New bill to ramp up housing density in major urban centres

21 October 2021

The Government has announced a new bipartisan effort to increase housing supply in major urban centres. Initial feedback has been largely positive, but some concerns have been raised. They include the implications for already stretched brownfields infrastructure, whether the initiative will deliver quality housing outcomes and the capacity of the construction industry to deliver the enabled outcomes.

The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill (the Bill) proposes:

  • To bring forward the timeframes for Councils to action the intensification policies in the National Policy Statement on Urban Development 2020 (NPS-UD) by one year.
  • New provisions to allow up to three homes of three storeys per site “as of right” in major urban centres – bypassing the need to obtain a resource consent.
  • A new streamlined planning process that Councils must follow to action these changes by 20 August 2022.

The new intensification rules are driven by the shortage and unaffordability of housing in New Zealand, and are indicated to result in anywhere between 48,200 and 105,500 new homes in the next 5-8 years.

Here are five key takeaways from the Bill, focussing on the new provisions.

  1. Changes to Medium Density Residential Standards
    Councils will be required to notify plan changes for “Medium Density Residential Standards” (MDRS) allowing up to three buildings of three storeys on each site by 20 August 2022.

    The MDRS provisions will apply to Councils in Tier 1 urban environments – covering Auckland, Hamilton, Tauranga, Wellington and Christchurch – and to all residential zones in such environments except large lot and settlement zones. In addition to the building height changes, the MDRS will include reduced boundary setbacks, smaller private outlook spaces, and the ability for resource consents (where the permitted activity standards aren’t met) to proceed on a non-notified basis. Councils will be able to notify more permissive plan changes, but will be bound by the ‘three buildings of three storeys’ bottom line unless a qualifying matter applies.
  2. Exceptions for qualifying matters
    There will be exceptions for qualifying matters, including heritage and nationally significant infrastructure.

    Unsurprisingly, Councils will be able to notify changes that are less permissive than the MDRS in relation to specific areas within residential zones if specified qualifying matters are present. These include the need to give effect to a designation or heritage order, the safe and efficient operation of nationally significant infrastructure, and “any other matter” that makes the MDRS inappropriate in an area. While these are essentially identical to the qualifying matters in the NPS-UD, how Councils will interpret their scope remains to be seen.
  3. No appeals
    There will be a new process to implement these changes, with no appeals.

    The MDRS will be implemented through notifying an “intensification planning instrument” via the “intensification streamlined planning process” (ISPP). This process is a quicker version of the existing streamlined RMA planning process. The ISPP will include an independent hearings panel process and recommendation, and the ability for the Minister for the Environment to step in as decision maker if the Council does not accept the Panel’s recommendations. There will be no rights of appeal from the Council or Minister’s decision. Access to judicial review is preserved and there is a requirement for pre-notification engagement with iwi.
  4. Assessment under new rules from mid-2022
    Resource consents lodged after notification will be assessed under the new rules.

    The MDRS provisions will have legal effect as soon as they are notified by Councils – meaning 20 August 2022 or sooner. Consent authorities will be required to determine new resource consent applications lodged after this date against the MDRS provisions in the notified plan, and any inconsistent provisions in an operative plan will cease to have effect for the purpose of considering applications.
  5. Inconsistent plan changes must go
    Existing plan changes not consistent with the new rules will need to be withdrawn.

    Once the Bill is enacted, Councils and applicants will be required to withdraw proposed plan changes or accepted private plan changes relating to current or proposed residential zones that:

    • do not incorporate the MDRS; and
    • for which a hearing has not been completed on, or before, 20 February 2022.

Councils will be required to use clause 8D, Schedule 1 of the RMA to withdraw these inconsistent plan changes.

Further consideration should be given to creating a deemed variation to existing plan changes so they can continue to be assessed on the basis they incorporate the MDRS provisions. This may be warranted given the significant investment required to prepare and process existing plan changes.


Initial feedback has been largely positive. The bi-partisan nature of this proposal is welcome. Some Councils have raised concerns that the changes could lead to lower quality housing stock and about the capacity of already stretched infrastructure to cope with this additional demand, as well as how necessary infrastructure upgrades will be funded. Other commentators have noted that construction materials and workers are key constraints on supply at present, with the housing construction industry already running at full capacity. Whichever way you look at it this is a major change. In the short term the change is likely to result in upwards pressure on residential land prices as buyers and sellers factor increased development potential into their decision making.

If you have any questions about the matters raised in this article, please get in touch with the contacts listed, or your usual Bell Gully adviser.

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.