Bishop to slash 400,000 dwellings from Auckland’s 2m capacity requirement

2026-02-18 - 22:06

Analysis: If media reports are right that Chris Bishop took soundings on a pre-Christmas leadership bid (and I myself haven’t even taken soundings on whether this did happen!) then it’s probably also true that today is the dead rat he must swallow as punishment. He’ll front up to the business-backed Committee for Auckland at lunchtime, to announce the changes the Govt is imposing on the city’s planning – an unusually clunky intervention, especially given that Bishop appears largely in agreement with the direction Auckland Council had been taking. The problem is, the old medium-density residential standards and subsequent plan changes had proposed a total theoretical capacity for 2 million dwellings. That’s fewer than 1.4m on top of the existing 612,000, and assumes pretty much everyone who was allowed to develop their sites bulldozes their loved family homes and replaces them with half a dozen townhouses. That ain’t going to happen. Bishop had agreed to Mayor Wayne Brown’s proposal to be exempted from the medium-density standards, and to have greater flexibility to (for instance) downzone flood-prone areas. But Bishop made it a condition that the council still plan for the same housing capacity. Another 1.4m dwellings, taking the theoretical total to 2m. Someone, somewhere, started spinning the line that there would be 2m additional houses, which is as explosive as a pile of bull-crap with a vape battery poked into it as a detonator. That line’s been repeated by major media today. That became a political time bomb that terrified National’s Auckland MPs, already struggling to hold the seats they won off Labour in 2023. So in January, the first policy to be thrown on the PM’s election year bonfire was Bishop’s housing intensification compromise. (There have been a few more, including yesterday’s addition to the bonfire of a referendum on a four-year Parliamentary term). It became clear Bishop was at odds with his Cabinet colleague Simeon Brown – whose Pakuranga electorate, incidentally, is a safe as the houses that dot its green and leafy streets. Christopher Luxon was somewhere else again. As Wayne Brown told me last month, after meeting with the PM, “there’s a whole lot of MPs shitting themselves about the election”. He said then that Brown took “a Howick view” that is different from others – and Luxon’s Cabinet was not a happy family. “There’s more differences across the Cabinet than there are across my council, which is interesting. I mean, they’ve paid a lot more attention to Mrs Fletcher than anybody else should.” (Former mayor Christine Fletcher has led opposition to housing intensification). I reported last month that Luxon would slash the 2m figure. I’m now told it should settle at about 1.6m, when Bishop announces the changes today. That would still double the existing number – but remember, this capacity is very, very theoretical. The actual effect on the number of houses in Auckland is probably negligible. The final 400,000 dwellings that were never, realistically, going to be build, will still never be built. The reduced number may get the headlines – but the real issue is likely to be caveats imposed on the council about where it may up-zone or down-zone housing. Good luck to Wayne Brown if he tries to zone more intensified housing in Howick or Botany! We’ve already seen a fast-track consenting panel reject an application to build a 54-unit apartment complex in the PM’s Botany electorate, that Luxon had publicly opposed. New Reserve Bank Governor Anna Breman warns against expecting house prices to rise as fast as they did previously. Photo: Marc Daalder This is all highly pertinent to the economic outlook – and not just to the reliance of Brown’s aforementioned Howick folk on rising house prices inflating their net wealth. Because yesterday, the Reserve Bank pointed out that the past few years of housing changes may have turned our economy on its head. “This is a big change for the NZ economy.” No longer can home-owners rely on their house values to rise; increased housing demand has been met by increased construction in the past couple of year, causing house prices to stagnate and even drop. That’s the market. “We’ve seen the supply of new homes is relatively high,” said Anna Breman, the new Governor. “We don’t expect the same fast rise in house prices.” Now, home-owners they must now look to their jobs and the labour market to build their wealth, rather than to their weatherboard homes on their little patches of pavlova paradise. In other words, they must be more productive. In Auckland, any constraint on the flexibility of the council to zone new housing where it’s needed, and consent its construction, will impact on the longterm supply of housing. To state the obvious, that will drive up house prices faster than forecast, creating another housing bubble.