New Zealand’s Right to Build to Medium Density

Dull, inert cities, it is true, do contain the seeds of their own destruction and little else. But lively, diverse, intense cities contain the seeds of their own regeneration, with energy enough to carry over for problems and needs outside themselves ~ Jane Jacobs

Kensington, London

Recently there was bipartisan support for legislated changes to the planning rules that gives a right to build medium density housing in New Zealand.

Proposed Medium Density Residential Standards (MDRS)

Property owners in New Zealand’s Tier-1 urban environments (1) will be able to build three housing units on their sites as of right without a resource consent if they keep within the above parameters.

Source: missingmiddlehousing.com

The intent is to replace exclusive stand-alone housing zoning with a more flexible missing middle type zoning.

The announcement I thought was Judith Collins best performance as the leader of the opposition. Her response was very good when asked to comment about those who worry that reduced regulation means — a community loses its character. “To those… I say this: Our communities lose their character when people can’t afford to own their own home.”

Source: Twitter

Public submissions and local democracy are problematic when it comes to housing because these processes favour the already housed and under-weight the voice of the unhoused. It can be disheartening observing this process in action. Yet there are examples where the proposed planning rule changes have led to some deeper conversations about how these rules could be further optimised. This is useful because although the intent of the MDRS is great — the devil will be in the detail.

New Zealand unfortunately has a poor history of intensification because typically it has followed this pattern:

  • It started with large and long sections with the original house located at the front of the section. This housing typology was oriented to the street and backyard.
  • Then the back yard and side driveway was sub-divided.
  • Then the original home was replaced creating the sausage flat typology.
  • Now the orientation of this housing is sideways towards the neighbours.

Making the above type of intensification even more permissive will possibly cause problems as taller and bulkier buildings that face the neighbours get closer and closer together. Fortunately there is an alternative. Planning rules could be such that they are more permissive for constructing larger buildings that are oriented towards the street and backyard like the original housing.

One package of suggestions provides this solution — the Coalition for More Homes (CFMH) work on an alternative medium density residential standard that enables perimeter block developments would be very beneficial for improving housing typology choice. And I believe there is some tweaks to the proposed MDRS rules that would be helpful, too. I will start with the later because it will help explain the benefits of the former.

There is some concern that critiquing the MDRS and offering an alternative is often not about optimising a more permissive planning system but an anti-housing trojan horse that opposes a more permissive system. That is not the intent of this paper. There is no reduction in allowable built floor space from the below suggested changes. The competiveness of different housing typologies has been considered. The intent is discuss what type of more permissive planning rules is best. It is the author’s belief — that in the medium- to long-term a built environment which has better planning rules will facilitate a greater built floor response because it enables more value to be create.

Unfortunately these planning rule discussions are detail heavy, but given the importance of the issue it is worth taking the effort to understand the issues.

Suggestions for improving the MDRS proposal

Dwellings permitted — This should be unlimited.

The built envelope restrictions of the proposed MDRS already imposes a limit on how much floorspace can be constructed and therefore the number of new units possible — another limit is unnecessary.

Policy makers should not be picking winners regarding whether larger or smaller housing units are desirable. Policy makers do not have the information on what type of housing will satisfy demand — this is an issue best left to the market. A minimum size limit for each unit could be used, but industry players like banks have their own lower limit so this might not be necessary either.

Being able to replace one existing house with many residential dwellings will not reduce land values or the price of existing houses — it may even increase them. But it will reduce land costs for new medium density developments on a per unit basis compared to the counterfactual of there being a limit — such as 3 units — which the current proposal suggests. Land costs could be lowered by a considerable degree if for instance 6, 9, or 12 units rather than 3 were possible.

Land value increases related to this up-zoning proposal will likely represent a natural increase in value related to increased amenity of growing urban areas rather than an extractive scarcity increase. This is because of the large-scale nature of the MDRS up-zoning and competition between development sites. Also of note, new housing units pay rates to local government, so if any value is created some of it will be captured by the community.

The MDRS proposal is not a silver bullet to solve the housing crisis. Other supply responses are necessary, in particular, strategic city planning up and out, and infrastructure funding and financing. And there are many other supply and demand factors — social housing building, tax policy, interest rates and credit availability, immigration and local population growth — that have significant effects, too. So, unless all these pieces are in alignment, extractive land value increases may still occur. Broadly though — MDRS is a useful policy intervention that will help housing affordability.

Mixed use — the proposal should be altered to be permissive to mixed uses — retail, hospitality, office, healthcare, educational etc. Any nuisance issues, such as, noise, vibration or smell should have a specific restriction, rather than all mixed-uses being restricted.

Building coverage — Some existing residential areas for historical reasons — such as inner-city workingman cottages — have higher building coverage levels than the suggested 50%. The main reasons for building coverage rules are to ensure the city has some green spaces for better stormwater drainage and other ecological reasons. If higher limits on some sites haven’t caused problems in the past, then there shouldn’t be a reason why the existing building coverage level can’t be used for new multi-story developments.

Communal outdoor space — The balcony requirement could have an alternative — the legal and physical access to a communal landscaped outdoor space.

Balconies are expensive — households should not be required to pay for them if that is not their preference.

Outdoor space should not be defined ‘as one per unit’ — the prescription should be the outdoor space is the sum of 15sqm for ground floor units and 8sqm for above ground units and this space can either be private spaces as already defined or a communal space. The units without a private space would need to have a legal and physical accessway to the communal space and there would need to be a minimum dimension — such as 5m — to prevent useless narrow outdoor strips — like side yards — being counted as the communal space. Note the communal space could also include, in part or in full, a roof-top garden.

The rational for this suggestion is not to reduce the outdoor space requirement but to address the issue that some households may prefer a much larger communal outside space rather than a small private space. In particular this option might cater for families wanting access to a large outside playground area, and for communally focused papakainga and co-housing groups. Larger outdoor spaces would also enable larger trees to be planted.

Enabling perimeter block developments

Source: Twitter

At a broad high-level, I agree with the approach that the Coalition for More Homes (CFMH) have outlined in their paper on the MDRS and Scot Caldwell’s excellent piece in the Greater Auckland website.

Ensuring perimeter block developments are legally and economically viable would bring many benefits to how our cities intensify.

I agree with CFMH’s support for the intent of the MDRS proposal and I share their concern that it overly encourages sausage flat and infill housing typologies. These typologies when built at scale do have some issues.

There have been assertions that the MDRS proposal will create ‘slums of the future’. Perimeter block development provides an explanation for why that will not happen. In fact, overseas, perimeter block developments are often some of the most loved and most valuable pieces of real estate in their respective cities.

The CFMH gives a clear explanation of the advantages of enabling perimeter block development as an alternative to the sausage flat style of intensification.

CFMH state by removing height in relation to boundary and yard requirements at the front of the site, development can be brought right up to the front and side boundaries of the property. This means outlooks orient either towards the street or to the rear of the property, and all the open space gets unified as a single, large backyard.
We (CFMH) strongly support the intent of the Medium Density Residential Standards (MDRS), enabling three storeys everywhere allows for the full scale of housing typologies from stand-alone homes to terraced houses to three storey apartments, to be built in all neighbourhoods to meet different demands. However, most of New Zealand’s experience with suburban medium density housing to date has been with ‘sausage flat’ and ‘infill’. These typologies often have issues with privacy, private space, and sunlight access. The MDRS is likely to exacerbate these issues.

As well as the above concerns, I am concerned that the MDRS may lock in the sausage flat urban form that will resist further intensification because in many cases it is difficult to add height or floor area to an existing sausage flat. These urban areas in the future may become unresponsive to the demands of the city — whether it be for more housing or for other mixed uses. Meaning the MDRS would only be a temporary fix to built-environment concerns.

In contrast, the perimeter block development urban form has huge capacity for incremental intensification. Whilst also enabling more cohesive green spaces that will support a larger tree canopy. Further, it also provides ‘eyes on the street’, and it should encourage the placemaking improvement of street spaces too.

The difference between the sausage flat and perimeter block urban forms is just a few urban planning rules. Given this, I highly recommend that these rules are carefully considered in order to get them right.

Below is the CFMH alternative proposal aimed at enabling perimeter block development. I will comment on some of these.

Dwellings permitted, outdoor living space, and building coverage I have already discussed for the MDRS proposal. I believe these should apply to the alternative MDRS as well. Removing the limit on dwellings permitted and giving the communal outdoor space option should greatly improve the economic viability of perimeter block developments.

I wonder for the alternative MDRS if the 20m rule is necessary given my proposed below green space rule — although it may be a pragmatic compromise to cater for the situation where neighbouring properties have large differences in plot length.

The fundamental characteristic of perimeter block developments is the building is located at the street front and the green space is at back of the site. And the outlook of the windows and doors are to the front and rear, not to the sides. My suggestions are mainly about reinforcing these characteristics.

Green space — 35% of the property needs to be landscape outdoor space. Further, this space needs to be located in the back 50% of the property.

Side yards — A perimeter block development could have a narrow side yard and still meet the characteristics of a perimeter block development. There is a number of reasons why this option might be chosen. Saving on the expense of building a firewall (needs to be 1 metre away from the boundary). Side entrance accessways — say to a bicycle storage room. To allow easier and less expensive ventilation of bathrooms and kitchens.

The issue though is if there is no firewall then side windows can be constructed, which could overlook the neighbours. I suggest if side windows are constructed, then the planning rules are such that they are used for ventilation and light, but not outlook.

Corner sites — A perimeter block development at a corner site where two roads meet at T-junction or crossroad would be an ideal location for mixed use development due to their increased accessibility. Also, corner sites because of the 2 street frontages only have a back corner which they naturally overlook at the rear. These factors mean consideration should be given for creating an exception where higher building site coverage and lower green space is possible.

Further discussion

The importance of the perimeter block development housing typology means a decision would need to be made about whether the alternative MDRS replaces the original proposed MDRS or whether it is in addition to the MDSR.

I would not recommend replacement because it would eliminate some missing middle housing options — like infill accessory dwelling units.

If the additional option is chosen, this creates three further options for how to implement the decision.

  1. The property owner chooses which set of MDRS rules they will use to intensify their site.
  2. The property owner needs to gain permission from their neighbours to use the alternative MDRS rules. This can be a reciprocal arrangement i.e. the agreement applies both sides of the boundary — as an option — not a mandate.
  3. Some sort of group agreement among neighbouring properties along a street

Transport-wise there seems to be two future possibilities to decarbonise.

  1. Electric vehicle ownership replaces internal combustion vehicle ownership.
  2. People substitute away from owning a large vehicle that needs garaging — instead opting for multi-modal options — including technologies, such as, e-bikes, e-scooters, and other similar devices, and using smart phone technology to access mobility as a service (MaaS).

Policy makers should not pick a winner with respect to these technology options. Further, this means enabling the appropriate housing typology that best matches the transport technology choice. Such as an apartment in a perimeter block development being a good match for people who prefer the second transport decarbonisation option.

I have thought and written about intensification and housing typology issues for many years and my ideas have influenced other thinkers, such as.

New Zealand economist Peter Nunns 2017 article Legalising Perimeter Block Development

And Director of a US think tank — Alan Durning 2020 article Bottom-Up Upzoning and the 2021 article Yes, Other Countries Are Making More Progress on Housing, Case 4: The United Kingdom and New Zealand: Bold strokes against residential lockdown.

I believe the thoughtful discussion about the MDRS proposal provides New Zealand with the best, most comprehensive opportunity to improve housing and the built-environment to date.

Post Script

This article evolved from my submission to the Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill. Submissions closed on the 16th November and the Bill is being progressed as follows. It is worthwhile keeping up the pressure on Parliament so the best medium density built environment is possible.

(1) Tier 1 urban environments

Tier 1 urban environments include:

  • Auckland (Auckland Council)
  • Christchurch (Canterbury Regional Council, Christchurch City Council, Selwyn District Council and Waimakariri District Council)
  • Wellington (Wellington Regional Council, Wellington City Council, Porirua City Council, Hutt City Council, Upper Hutt City Council, Kāpiti Coast District Council)
  • Tauranga (Bay of Plenty Regional Council, Tauranga City Council and Western Bay of Plenty District Council)
  • Hamilton (Waikato Regional Council, Hamilton City Council, Waikato District Council and Waipa District Council).

Trying to optimise amenity and affordability values for urban areas