Hon Chris Bishop
Minister of Housing
Minister for Infrastructure
Minister Responsible for RMA Reform

Good morning.

I’m excited to be here at the Residential Development Summit.

Thank you to the Property Council for hosting this event.

Residential developers, investors, and the broader property community will play a key role in fixing New Zealand’s housing crisis.

We need your knowledge, expertise, and big ideas to help New Zealand’s housing system grow. We need to go up, we need to go out, we need more housing choice, and we need more tenure types.

Today I’d like to give you an update on our Going for Housing Growth programme, and how changes to the Resource Management Act (RMA) will make it simpler and easier to supply the housing that New Zealanders so desperately need.

I will also be announcing actions Government has agreed to that will enable more greenfield development – allowing our cities to grow out.

Letting our cities grow

I am, unapologetically, an urbanist – dare I say, an ‘urban nerd’ – and a proponent of growth.

I won’t dwell on our housing challenge. You’ve all heard me bang on about that before. Our housing crisis is holding New Zealand back socially and economically.

Report after report and inquiry after inquiry has found that our planning system, particularly restrictions on the supply of urban land, are at the heart of our housing affordability challenge.

I believe that fixing our planning system by making it more enabling and getting the fundamentals right in housing are the best things we can do to unleash New Zealand’s potential.

Getting this right will:

• lift economic growth and productivity,
• reduce the cost-of-living pressure from housing, and
• ensure New Zealanders can enjoy a higher standard of living.

As the Minister Responsible for RMA Reform, Minister of Housing, and now Minister of Transport, I get up every day determined to try and make a difference.

Update on Going for Housing Growth

Let me start with an update of our Going for Housing Growth programme.

It has three pillars:

• Pillar One: freeing up land for development and removing unnecessary planning barriers,
• Pillar Two: improving infrastructure funding and financing to support urban growth, and
• Pillar Three: providing incentives for communities and councils to support growth.

Pillar One

We have made good progress on Pillar One which includes:

• Housing Growth Targets for Tier 1 and 2 councils to “live-zone” 30-years of housing demand,
• making it easier for cities to expand,
• strengthening the intensification provisions in the National Policy Statement on Urban Development (NPS-UD),
• putting in new rules requiring councils to enable mixed-used development, and
• abolishing minimum floor areas and balcony requirements.

I announced these changes last year and officials have been working hard on the finer details.

The changes I announced last year build on the NPS-UD brought in by the previous government in 2020, but they obviously sit within the existing RMA structure.

As you’ll have seen on Monday, the Government is replacing the RMA entirely with two new laws.

This presents an obvious sequencing problem. We are committed to housing growth targets, strengthening density requirements, and so on.

This year we will consult on changes through Pillar One, as intended. You can expect that around May.

However, if we implemented them straight away in 2026, Councils would be forced to conduct expensive and lengthy plan changes – only to start all over again a year or so later once the new RMA comes into effect.

So, we’ve made the pragmatic decision to implement Pillar One of our Housing Growth changes as part of the replacement of the RMA.

This also allows us to think about housing growth targets in the context of standardised zones.

So, councils will implement Phase 3 of the Resource Management reforms through development of new plans, starting from 2027.

Rest assured, Pillar One will be ready to go for Councils’ 2027 Long Term Plan cycle.

Pillar Two

Now, let’s talk about Pillar Two – improving infrastructure funding and financing.

Pillar One is about upending the system by flooding the market with development opportunities and fundamentally making housing more affordable.

But, freeing up urban land is not enough on its own. We also need to ensure the timely provision of infrastructure.

Put simply, you can’t have housing without land, water, transport, and other community infrastructure.

But under the status quo, councils and developers face big challenges to fund and finance enabling infrastructure.

So, last month I announced five changes to our infrastructure funding and financing toolkit to get more houses built.

• The first is replacing Development Contributions (DCs) with a Development Levy System, where growth pays for growth,
• The second is establishing regulatory oversight of these Levies to ensure charges are fair and appropriate,
• The third is increasing the flexibility of targeted rates,
• The fourth is making changes to the Infrastructure Funding and Financing Act (IFF Act) that will make it more effective and simplify processes, and
• The fifth is broadening the IFF Act so that beneficiaries can help pay for major transportation projects.

I won’t go into too much detail here today.

But at a high-level, these changes will help create a flexible funding and financing system to match our flexible planning system.

These are some big changes, and it will take some time to get them right.

Our aim is to have legislation in the House by September this year, to come into effect next year.

Councils will be able to make the shift to development levies on the same timeline as the 2027 Long Term Plan cycle.

You can see, I hope, a lot of really good things coming together around 2027.

Pillar Three

On Pillar Three, officials are working away on this, and we will have more to say later this year.

Changes to RMA will support more housing

I want to quickly talk about how RMA reform will make it simpler and easier to supply the housing New Zealanders need.

For example, standardised zones will be a game changer.

I completely agree with urban economist Stuart Donovan – zoning is so balkanised that even large developers tend to stick to one or a few main centres as branching out requires reconfiguring to different planning rules.

Developers currently face a Gordian knot of these rules.

Maximum building heights of 9m in Kapiti versus 8m in Dunedin. Porirua requires an outdoor living space of at least 20m2 for a medium-density residential unit – in the Manawatu it’s 36m2. In Dunedin, maximum building site coverage can vary from 30% to 60% whereas in Taupō it varies from 2.5% to 55%.

Councils are even getting involved with things as niche as whether it is possible for someone to see the TV from the likely location of their couch – or whether doors should face out for “privacy” or in for “inclusion and community”.

I get email after email about this stuff. People stop me in the street to tell me about it. It is utterly out of control.

Councils should be focusing on engaging with communities, looking at capacity in the network, and making decisions on where growth is most appropriate.

And we need to grow both up and out.

For the remainder of this speech, I want to focus on what we are doing to enable more greenfield development.

Changes to the NPS-HPL

The National Policy Statement for Highly Productive Land – or the NPS-HPL, was introduced by the last Government to protect New Zealand’s highly productive soils. This piece of national direction is intended to boost food security for both our domestic food supply and primary exports.

However, it is clear that it has gone too far. As currently drafted, the NPS-HPL protects a total of 15 percent of the country’s landmass. That’s nearly as large as the entire Canterbury region.

This protected land often surrounds our biggest and fastest growing cities where growth is busting to get out.

I have lost count of the number of developers who have come up to me since this has been introduced, frustrated that they are unable to secure land for greenfield housing to be developed.

There needs to be a balance between how we protect our most productive land with our need for more housing to tackle our housing crisis.

Right now, that balance is out of whack.

National campaigned on amending the NPS-HPL to remove the lowest classification of land protected, what is known as LUC-3.

This kind of land is not the golden soils we need in Pukekohe – instead, it’s much lower quality land that is good for housing.

Despite being a lower quality of soil, two thirds of land protected by the NPS-HPL is classified as LUC-3.

I am pleased to announce today that Cabinet has agreed to remove LUC-3 from the NPS-HPL this year, fulfilling our election promise.

Across the country, this will open up land for housing roughly equivalent to the size of the Waikato region.

Alongside this, we are going to consult on whether we should establish what we’ve called ‘special agriculture zones’ around key horticulture hubs like Horowhenua or Pukekohe. This would essentially protect LUC 1, 2 and 3 land when it is grouped together in a natural configuration.

We need more houses, and we need more greenfield development.

Removing these restrictions will allow us to have our vegetables and eat them too.

Changes to the NPS-HPL will be progressed as part of our National Direction changes in Phase 2 of our RMA reforms.

I will announce further details about the timing and shape of that package tomorrow but wanted to announce this change today to highlight our Government’s commitment to greenfield housing.

Greenfield Model

To further demonstrate this commitment, we are also taking action to get more greenfield houses built in the near term.

I am pleased to announce that the Government will provide finance to developers to ensure more medium-sized greenfield developments – think around 1,000 to 2,000 dwellings – are enabled through the Infrastructure Funding and Finance Act.

We are calling this the Greenfield Model.

The Government will support National Infrastructure Funding and Financing Ltd – or NIFFCo – in lending up to $100 million to developers for infrastructure needed to enable new greenfield housing.

This model is being funded using existing unallocated funding within NIFFCo.

Here is how it will work.

NIFFCo will lend to an IFF Act Special Purpose Vehicle at a very competitive interest rate during the development phase of a project.

Then, the debt will be refinanced to private markets once the development is complete, with the funding ultimately being repaid by future homeowners through an annual levy.

The development phase of a project is often the riskiest – and private financiers reflect this by charging higher interest rates.

NIFFCo’s loan will provide lower cost financing to developers over the development period by charging approximately what private financiers would charge for completed developments.

This is a big win for growth.

NIFFCo will also be able to recycle capital into new projects after the five- to seven-year development period.

We are putting the Greenfield Model in place as a targeted interim measure while our Going for Housing Growth policy and Local Government reforms bed-in from 2027 or so onwards.

To date, the IFF Act has not been used for greenfield housing developments.

The Act is complex, and levies are deemed too expensive. The higher than anticipated levies are also much less favourable than using DCs which are often artificially low, under-recover growth costs, and are cross subsidised by rates.

The economics of IFF Act levies just don’t make sense right now.

The changes we are making through Pillar Two, particularly around improvements to the IFF Act and our shift from DCs to Development Levies, will do the heavy lifting to fix incentives and put in place a more effective infrastructure funding and financing system where growth pays for growth.

But, as fast as we are going on this, it won’t happen overnight.

So, the Greenfield Model is a good short-term, cost-effective intervention as the lower interest rate provides benefits of around $10,000 per dwelling.

For comparison, the Infrastructure Acceleration Fund, which was set up to support new housing by the previous government, cost around $28,000 per house.

This model will support growth that otherwise wouldn’t have happened – or would have happened much later.

I am excited to just crack on.

Conclusion

Let me finish by saying that solving our housing crisis is one of this Government’s top priorities.

And to be honest, it is my number one priority.

I look forward to working with you to grow up and out, and to deliver more housing that New Zealanders need.

Thank you.

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