Govt housing deregulation is a “charter for property developers”

Last Thursday, Housing Minister Chris Bishop announced radical new plans to deregulate property development in New Zealand. He’s won praise for his efforts from across the political spectrum, including those on the political left and millennials who think Bishop is bravely fighting for the victims of the housing affordability crisis.

However, there are also signs that his deregulation will do little for housing affordability yet produce inferior housing and create all sorts of negative impacts on the urban environment. Instead of deregulating for “moral” reasons of combating housing affordability, it looks like Bishop and his government are simply implementing the demands of the powerful property development industry, especially those that have donated generously to the parties now in power.

Bishop’s “Going for Housing Growth” plan

The Minister of Housing has announced that he will enable property developers to “flood the market” with houses. And he’ll do this by reducing restrictions on where and how developers can build homes and commercial property. Council regulations and building codes created by communities and urban planners are being thrown on the bonfire. Bishop says he’s doing this because he wants cities to expand upwards and outwards.

According to Luke Malpass, the political editor of The Post, this is a radical and free-market programme being launched. Writing over the weekend, he explains that Bishop is taking power away from urban and town planners and giving it to the market. It’s all about the freedom of property builders and buyers to choose what they want.

Malpass correctly suggests that Bishop’s announcement is radically rightwing: “parts of his speech could have been from Milton Friedman’s famous 1980s book, Free to Choose. Choice is key, and casting away the impediments and bottlenecks to development is the name of the game. Consumers will ultimately decide the rest and developers will reflect those choices.”

Whether this results in urban sprawl and the conversion of farmland into suburbia should be left to “the market.” According to Malpass, Bishop believes that “if people want to live on city fringes in a cheaper, bigger house, with a bigger commute, that’s up to them.”

Similarly, the Herald’s Thomas Coughlan says the deregulation in housing and land use is comparable to the neoliberal reforms of the Fourth Labour Government: “In quite typical New Zealand fashion, and again reminiscent of the 1980s in the space of four years, we have gone from having some of the world’s most restrictive urban land markets to having some of the least. The Economist, an enthusiastic cheerleader of our 1980s reforms, has written warmly of New Zealand’s efforts to improve housing affordability through deregulation.”

Reflecting on Bishop’s speech and the generally positive response, Coughlan says there is now a bi-partisanship consensus in favour of property development deregulation: “Everyone has compromised. The left has had to embrace free-market thinking as a pathway to reducing the social ills of the housing crisis, the right has had to give up on its ability to control picturesque urban environments and to use the family home as a neverending stream of unearned wealth.”

What Bishop’s deregulation means in practice

The idea of building much more housing, much more quickly, is incredibly attractive given the ill effects of the current housing affordability crisis. Yet the details of Bishop’s programme suggest that this will also have a number of highly detrimental impacts.

Urban sprawl is the most obvious. Bishop is taking away the ability of councils to impose urban-rural boundaries, which will open massive amounts of greenfields on the city fringes to be built upon, probably in a sprawling fashion. As Auckland Mayor Wayne Brown said this week, this will result in the loss of highly productive land for agriculture and at the “detriment of our unique landscapes, waterways, and harbours.” The impact on freshwater and ecosystems could also be severe.

Densification of urban areas will also now occur with fewer regulations for property developers and landlords. He’s allowing developers to build much tinier apartments without balconies. Bishop is selling this with reference to the stylish types of apartments in cities like Paris and Rome. And anyone who opposes this, Bishop suggests, is essentially favouring that people live in cars and emergency motels instead.

Although the property industry has responded extremely positively to all this axing of red tape, a few have been breaking ranks. For example, Christchurch property developer Vincent Holloway went on RNZ’s Morning Report on Friday to say that “the government's changes were turning the situation into more of a free market for developers” in which developers could “build anything and let the market decide what it wants”.

Holloway expected the results would be very negative—ghettos, “shoe-box” apartments, and ugly buildings in the city centre. According to RNZ, he said typical apartments would “have tiny awning windows in apartment blocks stuck in the shade.” He also predicted that cities would have trouble accommodating the levels of stormwater created by this approach, leading to more flooding.

Similarly, developer David Whitburn, from Auckland’s Whitburn Group, told The Post that Bishop’s deregulation would lead to a disastrous housing situation in which vulnerable people would live in ghettos. He said Bishop’s policy would be a disaster: “there are many developers who are only interested in money. So they won’t apply good design principles to create good living spaces… It will be all about how many apartments can be squeezed in, and that will create some nasty, but more affordable accommodation.”

Urban housing commentator and activist Jane O’Loughlin also told The Post that Wellington was also likely to suffer from Bishop’s enabling of property developers to do what they wanted: “The idea that developers are there to create good quality, affordable housing for the population is a bit of a fantasy. Really, they're there to make money… It’s not going to achieve a good city.”

The policy is also likely to stretch infrastructure in cities and towns everywhere. The lack of investment in roads, freshwater supply, schools, and sewage will create further problems.

Bishop has said that he will deal with infrastructure issues later this year. At this stage, the government will also be implementing some similarly radical and free-market reforms, which will alleviate costs from property developers and put them back onto future citizens.

Bishop’s relationship with property developers

It’s no coincidence that the Minister of Housing made his housing deregulation announcements to the Real Estate Institute of New Zealand last week. The property industry’s owners stand to benefit the most from these reforms.

Some have, therefore, suggested that property developers have been lobbying for these reforms. Writing on X, sociologist Peter Davis posted his analysis of Bishop’s programme: “Auckland urban sprawl here we come. With weakening of urban limits, reducing council powers, & removing medium-density, this is just what the developers who donated were looking for. Big capital gains to be made, long commutes, farm land appropriated.”

Before Bishop's announcement, National Party insider Matthew Hooton also wrote in the Herald that the Minister is “obsessed” with enabling property development. He points out that Bishop’s official reason for enabling property developers is a “moral” one – to solve the housing crisis. But he points to two more robust explanations for Bishop’s obsession.

First, it’s to keep house prices from getting further out of control as record-high immigration shifts into the country. Hooton says that the “Government’s commitment to keep immigration high” for economic growth means that new houses are required. He says, “The only reason we need new houses – and the only reason we’ve ever needed them this century – is to accommodate new immigrants.”

Second, it’s because “Bishop’s new houses are great news for property developers, construction companies and tradies”. Hooton points out that “Bishop has long advocated for Winton Land’s Sunfield development to house 15,000 people in cheap homes on the edge of South Auckland.” Therefore, Bishop is entirely friendly with the industry and keen to carry out the policies that will help them do more business.

Similarly, during last year’s election campaign, Hooton argued in the Herald that National’s housing policies had been created “with the help of lobbyists” for “the property-development industries”.

Incidentally, corporate lobbyist Georgina Stylianou has been one of the most ecstatic cheerleaders for Bishop’s deregulation this week. The former National Beehive staffer, turned lobbyist, now writes a politics column for The Post, and this week, she used it to praise the reforms in an opinion piece titled “How Chris Bishop has got it right with his housing plans”. She argued that the Minister is being driven by “his progressive values”, and she paints the reforms as a socialist triumph that the poor and homeless should be celebrating.

Taking on the idea that Bishop’s policies could be mistakenly seen as “the scrum being screwed towards property developers”, Stylianou suggests that instead, the reforms are simply about getting things done. She calls for Labour to adopt National’s property developer policies rather than oppose them, suggesting that Labour should tack on progressive elements rather than try to overturn them.

Donations to the Government parties from the property industry

The idea that property developers are driving the National-led Government’s housing programme is backed up by looking at who’s been donated to the parties in power. Those in the housing industry feature prominently in the three parties’ donor lists.

At the top of the list is a $500,000 donation from Warren Lewis to National last year. Lewis owns FMI Building Innovations, a “building systems and materials supplier.” National says it is the largest donation the party has ever received.

Property developer Trevor Farmer has given National $200,000 over the last few years. In the same period, he’s donated $215,000 to Act and $50,000 to NZ First. His business partner, Mark Wyborn, has given National $100,000 over the last couple of years, $200,000 to NZ First in 2023, and $50,000 to Act in 2021. And NZ First received $145,000 last year from Wellington property developer Vlad Barbalich.

One of the largest private developers in New Zealand, Manson TCLM, is partly owned by Culum Manson, who gave $70,000 to National in 2023. And Christchurch property investor Philip Carter donated $59,500 to National.

John and Michael Chow (“The Chow Brothers”) have also become big property players, partly due to their partnership with John and Max Key in recent years. In 2022, their family company, Stonewood Group, donated $44,000 to National.

Progressive Auckland housing developer Ockham Residential is involved in donations to parties. Last year, just before National came to power, the company's Chief Executive, William Deihl, gave $20,500 to National (which followed on from owner Mark Todd donating $50,000 to Labour and $20,000 to the Greens).

The most interesting housing donations to National have been related to the Winton Land property group, of which lobbyist and former National Finance Minister Steven Joyce is a director.

In May 2022, the party received $52,000 from Speargrass, a holding company owned by Winton’s CEO, Chris Meehan. Then, in 2023, Meehan donated $103,260 to National and $50,000 to Act.

After the National received its first donation, Bishop, the party’s Housing spokesperson, put out a press release backing the Winton company in their fight with state housing agency Kāinga Ora. The company was taking legal action against Kāinga Ora, claiming more than $138 million because the government agency had rejected a request by Winton to help fast-track their “Sunfield” development plans in South Auckland projects using special powers under the Urban Development Act.

Of course, now Bishop is in charge of Kāinga Ora, and has ordered the agency to stop constructing more state houses. Meanwhile the Minister appears to be doing everything he can to supercharge the private sector to build houses for profit.

There’s more than symbolism here. Property developers like Winton are clearly the winners in a new deregulated housing market in which corporate lobbying and political donations appear to strongly influence public policy.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

This analysis is supplied exclusively to Democracy Project Substack subscribers and the New Zealand Herald.

Key Sources

Miriam Bell and Thomas Manch (The Post): The billion-dollar question hanging over housing reforms (paywalled)

Thomas Coughlan (Herald): Labour and National housing policy leaves anti-density backers nowhere to run (paywalled)

Erin Gourley (The Post): Ghettos in the making or welcome housing boost? (paywalled)

Matthew Hooton (Herald): House price fall risks ratings downgrade (paywalled)

Matthew Hooton (Herald): Why National’s tax fantasy is dead (paywalled)

Luke Malpass (The Post): Like it or loathe it, the coalition is cracking on (paywalled)

Sam Sachdeva (Newsroom): Govt’s housing ‘evolution’ balances intensification and urban sprawl

Georgina Stylianou (The Post): How Chris Bishop has got it right with his housing plans (paywalled)

Chris Trotter (Democracy Project): The Enemies of Sunshine and Space

RNZ: Housing reforms mean a free market and 'extremly ugly buildings', developer says