Housing targets have long been a political football. They are also an emotional political subject. Would it not be better to take some of the heat out of the housing debate and ask more systematically how we could better plan for future housing supply?

“Our cities have been meeting their housing targets for years while house prices kept climbing,” said Dr Benno Blaschke, Research Fellow at The New Zealand Initiative. “The housing targets gave politicians and communities a number to fight over while ignoring everything underneath.”

New research from The New Zealand Initiative, Beyond Targets, proposes a better way to hold councils to account: replace housing targets with price indicators. They tell planners whether people have real and affordable choices about where to live and build, or whether rules are forcing people and businesses into bidding wars over scarce permissions, jacking up prices.

A suite of tests can do the job. For example, price jumps at boundaries (at the city fringe or inside it) reveal whether planning rules create artificial scarcity. The cost of land per square metre of permitted housing shows how rules inflate land costs as part of house prices. And where buyers pay a premium for location alone, that pattern can be checked against zoning to see whether councils are allowing development where people want to be, or pushing them into low-demand areas.

Auckland Mayor Wayne Brown was right when he said that housing targets make people focus on the wrong thing. Environment Court Judge Jackson compared this to “the Soviet model of setting aside X hectares for the production of pig iron.”

“A central authority decides how much is needed, then imposes their will on everyone by allocating their chosen quantity as a cage on cities,” Dr Blaschke said. “Price-based accountability would expose how that forces the market to price what is scarce: permission.”

Urbanist Alain Bertaud reinforced this during his New Zealand visit earlier this year. Forecasts baked into regulation, he warned, straitjacket cities. Housing Minister Chris Bishop’s own description of the two million figure as “a red herring that transformed into a lightning rod” proved the point. 

Beyond Targets recommends an independent expert panel of urban economists, building on the model of the Independent Hearings Panel that helped shape Auckland’s Unitary Plan but with permanent standing and the power to overrule council plans when they do not work for ordinary people and businesses. 

“It will never be possible to completely take the politics out of housing,” Dr Blaschke said. “But an expert panel does two things: it puts a layer between communities and politicians so that decisions do not directly expose ministers; and it shifts the focus from headline numbers to the real question. Do the rules make our cities more affordable and productive, or not?” 

This should make housing debates calmer, more rational and conducive to delivering the housing outcomes New Zealand needs.