An American-Style Housing Crisis in New Zealand

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Car-dependent suburban sprawl. Home prices and rents skyrocketing. Brewing discontent from young people angry about being locked out of homeownership. I’m not talking about the United States—I’m talking about New Zealand.

Just as the U.S. has struggled with a housing affordability crisis, so has New Zealand. But the Kiwis have it worse. Although America still retains regional housing markets that are significantly more affordable than those of our most productive job centers on the coasts, New Zealand, like most countries, is much smaller and has many fewer metropolitan areas.

“Housing politics is local,” is a common refrain in the U.S. Sometimes it comes from local elected officials being territorial over their considerable land-use authority, but sometimes it comes from federal actors who may want to wash their hands of the problem. But the Kiwis showed that intervention from federal officials was necessary to spur local governments to make it easier to build more housing.

As a result of the national government’s efforts in Auckland alone, up to 43,000 housing permits were issued over six years, yielding a whopping 28 percent reduction in rents compared with what they would have been without those changes.

In today’s episode of Good on Paper, I talk with Eleanor West, a housing-policy expert and activist from New Zealand who has been one of the most outspoken voices in trying to bring the lessons learned from her home country to the rest of the world. We talk about what our two countries have in common and the pitfalls New Zealand still faces in addressing its housing crisis.

The following is a transcript of the episode:

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Jerusalem Demsas: One of the best ways to understand policy debates happening in your own country can be to talk to people in other places. After all, if the same problem exists in both Germany and Tanzania, it can help eliminate explanations that rest on the specific languages, cultures, or practices of either country.

The housing crisis is like this. There’s a lot that’s important about the specifics of America’s history, culture, and institutions in understanding our housing crisis. But other countries have experienced housing crises, too. How they have chosen to address them can help us understand how we should act, as well.

Today’s episode is going to take us to the other side of the world: New Zealand, a country whose housing crisis rivals our own or even outpaces it. In 2019, according to one international comparison of eight wealthy, Anglophone countries, New Zealand was the country with the second-least affordable housing. The U.S. was eighth.

And similarly to the United States, New Zealand is heavily suburbanized. In fact, more than 80 percent of residents live in detached, single-family homes, 20 percentage points higher than the U.S. And again, similarly to the U.S., zoning and land-use regulations are choking the supply of new housing. So there’s a lot to compare.

But unlike the United States, New Zealand has taken ambitious, national steps to address this problem. Steps that led to a “building boom,” as economics writer Joey Politano put it. Joey compares New Zealand with two of America’s largest metro areas: the Los Angeles and San Francisco regions, which have more than three times as many people as the Pacific nation. Even so, New Zealand permitted more housing units than both cities combined last year.

The effects of these policies have been dramatic. In the places that made it easier to build more housing, rent-to-income ratios have declined, proving that building a lot more housing is both possible and a clear way to make rents and home prices more affordable.

My name’s Jerusalem Demsas. I’m a staff writer here at The Atlantic, and this is Good on Paper, a policy show that questions what we really know about popular narratives.

My guest today is Eleanor West. Eleanor is an activist from New Zealand, a former member of the Generation Zero, a youth climate-campaign group, and a housing-policy researcher who has worked to bring the example of New Zealand to the rest of the world—both the policy wins and the political pitfalls. I’m so excited to have her here.

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Demsas: Hi, Eleanor. Welcome to the show.

Eleanor West: Kia ora. It’s so great to be here.

Demsas: So New Zealand has made a series of big housing moves that have made so much noise that they’ve, I think, impacted American housing debates. As someone who’s very involved in them, I think many other people haven’t heard about this, but it culminated in sort of a big policy shift in 2021.

But I want to take us all the way back to what I think is probably the beginning of these modern policy debates, which is the 2011 Christchurch earthquake, which if folks don’t remember, that’s a really devastating natural disaster. The estimated cost was like NZ$40 billion to rebuild, not to mention, of course, all the lives lost—185 victims. It is a quite depressing place to start, but it’s the beginning of New Zealand’s modern experiments with upzoning.

So of course, Christchurch has to rebuild, and the national government steps in. Eleanor, can you take the story from there? What happens?

West: Yeah. Sure. So as you were saying, there was this massive earthquake in Christchurch, and the city lost a huge portion of its housing stock just overnight. And so immediately, house prices started spiking because there was a shortage, and we had a conservative government in at the time—the National Party—and they were very receptive to advice from economists and the New Zealand Productivity Commission that one of the ways they could kickstart the rebuilding Christchurch would be to relax the zoning regulations down there and suspend parts of the primary planning legislation to trigger developers to get involved and make it an affordable place to build.

They did that, and it worked spectacularly well. Christchurch grew out quite a lot, quite rapidly, but it meant that there was a really sudden supply shock into the market there. And consequently, house prices in Christchurch have been kind of flatlining for quite some time since then, while they’ve been skyrocketing in the rest of the country.

Demsas: Can you help put some more detail into there for us? What specifically did the government have Christchurch do?

West: Okay. So Christchurch is actually made up of multiple smaller cities. There’s Christchurch city, and then there’s Rolleston and other places around. So one of the things they did was they encouraged the city council in Christchurch city itself to raise building-height limits and allow higher-density buildings, which was mostly terraces and walk-up apartment buildings.

But something else that they did was they forced the councils in the area—so not just Christchurch but in the surrounding area, part of the metropolitan area—to rezone a bunch of rural land for housing that had always been intended to be drip fed into the planning system over the next few decades. But kind of overnight, they were like, Okay. This land that was planned to be for housing in the future is going to be for housing now, and it was just a free-for-all. Like, This land is available. You can build.

And so the city sprawled outwards because growing up was quite difficult. I’m sure you can imagine, post-earthquake, people didn’t really trust the ground. There were huge liquefaction issues that made building taller apartments challenging. There were still a lot of uncertainties about the engineering involved in that.

Something I don’t think a lot of people realize about the earthquakes that we’ve been having in New Zealand—like the Christchurch earthquake and I’m pretty sure the Kaikōura earthquake, as well—I’m pretty sure both of those earthquakes happened on fault lines that our earthquake scientists weren’t actually aware of. So it was quite an uncertain time.

Demsas: And was there a lot of opposition to trying to make it easier to build a lot more housing in Christchurch at the time? Or did everyone understand, There’s been this big earthquake. A lot of buildings have been destroyed. Obviously, we need a bunch of housing for people who were already living here? Is there that sort of synergy between local and national officials? Or why not?

West: Yeah. I’m not sure that I can talk to that with great authority, because I wasn’t very involved in this debate at the time, but my recollection of it is that the supply crunch was really felt. We went from talking about the Christchurch earthquake to talking about the housing shortage in Christchurch very quickly. And so I think people definitely recognized that this was a problem.

And people who lived in Christchurch who lost their homes, they were desperate. They were at the coalface. They wanted to rebuild. They wanted to remake their lives there. A lot of people ended up leaving the city, and I don’t think that that was always a pleasant or happy experience for them. So there was a lot of demand to make it easier to build.

Demsas: And I think this is something that—we have talked about this on the show, but I always like to go over it again: Can you just explain how upzoning leads to lower rents and home prices? And by upzoning, I mean I’m referring to exactly what Eleanor just talked about, which is just intensifying land use.

So basically, like: On a plot of land, we can say that you can only build a single-family home. But if we say, Oh, you can also build a duplex, we’ve upzoned. And if you take a piece of land where you could previously build a duplex and say you can only build a single-family home, you’ve downzoned. That’s what we’re talking about there.

But, Eleanor, how does that actually affect home prices?

West: Yeah. So if you wanted to take a really simplistic view of the housing market, you can apply the classic model of supply and demand: When supply is constrained and demand is high, there’s a lot of competition for a scarce resource, and that pushes the prices up.

So I think that that’s quite commonly understood now to be one of the key drivers for the housing crisis in New Zealand and in many other Anglosphere countries—is that there has been a huge supply shortage in recent decades. And one of the reasons why we’ve had that supply shortage is because we’ve had overly restrictive land-use regulations in our cities, that they inhibit the ability of the market to respond to growing demand.

The population of New Zealand is growing. It’s a great place to live. People want to move here. People are having kids. But a lot of our cities are very low density. They were built relatively recently during the automobile era, so it’s a lot of motorways and sprawl. And, like, the Kiwi dream is you want to have your quarter-acre section with your standalone home and your backyard, and you want to have the amenities of living in a city, but you definitely want to have a backyard.

And so for a long time, we’ve had zoning regulations in New Zealand that kind of restrict the ability to build anything other than a standalone home, usually two stories. And so as the population has grown, there’s been a lot more demand for housing, but developers haven’t been able to build housing in the places where people want to live, like the inner city, because these zones restrict the ability to build up, and there’s kind of no more space to grow out in the inner city. And so there’s just a lot of competition for these houses in the highly desirable areas. Unless we address the supply constraint, that competition is just going to keep driving prices up.

Demsas: It’s very funny to hear the Kiwi version of the American dream. It’s like, yeah, white picket fence, backyard, but also you get the amenities of having a main street with accessible amenities to you. Glad to know that’s not just an American phenomenon.

West: No. Not at all. I think that’s colonization, right? We’re all the same in our bones.

Demsas: So a few years after the Christchurch experience, Auckland does a really ambitious upzoning. Can you talk about how that went and also how Christchurch’s experience influenced what happened in Auckland?

West: Yeah. Auckland is the biggest city in New Zealand. It’s home to about a third of the population of the country. And prior to 2010, it was actually a bunch of smaller cities. And then the central government forced Auckland to amalgamate into a supercity.

And in that process, they directed the new council that was formed there, the Auckland Council—they directed them to draft a new plan for the city, encompassing all of these new satellite cities that had been incorporated into Auckland. So they could have merged their existing plans, but instead, they decided that they were going to have a fresh start and draft a completely new plan. So they started that process in about 2010, and the final plan was published in 2016.

So the first draft of the plan—I’m pretty sure that was published in 2012—was very ambitious. So the councilors had decided they wanted a big change in Auckland. And at the time, congestion was a real issue. I was just talking before about how our cities have been sprawling outward for a really long time. The primary mode of transport for most New Zealanders is their car. So congestion was crazy.

And it was a really hot-button issue—you know, getting a lot of media attention, scary headlines. That, among other issues, was really driving the councilors to want to be more ambitious about how they designed the city going forward. They had gotten very excited about this compact-city model that was kind of taking off internationally. You know, “15-minute cities” are very buzzy at the moment, but the buzz back then was the compact-city model. So they decided that they wanted to adopt this, and as a way of encouraging a compact city, they thought, Well, we’ll just raise building-height limits in the inner city. That was not well received by the population of Auckland when they released the plan.

Demsas: Why not?

West: Surprisingly, people don’t like apartment buildings popping up next door. They call them “sun stealers.” I think that’s one of the more charitable terms that people have used. But also, part of the problem is that because New Zealand cities were built really recently, the old parts of the cities—i.e. the pre-1930s character areas that are full of the beautiful wooden bungalows, a bit like San Francisco, a city that I’ve never been to, but I’ve heard it’s very similar—but these historic suburbs are really close to the inner city, which is the perfect distance to walk to work.

And these areas, in particular, because housing has been constrained in these areas due to character protections, house prices were already quite high there. And they’re quite a wealthy part of the city to be living in, and so there was a lot of organized opposition to the draft plan. Consequently, several councilors got cold feet. They’re in a really tricky position. The voter turnout in local-body elections is not high in New Zealand. It’s usually around 40 percent, and it’s pretty dominated by homeowners. So when homeowners are angry with you about something, you backpedal fast. So a few of the councilors got cold feet. They backed down. They ended up releasing another draft of the proposed unitary plan that was much less ambitious about its upzoning.

But by this point, the central government in New Zealand—we only have two layers of government really: local, central; no states. The central government, by this point, was getting really concerned about house prices. They had been rising steadily since the financial crisis. And they had been receiving advice from economists, the Productivity Commission over the years preceding—like, during the development of the Auckland Unitary Plan, I suppose—telling them that one of the drivers of the housing crisis is the supply constraints from planning regulations.

And so they really took the opportunity to pressure Auckland Council. They installed an independent hearings panel to oversee the process of developing the new unitary plan. And this panel was supposed to make recommendations to the councils—like, expert recommendations based on the consultation process and everything. And they were also pushing the council to raise building-height limits.

So the Auckland Unitary Plan that was adopted, finally, in 2016 was actually quite ambitious in the end. So it ended up upzoning about three-quarters of Auckland city, which is massive. As far as I’m aware, it’s the first case of broad upzoning in an Anglosphere country with similar planning systems to New Zealand. Yeah, so that was a pretty, pretty major change for the city that wouldn’t have happened, probably, without the central-government intervention.

Demsas: Yeah. I feel like, in the American context, we’re used to seeing a lot of headlines about, Minneapolis has ended single-family zoning, or, Berkeley tackles single-family zoning, or, Parking minimums ended, in a variety of cities. And a lot of these are great reforms, and people are chipping away at a problem. But there’s nothing like what Auckland did, where you see this massive, across an entire metropolitan area, large, broad upzoning.

And so what we’ve seen in many places is more piecemeal. And so a lot of the research and studies have been done on more piecemeal upzoning changes and making it easier to build more housing in kind of these smaller ways. But Auckland presented this very different experience for research. And I think the impacts of this are pretty remarkable, right?

So there have been a few studies on this now. One shows that you see nearly 22,000 housing permits, which is 4 percent of the housing stock, increased after these changes. You see another study says it’s even more: 43,000 housing permits are basically given. And then a final study shows that its effect on rents is pretty significant too, that six years after this all happened, rents are 28 percent lower than they would have been otherwise. So this is pretty remarkable.

How was this sort of thing received? When all this starts happening, does everyone start accepting the gospel of housing-policy nerds?

West: Well, I think it depends. How was it received? In Auckland, people were pretty bitter about it. It was a change that was forced onto them, and I don’t think that the people who are engaged in local council elections are necessarily motivated by house prices. So even though this is a good thing for the city and arguably for the country, there are local costs to those distributed benefits. So I don’t know. The residents of Auckland—it probably wasn’t so well received at the time.

But I think over time, there has been a growing acceptance that it has been a good thing for the city. There is all this new housing popping up all over the place. And because it’s new housing, it’s built to the building code, which means that it’s warm, dry housing. And it’s become quite desirable, especially among young people—like, people my age. Now that there’s the option, you can live in a beautiful new terrace home or in an apartment in the city. That didn’t used to be an option. And now that it is, people can try that for themselves and think, Oh, actually, this is way better. It’s so nice to live in the middle of the city and have access to all of this amenity.

So I think that the culture is changing. And I think that—we’ll get onto this when we talk about New Zealand’s wider upzoning policies later—but this sense that people were coming more accepting of the changes over time was one of the things that motivated central-government politicians to push harder on upzoning.

Demsas: And as I mentioned, this is a pretty broad upzoning. And what we’ve seen a lot of the time in the U.S. is that some shifts to policy changes on housing don’t lead to a lot of output. You don’t see a bunch of new homes get built because Minneapolis legalizes triplexes or something like that.

Were there specific reforms that Auckland pursued that you think had a large effect or some interaction between a few different policies? What sorts of things do you actually point to that you think actually led to a lot of the new homes being built?

West: I think it was this broad raising of the building-height limits, definitely. They also did some stuff around reducing the ability of the council to set minimum car-parking requirements. That helped. But I do think it was the building-height limits and the fact that they did it broadly across the whole city.

I think that really helped with the affordability aspect because the thing about upzoning, when you were talking earlier about how it’s often piecemeal—what I would call targeted upzoning—when planning permissions are scarce (like, there aren’t very many developable sites where you’re allowed to build an apartment building, say), then developers have to compete with each other for those sites, and it makes the price of that land go up.

So when governmental councils change the rules and only allow a small section of the city to build apartment buildings—so when they only upzone a small section, targeted upzoning—the land prices in those areas spike. Whereas in Auckland, because they upzoned three-quarters of the city all at once, it meant that these developable land parcels, they weren’t scarce. So upzoning didn’t have such a big effect on land prices as it would have if the upzoning had been more targeted, which is really good for affordability. So you get the supply response, which helps with affordability. But you also reduce the spike in land prices, which is another good outcome for affordability.

But it wasn’t uniform upzoning. Like I said, it was only three-quarters of the city, and some of those wealthier character suburbs that I was talking about earlier, they managed to escape quite a lot of the brunt of that upzoning. Quite a lot of the new housing supply is being delivered in outer suburbs, so not that close to the inner city. They’re connected on transport lines, but they’re not in walking distance of the jobs and whatnot, which I think is also a factor, definitely.

Demsas: Okay. We’ve talked about Christchurch, and we’ve talked about Auckland. These are both in the early 2010s. It feels like the national government is getting very emboldened by these efforts.

I think that one of the big dynamics that you talk about in your work and something that we’ve talked about on the show, as well, is this interaction between local and national governments. And I wanted to ask you why you think giving local governments more power to manage development seems to inexorably lead to building less housing.

You know, in 1976, Harvey Molotch writes this really, really famous piece called, “The City as a Growth Machine,” where he theorizes that “each unit of a community strives, at the expense of the others, to enhance the land-use potential of the parcels with which it is associated.” Essentially, shopkeepers are competing for where the bus stop is going to be placed, because if the bus stop is near you, then more people come to your shop, or hotel owners are going to fight to get the convention center built nearby. So his theory is that all of these different units, particularly business interests, are pushing for growth, are pushing for more things to be built near them, for land use to be intensified, and for upzoning to happen.

This is not what we’re seeing, though, and the dynamic you’re describing here, where there’s a lot of some very legitimate local costs, seems to push in the other direction. But I wonder why you think that is.

West: I think there are several things. I think those economic benefits you talk about, they’re less tangible to regular, everyday people. You don’t necessarily see the impacts of that in an easy, relatable way, whereas the costs that come with new housing in your area, those are very tangible. They’re felt.

An apartment building goes up next door—you get less sun on your property. Suddenly, there are 10 extra cars on your street, and it’s congested, and there’s more air pollution. Suddenly, your doctor’s office is really full, and you can’t get same-day doctor appointments anymore. Your kid’s class goes from being 20 kids to 30 kids, and it’s unmanageable, and performance at school goes down. Those negative effects are very tangible. And people also—I think this is a pretty well-established phenomenon in psychology, that people weigh negative effects stronger. I think that that’s got something to do with it.

In a perfect world, everyone who had a stake in local government would vote in local government, right? Everyone would be involved in that process, and they would be keeping an eye on what these regulations are and what they do and be engaged in the process. But in reality, I think people who don’t own homes don’t really feel like local government is for them. They don’t really see clearly how the decisions made by local government affect their lives, because it’s kind of pitched to everyone as, These are the people who charge rates on property owners. And they deliver libraries and swimming pools, and that’s all that they do. So if you’re not a property owner, why should you care?

So we get really low voter turnout in local elections, which contributes to the problem. And then you end up with the system—like, our councils are populated by councilors who are just regular, normal people. And they mean extremely well, but the people that they’re hearing from all the time are homeowners—homeowners or people with the financial resources to turn up to council meetings during the day, when other people who don’t have those financial resources are, for instance, at work. I think in that regard, you hear a lot from retirees who have a lot of time on their hands to participate in these processes—people who understand the system, who have the education levels to be able to game the system, you know, to know when the consultations are happening and what you need to write in a consultation so that your submission doesn’t get ignored. All of these avenues are available to them, and they use them because those local costs are so tangible.

[Music]

Demsas: After the break: America’s role in New Zealand’s housing crisis.

[Break]

Demsas: And I feel like, hearing you talk, people probably feel it sounds a lot like the American context. And this is part of why I wanted to have you on the show. I think that the Anglo world’s shared political heritage, but also just sharing the language, facilitates a lot more copying. But I think that this shared history is something that is often not really well known.

Part of the context we’re talking about here, of these reforms, is—these reforms are happening because, like, 50 years ago, both of our countries pursued downzoning of some of our major cities. So can you talk a little about that history in the 1970s and New Zealand’s decision to make it harder to build more housing?

West: I think that a lot of that came out of this growing environmental-protection movement. You know, you have Rachel Carson’s Silent Spring, and all the birds are dying, and then everyone gets concerned about the environment, and that has flow-on effects into every policy area, including urban planning. So you get a lot of people who are rightly concerned about these things and fighting the good fight, trying to stop greedy developers from building on nature reserves in the city or concreting over everything, because it’s bad for the environment, so there’s this real push.

I think it also came from—I don’t know—the advocacy of people like Jane Jacobs, standing up to the man and to the corporate machine that’s making all the decisions. And there was this big push towards more participatory planning. Like, if you’re living somewhere, you should have a say over what’s happening in your somewhere. And I think you could argue that the pendulum has swung. It was very in favor of, I guess, developers—of big business. And now it’s swung more in favor of the local residents, you could argue possibly too far.

But I think this experience has happened in the U.S., in New Zealand, in the U.K. So in New Zealand, this culminated in updates to the Town and Country Planning Act. They really restricted the zoned capacity in cities, and this was, at the time, seen as a good thing. This was a fight for progressive cause, and: We’re going to make our cities more beautiful and pleasant and easy to live in. And those economic costs were not understood at the time, I would say.

And I think something that’s worth touching on if we’re talking about the shared history, but also culture, between places like New Zealand and the U.S.—I guess being relatively recently colonized countries, New Zealand more so—New Zealand has a really strong culture of individualism. Like, it’s very, You’re out there for yourself. You put yourself and your family first. And so you defend the borders of your property, and then you think about the community.

And there are pros and cons to an individualistic society. I think it drives a lot of innovation, and you move away from groupthink and that kind of thing. But I think this is one of the costs, is that we’re not as community minded as I would like to see. And so people are prepared to, I guess, cause costs to their neighbors and to the city and to New Zealanders as a whole if it means that they avoid some costs, you know?

Demsas: I always think this is a very interesting part of the debate, though, because in one way, you can think of the individualistic expression on housing policy as being, I don’t want anything to change in my neighborhood, because that will destroy my quality of life. Who cares what happens to rents? Who cares what happens to house prices? Who cares what happens to homelessness? I don’t want to deal with that here.

But then there’s another thing where it’s like, people who are property-rights maximalists are often very pro making it easier to build more housing, because, essentially, what these zoning regulations are is the government telling you that, like, you own a piece of land, and you’re not allowed to do what you want with that piece of land.

And so—I don’t know—that tension always feels very interesting to me because it’s both individualistic, but it’s almost like you don’t just have the property right to the property that you own but also to your whole neighborhood.

West: Yeah. I always find that quite funny, right? When you talk to people about their neighborhood changing over time, and they’re like, Well, I bought my house at this point in time, and it was like this, and I expected it to stay that way. And it’s like, Why? Why did you expect it to stay that way? To me, that seems like quite an unreasonable assumption.

But I guess there’s a whole generation of people where, for several decades, that was just the case. Things stayed the way that they were. And we got used to that. And we expected that. And there was enough room that we could expand out, so there wasn’t so much pressure, and the demand for the inner city hadn’t come yet. And so yeah, things could stay the same.

Demsas: Yeah. You know, you mentioned that in cities in New Zealand, they decreased zone capacity. In your article that you wrote in Works in Progress magazine, you wrote that in the center of Auckland, zoned capacity for new housing was cut in half. Comparing that to the U.S. in 1961, actually, New York City reduced its zoned capacity by 79 percent, and Los Angeles slashed the potential population capacity from 10 million to 4 million. Often, I think people do not realize this.

I wrote an article a while back about Minneapolis, in which I just put in the end statistics about how Minneapolis is smaller than it had been roughly 50 years ago. And I think people don’t realize it. Like, Oh, my gosh. All this growth is happening. All this stuff is happening, but cities’ population capacity has shrunk over this time period, and it’s become harder and harder to actually accommodate the people who want to move there, even as there’s been this job boom and the suburban build-out in these places.

But we actually haven’t gotten to the biggest policy shift that I think really got New Zealand a ton of attention. So we had these Christchurch and Auckland changes, but then there seems to have been a decision to go even bigger. So New Zealand 2021—what happens?

West: Well, actually, taking it back to 2017, we’d had this conservative government that had been in place since the 2008 financial crisis, and then through the Christchurch earthquakes period. They were pushing in Christchurch and Auckland for upzoning. They also introduced this policy around special housing areas, where they realized that supply constraints were a problem.

And so they introduced this policy where they were going to work with local governments to identify areas that were suitable for high-density development and, I guess, create shortcuts, easier pathways for developers to build in those areas. So that was kind of an interesting experiment that happened under that conservative government. But ultimately, I think that this conservative government that we had up until 2017, they were moving in the right direction. They were tinkering with this stuff, but they weren’t necessarily being brave enough to actually override councils.

In 2017, we had a change of government, and the Labour Party came in. And with the Labour Party, we got a few new ministers who had their moment in the sun. A couple of those—Phil Twyford, David Parker, in particular—they, in their time in opposition, had spent a lot of time looking into this issue of land-use regulations. I think they had been particularly influenced, actually, by a couple U.S. academics. Ed Glaeser and Alain Bertaud both came to New Zealand in 2013 and 2014, I think it is. They did lecture tours around the country. These politicians attended those lectures. They were persuaded about the need to relax land-use regulations. Phil Twyford, when he was elected in 2017, when Labour was elected, he became the minister for housing and urban development and transport.

Phil Twyford is an interesting guy. He’s very open to conversation with anyone, not very bound by the usual left-wing political boundaries, I suppose. So he had been talking to quite a few right-wing, you might say, or libertarian economists on this issue, for instance. And so he developed this platform where he wanted to go hard and fast on addressing land-use regulations. The first thing that he came into government wanting to do was to introduce a new national policy statement on urban development and force councils to upzone in the major cities.

He came in with this idea pretty fully formed in his mind, and he made it happen. In 2020, they introduced this policy, the National Policy Statement on Urban Development. Essentially, it made the councils in New Zealand’s biggest cities—they had to raise building-height limits around mass-rapid-transit stops in city centers and in urban centers, so, like, the little towns in the suburbs. And that was a massive change. So that was a very directive policy that councils didn’t have a lot of flexibility on.

And then following that, a year later, in 2021, they then introduced the Medium Density Residential Standards, which set a new default zone in all our major cities of three homes of up to three stories on any section by right. So those two policies, they were introduced, like, Bam, bam, one after the other, during the pandemic, so everyone was extremely distracted and not really paying attention to these massive changes in our zoning system.

And they were also both introduced with support from the National Party, the conservatives, who were now in opposition due to some—what I think was some pretty brave actions from a few key figures in the National Party who decided, on behalf of their party, that these policies were good, and that they were aligned with what National had been doing when they were in government, and that it would be silly to oppose them for the sake of being oppositional. And so they agreed to support them, which was—I mean, it’s not unheard of in New Zealand, but it’s still not very usual to pass major policies like that with bipartisan support.

Demsas: Okay. So the two major changes that you’re outlining here are transit-oriented development, so basically making it easier to build more housing in transit corridors, and then, secondly—and correct me if I’m wrong—you’re saying on any plot of land, you have to allow up to three stories if it already allows housing to exist? So a place that has any type of residential development has to allow up to three stories?

West: Yes. There were exceptional cases included. For instance, if it’s in a hazard area for floods or whatever, or if you can attest to the character of your neighborhood. Some areas were exempt due to their character status, because they have beautiful old homes or whatever.

But for the most part, unless you had a good reason not to, the new default zone had to become three homes of up to three stories. But these policies—they were introduced in the central-government level, but then they were handed over to councils. So councils were given a time frame in which they had to implement these policies in their plans. So it wasn’t an overnight change. It was going to take a few years to bed in.

Demsas: And I think one thing to note here, for anyone who is less in the weeds on zoning policy here—when these changes happen, it doesn’t mean that all of a sudden, like, all these homes need to be redeveloped and turned into three-story buildings. It just means they are allowed to be turned into anything up to three stories. So that’s one of the most important—I think that often, when people have these debates, they’re like, Oh, a bulldozer is coming to your single-family home to turn it into an apartment building. And no, it’s just what is now legally permissible includes not just single-family homes but also some more-dense housing.

West: Yes. That’s a very good point.

Demsas: So what is the effect of this shift? How much of this actually gets implemented at the local level? I think you’re kind of foreshadowing that a bit here.

West: Yeah. So these two policies—when the National Policy Statement on Urban Development was introduced, it came with a timeline in which councils had to implement these policies in their plans. The Medium Density Residential Standards that followed, they follow the same timeline as the NPSUD. So there was just one round of changes that councils had to make. And I would say that many councils have been quite resistant. I think the NPSUD, like, the first policy, that transit-oriented-development policy—I should add, also, that policy made it that councils are no longer allowed to apply minimum car-parking requirements.

That’s another aspect of that policy.

But that policy was actually taken on a roadshow around the country during consultation. You know, councils were talked to, they got submissions. It wasn’t a secret policy. People knew it was coming. It just didn’t really get very much attention, because, I think, it wasn’t very tangible. It was going to take a few years to bed in. But also, because of the pandemic, no one was paying attention. And so councils knew that that policy was coming, and it seemed like they didn’t love it. But it was smart. It was justifiable. It wasn’t going to broadly change every part of the city. It was just transit corridors and inner-city areas.

The Medium Density Residential Standards were kept secret from local government until the day they were announced to the public. They were not consulted on until they were announced to the public.

Demsas: Why?

West: Well, there are multiple reasons. I think there was a sense that local governments would hate them, which was an accurate sense. They don’t like being forced to do things. Fair enough. But also because when the National Policy Statement, that first policy, was introduced—at the time that it was released, Labour didn’t know that the National Party was going to support it. They opted to support it after the announcement, post its release.

And I think that getting the support from the opposition party really emboldened the Labour ministers, and they were like, Oh, we could actually push way further on this because National might support us. And so they entered secret talks, secret conversations behind closed doors with the National Party, and they developed the Medium Density Residential Standards in partnership. And because of this, I think, is one of the reasons why they kept it secret.

So even the government agencies—I know if you weren’t directly working on those policies, you didn’t know about it. I was working in the Ministry [of] Housing and Urban Development when this policy was announced. And I had no idea that it was happening, so it was a very, very closed tent. And part of the reason was that, I think, between the two parties, they wanted to be on the same page before they were exposed to external pressure from voters, which is, you know—fair enough. (Laughs.)

Demsas: Well, perhaps not fair enough, because it seems like the backlash ended up really hurting this policy. Can you talk about how that backlash played out?

West: Yeah. As part of my research, I’ve interviewed a lot of people, and the word blindsided came up a lot—that local government felt that they’d been blindsided by this policy and that it really ruined a lot of already pretty-fragile relationships with central government.

We were coming out with the pandemic, so people had more time and attention on their hands to pay attention. And it was a really easy policy to describe to people. It’s like, Next door, you’re going to get a three-story apartment building or three terraces. And anyone can do that at any time. And so part of the problem of this secret tent between Labour and National is that they didn’t involve any of the minor parties in these debates, because, you know: small tent, easier to keep a secret.

As a result of that, the ostensibly libertarian party in New Zealand, ACT, they saw this as an opportunity to win votes off National. They hadn’t been included in the debate. It wasn’t their policy. So they ran a pretty intense campaign against the Medium Density Residential Standards, which put the National Party in a really awkward position, because around this time, Phil Twyford, who had been the housing minister for Labor for various reasons, had been kind of demoted to the back bench of the Labour Party. So he had been, like, the architect and the biggest advocate for these policies. And he was kind of a bit muffled now on the back bench of the Labour Party, which meant that the National politicians who had stuck their necks out to support the Medium Density Residential Standards were kind of being left high and dry to defend them on their own.

And when I interviewed some National Party politicians, that’s what they told me. That’s how they felt: that they had been left on their own without the support of Labour, even though it was Labour’s policy. Various reasons why that happened, but it made them extremely vulnerable to this negative campaigning from ACT.

And so when the leadership of the National Party changed in 2021, right as the Medium Density Residential Standards had been going through Parliament, and the new leader—my understanding is that he, Christopher Luxon, in particular, got cold feet about the issue. They were heading into an election year, and it wasn’t his policy. He hadn’t been involved in it. And I think he just decided on the Medium Density Residential Standards, at least, that he would make a captain’s call and pull the plug on them. So he announced that they were withdrawing their support, which I understand was not a popular decision within the National Party. There was quite a lot of upset with the people who had supported that policy. But I guess that was the result of the secrecy and the speed with which they introduced these policies.

Demsas: From your perspective, this cross-party coalition that was very, very fragile—it broke down because of the backlash to the secrecy. Do you feel like most of what people are reacting to is the process and the lack of transparency, and that a better process could have led to more cohesion here? Or that, really, the problem is that people are opposed to upzoning, and this is just one way of creating backlash to that?

West: It’s a bit of a catch-22 because, on the one hand, people were angry about the secrecy and the speed with which this policy was introduced. But on the flip side, there was a moment for that. We were right at the height of the pandemic when this policy was going through Parliament. We’d normalized urgent policymaking to some extent, so it became possible to do this.

And also, house prices had just skyrocketed over the pandemic. I think they went up something like 40 percent between the start of the pandemic and this point at which the Medium Density Residential Standards were going through Parliament. And so people were really, really upset about house prices. It had become a No. 1 issue polling across the country. And there was, I think, the sense in central government that doing something would be well received. And if they had taken too long to respond to the crisis, I think there is a chance that the backlash could have been even worse.

I don’t know. It’s hard to know if it could have been different. I think that there is just this big contingent of people who are opposed to upzoning because of those local costs, regardless of the distributed benefits. And unless we can give them an incentive to say yes to upzoning—if we can provide them some local benefits, which I’m not sure the government is doing enough to provide those carrots, essentially, at the moment—we’re going to continue to see this opposition.

But I do think it’s changing. I think there is, perhaps, even a generational shift happening at the moment. I think that the issue of upzoning ’90s regulations is becoming more salient among my generation, the younger generation, you know? People who are locked out of the housing market—people are becoming more accepting. I know my mom, for instance, is now a YIMBY.

Demsas: Oh, yeah?

West: Yeah. She’s upset about the effects on her house price, but she’s happy, for me, for the city. (Laughs.)

Demsas: This is something that I think is really interesting—your personal background here—because one thing you mentioned earlier is that a lot of the 1960s, ’70s backlash to development is driven by environmental concerns. But your background is also as a climate activist as part of Generation Zero. Can you talk a little bit about the climate politics in New Zealand?

Because here in the U.S., when I’ve done reporting on this, you see a generational split. You see kind of younger—particularly, people who grew up under, The environment is about caring about carbon emissions, it’s kind of like a tech response: You want to get electric vehicles rather than gas-guzzling cars. You want to make sure you have passive houses or things like that built. You want renewable energy built.

That sort of vibe is very, very different than the environmentalists of maybe the Boomer generation and maybe early Gen Xers, as well, for whom environmentalism is often anti-development, really focusing on conservation and wildlife and things like that. Is that a similar story in New Zealand? Or is Generation Zero kind of a representative of the entire environmental movement there?

West: Definitely not representative of the entire environmental movement. It is a similar story to what you’ve just told. You do have this generational shift or divide, I guess, in what is seen as environmentalism.

To my background, I’m a qualified environmental scientist. That’s what I studied, and I spent years involved in this organization, Generation Zero, that you’ve mentioned, which is a youth-led climate-action organization in New Zealand. Generation Zero was responsible, for instance, for pressuring the central government into passing New Zealand’s Zero Carbon Act in 2019.

And I think what’s interesting and different about New Zealand is that Generation Zero, in particular, when they conceived of this project to have a Zero Carbon Act in New Zealand, they understood very early on that this policy was not going to be enduring if it wasn’t passed with bipartisan support. So the intention, right from the start, was to win over parties on both sides of the political spectrum to addressing climate change. And so Generation Zero’s founding principles revolved around this idea of nonpartisanship and of being pragmatic and reasonable and, I guess, professional. And so this Zero Carbon Act campaign was their big project.

But at the same time, the Auckland Unitary Plan was going through, and Generation Zero has always had quite strong local branches. And so the Auckland unitary plan kind of became the project of the Auckland local branch, that they understood the carbon implications of compact urban form. And so they were a really big influence on the debates in Auckland, getting young people interested and excited and participating in these consultations and voting on these issues.

And so I think that that’s had a big influence on the wider movement in New Zealand around urbanism, is that we kind of—I mean, I get the sense that it’s a bit different in the U.S. But I think this issue of compact urban development and upzoning has often been approached with an environmental flair, when people in the U.S. seem very fixated on the affordability arguments—which, I mean, we have been as well. But there has also always been this narrative of, This is how we achieve emissions reductions, is by building up.

Demsas: I feel like the political dynamics here are really interesting. From the U.S. context, the stringent land-use regulations are often really conceived of as Democratic state and city problems. So our liberal party feels, I think, a lot of the brunt of the criticism about, you know, high home prices in San Francisco, California writ large, Washington State, Oregon, New York, Massachusetts, all the way down. And you see much more affordability in conservative states. And there’s a debate about this. Part of it is, Okay. Well, many conservative states don’t really have the kind of population pressure as Democratic states, right? So they don’t actually have to face this problem.

It’s been hard to really continue that defense, given that you see a lot of population shifts towards places like Texas and Florida, which are Republican controlled. And I wonder, in the context you’re talking about here, it seems like the conservative party was kind of the spearhead of upzoning in New Zealand. And do you think that’s because the conservative politicians are more amenable to these sorts of arguments? Or do you think Labour would have also done the same thing in that position if they were in charge during Christchurch and during the Auckland upzoning?

West: Well, what I think is important to understand about the New Zealand context is that this debate around relaxing land-use regulations didn’t start with upzoning.

It started with relaxing land-use constraints on growth out. It was kind of sparked by this paper published by a New Zealand economist in—I think he published a working paper in 2008, Arthur Grimes. He did this paper looking at Auckland’s urban-growth limit, which was essentially the boundary beyond which they refused to zone for residential.

And he found that house prices were 10 times higher inside the urban boundary than they were outside. And he was like, This regulation, this boundary on growth outwards is having a massive impact on house prices in Auckland. And that really caught the attention of central-government politicians. And I think you’re right, perhaps because they’re more receptive to these arguments about free markets, property rights, You should be allowed to do what you want on your land. People should be allowed to build wherever they want, whenever they want, whatever they want.

So I do think that there was an element of that. Upzoning was an afterthought, in some regards. I think there was this understanding that if the problem that we’re trying to address is affordability, then we need to relax constraints on growth out. And I think it was only later that upzoning was also understood to be a policy that would help with affordability.

Demsas: So densification was mostly seen, as you said, in the climate context, whereas conservatives are basically like, You could just sprawl. You could always get affordable housing if you continue building out into the suburbs and suburbs and suburbs.

West: Yeah. Kind of. And I think, yeah, the density was in the climate considerations, but also things around like livability, congestion, that kind of stuff, as well. But I think that by the time that Labour came into government, upzoning had started to be understood, at least by politicians or policy wonks in those circles, as a housing-affordability policy, not just an environmental policy, which meant that they had two avenues, among others, that they could sell this policy on. It was the same direction of policymaking as National had been taking, but Labour just put a more left-wing spin on it, I’d say.

Demsas: Well, Eleanor, always our last question: What is something that you thought was a good idea at the time but ended up being only good on paper?

West: Oh, yeah. To take us completely away from housing policy and land-use regulations: workplace Secret Santa. It always seemed super fun when I was younger, but I’ve come to understand in my old age that I just do not have space in my heart or mind to accept another novelty mug into my life. I just can’t do it.

Demsas: (Laughs.) What did you last get that radicalized you on Secret Santa?

West: It’s just that I’ve received more than one novelty mug in my lifetime.

Demsas: Okay.

West: Or those Lindt gold chocolates with Nutella in them, which is perfectly in the price range. So it’s just like a group of people gifting those to each other. I don’t know. I’m just not into it.

Demsas: So it’s not that you feel like you’re burdened by having to give gifts. You are burdened by these low-quality gifts that you’re receiving.

West: I’m burdened by the gifts. I’m burdened by having to give the gifts because it’s hard with your colleagues. You don’t want to be too thoughtful, because that could be awkward and weird.

Demsas: Agreed.

West: But if you’re not thoughtful enough, people are like, Oh, you just popped to the supermarket over the road and bought a box of chocolates, didn’t you? Don’t you care about your colleagues? Don’t you care about team culture? Don’t you care about workplace Secret Santa? You know, I’m not into it.

Demsas: Well, Eleanor, thank you so much. Right for the holiday season, a perfect “good on paper.” Thanks for coming on.

West: Thanks so much for having me. It’s been a delight.

[Music]

Demsas: Good on Paper is produced by Jinae West. It was edited by Dave Shaw, fact-checked by Ena Alvarado, and engineered by Erica Huang. Our theme music is composed by Rob Smierciak. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.

And hey, if you like what you’re hearing, please leave us a rating and review on Apple Podcasts.

I’m Jerusalem Demsas, and we’ll see you next week.