Will the new housing density rules affect you?

You’ve probably seen a lot of noise in the news recently about the new housing density rules, which have come about from the National Policy Statement on Urban Development 2020.

In some regions, this policy will allow three houses on a single site (each up to three storeys high), without any need for resource consent.

But many areas of the country won’t be affected, so what you’re hearing in the national news may not apply to you.

Roger Gordon from our Waikato office explains what the National Policy Statement is, who it will impact and what the rollout might look like.

What is the National Policy Statement?

The National Policy Statement on Urban Development is essentially the government's drive to make housing density higher and streamline the consenting process so that more houses can be built.

Some homeowners and investors are excited by the opportunity that this policy presents, while others are worried because they don’t want to be surrounded by high-density housing.

How do I know if the National Policy Statement will affect me?

It depends where your property is located. In some regions, there could be no effect at all.

The main areas affected are the tier one councils:

• Auckland – Auckland Council
• Hamilton – Waikato Regional Council, Hamilton City Council, Waikato District Council and Waipā District Council
• Tauranga – Bay of Plenty Regional Council, Tauranga City Council and Western Bay of Plenty District Council
• Wellington – Wellington Regional Council, Wellington City Council, Porirua City Council, Hutt City Council, Upper Hutt City Council and Kāpiti Coast District Council
• Christchurch – Canterbury Regional Council, Christchurch City Council, Selwyn District Council and Waimakariri District Council

In theory, if your property isn’t located within any of the tier one councils listed above, it’s not under the framework of the National Policy Statement. However, the path to higher densities will likely end up being widespread over the country.

If your property isn’t within a tier one region, your council may naturally go through a planning process and decide to bring in new rules that affect you. However, they won’t be under the timeframe or process outlined in the National Policy Statement.

What will the changes look like in tier one areas?

Each council is dealing with the National Policy Statement differently, in terms of both outcome and timeframe.

Some tier one councils have already published plan changes and timeframes, but the majority are still going through the process of submissions and hearings.

How it will play out in each region is yet to be seen and we’ve probably got another year of uncertainty.

In some areas (like Hamilton City Council), we know that changes aren’t expected until late 2023 at the earliest.

Will the changes be fairly similar in each tier one region?

The tier one councils are all reacting to the National Policy Statement differently.

In some regions, it’s quite complex. For example, some parts of cities may have new heritage classifications that have other limitations.

Understanding the meaning of operative, proposed and plan changes (and the weighting of each through the planning, hearing and appeals process) adds to the complexity of gauging the impact on any one property.

In addition, the market may react to changes prior to formal adoption and this adds to the overall risk profile.

This is why it’s crucial to seek local expertise, rather than making decisions based on what you’re hearing from friends or national media outlets.

If you’re talking to your friends and family about the rule changes, you need to be certain that you’re talking about the same council, the same planning rules and any potential changes.

And if you’re investing in a different region to where you live, the same thing applies – be wary of what you know compared to what’s going on in that region.

Note: on 15 November 2022, the Spatial Planning Bill and the Natural and Built Environment Bill were both introduced to Parliament. Further changes are likely as a result of these bills.

How we can help

There are many moving parts to the National Policy Statement, so local expert advice is key.

It used to be that purchasers and investors could just buy a residential property and find out the rules later, but with all the changes rolling out, it’s more important than ever to educate yourself first.

Whichever region your property is in, we can explain how the National Policy Statement will affect you and help you make wiser investment decisions.

Get in touch with a valuer today