Ministers were warned Auckland intensification roll-back could worsen affordability. They did it anyway
Friday, 3 April 2026
Officials warned the Government’s plan to cut Auckland’s housing capacity requirement could worsen affordability, push up rents and house prices, and did not clearly deliver net benefits - but ministers pushed ahead anyway.
The warning, contained in a regulatory impact statement from the Ministry of Housing and Urban Development and the Ministry for the Environment, was written before the Government went further this week and cut the minimum requirement again, from 1.6 million homes to about 1.4m.
That was the second reduction in six weeks, after Housing Minister Chris Bishop earlier backed down from the original requirement for Auckland to enable capacity for up to 2m homes.
This figure became controversial, with Bishop calling it a “lightning rod”.
Read more:
The number comes from Auckland Council’s work known as Plan Change 120, which is a Government requirement. PC120 enables more townhouses in the city’s inner suburbs and allows for six to 15 storey apartment buildings along rail lines and some bus routes.
In advice to Bishop, officials said their preferred option was to keep the existing 2m homes requirement.
While that figure was well above projected population growth they said that level of headroom supported a more competitive land market and improved the chance enough homes would actually be built in practice.
The document said cutting that capacity came with clear affordability risks, including “the risk of higher house prices and rents associated with reduced housing capacity”.
It also warned that lowering Auckland’s capacity would likely reduce the supply of developable sites, intensify competition for the land that remained, and have “possible implications for rents and house prices”.
Areas downzoned relative to Plan Change 120 as notified could lose development opportunities, while competition for city centre land could intensify, they said.
Officials were blunt about the minister’s preferred option.
“The costs and benefits of the preferred option do not clearly stack up.”
The trade-off, they said, was flexibility.
The change would “provide sufficient flexibility for Auckland Council and hearings panel to respond to submitter feedback and evidence”, including concerns about infrastructure, natural hazards and neighbourhood character.
The Government first cut the target from 2m to 1.6m after backlash from some councillors, constituents and ACT.
The Post has also previously reported that Christopher Luxon made the captain’s call to lower the figure after pressure from his Auckland MPs.
That resulted in Bishop walking back the policy to 1.6m in February. But this week he slashed it again to 1.4m - noting upzoning around City Rail Link stations and the National Policy Statement on Urban Development requirements would enable about 1.6m homes anyway.
In announcing the watered down policy, Bishop said it was his expectation that the “revised number finally brings consensus on this important issue”.
In their impact report, officials noted they did not have access to the roughly 10,000 submissions on PC120.
But they said public commentary suggested many Aucklanders supported intensification in the “right places” — particularly around the city centre and rapid transit — while opposing it in areas with infrastructure constraints, hazard risks, or concerns about neighbourhood character.
They also warned that repeated changes to capacity settings could undermine certainty, weaken Auckland’s competitiveness, and cause developers, investors and landowners to hold back.
And the proposal would have “clear distributional impacts”, they said, with some landowners losing development opportunities while reduced overall capacity could increase scarcity and competition across the city.
There was also a process cost — which according to Auckland Council figures is already substantial.
The supercity has been in planning limbo for five years, has spent $13 million on the process, assigned 55 full time staff, and is working through a record 10,500 public submissions.
“Introducing legislative change while a plan change process is underway creates a number of risks,” officials warned.
The hearings panel had already been appointed, submissions had closed, and the process was advancing.
Reopening parts of it to accommodate a lower target would impose extra cost, additional work and possible delay, while adding further uncertainty for landowners and developers.
That concern has also been raised by Auckland Mayor Wayne Brown who said on Monday that the latest shift was “awkward for staff, it’s awkward for the commissioners, it’s awkward for the process”.
He said repeated Government intervention had slowed intensification rather than sped it up.