NZ Government to Axe Top-Down Mandate on Housing

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The MDRS planning laws bypassed councils as a way to speed up building approvals for the country’s rapidly growing housing demands.

Planning laws brought in by the previous New Zealand government aimed at boosting urban density to address the country’s housing shortage are headed for the chopping block, said the ACT Party.

The Medium Density Residential Standards (MDRS) (Enabling Housing Supply and Other Matters) Amendment Act 2021 requires local councils to provide housing with a maximum density standard of three houses per residential site with a maximum height of 11 metres, or three stories.

Rapidly accelerating housing supply in areas where the demand is high also led to a national government decision to bypass local council plans to allow a wider variety of homes to be built. The new standards aimed to ease planning rules for what can be built without resource consent.

The amendments took legislative immediate legal effect but were slated to be operational by March of this year.

In 2021, now-Prime Minister Christopher Luxon and Deputy Leader Nicola Willis agreed to co-operate with the then-Labour government in a bipartisan agreement, ratified in May 2023, to promote the scheme.

But the National Party backtracked on this agreement in the lead-up to last November’s general election, where Mr. Luxon registered his objection to the perceived overarching nature of the MDRS saying, “I think we’ve got the MDRS wrong.”

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Mr. Luxon told the New Zealand Herald that he preferred building on land that was previously undeveloped, areas known as greenfields, and favoured densification around transport corridors, but wanted to give decision-making power back to local councils for their cities.

“We’ve always said, look, we’d make sensible changes to it. It’s pretty clear from the feedback from the community that there are changes to be made,” Mr. Luxon told RNZ.

MDRS Flawed from the Beginning: ACT

Post-election, National’s partner ACT said their coalition agreement with National and NZ First commits to making MDRS optional for councils.

In a statement released last week, ACT’s Housing spokesperson Cameron Luxton said, “Now we’re giving councils back control over what happens in their community” and emphasised they never thought the MDRS was a good idea.

“This will be a huge relief for many, “ said ACT MP Cameron Luxton, a former builder.

“Councils up and down the country were rejecting the law, and now we’re making it entirely their choice.”

ACT had proposed using the existing Auckland Mixed Housing Zones to achieve intensification of building.

“It meant someone can build a three-story building one metre from your boundary with no design standards. It could mean floor-to-ceiling windows on the third floor looking into your living room, with no thought for existing homeowners,” ACT said.

“The problem was that the law focussed on changing our planning laws when we know it’s not the planning laws that are the issue. If it was a matter of zoning, the problem would already be solved.”

Mr. Luxton said the cost to councils to fund new infrastructure to accommodate MDRS was a major driver in their objection.

“Councils can’t afford it. Without more infrastructure, there won’t be more houses in total, they’ll just be in different places,” he said.

“ACT has proposed to introduce a GST-sharing scheme that would provide councils with more resources to cope with a growing population. Our coalition agreement commits to considering this as a financial incentive for councils to enable more housing.”

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