Infrastructure, development and primary sector national direction

The Government has committed to amend the Building Act 2004 and the resource consent system to make it easier to build granny flats⁴⁵ or other small structures up to 60 square metres, requiring only an engineer’s report.

The Government invited submissions on changing the rules around building granny flats from 17 June to 12 August 2024 through a discussion document.⁴⁶ Almost 2,000 submissions⁴⁷ were received on the discussion document, which proposed the following actions:

• develop new national environmental standards under the RMA to enable a ‘minor residential unit’ up to 60 square metres to be built without the need for a resource consent, subject to specified permitted activity standards
• add a new schedule to the Building Act 2004 to provide a building consent exemption for granny flats up to 60 square metres, subject to a set of conditions, and make associated changes to the Local Government Act 2002 (referred to collectively as ‘the building consent exemption changes’).

The Government has decided to proceed with preparing National Environmental Standards for Granny Flats (Minor Residential Units) (NES-GF) under the RMA. The proposal has been updated based on feedback received through the 2024 discussion document, and to align with changes to the proposals under the Building Act 2004.

This updated proposed NES-GF differs from the proposal outlined in the 2024 discussion document in that it proposes a maximum internal floor area of 70 square metres (increased from 60 square metres) for granny flats that are permitted activities. It also proposes changes to several permitted activity standards. More detail on the proposed provisions is included in attachment 1.6 of this document.

Submissions are invited on the updated proposed NES-GF. These will be considered alongside submissions received on the 2024 discussion document, in preparing a report on this new national direction instrument.⁴⁸

This consultation only relates to the NES-GF proposal.⁴⁹ The Government has already made final policy decisions on the building consent exemption changes, which is following a separate process.⁵⁰

^{45 Granny flats are known as ‘minor residential units’ in the resource management system.}

^{46 Ministry of Business, Innovation & Employment and Ministry for the Environment. 2024. Making it easier to build granny flats. Discussion document (PDF, 779KB). Wellington: Ministry of Business, Innovation & Employment.}

^{47 Ministry of Business, Innovation & Employment and Ministry for the Environment. 2024. Making it easier to build granny flats. Summary of submissions (PDF, 1.3MB). Wellington: Ministry of Business, Innovation & Employment.}

^{48 Provided to the Minister under section 46A(1)–(3) of the RMA.}

^{49 For further information, see Ministry of Business, Innovation & Employment. Making it easier to build granny flats (2024). Retrieved 28 April 2025.}

^{50 Hon Chris Bishop, Hon Chris Penk, Hon Shane Jones. 5 April 2024. Super-sized granny flats coming to backyards. Retrieved 14 May 2025.}

Housing affordability is a key issue in New Zealand

New Zealand has some of the least affordable housing in the world,⁵¹ and home ownership dropped from 74 per cent in the 1990s to 65 per cent in 2018.⁵² High housing costs have a greater impact on retirees on fixed incomes, Māori, Pacific people, and people with disabilities.

^{51 OECD. 2020. How's Life? 2020: Measuring Well-being (PDF, 7.2MB). Paris: OECD Publishing. Table 1.1, p 23.
52 Stats NZ. 2020. Housing in Aotearoa (PDF, 9.6MB). Wellington: Stats NZ.}

There is increasing demand and a lack of supply of small houses

Poor alignment between household size and number of bedrooms in existing dwellings suggests an undersupply of one- to two-bedroom homes for smaller households. The 2018 Census recorded that just under twenty per cent of houses in New Zealand had two bedrooms, and six per cent had one bedroom – but over half the recorded households had one or two people.⁵³ Demand in the future is likely to increase, due to demographic changes such as:⁵⁴

• more single parent families
• people having fewer children
• an ageing population.

Data collected in December 2024 show 49 per cent of applications in the public housing register require one bedroom.⁵⁵

^{53 Stats NZ. 2018. Census data.}

^{54 Stats NZ. 2018. Census data.}

^{55 Ministry of Social Development. December 2024. Monthly Housing Report (PDF, 1.3MB). Factsheet. Wellington: Ministry of Social Development. p 2.}

Regulatory barriers increase the time and cost to build new houses

Housing has become more difficult and expensive to build in New Zealand. The cost of building a house has increased around 41 per cent since 2019.⁵⁶ Regulatory compliance costs for consenting and building are part of what drives housing costs. If a small house requires a resource consent, this costs around $1,500.⁵⁷ This may be small in proportion to the overall financial cost of building a minor residential dwelling, but the average time taken to process land-use consents has steadily increased. Resource consent processing time in 2022/23 was more than double the regulated 20 days.⁵⁸ Removing the time and cost barriers to consents would likely lead to more construction of this type of housing, helping to address the current unmet demand.

^{56 The 41.3% represents the cumulative increase since the fourth quarter of 2019. This mostly occurred in 2021 and 2022.}

^{57 National monitoring system 2021/22 consent data for minor residential units. Ministry for the Environment. National monitoring system. Retrieved 28 April 2025.}

^{58 Ministry for the Environment. 2024. Patterns in Resource Management Act Implementation – National Monitoring System data from 2014/15 to 2022/23 (PDF, 2.3MB). Figure 10, p 15.}

Inconsistent approach to regulating granny flats

Some district plans currently enable granny flats, but there is inconsistency in how enabling these provisions are across the country. Not all councils enable granny flats, some councils only enable granny flats in either residential or rural zones, and the relevant standards vary.

A new NES-GF is proposed to support the development of granny flats (minor residential units) in identified areas. More detail on the proposed provisions is included in attachment 1.6 of this document.

The proposed NES-GF is intended to enable one small, detached, self-contained, single-storey house (minor residential unit) per site for residential use as a permitted activity (ie, no resource consent required). The proposed NES-GF uses the definition for ‘minor residential unit’ in the National Planning Standards.⁵⁹ The proposal is for the NES-GF to apply in residential, rural, mixed-use and Māori-purpose zones, where specified permitted activity standards are met.

^{59 Defined as “a self-contained residential unit that is ancillary to the principal residential unit, and is held in common ownership with the principal residential unit on the same site”. Ministry for the Environment. 2019. National Planning Standards (PDF, 933KB). Wellington: Ministry for the Environment. p 60.}

The proposed permitted activity standards for granny flats are:

• a maximum 70-square metre internal floor area
• one minor residential unit per site in common ownership with the principal residential unit on the same site
• 50 per cent maximum building coverage in residential zones, mixed-use zones and Māori purpose zones (with no maximum coverage in rural zones)
• minimum front and side boundary setbacks of 2 metres in residential zones
• minimum front boundary setbacks of 10 metres, and side and rear boundaries of 5 metres, in rural zones
• 2-metre setbacks from the principal residential unit.

Some district plans already have rules relating to minor residential units that are more enabling than the standards proposed in the NES-GF. In addition, councils that have implemented the medium-density residential standards may have more lenient rules and standards – for example, relating to setbacks. The proposal is that district plan standards can be more lenient than those in the NES-GF.⁶⁰ This would ensure the proposed NES-GF does not restrict the level of development already enabled in some areas by district and unitary plans.

Although district plans may have more lenient standards for minor residential units, a building consent may still be required if relevant conditions under the Building Act 2004 are not met.

^{60 As provided in section 43B(3) of the RMA.}

The proposed NES-GF includes a list of matters relating to minor residential units that local authorities cannot set rules for in district or unitary plans. This list details standards to ensure the uptake of granny flats is not unduly limited, namely:

• individual outdoor space
• glazing, privacy or sunlight access
• parking and access.

The proposal is that existing district plan rules apply where a development does not meet one or more of the specified permitted activity standards in the NES-GF (ie, where a granny flat is no longer a permitted activity under the NES-GF).

The proposed NES-GF will not set rules or standards or change any consent requirements for:

• subdivision
• earthworks
• matters of national importance under section 6 of the RMA (eg, management of risks from natural hazards)
• specific use of the minor residential unit (other than for residential activities)
• regional plan rules
• papakāinga
• setbacks from transmission lines, railway lines and the National Grid Yard.

These matters will continue to be managed through existing RMA plans or national environmental standards (where relevant).

Table 8 outlines the anticipated impacts of the NES-GF proposal on various parties, with more detail available in the Interim Regulatory Impact Statement: National Environmental Standards for minor residential units (granny flats) on the Ministry for the Environment’s website.

Table 8: Overview of anticipated impacts of the proposed NES-GF

^{61 Schedule 1 of the RMA provides for the preparation, change and review of policy statements and plans.}

The Minister Responsible for RMA Reform considers the proposals to be consistent with the purpose of the RMA because they:

• ensure the use, development and protection of natural and physical resources as the following matters are out of scope of the proposed NES-GF and would continue to be managed by existing provisions in district and regional plans:
  • subdivision
  • earthworks
  • matters of national importance under section 6 of the RMA (eg, management of risks from natural hazards)
  • specific use of the minor residential unit (other than for residential activities)
  • regional plan rules
  • papakāinga
  • setbacks from transmission lines, railway lines and the National Grid Yard
  • (note: a resource consent may still be required for these matters, to ensure effects are appropriately managed)
• provide for the social, economic and cultural wellbeing of people and communities, and their health and safety, by:
  • increasing housing supply and housing choice (The proposed NES-GF will remove resource consent requirements for minor residential units and provide consistent permitted activity standards and allow local authorities to provide for more enabling standards to support housing supply and housing choice.) 
  • providing clarity where existing RMA plan provisions apply 
  • supporting intergenerational living and ageing in place
• ensure development has no more than minor adverse effects on the environment, where permitted activity standards are met. This would ensure effects would be similar to what could occur resulting from a permitted single dwelling on the site.

Māori who want to develop housing face issues of cost and time to consent small, simple houses. The proposed NES-GF may help address the regulatory and consenting challenges for developing on Māori land,⁶²and for papakāinga⁶³ and kaumātua housing,⁶⁴ where this NES applies. This proposal therefore has the potential in these circumstances to:

• make it easier for Māori land trusts, whānau and other Māori groups to build affordable housing at a reduced cost, and support intergenerational living
• increase housing stock likely to be taken up by Māori renters.

This proposal is not designed to address the broader challenges related to building papakāinga and other Māori housing (including on Māori land). This means the application of this policy to these matters has some limitations. For example, the proposals may not always fit with the characteristics of collectively owned Māori land (eg, where the minor residential unit may not necessarily be held in common ownership with the principal unit). For this reason, a targeted national environmental standard is proposed to enable papakāinga (discussed below in Part 3.2: National Environmental Standards for Papakāinga).

The overall impact of the proposed NES-GF on Treaty settlements is likely minor, because the proposal does not:

• prevent councils from upholding their statutory acknowledgment commitments for consenting and plan-making
• directly affect planning processes that involve post-settlement governance entities (PSGEs) and joint entities.

Some impact may result because the proposed NES-GF can override district plan rules and mechanisms that notify PSGEs through resource consent processes. However, minor residential units are unlikely to have any significant impact, because:

• granny flats are unlikely to be built on areas of cultural or historical significance, since they require an existing primary dwelling to be exempt from resource consent processes.

Section 6 of the RMA is out of scope of the proposed NES-GF, and will continue to be regulated by councils.

Consultation is necessary to test whether iwi, hapū and other Māori groups have concerns about the proposal or any perceived impacts on sites of significance to Māori, marae, Māori land, land returned under Treaty settlements or other matters of significance to Māori groups.

^{62 Includes Māori customary land and Māori freehold land (as defined by Te Ture Whenua Māori Act 1993).}

^{63 Can be described as communal settlements on ancestral Māori land.}

^{64 Housing specifically provided for kaumātua (elders).}

General material on implementation supporting the proposed NES-GF, including the statutory requirements, is provided in section 4 of this document. Specific implementation provisions proposed for these national environmental standards are:

• the NES-GF proposes that district plans can include more lenient permitted activity standards
• home owners wishing to build a granny flat on their property will need to check the 
  NES-GF or the relevant district plan (if relying on more lenient rules) to see whether a proposed granny flat:
  • will meet the standards in the NES-GF
  • will meet more enabling standards in the district plan, or
  • requires them to apply for a resource consent.