Going for Housing Growth: Providing for urban development in the new resource management system

The current NPS-UD provides councils with discretion about how they estimate future demand for housing. This approach can result in inconsistencies between councils in terms of the amount of capacity they need to provide for and risks an undersupply of development capacity depending on the scenarios used. To address this, we propose additional standardisation in the way that housing growth targets are calculated.

We propose that each relevant council would have its own target, which would apply to the urban environment only (they would not apply to rural or semi-rural areas within a council’s boundary, consistent with the current NPS-UD). Councils within an urban environment could transfer a portion of the Target between themselves by mutual agreement.

Councils would determine their target by using 30-year household projections provided on Te Tūāpapa Kura Kāinga website. These would be based on Statistics NZ Statistical Area 2 (SA2) high growth scenario projections. Councils could choose to use a higher projection, but not lower. Councils would aggregate the relevant urban SA2 areas to give a total household projection for their urban environment and then convert this to demand for dwellings.

Councils would need to include a 20 percent contingency margin in their housing growth target (in place of the current competitiveness margin) on top of growth projections. This recognises that the risks of undersupply are much higher than oversupply.