National policy statement on urban development

This is about ensuring New Zealand’s towns and cities are well-functioning urban environments that meet the changing needs of our diverse communities. It removes overly restrictive barriers to development to allow growth ‘up’ and ‘out’ in locations that have good access to existing services, public transport networks and infrastructure.

Official title

National Policy Statement on Urban Development 2020

Lead agency

MfE and Ministry of Housing and Urban Development

In force from

20 August 2020

What it does

The National Policy Statement on Urban Development (NPS-UD 2020) recognises the national significance of:

  • having well-functioning urban environments that enable all people and communities to provide for their social, economic, and cultural wellbeing, and for their health and safety, now and into the future
  • providing sufficient development capacity to meet the different needs of people and communities.

A3 graphic on the NPS-UD 2020 (PDF, 7.27 MB)

Why it is needed

Some urban areas in New Zealand are growing quickly. To support productive and well-functioning cities, it is important that there are adequate opportunities for land to be developed to meet community business and housing needs.

The 2015 Productivity Commission inquiry into Using land for housing recommended that a national policy statement could help address the constraints on development capacity in the resource management system. The NPS-UDC 2016 formed part of the Government’s response to the Productivity Commission recommendations.

Using land for housing [New Zealand Productivity Commission website]

In September 2017, the Government established the Urban Growth Agenda (UGA). The UGA is a programme that aims to remove barriers to the supply of land and infrastructure and make room for cities to grow up and out. The NPS-UD 2020 contributes to this. It does this by addressing constraints in our planning system to ensure our system enables growth and supports well-functioning urban environments.

Urban Growth Agenda [Ministry of Housing and Urban Development website]

Consultation held on the proposed NPS-UD 2020

As part of the UGA work, the Government consulted the public on the proposed NPS-UD 2020 from 21 August to 10 October 2019.

Visit on the National Library website archive Planning for successful cities – our proposal, your views

What it requires

The NPS-UD 2020 requires councils to plan well for growth and ensure a well-functioning urban environment for all people, communities and future generations

This includes:

  • ensuring urban development occurs in a way that takes into account the principles of the Treaty of Waitangi (te Tiriti o Waitangi)
  • ensuring that plans make room for growth both ‘up’ and ‘out’, and that rules are not unnecessarily constraining growth
  • developing, monitoring and maintaining an evidence base about demand, supply and prices for housing and land to inform planning decisions
  • aligning and coordinating planning across urban areas.

The NPS-UD 2020 contains objectives and policies that councils must give effect to in their resource management decisions.

Not all NPS-UD 2020 objectives and policies apply to all councils

The objectives and high-level policies of the NPS-UD 2020 apply to all councils that have all or part of an urban environment within their district or region. However, some policies apply only to tier 1 or tier 2 councils.

The Introductory guide to the National Policy Statement on Urban Development outlines what objectives and policies apply to which councils and the timeframes for implementation.

Introductory guide to the National Policy Statement on Urban Development

Guidance on implementation

Development feasibility tool

Development feasibility tool — see Guidance for local authorities [Housing and Urban Development website]

This tool can help local authorities determine how much of the development capacity for housing allowed in plans would be commercially feasible to develop in the current market. It takes into account the costs and revenue associated with developing land or homes of different types, size and locations. The tool can be used on a standalone basis to understand the development feasibility of representative sites in specific greenfield or brownfield areas. Alternatively, it can help councils to build their own development feasibility model. Analysing development feasibility is an essential part of the housing and business development capacity assessment and basis for ensuring that plans provide sufficient feasible capacity.

 

Urban development dashboard

Urban development capacity dashboard [Housing and Urban Development website]

The dashboard and accompanying guide, technical reports and raw data are provided to help local authorities to give effect to the National Policy Statement on Urban Development (NPS-UD), particularly subpart 3 – Evidence-based decision making and Subpart 5 – Housing and Business Development Capacity Assessment (HBA). The dashboard will help ensure that local authorities have robust and frequently updated information about their urban environments that they can use to inform planning decisions.

Market indicators included on the dashboard

  • Residential building consents compared to changes in household numbers
  • Dwelling sales prices
  • Dwelling rents
  • Ratio of dwelling sales prices to rents
  • Dwelling sales volumes as a percentage of total residential stock
  • Land value as a percentage of capital value
  • The Housing Affordability Measure (HAM).

Price efficiency indicators included on the dashboard

  • Price-cost ratios, which compare the extent to which construction costs or land costs contribute to house prices
  • Rural-urban differentials for residential land
  • Industrial zone differentials
  • Land concentration control indicators.

Indicators are available for each extended urban area and in some cases for territorial authorities, wards and area unit. The dashboard information will be updated quarterly (with price efficiency indicators being updated less frequently as new data is made available).