6.3. Building attractive and inclusive cities


Te hanga tāone ātaahua, whakakotahi hoki

6.3. Building attractive and inclusive cities

New Zealand’s cities are growing. Our infrastructure and planning policies make them attractive and inclusive places in which to live, work and play.

There are many ways to define a city. For this strategy, we use it to mean areas that are big enough to face ‘urban’ challenges like peak-time traffic congestion. In New Zealand, these places range in size from Queenstown to Auckland. Different places in and around cities may face different infrastructure challenges.

Today, 56% of the world’s population lives in cities, a proportion that will increase to 68% by 2050.157 People are attracted to cities by the many work, social and cultural opportunities they offer. In bringing people together, they are also centres of innovation and economic opportunity. The 300 largest cities in the world now account for nearly half of all global economic output.158

For more than a century, most New Zealanders have lived in towns and cities.159 In 2018, New Zealand’s five largest cities and their satellite towns accounted for 64% of the population.160 More than two-thirds of all population growth to 2050 is expected on just the 3% of the land that contain our cities.161

However, our cities face some major challenges. They can be congested, crowded, unaffordable and polluted. Addressing these challenges can unlock the potential of our cities so they can use less energy, provide higher wages and have greater productivity. It can even result in better health, greater social connection and improved community wellbeing for their residents.162 To leverage our cities for the benefit of all New Zealanders, we need world-class infrastructure that builds on the competitiveness of our cities, safeguards inclusivity, enables access and mobility, promotes the affordability of housing and ensures New Zealand has a place on the global stage.

Our cities need to be attractive and inclusive places in which to live.

  • Attractive cities succeed in attracting migrants and retaining New Zealanders because they offer affordable housing, good access to jobs and education and good quality of life.
  • Inclusive cities offer opportunities for all, regardless of income, age, ethnicity, gender, disability status and other personal characteristics.

6.3.1 Context


Housing and land prices are high by international standards.

Auckland is now one of the world’s most severely unaffordable cities, with a median house price that’s 10 times the median household income.163 All large and mid-sized New Zealand cities have median house prices well over five times the median household income. Since 2000, average house prices have quadrupled in Auckland and tripled in other large, fast-growing cities, including Christchurch, Wellington, Hamilton and Tauranga. Average rents have more than doubled in these cities.164 Wages haven’t kept up and New Zealanders now spend more and more of their incomes on housing.165 There’s also a housing shortage. This is affecting many New Zealanders, particularly Māori and Pacific peoples, who are less likely than others to own homes. The housing shortage also means that the most disadvantaged in our society are more likely than others to live in damp or mouldy homes, experience overcrowding and have poor health and wellbeing as a result.166,167,168

Many issues are holding us back from building new housing.169 These include planning policies that limit the height and number of homes that can be built in some areas, insufficient water and transport infrastructure to support new homes, and difficulties gaining resource consent for new housing. Other barriers include inefficient building consent processes, challenges to accessing development finance, a building industry that can’t keep up with demand and at present, hold-ups in the supply of building materials. Planning constraints are estimated to have increased land prices on the edges of our cities by over $200,000 per section in Auckland and Queenstown and between $90,000 and $140,000 in Wellington, Tauranga, Hamilton and Christchurch.170 The impacts are even higher in inner-city areas, where councils have historically set strict limits on development.171

Poorly performing infrastructure affects our economy and our quality of life.

The infrastructure problems in our cities can affect all of us. As a key contributor to delays in freight and business travel, road congestion in Auckland is estimated to be having direct and indirect impacts that are equivalent to 0.5% to 0.9% of the city’s GDP.172 These are on top of the problems it’s creating for the people who lose personal time while sitting in traffic and the stress this causes.173 As the population of our cities increases, so will the pressure on road networks.

When infrastructure fails or performs poorly, it’s often the disadvantaged who feel it most acutely since they have fewer options. Those with resources easily find alternatives. When energy networks are disrupted or water quality is compromised, they can afford off-grid alternatives like solar power and rainwater-collection systems. When congestion worsens, they can afford to live in inner-city locations. These options aren’t available to people on lower incomes who can’t afford to pay for alternatives. Infrastructure is also often poorly designed for people with disabilities.174

Historically, the way we planned and built infrastructure also had impacts for Māori.175 An example is the Ōrākei wastewater scheme, constructed in Auckland in 1914, which disposed of untreated sewage from Auckland’s growing suburbs into the Waitematā Harbour.176 Sewage outflows contaminated shellfish beds belonging to local iwi, Ngāti Whātua, which had unsuccessfully opposed the scheme.177 The completion of the Māngere wastewater treatment plant in 1960 allowed the Ōrākei outflow to be closed, but still caused pollution in Manukau Harbour.

What’s different about Auckland?

As it’s New Zealand’s largest city, Auckland’s performance affects all of us.

  • Auckland is critical to attracting and retaining migrants and businesses, as it’s the only New Zealand city that’s big enough and has the international connections to compete with larger Australian cities.178
  • Auckland’s firms and workers contribute more to the economy than similar firms and workers elsewhere in the country.179
  • Auckland pays as much or even more in taxes than it receives from the government. This is because it’s received less government spending, per person, than most other regions in the past.180

Auckland also faces some significant challenges.

  • House prices and rents are extremely high and this is eroding the advantages of living in Auckland, encouraging professionals, skilled workers and others to move to Australia and increasing pressure on house prices elsewhere in New Zealand.181
  • Auckland has significant infrastructure issues, including traffic congestion, that make it more difficult for people to access jobs and education.182 It’s also expensive to fund the infrastructure needed to keep up with the city’s growth.

6.3.2 What we heard


“Our cities can’t keep up with growth” was ranked as the sixth most important infrastructure issue facing New Zealand by respondents to the Aotearoa 2050 survey. During our consultation, we also received submissions in favour of:

  • Changes to urban planning rules.
  • Improvements to transport infrastructure in our cities.
  • Congestion pricing (provided options or alternatives were available so that those on lower incomes would not be made worse off).
  • Lead corridor protection for infrastructure, which is where areas of land are protected from development so that they can be used for the infrastructure we know we’ll need in the future.

Both the consultation and the Aotearoa 2050 survey revealed support for low-carbon transport options. Many submitters also supported telecommunications improvements.

The government currently has a number of reform programmes underway that will affect infrastructure in our cities. These include resource management reform, Three Waters Reform and the Review into the Future of Local Government. Some submitters expressed reservations about aspects of these programmes and asked for Te Waihanga to take a clear position.

We also heard support for addressing issues around housing supply and affordability and the need to consider housing, employment, water and transport in infrastructure planning.

6.3.3. Strategic direction


Taking a long-term approach to our infrastructure

We need long-term protection for future infrastructure networks as our cities grow.

By 2050, up to 4.8 million people will live in or near New Zealand’s five largest cities.183 To meet this growth, we need to plan for infrastructure networks before they’re needed. Otherwise, it may be difficult, if not impossible, to provide them later. This increases the likelihood of future problems such as traffic congestion and a lack of good public transport options.

The preparation for future infrastructure should look at all the types of infrastructure and transport that will be needed. It should consider:

  • The potential for rapid transit networks in existing and future urban areas, even if they may not be needed in the near future.
  • How land can be adapted if needs change. For example, land that’s protected for a long-term rapid transit corridor could either be used for a busway or rail line, or converted to other uses.
  • Designing street networks so they provide for current and future needs. For instance, street grids that distribute traffic across many routes may be better in the long-term than street layouts that feed all traffic into a small number of major roads.184

It sometimes makes sense to invest in new infrastructure ahead of housing and commercial development in growing areas. However, this can be costly and financially risky. An alternative option is to identify, protect and acquire corridors of land and sites for future infrastructure. This ensures that land is available to provide infrastructure in the future, while also allowing for flexibility in how and when that infrastructure will be developed.

We need to remove unnecessary barriers to protecting land for future infrastructure. Resource management reform should make it possible to allow for flexibility in how infrastructure corridors can be used in future. The reform should also enable corridors to be designated well in advance of urban growth. Current legislation typically only provides protection for five years at a time, which drives up costs.

In addition, the Public Works Act 1991 requires infrastructure providers to buy land as soon as it’s designated if the owner would experience hardship from the designation. The alternative is to lift the designation. A dedicated fund for buying corridors of land for future infrastructure needs, supported by a strong set of principles on how it can be used, is needed to make advance property purchases.185

Integrating land-use regulation and infrastructure

Coordinated regional spatial planning will ease the pressure on infrastructure and housing as our cities grow.

Regional spatial planning is long-term, strategic planning for how land will be used in a region (see “Regional spatial planning” in Section 6.2). It requires infrastructure providers, land-use planners and other stakeholders to develop a shared framework for accommodating future population and economic growth while managing the impacts of growth on infrastructure and the environment. A good regional spatial plan should allow for alternative futures, such as population growth that’s faster than expected, rather than tightly constraining growth.e It should be supported by good information on how much growth infrastructure networks can manage and options for upgrading them. It should also identify opportunities to optimise government landholdings, noting that there are already some existing initiatives in this space.187 This will help to address housing supply and affordability and manage pressure on infrastructure.

Standardising the planning rulebook will provide greater integration between land-use planning and the provision of infrastructure.

The recent National Policy Statement on Urban Development requires councils in our largest cities to provide for housing growth, both ‘up’ through apartments and high-rise buildings in inner-city areas and around rapid transit stations and ‘out’ through new homes at the outskirts of cities.188 This will enable more homes to be built throughout urban areas. There’s a need to monitor progress and strengthen policy directions for resource and building consenting if required. One opportunity is the mandatory use of independent hearing panels to review plans for fast-growing cities.

There’s also a need to use resource management reform to standardise some planning rules across councils, so developers have greater certainty and clarity. While the recent Medium Density Residential Standards have introduced some consistency, people seeking to build similar housing, business, or infrastructure developments in different council areas often face complex and varying rules.189 Standardisation should focus on residential and business zoning or rules about transport and utilities where there are strong benefits to be gained from a consistent approach, rather than issues where local differences may be more important, such as water regulation. Each council should still have the chance to decide on the areas that are to be used for homes and those that are more suitable for business use.190

Coordination between local governments is needed in growing urban areas.

An increasing number of people are living in one council area and commuting to work in another, as shown in Figure 22. For instance, the share of workers commuting across council boundaries in the Hamilton, Waikato and Waipā districts more than doubled between 2001 and 2018. There’s an increasing need to coordinate transport infrastructure and public transport service planning between councils to ensure that cross-border journeys work well.191 Urban planning also needs to be coordinated to ensure that housing can be developed in the right places. Case Study 6 discusses some potential benefits of better coordination between local governments in growing urban areas. There’s a need to review the boundaries and responsibilities of local governments to ensure these benefits are achieved.

Easing pressure on our infrastructure networks

Congestion pricing is the best way to improve access and mobility in New Zealand cities, but it needs to be fair for everyone.

A well-functioning urban transport system should enable mobility and access to jobs, education and other opportunities, ensure that people are safe while travelling and contribute to reducing carbon emissions. Different approaches are needed to achieve better outcomes in these areas.

In the past, transport agencies worldwide have attempted to reduce peak-hour traffic congestion by building or widening roads. This hasn’t worked. Rather than improving travel times, it’s tended to encourage more people to drive, causing more congestion and carbon emissions.194 These effects can be seen on some of our recently widened urban motorways where journeys are still slow and unreliable.

Congestion pricing and road tolling have been proven to increase access and mobility by reducing excessive traffic congestion. They should be considered in cities where this is currently a problem or is likely to become one. Congestion pricing in Auckland is expected to reduce congestion at peak times by 8 to 12%, generating significant social and economic benefits.195 The experience of congestion charging in the Swedish city of Stockholm highlights some of the potential benefits (see Case Study 7).

Congestion charging can also contribute to reducing carbon emissions.

Congestion pricing can be an effective way to incentivise residents towards low-carbon transport alternatives, by raising the cost of using a private vehicle relative to public transport and active modes. One recent study found that some congestion pricing schemes have had a significant impact, accounting for emission reductions of more than 10%.196

Case studies

The solutions to the issues we face have often been shown to work here and overseas. These case studies are an example to learn from.

More public and active transport will give people alternatives to paying a congestion charge.

Improvements to infrastructure for public transport, walking, micro-mobility (such as e-scooters) and cycling need to be made when congestion charges are introduced, if these options aren’t already available. This will increase the effectiveness and public acceptance of congestion charging, because it will give people alternatives to driving and reduce the charging levels needed to ease congestion.200,201 Increasing the availability of public transport and active transport options will also contribute to reducing carbon emissions from transport.

Complementing congestion charging with a more flexible zoning policy will also allow for more housing choice inside the congestion-charge zone and provide a further option to avoid the charge. In some cases, subsidies may also be needed for those on lower incomes, people with disabilities and others who face significant barriers to paying the charge.

By shifting travel demands, congestion charging will change the way we invest in our transport infrastructure. It could mean that in the short term, we can choose not to widen roads that no longer have issues with traffic congestion and instead increase public transport capacity to cater for increased demand. However, in the long-term, even with congestion charging, there’ll be a need to increase road and public-transport capacity to provide for rising travel demands. The results we see from congestion charging should inform decision-making on when and where to build new transport infrastructure.

Better designed developments can ease pressure on the road network.

There’s limited space for creating new roads or public transport routes in areas that have already been developed. Where possible, new development should be planned and designed so that it reduces demand on our roads (see Case Study 8). This can be achieved with transit-oriented development (TOD), which increases housing development near train and other rapid transit stations and mixed-use development. This is development where homes, commercial buildings and shops are co-located in an area and people don’t need to drive between these places.202,203

Better coordination between central and local government and private sector organisations is needed to deliver an effective TOD. Both developers and infrastructure providers will need to plan carefully and implement consistently to make these changes work.204 Providing streets that make it easy and safe for people to walk from home to the transit station will encourage them to live near transit stations and use public transport. The amount of on-site parking that’s supplied with new development can affect people’s decisions on how many cars to own and how to travel.205,206

Remote working may reduce the load on city roads over time.

Improvements in technology have made remote working easier and more attractive. The potential for more people to work from home was seen during the COVID-19 lockdowns, although remote working is not available for everyone. During New Zealand’s Alert Level 3 and 4 lockdowns in 2020, 42% of employed people worked from home at least part of the time and many organisations adopted remote -working tools and developed flexible working policies.212 This trend should be monitored, as remote working may have significant impacts on urban transport networks. Some of these impacts could be positive for instance, if remote working reduces peak-hour congestion, while others may be negative, for instance, if reduced public transport use results in the need to increase fares or reduce service frequencies.

Good incentives are needed to provide quality water infrastructure at an affordable cost.

The cost of maintaining existing water infrastructure and building new water networks to cope with growth is a challenge for growing cities.213 A lack of water infrastructure can put a handbrake on housing development.

Water-sector reforms offer opportunities to improve the way we provide water infrastructure in growing cities. Reforms can improve the ability of water providers to respond to the need to renew ageing infrastructure, improve water quality and provide for growth.214 Performance-based economic regulation, which requires high-quality service for both existing and new users and sets incentives for providing services at an affordable cost, is important to achieving this. This approach is already used in sectors like telecommunication and electricity distribution.215

To improve responsiveness to new housing development, there’s a need to unlock the ability of water providers to:

  • Borrow to finance new infrastructure.
  • Set prices for access to and use of water networks that allow the cost of infrastructure upgrades to be paid back over time.216

There’s also a need to recognise the role that private developers may play in providing water infrastructure, such as through the use of the Infrastructure Funding and Financing Act 2020 or through agreements that allow developers to benefit from providing spare capacity that can be shared with other users.

Water and wastewater metering and water conservation can reduce water use and wastage.

We need to improve water conservation and management to reduce the need for costly drinking water, wastewater and stormwater infrastructure. This can be done by creating incentives for users and providers to conserve water, such as through volumetric charging for water and wastewater, using metering to identify leaks, removing regulations that make it hard to take steps to save water such as rainwater collection, and ensuring that consumer standards support water conservation.

Volumetric charging can reduce the amount of water that’s wasted. After water meters were introduced, daily water use declined by 25% on the Kapiti Coast and 30% in Tauranga during peak periods.217 Volumetric charging may need to be accompanied by targeted assistance for low-income households and disadvantaged users.

Better water pricing should also happen alongside other measures that make it easy for people to save water. Rainwater harvesting and buffer tanks for stormwater and wastewater flows can increase the share of water that’s captured and used on-site and reduce the amount of water needed from the network.218 However, there are barriers to adopting these solutions, such as resource and building consent requirements for rainwater tanks.219 These barriers should be reviewed and reduced wherever possible.

Section 6.3 - Building attractive and inclusive cities

12. Improve water infrastructure pricing and provision in cities

How

The water, wastewater and stormwater sector should be reformed, including by:

  1. Implementing performance-based economic regulation and water quality regulation to ensure that water providers are incentivised to drive efficiency and deliver excellent customer service.
  2. Ensuring that there’s a clear link between the cost of providing water services and the prices that are charged to users, following the principles in Section 7.2.
  3. Allowing entities to use their balance sheet capacity to finance infrastructure for growth, as well as funding asset renewals and improvements in water quality.
  4. Clarifying the interface between water service entities and developer-financed water infrastructure provided under the Infrastructure Funding and Financing Act 2020.
  5. Ensuring that developers can benefit appropriately from the provision of infrastructure that has spare capacity.
  6. Developing cost-benefit analysis guidelines to standardise evaluation decisions on water infrastructure against social, environmental and economic benefits.

Who

DIA, Local Government (or New Water Entities), MBIE (or Economic Regulator)

When

2022-2031

Want to know more

WSA, LFF, MHT

13. Reduce pressure on water infrastructure through better water management and conservation

How

Steps that should be taken to reduce pressure on water infrastructure include:

  1. Using planning rulebooks to encourage on-site solutions. For example, building coverage could be increased in exchange for installation of on-site stormwater-management devices.
  2. Removing regulatory barriers to water conservation, such as consent requirements to install rainwater harvesting tanks.
  3. Setting performance standards that improve the water performance of appliances.

Who

Local Government (or New Water Entities), MfE, MBIE, DIA, Taumata Arowai

When

2022-2031

Want to know more

GIW

14. Realign local government boundaries, where appropriate, to improve coordination of infrastructure and planning outcomes

How

Where appropriate, local government boundaries should be redrawn to better align borders with functional labour-market boundaries to enable the coordination of key infrastructure and planning decisions. The realignment of boundaries should be guided by:

  1. The alignment of borders with wider urban labour markets, commuting and urban growth patterns.
  2. The costs and benefits of integrating regional planning and infrastructure provision.
  3. An integration of infrastructure planning, ownership and operation to enable the efficient provision of infrastructure.
  4. The alignment of funding streams with the infrastructure funding and financing principles outlined in Section 7.2.
  5. A consideration of mechanisms for local voices to continue to inform decision-making.

Who

DIA, Review into the Future for Local Government

When

2027-2031

Want to know more

LMA

15. Increase the supply and use of low-emissions transport modes

How

Transport network planning and funding entities should:

  1. Improve the quality, speed and reliability of public transport to major employment centres.
  2. Improve active transport infrastructure, starting with low-cost solutions such as improving pedestrian crossings and reallocating existing road space to provide safe cycling facilities.
  3. Reduce barriers to the cost-effective implementation of low-emissions transport modes and streamline costly resource management and local government consultation processes.
  4. Increase certainty of funding to enable low-emissions transport modes to scale up efficiently.
  5. Ensure all options considered for investments are subject to appropriate cost-benefit analyses.

Who

MoT, Waka Kotahi NZ Transport Agency (Waka Kotahi), MfE, Local Government

When

2022-2041

Want to know more

TCQ, ITN, INH

16. Reduce costs by optimising infrastructure corridors

How

Enable the planning and protection of infrastructure corridors in advance of growth through the following steps:

  1. Develop a lead infrastructure policy and supporting guidance that provides a clear definition of lead infrastructure. The policy should include evaluation techniques for decision-making.
  2. Amend resource management legislation to extend the duration of designations to 30 years and allow designations to be granted based on concept plans. Statutory tests for designations should be based on an established evaluation methodology.
  3. Establish a corridor reservation fund with a secure funding source that can be used for early corridor-protection activities, such as buying designated or identified sites in advance.

Who

MfE and Treasury, supported by Te Waihanga and Infrastructure Providers

When

2022-2031

Want to know more

BUP, CPR, ATA, ITA

17. Optimise the use of urban land

How

Review central and local government land holdings to identify opportunities for land swaps, releases of land for development and relocations of major public facilities.

Who

Central Government, Local Government

When

2032-2041

Want to know more

ULH, CBG

18. Improve the efficiency and consistency of urban planning by standardising planning rulebooks

How

Standardise the planning policies of regional and district plans. This should:

  1. Establish national uniform definitions for land use policy.
  2. Develop a National Planning Framework that appropriately standardises rules, with local authorities required to adopt these rules with limited variations.
  3. Make consistent provision for papakāinga housing on Māori land and other forms of community housing.
  4. Merge regional and district plans into a smaller number of combined plans.

Who

MfE, Ministry of Housing and Urban Development (MHUD), Local Government

When

2022-2026

Want to know more

RAN, BUP, JUL

19. Improve the delivery of transit-oriented development (TOD)

How

Undertake post-implementation reviews of recent transit-oriented development (TOD) opportunities. These reviews should:

  1. Reflect international best practice, be independent and assess actual performance against appraisal, cost schedule and benefits.
  2. Recommend changes to practices and policies to increase the effectiveness of TOD delivery.

Who

MoT, Waka Kotahi, MHUD, Kāinga Ora

When

2022-2026

Want to know more

TSS

20. Improve the efficiency and outcomes of infrastructure through spatial planning

How

Resource management reforms should include requirements for regional spatial plans that:

  1. Provide clear direction to district plans and funding plans.
  2. Include mechanisms for participation by relevant central government infrastructure suppliers and Māori.
  3. Provide for cities to double or triple in population and provide alternative scenarios for the spatial distribution of growth, rather than providing only for a single growth scenario.
  4. Identify future infrastructure requirements, including future transport networks and other major infrastructure.

Who

MfE, MHUD

When

2022-2026

Want to know more

BUP, RAN

21. Reduce congestion and improve urban mobility

How

Implement congestion pricing and road tolling in urban centres by:

  1. Implementing recommendations in the “The Congestion Question” report[220] for congestion charging in Auckland. Stage implementation as appropriate, considering current and future public transport arrangements.
  2. Immediately removing legislative barriers to implementing congestion charging and road tolling, such as requirements in the Land Transport Management Act 2003 for alternative untolled routes.
  3. Progressing planning for congestion pricing schemes for Wellington and other cities as appropriate.
  4. By 2025, identifying other urban areas where congestion pricing may be beneficial.
  5. Assigning responsibility for setting and adjusting prices to an appropriate independent institution.

Who

MoT, Waka Kotahi, Local Government

When

2022-2031

Want to know more

TCQ, LGW, LFF

22. Target transport investment to areas of highest need using signals from congestion pricing

How

Share and use data and signals from congestion pricing to identify where future multi-modal transport investment is needed.

Who

Waka Kotahi, Local Government

When

2032-2050

Want to know more

LFF, TCQ, LGW

23. Increase housing development opportunities in areas with good access to infrastructure

How

Improve development opportunities in areas already well served by infrastructure by:

  1. Accelerating the implementation of the National Policy Statement on Urban Development and monitoring compliance, including requirements to upzone around rapid-transit and employment centres.
  2. Enabling greater urban development, including requirements for minimum levels of mixed-use zoning and upzoning.
  3. Prioritising provision of human necessities, such as housing, over preservation of subjective preferences (e.g. heritage, character and amenity).
  4. Using national direction to set binding targets for increased housing and business capacity commensurate with future growth expectations, guided by land prices in high-demand areas.

Adopting independent hearings panels to review district plan changes.

Who

Local Government, MfE, MHUD

When

2022-2031

Want to know more

BUP, RAN

24. Improve spatial planning through better information on infrastructure capacity and costs to service growth

How

Improve information on the infrastructure cost implications of different growth possibilities by:

  1. Developing, validating and publishing a spatial model of the long-run average infrastructure costs of servicing growth in different locations, to inform issues like regional spatial planning, local government development contributions policies and the alignment of development-capacity increases with infrastructure capacity and low-cost opportunities for development. This model should cover all relevant types of public infrastructure.
  2. Requiring water entities to publish geo-spatial information on water asset condition, capacity for growth in existing water networks and capacity for growth due to planned network upgrades.
  3. Developing a common approach to measuring the condition and capacity of water infrastructure assets.

Who

MHUD, Te Waihanga, Infrastructure Providers

When

2022-2031

Want to know more

CBD, WCB