open until 17 August 2025.

This article predominately addresses Pillar 1 and the specific areas on which public feedback is being sought.

Pillar 1: Freeing up land for urban development

Pillar 1 aims to utilise New Zealand’s resource management system to support competitive urban land markets, enable growth in cities, provide for diverse housing needs and effectively manage our natural and built resources.

The Government intends to implement this pillar as part of Phase Three of its resource management reform process, being the replacement of the RMA – taking effect later in 2026. The following reforms are proposed:

Future development strategies and spatial planning

While many councils choose to undertake spatial planning, other than requirements for Future Development Strategies (FDS) under the National Policy Statement for Urban Development (NPS-UD) and requirements for Auckland Council to prepare a spatial plan, there is currently no legislative requirement for spatial plans.

The proposal is for the new Planning Act to require long-term strategic spatial planning, which will replace FDSs. Spatial plans would have stronger weight on regulatory, transport and funding plans; are likely to be undertaken over a longer time horizon; be informed by a wider range of information than FDSs including demand, cost and supply of infrastructure; minimum infrastructure requirements; requirements for implementation plans, including a requirement to identify priority development areas.

Feedback is sought about how spatial planning requirements should be designed to promote good housing and urban outcomes in the new resource management system.

Housing growth targets

Under the NPS-UD[1], councils are required to provide capacity through their district/regional plans for short medium and long-term housing demand. Only short-term demand needs to be enabled in an operative district plan, capacity to meet medium term demand can provided in an operative or proposed district plan and long-term capacity only needs to be identified in an FDS.

Under the proposal, Tier 1[2] and 2[3] councils would need to enable enough feasible and realistic development capacity to meet 30 years of housing demand based on ‘high’ demand projections with a 20% contingency margin.

However, it is not expected that all capacity will be immediately serviced by infrastructure, with the provision of infrastructure to be staggered based on the most likely demand scenario. This may be a cause for alarm for places such as Queenstown where a shortfall in public infrastructure at the current development rate has already seen an over-capacity sewerage facility discharging waste into a local river.

The consultation documents seek feedback on the following specific matters:

• providing an agile land release mechanism to allow councils to identify residential development capacity in their plans that is not ready to be developed, i.e. land be zoned as indicative urban zones;
• how housing growth targets are determined including the use of price efficiency indicators which reflect how land markets are functioning in practice;
• how development and infrastructure capacity is determined; and
• the inclusion of a business land requirement to ensure housing and development capacity doesn’t ‘crowd out’ business growth.

Enabling greenfield growth

Key proposals designed to enable greenfield growth include:

• strengthening requirements for councils to be responsive to unanticipated or out of sequence development and better support developers to progress private plan changes;
• Removing councils’ ability to impose a rural-urban boundary line in planning documents; and
• Require Tier 1 and 2 councils to zone for at least 30 years of housing demand, rather than a minimum of 3 years.

Intensification in the right place

Under the current system, Tier 1 councils are required to allow:

• in city centre zones – building heights and density to realise as much development capacity as possible
• in metropolitan centre zones, and within a walkable catchment of city and metropolitan centre zones and existing and planned rapid transit stops – building heights of at least six storeys
• within and adjacent to neighbourhood, local and town centre zones – building heights and density in line with the level of commercial activity and community services.

Tier 2 councils are required to allow building heights and densities commensurate with the greater of accessibility and demand, across the entirety of urban environments.  The consultation document does not expand on what this means, and whether there is any difference to the current similar requirement in the NPS-UD.

Under the proposal, Tier 1 councils would be required to allow heights and housing densities across their urban areas commensurate with the greater of accessibility of services or demand for housing, rather than just in and around neighbourhood, local and town centres. They would also need to identify ‘strategic transport corridors’, such as key bus routes and upzone around these. Tier 2 requirements would remain the same.

Feedback is sought on the following specific matters:

• key public transport corridors;
• intensification catchment sizes;
• minimum building heights to be enabled;
• offsetting the loss of development capacity, where councils choose to modify nationally standardised zones because they consider intensification to be inappropriate; and
• intensification in other areas.

Mixed-use development

There is currently no specific direction on mixed-use development.

Under the proposal, Councils would be required to enable a greater mix of uses such as allowing cafes and retail closer to where people live as part of the standardised zones to be implemented.

Minimum floor area and balcony requirements

While there are no specific requirements for minimum floor area and balcony requirements under current national direction, many district plans have their own rules/standards for these matters.

Under the proposal, any such requirements would be removed by narrowing the scope of the new resource management system to ensure that only effects or externalities on third parties are managed.

Making the medium density residential standards optional

Tier 1 councils and Rotorua District Council are currently required to implement the medium density residential standards (MDRS). In practise, all tier 1 Councils except Auckland Council and Christchurch City Council have fully incorporated the MDRS into their plans.

The Resource Management (Consenting and Other System Changes) Amendment Bill proposes to make the MDRS optional. The select committee report was released 11 June 2025 and the bill is currently undergoing its second reading.

Under the proposal, Councils that have already notified or adopted MDRS-compatible plans would be able to retain and build on that work, rather than start again.

Auckland and Christchurch would have bespoke arrangements that allow them to revise current plan changes, provided they meet or exceed previous housing capacity expectations. For example, Auckland Council will have the option to replace Plan Change 78 with a more targeted intensification approach, particularly around the City Rail Link.

Pillar 2: Improving infrastructure funding and financing

In February 2025, the Government announced its decisions on Pillar 2 of the GfHG programme. Pillar 2 is about improving infrastructure funding and financing settings to encourage the building of more houses. These settings are intended to relieve growth pressures and limit financial impacts on councils and ratepayers. The key decisions include:

• replacing development contributions with a development levy system;
• improving the Infrastructure Funding and Financing Act 2020; and
• improving the flexibility of targeted rates for growth infrastructure.

The Government is undertaking detailed design of this proposal, with legislation expected to be introduced in September 2025 and enacted in mid-2026. This will include a period for public consultation.

Pillar 3: Providing community and council incentives to support growth

Pillar 3 is about providing the incentives for councils and communities to support growth. There is minimal detail currently available around a timeline for this, however, the government’s latest discussion document anticipates public consultation in the latter half of 2025.

Want to know more?

If you have any questions about the Going for Housing Growth Programme or are interested in making a submission during this consultation period, please contact our specialist Environment, planning and natural resources team

[1] NPS-UD Policy 2

[2] Auckland, Hamilton, Tauranga, Wellington, Christchurch

[3] Whangārei, Rotorua, New Plymouth, Napier Hastings, Palmerston North, Nelson Tasman, Queenstown, Dunedin

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