What do you think of councils' land use rules?

The Productivity Commission is seeking submissions on its issues paper Using land for housing.

Commission chair Murray Sherwin said: “Housing affordability is a key challenge facing New Zealand, especially in our growing cities. The limited availability and high price of land is a concern when housing is becoming difficult to access for many.”

The inquiry builds on the Commission’s report into housing affordability.

It notes that over the next decades, the population of some cities will grow significantly and the number of homes required will grow even faster because fewer people will live in each property.

“Over the past decade, housing supply has struggled to keep pace with demand and there have been significant increases in housing costs, especially in our main cities. A lot of factors affect the supply of affordable housing, but one of the most important is the availability of land.”

It said the land component of housing costs had increased rapidly over the last 20 years, particularly in Auckland, where land prices now make up more than 60% of the cost of a new home. Through the rest of the country, land costs account for 48%.

The issues paper notes that local government planning systems and regulations affect the speed and efficiency with which land is made available for housing. It says land prices may be contributing to the construction of larger, more expensive houses.  “In the early 1960s, the value of most new housing was lower than the average value of existing housing. New builds in the last decade are increasingly valued in the upper quartile of all housing stock.”

Sherwin said: “Making it easier to access and use land for housing is an essential part of any response. Our inquiry will look at options for sourcing land, including new developments on the edges of cities as well as intensifying housing within cities. We will also examine the factors that limit how land can be used, including the availability of infrastructure.”

Questions being asked include how accurate local authority assessments of the demand for and supply of land are, how they reflect market demands, what steps local authorities should take to ensure people affected by land use changes have the opportunity to comment, and how easy it is to understand the objectives of local authority plans.

Sherwin said feedback was being sought from the industry, local authorities and the public. “In order to understand which local government processes work well on the ground, we need to hear from those who have experience with developing land, interacting with councils or running local authority planning and land use processes. In particular, we are keen to hear people’s views on the questions set out in our issues paper."

Submissions close December 22.