Source: New Zealand Government
Good afternoon, everyone.
I’d like to acknowledge Rupert Hodson and Sarah Sinclair for the warm welcome, NZICC for hosting, and the Committee for Auckland for putting on today’s event.
It’s good to be back.
It’s been around a year since I spoke to you as the newly minted Minister of Transport.
The thesis of that speech was straightforward:
To create a brighter, more prosperous future for all New Zealanders, we must allow Auckland to grow and become a world-class, international city.
That means we, as a country, saying “yes” a lot more often and “no” a lot less.
Yes, to infrastructure. Yes, to events. Yes, to transit-oriented development. Yes, to housing. And yes, to growth.
So, what does “yes” actually mean?
It’s not just a political slogan or some ideological posturing about progress.
It means real change.
And that’s what this Government is about.
We are a reforming government.
We refuse to accept the idea that New Zealand is in a state perpetual managed decline.
We refuse to accept the idea that we can slip into the ranks of a relatively wealthy middle-income country where our best and brightest leave.
We refuse to accept the idea of managed mediocrity.
With bold and tough decisions, and by tackling tough issues, we can lift living standards for everyone and drive increased prosperity.
In education, we are reversing the 30-year experiment on our kids of pretending that basic knowledge and facts don’t matter. We’re restoring standards, teaching the basics, and focusing on achievement.
We’re reversing wealth destructive earthquake prone building legislation, opening up competition in building materials, and tackling joint and several liability.
We’re finally sorting the Holidays Act. Major reforms are underway to employment law and health and safety.
In short, we are fixing the basics of the economy and building the future.
I have the enormous privilege of driving change in a number of important areas, and I’m pleased to say we accomplished a lot last year.
The Planning Bill and the Natural Environment Bill are in the House to replace the failed Resource Management Act (RMA) once and for all.
We know some changes are needed to reflect this Government’s policy ambitions and to get the Bills right. I look forward to going through submissions and taking on New Zealanders’ feedback.
Ten projects were granted consent under our Fast-Track legislation representing thousands of jobs and billions in investment. Of those ten projects, six are Auckland-based and include the Port of Auckland Extension, two quarry expansions, and three mixed-residential developments.
And we started construction $7 billion of central-government-funded infrastructure in the second half of 2025, including level crossings here in Auckland.
As we begin this year, there’s a lot to look forward to.
The economy is undoubtedly turning a corner.
New Zealand has been through a long and difficult economic adjustment. The post-Covid period brought inflation that lingered too long, interest rates that hurt too many households, and a downturn that took time to unwind.
The most recent Treasury forecasts show the economy has begun to turn a corner. Growth strengthened through the second half of last year, unemployment is stabilising, and confidence is returning. Momentum is building – but sustaining it requires discipline and focus.
Here in Auckland, I sense a real sense of optimism.
This wonderful new convention centre has just opened.
We’re liberalising Eden Park’s planning rules so it can host more concerts and events.
The central interceptor project will be finished later this year.
Also, later this year, City Rail Link (CRL) will open, as will new rail stations at Drury and Paerata. Ngakoroa will follow in 2027.
The third main line is now open, separating freight from passenger rail, and the line to Pukekohe has been electrified. The Auckland Rail Network Rebuild is coming to an end.
Funding has just been confirmed to complete the Eastern Busway. Yesterday, NZTA applied for Fast Track approval for the Northwestern Busway.
Slowly but surely, the Auckland Rapid Transit network is being built.
Government’s vision for housing
In that context, today, I want to talk more about housing and its importance to New Zealand. For too long, our housing market has held us back socially and economically.
Economically, housing eats up disposable income, meaning less can go toward goods, services, and investment. It ties up wealth; and displaces productive investment.
A lack of housing in the right place also leaves productivity and agglomeration benefits on the table.
Socially, housing plays a large factor in young kiwis deciding to leave New Zealand to find better opportunities.
Unaffordable housing also tips more people into situations where they need support. Currently, there are around 19,500 families on the social housing wait list.
Various governments of all different colours have put housing in the too hard basket and failed to make the tough calls required.
This government is different.
I am determined to fix housing for three reasons.
Boost the economy
Help get the books back in order
Moral case
The first reason is to boost the economy.
Housing is fundamentally a productivity enabler, and for decades, New Zealand has suffered from a productivity disease.
As Paul Krugman so famously observed, “Productivity isn’t everything, but in the long run, it’s almost everything.”
Productivity drives our standard of living and our prosperity.
Even though New Zealand is blessed with extraordinary competitive advantages like natural resources, an abundance of land, relatively cheap renewable energy, and a Number 8 Wire mentality – we have fallen behind.
We used to make the most of our advantages. In 1900, we had the highest number of patent applications per capita in the world, and in the 1950s and ‘60s we built innovative and world-leading infrastructure. In the early ‘60s, our productivity was well above Australia’s, but somewhere in the ‘70s our productivity dropped, and the gap kept widening.
Now, our productivity is closer to places like Poland, Hungary and the Czech Republic than it is to Australia and other western European countries we like to compare ourselves to.
In other words, our productivity rates are on par with countries that endured 40 years of communism.
The hope or assumption that our advantages will automatically confer prosperity is misguided.
Complacency is a blight on progress.
It will take a sustained effort and hard work across many years to really get productivity going again. It isn’t going to be easy.
But a good starting point is housing.
There is now a mountain of economic evidence that cities are engines of productivity, and the evidence shows bigger is better.
In New Zealand, it is estimated that doubling a city’s population could increase output by 3.5%. And, on average, workers in cities earn one third more than their non-urban counterparts.
Throughout history, cities have also been the hub of innovation. Think 15th century Florence, 17th century Amsterdam, 18th century London, and San Francisco today.
A well-functioning housing market that delivers thriving cities, growing productivity, and super-charged industry will do more to create a brighter future for everyone in this room – and for everyone in New Zealand – than just about anything else Government can do.
Early economic modelling of our RMA reforms suggests that liberalising housing will lift GDP by at least 0.45% annually by 2050, with growth continuing thereafter.
New Zealand can simply raise our productivity by allowing our towns and cities to grow up and out. We need bigger, denser cities and, to facilitate that, we need more housing capacity.
The second reason to fix housing is to help get the government books back in order.
Central government spent over $5 billion last year alone on housing assistance in many different forms. That includes the accommodation supplement, subsidies for income-related rents for people in social housing, emergency housing grants, transitional housing, and initiatives to address homelessness.
Each new government programme has begat another government programme; and they have grown like mushrooms.
The system is complicated, confusing, and often duplicative.
Most importantly, it is extremely expensive.
If that $5 billion stays flat over the 4-year budget period, the Government will spend over $20 billion on helping people to be housed.
That’s 15 Transmission Gully motorways, or around seven New Dunedin Hospitals – an astonishing amount of money to spend every four years.
Every dollar spent on subsidising rents is money that can’t be spent improving our education system or on fixing the health system.
I recognise there will always be some people who require housing support no matter how affordable the general market is – and that’s OK. But improving housing affordability will significantly reduce the demand on the government for housing support.
The third reason to fix housing is the moral case.
Something has gone very wrong when home ownership is at record lows in a country that used to pride itself on being a property-owning democracy.
Something has gone very wrong when so many New Zealanders and their families look overseas in search of more affordable housing.
One of my staffers was at an Auckland bar last Saturday and overheard a young couple reacting to someone who said they owned two houses.
It went something like: “Wow, you must be so rich”, and “It’s too hard to buy a home in New Zealand for us”.
Conversations like this happen every day across many bars.
Then, suddenly, you have a generation of young people ready to leave a country that did not make room for them.
The simple truth is that young people today just don’t have the same opportunity to get into the housing market as their parents did, or their grandparents.
In 2002, New Zealand’s housing market met the widely accepted international standard of housing affordability, with the ratio of house prices and wages at 3:1.
Now, house prices outstrip wages by around 6:1.
Fundamentally this is an issue of intergenerational equity.
So – economic, fiscal, and moral – that’s my case for changing housing in New Zealand.
Fixing the housing crisis
This Government is committed to solving our decades-long housing crisis, and we are making good progress:
Rents are flat and more affordable, the social housing register is down by around 6,000 applicants, and the share of first home buyers in the market was at record levels at the end of last year.
Our going for Housing Growth policy is about fixing the fundamentals and is focused on three pillars:
Pillar One: Freeing up land for urban development, including removing unnecessary planning barriers
Pillar Two: Improving infrastructure funding and financing to support urban growth
Pillar Three: Providing incentives for communities and councils to support growth.
I’ll quickly run through where we are at on each.
In 2024, we made decisions on Pillar One which includes Housing Capacity Targets for Tier 1 and 2 councils to “live-zone” 30-years of housing demand, making it easier for cities to expand, strengthening intensification provisions in planning rules, requiring councils to enable mixed-used development, and abolishing minimum floor areas and balcony requirements.
Our RMA reforms are crucial for delivering this, as most of these changes will be operationalised through the National Instruments established by the Planning and Natural Environment Bills.
My intention is for the Planning Act to enable competitive urban land markets – where development opportunities are abundant and land prices reflect underlying development costs and demand, instead of reflecting artificial scarcity.
This means more greenfield development and more density – the up and out approach.
I also know that land supply is only part of the solution. We also need better tools to fund the enabling infrastructure that makes new housing possible.
In 2025, we progressed two key improvements to Pillar Two:
We introduced the Infrastructure Funding and Financing Amendment Bill which will make it easier for developers, councils, and other infrastructure providers to use the Act to deliver projects free from local authority funding and financing constraints.
And we released an exposure draft of the Local Government (Infrastructure Funding) Amendment Bill, which will replace Development Contributions with a new Development Levies system. The new system will give councils greater flexibility to recover the costs of growth to match our new flexible planning system.
To ensure this new flexibility is used appropriately, the Government has also agreed, in principle, to the Commerce Commission becoming the regulator for Development Levies.
PC120
That brings me to Plan Change 120 (PC120) – Auckland Council’s amendments to the Auckland Unitary Plan.
I know PC120 has been divisive.
So today, I want to do three things:
Set the record straight on PC120.
Assure Aucklanders that we have listened to their feedback.
Recommit to growth together.
So, how did we get here?
Let’s start at the beginning.
Auckland Unitary Plan (2016)
Following the amalgamation of Auckland’s local councils in 2010, the John Key-led National Government passed special legislation requiring Auckland Council to develop a consistent set of planning rules for the whole region.
That’s where the Auckland Unitary Plan, or AUP comes in.
After holding over 250 public meetings, receiving 21,000 pieces of written feedback, 13,000 submissions; and standing up an Independent Hearings Panel, which held 249 days of hearings across 60 topics and considered over 10,000 items of evidence –
Auckland Council made decisions on the AUP, and it was made operative in November 2016.
Overall, the Plan upzoned approximately 75% of Auckland’s urban land. This presented economic researchers with a rare opportunity to study the causal effects of major zoning reforms.
Auckland is now home to one of the most well-studied examples of zoning reforms globally. Places like New York, London, and Ireland have been looking to Auckland for how to make their cities more affordable.
Ryan Greenway McGrevy (2023) found that upzoning from the AUP led to an additional 43,500 consents within six years – precipitating a boom in housing construction.
Further work from Ryan and Yun So in 2024 found that the AUP made housing more affordable. Aucklanders are paying around 30% less in rent than they otherwise would have if the city had not upzoned.
These studies were later peer-reviewed by Stuart Donovan and Matthew Maltman where they concluded that:
“There is remarkably robust evidence that zoning reforms increased housing supply and reduced rents in Auckland.”
So, you don’t have to take my word for it –
Thanks to these fantastic kiwi academics, and those who paved the way for them (like Edward Glaeser and Joseph Gyorko), there is now a mountain of empirical evidence that the AUP worked.
National Policy Statement on Urban Development (2020)
Building on the AUP, the previous Labour Government introduced the National Policy Statement on Urban Development (NPS-UD).
The NPS-UD is a key tool in our growth agenda and directs councils to remove overly restrictive planning rules and to allow for growth up and out – particularly in locations with good access to existing services, public transport, and infrastructure.
I want to acknowledge Phil Twyford’s work on this.
The NPS-UD was a great starting point, but this Government is committed to going further to help create competitive urban land markets and abundant development opportunities.
We are doing this through RMA reform and our Going for Housing Growth programme, which I touched on earlier, and includes strengthening of the intensification provisions in the NPS-UD.
Medium Density Residential Standards (2021)
The previous Labour Government also introduced the Medium Density Residential Standards (MDRS), which enabled a “3×3 rule”, generally allowing three dwellings of three storeys on each section.
Most councils have changed their plans to include the MDRS. But for cities like Auckland that have significant variations in housing demand by location, the MDRS was a blunt, one-size-fits-all tool.
Housing capacity is not created equal.
A section near amenities and close to Auckland CBD could have demand and be commercially viable for a hundred apartments, whereas a flood-prone section could have next to no demand.
Having both sections subject to the MDRS is a wasted opportunity.
This Government’s approach to make room for growth is to:
Set minimum dwelling capacity targets based on population growth.
Mandate capacity where it makes sense and is more likely to turn into actual housing like around rapid transit nodes.
And to otherwise return local decision making to councils on where growth is enabled.
Although there has been some back and forward, the direction of travel is clear. Taken together, the AUP, NPS-UD, MDRS, and this Government’s Going for Housing Growth polices represent over a decade of progress in New Zealand’s housing policy.
PC120 is the next step.
National’s policy in 2023 was to make the MDRS optional for councils. When I became Housing Minister, Auckland Council asked me to let them withdraw from Plan Change 78 (PC78) because it required the MDRS all over Auckland.
They also wished to downzone areas where there are flooding and coastal inundation risks.
We then came to an agreement – Auckland could opt out of the MDRS, but they would keep overall housing capacity at the same level or more as it would have been if PC78 was “turned on”, but Council would rejig and improve where that capacity is located.
To help with that, Parliament legislated to require large upzoning near five key stations benefiting from CRL, so that existing and new Aucklanders could make the most of our $5.5 billion public transport investment – alleviating congestion, reducing travel times, and boosting growth and productivity.
Giving Auckland more flexibility was the right thing to do.
This replacement plan change is PC120.
Many of you must be thinking – what about the Central Government target of building 2 million homes?
It doesn’t exist.
The 2 million figure is derived from Auckland Council’s own modelling in 2025, which concluded that PC78 would have enabled capacity of around 2 million dwellings.
So, based on the equivalency requirement I’ve just talked about, PC120 would also enable capacity for around 2 million homes.
It sounds like a lot, but capacity counts the number of theoretical homes if every site were developed to its permitted maximum – where in reality, only a fraction of capacity is ever built.
For instance, as at 2025, the AUP has capacity for 1.2 million dwellings. But 10 years on from the AUP going live, only around 100,000 homes have actually been built.
Capacity simply means the ability to develop housing.
Capacity may or may not get taken up depending on a range of factors including commercial feasibility, and infrastructure availability and costs.
Zoning for more dwellings than is technically needed is the bedrock of achieving affordable housing because it reduces the artificial scarcity of urban land, supresses prices, and increases competition.
The idea is to give developers and builders lots of choice and, based on demand, the market works out where it is best to build.
So, to dispel the myth –
PC120 wouldn’t mean two million more houses would get built.
PC120 also won’t mean houses getting built without appropriate infrastructure. In fact, PC120 focuses development on areas best served by huge, city-shaping infrastructure investments like CRL, the Central Interceptor, and hundreds of millions being spent on three waters upgrades.
To be frank, the 2 million number was a red herring that transformed into a lightning rod.
But there is a lesson in that, and one I’ve personally learned from.
It’s clear a lot of Aucklanders are concerned about what growth means for them. That’s completely understandable. People want to know that their suburbs will continue to be liveable. That is what Government wants too.
This kind of angst in Auckland isn’t helpful for our housing goals. We need people to come with us on the journey of more capacity and more housing.
We hear you and we are ready to act.
Changes to PC120
So, today I can announce Cabinet has agreed to legislate to soften the housing capacity equivalency requirement.
Currently, that number equates to at least 2 million, and we are lowering it to at least 1.6 million.
Right now, the AUP enables capacity of 1.2 million additional homes.
The Government’s view is that 1.6 million is the midpoint between the 1.2 million housing capacity enabled by the AUP, and the 2 million that would have been enabled by PC120 (as currently notified).
This reduction is significant and strikes an appropriate balance between those Aucklanders concerned about densification, and those who wish to see more growth.
Early analysis from Auckland Council suggests that compared to PC78, PC120 would have seen up to 20% more development capacity being turned into actual houses. This is because PC120 targets capacity in places where people want to live, that are more commercially viable, and that have better infrastructure capacity – like in town centres and near transport hubs.
Going from at least 2 million to at least 1.6 million does reduce minimum housing capacity by around 20%, but this is in the context of a stronger Plan Change that could see a 20% increase in planned housing turning into real housing.
PC120 is a stronger Plan because of the Government’s and Auckland’s shared objective of upzoning around key CRL stations, and shared commitment to the NPS-UD. We are not backing away from these bottom lines.
On the process from here – Cabinet has asked for a summary of the provisional zoning changes the Council would make once we legislate. And once we legislate the lower housing capacity number, the rest is in Auckland Council’s hands.
The Council will determine which parts of Auckland they wish to downzone in PC120. They can then formally withdraw parts of PC120 from the Plan Change, except for those parts needed to implement the NPS-UD or to upzone around key CRL stations.
We are legislating in the middle of a plan change process that is already underway, so it is quite legally complicated, but we have devised a way through that will allow Aucklanders to see the areas that will be removed from PC 120 and provide another opportunity for Aucklanders to have their say – including those who have already submitted on PC120 and others who would like to join.
I want to stress that I am determined to put this issue to bed once and for all. Auckland has been struggling with an update to the AUP since 2021. I accept Parliament hasn’t helped, but it’s now 2026.
I think we’ve now got the balance right.
The new Plan will mean more growth around the areas that make the most economic sense and where there is the most support – CRL stations, rapid transit stations, metropolitan centres.
And it means more flexibility for Auckland around suburban Auckland.
I also want to talk about the CBD.
While PC78 increased capacity in the city centre, the Government believes there remains significant unrealised potential.
Existing provisions, such as setback requirements, tower dimension controls, and height limits, constrain development and should be revisited.
Enabling more growth in the city centre will unlock productivity and increase the benefits of CRL even further.
However, for largely unfathomable RMA legal reasons, the City Centre Zone is not included in PC120, and the Council does not have a simple mechanism to unlock this potential.
Therefore, Cabinet has agreed that I will start an investigation into these planning provisions that are holding back Auckland’s city centre, with a view to making regulations under the RMA – similar to what we have just announced for Eden Park.
My intention is that any additional housing capacity enabled in the city centre will count towards the new requirement to provide capacity for at least 1.6 million dwellings.
Together, these changes announced today will provide Auckland Council greater flexibility to respond to the feedback of Aucklanders and tackle our housing crisis.
I have no doubt we can do both.
So, what does this look like in practice?
It will likely mean less growth enabled in suburbs while keeping capacity enabled around CRL stations, other train stations, busways, metro centres, and the CBD.
The evidence is clear – well connected growth drives productivity.
I’m grateful to have an advocate of housing and urbanism in Mayor Wayne Brown who backs density like I do.
And that’s important because ultimately, PC120 is Auckland’s Plan – not the Government’s.
We set the guardrails, and – rightly – Auckland Council largely decides where and how growth occurs.
What sort of Auckland are we trying to build?
Before I wrap up, I just want to take a step back and reflect on the Auckland we are trying to build.
This Government’s ambition for Auckland is that it is allowed to grow and become an international, world-class city.
This means:
a growing rapid transport network, so people can get where they need to go faster and have more transport choices,
growing housing capacity and supply, so people have more choice where and in what type of home they live in,
a growing events calendar, so people can play as hard as they work, and
a growing and more productive economy.
That’s what we’re about as a Government: growth.
Conclusion
Today’s announcement is a confident step forward on increasing housing capacity in Auckland.
We heard Aucklanders’ feedback, and we have answered.
Softening the housing capacity requirement strikes an appropriate balance between those Aucklanders concerned about densification, and those who wish to see more growth.
Some people will think this doesn’t go far enough to protect their suburbs; others will think we have taken a step back on housing affordability.
But I’m sure we can all agree that Auckland could debate this question – and this number – for a lifetime and get no closer to a remotely agreed-on decision.
At some point someone needs to make a call and move forward.
We need people to come on the journey of more growth, and that’s what these changes help do.
Although New Zealand has gone back and forward on housing, the direction of travel is clear.
Taken together, the AUP, NPS-UD, MDRS, upcoming Going for Housing Growth policies – and now – PC120 represent over a decade of progress in New Zealand’s housing policy.
I am absolutely committed to continuing that progress step by step – it’s why I get up every morning.
It’s my strong view that if we can fix housing there is nothing, nothing that we can’t fix together as a country.
Thank you.