New Zealand’s Planning Bill is supposed to make housing affordable. For the first time, the law would require the planning system to create competitive land markets. That is a big deal, if it works. But the Bill has a problem.

When zoning restricts what can be built and where, owners of land where building is allowed have a strong upper hand. The Bill aims to flip that around by making enough land available across the wider urban area so that landowners have to offer better deals for buyers. This disciplines land values, exerting downward pressure on house prices.

But the Bill neither defines what “competitive land urban markets” mean nor provides a test for it. It furnishes no way to measure whether it is happening and no consequences if it is not.

A judge will eventually have to decide whether a council’s plan meets this goal. Lacking guidance in the law, the judge will fall back on how planning has always been done. The old system will end up defining the new goal. And the old system is the reason houses are unaffordable in the first place.

Some will say the details can be worked out later, through regulations. But the goal of creating competitive land markets sits at the heart of the new planning system. Officials drafting regulations will say, rightly, that something this big should have been settled in the law itself. So, it will not get done later. It will just sit there, undefined, doing nothing.

Our research note proposes a fix: Tie the goal to observable things, such as differences in the prices of adjacent parcels of land across zoning boundaries, and to comparing land prices within the urban area to those outside it. Make it measurable.

Suppose land on one side of a zoning boundary is persistently worth multiples of land on the other side. This tells you the planning system has failed to make enough land available. The council should then be required to release more land for building.

Additionally, the Bill also allows councils to assess their own performance. A student who marks her own exams will never fail.

New Zealand has tried planning reform before. Every time, bold goals were quietly sanded down in the years that followed. Meanwhile, the housing crisis remains relentless.

Government has a narrow window to get this right. The committee has our proposal. We hope it uses it.