To cope with Auckland’s rapid growth in population, it will be a requirement by law to have Auckland Council open sufficient land to build residential houses.

The new national policy statement (NPS) has sent a very clear directive to urban councils that they had to provide enough capacity for new housing and businesses to the projected increase and growth. ”If they are not matching up in terms of their plans, they will be required by law to change them,” Housing Minister Nick Smith said.

The new policy would have a great impact on the 27 growing councils, especially in Auckland. The statement demands that sufficient housing capacity had to be created but does not specify where councils needed to open up land. ”We are not telling councils to build up or out”, Dr Smith said, but simply to provide enough land to match population growth.

There is not an easy solution to solve housing affordability problems and land use was the key driver behind rising house prices, he said. High section prices were a ”huge, compounding problem” because no one would build an affordable home on a $450,000 section. ”While others have attacked foreigners and proposed new taxes and red tape, Act has always said that housing affordability is fundamentally a land supply issue.” Dr Smith said.

Property Institute of New Zealand Chief Executive, Ashley Church, supports directive to open up land. He suggests that councils have been dragging the issue for a mixture of reasons related to ideology and cost will ”no longer be able to hold cities to random”. ”Councillors who are ideologically opposed to opening up lands because of their personal beliefs will no longer be able to impose their worldview on ratepayers and house buyers. Likewise, Councils which have used the cost of infrastructure as an excuse not to open up green-fields will now need to look more carefully at their spending priorities and may need to move a few vanity projects further down the list”. He said.

Former City Councillor himself and spent 3 terms on the Napier City Council, Mr Church said he understood the spending pressures that Councils were under but noted that urban growth brings a return I the form of additional rates.

We are reminded that freeing up land would not immediately bring down the housing price but it may be a factor in slowing down the rate of house prices increase. ”Anything which increases land supply and enables the building of more homes will help to get those increases under control”.