Lessons Learned from New Zealand’s Density-Zoning Changes

Editor’s Note: This article was written for the June 2024 issue of the Blueridge Bulletin. It is archived here as part of our coverage of the SSMUH issue. Our documents about that topic are all archived here.

Lessons Learned from New Zealand’s Density-Zoning Changes
Jim Hanson, Councillor, District of North Vancouver

Recent provincial legislation (bills #44 and #47) brings a new era of higher-density zoning across our province. The aim of this legislation is to require local governments to permit multiplex housing on lands previously zoned for single-family housing (Bill #44) and to permit significant densification near transit zones (#47). The aim of the legislation is to increase the supply and diversity of housing and improve affordability.

The escalating cost of housing is a worldwide problem. New Zealand, for example, has for years experienced housing costs that are challenging for many to afford. New Zealand’s major city, Auckland, ranks just behind Vancouver as one of the world’s least affordable communities on a price-to-income basis. Like British Columbia, New Zealand has a long history of prioritizing single-family zoning and a preference for single-family housing as a way of life for families.

Of importance for policymakers in British Columbia is the fact that starting in 2016, New Zealand introduced legislation similar to our Bills #44 and #47. The Auckland Unitary Plan of 2016 upzoned three quarters of its residential areas to allow higher-density housing, while in 2021 the New Zealand national government passed sweeping zoning reform that effectively abolished single-family zoning throughout most of the country’s major cities.

So what has been the result? While it is true that differences in geography and local economic factors will inevitably influence the outcome of any such zoning reform, we can reasonably look to New Zealand to give us some perspective on the likely impacts of Bills #44 and #47. In terms of New Zealand’s affordability ranking, there is some reason to believe that the changes have improved housing affordability in Aukland. While Auckland was ranked as the 4th least affordable city worldwide in 2016, it was the seventh least affordable in 2022. Vancouver, meanwhile, held its ranking as the third least affordable city throughout this time frame.

In Auckland these changes have been associated with an increase in residential construction, notably a major rise in attached and medium-density units (building permits in the city increased from 6,000 in 2015 to 14,300 in 2020). Another outcome has been an increase in housing construction in areas closer to the city centres and in areas with better public amenities, notably neighbourhoods with better transit.

While the analysis can only be preliminary at this stage, given the time lags involved between zoning changes and residential construction, it would seem that in New Zealand the greatest impacts have been in areas with the greatest development potential (near to the city centres, close to transit and services) while the farther out suburbs have seen the least impact. In the areas that are most desirable for redevelopment (near transit and amenities), there has been an escalation in land costs with developers bidding up prices.

In the short term, the biggest economic winners from the zoning changes have been owners of older single-family homes near transit who have seen a further escalation of their land values. At the same time, research indicates that renters and those seeking affordable ownership options have found some price relief as a result of these reforms.

Based on the New Zealand experience, we can expect Bills #44 and #47 to result in more housing and eventually lower costs on a relative basis, but positive price impacts will not occur quickly. With this increased housing supply will come increased populations, with more demand on essential services and infrastructure, more traffic congestion, greater demands on public transit, busier hospitals, to name only a few impacts, with taxpayers footing the bill for necessary upgrades and expansions.

In the years that follow, we will be better able to assess the full impacts of this higher density and its consequences for both the economics and broader livability of our communities, positive and negative. In the short term, we need to pursue different strategies if we wish to address immediate issues of affordability and homelessness.

For my part, I will speak out for a collaborative approach between provincial government and local government on housing issues and for making sure that the housing we are building is the housing we most urgently need.