New policy proposed for urban development to tackle housing crisis in New Zealand

The New Zealand government on Thursday unveiled controversial new rules to free up land for building in a bid to tackle the country's growing housing crisis.

The proposed National Policy Statement (NPS) on Urban Development Capacity would require councils to ensure land supply for housing and business kept pace with growth, Environment, Building and Housing Minister Nick Smith said.

The high price of land in the largest city of Auckland, home to a third of New Zealand's population and the center of the country's housing crisis, was hindering construction of affordable homes, Smith said in a statement.

"This new policy is about tackling the long-term root cause of New Zealand's housing affordability problems," said Smith.

"Insufficient land supply in Auckland has seen median section prices rise from 100,000 NZ dollars (68,270 U.S. dollars) in 1990 to 450,000 NZ dollars (307,215 U.S. dollars) now -- an increase of 350 percent," he said.

"In the same time, building costs rose 78 percent and the Consumer Price Index 71 percent. The high section price compounds the affordability problem because the built home will also be highly priced."

The new policy required councils to provide sufficient land for new housing and business to match projected growth in their region plans, and to respond to housing affordability data, building and resource consent data, and value of land on the urban boundaries.

Councils would also have to provide for over-supply to ensure competition and recognize the national significance of ensuring sufficient land over local interests.

"New Zealand's decline in housing affordability and ownership is decades old and there are no instant or easy fixes. This systematic reform of our planning system is an important component of the long-term solution," said Smith.

The NPS was open for submissions until July 15 and the government aimed to implement in October.

Business and property sector groups generally welcomed the NPS proposals, but critics and opposition lawmakers doubted it would provide affordable housing, especially in Auckland, where the average house price is forecast to hit 1 million NZ dollars (682,700 U.S. dollars), or more than 10 times the average salary, within a year. Endit