Government open to changing housing density rules after National abandons bipartisan agreement

The Government is hoping to bring National back to the negotiating table on housing density by being open to revising current settings, after National abandoned a bipartisan agreement and announced its own housing policy.

National housing spokesman Chris Bishop revealed the policy on TVNZ’s Q+A today, which included councils being able to opt out of the Medium Density Residential Standards that allowed three-storey dwellings to be built on all residential land in main cities.

Those standards were central to the 2021 agreement between Labour and National - a rare bipartisan effort to address the country’s housing shortage.

It appears Labour’s Housing Minister Dr Megan Woods attempted to stay National’s hand by sending a letter to Bishop, leader Christopher Luxon and deputy leader Nicola Willis yesterday, offering to “work together again... to ensure certainty and stability in housing policy”.

However, that doesn’t seem likely given Bishop’s response that it would take Labour adopting parts of National’s policy.

The letter’s tone wasn’t exactly warm. Woods reminded the trio of National’s “enthusiastic support” for the legislation and how the policy announcement would sow doubt in the sector.

“Many of the measures in the legislation are in there because your former housing spokesperson Nicola Willis successfully advocated for them. This legislation is not Labour’s alone, it is both Labour’s and National’s,” Woods wrote.

“Your change in position removes that certainty, so I am keen to explore if that can be regained, in the interests of councils, developers, property owners and aspiring homeowners.”

There was also a not-so-subtle dig at National’s record on housing as she confirmed the Government was open to changing settings.

“I am committed to turning around the housing crisis we inherited,” Woods wrote.

Housing Minister Dr Megan Woods wrote a letter to key National figures with the hope of working together again on housing density. Photo / Mark Mitchell

“The Labour Government has always been open to tweaks to the new medium density settings and to work together with interested parties on possible changes.”

Woods, speaking to media at Labour’s party Congress in Wellington today, said she hadn’t received a response.

Bishop told the Herald his party’s policy was believed to be what’s required to fix housing in New Zealand.

“If Labour wish to adopt all or any of our changes, we’re happy to work with them on that.”

Prime Minister Chris Hipkins, speaking alongside Woods, accused National of putting an election win ahead of improving housing.

“The fact that they are walking away... from the bipartisan approach suggests that they’re more interested in the politics than they are in building new houses.”

However, he would not clarify whether Labour remained committed to the current settings and conceded discussions could be had with the Opposition.

“If they have some concerns, we’re happy to talk to them about it.”

If elected, National would give councils discretion to either increase density or develop farmland - called greenfield sites - but they would be required to zone land for 30 years’ worth of housing demand in the “short term” and, if they didn’t, central government would do it for them, according to Bishop.

National Party housing spokesman Chris Bishop announced the policy this morning. Photo / Angus Dreaver

A $1 billion fund for “Build-for-Growth incentive payments” would be provided to councils to deliver more new housing and would be funded by stopping existing programmes such as KiwiBuild.

The party also supported building at least six-storey properties near public transport hubs, as a way to boost housing stocks in city centres.

The intention of the policy was to make up the shortfall of more than 100,000 homes and make housing more accessible to young people. However, questions remain as to how much sprawl it would cause further away from main centres and the costs of developing the necessary infrastructure to support new housing.

The Green Party had been critical of the “confused and rushed” policy while Act - the only party to vote against the legislation - claimed National was following in its footsteps.

National leader Christopher Luxon revealed the move at a recent public meeting in Auckland. He said the party had got it wrong on housing density rules, despite his earlier support for those rules.

On Q+A, Bishop said the party’s housing policy had been debated in recent months but wasn’t finalised until a few days ago, after Luxon made his comments in Auckland.

He denied it was a “flip-flop”, citing the requirement that would be placed on councils to make swift decisions.

“They have to put 30 years of growth into the market right now to create abundant development opportunities to drive down the cost of land, both at our city fringes but also inside our cities to make housing more affordable.

“If they don’t, central government, a National government, will rezone that land for them.”

National’s election policy preceded one from Labour, with Hipkins promising $420 million over four years to make permanent an apprenticeship support scheme introduced during the Covid-19 pandemic.

The Apprenticeship Boost scheme paid employers $500 per month for the first two years of an apprenticeship to support training employees.

Introduced as temporary assistance for businesses during the Covid-19 pandemic, it had contributed to a 61 per cent increase in the number of apprentices over the last three years.

Hipkins, during his speech to party members at the Congress, said the move was intended to address skills shortages and lessen the reliance on overseas labour.