A campaign for Wellington, and beyond

Dr Eric Crampton
Insights Newsletter
2 February, 2024

If a council’s zoning plans are wrong, it is hard for anything else to be right.

If building enough housing in places where people want to live is forbidden, housing will be scarce, rents and house prices will be too high, and every other ‘wellbeing’ that councils try to deliver will suffer.

And if plans are too prescriptive about what is allowed where, they will quickly be out-of-step with the needs of a living city.

Wellington’s District Plan comes to a vote on March 14. Council must weigh the advice of the Independent Hearings Panel, which effectively suggested that normal laws of supply and demand do not apply to housing.

Better advice is available.

The City for People coalition of housing affordability groups has pitched a set of measures for the revised plan.

They propose increasing or removing height limits in the city centre.

They would broaden the definition of ‘walkable’ catchments, and of mass transit, so taller buildings would be allowed in more places.

They would maintain the now-optional Medium Density rules so more housing could be built across the entire city.

And they would not expand ‘special character’ protections beyond those set in 2021.

Their suggestions, which reflect the broad consensus of the country’s urban economists, would help enable a lot more housing.

But they do not go far enough.

For too long, New Zealand urban planning was a battle. Some wanted denser development in town while prohibiting suburban expansion. Others wanted suburban expansion and tight restrictions on inner-suburb density. Each blocked the other. Building could not keep up with demand. House prices skyrocketed.

The City for People proposals are excellent for enabling density. But outward expansion also needs to be allowed.

When cities can grow both up and out, it is hard for downtown land prices to skyrocket. Land prices across the whole city are anchored by the ability to turn paddocks into subdivisions. Without that potential competition, urban land prices inflate.

The ability to build new suburbs, even if never taken up, helps make downtown apartments more affordable.

And if new suburbs have higher infrastructure costs than downtown apartments, letting those suburbs cover their own infrastructure costs over time makes far more sense than prohibiting development.

Wellington’s councillors should embrace the City for People’s proposals over the Panel’s, while also allowing development more broadly.

And the Minister for the Environment should support Council if it does.

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