Urban and Housing Policy

National Policy Statement - Urban Development Capacity

M.E has been closely involved in research and developing methods to assist councils comply with the NPS-UDC. 

We have assisted high growth councils to prepare their Housing and Business Assessments (HBAs), and our team has contributed in key workshops with MBIE, MfE and growth councils, providing advice and ideas on methods and interpretation of findings. While the NPS-UDC offers a number of positives for urban planning, we have concerns about key provisions which require councils to assess residential capacity based only on the current feasibility of housing development, and the implicit assumption that market conditions and prices will not change over the next 30 years even though cities will experience substantial population and business growth, with the urbanisation of significant areas of land.   M.E has prepared a discussion paper on this issueDownload M.E's Discussion Paper:

M.E NPS-UDC Discussion Paper v2 M.E NPS-UDC Discussion Paper v2 (780 KB)

Urban Growth Agenda 2018

Underpinning the Urban Growth Agenda and the earlier NPS-UDC is the premise that our land markets are inefficient, and that is the cause of high housing prices. We have examined the underlying economic rationale for that Inefficient Markets premise – based on the Marginal Opportunity Cost (MOC) theory and the view that urban land should cost no more than rural land plus allowance for infrastructure and land development, and the value of convenience from co-location with urban services. We have deep concerns about that premise, because it depends on the notion that land values are not related to either potential land use or to location – which is directly at odds with inter alia economic theory and principles of valuation. These concerns are set out in the Paper Inefficient Markets – the Basis for New Zealand’s Urban Policy published in the NZPQ (March 2019) Download M.E's Paper:

M.E Urban Policy Paper M.E Urban Policy Paper (530 KB)

M.E Submission on Proposed NPS on Urban Development M.E Submission on Proposed NPS on Urban Development (352 KB)

Making Room for Growth

The Minister of Housing recently (April 2019) set out his Making Room for Growth initiative, with its key objective “..to bring down urban land prices by flooding the market with development opportunities.” He intends to “break the current land market model” where planning and infrastructure financing have created an “artificial scarcity of land”, and led to an Auckland market characterised by “land banking and speculation”. Planning has “stopped our cities growing up, preventing efficient land use, blocking … more affordable housing options”. The Minister intends to “replace the Urban Growth Boundary with a more expansive approach to spatial planning.” 

M.E examined the rationale for this latest initiative, and found it too is based on the premise of an inefficient land market. The shortcomings and implications of the economic rationale for that premise, are set out in the latest Paper Making Room for Growth – a strategy founded on poor economics, which can be read here.

Making Room for Growth Making Room for Growth (237 KB)



M.E has examined housing affordability matters in considerable detail, and we developed first the capability to directly link household demography and income and tenure with property value and type. That sets out the key structures of household demand for dwellings at the city and suburb level, and offers the basis for projecting future demands. We have studied the KiwiBuild initiative in detail, to identify which non-owner households can both be eligible for a KiwiBuild dwelling and qualify for finance from a lending institution. We have also examined the longer term implications for the housing and private rental market of a 100,000 dwelling KiwiBuild outcome, as well as what it means for construction.  

Housing Ownership

We have examined the vexed issue of overseas ownership within the New Zealand residential property market, drawing from the most recent statistics nationally and by region within New Zealand. 

For queries or comments on

 M.E's discussion document contact 
Douglas Fairgray

For queries or comments on

M.E's discussion document contact 
Douglas Fairgray