Headlines this week suggest a retreat. Prime Minister Christopher Luxon has signalled a softening of Auckland's housing intensification. It looks like Housing Minister Chris Bishop has been undercut.

That perception matters. Housing markets run on expectations. But the deeper lesson is not about one Prime Minister. Jacinda Ardern championed housing reform in her first term, then retreated in her second. Now Luxon is pulling back too. Same pattern, different party. Housing reform cannot depend on political resolve alone, least of all on the rare ministers willing to push further than their leaders.

Technically, what has been signalled is not as damaging as it appears. National has already made clear that Labour's Medium Density Residential Standards (MDRS) will become optional. Minister Bishop's framing was that councils should retain discretion over where intensification occurs, but not how much. The obligation would be to meet an overall capacity target, even with flexibility in how.

That approach does not break the economics of housing supply, but neither does it help. It makes the path harder and slower. What drives affordability is not uniform density everywhere, but the availability of alternatives. When land can be brought to market easily and in sufficient volume, prices soften. Uniform intensification is a means, not an end.

The problem is not the mechanics. It is credibility.

Auckland's housing costs depend not just on current rules, but on beliefs about whether those rules will last. When signals suggest reform may falter where it matters most, developers pause, investors wait, and downward pressure on land prices is delayed.

This is where the moment becomes more than a skirmish over zoning. Competitive urban land markets (where developers have enough alternatives that no single landowner can charge excessive prices) are not just a policy preference of the current Government. They are proposed to become an explicit goal of the planning system itself, written into law to inform future plans and decisions. That makes competitive land markets a feature of the system, not just an aspiration.

The real question is not whether Auckland’s current intensification rules are adjusted. It is whether the Government will embed competitive land markets as a durable statutory principle into the planning system, especially when that commitment becomes uncomfortable.

So far, the answer is still yes. Nothing announced this week directly undermines that goal. But it sends a warning signal. It suggests that when reform collides with short-term political pressure, even central government struggles to hold its course.

Minister Bishop has widely spoken about his commitment to competitive land markets and the long game ahead. But holding that course is hard, as Luxon's signals this week show. We often describe local government as captive to short-term pressures, constrained by vocal incumbents and electoral incentives. But central government is no different. It too struggles to stay the course when politics pushes back. It is not a sober driver and needs to hand over the keys to rules and institutions that can follow through.

This is not a partisan critique. The past decade of housing reform tells a bipartisan story. Under Bill English, Treasury officials began articulating the case for competitive land markets. Under Phil Twyford, the idea was translated into policy through the Urban Growth Agenda. Under Chris Bishop, the framework has been taken further, with explicit focus on planning, finance, and incentives.

Housing affordability reflects a generational divide, but politics still complicates the picture. Younger New Zealanders see housing as the defining constraint of their lives. Older cohorts may not perceive it as a priority. Bishop and Seymour belong to the same generation, yet Bishop champions reform and Seymour answers to Epsom.

This is why relying on "good Ministers" is not enough. New Zealand has been fortunate to have capable reform champions. But systems that only work when the right person holds the portfolio are fragile by design. A predictable housing market requires rules that hold their course even when political winds shift.

The logic of competitive land markets points the same way. Move away from systems where councils or ministers can block development case by case, and toward rules that make building possible by default. Narrow the scope for ad hoc retreat. Reduce reliance on courage at the top; embed clarity in the system.

If the Government follows through, this week's wobble will matter less over time. If it does not, then the episode will be remembered as an early sign that political resolve could not be sustained.

Housing reform is a long game. The real benefits will show up in the 2030s, not the next election cycle. Whether we get there depends less on who blinks in the short term, and more on whether we are willing to hand the keys to institutions that can keep driving when politics inevitably swerves.

To read the article on the NZ Herald website, click here.