The price is right : land prices can help guide land use regulation
September 24, 2015
House prices continue to reach new heights, pricing many younger families out of home ownership and reducing the capacity for some cities to accommodate productive workers. Land supply, initially carefully planned to keep up with demographic forecasts, has been crimped by a combination of tight geography and land use regulation that has moved house prices higher. Auckland is not alone - many other cities and regions are affected by tight land use regulation. But the city's processes and the existing legislative environment have not kept pace with demand, exacerbated by strong immigration and New Zealanders staying closer to home rather than crossing the Tasman. Within that context, we were asked by the Ministry for the Environment and the New Zealand Treasury to assess whether variation in the price of land across the city - land price differentials - could be used as a signal of 'tight' land use regulation to prioritise development under existing resource management legislation. This paper reports initial scoping analysis on how land prices can inform development capacity so district and regional planning can evaluate the needs of urban areas and respond appropriately.