The past decade has seen a dramatic increase in New Zealand house prices. A major contributor to this increase has been an insufficient supply of land and development capacity for housing, both within and outside cities, to meet increasing demand. The Government asked the Productivity Commission to look into the processes that New Zealand’s fastest-growing local councils use to provide land for housing (including planning, zoning and the provision of infrastructure such as roads and water pipes) and to make recommendations about how this can be improved.
The Commission has identified a number of areas where the responsiveness of urban planning could be improved, but the most important step that needs to be taken is a credible commitment to bring land price inflation under control. This is needed to shift incentives on all the players in the land supply and development system. This report outlines a range of changes to reform land use rules, planning processes, and local incentives that will measurably improve land supply and development capacity.