In the latest Auckland Economic Quarterly titled Observations on cities and Auckland, Blick discusses the effect of the Auckland Unitary Plan, the city’s planning rulebook, and how increases in housing capacity can benefit affordability.

“The evidence clearly shows that upzoning for greater housing capacity has generated significant positive outcomes, including substantially more new homes and improved housing and rental affordability,” says Blick.

The University of Auckland¹ found that around 22,000 new homes consented between 2016 and 2021 — one-third of all homes consented in residential areas in that period — were a direct result of upzoning in the Auckland Unitary Plan. That equates to 50% more dwellings consented than would otherwise have been the case, says Blick.

According to Blick, allowing for higher potential density lowers development costs per dwelling and contributes to a more responsive housing supply and a more favourable trajectory in housing prices over time.

Between 2017 and 2024, Auckland rents increased by 22%, compared with 34% nationally. The University of Auckland research found the rents for three-bedroom homes were 26-33% lower than before the Auckland Unitary Plan was introduced.

“This doesn’t mean that Auckland is affordable, but it does show that prices are lower than they would have been without the Auckland Unitary Plan. We have a long way to go yet, but Auckland’s experience shows how land use policy is a powerful lever for enabling more housing to be built,” says Blick.

Consents for new homes hit Australian levels

Blick says that, when compared to Australia, Auckland has surpassed New South Wales and matched Victoria in new home consents on a per capita basis. Building consents per capita have also been stronger in Auckland than across the rest of New Zealand over the past seven years.

This, he explains, is on the back of Auckland’s record-breaking numbers of building consents, “skyrocketing from under 12,000 annually before the Auckland Unitary Plan to over 20,000 in 2021 and 2022”.

The report says this upsurge has been driven by new multi-unit dwellings, such as townhouses, as people choose to live in locations upzoned for higher density living, closer to employment, transport options, and amenities – where housing demand is highest. 

Key findings of the report:

• On average, between 2017 and 2023, Auckland issued 9.5 consents per 1000 residents, compared to 5.9 between 1996 and 2016. The average rate of consents per 1000 residents for the rest of New Zealand rose from 5.4 to 7.0. The equivalent rate for the Wellington region rose from 4.1 to 5.6.
• This rate of consenting between 2017 and 2023 has outperformed New South Wales (7.1 consents per 1000 residents) and matched Victoria (9.6 per 1000).
• 21,800 new homes consented from 2016 to 2021 were a direct result of the Auckland Unitary Plan and would not have occurred in its absence. That is one-third of the dwellings consented in residential zones in that period.
• Without the Auckland Unitary Plan, there would have been 43,900 consents for new homes between 2016 and 2021, rather than the actual 65,700 consents in residential zones, a 50% increase.
• Rents and house prices in Auckland have been on a lower growth path than New Zealand as a whole. Rents in Auckland increased by 22% between 2017 and 2024, compared with 34% nationally and 36% in the Wellington region.

• Research finds that, six years on from the Auckland Unitary Plan, rents in Auckland would have been at least 28% higher if the reform had not been undertaken.¹

Read the full Auckland Economic Quarterly article here.

For further reading, download accompanying paper ‘Zoning reform in Auckland — what can we learn from the emerging literature’ here.

References

^{1. Greenaway-McGrevy, R. and So, Y. (2024, March). Can Zoning Reform Reduce Housing Costs? Evidence from Rents in Auckland [Economic Policy Centre working paper No. 016]. The University of Auckland Business School.}