Labour and National in standoff over housing density

The main parties both say they are willing to work together on policies to build more housing, but neither seems likely to budge over their approach.

Housing Minister Megan Woods has now offered twice to meet with National's leadership after they pulled their support for the Medium Density Residential Standards (MDRS) this weekend.

National say they would be happy to talk, but their new policy of developing in greenfields land is better than the previously negotiated deal.

With Labour leaving the door open to further changes to the standards in the wake of National's exit, neither approach seems likely to bring the certainty the sector demands.

The MDRS standards allow up to three homes three storeys high to be built on most sites in New Zealand's main towns and cities with no need for resource consents.

The move was originally announced in October 2021 in a rare show of bipartisanship - Woods and Minister David Parker sharing the stage with then-Housing Spokesperson Willis and National's then-leader Judith Collins.

Woods said it "makes sense to work together where there is a consensus".

Willis at the time said National was standing together with Labour "to say an emphatic yes to housing in our backyards", but that emphatic yes became a no over the weekend when the party's housing spokesperson Chris Bishop unveiled their new housing policy.

National's new plan would require councils to zone enough land for 30 years of development, and make that land immediately available for that purpose. It would also mean an increase in mixed-use zoning - commercial and residential property together.

The kicker was they would also allow councils to opt out of the MDRS - with leader Christopher Luxon going so far as to say the party had got MDRS wrong.

Bishop on Tuesday said the new policy was better - giving councils and communities more flexibility in how they implement density.

"I think our programme is extremely ambitious, I'm really proud of it," he said. "The point is to smash the urban limits that have held our cities back, so, the Infrastructure Commission, Treasury, the Productivity Commission - there's now a decade worth of reports on how restrictions on the edges of our cities drive up land prices.

He said the party had signed up to the government's MDRS proposal in 2019 because "we thought it was better than doing nothing".

"What we are proposing is better than what we have in the MDRS, it is more ambitious, it will take housing more seriously, it will drive down land prices and it will lead to more affordable housing."

Willis said it would allow councils to use the MDRS if they wanted - or not.

"If they want to do it through an MDRS that's fine, if they want to do it through greenfields development that's fine too."

She denied backing out of the standards was a u-turn.

"I don't see it that way, I think it's a step forward."

Green Party co-leader James Shaw criticised National's plan as bad for the climate, bad for the economy.

"I think the main thing we're kind of a bit bemused by is the idea that actually there would be a lot of farmers who would be worried that their political party, the National Party, is considering swallowing up vast tracts of countryside for urban sprawl and the cost of that to the country is massive compared with densifying your cities, which was the original intent.

"Urban sprawl is a more expensive, less efficient and more polluting way of creating our cities, it doesn't work. We've got decades of experience in it not working. I think the idea that you'd now pump for that failed model is daft."

Woods also had some major reservations.

"I'm still not sure what exactly they mean when they say they're going to make 30 years of zoned land buildable," she said. "By my back-of-the-envelope calculations that's tens of billions of dollars of infrastructure funding that is required as soon as that is put into place.

"The document I've seen is very light on detail, I'm keen to understand more and that's exactly why I've invited them to a further meeting so we can have this conversation."

Bishop had some further details which could shed some light for Woods.

"She needs to read the policy properly because one of the key parts of the policy is there has to be greenfields availability, there has to be abundant development opportunities both on the edges of our cities which is greenfields but also inside our cities. But that if there is greenfields growth that has to happen then it can't be cross-subsidised by existing ratepayers.

"People moving into new housing, into greenfields housing developments will have to pay for the infrastructure by way of a targeted rate or levy over 30 years ... this is what the last National government trialled at Milldale, which continued under the current government."

He seemed happy at the idea Labour might want to poach it.

"I say if the Labour Party wants to come to the party and pick up some of these ideas well we are all for that because we've got to get on top of this 30-year public policy disaster that is housing in New Zealand.

"Some of what we're talking about is similar to what Labour has themselves said in the past, so if we can find a common ground there that's a good thing."

Prime Minister Chris Hipkins on Monday seemed receptive to some kind of collaboration.

"We'll certainly have a look at it. Our preference, though, as it has been, is that we provide greater certainty by not having this become a political football."

Hope, then, for cross-party collaboration on housing once again; but hope that would appear dashed by the looming election campaign.

Luxon stood firm on National's new approach, painting Woods' offer as an admission of failure.

"Basically she's conceding - as Chris Hipkins is as well - that it's not working, and we'd love to sit down and actually do a bipartisan deal on our policy, we think it's a better policy.

Woods herself had some hard bottom-lines.

"We're not going to agree on everything in terms of housing policy, we certainly won't agree to raiding state-house funding to pay for other bits of housing ... what we've seen in National's plan over the weekend is them showing yet again what they will do to state housing if they get into government. That is not something I will ever agree to."

And Hipkins on Monday had also suggested the current standards might also be up for review.

"The compromise arrangement that was reached had a lot in it that the National Party had been asking for ... if they're not willing to stand behind them, of course, we will take a moment to look at whether we're willing to stand behind things that they ultimately proposed."

The only thing developers can be left certain of: the future is uncertain.

Shaw suggested the whole mess could have been avoided.

"When that first went through we put a number of amendments up including mixed use, and the Nats and Labour voted that down, so we are left feeling a little bit like if they'd listened to us in the first place they wouldn't be in half the mess they're in at the moment."