Axulus
Veteran Member
Great article regarding New Zealand's successes in greatly easing zoning restrictions, its subsequent housing construction boom, and it's effect on prices:
Some highlights:
https://www.apricitas.io/p/new-zealands-building-boomand-what
Some highlights:
the 2016 Auckland Unitary Plan (AUP) upzoned 3/4 of the city’s residential land to legalize townhouses, terraced homes, or multi-story apartments in areas that previously only allowed detached single-family homes, helping to reverse decades of successive downzonings
...
upzonings in Auckland and elsewhere in New Zealand have set off a massive construction boom throughout the entire archipelago. In 2023, New Zealand (population: 5.2M) permitted 37k housing units, more than the San Francisco and Los Angeles metro areas combined (population: 17.3M). Auckland, a city of only 1.7M, permitted 15k units last year—while preliminary data shows the 5 boroughs of New York City (population: 8.3M) permitted a meager 9.2k units by comparison. In total, New Zealand permitted 9.7 new housing units per 1000 residents in 2022, a 45-year-high that was nearly double the rates seen in the US.
...
the evidence is overwhelmingly clear that upzonings have significantly increased housing production—the AUP is estimated to have created more than 43k extra housing units from 2016-2022, while the Lower Hutt upzonings increased total Wellington region housing starts by 12-17%. That, in turn, has significantly improved housing affordability—rent-to-income ratios in Auckland have significantly declined even as they have steadily risen elsewhere in New Zealand
In fact, after adjusting for inflation rents in Auckland have been essentially flat since the 2016 AUP—and Greenaway-McGrevy estimates that 2-bedroom apartment rents are roughly 26-33% lower than they would be in the absence of upzonings. That easing of rent pressures was felt most at the lower end of the price distribution—real rents of Auckland’s cheaper apartments fell faster than the real rents of its median apartment. From 2016-2020 rents in the Wellington region grew much faster than rents in Auckland, but even they have declined amid the steady rise of construction in Lower Hutt since the start of the pandemic.
Real home prices have also been constrained by the upzonings—after rising steadily for years, median sales prices in Auckland leveled off in 2016 and remain at those levels even 8 years later. Real prices in the Wellington region increased up until the early pandemic, but remain roughly at 2019 levels today.
https://www.apricitas.io/p/new-zealands-building-boomand-what