Can Chris Bishop pull a housing rabbit out of his hat?
The housing minister says he wants tens of thousands more homes built to fix our housing crisis. But this will mean taking on councils, his coalition partners and the entrenched interests of homeowners. Henry Cooke takes a look at the potentially impossib
Chris Bishop is a very busy man. He’s a newish father, a local MP in a marginal seat, the coalition Government’s main legislative planner, and also the minister for infrastructure, sport, RMA reform and, most importantly of all: housing.
Housing was the issue most responsible for sending National to the Opposition benches in 2017, and had a big part to play in the shine coming off Labour, too.
It is a gaping sore in New Zealand’s body politic, one that creates sick kids and poor families, and holds back our economy. Bishop knows this and professes a deep desire to enable tens of thousands of homes to be built – so many that we stop showing up on the top of international comparisons lists for “least affordable housing”.
And yet the only actual policy Bishop has committed to so far is a reversal of a widely praised bipartisan move from the last government – one which forced councils to allow for densely-packed townhouses in every major city in the country.
Independent analysis suggested the policy would add up to 105,000 dwellings to our housing stock.
This reversal was made under serious political pressure from existing homeowners and the Government’s coalition partner, ACT.
He’s currently very busy at work with a replacement. Indeed, an OIA request
Stuff made revealed there had been 2100 emails between his office and the Housing and Urban Development Ministry on this specific replacement in his first three months of power – 24 emails a day.
If this replacement manages to make housing affordable while keeping the coalition and wary councils onside it will be one of the great political tightrope walks of our time. If it fails it could be his very own KiwiBuild.
In other words, he doesn’t just need luck or political nous. He needs what spammy headline writers have been promising us for decades: One weird trick. Or maybe quite a few.
Stuff spoke to economists, local government and campaigners to get an idea of how he might try to wriggle out of this bind. But first, we need to understand how he got here.
The story so far: New Zealand stops building new houses
New Zealand’s housing crisis didn’t happen overnight, but it did happen over about one generation.
From the 50s through the late-80s we had reasonably abundant and affordable housing, with a median house usually costing under three times the median annual income. But prices then started rocketing up, particularly from the turn of the century: Between 2000 and 2021 New Zealand house prices rose by about 256% after inflation – faster than in any other country in the OECD. Rents rose significantly, too.
In 2021, 60% of low-income renters in New Zealand spent more than 40% of their income on rent – the highest rate in the entire OECD – and 45% of all renting households spent more than 25% of their income on rent.
There has been some cooling as interest rates have risen, and it is clear that part of that story of high growth has been low interest rates, which have allowed people to borrow astronomical sums to buy damp villas in nice streets.
But another huge part of the story has been New Zealand’s restrictive planning laws, which make it illegal or extremely hard to build housing where people actually want it.
One usually blamed 1991’s Resource Management Act (RMA) at this point but research from the Infrastructure Commission shows the problem actually started a few decades earlier, when councils stopped actively encouraging population growth and started trying to limit it.
“Planning began to focus less on facilitating growth and planning infrastructure, and more on maintaining the character of existing neighbourhoods by stopping the construction of blocks of flats and apartments,” the commission wrote.
Councils did this through a thing called “zoning” – the methods they use to decide what you can legally do on different bits of land.
“Zoned” land isn’t the same as an actual house. It’s just a place where a house can legally be built. This makes it hard to be exact about how much zoned land one should have. You could technically zone just enough land for the number of houses you think the city needs – but people might not want to build or buy houses on that land.
It would be like if you went to the supermarket and it said it had exactly enough food for everyone to go home with a meal – but no more. The desirable food would immediately be bought and you would be left trying to make a nice meal out of a turnip.
This is essentially what happened as we started to zone for less housing in the 1970s.
We can see this by looking at Auckland: In 1961, the council had zoned enough land for new housing for the population to treble. Obviously, people wouldn’t actually build on every bit of that zoned land, but there was enough of it that the market could respond when populations did grow – there were a lot of options at the supermarket.
In the 1970 district scheme, the volume of zoned land roughly halved, even as the population grew, and it stayed very low for decades, while house prices and rents took off. Councils did this for a variety of reasons. New housing is typically unpopular with existing homeowners, who view it as a threat to their way of life – whether by removing sunshine, adding cars to their streets, or from the dampening effect on their home’s skyrocketing price.
The RMA made extensive consultation with existing communities mandatory, and councils generally listened to those residents, who were also their most reliable vote. It didn’t help that councils themselves were generally strapped for cash and thus incentivised to stop new housing – which came with big costs for them in terms of new infrastructure.
The story so far: The battle to allow more housing
Central governments became increasingly aware of this issue. Voters started to complain about being locked out of home ownership. Schemes like the Accommodation Supplement and temporary motel stays started to cost billions every year.
At first, government measures focused on what economists call the “demand” side – basically trying to help those who wanted to buy or rent with the money to do so. But eventually there started to be serious talk about addressing “supply” too – the overall