(Jointly authored with Evan Roberts at the University of Minnesota and cross-posted at Streets.mn with fancier pictures!)

Exciting things are happening in New Zealand! In particular, for the world of zoning reform and municipal relations to higher orders of governance. No, don’t stop reading there. It’s exciting, we promise!

As with many jurisdictions around the world, especially in the Anglo-sphere, New Zealand has been struggling with a housing affordability crisis for much of the past two decades. Housing prices began a sustained rise around 2002, which contented successive governments from both sides of the political spectrum through around 2010 since rising prices benefited incumbent owners. In the last decade the downsides to persistent rapid rises in housing prices have been recognized, but policy changes were largely limited to financial and macroeconomic levers. After experimenting with a variety of policies (many of which would be familiar to BC, like NZ’s much-touted “foreign-buyer ban“), New Zealand has continued to see its prices rise. Largely in response, and under Jacinda Ardern’s progressive Labour Party government, New Zealand recently and decisively turned its attention toward increasing housing supply. Under the National Policy Statement on Urban Development 2020 (NPS-UD), launched last summer, New Zealand has focused on reforming the role of municipal planning, which the national government has identified as a special hindrance limiting new construction. To quote directly:

Constraints in the planning system have made it harder for people to build and live in the homes they want, where they want. This has led to high land prices, unaffordable housing, and a system that incentivises land banking and speculation. It has also resulted in people having poor access to employment, education and social services. This impacts most on our poor, vulnerable and younger generations.

NPS-UD 2020 Expected Outcomes

We strongly suspect that New Zealand is not the only jurisdiction where constraints in the planning system might be causing trouble. So let’s have a look at New Zealand’s reforms, and consider how they might be applied to municipal relations with higher orders of governance elsewhere. In particular, we’ll be highlighting Vancouver, BC and Minneapolis, MN.*

Cross-jurisdictional comparisons

Though their powers and specific structures as country, province, and state remain distinct, it’s also conveniently the case that New Zealand, British Columbia, and Minnesota are all just about the same size as jurisdictions, at approximately 5 million people each. Levels of urbanization are similar in British Columbia and New Zealand (>85%), though the rural population of Minnesota is larger (25%). Finally, the period of Anglo colonial settlement for all three jurisdictions is similar, dating to the mid-nineteenth Century, meaning urbanization is also relatively new, and cities have largely built out in response to the rise of the automobile and the contemporaneous spread of the planning profession.

Set against these similarities though are some important differences. British Columbia and New Zealand have both seen sustained high levels of immigration from Asia, and a corresponding public association between housing price rise and recent immigrants. While the Minneapolis metropolitan area has grown in population size, the composition has differed with internal migration from other parts of the United States playing a larger role. Vancouver and some of the major New Zealand cities also face greater topographical constraints on building than the small undulations and lakes left on the Minnesotan landscape by receding glaciers. Consequently Vancouver, Wellington and Auckland start out as significantly denser cities than Minneapolis and its suburbs.

Finally, political structures and traditions play an important role in the relationship between municipal governments and their national or sub-national overseers. British Columbia and New Zealand both operate in the Westminster tradition with a unicameral parliament, and a greater assumption of provincial or national ascendancy over municipal actions. The American traditions of localism are stronger in Minnesota, although the legal supremacy of the state over the municipality is clear in law.

Models for Municipal Planning Reform

Returning to what New Zealand might offer, let’s start by laying out a simple framework for thinking through three strategies for municipal planning reform. First, municipalities might be entrusted to reform themselves. Second, municipal planning targets might be more carefully subject to oversight by higher orders of government, applying structured incentives (carrots and sticks) for municipalities to use their existing powers better. Third, municipalities could be stripped of certain exclusionary powers altogether. Where Vancouver and Minneapolis provide interesting examples of the promise and limits of municipal self-reform, New Zealand provides a case for higher level reform integrating restructuring of planning targets with the stripping of exclusionary powers.

Municipal Self Reform	Planning Targets Reform	Planning Powers Reform
No State/Provincial Role	State/Provincial Oversight & Incentive Role	State/Provincial Constraining Role
Examples: Vancouver “Suited Duplex” & Minneapolis “Triplex” Reforms	Examples: New Zealand Housing Target & Planning	Examples: New Zealand Lifting of Parking Requirements & Sub-Six Floor Caps

Vancouver and Minneapolis are great cases to think about in part because each municipality has had some success in reforming its lowest density zoning, theoretically opening up opportunities for more housing. In Vancouver’s case, it recently legalized up to four dwelling units across most of its RS “residential single-family” lots (up to two owner-occupied, with each potentially containing a separate rental suite). Minneapolis famously made triplexes legal across most of its low density zoning. In this sense, both Vancouver and Minneapolis are North American examples of where municipalities can reform themselves, making extra density an option. Comparatively speaking, New Zealand’s municipalities also offer much of this kind of infill density, in addition to small lot sizes (300-400 square meters) and minimal setbacks. Yet other constraints in local zoning codes (including, for instance, strict floor space limits in Vancouver and minimum lot sizes in Minneapolis) have prevented a great deal of uptake for new options so far. In all jurisdictions it’s become clear that more new options are needed, especially those enabling expansion of multi-family apartment buildings. Here, despite public opinion broadly in support of existing and deeper reforms, there appear to be real and continuing limits to municipal predispositions and powers to reform themselves.

In terms of predispositions, municipal politics are often poorly representative. Relatively few residents vote in municipal elections. By contrast, Provincial, State, and Federal authorities generally speak for broader electorates. For instance, voter turnout for the most recent election in the City of Vancouver (39%) ran far below those for recent elections in the Province of BC (55%), and Canada (67%) as a whole. The disparities are even more striking in New Zealand, where just 35% of Aucklanders and 40% of Wellingtonians voted in the 2019 municipal elections, but 82% showed up in the 2020 national elections. Even fewer residents show up to participate in municipal processes, including hearings on rezonings and bylaw changes. Both those who tend to vote and show up at hearings skew older, wealthier, and whiter. Full participation also generally remains limited to those who have already secured housing within a municipality, excluding, by default, non-residents who would like to join but can’t find a place to live. Overall it’s relatively easy for municipal politics to become captured by those most resistant to change and greater inclusion. Municipal powers tend to match these predispositions, oriented toward embedding exclusion within zoning codes.

Though it’s not the only jurisdiction to do so, New Zealand’s NPS-UD 2020 offers a nice and ambitious model for taking on both municipal predispositions and powers, filling out our other two paths to reform above. In terms of predispositions, the NPS-UD clearly mandates an overhaul of municipal housing targets and ties them to specific pre-zoning and infrastructural readiness for the construction of more housing, while leaving many details for where new housing should go to municipalities. At the same time, In terms of powers, the NPS-UD also takes away some municipal discretion in targeting the specific powers that have caused the most problems for adding new housing, in particular parking requirements and height limits near major transit investments. The graphic below highlights these and other changes in an accessible form (click for source and larger size!).

Let’s have a look at Target setting in further detail. Here, NPS-UD 2020 follows upon an earlier NPS on Urban Development Capacity from 2016, which attempted to create mechanisms bringing accountability to municipal planning for housing. Crucially, while the earlier policy statement remained relatively vague on details and specific incentives, NPS-UD 2020 makes plain that municipalities are to provide estimates of Urban Development Capacity in terms of new dwellings that are:

a) plan-enabled; and

b) plan-enabled and infrastructure-ready; and

c) plan-enabled, infrastructure-ready, and feasible and reasonably expected to be realised.

NPS-UD 2020, Section 3.25

Development capacity is to be linked to a Housing Demand Assessment, with specific reference to market indicators and needs of a variety of communities. Where Development Capacity fails to meet Housing Demand (plus an appropriate “Competitiveness Margin”), municipalities are to analyze what’s going wrong, identifying constraints as inherent to planning or infrastructure. Where infrastructure is identified as a problem, funding from the Housing Accelerator program can be leveraged to assist municipalities, offering a carrot. If municipal authorities continue to drag their feet, the government has also discussed suspending further municipal review and powers, brandishing a stick.

In addition, the NPS removes some existing municipal powers, particularly for the biggest “Tier 1” urban areas. In all municipalities, planning should remove minimum parking regulations, accept as they pertain to accessibility (policy 11). For Tier 1 urban areas, within walking catchments of rapid transit, city centres, or metropolitan centres, building height limits are not to be capped below six storeys (policy 3). Tier 1 urban areas include New Zealand’s biggest metro areas of Auckland, Hamilton, Tauranga, Wellington, & Christchurch. Of note, none of these reach the size of metropolitan Vancouver or Minneapolis-St. Paul. These are big policy moves that would have far-reaching impacts if transported over to these jurisdictions.

Other aspects of the NPS-UD 2020 are also noteworthy, including the commitment to consultation with and housing provision for Māori (objective 5 & section 3.24) under treaty obligations. The whole statement is worth a read! As of now the NPS-UD 2020 remains in the middle of implementation. Affected Councils have until 2022 to dispense with height limits, for instance. In the meantime, municipal foot-dragging and NIMBY backlash continue. Nevertheless there’s reason to believe New Zealand could provide a viable model for jurisdictions like BC and Minnesota to consider in reforming municipal planning authorities.

Takeaway

Some upper-level North American jurisdictions, like California, have reformed and seriously strengthened municipal housing targets. Others, like Oregon, have recently stripped municipalities of some of their exclusionary powers, as with zoning for single-family houses. What New Zealand does especially well is bring these strategies together and ramp them up toward greater ambition. BC already has mechanisms similar to NZ’s 2016 strategy in place, requiring municipalities to produce housing needs reports. But as recognized by NZ’s 2020 policy, it will likely require more carrots and sticks to produce results. Most recently, Canada and BC’s joint Expert Panel on Housing Supply & Affordability issued a final report arguing much the same, though it will be up to the province to implement. No upper North American jurisdiction has yet banned parking requirements (though Minneapolis and Edmonton did this at the municipal level!) or caps below six storeys near transit and city centres (though California arguably came close!) The sum of efforts points to a persistent problem: “Constraints in the planning system” are making it “harder for people to build and live in the homes they want, where they want” in a lot of municipalities, prompting higher levels of government to step in and try to fix things. New Zealand offers a welcome new model for how it might be done.

* – Where Nathan came to Vancouver, BC by way of Minneapolis, MN, Evan came to Minneapolis, MN by way of Wellington, NZ, which might also go some way toward explaining our fascination with how these three jurisdictions might speak to each other.